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Civil Appeal No. 522 of 1971.
Appeal by special leave from the judgment and order dated the 26th April, 1968 of the Calcutta High Court in I. T. Reference No. 50 of 1965.
N. N. Goswamy and Arvind Minocha for the Appellant.
B. B. Ahuja and section P. Nayar for the Respondent.
The Judgment of the Court was delivered by FAZAL ALI, J.
This appeal by special leave involves the interpretation of the scope, extent and ambit of section 34(1) (b) of the Income tax Act, 1922 with particular reference to the connotation and import of the word `information ' used in section 34(1) (b).
Although the question appears to have been settled in one form or the other by the decisions of this Court, the changing and diverse society such as ours ' dealing in complex commercial activities continues to produce multifarious facts of taxable income which has escaped assessment cloaked under difficult propositions and knotty legal problems.
It is the onerous task of this Court to dispel the doubts and resolve and reconcile the differing views taken by the High Courts in various situations which every time poses a new problem.
The points involved in the instant case have baffled many a legal brain so much so that the High Court also appears to have been in two minds whether to place the information in the instant case as based on the materials already on the record of the original assessment of 1956 57 revealed by closer circumspection or to the information derived from subsequent or fresh facts.
Before, however, examining the legal incidents of section 34 of the Income tax Act, 1922, it may be necessary for us to travel into the domain of the facts of the present case which are short and simple.
969 The assessee appellant M/s Kalyanji Mavji & Company is a registered partnership firm dealing in various commercial activities.
The said firm filed its return for the year 1956 57 corresponding to the accounting Gujarati Diwali Year 2001 showing a total income of Rs. 7,44,551/ after claiming a deduction of a sum of Rs. 43,116/ being the amount of interest paid by the assessee on the debts incurred for the partnership business.
The Income tax officer accepted the return but on appeal to the Appellate Assistant Commissioner the assessment was reduced by a sum of Rs. 9,200/ by his order dated July 3, 1958.
For the assessment year 1957 58 the assessee showed the same income and the deduction claimed was allowed.
The next year 1958 59, however, presented quite a different complexion.
While the assessee filed his return in the year 1958 59, the Income tax officer concerned suspected the correctness of the return particularly the deduction of interest and found that as the amount of the deduction claimed was utilised for giving interest free loans to the partners for clearing up their income tax dues it could not be said to be a loan incurred for the expenses of the partnership business and he accordingly disallowed the deduction claimed by the appellant.
This discovery led the Income tax officer to issue notice to the appellant under section 34(1) (b) of the Income tax Act, 1922 hereinafter referred to as `the Act ' for reopening the assessment of the year 1956 57 hereafter to be referred to as `the original assessment ' on the ground that the deduction having been wrongly allowed, taxable income and escaped assessment.
After hearing the appellant the Income tax officer completed the assessment and included the sum of Rs. 43,116/ to the total income shown, by the assessee.
Thereafter the appellant filed an appeal before the Appellate Assistant Commissioner against the order of the Income tax officer but the appeal was dismissed by the Appellate authority which confirmed the order of the Income tax officer.
It may be pertinent to note here, that in his order the Appellate Assistant Commissioner pointed out that in the assessment years 1958 59 and 1959 60 the Income tax officer found that the appellant had no evidence with him to show that the funds borrowed on which the interest was paid were utilised for the purpose of the business and not diverted to the partners.
Thereafter the appellant filed a second appeal to the Income tax Appellate Tribunal, "B", Bench Calcutta.
The Tribunal after having accepted the facts culminating in the order of the Appellate Assistant Commissioner was of the opinion that the information of the Income tax officer resulting in the notice under section 34(1) (b) of the Act to the assessee was not based on any fresh facts but was derived from the materials on the records of the original assessment.
The Tribunal further found that if the Income tax officer while completing the original assessment would have been careful enough to scrutinise the balance sheet he would have at once detected the infirmity on the basis of which the subsequent Income tax officer issued the notice under section 34(1) (b)` of the` Act to the appellant.
The Tribunal further was of the opinion that the subsequent Income tax officer merely changed his opinion on the basis of the very materials that were before him when the original assessment was made and that was not sufficient to attract the provisions of section 34(1) (b) of the Act.
The Tribunal accordingly allowed the appeal and set aside the order of the Income tax officer issuing notice to the assessee under section 34(1) (b) 970 for reopening the original assessment.
Thereafter the respondent, namely, the Commissioner of Income tax approached the Tribunal for making a reference to the High Court under section 66(1) of the Act as a result of which the Tribunal referred the case to the High Court at Calcutta after framing the following question: "Whether on the facts and in the circumstances of the case, the Tribunal, was right in holding that the re assessment made by the Income tax officer under section 34(1) (b) of the Indian Income tax Act, 1922 was incompetent ?" The High Court, after hearing the parties, differed from the view taken by the Tribunal and held that the present case squarely fell within the ambit of section 34(1) (b) of the Act inasmuch as the information on the basis of which the Income tax officer sought to re open the original assessment was based on subsequent facts as also on the materials of the original assessment revealed by more careful and closer circumspection of those materials.
The High Court referred to a number of decisions of this Court as also to the decisions of the Calcutta High Court.
The appellant sought leave to appeal to this Court against the order of the High Court, which having been refused, the appellant obtained special leave from this Court, and hence this appeal.
In support of the appeal it was contended by Mr. Banerjee that the view taken by the High Court is legally erroneous inasmuch as the admitted facts of this case would disclose that the information relied upon by the Income tax officer in order to re open the original assessment was not derive from external sources but amounted to a mere change of opinion on the very facts and materials that were present on the record of the original assessment.
It was also submitted that it was not open to the Income tax officer to have re opened the original assessment merely because he took a different view of the matter in the assessment year 1958 59.
Lastly it was argued that the High Court had not correctly applied the ratio laid down by this Court in Commissioner of Income tax, Gujarat vs A. Raman and Company(1).
Mr. Ahuja appearing for the Revenue submitted that the order of the Income tax officer was fully justified and the High Court had taken the correct view of the law.
In order to appreciate the contentions advanced by counsel for the parties, it is necessary to make a brief survey of the provisions of section 34(1) of the Income tax Act, 1922.
The section runs thus: "34.
(1) If (a) the Income tax officer has reason to believe that by reason of the omission or failure on the part of an assessee to make a return of his income under section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year, income, profits or gains chargeable to income tax have escaped assessment for that year, or have been under assessed or assessed at too low a rate, or 971 have been made the subject of excessive relief under the Act, or excessive loss or depreciation allowance has been computed, or (b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income tax officer has in consequence of information in his possession reason to believe that income, profits or gains chargeable to income tax have escaped assessment for any year, or have been under assessed, or assessed at too low a rate, or have been made the subject of excessive relief under this Act, or that excessive loss or depreciation allowance has been computed, he may in cases falling under clause (a) at any time and in cases falling under clause (b) at any time within four years of the end of that year, serve on the assessee, or, if the assessee is a company, on the principal officer thereof, a notice containing all or any of the requirements which may be included in a notice under sub section (2) of section 22 and may proceed to assess or reassess such income profits or gains or recompute the loss or depreciation allowance; and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub section Provided * * * *" It would be seen that section 34(1) contemplates two categories of cases for re opening the previous assessment (1) where there has been an omission or failure on the part of the assessee to make a return of his income under section 22 or to disclose fully and truly all material facts necessary for his assessment; and (2) where there has been no such omission on the part of the assessee but the Income tax officer on the basis of information in his possession finds that income chargeable to tax has escaped assessment for any year.
It is, therefore, manifest that the first category deals with cases where an assessee is himself in default and the second category deals with cases where there is no fault on the part of an assessee but where the income chargeable to tax has actually escaped assessment for one reason or the other and the Income tax officer comes to know about the same.
In the instant case, however, we are concerned with clause (b) of section 34(1) extracted supra.
Before however proceeding to interpret the ambit and import of section 34(1) (b) it may be necessary to consider the history of section 34 of the Act which appears to have passed through different phases with amendments and additions made to the section from time to time.
Section 34 as it stood in 1922 was as follows: "34.
If for any reason income profits or gains chargeable to income tax has escaped assessment in any year, or has been assessed at too low a rate, the Income tax officer may, at any time within one year of the end of that year, serve on 972 the person liable to pay tax on such income, profits or gains, or in the case of a company on the principal officer thereof, a notice containing all or any of the requirements which may be included in a notice under sub section (2) of section 22 and may proceed to assess or reassess such income, profits or gains, and the provisions of this Act shall, so far as may be apply accordingly as if the notice were a notice issued under that sub section: Provided that the tax shall be charged at the rates at which it would have been charged had the income, profits or gains not escaped assessment or full assessment, as the case may be.
" It would be seen that in the section as it stood in 1922 the word `information ' was not there at all and the section merely empowered the Income tax officer to reopen the assessment of any year where income chargeable to tax had escaped assessment.
No conditions or limitations on the power of the Income tax officer were at all laid down under the section.
It appears that the appropriate Legislature in its wisdom thought that this would be too wide a power to be given to the Income tax officer and may not be workable.
In these circumstances, by the Indian Income tax (Amendment) Act, 1939, this section was recast as under: "34 (1) If in consequence of definite information which has come into his possession the Income tax Officer, discovers that income, profits and gains chargeable, to income tax have escaped assessment in any year, or have been under assessed, or have been assessed at too low, a rate, or have been the subject of excessive relief under this Act the Income tax officer may, in any case in which he has reason to believe that the assessee has concealed the particulars of his income or deliberately furnished inaccurate particulars 1, thereof, at any time within eight years, and in any other case at any time within four years of the end of that year, serve on the person liable to pay tax on such income, profits or gains, or, in the case of a company, on the principle officer thereof, a notice containing all or any of the requirements which may be included in a notice under sub section (2) of section 22, and may proceed to assess or re assess such income, profits or gains, and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub section: Provided * * * " It may be pertinent to note that by virtue of this amendment the concept of the Income tax officer deriving definite information was introduced for the first time.
The word 'information ' was qualified by `definite ' and an additional condition was incorporated namely that the Income tax officer discovers that income chargeable to tax had 973 escaped assessment.
This provision led the Courts to approach the provisions of the section with greater circumspection and stricter scrutiny as a result of which many cases of escaped assessments had to be set at naught by some decisions of the Courts.
This led the Parliament to take a fresh view of the situation.
Accordingly by the Income tax and Business Profits Tax (Amendment) Act, 1948, the section was re cast in the present form as quoted above.
There were further amendments in 1954 and 1956 with which we are not concerned.
Ultimately by the Income tax Act, 1961, the section underwent a complete transformation and even the setting of the section was changed which now forms section 147(a) & (b) of the Income tax, 1961.
We are now concerned in this case only with section 34(1) (b) as it stood after the amendment of 1948.
Another pertinent fact which may be mentioned here is that although section 34 was the subject of several amendments, yet the word `information ' which was introduced in 1939 has not been defined at all.
Since the word `information ' has not been defined, it is difficult to lay down any rule of universal application.
At the same time it cannot be disputed that the object of the Act was to see that the tax collecting machinery is made as perfect and effective as possible so that the tax payer is not allowed to get away with escaped Income tax.
The fact that the adjective `definite ' qualified the word `information ' and the word `discovers ' which were introduced in the Income tax (Amendment) Act, 1939 were deleted by the Amendment Act of 1948 would lead to the irresistible inference that the word `information ' is of the widest amplitude and comprehends a variety of factors.
Nevertheless the power under section 34(1) (b), however wide it may be, is not plenary because the discretion of the Income tax officer is controlled by the word "reason to believe".
It was so held by this Court in Bhimraj Pannalal vs Commissioner of Income tax Bihar and Orissa(1), while affirming the decision of the Patna High Court in Bhimraj Panna Lal vs Commissioner of Income tax, Bihar and Orissa(1).
This legal proposition, however, is not disputed.
It, therefore, follows that information may come from external sources or even from materials already on the record or may be derived from the discovery of new and important matter or fresh facts.
The word `information" will also include true and correct state of the law derived from relevant judicial decisions either of the Income tax authorities or other courts of law which decide income tax matters.
Where the ground on which the original assessment is based is held to be erroneous by a superior court in some other case, that will also amount to a fresh information which comes into existence subsequent to the original assessment.
A subsequent Privy Council decision is also included in the word `information '.
Thus it is very difficult to lay down any hard and fast rule.
But this Court has in two leading cases laid down some objective tests and principles to determine the applicability of section 34(1) (b) of the Act which we shall now discuss.
974 In Maharaj Kumar Kamal Singh vs The Commissioner of Income tax, Bihar & Orissa(1) the word "information" fell for interpretation by this Court, where it was observed thus: "We would accordingly hold that the word "information" in section 34(1) (b) includes information as to the true and correct state of the law and so would cover information as to relevant judicial decisions.
If that be the true position, the argument that the Income tax officer was not justified in treating the Privy Council decision in question as information within section 34 (1) (b) cannot be accepted.
* * * * * In our opinion, even in a case where a return has been submitted, if the Income tax officer erroneously fails to tax a part of assessable income, it is a case where the said part of the income has escaped assessment.
The appellant 's attempt to put a very narrow and artificial limitation on the meaning of the word "escape" in section 34(1)(b) cannot therefore succeed.
" It will be seen that this Court was in favour of placing not a narrow but a liberal interpretation on the provisions of section 34(1) (b) of the Act.
This decision was considered by this Court in Commissioner of Wealth Tax, West Bengal vs Imperial Tobacco Company of India Ltd.(2) where Wanchoo, J., speaking for this Court observed as follows: "It may be added that after the decision of this Court in Maharaj Kumar Kamal Singh 's case it is now settled that "information in section 34(1) (b) included information as to the true and correct state of law, and so would cover information as to relevant judicial decisions" and that such information for the purpose of section 34(1) (b) of the Income tax Act need not be confined only to cases where the Income tax officer discovers as a fact that income has escaped assessment.
" Similarly in Commissioner of Income tax, Excess Profits Tax, Hyderabad, Andhra Pradesh vs V. Jagan Mohan Rao and ors.(3), while following the decision of this Court in Maharaj Kumar Kamal Singh 's case (supra) it was observed as follows: "In these circumstances it was held by this Court firstly that the word information in 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, secondly that `escape ' in section 34(1) was not confined to cases where no return had been submitted by the assessee or where income had not been assessed owing to inadvertence or oversight or other lacuna attributable to the assessing authorities.
But even in a case where a return had been submitted, if the Income tax officer had erroneously failed to tax a part of the assessa 975 ble income, it was a case where that part of the income had escaped assessment.
The decision of the Privy Council, therefore, was held to be information within the meaning of section 34(1)(b) and the proceedings for re assessment were validly initiated.
" The matter was again fully considered by this Court in A. Raman and Company 's case (supra), where Shah, J., speaking for the Court extended the connotation of the word `information ' to two different categories of cases and observed as follows: "The expression "information" in the context in which it occurs must, in our judgment, mean instruction or knowledge derived from an external source concerning facts or particulars, as to law relating to a matter bearing on the assessment.
* * * * * Jurisdiction of the Income tax officer to reassess income arises if he has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment.
That information, must, it is true, have come into the possession of the Income tax officer after the previous assessment,`but even if the information be such that it could have been obtained during the previous assessment from an investigation of the materials on the record, or the facts disclosed thereby or from other enquiry or research into facts or law, but was not in fact obtained, the jurisdiction of the Income tax officer is not affected.
" An analysis of this case would clearly show that the information as contained in section 34(1) (b) must fulfil the following conditions: (1) The information may be derived from an external source concerning facts or particulars as to law relating to matter bearing on the assessment; (2) That the information must come after the previous or the original assessment was made.
In fact the words "in consequence of information" as used in section 34(1) (b) clearly postulate that the information must be subsequent to the original assessment sought to be reopened; and (3) That the information may be obtained even on the basis of the record of the previous assessment from an investigation of the materials on the record, or the facts disclosed thereby or from other enquiry or research into facts or law.
These categories are in addition to the categories laid down by this Court in Maharaj Kumar Kamal Singh 's case which has been consistently followed in several decisions of this Court as shown above.
976 On a combined review of the decisions of this Court the following tests and principles would apply to determine the applicability of section 34(1) (b) to the following categories of cases: (1) Where the information is as to the true and correct state of the law derived from relevant judicial decisions; (2) Where in the original assessment the income liable to tax has escaped assessment due to oversight, in advertence or a mistake committed by the Income tax officer.
This is obviously based on the principle that the tax payer would not be allowed to take advantage of an oversight or mistake committed by the Taxing Authority; (3) Where the information is derived from an external source of any kind.
Such external source would include discovery of new and important matters or knowledge of fresh facts which were not present at the time of the original assessment; (4) Where the information may be obtained even from the record of the original assessment from an investigation of the materials on the record, or the facts disclosed thereby or from other enquiry or research into facts or law.
If these conditions are satisfied then the Income tax officer would have complete jurisdiction to re open the original assessment.
It is obvious that where the Income tax officer gets no subsequent information, but merely proceeds to re open the original assessment without any fresh facts or materials or without any enquiry into the materials which form part of the original assessment, section 34(1) (b) would have no application.
Learned counsel for the appellant heavily relied on the decision of this Court in Bankipur Club Ltd. vs Commissioner of Income tax, Bihar and Orissa(1) in support of the proposition that in the instant case the Income tax officer has proceeded to re open the assessment on the basis of the very materials which formed the subject of the original assessment.
It was submitted that in the original assessment the assessee had claimed a deduction and had produced the balance sheet and these very factors were also present when the Income tax officer sought to make the assessment for the year 1958 59 and 1959 60, and since no fresh facts were brought to his notice it was not open to him to re open the original assessment.
The facts of the case relied upon by the appellant are clearly distinguishable from the facts of the present case.
In Bankipur Club Ltd. 's(1) case it appears that the Club had in its return placed all the materials with full details.
The facts placed before the Income tax officer were self evident and no calculation or scrutiny was necessary to find out the effect of the materials 977 placed before the Income tax officer.
In view of this peculiar situation, Hegde, J., speaking for the Court observed: "The fact that the club had received certain amounts as guests charges from its members had been placed before the Income tax officer.
It is not the case of the Income tax officer that he did not come to know all the relevant facts when he made the original orders of assessment.
It is also not his case that at the time he made those orders he was not aware of the true legal position.
It was for the Income tax officer to show that he had received some information subsequent to his passing the original orders of assessment.
No such material was placed before the Tribunal.
That being so, the Tribunal, in our opinion, was right in holding that the Income tax officer was incompetent to initiate proceedings under section 34(1) (b).
" In the instant case it would appear that three additional facts had come into existence after the original assessment for the year 1956 57 was made by the Income tax officer.
These were (i) that for the assessment year 1958 59 the Income tax officer did not accept the assessee 's plea that he should be allowed deduction for a sum of Rs. 43,116/ ; (2) that the Income tax officer came to a finding that the assessee had not proved that the amount of deduction claimed was really in connection with the partnership business but held that this was on account of interest free advance to the partners to pay their income tax dues; and (3) the conduct of the appellant in not clearing the doubts of the Income tax officer when the appellant was given the notice to contest the assessment merely on the question of law also spoke volumes against the assessee and was also an additional factor which weighed with the Income tax officer.
It would be seen that the Income tax officer in his order, which is Annexure A to the statement of case filed by the Tribunal, observed as follows: "In the course of the assessment proceedings for 1958 59 however it was discovered that the assessee 's claim of payment of interest on money borrowed was not proper.
Inasmuch as the entire money borrowed had been utilised not for the purpose of business but in giving interest free advance to the partners of the firm. . . . .
In fact no argument as regards the allowance or disallowance of the interest amount in question was placed but the entire argument of the representative proceeded on the basis that the action u/s 34 itself was illegal. . . . .
There is no doubt that there has been under assessment in this case and there is also no doubt that the fact of under assessment has been brought to the notice of the Income tax officer only in the course of the income tax proceedings for 1958 59.
" Similarly the appellate Assistant Commissioner in his order, which is Annexure B to the statement of the case, observed as follows: "At the time of the original assessment the appellant claimed an interest of Rs. 43,116/ which was allowed by 978 the I.T.O. in full.
However, later on, while making the assessment for the assessment years 1958 59 and 1959 60, the I.T.O. found that the appellant had no evidence with him to show that the funds borrowed on which the interest was paid, in fact, were utilised for the purpose of the business and not diverted to the partners.
" These findings by the two authorities have been clearly mentioned in the order of the Tribunal, which, while narrating the facts, observed as follows: "Subsequently, however, when the Income tax officer was making the assessment for the assessment year 1958 59, he discovered that the assessee did not utilise the borrowed money for the purpose of the business but for giving interest free advances to its partners.
The Income tax officer, therefore, had reasons to believe that income to the extent of Rs. 43,116/ had been under assessed and he issued notice under section, 34." Thus in view of the findings given by the Income tax authorities the following facts emerge: (1) that at the time of the original assessment the appellant had filed his return claiming a deduction of Rs. 43,116/ and filed the balance sheet in support of his plea; (2) that the balance sheet showed that the capital of the firm was Rs. 8,70,000/ , total drawings by the partners stood at Rs. 29,31,998/ and the loans were Rs. 6,63,292/ The Income tax officer who completed the original assessment appears to have accepted the claim of the appellant because the balance sheet without any further scrutiny and a close calculation would not have revealed that the amount of deduction claimed was really in the nature of interest free loans given to the partners to meet their income tax liabilities: (3) that in 1958 59 the Income tax officer discovered that the deduction claimed by the appellant was not correct and he accordingly called upon it to prove its plea but the appellant led no evidence before the Income tax officer.
From this the Income tax officer concluded that the amount sought to be claimed as deduction was not incurred for the purpose of the partnership business.
Thus, therefore, the subsequent information was (1) the discovery by the Income tax officer that the deduction was wrongly claimed and his disallowance of that deduction; and (ii) the conduct of the appellant itself in not adducing any evidence or materials to prove its stand that the deduction was validly claimed.
979 We might mention that it was submitted by Mr. Banerjee that in fact the amount sought to be deducted was paid towards the income tax liability of the partners and this was done to protect the business itself and to improve the credit of the partners.
Even this specific plea does not appear to have been taken before the Income tax officer.
We are, however, not concerned with this particular plea because we are given to understand by the counsel for the appellant that the appeals against the assessment orders for the years 1958 59 and 1959 60 are pending before the Income tax authorities.
In these circumstances we are clearly of the opinion that the facts of the present case clearly fall within the tests and principles laid down by this Court in A. Raman and Company 's case (supra) inasmuch as the Income tax officer proceeded on the basis of the information which came to him after the original assessment by fresh facts revealed in the assessment for the year 1958 59 and consisted of the conduct of the appellant itself in not adducing any evidence to support its plea.
We are, therefore, unable to agree with the view of the Tribunal that this was a case of a mere change of opinion by the Income tax officer on the materials which were already on the record.
our attention was also drawn by the learned counsel for the appellant to the decision of the Bombay High Court in Commissioner of Income tax, Bombay City II vs H. Holck Larsen(1).
In this case, Chandrachud, J., as he then was, speaking for the Court after review of the authorities of this Court and other High Courts, observed as follows: "What is obligatory in order to apply section 34(1)(b) is that he must have "information" in his possession in consequence of which he has reason to believe that the income has escaped assessment or is under assessed, etc.
The distinction really consists in a change of opinion unsupported by subsequent information on the one hand and a change of opinion based on information subsequently obtained, on the other.
In the former class of cases, the assessment proceedings are attempted to be re opened without the discovery of an error and without receiving any information as to fact or law. . . . .
Such a reopening is based on a "mere" change of opinion and is without jurisdiction. . .
In the latter class of cases, the reopening is based on information leading to the requisite belief and is therefore within the jurisdiction of the officer.
" This decision is really based on the question whether it is open to the Income tax officer to change his opinion subsequently on the same materials and reopen the original assessment.
We are no doubt inclined to agree with the view expressed by Chandrachud, J., in the aforesaid case, but as this question is not free from difficulty as there is some divergence of judicial opinion on the subject, we would refrain from giving any definite decision on this point, particularly when in 980 the view we take in the instant case, this point does not really arise for determination in this case, which is really based on another principle, namely, that the information was derived by the Income tax officer from fresh facts and is clearly covered by the principles laid down in A. raman and Company 's case (supra).
For the reasons given above, we find ourselves in complete agreement with the view taken by the High Court.
Accordingly the appeal fails and is dismissed but without any order as to costs.
S.R. Appeal dismissed.
| The appellant company, a registered partnership firm, filed its income tax returns for the years 1956 57 and also for 1957 58 respectively showing a total income of ' Rs. 7,44,551/ , after claiming a deduction of a sum of Rs. 43,116/ , being the amount of interest paid by the assessee on the debts incurred for the partnership business along with the balance sheet in support of the said deductions.
The Income Tax officer accepted the claim on the basis of the balance sheet.
When the assessee filed his return for the year 1958 59, the Income Tax officer discovered that the deduction claimed by the appellant was not correct and called upon the assessee to prove its plea.
But, the assessee did not lead any evidence before him.
The Income Tax officer finding that the deduction of interest claimed was utilised for giving interest free loans to the partners for clearing their income tax dues and, as such, it could not be said to be a loan incurred for the expenses of the partnership firm, not only disallowed the deduction claimed for that assessment year, but also issued a notice under section 34 (1) (b) for the re opening of the original assessment of the previous years on the ground that the deduction having been wrongly allowed, taxable income escaped assessment.
Accordingly, the Income Tax officer re assessed him by including Rs. 43,116 to the total income.
The appeal to the Appellate Assistant Commissioner failed.
However, on second appeal, the Income Tax Appellate Tribunal "B" Bench, Calcutta, set aside the order of the reassessment opining that the information resulting in the reassessment notice under section 34(1)(b) was not based on any fresh facts, but was derived from the materials on the record of the original assessment amounting to a change of opinion and, as such, was not sufficient to attract the provisions of section 34(1)(b).
On the application of the respondent Revenue, the Tribunal made a reference under section 66(1) of the Act framing a question, namely, "Whether on the facts and in the circumstances of the case the Tribunal was right in holding that the reassessment made by the Income Tax officer under section 34(1)(b) of the Indian Income Tax Act (1922) was incompetent ?" to the High Court, which answered it in the negative and held that the case squarely fell within the ambit of section 34(1)(b) of the Act inasmuch as the information on the basis of which the Income Tax officer sought to reopen the original assessment, was based on subsequent facts ' as also on the materials of the original assessment revealed by more careful and closer circumspection of these materials.
Negativing the following three contentions of the assessee appellant, namely, (i) The information relied upon by the Income Tax officer not having been derived from external sources, it amounted to a mere change of opinion on the very facts and materials that were present on the record of the original assessment not attracting the provisions of section 34(1)(b) of the Act.
967 (ii) It was not open to the Income Tax officer to have reopened the original assessment merely because he took a different view of the matter in the assessment year 1958 59.
(iii) That the High Court has not appreciated the ratio laid down by the Supreme Court in Commissioner of Income tax, Gujarat vs A. Raman and Company, , and dismissing the appeal by special leave, the Court ^ HELD: (1) section 34(1) contemplates two categories of cases for reopening the previous assessment (1) where there has been an omission or failure on the part of the assessee to make a return of his income under section 22 or to disclose fully and truly all materials facts necessary for his assessment; and (ii) where there has been no such omission on the part of the assessee but the Income Tax officer, on the basis of the information in his possession, finds that income chargeable to tax has escaped assessment for any year.
The first category deals with cases where an assessee is himself in default and the second category deals with cases where there is an default on the part of the assessee but where the income chargeable to tax has actually escaped assessment for one reason or the other and the Income Tax officer comes to know about the same[1971 E F] (2) The word "information" which has not been defined in the Act is of the widest amplitude and comprehends a variety of factors.
Nevertheless, the power under section 34(1)(b), however, wide it may be, is not plenary because the discretion of the Income Tax officer is controlled by the words "reason to believe".
[973 C & E] Bhimraj Pannalal vs Commissioner of Income tax, Bihar and Orissa, an Bhimraj Panna Lal vs Commissioner of Income tax, Bihar & Orissa, , followed.
(3) Since the Income Tax officer was to see that the tax collecting machinery is made as perfect and effective as possible so that the tax payer is not allowed to get away with escaped income tax, in view of the difficulty in laying down any rule of universal application, the following tests and principles would apply to determine the applicability of section 34(1)(b) to the following categories of cases: (i) Where the information is as to the true and correct state of law derived from relevant judicial decisions; (ii) Where in the original assessment the income liable to tax has escaped assessment duel to oversight, inadvertence or a mistake committed by the Income Tax officer on the principle that the tax payer would not be allowed to take advantage of an oversight or mistake committed by the taxing authority; (iii) Where the information is derived from an external source of any kind.
Such external source would include discovery of new and important matters or knowledge of fresh, facts which were not present at the time of the original assessment; and (iv) Where the information may be obtained even from the record of the original assessment from an investigation of the materials on the record or the facts disclosed thereby or from other enquiry or research into facts of law.
If these conditions are satisfied, then the Income Tax officer would have complete jurisdiction to reopen the original assessment.
It is obvious that where the Income Tax officer gets no subsequent information, but merely proceeds to reopen the original assessment without any fresh facts or materials or without any enquiry into the materials which from part of the original assessment, section 34(1)(b) would have no application.
[973 C, D, 976 A E] Maharaj Kumar Kamal Singh vs The Commissioner of Income tax, Bihar & orissa [1959] Supp.
(1) S.C.R. 10; Commissioner of Wealth tax, West Bengal vs Imperial Tobacco Company of India Ltd. [1966] Supp.
S.C.R. 174; Commissioner of Income tax.
Excess Profits Tax.
Hyderabad, Andhra Pradesh vs V. Jagan Mohan Rao and ors.
and Commissioner of Income tax Gujarat vs A. Raman and Company, , discussed.
968 (4) In the instant case the subsequent information was the discovery by the Income Tax officer the deduction was wrongly claimed and the consequent disallowance of that deduction and the conduct of the assessee itself in not adducing any evidence or materials to prove its stand that the claim was validly made which led to the issue of the notice under section 34(1)(b) for reopening the assessment [978 H] (5) The case really fell within the tests and principles laid down in A. Raman Company 's case and within the ambit of section 34(1)(b) inasmuch as the Income Tax officer proceeded on the basis of the information which came to him after the original assessment, by fresh facts revealed in the assessment for the year 1958 59 and consisted of the conduct of the assessee in not adducing any evidence to support its plea.
It was not a case of a mere change of opinion by the Income Tax officer on the materials which were already on record.
[1979 B C] Commissioner of Income tax, Gujarat vs A. Raman and Company, , applied.
Bankipur Club Ltd. vs Commissioner of Income tax, Bihar and Orissa, , 834, distinguished.
[On the question "Whether it is open to the I.T.O. to change his opinion subsequently on the same materials and reopen the original assessment" which arose in the decision in Commissioner of Income Tax, Bombay City 2 vs H. Holck Larsen, , 479, relied on by the appellant assessee and also on the contention that in fact the amount sought to be deducted was paid towards the income tax liabilities of the partners, the Court applied "Non liquet"]
| 3404.txt |
Civil Appeal No. 54 of 1969.
From the Judgment and Order dated 23 10 1968 of the Mysore High Court in R.F.A. No. 25/63.
B. D. Dal, section Bhandare, A. N. Karkhanis and Miss M. Palival for the Appellant.
V. section Desai and N. Nettar for the Respondent.
164 The Judgment of the Court was delivered by SARKARIA, J.
This appeal by the defendant, on certificate, is directed against a judgment, dated October 23, 1968, whereby in First Appeal, the High Court of Mysore set aside the judgment and decree passed by the joint Civil Judge, Senior Division, Belgaum.
The pedigree of the family given below will be helpful in understanding the facts leading to this appeal: Ravalojirao (died before 1900) | | | Narayanarao Ramachandrarao (died in 1924) (died on 20 1 1955) | | Tuljeramarao Krishnabai (died in 1944) (Defendant appellant) | | | | Appasaheb Nanasaheb (Pltf.1.) (Pltf.2.) Sou.
Vasundhararaje (Pltf. 3.) | | | | | | | Ashok Kumar Pushpendra Virendra Indrajit Ravalogirao | (Pltf.3) Singh Singh Singh (Pltf.9) | (pltf.6) (pltf.7) (pltf.9) Narayanarao (Pltf.10) By a registered document, dated July 25, 1902 (exhibit 39), executed by Narayanarao, six Desgat lands situated in villages Nanandi, Umarani and Nandikurli totalling about 120 acres, were received by Ramachandrarao, for separate living and maintenance of himself and his male lineal descendants.
Out of the lands covered by the said deed, three lands comprised in Survey Nos. 114 (26 acres 30 gunthas), 115 (9 acres 38 gunthas) and 116 (26 acres 34 gunthas), totalling about 63 acres and 22 gunthas, situate in the area of village Umarani, Taluka Chikodi, are the subject matter of the suit, out of which this appeal has arisen.
The respondents herein, who are the grand sons and great grandsons of Narayanarao, on July 24, 1960, instituted Suit No. 26/60 in the Court of Civil Judge, Belgaum against Smt.
Krishnabai, appellant, for possession of the said lands and for recovery of past and future mesne profits, with these allegations: (i) that the suit lands were Desgat Watan lands and were part of the Desgat Watan estate of Nanandi, (ii) that by virtue of an ancient and immemorial family and territorial custom, the Desgat estate of Nanandi was impartible and descended from generation to generation to the seniormost member by the rule of primogeniture, while the junior members of the family were only given some lands for their maintenance by the holder of the Desgat for the time being; (iii) that till his death, 165 the appellant 's father continued to be an undivided member of the Joint family consisting of himself and the plaintiffs; and (iv) that on July 31, 1956, a partition by metes and bounds has taken place between the plaintiffs inter se under a partition deed.
The suit was resisted by the defendant appellant.
She denied the alleged ancient, family and territorial custom of primogeniture.
She denied that the property formed part of the Desgat Watan estate of Nanandi.
She further denied that her father, Ramachandrarao, came into possession of the suit land for his maintenance.
She further pleaded that Ramachandrarao and his brother Narayanarao had separated during their life time and the suit lands and some other lands were given to Ramachandrarao in the partition between the two brothers towards a part of his share, and it was agreed that the share of Ramchandrarao in other family properties would be separated and settled at some future convenient time.
She further stated that since 1902, Ramachandrarao was in separate possession and enjoyment of the suit lands till his death on January 20, 1955, and that at the time of his death he was not an undivided member of the joint family of himself and the plaintiffs.
She further pleaded that on her father 's death she succeeded to the suit lands, which were his separate property.
She further relied on the Bombay Pargana and Kulkarni Wantans (Abolition) Act, 1950 (Bombay Act No. 60 of 1950), (for short, called the Act), and the re grant of the land made in favour of her father, under that Act.
The learned trial judge by his judgment, dated September 29, 1962, dismissed the respondents ' suit with these findings: (a) that the alleged custom of impartibility and devolution of property by the rule of primogeniture had not been proved; (b) that there was a severance of the joint family consisting of the two brothers, in 1902, when they had agreed to separate, that since then for about 53 years till his death in 1955, Ramachandrarao was living separately and enjoying the suit land as his separate property; (c) that the suit lands were originally Watan lands, but they were not so at the date of the suit because the Bombay Act 60 of 1950, which came into force on May 1, 1951, had abolished Watans and thereafter the suit lands were, on the application of its holder, Ramachandrarao, regranted in his favour; that the plaintiffs were aware of Ramachandrarao 's application for the regrant and they had tacitly assented to the regrant in his favour.
166 Aggrieved, the plaintiffs preferred an appeal in the High Court of Mysore.
The High Court affirmed the finding of the trial court, that the custom pleaded by the plaintiffs with regard to the impartibility of the property had not been established.
It observed that "the onus of proving partition is on the defendant, "but the only evidence in support of her case that Ramachandrarao was divided, is Exhibit No. 39".
The High Court construed the deed (exhibit 39) with the aid of its translations into English, one made by the trial judge and the other by the High Court Translator.
It then took note of these features in support of the 'theory of partition ': "(a) Permanency of the arrangement.
The deed provides that Ramachandrarao and his descendants in the male line shall enjoy the property from generation to generation without interference from the grantor.
(b) Cesser of commonsality.
The deed says that Ramachandrarao desired to live separately and therefore the lands were granted to him.
The evidence is that Ramachandrarao lived separate from 1902.
There is no evidence to the contrary.
" It then listed these features to negative the 'theory of partition ': "(a) The nomenclature of the deed.
It is styled as a deed of maintenance.
(b) It was executed by one of the parties only.
If it was intended to be a partition deed it would have been executed by both the parties each relinquishing his rights in the properties not allotted to him.
(c) The deed says that the lands were given to the grantee and his descendants in the male line for maintenance only and they should enjoy the lands continuously.
(d) The total extent of the Desgat lands was over eight thousand acres; if partition was intended, Ramachandrarao who was entitled to a one half share would not have been contented with 90 acres valued at Rs. 3,400/ .
" After cataloguing these pros and cons the High Court concluded: "In our judgment, Exhibit 39 considered along with the circumstances in which it was executed, does not establish the defendant 's case that Ramachandrarao was divided from Narayanarao in 1902 and that the suit lands, among others, were allotted to Ramachandrarao 's share.
We are of the view that on the erroneous but honest belief that Des 167 gat was an impartible estate, Narayanarao granted the lands to Ramachandrarao and his descendants in the male line in lieu of their maintenance.
When Ramachandrarao died without male issue, the interest granted ceased or the tenure came to an end.
The plaintiffs who are the surviving members of the family are entitled to resume the lands.
" Although no such plea was taken by the plaintiffs in the plaint, the High Court held that in view of Section 90 of the Indian Trust Act, the regrant made, after the abolition of Watans, under the Act in favour of Ramachandrarao must ensure for the benefit of the family of the Watandars including the plaintiffs, because Ramachandrarao at the time of his death was holding the suit land as an undivided member of the joint family, for his own benefit and that of the other members of the undivided family.
Since there was no evidence as to the occupancy price paid by Ramachandrarao to obtain the regrant, the High Court, after allowing the appeal and setting aside the decree of the Trial Court, remanded the matter to the court below, with a direction that it should ascertain the amount of occupancy price paid by Ramachandrarao, and then pass a decree for possession in favour of the plaintiffs subject to the repayment of the said amount.
Hence this appeal by the defendant on the basis of a certificate granted by the High Court under Article 133(1)(e) and (c) of the Constitution.
Shri B. A. Bal, learned counsel for the appellant, has, in the course of his arguments, sought to make out two main points: 1.
(a) Sometime prior to the execution of the deed.
(exhibit 39) dated July 25, 1902, there was a severance of the joint Hindu family as a result of an intimation by Ramachandrarao of his intention to separate and Narayanarao 's acceptance of the same.
Such severance can he clearly inferred from: (i) the recitals in the deed (exhibit 39), the permanent allocation of the suit land along with some other land, to Ramachandrarao and his descendants, and (ii) the subsequent conduct of the members of the erstwhile joint family.
(b) Since the deed (exhibit 39) (it is argued) is more than 75 years old and Narayanarao, Ramachandrarao and others who might have given evidence with regard to the circumstances resulting in this transaction are all deed and gone, the recitals, in the deed coupled with the subsequent conduct of the parties, and supplemented by reasonable inferences, were more than sufficient to discharge the initial 168 onus, if any, on the defendant to show severance of the joint family since 1902 or thereabout and the same continued till Ramachandrarao 's death in 1955.
Reference in this connection has been made to Bhagwan Dayal vs Mst.
Reoti Devi.(1) (c) Since at the time of his death in 1955, Ramachandrarao was not a member of an undivided Hindu family and the suit land was his separate property, his daughter the defendant would, even according to traditional Hindu Law, inherit his estate to the exclusion of the plaintiff collaterals.
(2) Section 4 of the Bombay act 60 of 1950 abolished Watons with effect from May 1, 1951.
Section 5 of the same Act abrogated the rule of primogeniture and also every law or custom by virtue of which females were postponed to males in the matter of succession.
After the abolition of the Watons Ramachandrarao alone, to the knowledge of the plaintiff respondents, obtained a regrant of the suit land from the Government in his favour.
Similarly, the plaintiffs applied for regrant of the other Ex watan lands measuring about 8000 acres, to the exclusion of Ramachandrarao.
The regrant of the suit land in favour of Ramachandrarao created new rights exclusively in his favour.
Since on May 1, 1951 he was holding the suit land separately as a divided member of the family, the regrant did not ensure for benefit of the plaintiffs.
As against this, Shri V. section Desai submits that since it was the admitted case of the parties that sometime before the execution of the deed (exhibit 39) dated July 25, 1902.
Narayanarao and Ramachandrarao constituted a joint Hindu family governed by Mitakshra, and the presumption of jointness in case of brothers is stronger, the burden was on the defendant to prove by cogent and convincing evidence that the joint family had disrupted and Ramachandrarao had separated in 1902 and the suit land was his separate property which fell to his share in partition.
It is maintained that the recitals in the deed, exhibit 39, do not furnish any evidence that Ramachandrarao had communicated an unambiguous and clear intention to separate from his brother in estate and thenceforth hold it in defined shares.
It is urged that the transaction evidenced by the deed should be construed by the Court, not according to its own sense of right and wrong, but according to the notions and beliefs prevailing among orthodox Hindus in 1902, of a strata of society to which Narayanarao and Ramachandrarao belonged.
In 1902, proceeds the argument, to cause disruption of a joint Hindu family of Watandars 169 was considered to be a sin.
According to Shri Desai, if the document, exhibit 39, is considered from that view point it would appear that the arrangement devised thereby was consistent with the continuance and preservation of the jointness of the family and its estate, rather than its division and disruption.
It is pointed out that the area of Watan Land held by the joint Hindu family in 1902 was about eight thousand acres, and if the intention of the brothers was to sever the joint family status, there was no difficulty in declaring that thenceforth the two brothers would hold the entire estate in equal, defined shares.
It is emphasised, though Ramchandrarao, died in 1955, he never asked for partition and possession of his one half share in the remaining seven or eight thousand acres held by Narayanarao and his descendants, but remained contented with a mere 118 or 120 acres given to him for maintenance under exhibit 39 in 1902.
It is further submitted that the Court cannot construe the deed exhibit 39, as a deed of partition, but only as a deed of maintenance, as it, expressly purports to be, because in view of Section 92 of the Evidence Act no extrinsic evidence is admissible to contradict or vary its terms.
In support of his arguments Shri Desai has referred to Paragraph 448 of Mayne 's Hindu Law (1953 Edn.).
Learned counsel further submits that in view of the paucity of evidence produced by the defendant appellant to show division of the joint family, the High Court was right in holding that Ramchandrarao died as an undivided member of the joint Hindu family consisting of himself and the plaintiffs.
It is submitted, in that view of the matter, the second point urged by Shri Bal does not survive for decision.
Nevertheless, Shri Desai took us through the relevant provisions of the Bombay Act LX of 1950 and the Watan Act of 1874, to show that there is nothing in those provisions which militates against the finding of the High Court to the effect, that if Ramchandrarao died as an undivided member of the joint family, the regrant would enure for the benefit of all the members of the family.
We will take Point No. 1 canvassed by Shri Bal.
The primary question that falls to be considered is, whether in 1902 or shortly prior to it, there was a partition between the two brothers Narayanarao and Ramchandrarao in a manner known to law.
In this connection, it is necessary, at the outset, to notice the fundamental principles of Hindu Law bearing on the point.
The parties are admittedly governed by Mitakshra School of Hindu Law.
In an undivided Hindu family of Mitakshra concept, no member can say that he is 170 the owner of one half, one third or one fourth share in the family property, there being unity of ownership and commonsality of enjoyment while the family remains undivided.
Such unity and commonsality or the essential attributes of the concept of joint family status.
Cesser of this unity and commonsality means cesser or severance of the joint family status, or, which under Hindu Law is 'partition ' irrespective of whether it is accompanied or followed by a division of the properties by metes and bounds.
Disruption of joint status, itself, as Lord Westbury put it in Appovier vs Rama Subha Aivan.
,(1) in effect, "covers both a division of right and division of property.
" Reiterating the same position, in Giria Bai vs Sadashiv,(2) the Judicial Committee explained that division of the joint status, or partition implies " separation in interest and in right, although not immediately followed by a de facto actual division of the subject matter.
This may, at any time, be claimed by virtue of the separate right.
" The division of the joint status may be brought about by any adult member of the joint family by intimating, indicating or representing to the other members in clear and unambiguous terms, his intention to separate and enjoy his share in the family property, in severality.
Such intimation, indication or representation may take diverse forms.
Sometimes it is evidenced by an explicit declaration (written or oral); sometimes, it is manifested by conduct of the members of the family in dealing separately with the former family properties.
Service of notice or institution of a suit by one member/coparcener against the other members/coparceners for partition and separate possession may be sufficient to cause disruption of the joint status.
We will now deal with the first proposition propounded by Shri Bal, in the light of these principles.
The primary question that arises for consideration is, whether Ramchandrarao had brought about a division of the joint family status or partition by intimating to his brother in clear terms, sometime in 1902 or shortly prior thereto, his intention to separate and enjoy his share in severality.
Answer to this question depends on inferences which may, reasonably be drawn from the contents of the deed (exhibit 39) and the subsequent conduct of the parties.
The original deed, Ex.39 is in Marathi.
It was rendered into English by the trial judge himself, who concededly had adequate knowledge of Marathi.
According to him, the deed (Ex.39) speaks of a division of 171 the joint family status and separation of interests.
For this construction, the trial judge drew much on the word "Vibhaktarahave" which, according to him, connotes division of status.
The learned Judges of the High Court however, did not accept this interpretation.
They preferred to rely on the English translator of this deed made by the High Court Translator.
Since there is some variation between the two translations, it will be worthwhile to extract the same here for facility of comparison and reference.
The translation effected by the trial judge, reads as under: "You (Ramchandra Rao) are my younger brother.
We were living jointly till today.
Recently you have desired to take some property for maintenance (Nirwah Kurat) and live separate after division (Vibhaktarahave).
Since I have deemed it proper to give you some property for your maintenance as befits our Sansthan, I have given you the following properties for your maintenance.
(Then follows the description of the properties).
All these lands have been given to you along with the appurtenances for meeting the livelihood of you and your family members.
Hence, you and your successors i.e., your natural born male descendants should enjoy the properties from generation to generation and live happily.
The Sansthan will not interfere with the lands any longer.
Only you and your natural male descendants should enjoy the property.
You shall also pay the Joodi to the Government hereafter." (The disputed words have now been underlined).
The translation made by the High Court Translator reads as below: "You are my younger brother and you have been residing with me only in jointness up till now.
As you have been recently thinking of residing separately yourself by receiving some properties for your maintenance, I found it proper to give you some property for your maintenace as befits our Sansthan and have given you for your maintenance the 'Desgat ' lands of our Khata situate in the below mentioned villages in Taluka Chikodi Sub District, Belgaum District.
Particulars thereof are as under: Lands situate at Village Nanadi.
(1) Bagayat Land of No. bearing Survey No. 189 measuring 14 acres 23 guntas assessed at Rs. 20 0 0.
The land together with a well valued at Rs. 1000/ .
(2) The land 172 measuring 9 acres 30 guntas assessed at Rs. 41 8 0 out of Survey No. 187 is bounded on the east by a land in our possession out of the same No. on the west by the village limits, on the south by the land No. 196 and on the north by the land bearing Survey No. 198.
In the land enclosed within the aforesaid boundary there is a well.
This well has two "Veravantas" i.e. one on the Eastern side and another on the Southern side.
It has 10 'motes '.
Out of the 'motes ' of that well we are to get water with 3 'motes ' and you are to get water with 2 'motes '.
Repairs to the said well also are to be carried in that portion only and the expenses required to remove the mud etc., are also to be borne in the same proportion itself.
Value Rs. 1000/ Lands situate at the Village Umarani.
Rs. No. Acres Assessment 3 99 26 30 14 0 0 The said 3 4 100 9 38 9 0 0 lands are 5 101 26 34 17 0 0 entire No. and are valueed at Rs. 1000/ together with the appurte nant thereof.
Land situate at Majere Kenpatte in the Village Nandikurli.
6 120 24 18 9 0 0 This land of entire No. together with the appurtenances thereof is valued at Rs.400/ .
The lands as mentioned above are given to you for your maintenance and the maintenance of your dependants.
Hence, you and your descendants, i.e., natural male descendants should enjoy the said lands continuously and live happily.
In respect of the said lands given to you, you will not be put to any trouble from the state (Sansthan) in any manner but, the said lands are to be continued with you and your natural male descendants.
You should go on paying the joodi payable by you to the Government in respect of the said lands in our possession are given to your possession today.
To the above effect the deed of maintenance is duly executed.
" A comparative study of the above extracts would show that except for the English rendering of the word "Vibhaktarahave" by the learned trial judge, there is no substantial difference between the two translations.
The Marathi word "Vibhaktarahave", according to my learned Brother on this Bench, who has working knowledge of Marathi, is a compound of two words, namely, "Vibhakta" and "Rahave".
"Vibhakta" appears to have its root in the Sanskrit word "Vibhaga".
"In the Mitakshra, Vijnanesvara defines the word 173 "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." (See Para 448 of Mayne 's Hindu Law, 11th Edition.) 'Rahave ' means "living".
In view of this etymological analysis, it cannot be said that the learned trial judge 's interpretation of the word "Vibhaktarahave" as equivalent to "live separately after division" was literally wrong.
Even the learned Judges of the High Court (who did not claim to know Marathi), have not held in categoric terms that this translation of "Vibhaktarahave" made by the trial judge is grammatically wrong.
What the learned Judges appear to say is that the context in which the word "Vibhaktarahave" has been used, gives it a meaning different from its grammatical sense, so that it cannot be understood as signifying an intention to divide, but connotes only a desire to live separately.
The learned Judges have sorted out four features from the context of the deed, exhibit 39, which, according to them, militate against the literal interpretation of the word "Vibhaktarahave" and negative the theory of division of status.
Those features it will bear repetition are: (i) The deed is styled as one for maintenance, (ii) It was executed by Narayanarao only, (iii) The lands under the deed were given to Ramchandrarao and his descendants in the male line for maintenance only, (iv) The total extent of 'Desgat ' lands was over 8000 acres.
Ramchandrarao should have claimed half of the entire 'Desgat ' area and not remained contented with about 90 acres given to him under the deed exhibit 39).
In our opinion, none of these features, if appreciated in the right perspective, detracts from the conclusion that there was a division of joint family status as a result of an intimation to Narayanarao by Ramchandrarao, of his intention to separate, followed by allotment to Ramchandrarao in furtherance of that division, the lands mentioned in exhibit 39.
The four features listed above rested on erroneous assumptions.
Even according to the High Court, both the brothers were, at the time of execution of the document exhibit 39, labouring under an erroneous belief that the 'Desgat ' lands were impartible and held by the eldest member of the family in the male line, while the junior members were entitled only to maintenance.
The High Court has expressly upheld the finding of the trial Court that no custom was established according to which, the 'Desgat ' lands of the family were impartible and vested only in the eldest male member of the family to the exclusion of the junior members.
The High Court has further not disagreed with the trial courts finding that no custom of primogeniture in this family has been established.
174 Once it is held that this two fold assumption or belief about the impartibility of the estate and its devolution in the male line by rule of primogeniture was fallacious, the said four features stemming therefrom, lose their significance.
These features which purport to give the transaction (exhibit 39) the colour of a mere maintenance arrangement as distinguished from an absolute transfer or allotment, have to be credited with no more substance than phantoms conjured out of phantasy, probably by the sole executant of the deed with a self serving motive.
In any case, they are words of vain show or form lacking reality.
We have therefore, to peal aside this jejune and illusory cover, to reach at the kernel and concentrate on the crucial features of the document exhibit 39.
We are unable to accept Shri Desai 's argument that the process adopted by us would involve contravention of Section 92 of the Evidence Act.
Firstly, in this process, which is essentially one of construction of the deed, exhibit 39, no question of contradicting, varying, adding to or subtracting any term of the disposition is involved.
The deed, exhibit 39, falls into two distinct parts: The first of them comprises the preamble or the preliminary recital of a past fact.
This part does not contain any term of disposition of property.
Such terms are confined only to the second part.
Section 92 prohibits only the varying of terms of the documents, not the memoranda or recitals of facts, bereft of dispositive terms, particularly when the correctness of the whole or any part of the recital is in question.
We are primarily concerned with this preliminary recital which does not fall under the dispositive or operative portion of the document.
The question is, whether or not this recital of a past oral intimation by Ramchandrarao to Narayanarao had caused severance of joint family status.
It is settled law that a clear intimation by a coparcener to the other coparcener of his intention to sever the joint status need not be in writing.
For these two fold reasons, the bar in section 92 against the admissibility of extrinsic evidence for the purpose of showing that the insertion of the words "for your maintenance" in the recital is wrong, unreal, unmeaning and the coinage of the executant 's own brain, is not attracted.
Secondly, there is ample authority for the proposition that 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 an illusory, fictitious and colourable device which cloaked something else, and that the appa 175 rent state of affairs was not the real state of affairs.
[See Chandi Prasad Singh vs Piari Bedi C.A. No. 75 of 1964, decided on 16 3 1966, and Bhagwan Dayal vs Mst.
Reoti Devi (supra) ].
This preliminary recital in the deed, exhibit 39 (as translated by the learned trial judge), with due emphasis on the words 'recently ' and 'Vibhaktarahave ', coupled with the surrounding circumstances and natural probabilities of the case, definitely raises the inference that sometime in the recent past, prior to the date of the deed, exhibit 39, Ramchandrarao had clearly and persistently intimated to his coparcener, Narayanarao, his intention to sever the joint family status and to hold and enjoy his share of the joint family property in severalty.
The immediate and inexorable consequence of this intimation was disruption or division of the joint status, which, in the eye of Hindu Law, amounted to 'partition '.
From that date onwards, which preceded the date of the deed, exhibit 39 Narayanarao and Ramchandrarao ceased to be coparceners and held the former coparcenary property as tenants in common.
Thus, at the time of execution of the deed exhibit 39, the joint family status did not exist; it had already been put an end to by Ramchandrarao 's intimation to Narayanarao, of his intention to divide and separate.
If that be the true position, it was not open even to Ramchandrarao, much less to Narayanarao, to nullify the effect of the communication of the former 's intention which had resulted in severance of the joint status, by revoking or withdrawing that communication.
Ramchandrarao could not get back to the old position by mere revocation of the intention.
A coparcenary is purely a creature of Hindu Law; it cannot be created, or recreated after disruption, by the act of par ties, save in so far that by adoption a stranger may be introduced as a member thereof or in the case of reunion.
[See paragraphs 214 and 325 of Mulla 's Hindu Law and this Court 's decision in Puttorangama vs Ranganna; Bhagwan Dayal vs Mst.
Reoti Devi (supra).] There is hot evidence that after the severance of the joint family status, there was a reunion.
As before the High Court, here also, an argument was raised that the preliminary recital in the deed, exhibit 39, being qualified, furnishes little or no evidence for a finding that Ramchandrarao had declared and intimated in clear and unambiguous terms his intention to sever the joint family status.
176 We are unable to accept this argument.
It has to be borne in mind that this document has been let in evidence more than 70 years after its execution.
Narayanarao and Ramchandrarao and all others who might have given evidence with regard to the circumstances of this recital in particular, and the deed in general, are long deed and gone.
There is no dearth of authority for the proposition that in such a situation, it is permissible to draw reasonable inferences to fill the gaps or details obliterated by time.
[See Chintamanibhatia Vankat Reddy vs Rani of Wadhavan; Sree Sree Iswar Gopal Jien Thakur vs Pratapmal Bagaria.
The preliminary recital in the deed, therefore, assumes importance.
Read in the light of the surrounding circumstances and in the perspective that the 'Desgat ' land was partible coparcenary property of the two brothers, each of whom had an equal interest therein and an equal right to get his share divided and thereafter enjoy it in severalty, this recital establishes with a preponderance of probability, that sometime before the execution of the deed, exhibit 39, Ramachandrarao had communicated to his brother, in clear, unmistakable terms his intention not only to separate in residence and user and put an end to commonsality, but also to sever the unity of ownership and enjoy his share in severalty.
The result was division of the joint status.
Once it is found that the division of the joint status preceded the execution of the deed, exhibit 39, then the disposition made thereunder could only be a step towards the implementation of that division and in recognition of Ramchandrarao 's right to have his share, wholly or partly demarcated and specified for separate enjoyment as an absolute and exclusive owner thereof.
While giving the land measuring 118 or 120 acres to Ramchandrarao in recognition of the latter 's equal right in the Desgat, Narayanarao had no power to impose the futile condition that the land was being given to Ramchandrarao and his male lineal descendants for maintenance.
As already discussed, this insertion by the executant from an ulterior self serving motive was devoid of substance; it could not be attached any greater importance and realty than the phantasmic assumption, from which it was conjured up: a fortiori, when in the deed, exhibit 39, there is no stipulation that in the event of Ramchandrarao 's male line becoming extinct, the land would revert to the 'Desgat ', and Narayanarao or his descendants would have a right of re entry.
177 We are in agreement with the trial court that the expressions "Potgi" (maintenance) or "Nirwahkrit" in the deed cannot be construed as conferring an estate with restricted rights of 'ownership ', limited to the lifetime of Ramchandrarao and his linear male descendants.
The deed evidence a permanent transfer or allotment of about 118 or 120 acres of land to Ramchandrarao to be enjoyed from generation to generation to the entire exclusion of Narayanarao and his descendants.
In terms, Narayanarao did not reserve any right of reversion in favour of himself and his branch in any circumstances.
Irrigation rights also with regard to the land transferred or allotted under this deed, were divided.
It was further provided that from the date of the deed, payment of Joodi to the Government in respect of this land, shall also be the exclusive liability of Ramchandrarao and his descendants.
The inference that this land, measuring about 118 acres was given to Ramchandrarao in partial implementation of division of joint family status or partition, receives further confirmation from the following circumstances: (a) From the date of the deed, exhibit 39, till Ramchandrarao 's death in 1955, for a period of about 53 years, the lands disposed of by the deed, throughout remained in the full, exclusive and uninterrupted enjoyment of Ramchandrarao.
The relevant entries in the revenue records during this period, also, stand exclusively in his name as owner in possession thereof.
(b) After the abolition of Watans in 1951, Ramchandrarao alone applied for regrant of this land in his favour, under the Watan Abolition Act.
The plaintiffs were at all material times, admittedly aware that Ramchandrarao had applied for the regrant of this land exclusively in his favour, but they never objected, and tacitly assented to the same.
On the other hand, the plaintiffs applied and obtained regrant of the 'Desgat ' lands (other than those which were the subject of the deed, exhibit 39), in their favour to the exclusion of Ramchandrarao.
In the light of the above discussion, we are of opinion (i) that there was partition or division of the joint family status sometime prior to the execution of deed, exhibit 39, and (ii) that the disposition of about 118 or 120 acres made under that deed was, in substance an absolute allotment of that land to Ramchandrarao, towards implementation of that division or partition in recognition of the latter 's right to have his share demarcated by metes and bounds to be enjoyed exclusively in severalty.
Point No. 1 is thus found in favour of the appellant.
In view of the above finding that the suit property was the separate, divided 178 property of Ramchandrarao at the date of his death, and under the traditional Hindu Law, would go by succession to his daughter, the appellant herein, to the exclusion of the plaintiff collaterals, it is not necessary to decide Point No. 2 canvassed by the appellant.
In the result, for all the reasons aforesaid, we allow this appeal and dismiss the plaintiffs suit with costs throughout.
P.B.R. Appeal allowed.
| 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]
| 4049.txt |
ition No. 11222 of 1983.
(Under article 32 of the Constitution of India) Soli J. Sorabjee, Gopal Subramanyam, L. P. Agarwala, R. P. Singh, N. P. Agrwala and V. Shekher for the Petitioner.
F. section Nariman, Rathin Das for Respondent Nos. 1 & 2.
section N. Kacker, D. K. Sinha and J. R. Das for Respondent No. 3.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This is an application under article 32 of the Constitution of India.
Notice was issued and the respondents have filed counters and have made submissions on the application.
The petitioner is the lessee of the premises No. 7/1 A D Lindsay street, Calcutta which is situated in an important commercial locality of Calcutta.
The ground floor and mezzanine floor of premises No. 7/1 D, Lindsay Street, Calcutta were requisitioned by Government of West Bengal by order of requisition No. 21/58 Reqn.
dated 25th February, 1958 which was substituted by requisition order No. 123/60 Reqn.
dated 10th November, 1960 issued under the West Bengal Premises Requisition and Control (Temporary Provision) Act, 1947, hereinafter called the said Act for establishing main Sales showroom of respondent No. 4 herein which is the West Bengal Handicraft and development Corporation Limited (a West Bengal Government undertaking).
The area under requisition is 2521 sq.
ft on ground floor and 1677 sq.
on mezzanine floor aggregating to 4198 sq.
The rent compensation payable under the said Act was fixed by the Land Acquisition Collector, Calcutta on or about 31st March, 1959 at Rs. 1, 450 per month inclusive of taxes and repairs with effect from 10th June, 1958 which was ultimately modified to Rs. 2,500 per month by the High Court of Calcutta.
It is alleged on behalf 689 of the petitioner that in fixing the monthly compensation for acquisition by Land Acquisition Collector, the High Court in appeal took into consideration the rate prevailing in the year 1958, being the year in which the requisition took place.
A showroom of respondent No. 4 has been set up there.
The contention of the petitioner is that from the very beginning the State Government had the intention of keeping the said requisitioned premises permanently.
The petitioner contends that the State Government had ample power to acquire the said property under the Land Acquisition Act at the time of issue of order of requisition.
In spite of power to acquire the premises in question, the State Government resorted to requisition the same with the intention of permanently acquiring property in an indirect manner thereby the State Government has acted in improper exercise of powers and authority and has not exercised the power bonafide, alleges the petitioner.
The petitioner further alleges that the object is clearly to avoid the obligation to pay reasonable compensation for acquisition and instead thereof continue occupying the area by paying nominal monthly rent as compensation.
Therefore, according to the petitioner, the order of requisition has been passed for extraneous purpose and is arbitrary and malafide.
The petitioner also alleges that according to the present letting value prevailing in the market, the value would be over Rs. 43,668 approximately per month.
We are, however, in this application not concerned with that controversy.
The petitioner has submitted that requisition can be for temporary period and for a temporary purpose, and the State Government under the garb of requisition has really acquired the property and has avoided the obligation to pay compensation for acquiring the property which will be over Rs. 29 lakhs.
According to the petitioner, the West Bengal Act of 1947 which was intended to remain in force for a short temporary period does not contain any provision for revision of rent.
The said Act came into force on or about 1st January 1948.
The said Act contains no provision for acquisition of any property but deals solely with requisition of property for making temporary provision.
The said Act by various Acts has been renewed from time to time, the last of such renewal as per averments has been extended upto 31st March, 1985.
It is further the case of the petitioner that the said 690 Act cannot be converted into a permanent Act and there cannot be a permanent requisition.
According to the petitioner, by this process the property in question has been kept under requisition for 25 years.
This, it was submitted, is a fraud upon the power.
According to the petitioner, the State Government had the option of acquisitioning the property.
The State Government had also full knowledge that the possession of the said area was required for a permanent purpose or at least for an indefinite period i.e. for setting up a show room and in spite of the same did not choose to acquire the property but arbitrarily issued the order of requisition under the said Act.
Petitioner states a that he requires the premises in question to carry on his own business and the said right is being interfered with and therefore infringes upon petitioner 's fundamental right.
The petitioner contends that it violates both article 14 and article 19(1)(g) of the Constitution.
There are various allegations about damages being done to the premises in question.
We are not concerned in this application with the said allegations.
The petitioner prays for an order of derequisition of the premises.
On behalf of the respondents, the main contention is that the said Act has been renewed from time to time and there is no limitation to the power of requisition except that the same must be for public purpose.
According to the respondents, the purpose in this case is indubitably a public purpose and that public purpose remains.
The respondents contend that there is no limitation on the exercise of that power.
On behalf of the applicant, reliance was placed on the decision of this Court in H. D. Vora vs State of Maharashtra and Ors.
(Civil Appeal No. 1212 of 1984) judgment delivered by my learned brother Bhagwati to which I was a party.
There the question as was posed by Bhagwati, J. was whether an order of requisition of premises can be continued for an indefinite period of time or it must necessarily be of temporary duration.
The case discussed the other contention and repelled the attack on the order of requisition on the ground that the order of requisition did not set out the public purpose for which it was made.
It was noted by us in the 691 decision of H. D. Vora that the High Court had held that no material was placed before it to show what was the public purpose for which the order of requisition was made and in fact there was no denial on the part of the state government or the appellant of the averment made on behalf of the third respondent that the appellant in that case was neither a government servant nor a homeless person for whom the order of requisition was purported to have been made.
We found that the view taken by the High Court was well founded and it was not possible to hold on the material before us that the order of requisition was made for public purpose.
On behalf of the appellant, however it was contended that the order of requisition in that case was challenged after a lapse of over 30 years and as such that challenge was liable to be dismissed but this Court in Vora 's case relied on another ground namely, that an order of requisition was by its very nature temporary in character and could not endure for an indefinite period of time in the facts of that case, and the order of requisition in that case therefore ceased to be valid and effective after the expiration of a reasonable period of time and that it could not, under any circumstance, continue for a period o over 30 years.
Brother Bhagwati noted the difference recognised by law between "requisition" and "acquisition" and it was further stressed that where acquisition under Land Acquisition Act, 1894 was possible, the Government under guise of requisition could not continue to use the property under requisition for an indefinite period of time thereby in substance.
acquiring the property because that would be misuse by the Government of its powers.
It was observed in that case that if the Government wanted to take over the property for an indefinite period of time, the government should acquire the property but it could nor use the power of requisition for achieving that object.
In those circumstances it was observed that the power of requisition was exercisable by the government only for a public purpose which was of transitory character, if the public purpose for which the premises were required was a perennial one or of permanent character from the very inception, no order could be passed requisitioning the premises and in such a case the order of requisition if passed would be fraud upon the statute, for the government would be requisitioning the property when really speaking it wanted the property for acquisition, the object of taking the property being not transitory but permanent and in such circumstances it was held that an order of requisition for a period of such a long time as 30 years as it had happened in that case made the order of requisition 692 bad.
Relying mainly on the aforesaid basis and the facts alleged in this case, on behalf of the petitioner it was urged before us that the order of requisition was bad and arbitrary.
On behalf of the respondents, however, attention was drawn to a decision of this Court in the case of Collector of Akola and Ors.
vs Ramachandra & Ors a decision of a Bench of three learned judges, There, the land owned by the respondents was requisitioned under the Bombay Land Requisition Act for a public purpose viz,, for establishing a new village site to resettle victims of flood.
The respondents filed a writ petition in the High Court challenging the validity one extended until then upto 1963, the power to requisition thereunder would be with the government only during the time that it subsisted: so an order passed for a permanent purpose could not be in the contemplation of the Act.
The High Court accepted the objection and quashed the order.
It was held by this Court in appeal that the power of requisition under the Act could be exercised whether the public purpose was temporary or not and the exercise of that power for the purpose of rehabilitation of flood sufferers was neither in abuse of the power nor unjustified under the Act.
The words "for any public purpose" in Section 2(1) were wide enough to include any purpose of whatever nature and did not contain any restriction regarding the nature of that purpose.
It placed no limitation on the competent authority as to what kind of public purpose should be for the valid exercise of its power nor did it confine the exercise of that power to a purpose which was of temporary nature.
The Court observed that there was no antithesis between the power to requisition and the power of compulsory acquisition under Land Acquisition Act.
Neither of the two Acts contained any provisions under which it could be said that if one was acted upon, the other could not be.
In that case the facts were that the government made an order of requisition under temporary Act for rehabilitating the flood victims and also initiated proceedings under the Land Acquisition Act 1 of 1894 in respect of those very lands and issued a notification under Section 4 thereof.
It was contended that the action of the government was bad.
The only question which was argued in that case was whether an order of requisition could be made for a permanent purpose.
693 The order of requisition in that case was challenged on the ground that the purpose for which the order of requisition was made, namely rehabilitation of flood affected victims, was a permanent purpose and the order of requisition was therefore bad from its inception, since an order of requisition could be made only for a temporary purpose.
The argument of the petitioner who challenged the order of requisition was, inter alia, that the competent authority had no power to invoke the Land Requisition Act inasmuch as the purpose for which it was exercised was of a permanent character.
This argument appealed to the High Court and the High Court held that the order of requisition was "unjustified under the Bombay Land Requisition Act".
It was only this argument which was considered by this Court and this is how this Court formulated in that case the question for its decision: "The only question arising in this appeal thus is whether the Act authorises an order of requisitioning even if the purpose for which it is made is not a temporary purpose ?" This Court held that the only restriction imposed by the statute on the power of requisition conferred on the State Government was that this power could be exercised " Only for a purpose which is a public purpose" and "on the face of it the sub section does not contain any express limitation to the power to requisition, the only limitation being that an order thereunder can be passed for a public purpose only" and there is no implied limitation that the requisitioning authority has no power thereunder to pass an order where the purpose is not temporary".
This Court said that the premises requisitioned "may be used for a temporary purpose or for a purpose which is not temporary in nature", and added that the power of requisition is not" restricted to a temporary purpose only".
No question was raised before this Court in that case as to whether an order of requisition can continue for an indefinite duration.
The argument before this Court in H.D. Vora 's case was not that the order of requisition was initially bad, when made, on the ground that it was for a purpose which was a permanent purpose.
It fact, no one contended that the purpose of housing homeless person was not a temporary purpose but a permanent purpose and therefore the order of requisition was bad.
The principal argument advanced was that though the order of requisition was good when made, it ceased to be valid and effective, because it could not legitimately be continued for an indefinite length of time.
The order of requisition in that case had been allowed to continue for a period of almost 30 years and that is why this Court said that the order of requisition had ceased to be 694 valid and effective and the premises must therefore be derequisitioned.
It is no doubt true that some observations have been made in the judgment in that case with regard to the permanent or temporary character of the purpose for which an order of requisition could be made and to that extent what is said in that judgment may have to be slightly modified, but the principal decision in that case was that an order of requisition is by its very nature temporary in character and cannot be allowed to continue for an indefinite length of time, because then it would tantamount to an order of acquisition and would amount to a fraud on the exercise of the power of requisition, especially where there is no impediment in making the acquisition and no effort was made to acquire, must be regarded as a correct enunciation of the law which does not in any way conflict with what was laid down in the case of Collector of Akola vs Ramachandra (supra).
The latter decision merely laid down that an order of requisition can be made for a permanent purpose while the for mer dealt with a totally different question, namely, whether, whatever be the character of the purpose for which an order of requisition was made, the question was, could the order of requisition be continued for an indefinite length of time and it was held that the order of requisition would cease to be valid and effective after the expiration of a reasonable period of time, even if it was valid when made, and what, in the circumstances of a given case would be a reasonable period of time would depend on the facts and circumstances of the case.
There is therefore no contradiction between the decision in Collector of Akola vs Ramachandra and the latter decision in H.D. Vora 's case.
It may not be inappropriate to note that there are significant differences between 'requisition ' and 'acquisition '.
These have different legal consequences and these affect the owners concerned in different manners.
But the State has the power both of requisition as well as acquisition, subject to one condition, i.e., the property acquired or requisitioned must be for public purpose.
In the "Words and Phrases Judicially Defined" by Roland Burrows K.C. Vol.
4 at p. 562, it was observed that the word 'requisition ' was not a term of art and does not cannot the same state of things in every particular case.
In the Fourth Edition of Stroud 's Judicial Dictionary at page 2355, it has been mentioned that 'requisition ' is as follows: 695 "Requisitioning ' is not a term of art and has different meanings.
Its usual meaning is nothing more than hiring without taking the property out of the owner although the owner has no alternative whether he will accept the proposition of hiring or not.
It may, however, involve the taking over of the actual domination of a chattel (The Steaua Romana (1944) P.43).
"Requisitioned house"; "requisitioned land" Stat.
Def., Requisitioned Houses and Housing (Amendment) Act 1955 (c.24), section 18 (1).
" In the case of Mangilal Karwa vs State of Madhya Pradesh, it was observed as follows: "If the term 'requisition ' has acquired any technical meaning during the two World Wars it has been used in for the sense of taking possession of property for the purpose of the State or for such purposes as may be specified in the statute authorizing a public servant to take possession of private property for a specified purpose for a limited period in contradistinction to acquisition of property by which title to the property gets transferred from the individual to the State or to a public body for whose benefit the property is acquired.
In 'requisition ' the property dealt with is not acquired by the State but is taken out of the control of the owner for the time being for certain specified purposes.
Even for this limited purpose, however, the owner becomes entitled to compensation, because 'requisition ' of the property amounts at least to a temporary deprivation of the property." Thus, normally the expression 'requisition ' is taking possession of the property for a limited period in contradistinction to 'acquisition '.
This popular meaning has to be kept in mind in judging whether in a particular case, there has been in fact any abuse of the power.
Orders of requisition and acquisition have different consequences.
These have been noted by this Court in the observations of Mukherjea, 696 J. in the decision in the case in Chiranjit Lal Chowdhury vs The Union of India and Others and the distinction between 'requisition ' and 'acquisition ' is also evident from Entry 42 in List III of the Seventh Schedule.
Original Article 31 clause (2) of the Constitution recognised the distinction between 'compulsory acquisition ' and 'requisition ' of the property.
The two concepts are different: in one title passes to the acquiring authority, in the other title remains with the owner, the possession goes to the requiring authority.
One is the taking over of the title and the other is the taking over of the possession.
It was further contended on behalf of the respondents that part of the premises i.e. one room as in the instant case before us, cannot be acquired.
Therefore the ratio of the decision in the case of H. D. Vora would not be applicable because there was no power to acquire the premises in question.
Secondly, it was urged that the petitioner in the instant case was not the owner of the property at all and the question of acquisition of the requisitioned premises does not arise at all.
It was, thirdly, contended that it was not possible in the facts and circumstances of the case to get any other alternative accommodation for the showroom of the State Handicraft and Development Corporation which indisputably is a public purpose.
It was emphasised that the West Bengal Premises Requisition and Control (Temporary Provision) Act, 1947 does not contain any power to acquire the premises in question.
The main thrust of the argument was that section 49 (1) of the Land Acquisition Act, 1894 provides: "The provisions of this Act shall not be put in force for the purpose of acquiring a part only of any house, manufactory or other building, if the owner desire that the whole of such house, manufactory or building shall be so acquired." In other words it was urged that this provision almost prevents the acquisition of a part of a house or building.
It may be pointed out that section 49 (1) of the Act has been amended so far as West Bengal is concerned by the West Bengal of 1955 with effect from 20.10.1955 and the amended section 49 (1) so far as Calcutta is concerned runs thus: "Section 49 (1): The provisions of this Act shall not be put in force for the purpose of acquiring the part only of any house, manufactory or other building, if the acquisition of the part will render the full and unimpaired use of the remaining portion of the house, manufactory or building impracticable.
Provided that, if any question shall arise as to whether the part proposed to be acquired will render the full and unimpaired use of the remaining portion of the house, manufactory or building impracticable, the Collector shall refer the determination of such question to the court and shall not take possession of such part until after the question has been determined.
In deciding on such a reference the Court shall have regard only to the question whether the land proposed to be taken is reasonably required for the full and unimpaired use of the remaining portion of the house, manufactory or building.
" The aforesaid provision suggests that even a part of a building or a house can be acquired provided the conditions mentioned and the procedure specified therein are followed and there is no absolute bar to the acquisition of a part of a house or a building as suggested by the counsel for the respondents.
In view of the decision in the case of H. D. Vora in the light of the decision of this court rendered by Bench of three Judges in Collector, Akola and Ors.
vs Ramachandra and Ors.
(supra) and bearing in mind the distinction between 'requisition ' and 'acquisition ' as also the provisions of West Bengal amended section 49 (1) (quoted above), the correct position in law would be that it will not be correct to say that in no case can an order of requisition for permanent purpose be made but in a situation where the purpose of requisitioning the property is of a permanent character and where the Government has also the power and the opportunity to acquire the property or a part thereof especially upon the fulfil 698 ment of the conditions of section 49 (1) of the Land Acquisition Act (as amended by the West Bengal Act) to the extent applicable, if the Government chooses not to exercise that power nor attempts to exercise that power to achieve its purpose, then that will be bad not because the Government would be acting without power of requisition but the Government might be acting in a bad faith.
In other words, if there is power to acquire as also the power to requisition and the purpose is of permanent nature by having the property or a part thereof for the Government then in such case to keep the property under requisition permanently might be an abuse of the power and a colourable exercise of the power not because the a Government lacks the power of requisition but because the Government does not use the other power of acquisition which will protect the rights and interests of the parties better.
Where one is repository of two powers that is power of requisition as well as power of acquisition qua the same property and if the purpose can equally be served by one which causes lesser inconvenience and damage to the citizen concerned unless the repository of both the powers suffers from any insurmountable disability, user of one which is disadvantageous to the citizen without exploring the use of the other would be bad not on the ground that the Government has no power but on the ground that it will be a misuse of the power in law.
It is true that the purpose indisputably in the instant case is a public purpose.
It is also true that the only part of the building namely one room has been requisitioned for the show room but the premises in question has remained under requisition for over 25 years and the purpose of having the premises in question is of a permanent and perennial nature.
But that by itself without anything more would not enable the court to draw the inference that the exercise of the power was bad initially, nor would the continuance of the requisition become mala fide or colourable by mere lapse of time.
In order to draw such an inference some more material ought to have been placed before the court.
In the circumstances after having heard counsel on either side fully we feel that the following would be an appropriate order to be made in the instant case: 1.
The impugned requisition order is upheld but the continu 699 ance of the requisition of the premises in question is permitted subject to the conditions mentioned hereinafter.
The Government is directed to take steps to acquire premises in question by complying with the conditions mentioned and by following the procedure prescribed in section 49 (1) of the Land Acquisition Act, 1894 as substituted for the State of West Bengal by the West Bengal Act 32 of 1955 and if possible issue an appropriate order acquiring the same if Government wants the continued use of the premises.
Such steps should be completed within a period of three years from today.
If, however, there are insurmountable difficulties in acquiring the premises under section 49 (1), the Government will be at liberty to apply to this court for appropriate directions.
We also hope that the Government would take steps to acquire any alternative property or premises under Land Acquisition Act, 1894 in view of the fact that the purpose of the Government is more or less permanent and such steps should also be taken not beyond a period of three years as aforesaid.
If the aforesaid conditions or directions are not complied with, the petitioner will also be at liberty to apply to this court for appropriate directions in accordance with law.
In the meantime, the parties are at liberty to make any appropriate application for the enhancement of rent or compensation in accordance with law, if they are so entitled to, and this will also not prejudice the parties from proceeding with any suit for damages etc.
that may be pending.
The parties will pay and bear their own costs.
The application is disposed of accordingly.
CIVIL ORIGINAL JURISDICTION: Review Petition No. 641 of 1984.
Order in Writ Petition No. 11222 of 1983.
dated 15th April 1985 Since it has been brought to our notice (which should have been done when the matter was heard) that the West Bengal Act 32 of 1955 is not applicable to the facts of the case, we direct that any reference to that Act wherever it occurs shall be deleted and in particular, in para 2 of the order portion of our Judgment we delete the words "as substituted for the State of West Bengal by the West Bengal Act of 1955".
The rest of the order stands.
The Review Petition is disposed of accordingly.
S.R. Appeal dismissed.
| The petitioner is the lessee of the premises No. 7/1A D, Lindsay Street, Calcutta which is situated in an important commercial locality of Calcutta.
The ground floor and mezzanine floor of the said premises were requisitioned by Government for establishing main Sales Show room of respondent No. 4, namely west Bengal Handicrafts and Development Corporation Ltd., by an order of requisition No. 21/58 Regn.
dated 25.2.1958 under the West Bengal Premises Requisition and Control (Temporary Provision) Act 1947.
Though this Act itself is a temporary Act, this has been renewed from time to time, the last one renewing it upto 31st March, 1985.
Aggrieved by the piece meal extension of the 1947 Act and the requisitioning of his premises since 1985, the petitioner challenged the same by a petition under Article 32 of the Constitution and contended that (a) the West Bengal premises Requisition Control (Temporary Provision) Act 1947 cannot be converted into permanent Act and therefore requisition of his premises cannot be a permanent requisition ; (b) Requisitioning the property in this manner for more than 25 years amounts to indirect acquisition of the property and is a fraud upon the power; and (c) It violates both Articles 14 and 19 (1) (g) of the Constitution, since the petitioner who himself requires the premises for his own business is prevented from using.
Disposing of the petition, the Court ^ HELD: 1.
There are significant differences between 'requisition ' and 'acquisition '.
Normally the expression requisition is taking possession of the property for a limited period in contradistinction to acquisition.
This popular meaning has to be kept in mind in judging whether in a particular case there has been in fact any abuse of the power.
The distinction between 'requisition ' and 'acquisition ' is also evident from Entry 42 in List III of the Seventh Schedule, Original Article 31 clause (2) of the Constitution recognised the distinction between compulsory acquisition and requisition of the property.
The two 687 concepts are different; in one title passes to the acquiring authority, in the other title remains with the owner, the possession goes to the requiring authority.
One is the taking over of the title and the other is the taking over of the possession.
Thus the orders of requisition and acquisition have different consequences and affect the owners concerned in different manners.
But the State has the power both of requisition as well as acquisition, subject to one condition that is the property acquired or requisitioned must be for public purpose; Mangilal Karwa vs State of Madhya Pradesh, AIR 1955 Nagpur p. 153 at p. 157 approved, Chiranjit Lal Chowdhury vs The Union of India and others [1950] I SCR p. 869 referred to.
[695H; G; 696A B] 2.
Under Section 49 (1) of the Land Acquisition Act, 1942 as amended by the West Bengal Act 32 of 1955, even a part of the building or a house can be acquired provided the conditions mentioned and the procedure specified therein are followed and there is no absolute bar to the acquisition of a part of a house or a building.
[697F] 3:1 It will not be correct to say that in no case can an order of requisition for permanent purpose be made but in a situation where the purpose of requisitioning the property is of a permanent character and where the Government has also the power and the opportunity to acquire the property or a part thereof especially upon the fulfilment of the conditions of section 49 (1) of the Land Acquisition Act (as amended by the West Bengal Act) to the extent applicable, if the Government chooses not to exercise that power nor attempts to exercise that power to achieve its purpose, than that will be bad not because the Government would be acting without power of requisition but the Government might be acting in a bad faith.
In other words, if there is power to acquire as also the power of requisition and the purpose is of permanent nature by having the property or a part thereof for the Government then in such case to keep the property under requisition permanently might be an abuse of the power and a colourable exercise of the power not because the Government lacks the power of requisition but because the Government does not use the other power of acquisition which will protect the rights and interests of the parties better.
[697H; 698A C] 3:2 Where one is repository of two powers that is power of requisition as well as power of acquisition qua the same property and if the purpose can equally be served by one which causes lesser inconvenience and damage to the citizen concerned unless the repository of both the powers suffers from any insurmountable disability, user of one which is disadvantageous to the citizen without exploring the use of the other would be bad not on the ground that the Government has no power but on the ground that it will be a misuse of the power in law.
[698D E] 3:3 In the instant case, it is indisputably true that (a) The purpose of requisition is a public purpose; and (b) That the only part of the building namely one room has been requisitioned for the show room but the premises in question has remained under requisition for over 25 years and the purpose of having the premises in question is of a permanent and perennial nature.
But that by itself without anything more would not enable the court to draw 688 the inference that the exercise of the power was bad initially nor, would be continuance of the requisition became malafide or colourable by mere lapse of time.
In order to draw such an inference some more material ought to have been placed before the Court.
In the circumstances the continuance of the requisitioning of the premises in question must be permitted subject to fulfilment of the conditions mentioned.
[698H F]
| 4853.txt |
Appeal No. 216 of 1956.
Appeal by special leave from the judgment and decree dated August 28, 1950, of the Punjab High Court in Civil Regular First Appeal No. 343 of 1944.
L.K. Jha, K. P. Bhandari and Harbans Singh, for the appellants.
Darya Datt Chawla for respondent Nos.
1(i) to (iii).
February 9.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
This appeal by special leave arises from a partition suit filed by Baij Nath against his other coparceners.
Baij Nath is the son of Behari Lal and he had four brothers Kidar Nath, Raghunath Sahai, Jagan Nath and Badri Nath.
Kidar Nath was dead at the time of the suit, and his branch was represented by his five sons Ghansham Lal, Shri Ram, Hari Ram, Tirath Ram and Murari Lal, who were impleaded as defendants 1 to 5 respectively.
On the death of Ghansham Lal pending the Suit his two minor sons Jai Pal and Chandar Mohan were brought on the record as his legal representatives and their mother Mst.
Kaushalya was appointed guardian ad item.
The two minors are the appellants before us.
Chuni Lal, the son of Raghunath Sahai was defendant 6, Bal Kishan and Hari Kishan the two sons of Jagan Nath were defendants 7 and 8, and Badri Nath was defend.
ant 9.
Baij Nath 's case was that the family was undivided and he wanted a partition of his share in the family properties, and so in his plaint he claimed appropriate reliefs in that behalf.
The several defendants made out pleas in respect of the claims made by Baij Nath, but for the purpose of this appeal it is unnecessary to refer to the said pleas.
The suit wail instituted on Juno 11, 1941, 771 It appears that by consent of parties a preliminary decree was drawn by the trial court on October 30, 1941, but the validity of this decree was successfully challenged by an appeal to the Lahore High Court.
It was held by the High Court that all parties had not joined in the compromise and so the preliminary decree could not be sustained.
In the result the said decree was set aside and the case was remanded for trial.
It further appears that after remand parties again came together and by consent requested the court to pass a preliminary decree once again.
This was done on October 15, 1943.
This preliminary decree specified the shares of the respective parties and left three outstanding issues to be determined by Chuni Lal, defendant 6, who it was agreed should be appointed Commissioner in that behalf.
Pursuant to this preliminary decree the Commissioner submitted his interim report on November 19,1943, and his final report on November 29, 1943.
On receipt of the reports the trial court gave time to the parties to consider the said report which had been explained to them.
Parties wanted time and so the case was adjourned.
Since the property in dispute was valuable and the parties were unable to make up their minds about the said reports further time was granted to them by the court to consider the matter.
Ultimately, when parties did not appear to come to any settlement about the reports the case was adjourned to December 17, 1943, for objections to be filed by the parties.
Tirath Ram, defend ant 4 alone filed objections; nobody else did.
The said objections were considered by the court in the light of the evidence which had been led and a final decree was drawn on June 21, 1944.
Against this decree an appeal was preferred by the appellants before the High Court of Punjab, and it was urged on their behalf that the preliminary decree was invalid in that at the time of passing the said decree the court had failed to comply with the mandatory provisions of 0. 32, r. 7 of the Code of Civil Procedure.
The High Court did not allow the appellants to raise, this point because it held that their 99 772 failure to make an appeal against the preliminary decree precluded them from challenging its correctness or validity under section 97 of the Code.
Certain other minor objections were raised by the appellants on the merits but they were also rejected.
In the result the appeal failed and was dismissed, but in view of the circumstances of the case the parties were directed to bear their own costs.
It is this decree that is challenged by the appellants in their present appeal by special leave; and the only point which has been urged by Mr. Jha on their behalf is that the High Court was in error in disallowing the appellants to challenge the validity of the preliminary decree in their appeal before it.
Mr. Jha contends that in dealing with the question about the competence of the plea raised by the appellants the High Court has misjudged the effect of the provisions of 0. 32, r. 7.
It is common ground that at the time when the preliminary decree was passed by consent and the appellants ' guardian Kaushalya Devi agreed to the passing of such a preliminary decree and to the appointment of Chuni Lal as Commissioner the appellants were minors and that leave had not been obtained as required by 0. 32, r. 7.
Order 32, r. 7(1) provides that no next friend or guardian for the suit shall without the leave of the court expressly recorded in the proceedings enter into any agreement or compromise on behalf of the minor with reference to the suit in which he acts as next friend or guardian.
It is also not disputed that the agreement which resulted in the drawing up of the preliminary decree and the appointment of Chuni Lal as Commissioner fell within the scope of this rule and that sanction required by the rule had not been recorded in the proceedings.
The argument is that the failure to comply with this mandatory provision of the rule makes the agreement and the preliminary decree void, and if that is so section 97 of the Code of Civil Procedure would be no bar in the way of the appellants challenging the validity of the decree at the appellate stage.
The effect of the failure to comply with 0. 32, r. 7(1) is specifically provided by 0, 32, r. 7(2) which says 773 that any such agreement or compromise entered into without the leave of the court so recorded shall be voidable against all parties other than the minor.
Mr. Jha reads this provision as meaning that the impugned agreement is voidable against the parties to it who are major and is void in respect of the minor; in other words, he contends that the effect of this provision is that the major parties to it can avoid it and the minor need not avoid it at all because it is a nullity so far as he is concerned.
In our opinion this contention is clearly inconsistent with the plain meaning of the rule.
What the rule really means is that the impugned agreement can be avoided by the minor against the parties who are major, and that it cannot be avoided by the parties who are major against the minor.
It is voidable and not void.
It is voidable at the instance of the minor and not at the instance of any other party.
It is voidable against the parties that are major but not against a minor.
This provision has been made for the protection of minors, and it means nothing more than this that the failure to comply with the requirements of 0. 32, r. 7(1) will entitle a minor to avoid the agreement and its consequences.
If he avoids the said agreement it would be set aside but in no case can the infirmity in the agreement be used by other parties for the purpose of avoiding it in their own interest.
The protection of the minors ' interest requires that he should be given liberty to avoid it.
No such consideration arises in respect of the other parties to the agreement and they can make no grievance or complaint against the agreement on the ground that it has not complied with 0. 32, r. 7(1).
The non observance of the condition laid down by r. 1 does not make the agreement or decree void for it does not affect the jurisdiction of the court at all.
The non observance of the said condition makes the agreement or decree only voidable at the instance of the minor.
That, in our opinion, is the effect of the provision of 0. 32, r. 7(1) and (2).
The question as to the procedure which the minor should adopt in avoiding such an agreement or decree has been the subject matter of several decisions, and 774 it has been held that a compromise decree may be avoided by the minor either by a regular suit or by an application for review by the court which passed the said decree.
The decision in Manohar Lal vs Jadu Nath Singh (1), is an illustration of a suit filed by the minor for declaration that the impugned decree did not bind him.
It is, however, not necessary for us to deal with this aspect of the matter in the present appeal any further.
In support of his argument that the failure to comply with the requirements of 0. 32, r. 7(1) makes the decree a nullity Mr. Jha has very strongly relied on the decision of the Privy Council in Chhabba Lal vs Kallu Lal (2).
In that case an objection to the validity of a reference to arbitration was taken by a party in an appeal against the decree passed on an award; and one of the points raised for the decision before the Privy Council was whether an appeal lay against the decree in question.
Under Schedule 2, paragraph 16(2) of the Code which was then in force it was provided that upon the judgment pronounced according to the award a decree shall follow and no appeal shall lie from such decree except in so far as it is in excess of or not in accordance with the award.
The argument urged against the competence of the appeal was that the objection against the validity of the reference and the award could and should have been raised under paragraph 15(1)(c) of the said Sche dule, and since such an objection had not been so raised and a decree was drawn in accordance with the award under paragraph 16, r. 1 no contention could be raised against the validity of the decree outside the terms of paragraph 16(2).
This argument was repelled by the Privy Council.
It was held that the objection against the validity of the reference based on the ground that the requirements of 0. 32, r. 7(1) had not been complied with did not fall within the purview of paragraph 15(1)(c).
The said paragraph specified the grounds on which an award could be challenged.
It provided that the award could be set aside if it was made after the issue of an order by the (1) (1906) L.R. 33 I A. 128.
(2) (1946) L.R. 73 I.A. 52.
775 court superseding arbitration and proceeding with the suit or if it was made after the expiration of the period allowed by the court, or if it was otherwise invalid.
It is on the last clause in paragraph 15(1)(c) that reliance was placed in support of the contention that the challenge to the validity of the reference should have been made under the said clause.
The Privy Council did not uphold this argument.
" In their opinion," observed Sir John Beaumont, who spoke for the Board, " all the powers conferred on the court in relation to an award on a reference made in a suit presuppose a valid reference on which an award has been made which may be open to question.
If there is no valid reference the purported award is a nullity, and can be challenged in any appropriate proceeding.
" It is on this last observation that Mr. Jha has naturally relied; but, in our opinion, the observation in question does not purport to be a decision on the interpretation of 0. 32, r. 7(2).
The context shows that the said observation was made in support of the decision that the challenge to the validity of the arbitration and the award could not have been made under paragraph 15(1)(c) and nothing more.
We are not prepared to extend this observation to cases like the present where the point in dispute is in regard to the interpretation of 0. 32, r. 7.
It is significant that while describing the award as a nullity the Privy Council has also added that it can be challenged in any appropriate proceeding which postulates the adoption of necessary proceedings to avoid the award.
The point for consideration by the Privy Council was whether a proceeding under paragraph 15(1)(c) was indicated or whether an appeal could be regarded as an appropriate proceeding; but it was assumed that a proceeding had to be adopted to challenge the award.
The decision of the Privy Council was that the validity of the award could be challenged by an appeal because it could not have been challenged under paragraph 15(1)(c).
Since it could not be challenged under paragraph 15(1)(c), according to the Privy Council paragraph 16(2) could not be invoked against the competence of the appeal.
It is unnecessary 776 for us to examine the merits of the said decision in the present appeal.
All that we are concerned to point out is that the observation in the judgment on which Mr. Jha relies cannot be treated as a decision on the interpretation of 0. 32, r. 7(2).
That question did not directly arise before the Privy Council and should not be treated as concluded by the observation in question.
As we have already pointed out, the words used in 0. 32, r. 7(2) are plain and unambiguous and they do not lend any support to the argument that non compliance with 0. 32, r. 7(1) would make the impugned decree a nullity.
Mr. Jha has also relied upon another decision of the Privy Council in Jamna Bai vs Vasanta Rao (1).
In that case two defendants of whom one was a minor compromised a suit pending against them, and in doing so entered into a bond by which they jointly agreed to pay a certain sum to the plaintiff at a future date.
The leave of the court was Dot obtained on behalf of the minor as required by section 462 of the Code of Civil Procedure, 1882, which was then in force.
When a claim was made on the said bond it was held that the bond was not enforceable against the minor but it was enforceable for the full amount against the joint contractor.
We do not see how this case assists the appellants.
It appears that Jamna Bai who was the joint contractor on the bond advanced the plea that one of the two promisers can plead the minority and consequent immunity of the other as a bar to the promise 's claim against him.
This plea was rejected by the Privy Council, and that would show that the bond which was executed in pursuance of a compro mise agreement was not treated as null and void but as being unenforceable against the minor ' alone.
In ,that connection the Privy Council observed that the minor 's liability could not be enforced in view of the fact that the requirements of section 462 of the Code had not been complied with.
Indeed, in the judgment an observation has been made that the Privy Council was not expressing any opinion as to whether the bond could be enforceable against a minor even if section 462 had (1) (1916) L.R.43 I.A.99. 777 been complied with.
Thus this decision is of no assistance to the appellants.
Similarly, the decision of the Privy Council in Khiarajmal vs Daim (1), can also be of no help to the appellants, because in that case all that the Privy Council decided was that a court has no jurisdiction to sell an equity of redemption unless the mortgagors are parties to the decree or the proceedings which lead to it, or are properly represented on the record.
In other words, if a minor is not properly represented on the record no order passed in the proceedings can bind him.
We are unable to see how this proposition has any relevance to the point which we are called upon to decide in the present appeal.
If the preliminary decree passed in the present proceedings without Complying with the provisions of 0.32, r. 7(1) is not a nullity but is only voidable at the instance of the appellants, the question is: can they seek to avoid it by preferring an appeal against the final decree ? It is in dealing with this point that the bar of section 97 of the Code is urged against the appellants.
Section 97, which has been added in the Code of Civil Procedure, 1908, for the first time provides that where any party aggrieved by a preliminary decree passed after the commencement of the Code does not appeal from such decree he shall be precluded from disputing its correctness in any appeal which may be preferred from the final decree.
It is urged for the appellants that an appeal is a continuation of the suit and so the appellants would be entitled to challenge the impugned preliminary decree as much by an application made in the suit itself as by an appeal preferred against the final decree passed in the said suit.
It is true that the proceedings in appeal can be regarded as a continuation of the proceedings in suit; but the decision of the question as to whether the appellants can challenge the said preliminary decree in their appeal against the final decree must in the present case be governed by the provisions of section 97 of the Code.
The whole object of enacting section 97 was to make it clear that any party (1) (1904) L.R. 32 I.A. 23. 778 feeling aggrieved by a preliminary decree must appeal against that decree; if he fails to appeal against such a decree the correctness of such a decree cannot be challenged by way of an appeal against the final decree, which means that the preliminary decree would be taken to have been correctly passed.
When section 97 provides that the correctness of the preliminary decree cannot be challenged if no appeal is preferred against it, it clearly provides that if it is not challenged in appeal it would be treated as correct and binding on the parties.
In such a case an appeal against the final decree would inevitably be limited to the points arising from proceedings taken subsequent to the preliminary decree and the same would be dealt with on the basis that the preliminary decree was correct and is beyond challenge.
It would be idle to contend that what is prohibited is a challenge to the factual correctness of the decree on the merits, because if the said decree is voidable, as in the present case, the very point as to its voidable character is a part of the merits of the dispute between the parties.
Whether or not 0. 32, r. 7(1) applies to the case would certainly be a matter of dispute in such a case and the object of section 97 is precisely to disallow any such dispute being raised if the preliminary decree is not challenged by appeal.
The whole object which section 97 intends to achieve would be frustrated if it is held that only the factual correctness of the decree cannot be challenged but its legal validity can be even though an appeal against the preliminary decree has not been filed.
Therefore, in our opinion, the High Court was right in coming to the conclusion that it was not open to the appellants to challenge the validity of the preliminary decree in the appeal which they had preferred against the final decree before the said High Court.
| Order 32, r. 7(2) of the Code of Civil Procedure, which is intended to protect the interest of the minor, really means that an agreement or compromise entered into on behalf of the minor in contravention of 0. 32, r. 7(1) is voidable only at the instance of the minor and not at the instance of any other party to it.
Such contravention does not render the agreement or decree a nullity and the same has to be avoided in an appropriate proceeding.
Manohar Lal vs jadu Nath Singh (1906) L.R. 33 I.A. 128, referred to.
Chhabba Lal vs Kallu Lal (1946) L.R. 73 I.A. 52, jamna Bai vs Vasanta Rao (1916) L.R. 43 I.A. 99 and Khiarajmal vs Daim (1904) L.R. 32 I.A. 23, held inapplicable.
Where a preliminary decree is passed in non compliance with the provision of 0. 32, r. 7(1), the remedy of the minor is by way of an appeal against that decree and not against the final decree since section 97 of the Code is a bar to the challenging of the preliminary decree in an appeal against the final decree.
Consequently, in a suit for the partition where preliminary decree by consent was passed against the minor in contravention of 0. 32, r. 7(i) and that decree having been sought to be set aside in an appeal from the final decree the High Court held that section 97 of the Code precluded the appellant from doing so.
Held, that the decision of the High Court was correct and must be ashamed, 770 Held, further, that the object section 97 of the Code was intended to achieve would be wholly frustrated if it were to be held that the section merely prohibited a challenge to the factual correctness of the decree and not its legal validity.
| 1129.txt |
Appeal No. 490 of 1965.
Appeal from the judgment and decree dated April 30, 1964 of the Gujarat High Court in Special Civil Application No. 39 of 1963.
section T. Desai, P. B. Patwari, and O. C. Mathur, for the appellants.
Respondent No. 2 appeared in person.
H. R. Gokhale, section P. Nayyar for R. H. Dhebar, for respondent No. 3.
The Judgment of the Court, was delivered by Bhargava, J.
The appellants in this appeal are the Ahmedabad Mill owners Association, of which all the cotton mills in Ahmedabad local area are members, including the second appellant, the Nagd Mills Ltd. The third respondent, the Textile Labour Association, Bhadra, Ahmedabad (hereinafter referred to as "the Union") represents the workmen employed in the various mills which are members of the first appellant Association.
Under Standing Orders ,Settled under the Bombay Industrial Relations Act, 1946 (Bombay Act XI of 1947) (hereinafter referred to as "the Act"), conditions of service, including those relating to leave, were prescribed in view of clause 6 of Schedule 1 of the Act.
These Standing Orders were settled at a time when this clause 6 of the First Schedule to the Act read as follows: "Conditions, Procedure and Authority to grant leave." Subsequently, Schedule 1 was amended so as to read as: "Procedure and authority to grant leave," and simultaneously, clause 11 was added in Schedule 11 which read as: "All matters pertaining to leave and holidays, other than those specified in items 6 and 7 in Schedule 1.
" Consequent to this amendment in the Schedules, matters pertaining to leave could, thereafter, no longer be prescribed by Standing Orders, which were confined to matters contained in Schedule Iorly.
By a letter dated 21st April,, 1961, the Union gave notice to the first appellant, desiring that changes be made as specified in the Annexure to this letter.
Those changes sought in the Annexure related to grant of privilege leave, sick leave, casual leave, and pay in lieu of privilege leave to all workers employed in the local textile industry in the same manner in which, under the earlier Standing 439 Orders, the clerical and some other staff were granted these benefits.
This notice was given by the Union under section 42(2) of the Act.
The dispute was not amicably settled, and consequently, the matter was referred for conciliation.
The conciliation proceedings also failed, and, thereupon, the Conciliator, on 23rd June, 1961, issued a certificate that he had come to the conclusion from the discussions which the parties had before him that the dispute ' was not capable of being settled by conciliation.
Thereupon, by the letter dated 29th July, 1961, the Union referred the dispute to the Industrial Court under section 73A of the Act.
Before the Industrial Court, various pleas were taken on behalf of the appellants, and some of these pleas were the subject matter of preliminary issues which were decided before the Industrial Court could proceed to give the final Award.
Though a number of such preliminary issues were decided by the Industrial Court, we are only concerned with two such issues, as they were the only two matters pressed before us on behalf of the appellants in this appeal.
One issue raised was that section 73A of the Act was ultra vires Article 14 of the Constitution as it granted a right to the Union to make a reference to the Industrial Court, while no such right was granted to the employers.
The second point urged was that the Act did not apply to the cotton mills which were members of the first appellant Association, because it had not been made applicable to them under section 2(4) of the Act, while it could not become applicable to them under section 2(3) of the Act, because the Bombay Industrial Disputes Act, 1938, was not in force in these industries immediately before the commencement of the Act.
Both these points were decided by the Industrial Court against the appellants.
Consequently, the appellants moved a petition under Articles 226 and 227 of the Constitution in the High Court of Gujarat.
The High Court rejected these preliminary pleas raised on behalf of the appellants and upheld the view of the Industrial Court that the reference was competent.
The appellants have now come up to this Court under certificate granted by the High Court against this order of the High Court.
As we have mentioned earlier, the appellants had raised a number of pleas which were the subject matter of preliminary issues before the Industrial Court and several ' of them were the subject matter of the petition before the High Court also.
In this Court, however, reliance has been placed only on the two pleas, mentioned above.
The first plea is based on the language of section 73A of the Act which, on the face of it, grants the right to a Union only to make a reference of an industrial dispute for arbitration to the Industrial Court and does not grant any such right to an employer.
It was, however, urged on behalf of the respondents that, in fact, this section was introduced in the Act for the very purpose of placing the employers and the Union on terms of equality, and that, instead of creating any discrimination between them, this section, on the 440 contrary, was necessary to satisfy the requirements of article 14 of the Constitution.
To appreciate this submission made on behalf of the respon dents, certain features of the Act have to be examined and their implication taken into account.
Section 73A grants a right of making a reference of an industrial dispute for arbitration to the Industrial Court only to "a registered union which is a representative of employees and which is also an approved union.
" Further, under the proviso to that section, the reference cannot be made if the employer offers in writing before the Conciliator to submit the dispute to arbitration under the Act and the Union refuses to agree to it.
Two other conditions attached are that the dispute must first be submitted to the Conciliator and can be referred for arbitration to the Industrial Court only when the Conciliator certifies that the dispute is not capable of being settled by conciliation, and that no such dispute is to be referred if, under any provisions of the Act, it is required to be referred to the Labour Court for its decision.
It is the effect of all these detailed provisions, laying down limitations for reference under section 73A, that requires examination.
Under section 12 of the Act, the Registrar has to maintain registers of unions registered by him and a list of approved unions.
A Union is entitled to registration only if, during the whole of the period of three calendar months immediately preceding the calendar month in which it so applies, the membership of the Union has been not less than 15 per cent of the total number of employees employed in the industry, when it can be registered as a Representative Union.
In case there is no such Representative Union, a Union can be also registered either as a Qualified Union or as a Primary Union.
But it is clear from the language of section 73A that only a Representative Union has been given the right under that section.
Further, section 73A requires that the Union must also be an approved Union, which means that the Union must comply with the requirements of section 23 of the Act and have its name entered in the approved list.
Amongst the conditions required to be complied with by a Union to be brought.
on the, approved list, the most important is one which lays down that its rules must provide that every industrial dispute, in which a settlement is not reached by conciliation, shall be offered to be submitted to arbitration, and that arbitration under Chapter XI shall not be refused by it in any dispute.
It will thus be seen that the right of making reference under section 73A is only granted to a Union which is registered as a Representative Union and, being on approved list, has already made rules laying down that the Union shall offer every industrial dispute for submission to arbitration and will also not refuse arbitration of any dispute if the employers offer to submit the dispute for arbitration under Chapter XI of the Act.
Section 66 makes provision for submission of an industrial dispute for arbitration.
Sub section
(1) of that section gives the power to make a 441 reference to any person chosen by agreement by the disputing parties, while sub s ' (2) gives the option that the submission of the dispute may be made to the arbitration of a Labour Court or the Industrial Court.
Further, sub section
(5) of section 58 requires that before closing the conciliation proceedings before him, the Conciliator shall ascertain from the parties whether they are willing to submit the dispute to.
arbitration.
These disputes, to which these provisions apply, can only be those not relating to matters in Schedules I and III, because, under sub section
(1) of section 42, and employer is given the right to give a notice of change in respect of any industrial matter specified in Schedule 11, while, under sub section
(2) of section 42, the employee is granted a similar '.
right to give a notice if a change is desired in respect of an industrial matter not specified in Schedule I or Ill.
In respect of matters covered by Schedules I and 111, provision is made in sub section
(4) of section 42 which lays down that such disputes are to be decided by making an application to the Labour Court; and, as we have indicated earlier, section 73A does not apply to disputes which are required to be referred to a Labour Court.
The result of all these provisions is that section 73A of the Act comes into play only in cases where the dispute relates to matters not contained in Schedules I and III, the dispute is not resolved by private agreement or by conciliation, and there is no submission of the dispute to arbitration under section 66 of the Act.
It is in this light that the provision which has to be made by the Union in its rules under section 23(1)(v) assumes importance.
Whenever a dispute is raised either by an employer or by a Union which can ultimately take advantage of section 73A; of the Act, the Union must invariably offer that the dispute be submitted to arbitration, and, in the alternative, if the employer offers to submit the dispute to arbitration, the Union must not refuse it.
The result is that in respect of any such dispute, the Union has no option but to offer or agree to arbitration of the dispute under section 66 of the Act.
On the other hand, there is no such limitation placed on the employer.
There is no provision in the Act making it compulsory for the employer either to submit the dispute to arbitration or to agree to the submission of the dispute to arbitration when offered by the Union.
Consequently, whenever any industrial dispute arises, the employer can always ensure arbitration of that dispute by making an offer to the Union under section 66 of the Act, whereupon the Union is compelled to agree to submission of the dispute to arbitration.
Clearly, therefore, there was no need to make any Provision empowering the employer to make a reference of the dispute for arbitration to the Industrial Court.
On the other hand, if a Union wants a dispute to be settled and even offers that the dispute be submitted to arbitration under section 66 of the Act, the employer can refuse, whereupon the Union would be left without any remedy.
It is obvious that section 73A was enacted to fill this gap and place the Union on parity with the 442 employer so as to enable the Union to have any dispute settled by arbitration even when the employer does not agree to arbitration.
These provisions granting.
the rights to the employers and the Union are, of course, in addition to, and without prejudice to, the provisions contained in sections 72 and 73 of the Act, under which the State Government is given the power to refer any industrial dispute between employees and employees, and employers and employees to the arbitration of a Labour Court or the Industrial Court on the basis of a report made by the Labour Officer, or even otherwise.
These provisions in sections 72 and 73 leave the discretion with the State Government to make a reference in appropriate cases, so that neither the employers nor the employees can, as of right, obtain a reference under these sections from the State Government.
So far as they are concerned, the provisions contained in the Act require that the disputes between them must first go before a Conciliator for conciliation, and subsequently, either party can exercise its option of offering the submission of the dispute to arbitration when such an enquiry is made from them by the Conciliator under section 58(5) of the Act.
Thereafter, if the offer is by an employer, the Union, under its rules, is bound to accept the submission, so that whenever an employer desires that a dispute be decided by arbitration, the Union is compelled to agree to it.
In the reverse case, when a Union wants submission of the dispute to arbitration, the employer has discretion not to agree, and then only can the Union resort to section 73A and refer the dispute to the Industrial Court.
This section, in these circumstances did not at all require that the right granted to the Union should also be granted to the employer.
In this connection, two other points were urged by learned ,counsel for the appellants before us.
One was that, under section 66 of the Act, the offer to submit the dispute for arbitration can be to any private individual also, and this did not give the right to the employer to have it decided by an Industrial Court so as to be equated with the right of the Union to have it decided by the Industrial Court.
We do not think that the provision contained in section 66 of the Act places the employer under any such handicap.
Under sub section
(2) of section 66, the employer can straight away offer that the dispute be referred to the arbitration of the Industrial Court, and thereupon 'the Union would be debarred from refusing to agree to that submission.
In any case, even if the Union were to refuse to agree to it, the State Government will determine under s.71 of the Act whether the dispute should be referred to the arbitration of the Labour Court or the Industrial Court and refer it to that body.
The mere fact that the Union may not agree to .he offer of the employer to submit the dispute for arbitration to the Industrial Court whereupon the State Government can direct that the arbitration be made by a Labour Court or the Industrial Court does not, in our opinion, place the employer in any disadvantageous position, and we do not 443 think, therefore, that there was any requirement that the employer should also be given a right corresponding to the right of the Union under section 13A of the Act.
The second point urged by the learned counsel was that if the dispute is referred to the Industrial Court by a submission under section 66(2) of the Act, that Court will proceed to give its award in accordance with the provisions of the in view of section 68 of the Act, while if the dispute is referred at the instance of a Union under s.73A of the Act, the Industrial Court will deal with it as a .judicial Tribunal and will give its decision in accordance with the regulations made under section 92 of the Act.
We consider that this submission is based on a misapprehension of the scope of section 92 of the Act.
The rules and regulations made by the Industrial Court under section 92 are to govern the procedure of the Industrial Court in all proceedings before it irrespective of the fact whether those proceedings come up before it by a reference made by the State Government under.
s, 72 or section 73 of the Act, or by a reference made by the Union under section 73A of the Act, or by a joint submission made by the parties under section 66(2) of the Act.
Section 68 of the Act is in very general terms, and lays down that proceedings in arbitration under the whole of the Chapter XI are to be in accordance with the provisions of the , in.
so far as they may be applicable.
The provisions of the have, therefore, been made applicable not only to arbitrations by submission under section 66 of the Act, but also to arbitrations on references made by the State Government under section 72 or section 73 or a reference made by a Union under section 73A of the Act.
If the submission or the reference happens to be to the Industrial Court, that Court must follow the and regulations made under s.92, and the provisions of the will only apply insofar as they may be applicable in view of those rules and regulations.
Consequently, whether a dispute is referred for arbitration to the Industrial Court by submission under section 66(2) of the Act, or by a reference under section 73A of the Act, that Court has to proceed in the same identical manner and the parties seeking the reference obtain the award in both cases under identical circumstances.
In this connection, the regulations made by the Industrial Court, known as the Industrial Court Regulations, 1947 were brought to our notice.
A perusal of these regulations shows that, in the matter of procedure of the Industrial Court for dealing with arbitrations made by submissions under section 66, or by references under other sections, there is uniformity and no distinction is made between references under these different sections.
The Industrial Court is required to proceed in the same manner in all cases and to give its decision under section 87 of the Act.
It is significant that section 87, defining the duties of the Industrial Court, uses identical language in respect of all arbitrations by the Industrial Court; under clause (v) the duty 444 of the Industrial Court is laid down to be to decide industrial disputes referred to it in accordance with submissions registered under section 66 which provide for such reference to the Industrial Court, and under clause (vi), the duty of the Industrial Court is similarly defined to be to decide industrial disputes referred to it under sections 71, 72, 73 or 73A.
The ' Industrial Court, in all cases, is required to give a decision on the dispute, and hence, in all these proceedings, the parties have identical rights in the matter of procedure of the Industrial Court of, hearing and of obtaining a decision from it.
This makes it clear that section 73A of the Act was required only to fill up a gap which would have existed, leaving no remedy to a Union to obtain arbitration of a dispute if the employers did not agree to that arbitration, and that no similar right was required to be conferred on the employers who, under the other provisions of the Act, could always obtain a reference of the dispute to arbitration by making a submission under section 66 which the Union was bound to agree to.
The first point raised on behalf of the appellants has, therefore, no force and section 73A of the Act cannot be held to be invalid.
On the second question, it has rightly been urged on behalf of the appellants that the Act was not applied by the State Government to the industries run by the appellants, whether generally or by specifying any local area by issue of a notification under sub section
(4) of section 2 of the Act.
On behalf of the respondents, reliance was placed on sub section
(3) of section 2 for urging that the Act became applicable to the industries run by the appellants, because the Bombay Industrial Disputes Act, 1938 (hereinafter referred to as "the Bombay Act of 1938") was in force in these industries immediately before the commencement of the Act.
Admittedly, the Bombay Act of 1938 was made applicable to the entire cotton industry throughout the Province of Bombay by various notifications issued in the year 1939 under that Act by the then Provincial Government.
Ahmedabad, where the industries of the appellants are situated, was then a part of the Province of Bombay.
The Bombay Act of 1938 was never entirely repealed.
However, the Central Government enacted the Industrial Disputes Act No. 14 of 1947 which received the assent of the Governor General on 17th March, 1947, a id was brought into force from April 1, 1947.
This Act did not, in terms, repeal the Bombay Act of 1938, but the contention on behalf of the appellants is that the Bombay Act of 1938 and the Central both covered the same field of industrial disputes, and consequently, it should be held that the Bombay Act of 1938 became void on the ground of repugnancy with the under sub section
(1) of section 107 of the Government of India Act, 1935.
It was urged that the Bombay Act of 1938 as well as the were both enacted under the power conferred on 445 the Bombay Legislature and the Central Legislature under item 29 of of the Concurrent List III of the Seventh Schedule to the Government of India Act, 1935.
The principle relied upon by the appellants is that, if two pieces of legislation cover the same field and each one of them contains a complete code making detailed provision for all aspects of the subject matter of the legislation, repugnancy must be held to arise, even though one Act may not, in terms, repeal the other and may not correspond section by section with the other.
For this principle, reliance was placed on the tests enumerated by Nicholas in his Australian Constitution, 2nd Edition, p. 303, to determine inconsistency or repugnancy between a State law and a Commonwealth law in Australia.
The three tests were enumerated as follows: "(1) There may be inconsistency in the actual terms of the competing statutes; (2) Though there may be no direct conflict, a State law may be inoperative because the Commonwealth law, or the award of the Commonwealth Court, is intended to be a complete exhaustive code; and (3) Even in the absence of intention, a conflict may arise when both State and Commonwealth seek to exercise their powers over the same subject matter.
" This principle was deduced from the decisions in Ex Parte McLean(1) and the State of Victoria and Others 'V.
The Commonwealth of Australia and OtherS(2).
Reliance was also placed on decisions of this Court in Zaverbhai Amaidas vs The State of Bombay(3), Ch.
Tika Ramji & Ors.
vs The state of Uttar Pradesh & Ors.(4) and Deep Chand vs The State of Uttar Pradesh and Others(5).
In the last of these cases, after quoting from Nicholas, this Court held: 'Repugnancy between two statutes may thus be ascertained on the basis of the following three principles: (1) Whether there is direct conflict between the two provisions; (2) Whether Parliament intended to lay down an exhaustive code in respect of the subject matter replacing the Act of the State Legislature; and (3) Whether the law made by Parliament and the law made by the State Legislature occupy the same field." (1) ; (3) [1955] 1 S.C.R. 799.
(5) (1959] Supp. 2 S.C.R. 8.
(2) ; (4) (1956] 1 section C. R. 393.
446 Relying on these principles, it has been urged that the intended to lay down an exhaustive code in respect of settlement of all industrial disputes, and since the Bombay Act of 1938 was also on the same subject, it must be presumed that the two statutes are repugnant, so that the Bombay Act of 1938 became void with effect from 1st April, 1947 when the came into force.
It has, however, been rightly pointed out by the High Court in the judgment under appeal that the Bombay Act of 1938 did not confine itself entirely to the subject of settlement of industrial disputes.
Chapter V of that Act, containing sections 26 to 33 deals with a matter which is not covered by the at all.
These sections of the Bombay Act of 1938 lay.
down the procedure for prescribing Standing Orders regulating the relations between an employer and his employees, and for making changes therein.
The prescribing of the Standing Orders and making of changes in them may not involve any industrial dispute at all.
In fact, at the first stage, when Standing Orders are prescribed, no question would arise of any industrial dispute requiring settlement.
The , did not contain any provisions at all dealing with this subject of prescribing Standing Orders and making changes therein.
Consequently, even if the submission made on behalf of the appellants be accepted that the , is an exhaustive code dealing with the question of, settlement of industrial disputes, only those provisions of the Bombay Act of 1938 can be held to be repugnant and void on account of the repugnancy which also dealt with the same subject matter of settlement of industrial disputes.
The provisions contained in Chapter V of that Act, which had nothing to do with settlement of industrial disputes, could not, therefore, be affected by the enactment of the , and hence, the enforcement of the did not in any way affect the applicability of the provisions of Chapter V of the Bombay Act of 1938 to the industry run by the appellants.
To the extent that Bombay Act of 1938 contained these provisions in Chapter V, that Act, therefore, continued in force and also continued to apply to the industries now in question.
It was also urged that the did not, similarly, make any provision for arbitration of industrial disputes and, consequently, the provisions of the Bombay Act of 1938, relating to arbitration of industrial disputes, could not be held to have become invalid.
It is not necessary to examine this further question in view of our decision that at 1 east the provisions of Chapter V of the Bombay Act of 1938 continued in force.
That Act did not stand repealed as a whole; at best, only a part of that Act can be held to have ceased to be effective because of the repugnancy with the .
But, while another part of that Act continued to be in force, the Bombay Act of 1938 also continued to be applicable to the cotton industry in Ahmedabad 447 with which we are concerned.
When the Bombay Industrial Relations Act, 1946 came into force on 29th September, 1947, therefore, the Bombay Act of 1938 was applicable to these industries, and consequently, under sub section
(3) of section 2 of the Act, the Act became applicable to the industry ' of the appellants and did not require a notification under sub section (4) of section 2 to make it applicable.
This point was also therefore, rightly decided against the appellants, and the judgment of the High Court must be upheld.
The appeal is, therefore, dismissed with costs.
| A dispute regarding amendment of rules relating to privilege leave etc.
arose between the Ahmedabad Millowners ' Association and the union of workmen employed in the textile industry.
After conceliation proceedings were declared by the Conciliator to have failed, the union referred the dispute to the Industrial Court under section 73A of the Bombay Industrial Relations Act, 1946.
The Industrial Court decided against the Millowners who filed a writ petition in the ' High Court and thereafter appealed to this Court.
It was urged on behalf of the appellants that (i) section 73A was violative of article 14 of the Constitution since it gave a right to the workers union to make a reference but not to the employer (ii) the Act had not been made applicable to the cotton industry at Ahmedabad under section 2(4) and it was not applicable under section 2(3) because the Bombay Industrial Disputes Act, 1938 was repugnant to Central) and must be deemed to have been repealed.
HELD:(i) Section 73A was not violative of article 14.
Whenever any industrial dispute arises the employer can always ensure arbitration of that dispute by making an offer to the union under section 66 of the Act whereupon a registered and approved union is compelled to agree to submission of the dispute to arbitration.
Clearly therefore there was no need to make any Provision empowering the employer to make a reference of the dispute for arbitration to the Industrial Court.
On the other hand if a Union wants a dispute to be settled and even offers that the dispute be submitted to arbitration under section 66 of the Act, the employer can refuse, whereupon the union would be left without any remedy.
It is obvious that section 73A was enacted to fill this gap and place the union on with the employer so as to enable the union to have any dispute = by arbitration even when the employer does not agree to arbitration.
This section, in these circumstances did not at all require that the right granted to the union should also be granted to the employer.
[441 G H] There was no difference in the procedure to be followed by the Industrial Court in a reference under section 73A and that to be followed when the reference is under section 66.
In both the procedure under section 92 had to be followed.
[443 E F] (ii)Chapter V of the Bombay Industrial Disputes Act 1938 was not repugnant to the Central Act of 1947 and therefore continued to be in force, and consequently under section 2(3) of the Bombay Industrial Relations Act 1947 the latter Act became applicable to the industry of the appellants and did not require a notification under section 2(4) to make it applicable [446 G H; 447 A B] 438 Ex Parte McLean, ; Victoria and Others vs The Commonwealth of Australia and Others, ; , Zaverbhai Amaidas vs The State of Bombay, [1955] 1 S.C.R. 799, Ch.
Tika Ramji & Ors.
vs The State of Uttar Pradesh & Ors., and Deep Chand vs The State of Uttar Pradesh and Others, [1959] Supp. 2 S.C.R. 8.
| 2174.txt |
Appeal No. 207 of 1975.
From the Judgment and Order dated the 19 4 74 of the Gujarat High Court in Special Civil Appln.
No. 306 of 1973.
S.T. Desai and Girish Chandra for the Appellants.
I. N. Shroff and H.S. Parihar for Respondent.
The Judgment of the Court was delivered by RAY, C.J.
This appeal is by certificate against the judgment and order dated 19 April 1974 of the High Court of Gujarat in Special Civil Application No. 306 of 1973.
The question for consideration in this.
appeal is wheth er the petitioner before the High Court, who was the Regis trar of the Small Causes Court, Ahmedabad was subject to the disciplinary jurisdiction of the High Court.
The Registrar was appointed on 12 September, 1969 by an order of the Governor of Gujarat.
The High Court said that in view of the fact that the High Court is not the appointing authority the High Court has no disciplinary jurisdiction over the Registrar.
The High Court was in error in considering that the question of appointing authority is relevant in regard to the disciplinary jurisdiction of the High Court.
Under Article 235 the control over district Courts and Courts subordinate thereto including the posting and promo tion of, and the grant of leave to, persons belonging to the judicial service of a State and holding any post inferior to the post of district judge shall be vested in the High Court.
The expression 'judicial service ' is defined in Article 236 to.
mean "a service consisting exclusively of persons intended to fill the post of district judge and other civil judicial posts inferior to the post of district judge".
These two articles 235 and 236 are relevant for the purpose.
of ascertaining the extent of disciplinary juris diction of the High Court.
The Registrar of the Court of Small Causes is a person holding a civil judicial post inferior to the Post of district judge and is 'in Judicial service. ' Reference to the presidency Small Causes Courts Act 1882 is necessary to find out the powers, position and duties of the Registrar 712 of the Small Causes Court.
Section 13 of the Act states :.
"There shall be appointed an officer to be called the Regis trar of the Court who shall be chief ministerial officer of the Court".
The other provisions in the Act which deal with the Powers of the Registrar are to be found in Sections 9(1) 2(aa), 14, 33, 34, 35 and 36, which read as follows: "9(1) (aa).
The High Court may, from time to time, by rules having the force of law empow er the Registrar to hear and dispose of unde fended suits and interlocutory applications or matters.
14 The Provincial Government may invest the Registrar with the powers of a Judge under this Act for the trial of suits in which the amount or value of the subject matter does not exceed twenty rupees.
And subject to the orders of the Chief Judge, any Judge of the Small Cause Court may, whenever he thinks fit, transfer from his own file to the file of the Registrar any suit which the latter is competent to try.
33 Any non judicial or quasi judicial act which the Code of Civil Procedure as applied by this Act requires to be done by a Judge, and any act which may be done by a Commission er appointed to examine and adjust accounts under section 394 of that Code as so applied, may be done by the Registrar of the Small Cause Court or by such other officer of that Court as that Court may, from time to time, appoint in this behalf.
34 The suits cognizable by the Registrar under section 14 shall be heard and determined by him in like manner in all respects as a Judge of the Court might hear and determine.
the same.
35 The Registrar may receive applications for the execution of decrees of any value passed by the Court, and may commit and dis charge judgment debtors, and make any order in respect thereof which a Judge of the Court might make under this Act.
36 Every decree and order made by the Regis trar in any suit or proceeding shall be sub ject to the same provisions in regard to new trial as if made by a Judge of the Court.
" These provisions of the Act indicate in No. uncertain manner that the Registrar of a Small Causes Court exercises judicial powers, hears suits, passes decrees and an appeal is preferred from a decree of the Registrar.
Counsel for the appellant is right in his contention that the Registrar, Small Causes Court, inasmuch as he exercises judicial functions, is a judicial officer in Judicial Service and comes within the scope and intent of Articles 235 and 236.
713 The High Court was in error in holding 'that the High Court had no power to order disciplinary proceedings.
It is significant that the High Court abdicated its own discipli nary jurisdiction.
The independence of the judiciary has been emphasised by this Court in un mistakable terms in the following two decisions: 1.
High Court of Punjab & Haryana etc.
vs State of Haryana & Ors., reported in ; and 2.
Shamsher Singh & Anr.
vs State of Punjab, reported in 1975 (1) S.C.R.814.
The Gujarat High Court like other High Courts is compe tent to enquire into such disciplinary matters.
In the present appeal there were five contentions before the High Court on behalf 0f the Registrar.
The first contention falls in view of our conclusion that the High Court is the competent authority to hold departmental en quiry.
The second contention of the Registrar was that the High Court had no authority to direct further inquiry to be made in respect of recording the statement of Bhatt or to consider the reports made by the inquiry officer and come to a conclusion about the guilt of the Registrar.
The third contention of the Registrar was that the direction of the High Court that the statement of Bhatt be recorded was passed without hearing the Registrar and was violative of the rule of natural justice.
It will appear that the High Court issued directions and the statement of Bhatt was recorded by the Inquiry Officer.
Bhatt is a Lawyer.
He was busy in Court.
He could not appear before the Inquiry officer on the date fixed for taking his evidence.
The High Court asked the Inquiry Officer to record the evidence of Bhatt.
The Registrar was given a copy of the statement of Bhatt after recording of Bhatt 's evidence.
The Registrar was given an opportunity to deal with the evidence of Bhatt.
It is idle to contend that the Registrar ought to have been heard before the High Court directed that the statement of Bhatt should be recorded.
The fourth contention of the Registrar was that there was failure to give copies of documents demanded by him; therefore he did not have reasonable opportunity to defend himself.
The High Court did not go into this question in view of the fact that the High Court did not consider this question.
Counsel for the Registrar submitted that he wanted to address the Court on the materials which were not available now.
We are of opinion that the matter should be remitted to the High Court only on this question viz 'fail ure to give copies of certain documents demanded by the Registrar thus depriving him of a resonable opportunity to defend himself and therefore, the inquiry was contrary to the provisions of Article 311 of the Constitution '.
The fifth contention that the impugned order was passed by the Government without consulting the Public Service Commission does not survive in view of our conclusion that the High Court is the competent authority to make departmen tal inquiry.
714 For the foregoing reasons the judgment of the High Court is set aside and the matter is remitted to the High Court for consideration only of the fourth question as indicated above.
Parties will pay and bear their own costs.
S.R. Appeal allowed and case remitted.
| Pursuant to the departmental enquiry conducted by the High Court and on its recommendation, the Gujarat Governor dismissed the respondent from the service of Registrar, Small Causes Court, Ahmedabad.
The respondent challenged by way of a writ the said order contending: (1) The High Court was not his appointing authority and he being the member of general State service, the High Court has no authority to initiate proceedings, the appointment of the enquiry offi cer, framing of charges of misconduct and taking discipli nary proceedings etc.
(2) The High Court has no authority to direct further enquiry to be made in respect of recording the statement of one Mr. Bhatt, an advocate or to consider the reports made by the enquiry officer and come to the conclusion about his guilt or to issue show cause notice of punishment.
(3) The direction of the High Court that the statement 0f Mr. Bhatt is recorded was passed without hear ing the petitioner and this violated the rules of natural justice.
(4) The failure to give copies of certain documents demanded by the petitioner deprived him of a reasonable opportunity to defend himself and, therefore, the enquiry was contrary to the provisions of article 311 of the Constitu tion; and (5) .The impugned order was passed by the Govern ment without consulting the Public Service Commission and the same was illegal and bad in law.
The High Court held: (1 ) The post of the Registrar of Small Causes Court does not fall within the expression "judicial service" within the meaning of article 235 and (2) The High Court has no disciplinary jurisdiction over the Registrar in view of the fact that the High Court is not the "appointing authority".
Accepting the State 's appeal by certificate and remitting the case, the Court, HELD: (1 ) The Registrar of the Court of .Small Causes is a person holding a civil judicial post inferior to the post of District Judge and he is in judicial service.
Sections 9(1), 13 14, 33 to 36 of the indicate in no uncertain manner that the Registrar of Small Causes Court exercises judicial powers, Inasmuch as the Registrar Small Causes Court exer cises his judicial function, he is a judicial officer in judicial service and comes within the scope and intent of article 235 and 236.
[711 H, 712 G H] (2) The High Court was in error in considering the question of "appointing authority" as relevant in regard to the disciplinary jurisdiction of the High Court and also in holding that it had no power to order disciplinary proceed ings.
The High Court abdicated its own disciplinary juris diction.
The High Court is the competent authority to hold departmental enquiries.
[711 D E, 713 A C].
High Court of Punjab & Haryana etc.
vs State of Haryana and Ors.
; and Shamsher Singh & Anr.
vs State of Punjab ; , referred to.
711 (3) In the instant case the enquiry was contrary to the provisions of article 311 of the Constitution due to the fail ure to give copies of certain documents demanded by the Registrar, thus deprived him of a reasonable opportunity to defend himself.
[713 G]
| 3705.txt |
Civil Appeal No. 1697 Of 197 From the Judgment and Order dated 22.1.1972 of the Madhya Pradesh High Court in Misc.
Petition No. 358 of 1971.
M. Narayan, Mr. B. Shetya and Vineet Kumar for the Appellant.
S.S. Khanduja, Y.P. Dhingra, Baldev Krishan Satija and T.C. Sharma for the Respondents.
The Judgment of the Court was delivered by PG NO 444 RAY, J.
This appeal by special leave is against the judgment and order dated 22nd January, 1972 rendered by the High Court of Madhya Pradesh at Jabalpur in Miscellaneous Petition No. 358 of 1971 dismissing the writ petition holding that the Regulations framed by the Board of Secondary Education, Madhya Pradesh under Section 28(2)(d) of the Madhya Pradesh Madhyamik Shiksha Adhiniyam, 1955 have no statutory force and as such termination of service in violation of Regulation Nos.
7 1 and 79 does not entitle the appellant to a declaration that the termination was illegal and for a direction for his reinstatement in service.
The matrix of the case in short, is that the appellant was appointed as Head Master by the Managing Committee of Vidyut Grih Siksha Samiti, Korba on probation for a period of one year on a pay scale r of Rs.250 10 290 15 350 EB 20 450 with effect from 3.7.1968.
Meanwhile, the High School became a Higher Secondary School and as such on September 1, 1969 the Managing Committee appointed the appellant as Principal temporarily on a pay scale of 1) Rs.:Z75 25 300 15 405 EB 20 550 25 700 with effect from July 3, 1968.
The above scale was made applicable to him with retrospective effect i.e. from July 3, 19 F.N., the date of his appointment.
The appointment letter further states as follows: ". . . .
The appointment will be governed by the rules and regulations laid down by the Education Department of Madhya Pradesh State Government for the recognised Schools in the State unless and otherwise specified from time to time.
The appointment can be terminated on one month 's notice or pay thereof on either side." This School was established by Vidyut Grih Siksha Samiti, Korba, a body registered under the M.P. Non Trading Corporation Act, l962.
The Society under its bye laws has a Foundation Committee which is G its Governing Body and an Executive Committee, i.e. Managing Committee.
On June 23, 1971 the Managing Committee dispensed with the services of the appellant with immediate effect by giving him one month 's salary in lieu of notice.
The appellant made a representation against this order to the Divisional Superintendent of Education who by his letter dated June 24, 1971 directed the Secretary of the school to rescind the order of termination of the services of the appellant and to PG NO 445 hand over charge of the school to the appellant otherwise the recognition of the School will be withdrawn.
This letter was written on the ground that the termination of the appellant was wrongful being in breach of Regulation 79.
However, the appellant was not reinstated pursuant to the said letter.
The appellant, therefore, moved a writ petition before the High Court of Madhya Pradesh at Jabalpur.
This was registered as Miscellaneous Petition No. 358 of 1971.
The writ petition was heard by a Division Bench of the said High Court and it was held that Regulation No. 71 as well as Regulation No. 79 framed by the Board of Secondary Education under Section 28(2)(d) of Madhya Pradesh Madhyamik Adhiniyam, 1955 have no statutory force following the decision of this Court in the case of Dr. Ram Pal Chaturvedi vs State of Rajasthan and Ors., and as such the termination of service of the appellant in violation of the procedure prescribed in Regulation No. 71 and 79 of the said Regulations would not render the impugned order null and void.
It could at best be a wrongful dismissal from service by the master and the appellant 's remedy is only by an action for damages he might have sustained in consequence of the breach of the master and servant contract.
It was also held that the School in question was run by a private body and as such no writ of mandamus could be issued.
The Court further held that an order cannot be made against the society compelling the re instatement of the appellant as it is in the realm of contractual rights and obligations.
The writ petition was thus dismissed.
Against this judgment and order the instant appeal has been filed on special leave this Court.
In order to effectively consider the question whether these Regulations have got statutory force or not it is necessary to set out hereinbelow the relevant Regulations: "Regulation 61: No Educational Institution shall be recognised, or continued to be recognised unless it complies with the following requirements, namely: (1) That the Educational Institution shall comply with the conditions laid down in Chapter XII of these Regulations.
(2) that there shall be a Managing Committee as defined under the Adhiniyam consisting of not more than 10 members of which two shall be the Head of the Institution and a nominee of the Educational Officer concerned and that the Governing Body of Managing Committee shall be registered under the Societies Registration Act.
PG NO 446 Regulation 71: All Principal, Head Masters, Lecturers and Teachers, except those appointed temporarily for a period of less than one year, shall be on probation or a term of one year which may be extended to two years.
If after two years service any incumbent is continued in his appointment, he shall, unless the appointing authority, for reasons to be recorded in the writing, otherwise directs, be deemed to have been confirmed in that appointment.
On being confirmed the incumbent shall sign a contract of service in the form one or two (appended to these Regulations) as the case may be, as soon as practicable.
Regulation 79 (1): The Managing Committee shall not terminate the services and reduce the pay of Principal or Head Master appointed on written contract without first obtaining Director 's sanction for holding a full enquiry into the charges against him.
The incumbent shall be given in writing a statement of the charges against him, and also be afforded an opportunity of defending himself.
His previous services and character with reference to this incidental file and Service book shall also be taken into consideration before arriving at a decision.
(2) No decision as to termination of service or reduction of a Principal or a Head Master shall be valid, unless passed at Special Meeting by a majority of two thirds of members of the Managing Committee.
No such resolution shall be valid, if passed at an adjourned meeting.
3) The Principal or Head Master have a right of appeal to the Director against decision of the Managing Committee.
The decision of the Director shall be final." These Regulations were framed under the provision of Sectio 28(2)(d) of the said Act which reads as follows: "Sec.
28 Powers of Board to make Regulations (1) The Board may make Regulations for the purpose of carrying into effect the provisions of this Act (2) In particular and without prejudice to the generality of the foregoing power, the Board may make Regulations providing for all or any of the following matters, namely: PG NO 447 (d) The conditions of recognition of institutions for the purposes of admission to the privileges of the Board and framing of a School Code to ensure a minimum standard of efficient and uniform management of such schools.
" It thus appears that Section 28(2)(d) confers power on the Board to make Regulations regarding the conditions of the Institutions as well as for framing of "School Code" to ensure a minimum standard of efficient and uniform management of such schools.
Regulation 71 clearly provides that Principals, Head Masters, Lecturers and Teachers when appointed shall be appointed on probation for a period of one year which may be extended to two years.
It also provides that after two years of service if any incumbent is continued in his appointment he shall be deemed to have been confirmed to that appointment unless the Appointing Authority for reasons recorded in writing otherwise directs.
In this case the appellant has been appointed on probation as Principal with effect from July 3, 1968 and as he was allowed to continue for more than two years he shall be deemed to have been confirmed in the post of Principal of the said School.
The Managing Committee of the School by its letter dated June 23, 1971 terminated the services of the appellant after giving him one month 's salary in lieu of notice without serving on him any charges against him, Without holding any enquiry and also without giving him any opportunity of hearing before making the order terminating his service as required under the provision of Regulation 79(1) of the said Regulations.
The impugned resolution was also not passed at a special meeting by a majority of ,2/3rd of the members of the Managing Committee as provided in clause (2) of the said Regulation 79.
The High Court though found that there is a violation of the provisions of Regulation 71 and 79 yet as these Regulations have got no statutory force the appellant could not get the relief of a declaration that the order of termination of his service was illegal and invalid and also could not get an order for his re instatement in service as his appointment was in the realm of a contract of master and servant and his only remedy was an action for wrongful termination from service.
Two questions therefore fall for consideration namely whether the Regulations framed pursuant to a Statute can be said to have a statutory force the breach of which will entitle the aggrieved employee to get a declaration that the PG NO 448 impugned order was invalid and illegal and the employee should be allowed to continue in service or should be re instated in service.
The High Court has relied upon the decision of this Court in Dr. Ram Pal Chaturvedi vs State of Rajasthan and Ors.
,(supra) as well as Indian Airlines Corporation vs Sukhdeo Rai, [ ; In the case of Dr. Ram Pal Chaturvedi vs State of Rajasthan and Ors., the appointment of three respondents namely Dr. D.G. Ojha, Dr. P.D. Mathur and Dr. Rishi as Principal of Sr.
Patel Medical College, Bikaner, Rabindra Nath Tagore Medical College, Udaipur and Medical College, Jodhpur respectively was challenged on the ground that though they fulfilled the qualifications prescribed by Rule 30(4) of the Rajasthan Medical Service (Collegiate Branch) Rules 1962 they had not the requisite experience as provided in Ordinance No. 65 framed under the University of Rajasthan Act of 1946 and as such their appointments were not valid and legal.
The Syndicate of the Rajasthan University constituted under Section 21 of the Act is empowered under Section 29 read with Section 30 to make ordinances, consistent with the Act and statutes, to provide for the matters listed in Section 29.
These matters include in Clause VI "emoluments and conditions of service of University teachers".
The Syndicate made the ordinances pursuant to the provisions of this Section.
It was held that "The field of operation of this Ordinance appears to us to be restricted to the question of affiliation of the colleges concerned with the Rajasthan University.
It is note worthy that the University has not thought fit to object to these appointments.
If there is any violation of a provision of this Ordinance then that may appropriately be taken into account by the Rajasthan University for the purpose of withdrawing or refusing to continue affiliation of the colleges in question.
But clearly that would not render the impugned appointments null and void a fortiorari that can not confer any right on Dr. Ram Pal Chaturvedi to approach the High Court by means of petition for writ of quo warranto to challenge the appointments of these three persons This decision is not an authority for the proposition that Regulation framed pursuant to a Statute do not have a statutory force.
High Court was in error in holding otherwise.
This question is, however, concluded in favour of the appellant by a decision of this Court rendered by a 3 Judge Bench.
PG NO 449 The question whether a regulation framed under power conferred by the provisions of a Statute has got statutory power and whether an order made in breach of the said Regulation will be rendered illegal and invalid, came up for consideration before the Constitution Bench in the case of Sukhdev Singh & Ors.
vs Bhagatram Sardar Singh Raghuvanshi and Anr., [ ; In this case it was held that: "There is no substantial difference between a rule and a regulation inasmuch as both are subordinate legislation under powers conferred by the statute.
regulation framed under a statute applies uniform treatment to every one or to all members of some group or class.
The Oil and Natural Gas Commission, the Life Insurance Corporation and Oil and Natural Gas Commissionaire all required by the statute to frame regulations inter alia for the purpose of the duties and conduct and conditions of service of officers and other employees.
These regulations impose obligation on the statutory authorities.
The statutory authorities cannot deviate from the conditions of service.
Any deviation will be enforced by legal sanction of declaration by courts to invalidate actions in violations of rules and regulations.
The existence of rules and regulations under statute is to ensure regular conduct with a distinctive attitude to that conduct as a standard.
The statutory regulations h the cases under consideration give the employee a statutory status and impose restriction on the employer and the employee with no option to vary the condition. ' ' There is therefore, no escape from the conclusion that regulation have force of law.
The order of the High Court must therefore, be reversed on this point unhesitatingly.
In Indian Airlines Corporation vs Sukhdeo Rai the respondent who was an employee of the Indian Airlines Corporation Was found guilty of certain charges and dismissed from service after an enquiry held in breach of the procedure laid down by the Regulations made by the appellant under Section 45 of the Air Corporation Act, 1953.
A suit was filed by the respondent challenging the order of termination It was decreed by the Trial Court holding that the dismissal was illegal and Granted a declaration that he be continued to remain he service.
The Appellate Court as well as the High Court confirmed the decree.
On appeal this Court held that the relationship between the appellant,Indian Air lines Corporation and the respondent would in such cases be contractual i.e. as between a master PG NO 450 and servant and the termination of that relationship would not entitle the servant to a declaration that his employment had not been validly determined.
The termination though wrongful in breach of the terms and conditions which governed the relationship between the Corporation and the respondent yet it did not fall under any of the three well recognised exceptions and therefore the respondent was only entitled to damages and not to a declaration that this dismissal was null and void.
The respondent has sought support from this decision.
We are afraid the contention is wholly untenable.
The decision in Indian Airlines ' case has in terms been declared to be no longer good law and has in terms been overruled in Sukhdev Singh 's case ; by the Constitution Bench.
C Says Ray, C.J. speaking for the Court: "In the Indian Airlines case this Court said that there being no obligation or restriction in the Act or the rules subject to which only the power to terminate the employment could be exercised the employee could not contend that he was entitled to a declaration that the termination of his employment was null and void.
In the Indian Airlines Corporation case reliance was placed upon the decision of Kruse v Johnson, for the view that not all by laws have the force of law.
This Court regarded regulation as the same thing as by laws.
In Kruse vs Johnson the Court was simply describing the effect that the county by laws have own the public.
The observations of the Court in Kruse vs Johnson, that the by law "has the force of law within the sphere of its legitimate operation" are not qualified by the words that it is so ' 'only when affecting the public or some section of the public . ordering something to be done or not to be done and accompanied by some sanction or penalty for its non observance. ' ' In this view a regulation is not an agreement or contract but a law binding the corporation, its officers, servants and the members of the public who come within the sphere of its operations.
The doctrine of ultra vires as applied to statutes, rules and orders should equally apply to the regulations and any other subordinate legislation.
The regulations made under power conferred by the statute are subordinate legislation and have the force and effect, if validity made, as the Act passed by the competent legislature.
In U.P. Warehousing Corporation and Indian Air lines PG NO 451 Corporation case the terms of the regulations were treated as terms and conditions of relationship between the Corporation and its employees.
That does not lead to the conclusion that they are of the same nature and quality as the terms and conditions laid down in the contract employment.
Those terms and conditions not being contractual are imposed by one kind of subordinate legislation, Viz.
regulations made in exercise of the power conferred by the statute which constituted that Corporation.
of the regulations are not terms of contract.
In the Indian Airlines Corporation case under section 45 of the , the Corporation had the power to make regulations not inconsistent with the Act and the rules made by the Central Government thereunder.
The Corporation bad no power to alter or modify or rescind the provisions of these regulations at its discretion which it could do in respect of the terms of contract that it may wish to enter with its employees independent of these regulations.
So far as the terms of the regulations are concerned,the actions of the Corporation are controlled by the Central Government.
The decisions of this Court in U.P. Warehousing Corporation and Indian Airlines Corporation are in direct conflict with decision of this Court in Naraindas Barot 's case which was decided by the Constitution Bench.
Under the circumstances the plea of the respondents is meritless.
In Prabhakar Ramakrishna Jodh vs A.L. Pande and Anr., a question arose whether the provisions of ordinance 20 otherwise called the College Code framed by the University of Saugar under Section 32 and Section 6(6) of the University of Saugar Act, 1946 embodying the terms and conditions of teachers of the College affiliated to the University, have the force of law.
It was held that: "The provisions of Ordinance 20 i.e. the College Code " have got statutory force.
It confers legal rights on the teachers on the affiliated colleges and it is not a correct proposition to say that the "College Code" merely regulates the legal relationship between the affiliated colleges and the University alone.
We do not agree with the High Court that the provisions of the "College Code" constitute power of management.
On the contrary we are of the view that the PG NO 452 provisions of the "College Code" relating to the pay scale of teachers and their security of tenure properly fall within the statutory power of affiliation granted to the University under the Act.
It is true that Clause 7 of the Ordinance provides that all teachers of affiliated colleges shall be appointed on a written contract in the from prescribed in Sch.
A but that does not mean that teachers have merely a contractual remedy against the Governing Body of the College.
On the other hand, we are of opinion that the provisions of Clause 8 of the Ordinance relating to security of the tenure of teachers are part and parcel of the teachers ' service conditions and, as we have already pointed out, the provisions of the "College Code" in this regard are validly made by the University in exercise of the statutory power and have, therefore, the force and effect of law.
It follows, therefore, that the "College Code" creates legal rights in favour of teachers of affiliated colleges and the view taken by the High Court is erroneous. ' In the case of Manmohan Singh Jaitla vs Commissioner, U. T. of Chandigarh and Ors., [1984] (Supp) SCC 540 the appellant was appointed as Head Master of an aided School.
He was later confirmed by the competent authority.
A charge sheet was served on the appellant and disciplinary enquiry was held against him under section 3 of the Punjab Aided Schools (Security of Service) Act.
The enquiry was however, withdrawn later on and his seven years service was terminated by invoking the service agreement on ground that his service was no more required by the School.
This order was challenged by a writ petition before the High Court which rejected the same in limine but by a speaking order observing that as the School cannot be said to be 'other authority ' under Article 12, it was not amenable to the writ jurisdiction of the High Court.
The Supreme Court negatived the said finding of the High Court and held as follows: "The matter can be viewed from a slightly different angle as well.
After the decision of the Constitution Bench of this Court in Ajay Hasia vs Khalid Mujib Sehravardi, the aided school receiving 95% of expenses by way of grant from the public exchequer and whose employees have received the statutory protection under the 1969 Act and who is subject to the regulations made by the Education Department of the Union Territory of Chandigarh as also the appointment of Headmaster to be valid must be PG NO 453 approved by the Director of Public Instructions, would certainly be amenable to the writ jurisdiction of the High Court.
The High Court unfortunately, did not even refer to the decision of the Constitution Bench in Ajay Hasia, case rendered on November 13, 1980 while disposing of the writ petition in 1983.
in 1983.
In Ajay Hasia case, Bhagwati, J. speaking for the Constitution Bench inter alia observed (SCC p. 737, para 9) that "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".
Add to this "the existence of deep and pervasive State control may afford an indication that the corporation is a State agency or instrumentality".
Substituting the words 'public trust ' in place of the 'corporation ' and the reasons will mutatis mutandis apply to the School.
Therefore, also the High Court was in error in holding that the third respondent School was not amenable to the writ jurisdiction of the High Court." In Indra Pal Gupta vs Managing Committee, Model Inter College Thora, [ the appellant was appointed on probation for one year as Principal of Model Inter College, Thora, District Bullandshahr in accordance with the procedure prescribed by the Intermediate Education Act, 1921 (U.P. Act No. 2 of 1921) and the Regulations made thereunder.
The period of probation was however, extended by the Managing Committee of the said Model Inter College for a further period of one year.
On April 27, 1969 the Managing Committee adopted a resolution to terminate the services of the appellant in consideration of the report of the Manager of the College to the effect that due to his unsatisfactory services, it would not be in the interest of the Institution to permit him to continue as probationer any longer.
The service of the appellant was thus terminated without complying with the mandatory procedure laid down in Regulations 35 to 38 which provided for forming a sub committee to enquire into the allegations against the Principal and to frame definite charges against the Principal and to give him opportunity of hearing.
It was held that the order of termination made in breach of the provisions of the said Regulations which were made in pursuance of the provisions of the said Act, is illegal and invalid and as such the same was quashed.
The appellant was further declared to be in service of the College.
On a conspectus of these decisions the irresistible conclusion follows that the impugned order of termination of PG NO 454 the appellant from the post of Principal of the Higher Secondary School in breach of the Regulation 79 framed under the said Act is illegal and as such the same is liable to be quashed as the Regulations have got statutory force.
The appellant is liable to be re instated in the service as Principal of the said College.
We also hold that the Higher Secondary School in question though run by a private trust receives 100% grant from the Government as in evident from the affidavit sworn on behalf of the appellant and as such it is amenable to the writ jurisdiction for violation of the provisions of the said Regulations in passing the impugned order of termination of service of the appellant.
We therefore, set aside the order passed by the High Court which, in our opinion, is unsustainable and direct the respondents to re instate the appellant in the service of the said College.
Considering the facts and circumstances of the case we are of the opinion that the ends of justice would be met by directing the respondents to pay to the appellant a sum equal to 50% of the salaries and allowances from the date of termination till his re instatement in service as it appears that the appellant was not in employment during this period.
The appeal is, therefore.
allowed with costs.
R.S.S. Appeal allowed.
| The appellant was appointed from July 3, 196X as principal of the School run by the respondent society, a body registered under the M.P. Non trading Corporation Act, 1962.
On June 23, 1971 the appellant 's services were terminated with immediate effect by giving one month 's salary in lieu of notice.
The appellant made representation to the Divisional Superintendent of Education who directed the Society to rescind the order of termination because, according to him, the termination of the appellant was wrongful being in breach of Regulation 79 of the Regulations framed by the Board of Secondary Education under section 28(2)(d) of Madhya Pradesh Madhyamik Shiksha Adhiniyam, 1955.
The appellant however was not re instated by the society.
The appellant therefore filed a petition in the High Court, which was dismissed.
The High Court held that (1) the said Regulations had on statutory force and therefore the violation in this case of the procedure prescribed in Regulations 71 and 79 would not render the order of termination null and void; (2) the appellant 's remedy was only by an action for damages for breach of master and servant contract; and (3) the school being run by a private body, no writ of mandamus could he issued.
Allowing the appeal, it was, HELD ection 28(2)(d) of the Act confers power on the Board to make Regulations regarding the conditions of recognition of the Institutions as well as for framing of School Code" to ensure minimum standard of efficient and uniform management of such schools.
[447B C] PG NO 442 PG NO 443 (2) As has been held by this Court in Sukhdev Singh 's case, there is no subtantial difference between a rule and a regulation inasmuch as both are subordinate legislation under powers conferred by the statute.
There is therefore, no escape from the conclusion that the regulations, in the present case, have force of law.1449B] (3) A observed in Sukhdev Singh 's case, the doctrine of ultra vires as applied to statutes, rules and orders should equally apply to the regulations and any other subordinate legislation.
[450G] (4) The order of termination of the appellant from the post of Principal of the Higher Secondary School in breach of Regulation 79 is illegal and as such the same is liable to be quashed as the Regulations have got statutory force.
The appellant is liable to be reinstated in the service as Principal of the said school.
[454A B] (5) The Higher Secondary School in question though run by a private trust receives 100% grant from the Government and as such it is amenable to the writ jurisdiction for violation of the provisions of the said Regulations in passing the order of termination of service of the appellant.
454B C] Dr. Ram Pal Chaturvedi vs State of Rajasthan, [1970] I SCC 75; Indian Airlines Corporation vs Sukhdeo Rai, ; ; Sukhdev Singh & Ors.
vs Bhagatram Sardar Singh Raghuvanshi and Anr., ; ; Prabhakar Ramakrishna Jodh vs A.L Pandi and Anr., ; Manmohan Singh Jaitla vs Commissioner, U.T. of Chandigarh & Ors., [1984] Supp.
S.C.C. 540; and Indra Pal vs Managing Committee,, Model Inter College Thora, [l984] 3 SCC 384, referred to.
| 5868.txt |
Civil Appeal No. 161 of 1955.
Appeal from the judgment and decree dated 4th Jeth 2011, of the Jammu and Kashmir High Court in Appeal No. 1 of 2009, arising out of the judgment and decree dated the 2nd Magh 2008, of the said High Court in original suit No. 40 of 2007.
S.K. Kapur and N. H. Hingorani, for the appellant.
Bhawani Lal and K. P. Gupta, for the respondents.
August 19.
The Judgment of the Court was delivered by SARKAR J.
This appeal arises out of a suit filed in the High Court of Jammu and Kashmir for recovery of price of goods sold and delivered.
The only point involved in it is whether the suit was governed by article 115 of the Jammu and Kashmir Limitation Act.
The courts below have held, and this has not been disputed in this appeal, that if that article did not apply, the suit would fail on the ground of limitation.
Sometime in November 1946, the parties entered into an agreement in writing for the supply by the sellers, the respondents, to the buyer, the appellant, of 5,000 maunds of maize, 500 maunds of wheat and 100 maunds of Dal at the rates and times specified.
The agreement stated that on the date it had been made the buyer had paid to the sellers Rs. 3,000 and had agreed to pay a further sum of Rs. 10,000 within ten or twelve days as advance and the balance due for the price of goods delivered, after the expiry of every month.
It is admitted that the said sum of Rs. 10,000 was later paid by the buyer to the sellers.
565 Various quantities of goods were thereafter delivered by the sellers to the buyer and though such deliveries had not been made strictly at the times specified in the contract, they had been accepted by the buyer.
The buyer in its turn made various payments towards the price of the goods delivered but not month by month and had not further paid it in full.
The last delivery of goods was made on June 23, 1947, and the suit was brought on October 10, 1950, for the balance of the price due.
The learned Judge of the High Court who heard the suit held that article 115 had no application and dismissed the suit as barred by limitation.
The sellers went up in appeal which was heard by two other learned Judges of the High Court.
The learned Judges of the appellate bench of the High Court held that article 115 of the Jammu & Kashmir Limitation Act applied and the suit was not barred.
They thereupon allowed the appeal and passed a decree in favour of the sellers.
The buyer has now come up in appeal to this Court.
Article 115 of the Jammu and Kashmir Limitation Act which is in the same terms as article 85 of the Indian Limitation Act except as to the period of limitation, is set out below: Description of suit Period of Limitation Time from which period begins to run For the balance due Six years The close of the on a mutual open and which the last current account, wh item admitted or ere there have been proved is entered reciprocal demands in the account; between the parties such year to be computed as in the account.
If the article applied the suit would be clearly within time as the last item found to have been entered in the account was on June 23, 1947.
The only question argued at the bar is whether the account between the parties was mutual.
The question what is a mutual account, has been considered by the courts frequently and the test to determine it is well settled.
The case of the Tea Financing Syndicate Ltd. vs Chandrakamal Bezbaruah (1) may be referred to.
There a company had been (1) Cal, 649.
72 566 advancing monies by way of loans to the proprietor of a tea estate and the proprietor had been sending tea to the company for sale and realisation of the price.
In a suit brought by the company against the proprietor of the tea estate for recovery of the balance of the advances made after giving credit for the price realised from the sale of tea, the question arose as to whether the case was one of reciprocal demands resulting in the account between the parties being mutual so as to be governed by article 85 of the Indian Limitation Act.
Rankin, C.J., laid down at p. 668 the test ,to be applied for deciding the question in these words: " There can, I think, be no doubt that the requirement of reciprocal demands involves, as all the Indian cases have decided following Halloway, A.C.J., transactions on each side creating independent obligations on the other and not merely transactions which create obligations on one side, those on the other being merely complete or partial discharges of such obligations.
It is further clear that goods as well as money may be sent by way of payment.
We have therefore to see whether under the deed the tea, sent by the defendant to the plaintiff for sale, was sent merely by way of discharge of the defendant 's debt or whether it was sent in the course of dealings designed to create a credit to the defendant as the owner of the tea sold, which credit when brought into the account would operate by way of set off to reduce the defendant 's liability.
" The observation of Rankin, C.J., has never been dissented from in our courts and we think it lays down the law correctly.
The learned Judges of the appellate bench of the High Court also appear to have applied the same test as that laid down by Rankin, C.J. They however came to the conclusion that the account between ' the parties was mutual for the following reasons: " The point then reduces itself to the fact that the defendant company had advanced a certain amount of money to the plaintiffs for the supply of grains.
This excludes the, question of monthly 567 payments being made to the plaintiffs.
The plaintiffs having received a certain amount of money, they became debtors to the defendant company to this extent, and when the supplies exceeded Rs. 13,000 the defendant company became debtors to the plaintiff and later on when again the plaintiff 's supplies exceeded the amount paid to them, the defendants again became the debtors.
This would show that there were reciprocity of dealings and transactions on each side creating independent obligations on the other." The reasoning is clearly erroneous.
On the facts stated by the learned Judges there was no reciprocity of dealings; there were no independent obligations.
What in fact had happened was that the sellers had undertaken to make delivery of goods and the buyer had agreed to pay for them and had in part made the payment in advance.
There can be no question that in so far as the payments had been made after the goods had been delivered, they had been made towards the price due.
Such payments were in discharge of the obligation created in the buyer by the deliveries made to it to pay the price of the goods delivered and did not create any obligation on the sellers in favour of the buyer.
The learned Judges do not appear to have taken a contrary view of the result of these payments.
The learned Judges however held that the payment of Rs. 13,000 by the buyer in advance before delivery had started, made the sellers the debtor of the buyer and had created an obligation on the sellers in favour of the buyer.
This apparently was the reason which led them to the view that there were reciprocal demands and that the transactions had created independent obligations on each of the parties.
This view is unfounded.
The sum of Rs. 13,000 had been paid as and by way of advance payment of price of goods to be delivered.
It was paid in discharge of obligations to arise under the contract, It was paid under the terms of the contract which was to buy goods and pay for them.
It did not itself create any obligation on the sellers in favour of the buyer; it was not intended to be and did not amount to an independent transac 568 tion detached from the rest of the contract.
The sellers were under an obligation to deliver the goods but that obligation arose from the contract and not from the payment of the advance alone.
If the sellers had failed to deliver goods, they would have been liable to refund the monies advanced on account of the price and might also have been liable in damages, but such liability would then have arisen from the contract and not from the fact of the advances having been made.
Apart from such failure, the buyer could not recover the monies paid in advance.
No question has, however, been raised as to any default on the part of the sellers to deliver goods.
This case therefore involved no reciprocity of demands.
Article 115 of the Jammu and Kashmir Limitation Act cannot be applied to the suit.
The learned Judges appear also to have taken the view that since the goods were not delivered at the times fixed in the contract, and the prices due were not paid at the end of the months, the parties clearly indicated their intention not to abide by the contract.
We are unable to agree with this view.
Such conduct only indicated that the parties had extended the time fixed under the contract for delivery of the goods and payment of price, leaving the contract otherwise unaffected.
The learned Judges also observed that the contract did not provide how the amount advanced was to be adjusted.
But it seems clear that when the contract provided that the advance was towards the price to become due, as the learned Judges themselves held, it followed by necessary implication that the advance had to be adjusted against the price when it became due.
So there was a provision in the contract for adjusting the advance.
We think it fit also to observe that it is somewhat curious that any question as to the application of article 115 was allowed to be raised.
The applicability of that article depends on special facts.
No such facts appear in the plaint.
There is no hint there that the account was mutual.
We feel sure that if the attention of the learned Judges of the High Court had been 569 drawn to this aspect of the matter, they would not have permitted any question as to article 115 being raised, and the parties would have saved considerable costs thereby.
We therefore come to the conclusion that the appeal must be allowed.
The judgment and I order of the learned Judges of the appellate bench of the High Court are set aside and those of the learned Single Judge of the High Court are restored.
The appellant will be entitled to the costs in this Court and of the hearing of the appeal before the High Court.
Appeal allowed.
| Under a contract for the sale of goods, the buyer paid an advance amount towards the price of the goods to be supplied and various quantities of goods were thereafter delivered by the sellers.
The buyer from time to time made various other payments towards the price of the goods after they had been delivered.
The last delivery of goods was made on June 23, 1947, and the suit was brought on October 10, 1950, by the sellers for the balance of the price due for goods delivered.
The sellers pleaded that the suit was within time and relied on article 115 Of the Jammu and Kashmir Limitation Act under which the period of limitation was six years for a suit " for the balance due on a mutual, open and current account, where there have been reciprocal demands between the parties.
564 Held, that article 115 was not applicable to the case as there was no mutual account based on reciprocal demands.
The payment made by the buyer after deliveries had been given to it were in discharge of the obligations to pay the price due on account of these deliveries; the amount paid in advance was paid under the contract in discharge of obligations to arise ; none of such payments created an independent obligation in the sellers towards the buyer.
Tea Financing Syndicate Ltd. vs Chandrakamal Bazbaruah, Cal.
649, approved.
| 776.txt |
Appeals Nos. 2007 and 2008 of 1966.
Appeals by special leave from the judgment and order dated September 28, 1965 of the Kerala High Court in O.P. Nos. 219 and 223 of 1964.
83 D.R. Prem, R. N. Sachthey and section P. Nayar, for the appel lants (in both the appeals).
S.T. Desai and R. Gopalakrishnan, for the respondent (in both the appeals).
The Judgment of the Court was delivered by Sikri, J.
These appeals, by special leave, are directed against the judgment of the High Court of Kerala allowing two petitions filed by the respondent, M/s. A. section Bava, under article 226 of the Constitution.
The High Court, by this judgment, quashed two orders dated February 4, 1964, and directed the Collector of Customs, & Central Excise, Cochin, to hear the appeals preferred by M/s. A. section Bava.
The relevant facts are as follows: M / section A. section Bava.
hereinafter referred to as the petitioner, is a firm of dealers in Tobacco.
By two orders of adjudication dated March 31, 1963, the Assistant Collector of Customs demanded the payment of duty under Rule 40 of the Central Excise and Salt Rules, 1944.
The petitioner filed appeals against these orders on or about July 4, 1963, to the Collector of Customs & Central Excise.
The petitioner made a representation on October 3, 1963, requesting that it may not be required to deposit.
the duty demanded pending appeal.
The Collector, by letter dated January 9, 1964, rejected the representation and requested the petitioner to deposit the duty within 15 days of the receipt of the letter.
On the petitioner failing to deposit the amount, the appeals were dismissed on December 4, 1964.
Thereupon, as already stated, the petitioner filed two petitions under article 226 and the petitions having been allowed, and the appellant having obtained special leave, the appeals are now before us.
The High Court allowed the petitions on the ground that the notification No. 68/63 dated May 4, 1963, issued under section 12 of the Excise and Salt Act, 1944, hereinafter referred to as the Excise Act, declaring that section 129 of the , relating to matters specified therein shall be applicable in regard to like matters in respect of the duties imposed by section 3 of the Excise Act was in excess of the powers conferred under section 12 of the Excise Act.
The High Court also rejected the argument of the Collector of Customs and Central Excise that the petitioner having invoked section 129 of the , in the appeals preferred by it by praying for the dispensation of deposit, was precluded from proceeding under article 226 of the Constitution.
The learned counsel for the appellants has raised three points before us: (1)The petitions under article 226 were not maintainable as the petitioner did not avail himself of the remedy of revision provided by section 36 'of the Excise Act.
p(N)1SCI 7(a) 84 (2)The petitioner having availed of the remedy under section 12( of the was debarred from challenging the impugned notification, dated May 4, 1963.
(3)The impugned notification applying section 129 of the Custom: Act was good.
There is no force in the first point.
First, the point was no taken in the High Court.
Secondly, it is settled that the existence of a remedy by way of revision does not bar the jurisdiction of the High Court to entertain a petition under article 226.
Moreover the petitioner had alleged that the Collector had no jurisdiction to demand the deposit or duty pending the appeals as the notification dated May 4, 1963, was bad insofar as it applied section 129 of the .
In these circumstances it was not necessary for the petitioner to have filed revisions.
There is equally no force in the second point.
If the petitioner had not applied for dispensation of the deposit of the duty, the appellants would have contended that the petitions under article 226 were not maintainable.
Moreover, as already stated, the petitions raised a question of jurisdiction.
To appreciate the third point, it is necessary to extract the relevant statutory provisions.
Section 12 of the Excise Act authorises the Central Government to apply provisions of the , now replaced by the , in the following terms: "12.
The Central Government may, by notification in the Official Gazette, declare that any of the provisions of the , relating to the levy of an exemption from customs duties, drawback of duty, such modifications and alterations as it may consider necessary or desirable to adapt them to the circumstances, be applicable in regard to like matters in respect of the duties imposed by section 3".
The relevant part of the impugned notification dated May 4, 1963, reads as follows: " In exercise of the powers conferred by Sec. 12 of the Central Excise & Salt Act, 1944 (1 of 1944) the Central Government declares that the provisions of Section 129 of the , relating to matters specified herein shall be applicable in regard to like matters in respect of the duties imposed by Sec. 3 of the first mentioned Act. " Section 129 of the reads thus: "129.
(1) Where the decision or order appealed against relates to any duty demanded in respect of goods 85 which are not under the control of customs authorities or any penalty levied under this Act, any person desirous of appealing against such decision or order shall, pending the appeal, deposit with the proper officer the duty demanded or the penalty levied: Provided that where in any particular case the appellate authority is of opinion that the deposit of duty demanded or penalty levied will cause undue, hardship to the appellant, it may in its discretion dispense with such deposit, either unconditionally or subject to such conditions as it may deem fit.
(2)If upon any such appeal it is decided that the whole or any portion of such duty or penalty was not leviable, the proper officer shall return to the appellant such amount of duty or penalty as was not leviable.
" It will be noticed that section 129 requires an appellant to deposit the duty or penalty levied pending an appeal.
In other words, before an appeal can be heard the appellant must deposit the duty or penalty levied.
But under section 35 of the Excise Act, a person ,Aggrieved byany decision or order has an unfettered right to appeal.
Thequestion that arises in these appeals is whether the provisions ofs.
129 of the can be said to be provisions relating to procedure. relating to appeals ' within section 12 of the Excise Act.
As we have already said, the appeals are filed under section 35 of the Excise Act.
Section 129 of the debars the hearing of them unless the duty or penalty is paid.
This, it seems to us, is not procedure relating to appeals.
This Court in Hoosein Kasam Dada (India) Ltd., vs The State of Madhya Pradesh(1) had to consider a similar provision in section 22 of the Central Provinces and Berar Sales Tax Act, 1947.
Section 22(1), as originally enacted, read thus: " 22.
(1) Any dealer aggrieved by an order under this Act may, in the prescribed manner, appeal to the prescribed authority against the order: Provided that no appeal against an order of assessment, with or without penalty, shall be entertained by the said authority unless it is satisfied that such amount of tax or penalty or both as the appellant may admit to be due from him, has been paid." (1) [1953]987;4 S.T.C 114, 86 It was amended thus: "22.
(1) Any dealer aggrieved by an order under this Act May, in the prescribed manner, appeal to the prescribed authority against the order: Provided that no appeal against an order or assessment, with or without penalty shall be admitted by the said authority unless such appeal is accompanied by a satisfactory proof of the payment of the tax, with penalty, if any, in respect of which the appeal has been preferred.
S.R. Das, J., as he then was, repelled the argument of the learned) Advocate that 'the requirement as to the deposit of the amount of the assessed tax does not affect the right of appeal itself, which still remains intact, but only introduces a new matter of procedure ', and observed: "There can be no doubt that the new requirement 'touches ' the substantive right of appeal vested in the appellant.
Nor can it be overlooked that such a requirement is calculated to interfere with or fetter, if not to impair or imperil, the substantive right.
The right that the amended section gives is certainly less than the right which was available before.
A provision which is calcu lated to deprive the appellant of the unfettered right of appeal cannot be regarded as a mere alteration in procedure.
Indeed the new requirement cannot be said merely to regulate the exercise of the appellant 's pre existing right but in truth whittles down the right itself and cannot be regarded as a mere rule of procedure.
" These observations are fully applicable in the present case.
1 Section 35 of the Excise Act gave a right of appeal, but section 129 of the whittles down the substantive right of appeal and accordingly it cannot be regarded as "procedure relating to appeals" within section 12 of the Excise Act.
The appeals accordingly fail and are dismissed with costs.
One hearing fee.
V P S Appeals dismissed.
| 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.
| 2231.txt |
Appeal No. 1460 of 1969.
Appeal by special leave from the judgment and decree dated January 16, 1969 of the Gujarat High Court in Letters Patent Appeal No. 31 of 1966.
S.T. Desai, M. H. Chhatrapati, P. N. Tiwari and O. C. Mathur, for the appellants.
D. Y. Patel and I. N. Shroff, for respondents Nos. 1 and 3.
R. H. Dhebar, B. Datta and section P. Nayar, for respondent No. 2.
The Judgment of the Court was delivered by Bhargava, J.
The predecessors in interest of plaintiff respondents 1 to 3 gave, in 1895, land, bearing Serial Nos. 503 and 506 of Asarva within the limits of Ahmedabad Municipal Corporation, on lease for a period of 49 years at an annual rent of Rs. 199/ , to three persons, Shri Ramchandra Ambaram, Pardesi Sukhlal Anandram and Mehta Bogha Mugatram.
These original lessees, during the currency of the lease, made transfers of their rights and also granted sub leases.
A number of chawls and some other buildings were constructed on the land and some of them were let out on rent.
In 1945, the lessors, after serving notice on the occupants to give vacant possession, filed a suit for recovery of possession.
The suit was decreed on 8th July, 1946 on the basis of a consent decree as against some of the occupants including the four defendant appellants.
In the agreement, on the basis of which the decree was passed, it was agreed that the defendant appellants will continue in possession of the property for a period of five years and will hand over possession after the expiry of this period of five years.
For this period, they undertook to pay mesne profits every month at various rates on the lands in their possession.
Between them, the four appellants were required to pay @ Rs. 227 10 0 per mensem making up an annual amount of mesne profits of Rs. 2,731 8 0.
Similar terms were included 173 in the consent decree against other defendants who joined the compromise on the basis of which the decree was passed on 8th July, 1946.
The remaining defendants in the suit entered into a later compromise and,, as a result, another consent decree was passed on ' 28th January, 1949 against those defendants.
Under this decree, these remaining defendants were also entitled to continue in, possession for a period of five years from the date of the decree, but were required to pay mesne profits for this period.
All the defendants governed by the two decrees dated 8th July, 1946 and28th January, 1949, had to pay between them mesne profits monthly which worked out to an amount of Rs. 7,314 8 0 per annum.
Before, the expiry of the period of five years prescribed by either of the two decrees, the Custodian of Evacuee Property, in 1950, took possession of all the properties, as one of the decreeholders had become an evacuee.
After the property was released by the Custodian of Evacuee Property, an application was filed by the decree holders on 26th March, 1953 for execution of the consent decree dated 8th July, 1946 and, in that execution, possession was sought against the appellants of the property which was in .their possession.
Subsequently, a number of suits were filed for recovery of mesne profits also.
The Execution Court directed eviction of the appellants after over ruling the various objections ' raised by them in the execution proceedings.
The decision of the Execution Court on the objections taken by the appellants was challenged in appeal before the District Judge, in second appeal before a single Judge of the High Court of Gujarat, and by a Letters Patent appeal before a Division Bench.
All the Courts rejected the objectic raised by the appellants and upheld the order of the Execution Court directing delivery of possession.
It is against the judgment of the Division Bench in Letters Patent appeal in this execution that the appellants have come up to this Court in this appeal by special leave.
It is unnecessary for us to mention all the various objections that were taken at various stages by the appellants in the Execution Court, in the Court of the District Judge, or before the single Judge or the Division Bench in the High Court.
Only three of the points raised have been urged before us and, therefore, we are called upon to deal with these three points only.
The first point raised is that the decree which was passed on 8th July, 1946 was a nullity, because it was passed in contravention of section 11 ( 1 ) of the Bombay Rent Restriction Act No. XVI of 1939 (hereinafter referred to as "the Act").
This objection has been over ruled by the High Court on 'the ground that the provisions of the Act were not attracted by the lease in question on the expiry of which the suit for ejectment was decreed under the 174 consent decree dated 8th July, 1946.
Counsel appearing for the appellants urged that the terms of the decree passed as well as the terms contained in the lease deed of 1895 show that the Act was applicable because the land, to which the suit for ejectment related, was covered by the definition of "premises" to which the Act applies.
The expression "premises" is defined in section 4(2) of the Act as meaning (a) any building or part of a building let separately for any purpose whatever, including any land let therewith, or, (b) any land let separately for the purpose of being used principally for business or trade.
Admittedly, the lease of 1895 was not in respect of any building or part of a building let separately for any purpose whatever.
Reliance was placed on section 4 (2) (b) of the Act on the contention that the land had been let for the purpose of being used principally for business or trade.
Having gone through the documents relied upon by counsel for the appellants, we are unable to accept this submission.
In the plaint of the suit, as well as in the decree dated 8th July, 1946, there is no mention of the purpose for which the land was let out by the lease of 1895.
Reliance was,, however, placed on one of the pleadings in the plaint which had been reproduced in the decree in which the plaintiff respondents recited one of the terms of the lease in the following words : "On the expiry of the period of 49 years, the land shall be handed over without raising any dispute or objection or causing any obstruction, after removing whatever structures that might have been erected thereon and after making it as clear as it is." The argument was that this pleading indicates that the land was let out for making structures and those structures could only be utilised by being let out on rent.
This purpose would constitute business or trade.
We are unable to see any justification for such an inference.
The mere fact that there was a mention that structures that might have been erected will be removed can in no way lead to a reasonable conclusion that the principal purpose of the lease was the use of the land for business or trade.
Reference, in this connection, was also made to the terms of the lease of 1895; but we are unable to hold that it establishes the case of the appellants that the lease was taken principally for the purpose of using the land for business or trade.
All that the lease mentions is that it is for constructing houses and, at a later stage, 175 there is a mention that "in the said fields, the lessees could construct houses in any manner or use it in any manner.
" The other parts of the lease, on which reliance has been placed are as follows : 1.On the land of those fields we can build houses in any manner and we will receive income thereof and you will not raise any dispute or obstruction in respect thereof.
We can spend any amount on the construction of those houses which we will not demand from you for whatever reason nor we will have the right to deduct from rent payable to you.
2.If any houses are constructed thereon, we will remove the superstructures.
If we do not remove the structures then you will be the owners of the said structures.
If you take them, then we and our heirs and representatives will not object.
" We are unable to find even in these quotations from the lease any mention that the land is going to be used principally for the purpose of business or trade.
The lease does mention that it was being taken for constructing houses. 'Mere was no mention at all, however, of the manner in which the constructed houses were to be utilised.
Further, there is a clear option given to the lessees that they could us, , the land in any manner if they did not construct any houses.
These are terms on the basis of which it cannot be said that the land was being let out for business purposes.
The submission of counsel for the appellants was that, if the purpose was to construct houses and let them out on rent, that would constitute the use of the land for the purpose of business inasmuch as the lessees would be earning income from letting out those houses.
We are unable to accept this submission, because we do not think that the word "business ' or "trade" used in the definition of "premises" in section 4 (2) (b) of the Act comprehends within it a lease which is merely for constructing houses.
Learned counsel cited before us a number of decisions of Indian and English Courts, including decisions of the Privy Council and this Court,, in which the scope of the word "business" was interpreted.
That interpretation was given in connection with the word "business" as used either in income tax law or in the terms of a covenant or the Companies Act, etc.
We do not consider that it will be at all profitable to refer to them when interpreting the word "business" or "trade" as used in section 4(2) (b) of the Act, because none of those interpretations will cover a case similar to the one before us, where the lease was merely a permissive one giving a right to the lessees to construct houses and let them out or to use the land in any manner.
When the purpose of the lease 176 was expressed in this way, it is impossible to hold that the principal use, to which the land was to be put by the lessees, was business or trade.
As a consequence of this interpretation, it has to be held that the Act was not applicable to the lease of 1895 and, therefore, no question arises of the decree of 8th July, 1946 being invalid on the ground of contravening section 11 ( 1 ) of the Act.
The second point urged by learned counsel was that, by the consent decree itself, a new tenancy was created which was to continue for five years and, in the, meantime, the Bombay Rents Hotel & Lodging House Rates Control Act, 1947 came into force and the appellants were protected from ejectment under the provisions of that Act.
The consent decree does not state that a new tenancy is being created.
The argument was that the terms of that consent decree should be interpreted as indicating an intention to create a new tenancy. ' We are unable to find any such terms.
On the face of it, all that the, consent decree envisaged was that, though the judgment debtors were liable to immediate eviction, the decree holders agreed to let them continue in possession for a period of five years.
Since this concession was being granted as a special case, the decree holders insisted that mesne profits should be paid at a much higher rate so much so that between all the defendants, governed by the two decrees of 8th July, 1946 and 28th January, 1949, the amount payable as mesne profits became Rs. 7,314 8 0 per annum which had no relation with the original rent of Rs. 199/ per annum for the entire land fixed by the lease of 1895" In fact the decree holders sought further protection by requiring the judgment debtors to pay the mesne profits in monthly instalments, and the instalments were so fixed that the mesne profits due for five years were to be paid within a period of three years.
There was the further clause that, in case of default of payment of the mesne profits, the defaulting judgment debtors could be immediately called upon to deliver possession.
These terms can, in no way, be interpreted as creating a new tenancy constituting the decree holders as landlords and the judgmentdebtors as their tenants.
The terms of the consent decree neither constituted a tenancy nor a licence.
All that the decree holders did was to allow the judgment debtors to continue in possession for five years on payment of mesne profits as a concession for entering into a compromise.
The argument advanced must, therefore, be rejected.
Reference was made by learned counsel for the appellants, in support of his argument, to a decision of the Bombay High Court in Gurupadappa, Shivlingappa Itgi vs Sayad Akbar Sayad Budan Kadri(1), but that case, in our opinion, has no application.
In (1) 52 B.L.R. 143. 177 that case, in the consent decree itself, the first clause was that the defendant admits that he is a monthly tenant of the plaintiff and is to continue in possession till January 31, 1948.
This clause specifically and clearly, in the language used, made it manifest that the defendant was a monthly tenant and was to continue in that capacity in possession.
It was in these circumstances that it was held that a new tenancy had been created from the date of the consent decree.
In the case before us, the terms of the consent decree are in no way comparable with the terms used in the consent decree in that case.
The language used in the consent decree in the present case contains no indication of any intention to create a tenancy, so that the Bombay Rent Control, Act.
1947 could never apply to the case of the appellants.
The third point raised by learned counsel was that, since there was one single suit based on the lease of 1895 for ejectment of persons in possession, there could be only one single decree in that suit and the Court was incompetent to pass two separate decrees on 8th July, 1946 and 28th January, 1949.
Counsel, in this connection, relied on the provisions of rules 1 and 12 of Order XX of the Code of Civil Procedure which relate to the pronouncement of judgment and the Court passing a decree in a suit.
These rules have really no relevance.
On the other hand, rule 3 of Order XXIII, C.P.C., clearly envisages a decree being passed in respect of part of the subject matter of the suit on a compromise, and rule 6 of Order XII, C.P.C., permits the passing of a judgment at any stage without waiting for determination of other questions.
Thus, it is clear that, in the same suit, there can be more than one decree passed at different stages.
In the present case, the first decree of 8th July, 1946, was based on a compromise between the plaintiffs and some of the defendants, while the second decree dated 28th January, 1949 decided the rights of the remaining defendants.
Th. , two decrees were separate and independent and neither of them could be treated as a nullity.
In these circumstances, the Execution Court was right in re jecting all the objections raised by the appellants and in directing delivery of possession.
The appeal fails and is dismissed with costs.
V.P.S. Appeal dismissed.
| The predecessors in interest of the respondents, leased certain land at an annual rent of Rs. 199, in 1895 for 49 years.
The lease was a permissive one and gave right to the lessees to construct houses and let them out or to use the land in any manner.
The original lessees, during the currency of the lease made transfers of their rights and also granted sub leases.
A number of chawls and other buildings were constructed on the land and were let out.
The respondents terminated the lease and sued for recovery of possession in 1945.
A compromise was entered into with the appellants, who were some of the occupants, and a consent decree was passed on 8th July 1946.
Another consent decree was passed against the remaining defendants on 28th January 1949.
Under the two decrees the defendants were allowed to remain in possession for 5 years from the dates of the respective decrees and they bad also to pay monthly mesne profits which worked out to more than Rs. 7,000 per annum, and that amount was so fixed that the mesne profits due for the 5 years were to be paid in 3 years.
There was also a clause that in case of default, the defaulting judgment debtors could be immediately called upon to deliver possession In 1953, the respondents sought possession by executing the consent decree dated 8th July 1946.
On the questions : (1) Whether the decree contravened the provisions of the Bombay Rent Restriction Act, 1939, as the leased land was 'premises ' within the meaning of section 4(2)(b) of that Act; (2) whether the consent decree created a new tenancy which was protected by the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947; and (3) whether the passing of two separate decrees was illegal as the court was not competent to do so.
HELD : (1) 'Premises ' is defined in section 4(2) (b) as any land let separately for the purpose of being used principally for business or trade.
The words 'business or trade ' do not comprehend a lease which is merely for constructing houses.
The terms of the lease, in the present case, do not establish that the lease was taken principally for using the land for 'business or trade. ' [174 C D ; 175 G H] The mere fact that there was a mention in the pleadings that any structure that might have been erected would have to be removed, would in no way lead to the conclusion that the principal purpose of the lease was to build structures and that the structures should be utilised for being let out on rent and thus constitute business or trade.
Therefore tile decree did not contravene the provisions of the Bombay Rent Restriction Act.
[174 F G; 175 D E; 176 A] 172 (2)On the face of it, all that the consent decree envisaged was that though the judgment debtors were liable to immediate eviction, the decree holders agreed to let them continue in possession for a period of 5 years, and, since the concession was granted as a special case, the decree holders insisted on payment of mesne profits at a much higher rate.
The terms of the consent decree could in no way be interpreted as creating a new tenancy constituting the decree holders as landlords and the judgment debtors as their tenants.
[176 C E, F G] (3)Order 23, r. 3 and 0. 12, r. 6 of the Civil Procedure Code envisage that in the same suit there can be more than one decree passed at different stages [177 D F]
| 2862.txt |
rit Petitions Nos.
5870 93/81, Under Article 32 of the constitution of India WITH Civil Appeal NO.
2226/85 From the Judgment and Order dated 14.
2. 1984 of the Bombay High Court in Writ Petition No. 4215 of 1983 Yogesbwar Prasad, H. Salve, P. H. Parckh, Mrs., Rani Chhabra, Ms. Data Krishnamurthy, Ms. A. Subhashini, A. section Pundir, J.S. Bali, section Balakrishnan, Pramod Sarup and R. section Sodhi, for the petitioners.
V. B. Joshi for the Appellant.
The following Judgment of the Court was delivered by DESAI, J. Promise of socio economic justice depicted in rosy language in articles 38, 39 and 41 is being translated into a real action oriented programme by the stand taken by the Union of India and the Ministry of Finance in this group of petitions and application for special leave which deserves approbation and commendation.
Amongst the neglected sections of the society women form a bulk.
In that bigger class widows are possibly the worst sufferers both socially and economically.
To them, a helping hand is extended, for providing succour sorely needed, by the two statements made in the Court by Mr. B. Dutta, learned counsel appearing for the Union of India and the Ministry of Finance.
Throughout the course of hearing, Mr. B. Dutta adopted a positive, constructive and helpful attitude and he is equally entitled to our appreciation.
As a sequel to the decision of the Constitution Bench of this Court in D.S. Nakara and Of hers vs Union of India(l) a number of petitions came to be filed by persons claiming to be entitled to the socially beneficent approach of the Court.
One such group comprised (1) ; 1044 widows of erstwhile Government servants who are not in receipt of family pension.
Family pension came to be conceptualised in the year 1950.
When a Government servant die in harness or soon after retirement, in the traditional Indian family on the death of the only earning member, the widow or the minor children were not only rendered orphans but faced more often destitution and starvation.
Traditionally speaking the widow was hardly in a position to obtain gainful employment.
She suffered the most in as much as she was deprived of the companionship of the husband and also became economically orphaned.
As a measure of socioeconomic justice family pension scheme was devise to help the widows tie over the crisis and till the minor children attain majority to extend them some succour.
This appeared to be the underlying motivation in devising the family pension scheme.
It was liberalised from time to time.
The liberalisation was however subject to the condition that the Government Servant had in his life time agreed that he shall make a contribution of an amount equal to two months ' emoluments or Rs. 5,000 whichever is less out of the death cum retirement gratuity.
Those Government servants who did not accept this condition were denied the benefit of family pension scheme.
Focussing on the liberalisation that was introduced in 1964 it transpires that the widow and the minor children of those Government servants who died prior to 1964 were not eligible for the benefit of liberalised scheme.
The other class which was left out of the liberalisation scheme was those Government servants who specifically opted out of the family pension scheme, 1964.
The resultant situation was that since January 1,1964 there were in force two parallel schemes in operation namely a) a pre liberalisation scheme which continued to be in force those who retired prior to 1.1.1964 or those who did not contribute out of the death cum retirement gratuity, roughly styled as non contributory scheme.
The other was the contributory scheme.
Both these schemes are incorporated in Rule 54 and 55 respectively of the Civil Services Pension Rules 1972.
The Union of India in its onward march for ushering in socioeconomic justice in the form of social security further took a bold and imaginative step on September 22, 1977 by which the pre condition of two months ' emolument out of death cum retirement gratuity was done away with.
Recognising the need for such a 1045 beneficial change, the memorandum introducing the 1977 liberalisation recorded the decision of the Union of India as under: "The staff side has suggested in the National Council of the JCN that this family pension is a social security measure and the employee should not be called upon to contribute towards the scheme.
The matter has been examined in the light of the recommendations of the National Council and the President is pleased to decide that no deduction should be made from the death cum retirement gratuity as a contribution towards the family pension." Accordingly since September 22, 1977 the contributory scheme ceased to exist.
A very analogous situation arose.
The widows of the Government Servants who had not agreed to make the contribution in accordance with the 1964 scheme were denied the benefit of pension scheme and this disability continued even after the changes introduced in 1977 when the scheme ceased to be contributory.
Such widows moved this Court in writ petitions.
Widows similarly situated had also filed Writ Petition No. 3749/84 in the High Court of Judicature at Bombay.
A Division Bench of the High Court rejected the writ petition for reasons, which, in our opinion, are wholly untenable but that is beside the point.
We accordingly granted leave to the petitioners whose petition were dismissed by the Bombay High Court.
Rule nisi was issued in writ petitions filed in this Court.
It is not necessary to examine the concept of pension.
As already held by this Court in numerous judgments that pension is a right not a bounty or gratuitous payment.
The payment of pension does not depend upon the discretion of the Government but is governed by the relevant rules and anyone entitled to the pension under the rules can claim it as a matter of right.
Deoki Nandan Prasad vs State of Bihar and Ors.(1) State of Punjab & Anr.
vs Iqbal Singh(2) and D.S. Vakara & Ors.
vs Union of India.
Where the Government Servant rendered service, to compensate which a family pension scheme is devised, the widow and the dependent minors would equally be entitled to family pension as a matter of right.
In fact we look upon pension not merely as a statutory right but as the fulfilment of a constitutional promise in as much as it partakes the character of public assistance in cases of unemployment, (1) [1971] Supp.
SCR 634 (2) [19761 3 SCR 360 1046 old age, disablement or similar other cases of underserved want.
Relevant rules merely make effective the constitutional mandate.
That is how pension has been looked upon in D.S. Nakara 's judgment.
At the hearing of group of matters we pointed out that since the family pension scheme has become non contributory effective from September 22, 1977 any attempt at denying its benefit to widows and dependents of Government servants who had not taken of the 1964 liberalisation scheme by making or agreeing to make necessary contribution would be denial of equality to persons similarly situated and hence violative of article 14.
If widows and dependents of deceased Government servants since after September 22, 1977 would be entitled to benefits of family pension without the obligation of making contribution, those widows who were denied the benefits on the ground that the Government servants having not agreed to make the contribution, could not be differently treated because that would be introducing an invidious classification: among those who would be entitled to similar treatment.
When this glaring dissimilar treatment emerged in the course of hearing in the Court, Mr. B. Dutta learned counsel appearing for the Union of India requested for a short adjournment to take further instructions.
On the next hearing Mr. B. Dutta made a statement on behalf of Union of India, the relevant portion of which may be extracted: "Government have examined the matter.
As the Family Pension Scheme, 1964 was made non contributory from 22.9.1977, Government would agree to extend the benefit of the Family Pension Scheme 1946 to all the living widows.
Payment to such widows may be made from 22.9.1977 or the date of death of the pensioner, whichever is later, till the date of death of the widow.
The benefit will also be available in cases where the death of the pensioner occurs hereafter.
Administrative procedures are being evolved to facilitate identification of widows of Government pensioners and to lay down the guidelines for the determination of family pensions.
The benefit of family pension mentioned above will not apply to the widows of Government servants who would not have been covered by the scheme even if the scheme had been given retrospective effect." 1047 While examining the statement it transpired that certain clarifications were necessary. 'Common Cause ' a Society which is a petitioner in one petition pointed out certain aspects of the statement which needed clarification.
The Court directed the the 'Common Cause ' society to send a letter to the Ministry of Finance indicating the points on which clarifications were required by Y them.
The issues raised by the Society may be summed up as under: "(i) whether the orders will apply to the widow/minor son/ unmarried daughter as defined in the relevant provisions of family pension scheme; (ii) whether the scheme of pension as prescribed with effect from 1.1.1973 will be made uniformly applicable to all the eligible persons in the family pension scheme; and (iii) whether the benefits of family pension scheme will be made available to all pensioners irrespective of the fact whether they had or had not contributed two months ' emoluments in terms of the original family pension scheme, which contribution was subsequently deleted with effect from 22 9. 1977.
" Today when the matter was taken up for final hearing another statement was submitted by Mr B. Dutta on behalf of the of India.
The Government of India submitted its clarifications on the afore mentioned three points which reads as under: "(i) Governments are prepared to grant to the dependents i.e. minor sons, etc of the pensioners governed unclear pre 1964 scheme the same pensioners benefits as are admissible to the dependents under current pension rules.
(ii) It is clarified that Government are agreeable to apply the increased pension rates introduced from 1.1 1973 to all the eligible persons, including dependents.
This will, however, be subject to the condition that the total amount admissible (excluding dearness relief) under the liberalised provision now being agreed to, will not be more than what is admissible to a person covered 1048 under the Rules.
(iii) Government have already agreed to the grant of ar rears of family pension with effect from 22.9.77 the date on which contribution of two months ' emoluments by pensioners was dispensed with.
Persons who are now to be granted the benefits of family pension will not be required to contribute two months emoluments.
Similarly, no demand for refund of contribution already made by pensioners will be entertained, ' The clarifications offered are clear, unambiguous and wholly satisfactory.
Learned counsel appearing for the petitioners stated that nothing more is required to be done and requested us to incorporate the clarifications submitted to the Court.
Accordingly these petitions and appeals are disposed of in terms as herein above indicated.
We order accordingly.
The appeal against the decision of the Division Bench of the Bombay High Court is also allowed in the same terms.
This is a happy ending to this extremely humane problem.
| Since January 1, 1964, there were in force two parallel family pension schemes in operation, namely, (a) a pre liberalisation scheme which continued to be in force for those who retired prior to 1.1.1964 or those who did not contribute out of the death cum retirement gratuity, roughly styled as non contributory scheme.
The other was the contributory scheme.
Both these schemes are incorporated in Rule 51 and 55 respectively of the Civil Services Pension Rules 1972.
On September 22, 1977 the Government of India done away with the pre condition of contribution of two months emoluments out of death cum retirement gratuity.
But, the widows of the Government servants who had not agreed to make the contribution in accordance with the 1964 scheme were denied the benefit of pension scheme and this disability continued even after the changes introduced in 1977 when the scheme ceased to be contributory Such widows moved Supreme Court and Bombay High Court in writ petitions.
The High Court rejected the writ petition Disposing of the petitions and the appeal to this Court, ^ HELD: 1.
Since the family pension scheme has become non contributory effective from September 22,1977, any attempt at denying its benefit to widows and dependents of Government servants who had not taken advantage of the 1964 liberalisation scheme by making or agreeing to make necessary contribution would be denial of equality to persons similarly situated and hence violative of article 14.
If widows and dependents of deceased Government servants since after September 22, 1977 would be entitled to benefits of family pension scheme without the obligation of making contribution, those widows who were denied the benefits of the ground that the Government servants having not agreed to make the contribution, could not be differently treated because that would be introducing an invidious classification among those who would be entitled to similar treatment.
[1046 B D] 1043 2.
Where the Government servant rendered service, to compensate which a family pension scheme is devised the widow and the dependent minors would equally be entitled to family pension .19 a matter of right.
If fact the Court looks upon pension not merely as a statutory right but as the fulfilment of a constitutional promise inasmuch as it partakes the character of public assistance in cases of unemployment old age, disablement or similar other cases of undeserved want.
Relevant rules merely make effective the constitutional mandate.
That is how pension has been looked upon in D.S. Nakara 's case; , [1045; G H 1046 A]
| 5012.txt |
minal Appeal No. 645 of 1989.
From the Judgment and Order dated 17.3.89 of the Delhi High Court in Criminal Appeal No. 270/85.
AND Criminal Appeal No. 534 of 1989.
A.P. Mohanty and S.K. Sabharwal for the Appellants.
K. Lahri, V.C. Mahajan, Mrs. Indra Sawhney and B.K. Prasad for the Respondent.
The Judgment of the Court was delivered by KULDIP SINGH, J.
Sardar Singh, his wife Saraswati and his brother 's wife Savitri were charged under Sections 302/34 and 201/34, Indian Penal Code (IPC) for the murder of one Charanjit.
The trial Court convicted Sardar Singh and his wife Saraswati on both the counts and sentenced them to imprisonment for life on the first count and for five years on the second count.
Accused Savitri was, however, acquitted by the trial Court.
The High Court dismissed the appeal filed by Sardar Singh.
Saraswati was acquitted of the charge under Sections 302/34, IPC but her conviction and sentence Under Section 201/34 IPC was maintained by the High Court.
These two appeals are by Sardar Singh and Saraswati against the judgment of the High Court.
67 Sardar Singh, appellant and one Tara Chand are real brothers.
Both the them were residing in village Jhatikara.
They were living in adjoining houses.
Deceased Charanjit was living in a house adjacent to their houses.
Charanjit 's wife had died about ten years ago and he was living in the house by himself.
Deceased Charanjit had developed illicit relation with Savitri wife of Tara Chand and also with appellant Saraswati.
The prosecution case in a nut shell is that deceased Charanjit was having illicit relations with both Saraswati and Savitri and used to visit them during night for the last so many years.
On March 31, 1983 the deceased had gone to sleep in his house in the evening and did not appear thereafter.
On April 4, 1983 Lakhmi Chand, brother of the deceased, lodged report with the police expressing suspicion against the appellants and Savitri.
It is alleged that during the course of interrogation Sardar Singh appellant made a disclosure statement and consequently led the policy party to his sitting room where he pointed out a spot covered by a cot.
Sardar Singh, thereafter, dug the floor and the dead body of the deceased was recovered from a five feet deep grave.
Thereafter, at the pointing out of the appellant Sardar Singh, the police also seized doe (wood cutter) and knife contained in a canvas bag hanging in the adjacent room.
The dead body was tied with a rope and was wrapped in three gunny bags.
The recovered knife had no blood stained while the doe was found stained with blood.
On examination by the Serologist the blood stains on the doe were found to be human and of the same group as that of the deceased.
The entire case of the prosecution is based on circumstantial evidence.
The circumstances relied upon by the prosecution are as under: (1) The deceased had illicit relations with Saraswati and Savitri, wife and brother 's wife of appellant Sardar Singh.
(2) The deceased was last seen on the night of March 31, 1983 when he went to sleep in his house and thereafter his dead body was found buried in the appellants ' house.
(3) Sardar Singh appellant, on interrogation made a disclosure statement leading to the recovery of the dead body from a five feet deep pit in the sitting room of the appellants.
(4) Recovery of doe from the possession of the appellant which was 68 found to bear the same human blood group as that of the deceased.
Relying upon the above mentioned circumstances the trial Court and the High Court have convicted the appellants.
So far as appellant Sardar Singh is concerned, the chain of circumstances relied upon by the prosecution and accepted by the courts below leaves no manner of doubt that it was he who committed the murder of Charanjit.
We have been taken through the judgments of the trial Court and that of the High Court.
We agree with the reasoning and the conclusions reached therein.
We, therefore, uphold the conviction and sentenced of appellant Sardar Singh and dismiss his appeal.
So far as appellant Saraswati is concerned the High Court dealt with her case in the following manner: "Before we part with this order, there is one more fact which needs our consideration.
In this case, the disclosure that led to the recovery of the dead body has been made by Sardar Singh appellant.
There is no evidence direct or indirect to connect the appellant Saraswati with the commission of murder, though it can safely be said that she being the inmate of the house was in know of the fact that the dead body was buried in the house with a view to cause the disappearance of evidence.
In our view, the process of digging a grave of 5 feet deep and of the size of the deceased in length, the filling of the grave and then erasing the traces of the same is a long process and she must have been necessarily involved in the same.
since, in our view, there is no evidence to connect her with the commission of murder we acquit the appellant Saraswati of the charge under Section 302/34 IPC but maintain her conviction and sentence under Section 201/34 IPC.
" We are of the view that the reasoning adopted by the High Court in acquitting Saraswati of the charge under Section 302/34 IPC is equally applicable to the charge against her under Section 201/34 IPC.
It may be correct that the process of digging a grave of five feet deep, the filling of the grave and then erasing the traces etc.
may not have been done by Sardar Singh alone but there is not an iota of evidence on the record not even a whisper to the effect that it was Saraswati who helped him in 69 concealing or causing the evidence of the commission of the offence to disappear.
Simply because she is the wife of appellant Sardar Singh and as such is supposed to be living in the same house, it cannot be assumed that she was guilty of the offence under Section 201/34 of the Indian Penal Code.
According to the Prosecution Saraswati was having illicit relation with the deceased for several years.
Sardar Singh may or may not have taken her help in concealing the dead body.
Her being wife of Sardar Singh by itself is not sufficient to prove the charge under Section 201/34 IPC against her.
We, therefore, give benefit of doubt to Saraswati, allow her appeal and acquit her of the charge under Section 201/34, Indian Penal Code.
She is already on bail.
Her bail bonds are cancelled.
T.N.A. Crl.
A. No.645/89 dismissed.
Criminal Appeal No. 534/89 allowed.
| The appellant, A 1, his wife, A 2, and his brother 's wife, A 3, were prosecuted under Sections 302/34 and 201/34 of the Indian Penal Code.
Ile entire case was based on the circumstantial evidence : (a) the deceased had illicit relations with A 2 and A 3; (b) the deceased was last seen on the night when he went to sleep in his house and thereafter his dead body was found buried in the house of A 1; (3) during interrogation A 1 made a disclosure statement and consequently lead the police party to his sitting room where he pointed out a spot covered by a cot and thereafter he dug the floor and, the dead body of the deceased was recovered from a five feet deep pit; and (4) recovery of doe (woodcutter) from his possession bearing the same human blood group as that of the deceased.
Relying upon these circumstances the trial court convicted A 1 and A 2 on both the counts and sentenced them to imprisonment for life on the first count and for five years on the second count but acquitted A 3. 'Me High Court dismissed the appeal of A 1.
However, it acquitted A 2 on the ground that there was no evidence to connect her with the commission of the murder but maintained her conviction and sentence under sections 201/34 on the ground that she being the inmate of the house was in the know of the fact that the dead body was burried in the house with a view to causing the disappearance of evidence and she must have been necessarily involved in the process of digging a grave of five feet deep, the filling of the grave and erasing the traces etc.
Both the accused filed appeals in this Courts.
Dismissing the appeal of A 1 and allowing the appeal of A 2, this Court, 66 HELD: 1.
The chain of circumstances relied upon by the prosecution and accepted by the Courts below leaves no manner of doubt that A 1 committed the murder.
Accordingly his conviction and sentence is upheld.
[68B] 2.
There is not an iota of evidence on the record not even a whisper to the effect that it was A 2 who helped in concealing or causing the evidence of the commission of the offence to disappear.
Simply because she is the wife of A 1 and as such is supposed to be living in the same house, It cannot be assumed that she was guilty of the offence under section 201/34.
A 1 may or may not have taken help of his wife in concealing the dead body.
Her being wife of A 1 by itself is not sufficient to prove the charge under section 201/34.
She is accordingly acquitted of that charge.
[68H, 69A B]
| 7015.txt |
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.
| 1439.txt |
Appeal No. 1792 of 1971.
Appeal from the Judgment and Order dated the 31st March, 1970 of the Gujarat High Court in Special Civil Application No. 545/66.
R.H. Dhebar, S.K. Dholakia and A.C. Bhatia for the appel lant.
R.M. Mehta and Girish Chandra, for Respondent.
94 The Judgment of the Court was delivered by KHANNA, J.
This appeal on certificate is against the judgment of Gujarat High Court dismissing petition under article 226 of the Constitution of India filed by the appel lant for a writ of certiorari or other appropriate writ to quash two notices issued by the respondent to the appellant under section 148 of the Income tax Act, 1961 (hereinafter referred to as the Act of 1961).
The matter relates to the assessment years 1957 58 and 1959 60.
The appellant is a public limited company which carries on the business of manufacture of pottery and sani tary wares at Morvi and other places in the State of Guja rat.
In respect of the assessment year 1957 58, the corre sponding accounting year for which ended on July 31, 1966, the appellant filed its return under the Indian Income tax Act, 1922 (hereinafter referred to as the Act of 1922).
The predecessor in interest of the responded by assessment order dated April 16, 1959 assessed the total income of the appel lant at Rs. 4,60,372.
In computing the said income the Income tax Officer allowed depreciations amounting to Rs. 5,05,487.
For the assessment year 1959 60 the appellant like wise filed return.
Assessment order in respect of that year was made on March 30, 1961 and the income of the appel lant was assessed at Rs. 11,04,650 after allowing depreciation of Rs. 3,57,926.
On October 5, 1965 a letter was addressed on behalf of the respondent to the appellant stating that there had been a mistake in the calculation of the depreciation allowance in respect of certain items of the capital assets of the appellant for the period covered by the assessment years 1955 56 to 1962 63.
As a result of the mistake, it was stated, a sum of Rs. 2,39,723 had been allowed as deprecia tion allowance in excess of the permissible limit.
Enclosed with the letter was a chart showing excess depreciation allegedly allowed during the above mentioned period.
The excess amounts of depreciation for the years 1957 58 and 1959 60 were mentioned in the chart to be Rs. 37,869 and Rs. 26,945 respectively.
The appellant company was asked if it had any objection to the rectification of the mistake, the above letter was followed by another letter wherein the respondent wrote to the appellant that "the mistake in depriciation arose because the initial depriciation was not taken into account in finding out whether the total depreciation allowed exceeded the original cost".
On Febru ary 2, 1966 the Income tax Officer addressed 'another letter to the appellant stating that for the assessment years 1957 58 and 1959 60 the income of the appellant had escaped assessment for failure of the appellant to disclose all material facts within the meaning of section 147(a) of the Act of 1961.
The appellant in reply stated that depre ciation calculation sheets had been worked by the income tax authorities and there was no failure on the part of the appellant to disclose all facts.
The impugned notices were thereafter issued on March 4, 1966 by the Incometax Officer to the appellant stating that he had reason to believe that income of the appellant chargeable to tax for the assessment years in question had escaped assessment within the meaning of section 147 of the Act of 1961.
The Income tax Officer accordingly stated that he proposed to recompute and reas sess the income/loss/depreciation 95 allowance for the aforesaid years.
The appellant was called upon to furnish returns in the prescribed form within 30 days from the date of the service of the notices.
It was also mentioned that the notices were being issued after obtaining the necessary satisfaction of the Commissioner of Income tax.
The appellant thereafter filed writ petition in the High Court on April 29, 1966.
According to the case of the appellant, there was no omission or failure on its part to disclose fully and truly all material facts necessary for the assessment.
All material facts, it was stated, regard ing the acquisition of various capital assets from time to time were on the record of the department.
The fact that initial depreciation on the new assets had been allowed was also on the record of the department.
If there was any oversight on the part of the Income tax Officer, the appel lant, it was claimed, could not be held responsible for that.
The petition was resisted by the respondent and the affidavit of Shri N.M. Baxi, Income tax Officer was filed in opposition to the petition.
According to that affidavit, the appellant did not disclose in the return that initial 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 depriciation allow able for the assessment years in question.
The High Court found that the first requirement of section 147(a) of the Act of 1961 was satisfied inasmuch as the Income tax Officer had reason to believe that the income of the appellant for the two assessment years in question had escaped assessment.
The mistake arose because of the fact that the initial depreciation allowance which had been allowed to the appellant in respect of some of the items of the capital assets was not taken into account while comput ing the depreciation allowance during the relevant years.
As a result of that, it was found that the depreciation allowance during the various years, including the initial depreciation, exceeded the original cost of those items of the capital assets to the appellant.
Dealing with the question as to whether there was omission or failure on the part of the appellant to disclose truly and fully all mate rial facts, it was observed that the appellant was bound to disclose the fact that initial depreciation had been allowed in respect of the items of capital assets in question during the previous years.
The appellant as such .was held to have failed to disclose all material facts.
The plea of the appellant that all the material facts were already on the record of the department, in the opinion of the High Court, did not make material difference.
In result, the petition was dismissed.
Before dealing with the contentions advanced in appeal, it may be apposite to refer to the relevant provisions.
According to section 10 of the Act of 1922, the tax shall be payable by an assessee under the head "Profits and gains of business profession or vocation" in respect of the profit or gains of any business, profession or vocation carried on by him.
Such profits or gains shall be computed after making a number of allowances.
Those allowances include those 96 allowed in respect of depreciation, as mentioned in clauses (vi) and (vi a) of sub section (2), the material part of which at the relevant time read as under: (vi) in respect of depreciation of such buildings, machinery plant or furniture being the property of the assessee, a sum equivalent . to such percentage on the written down value thereof as may in any case or class of cases be prescribed, and where the buildings have been newly erected or the machinery or plant being new, not being machinery or plant entitled to the development rebate under clause (vi b), has been installed, after the 31st day of March, 1945, and before the 1st day of April, 1956, a fur ther sum (which shall however not be deductible in determining the written down value for the purposes of this clause) in respect of the year of erection or installation equivalent, (a) in the case of buildings the erection of which is begun and completed between the st day of April 1946 and the 31st day of March 1956 (both dates inclusive), to fifteen per cent, of the cost thereof to the assessee; (b) in the case of other buildings, to ten per cent of the cost thereof to the assessee; (c) in the case of machinery or plant, to twenty per cent, of the cost thereof to the assessee; Provided that (a). . . . (b). . . . (c) the aggregate of all allowances in respect of depreciation made under this clause and clause (vi a) or under any Act repealed hereby, or under the Indian Income tax Act, 1886 (II of 1886), shall, in no case, exceed the original cost to the assessee of the buildings, machinery, plant or furniture, as the case may be; (vi a) in respect of depreciation of buildings newly erected, or of machinery or plant being new which has been installed, after the 31st day of March, 1948, a further sum (which shall be deductible in determining the written down value) equal to the amount admissible under clause (vi) (exclusive of the extra allowance for double or multiple shift working of the machinery or plant and the initial depreciation allowance admissible under that clause for the first year of erection of the building or the installation of the machinery or plant) in not more than five successive assessments for the financial years next following the previous year in which such buildings are erected and such machinery and plant installed and falling within the period commencing on the 1st day of April, 1949, and ending on the 31st day of March, 1959," 97 It is apparent from the above provisions that depreciation of three distinct kinds could be allowed in respect of buildings, machinery and plant.
The first category was of ordinary depreciation equivalent to such percentage on the written down value thereof as may be prescribed.
The second category was of depreciation of buildings, newly erected, or new machinery or plant not being machinery or plant entitled to development rebate under clause (vi b) which has been installed after the 31st day of March 1945 and before the st day of April 1956 equivalent to such percentage if the cost thereof as is prescribed.
Such initial depreciation was granted in the first year of the construction of the build ing or installation of the plant or machinery.
This cate gory of depreciation was not deduction in determining the written down value for the purpose of clause (vi).
The third category of depreciation was additional depreciation which was claimable for a period of five years in respect of buildings, newly erected, or new machinery or plant in stalled after the 31st day of March 1948 in terms of clause (via).
The depreciation permissible under this category was deduction in determining the written down value.
Clause (c) of the proviso to clause (vi) of sub section (2) of section 10, however, makes it clear that the aggre gate of all three categories of depreciation allowance was in no case to exceed the original cost to the assessee of the building, machinery or plant, as the case may be.
The case of the respondent is that the amount of depre ciation allowed to the appellant in respect of certain items of capital assets for the two assessment years in question was so much that the aggregate of all allowances in respect of depreciation made under clauses (vi) and (vi a) of sub section (2) of section 10 of the Act of 1922 exceeded the original cost to the appellant of those items of the capital assets.
There was thus a violation of the provisions of clause (c) of the proviso to section 10 (2)(vi) of the Act.
The above mistake, it is stated, occurred because the initial depreciation which had been allowed in respect of those items of the capital assets was not taken into account in computing the depreciation regarding those items in the two assessment years in question.
The present is, therefore, a case, according to the respondent, of income escaping assessment under section 147 of the Act of 1961.
Reliance in this connection is placed upon clause (d) of Explanation (1) to section 147 of the Act of 1961, according to which it would be a case of income escaping assessment where excessive depreciation allowance is comput ed.
The material part of section 147 of the Act of 1961 reads as under: 147.
Income escaping assessment.
If (a) the Income tax Officer has reason to believe that, by reason of the omission or failure on the part of an assessee to make a return under section 139 for any 8 1458SCI/76 98 assessment year to the Income tax Officer or to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year, or (b) Notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income tax Officer has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance, as the case may be, for the assess ment year concerned (hereafter in section 148 to 153 referred to as the relevant assessment year) .
" According to section 148 of the Act of 1961, before making the assessment, reassessment or recomputation under ' section 147, the Income tax Officer shall serve on the assessee a notice containing all or any of the requirements which may be included in a notice under sub section (2) of section 139; and the provisions of the Act shall, so for as may be, apply accordingly as if the notice were a notice issued under that sub section.
The Income tax Officer has also, before issuing such notice, to record his reasons for doing so.
Section 149 prescribes the time limit for the notice.
The time limit in a case not falling under clause (ii) of sub section (1) of section 149, with which we are not concerned, shall be eight years from the end of the relevant assessment year.
In case falling under clause (b) of section 147, however, the time limit for the notice is four years from the end of the relevant assessment year.
Clause (a) of section 147 of the Act of 1961 corresponds to clause (a) of sub section (1) of section 34 of the Act of 1922.
The language of clause (a) of section 147 read with sections 148 and 149 of the Act of 1961 as also the corre sponding provisions of the Act of 1922 makes it plain that two conditions have to be satisfied before an Income tax Officer acquires jurisdiction to issue notice under section 148 in respect of an assessment beyond the period of four years but within a period of eight years from the end of the relevant year, viz., (i) the Income tax Officer must have reason to believe that income chargeable to tax has escaped assessment, and (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 (a) to make a return under section 139 for the assessment year to the Income tax Officer, or (b) to disclose fully and truly material facts necessary for his assessment for that year.
Both these conditions must co exist to confer jurisdiction on the Income tax Officer.
It is also imperative for the Income tax Officer to record his reasons before initiating pro ceedings as required by section 148(2).
Another require ment is that before notice is issued after the expiry of four years from the end of the relevant assessment years, the Commissioner should be satisfied on the reasons recorded by the Income tax Officer that it is a fit case for the issue of such notice.
The duty which is cast upon the asses see is to make a true and full disclosure of the primary facts at the time of the original assessment.
, 99 Production before the Income tax Officer, of the account books or other evidence from which material evidence could with due diligence have been discovered by the Income tax Officer will not necessarily amount to disclosure contem plated by law.
The duty of the assessee in any case does not extend beyond making a true and full disclosure of primary facts.
Once he has done that axis 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 re opening assessment [see Income tax Officer vs Lakhmani Mewal Das(1)].
The words "omission or failure to disclose fully and truly all material facts necessary for his assessment for that year" postulate a duty on the assessee to disclose fully and truly all material facts necessary for his assess ment.
What facts are material and necessary for assessment will differ from case to case.
In every assessment proceed ing, the assessing authority will, for the purpose of com puting or determining the proper tax due from an assessee, require to know all the facts which help him coming to the correct conclusion.
From the primary facts in his posses sion, whether on disclosure by the assessee,or discovered by him on the basis of the facts disclosed, or otherwise the assessing authority has to draw inference as regards certain other facts; and ultimately from the primary facts and the further facts inferred from them, the authority has to draw the proper legal inferences, and ascertain on a correct interpretation of the taxing enactment, the proper tax leviable see Calcutta Discount Co. vs Income tax Offi cer(2)] as further observed in that case: "Does the duty, however, extend beyond the full and truthful disclosure of all primary facts ? In our opinion, the answer to this question must be in the negative.
Once all the primary facts are before the assessing authority, he requires no further assistance by way of disclosure.
It is for him to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn.
It is not for somebody else far less the assessee to tell the assessing authority what inferences, whether of facts or law, should be drawn.
Indeed, when it is remem bered that people differ as regards what inferences should be drawn from given facts, it will be meaningless to demand that the assessee must disclose what inferences whether of facts or law he would draw from the ' primary facts.
" Keeping in view the principles enunciated above, we may deal with the contention advanced on behalf of the appel lant that the present is not a case in which action could be taken under section 147(a) of the Act of 1961.
This contention has been controverted (1) (2) 100 by the learned counsel for the respondent, who has canvassed for the correctness of the view taken by the High Court in the judgment under appeal.
It would appear from what has been ' discussed above that one of the essential requisites for proceeding under clause (a) of section 147of the Act of 1961 is that the income chargeable to tax should escape assessment because of the omission or failure on the part of the assessee to dis close fully and truly all material facts necessary for his assessment.
The present is not a case where the assessee had omitted or failed to file the return.
Question then arises as to what has been omission or failure on the part of the assessee to make a full and true disclosure.
There is nothing before us to show that in the return filed by the assessee appellant, the particulars given were not cor rect.
Form C under rule 19 of the Indian Income tax Rules, 1922 at the relevant time gives the form of return which had to be filed by the companies.
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 of any of the particulars given in those columns by the appellant company were factually incorrect.
Nor is it the case of the revenue that the appellant failed to.
furnish the particu lars required to be inserted in those columns.
Indeed, the copy of the return has not been filed and consequently no argument on that score could be or has been addressed before us.
Part V of the form no doubt requires the assessee to state the written down value in column No. (2).
Such writ ten down value had to be specified without taking into account the initial depreciation because such depreciation in terms of clause (vi) of section 10(2) of the Act of 1922 could not be deducted in determining the written down value for the purpose of that clause.
The case of the appellant is that in determining the amount of depreciation at the time of the original assessment for the two assessment years in question, the Income tax Officer relied upon the written down value of the various capital assets as obtaining in the records of the department.
This stand has not been contro verted.
When an income tax officer relies upon his own records for determining the amount of depreciation and makes a mistake in doing so, we fail to understand as to how responsibility for that mistake can be ascribed to an omission or failure on the part of the assessee.
It also cannot be disputed that initial depreciation in respect of items of capital assets in the shape of new machinery, plant and building installed or erected after the 31st day of March 1945 and before the 1st day of April 1956 is normally claimed and allowed.
It seems that the Income tax Officer in working 'the figures of depreciation for certain items of capital assets lost sight of the fact that the aggregate of the depreciation, including the initial depreciation, al lowed under different heads could not exceed the original cost to the assessee of those items of capital assets.
The appellant cannot be held liable because of this remissness on the part of the Income tax officer in not applying the law contained in clause (c) of the proviso to section 10(2)(vi) of the Act of 1922.
As observed by Shah J. in Commissioner of Income tax vs Bhanji Lavji,(1) section 34(1)(a) of the Act of 1922 (corresponding to section 147 '(a) (1)79 I,T.R. 582.
S.C. 101 of the Act of 1961) does not cast a duty upon the assessee to instruct the Income tax Officer on questions of law.
It may also be mentioned that so far as the assessment for the assessment year 1957 58 is concerned, the assess ment order was once rectified and at another time revised.
Despite such rectification and revision, the above mistake in the calculation of the depreciation remained undetected.
It was only in October 1965 that the Income tax Officer realised that higher.
amount of depreciation had been al lowed to the appellant than was actually due.
A letter to that effect was consequently sent to the assessee on Octo ber 5, 1965.
It was, however, nowhere mentioned in that letter that the higher amount of depreciation had been allowed and the income as such had escaped assessment because of the omission or failure on the part of the asses see to disclose truly and fully all material facts.
Refer ence to such omission or failure came only in a subsequent communication.
The submission made on behalf of the appel lant is not without force that reference was made to asses see 's omission or failure to disclose truly and fully all material facts because it was realised that after the expiry of four years from the end of the relevant assessment year, no action for reopening of assessment could be taken on the basis of detection of mistake alone unless there was also an allegation that the income had escaped assessment because of the omission or failure of the appellant to disclose fully and truly material facts.
Looking to a11 the facts, we are of the opinion that it cannot be said that the excess depre ciation was allowed to the appellant company and its income as such escaped assessment because of its omission or fail ure to disclose fully and truly all material facts.
It has been said that the taxes are the price that we pay for civilization.
If so, 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 sub ject.
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, we have to bear in mind that the policy of law is that there must be a point of finality in all legal proceedings, that state issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi judicial controversies as it must in other spheres of human activity.
So far as income tax assessment orders are concerned, they cannot be reopened on the scope of income escaping assessment under section 147 of the Act of 1961 after the expiry of four years from the end of the assess ment year unless there be omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment.
As already mentioned, 'this cannot be said in the present case.
The appeal is conse quently allowed; the judgment of the High Court is set aside and the impugned notices are quashed.
The parties in the circumstances shall bear their own costs throughout.
P.H.P. Appeal aIlowed.
| 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).
| 3802.txt |
Civil Appeal No. 1178 of 1984 From the Judgment and Order dated the 15th July, 1982 of the High Court of Madras in Civil Revision Petition No. 3396 of 1981.
AND Civil Appeal No. 6211 of 1983 From the Judgment and Order dated the 5th November, 1982 of the High Court of Andhra Pradesh in Civil Revision Petition No. 2477 of 1982.
WITH Civil Appeal No. 1992 of 1982 From the Judgment and Order dated the 17th December, 1981 of the High Court of Madras in Civil Revision Petition No. 152 of 1981 .
WITH Civil Appeal No. 1959 of 19X2 From the Judgment and Order dated the 14th December, 1981 of the High Court of Madras in Civil Revision Petition No. 1630 of 1980.
WITH Civil Appeal No. 3668 of 1982 From the Judgment and Order dated the 20th October, 1982 of the High Court of Madras in Civil Revision Petition No. 4087 of 1982.
WITH Civil Appeal No. 2246 of 1982 From the Judgment and Order dated the 5th November, 1981 of the High Court ot Madras in Civil Revision Petition No. 1397 of 198( ' AND Civil Appeal No. 4012 of 1982 From the Judgment and Order dated the 23rd November, 1982 of the High Court of Madras in Civil Revision Petition No. 3983 of 1981 Y. section, Chitale and P. N. Ramalingam for the Appellant in Civil Appeal No. 1178 of 1984.
652 P.G. K. K Mani, V. shekher and P.R. Setharaman for the Respondents in Civil Appeal No. 1178 of 1984 A.K. Sen and A.T.M. Sampath for the Appellant in Civil Appeal No. 6211 of 1983.
T.V.S. Narasimhachari for the Respondent K Ramkumar for the Appellant in Civil Appeal No. 1992 of A. T. M. Sampath for the Respondent.
A. section Nambiar for the Appellant in Civil Appeal No. 1659 of 1982.
K section Ramamurthy, and A.T.M. Sampath, for the Appellant in Civil Appeal No. 3668 of 1982.
C. section Vaidianathan and K. K Mani for the Respondents.
M. G. Ramachandran, and A.V. Rangam for the Appellant in Civil Appeal No. 2246 of 1982.
T. section Krishnamurthy Iyer for the Respondent.
T. section Krishnamurth Iyer.
and section Balakrishna for the Appellant in Civil Appeal No. 4012 of 1984.
Padmanbhan and D.N. Gupta for the Respondent in Civil Appeal No. 4012 of 1982.
The following Judgments were delivered FAZAL ALI, J.
These appeals invlove more or less an identical point of law relating to the interpretation of the term 'wilful default ' appearing in the proviso to section 10 (2) of the Tamil Nadu Buil dings (Lease and Rent Control) Act, 1960 (hereinafter referred to as the 'Act ') coupled with the Explanation which seeks to explain the intent Or the proviso.
We have heard counsel for the parties at great length and a large number of authorities have been cited before us in support of both the parties.
Before we take up the points of law involved in these appeals we would briefly narrate the bare facts of each of these cases in order to test the correctness of the points argued before us.
653 In Civil Appeal No. 1178 of 1984, the respondent landlord let A out the suit premises No. 3 B, New No 2 B, Davidson Street, Broadway Madras, to the appellant tenant on a monthly rent of Rs. 600 for non residential use.
The appellant, despite repeated reminders, did not pay the rent for the period from October 1978 to August 1979.
The respondent filed a suit on 2 12.79 for evicting the appellant on two grounds wilful default in payment of rent, and (2) material acts of waste committed in the building.
It may be mentioned here that before filing a suit for eviction of the appellant, the respondent on 17.9.79 sent a two months` notice to the appellant.
through his Advocate to clear up the dues.
The appellant on receipt of the notice paid up the amount of the arrears, amounting to Rs. 6,600 on 3.10.79, i.e., within the stipulated period of two months.
But, the respondent contended that in view of the past conduct of theappellant he was guilty of wilful default within the meaning of proviso to section 10 (2) of the Act.
So far as this appeal is concerned, as the entire rent had been paid up in pursuance of the notice dated 17.9.79 even prior to the filing of the suit, it is manifest that on the date of filing of the suit no cause of action in presenti having arisen, the suit should have been dismissed on this short ground alone as being not maintainable.
As indicated above, it was not open to the landlord after having received the entire amount of arrears before filing of the suit to have filed a suit for past conduct of the tenant.
This appeal, therefore, merits dismissal on this ground alone.
In Civil Appeal No. 6211 of 1983, the respondent tenants were given the suit premises No. 171582, Ward B, Old corresponding No. 2, New No. 5181582 Abid Road, Hyderabad, on a monthly rent of Rs. 225 which was, by mutual consent, increased to Rs. 275 per month in the year 1964.
From 1.7.66, the rent was again agreed to be increased to Rs. 300 per month.
The appellants landlord filed a suit under section 10 of the Andhra Pradesh Buildings (Lease, Rent and Eviction Control) Act, 1960 on 12.11.71, against the respondents for eviction on three grounds; (1) wilful default by the tenants in payment of rent for the months of September, October and November 1971 (total amount being Rs. 900, (2) the tenants sublet the premises to one Hanumantha, and (3) that the premises were required bona fide for their own use.
However, during toe pendency of the matter, the original landlords sold away their interest in the property in favour of the present appellants before us and, therefore, the question of bona fied requirement abated there itself.
654 The Rent Controller upheld both the grounds of wilful default and subletting.
Aggrieved by the said decision, the respondents tenant filed an appeal to the Chief Judge, City Small Causes Court, Hyderabad and the learned Chief Judge by his judgment held that wilful default in payment of rent for the month of September 1971 as also the question of sub letting was proved.
Against this decision of the Chief Judge, City Small Causes, the respondents filed a revision petition in the High Court.
It is not in dispute that the rent from September, 1971 on wards has not been paid and that by the time the eviction petition was filed, the default was only for the month of September 1971.
The High Court agreed with the lower courts with regard to wilful default for the month of September, 1971 and reversed the finding with regard to subletting but on the ground of wilful default ordered eviction of the respondents.
In civil Appeal No. 1992 of 1982, the respondent landlord filed an eviction petition against the appellant tenant on the grounds of wilful default and the premises needing repairs.
However, the second ground was not pressed and the only point which survived for deter mination was whether there was any wilful default on the part of the appellant.
The brief facts are that the appellant became a tenant under the father of the respondent in 1953 at a monthly rent of Rs. 15 which was subsequently mutually agreed to be increased to Rs. 49 per month.
The respondent contended in his petition that the appellant became a defaulter in payment of the rent as he did not pay the rent for the months of June 1977 to January 1978.
The respondent also issued a notice on 16.1.78 demanding the dues amounting to Rs. 392.
The appellant sent a detailed reply on 30.1.78 alongwith a Bank Draft for Rs. 392 which was, however, not encashed by the respondent and returned to the appellant subsequent to the filing of an eviction petition which was filed on 11.8.1978.
The Rent Controller found the tenant to be a wilful defaulter and consequently order his eviction.
However, on appeal the Appellate Authority reversed the finding of the Rent Controller and accepted the plea of the tenant that as he was ill he was not able to pay the rent.
In revision, the High Court did not agree with the finding of the Appellate Authority and restored the finding of the Rent Con troller and ordered the eviction of the appellant, holding that the explanation offered by the tenant could not be accepted as his sons were carrying on the business in the same premises and nothing pre vented them from paying the rent to the landlord of the appellant was ill.
655 In Civil Appeal No. 1659 of 1982, the respondent landlord filed an eviction petition against the appellant tenant in respect of a nonresidential premises on two grounds: (1) wilful default in payment of rent from 1.5.77 to 31,8.77, and (2) bona fide requirement for personal use.
The Rent Controller, after an equiry, ordered eviction of the tenant on both the grounds and the Appellate Authority confirmed the findings of the Rent Controller.
The landlord issued a lawyer 's notice on 1.9.77 to the tenant to clear up the dues.
After receipt of the notice the tenant paid the rent of two months ' only and for the remaining two months the tenant could not offer any satisfactory explanation and, therefore, the High Court in revision agreed with the findings of both the courts below in regard to wilful default of payment of arrears of rent and ordered eviction of the tenant on this ground alone.
The High Court, however, did not agree with the findings of the courts below with regard to bona fide requirement of the landlord and held that the landlord could not ask for a non residential portion for residential purposes having leased it out for a non residential purpose.
In Civil Appeal No. 3668 of 1982, the appellant took out the premises from the respondent for non residential use on a monthly rent of Rs. 350.
There was some misunderstanding between the parties over payment of rent and as a result of which it was agreed that the tenant would deposit the rent in the Bank.
The respondent landlord filed an eviction petition on 1.4.1980 in the court of the Rent Controller, after verifying from the Bank, that the tenant had not deposited the rent for the months of January and February 1980, thereby committing a wilful default.
The authorities below found against the arrangement of depositing the rent in the Bank and ordered the eviction of the appellant on the ground of wilful default.
The High Court upheld the decision of the courts below and held that the appellant had wilfully defaulted in the payment of rent and ordered the eviction of the appellant.
In Civil Appeal No. 2246 of 1982, the respondent landladies let out the premises to the tenant appellant for non residential use on a monthly rent of Rs. 105.
The respondents filed an eviction petition on 2.11.76 against the tenant on the ground of wilful default for non payment of rent for the period from January 1976 to September 1976, i.e., for a period of 9 months.
But before filing the eviction petition, the respondents on 6.7,1976 issued a notice to the tenant to pay the dues and on 17.7.76 the appellant paid a sum of Rs. 630 which was accepted by the landladies without prejudice.
The Rent 656 Controller found that the default in payment of rent was not wilful and therefore dismissed the appl.cation of the landladies.
On appeal, the Appellate Authority reversed the finding of the Rent Controller and held that the default, was wilful.
In revision, the High Court did not agree with the contention of the appellant that he was not wilful defaulter as immediately after filing of the eviction petition he had paid the entire arrears even before the serving of summons The High Court held that there was no satisfactory explanation by the tenant for nonpayment of rent for the period from January to June 1976 before the issue of notice Even after the payment of rent the tenant committed further default till the petition for eviction was filed on 2.11.76.
The high Court, therefore, upheld the finding of the Appellate Authority and ordered eviction of the tenant on the ground of wilful default.
In civil appeal No. 4012 of ' 1982, the appellant is in occupation of the residential premises bearing No 17 (New No 59), Burkit Road T. Nagar, Madras on a monthly rent of Rs. 325 payable according to English calendar month.
The respondent filled an eviction petition against the appellant on the ground of wilful default and bona fide requirement for her own occupation.
It was stated on behalf of the respondent landlady that the appellant committed wilful default in payment of rent from June 1976 onwards and after repeated demands a sum of Rs. 1000 was paid by him on 1.4.1977.
He had paid rent for five months to the Income Tax Department on behalf of the respondent but he did not produce any receipt evidencing payment to the Income Tax Department.
Assuming that the appellant had made the said payment, the respondent further contended that from February 1977 to July 1978 the appellant was in arrears, thereby committing a wilful default.
The Rent Controller did not agree with the contentions of the respondent and held that the default was not wilful and the requirement for own Occupation of the landlay was not bona fide.
On appeal, the Appellate Court came to the conclusion that the tenant had committed wilful default in payment of rent from May 1976 onwards as on 1.4.77 and from December 1976 as on 10.4.77.
However, the appellate authority was of the view that the respondent had not been able to prove her case for bona fide requirement.
But, on the around of wilful default, the eviction of the appellant was ordered.
In reviston, the High Court agreed with the findings of the Appellate Court and confirmed the eviction of the appellant on the ground of wilful default.
From a detailed survey of the provisions of the various Rent Acts prevailing in the States and various Union Territories of our 657 country, it appears that the provisions regarding eviction for default A in payment of rent are not uniform and differ from State to State.
Some Acts do not mention `wilful default ' at all, some mention it in a negative form while some put it in an affirmative form.
To cut the matter short, from a review of the various Rent Acts the position that emerges is that the provisions relating to eviction are couched in three different types of default (1) Acts which expressly mention 'wilful default ' without defining the same, (2) Acts which do not mention the words 'wilful default ' at all but confer a right on the landlord to evict the tenant on pure and simple default after a certain period of time when the rent has become due, which is also different in different States, (3) Acts which use the expression 'wilful default ' but in a negative form rather than in an affirmative form.
D These are the A.P. Buildings (Lea5e, Rent and Eviction) Control Act of 1960, The Orissa House Rent Control Act, 1967 and the Pondicherry Buildings (Lease & Rent Control) Act, 1969 (hereinafter referred to as the 'A P. Act, 'Orissa Act ' and 'Pondicherry Act ' respectively) The last category of the Acts is the Tamil Nadu Act, which is the Statute in question and which makes a marked improvement by broadening the ambit of 'wilful default ' in the proviso to section 10 (2) which is further clarified by virtue of the Explanation added to the said proviso by Act No 23 of 1973.
There are other Rent Acts which not only use the expression 'wilful default ' but which also give a sort OF a facility to a tenant even for an ordinary default to pay the entire rent together with interest, on payment of which the suit for eviction is dismissed or, at any rate, they contain provisions by which even if a suit for eviction is filed, the tenant is required to pay the entire arrears of rent, costs and interest, failing which his defence is struck out and the suit for eviction is decreed automatically.
In these circumstances, for the purpose of the present cases, it is not necessary for us to make a roving enquiry into or carry on a detailed survey of the Acts which do not use the term 'wilful default '.
We might usefully refer only to those Acts which contain the term 'wilful default ' either in a negative or in a positive form.
These Acts, as already indicated, are the A.P., Orissa, Pondicherry and the Tamil Nadu Acts.
Though we are concerned mainly with the Tamil Nadu 658 Act yet in order to understand the contextual background of the words 'wilful default ' and its proper setting, we might briefly examine the relevant provisions of the aforesaid Acts.
Section 10 (2) of the A.P. Act is the only provision which confers protection to the tenant from eviction under certain conditions.
Proviso to that sub section runs thus: "Provided that in any case falling under clause (i), if the Controller is satisfied that the tenant 's default to pay or tender rent was not wilful, he may notwithstanding anything in section 11, give the tenant a reasonable time, not exceeding fifteen days, to pay or tender the rent due by him to the landlord up to the date of such payment or tender and on such payment or tender, the application shall be rejected.
" It may be noticed that although the default contemplated by the Act is wilful yet it has been put in a negative form which undoubtedly gives sufficient leeway to the tenant to get out of the rigours of the statutory provision.
The proviso to s.7 (2J of the Orissa Act is similarly worded and the relevant portion of which runs thus: "Provided that in any case falling under clause (i) if the Controller is satisfied that the tenant 's default to pay or tender rent was not wilful." Pondicherry Act is another statute which also contains the word 'wilful ' in a negative form, the relevant portion of which runs thus: "Provided that in any case falling under clause (i) if the Controller is satisfied that the tenant 's default to pay of tender rent was not wilful. " The aforesaid Acts undoubtedly contemplate that a default simpliciter would not be sufficient to evict the tenant but it must further be shown that the default was not wilful.
The Act, however is silent on the mode and the manner in which a court may decide as to what is wilful and what is not wilful.
Thus, the Act has left it to the courts to decide this question.
So far as the Tamil Nadu Act is concerned, it clearly defines as to what is 'wilful default '.
Proviso to section 10 (2) of the Act runs thus: "Provided that in any case falling under clause (i) if the Controller is satisfied that the tenant 's default to pay or tender rent was not wilful, he may, notwithstanding anything 659 contained in section 11, give the tenant a reasonable time, t not exceeding fifteen days, to pay or tender the rent due by him to the landlord up to the date of such payment or tender and on such payment or tender, the application shall be rejected.
" This proviso was clarified by an Explanation added to it by Act No. 23 of 1973 which provides a clear criterion to determine as to what is wilful default and what is not.
in this connection, it was submitted by counsel for the tenants that despite the Explanation it is open to the Court on an appraisement of the circumstances of each case to determine whether or not the default was wilful and in doing, so it cannot be guided wholly and solely by the Explanation which is merely clarificatory in nature.
If the Court in the circumstances of each case finds that the default is not wilful then it can come to this finding despite the Explanation.
On the other hand, the argument ot the counsel for the landlords is that the very purpose of the Explanation is to briny about uniformity in court decisions by laying down a conclusive yardstick in the shape of the Explanation which says that a default would be wilful only if the landlord gives two months ' notice to the tenant and the tenant does not pay the rent after the expiry of this period.
In other words, the argument seems to be that the Explanation is to be read into the proviso so that the word 'wilful ' will have to be defined and interpreted in accordance with the criterion laid down by the said Explanation, i.e., 'issue of two months ' notice. ' The arguments merits consideration but before coming to any conclusion it may be necessary for us to examine the exact meaning of the words 'Wilful default ' as also the interpretation and the scope of the Proviso and the Explanation.
Prima facie, there seems to be some force in the argument of the counsel for the tenants that unless the conditions of the Explanation are fulfilled, whatever may be the nature of the default, it cannot be a 'wilful default ' as contemplated by the Proviso.
Before, however, going into this question further, let us find out the real meaning and content of the word 'wilful ' or the words 'wilful default '.
In the book 'A Dictionary of Law ' by L.B. Curzon, at page 361 the words 'wilful ' and 'wilful default ' have been defined thus: 'Wilful ' deliberate conduct of .l person who is a free agent, knows what he is doing and intends to do what he is doing.
660 'Wilful default ' Either a consciousness of negligence or breach of duty; or a recklessness in the performance of a duty.
In other words, 'wilful default ' would mean a deliberate and intentional default knowing full well the legal consequences thereof.
In Words and Phrases ', Volume 11 A (Permanent Edition) at page 268 the word 'default ' has been defined as the non performance of a duty, a failure to perform a legal duty or an omission to do something required.
In volume 45 of 'Words & Phrases ', the word 'wilful ' has been very clearly defined thus: 'Wilful ' intentional; not incidental or involuntary: done intentionally, knowingly, and purposely, without justifiable excuse as distinguished from an act done carelessly; thoughtlessly, heedlessly or inadvertently: in common parlance word 'wilful ' is used in sense of intentional, as distinguished from accidental or involuntary.
P. 296 "Wilful" refers to act consciously and deliberately done and signifies course of conduct marked by exercise of volition rather than which is accidental, negligent or involuntary.
In Volume III of Webster 's Third New International Dictionary at page 2617, the word 'wilful ' has been defined thus: "governed by will without yielding to reason or with out regard to reason; obstinately or perversely self willed.
" The word 'default ' has been defined in Vol.
I of Webster 's Third New International Dictionary at page 590 thus; "to fail to fulfil a contract or agreement, to accept a responsibility; to fail to meet a financial obligation.
" In Black 's Law Dictionary (4th Edn.) at page 1773 the word 'wilful ' has been defined thus: "Wilfulness" implies an act done intentionally and designedly; a conscious failure to observe care; Conscious; knowing; done with stubborn purpose, but not with malice.
The word "reckless" as applied to negligence, is the legal equivalent of "willful" or "Wanton".
661 Thus, a consensus of the meaning of the words 'wilful default ' appears to indicate that default in order to be wilful must be intentional, deliberate, calculated and conscious, with full knowledge of legal consequences flowing therefrom.
Taking for instance a case where a tenant commits default after default despite oral demands or reminders and fails to pay the rent without any just or lawful cause, it cannot be said that he is not guilty of wilful default because such a course of conduct manifestly amounts to wilful default as contemplated either by the Act or by other Acts referred to above.
The next question that arises for consideration is as to what is the scope of a proviso and what is the ambit of an Explanation either to a proviso or to any other statutory provision.
We shall first take up the question of the nature, scope and extent of a proviso.
The well established rule of interpretation of a proviso is that a proviso may have three separate functions.
Normally, a proviso is meant to be an exception to something within the main enactment or to qualify something enacted therein which but for the proviso would be within the purview of the enactment In other words, a proviso cannot be torn apart from the main enactment nor can it be used to nullify or set at naught the real object of the main enactment.
Craies in his book 'Statute Law ' (7th Edn.) while explaining the purpose and import of a proviso states at page 218 thus: "The effect of an excepting or qualifying proviso, according to the ordinary rules of construction, is to except out of the preceding portion of the enactment, or to qualify something enacted therein, which but for the proviso would be within it.
The natural presumption is that, but for the proviso, the enacting part of the section would have included the subject matter of the proviso.
" Odgers in 'Construction of Deeds and Statutes ' (Fifth Edn.) while referring to the scope of a proviso mentioned the following ingredients: P. 317 "Provisos These are clauses of exception or qualification in an Act, excepting something out of, or qualifying something in, the enactment which, but for the proviso, would be within it.
" P. 318 "Though framed as a proviso, such a clause may exceptionally have the effect of a substantive enactment.
" 662 Sarathi in 'Interpretation of Statutes ' at pages 294 295 has collected the following principles in regard to a proviso: (a) When one finds a proviso to a section the natural presumption is that, but for the proviso, the enacting part of the section would have included the subject matter of the proviso.
(b) A proviso must be construed with reference to the preceding parts of the clause to which it is appended.
(c) Where the proviso is directly repugnant to a section, the proviso shall stand and be held a repeal of the section as the proviso speaks the later intention of the makers.
(d) Where the section is doubtful, a proviso may be used as a guide to its interpretation; but when it is clear, a proviso cannot imply the existence of words of which there is no trace in the section.
(e) The proviso is subordinate to the main section.
(f) A proviso does not enlarge an enactment except for compelling reasons.
(g) Sometimes an unnecessary proviso is inserted by way of abundant caution.
(h) A construction placed upon a proviso which brings it into general harmony with the terms of section should prevail.
(i) When a proviso is repugnant to the enacting part, the proviso will not prevail over the absolute terms of a later Act directed to be read as supplemental to the earlier one.
(j) A proviso may sometimes contain a substantive provision.
" In the case of Local Government Board vs South Stoneham Union,( ') Lord Macnaghten made the following observation: "I think the proviso is a qualification of the preceding enactment, which is expressed in terms too general to be quite accurate." In Ishverlal Thakorelal Almaula vs Motibhai Nagjibhai(2) it was held that the main object of a proviso is merely to qualify the main enactment.
In Madras & Southern Maharatta Railway Co. Ltd. vs Bezwada Municipality,(3) Lord Macmillan observed thus: (1) (2) [1966] 1 SCR 367.
(3) ATR 663 "The proper function of a proviso is to except and to deal with a case which would otherwise fall within the general language of the main enactment, and its effect is confined to that case.
" The above case was approved by this Court in Commissioner Of Income Tax, Mysore, etc.
vs Indo Mercantile Bank Ltd.
,(l) where Kapur, J. held that the proper function of a proviso was merely to qualify the generality of the main enactment by providing an exception and taking out, as it were, from the main enactment a portion which, but for the proviso, would fall within the main enactment.
In Shah Bhojraj Kuverji Oil Mills & Ginning Factory vs Subhash Chandra Yograj Sinha,(2) Hidayatullah, J, as he then was, very aptly and succinctly indicated the parametres of a proviso thus: "As a general rule, a proviso is added to an enactment to qualify or create an exception to what is in the enactment, and ordinarily, a proviso is not interpreted as stating a general rule.
" In West Derby vs Metropolitan Life Assurance Co.(3) while guarding against the danger of interpretation of a proviso, Lord Watson observed thus: "a very dangerous and certainly unusual course to import legislation from a proviso wholesale into the body of the statute.
" A very apt description and extent of a provio was given by Lord Oreburn in Rhodda Urban District Council vs Taff Vale Railway Co.(q) where it was pointed out that insertion of a proviso by the draftsman is not always strictly adhered to its legitimate use and at times a section worded as a proviso may wholly or partly be in substance a fresh enactment adding to and not merely excepting something out of or qualifying what goes before.
To the same effect is a later decision of the same Court in Jennings add Another vs Kelly(5) where it was observed: "We must now come to the proviso, for there is, I think, no doubt that in the construction of the section the (1) [1959] 2 supp.
SCR 256.
(2) ; (3) (4) [l909] AC 253.
(5) 664 whole of it must be read and a consistent meaning if possible given to every part of it The words are "provided that such licence shall be granted only for premises situate in the ward or district electoral division in which such increase in population has taken place".
There seems to be no doubt that the words "such increase in population" refer to the increase of not less than 25 per cent of the population mentioned in the opening words of the section " While interpreting a proviso care must be taken that it is used to remove special cases from the general enactment and provide for them separately.
In short, generally speaking, a proviso is intended to limit the enacted provision so as to except something which would have other wise been within it or in some measure to modify the enacting clause.
Sometimes a proviso may be embedded in the main provision and becomes an integral part of it so as to amount to a substantive provision itself.
Apart from the authorities referred to above, this Court has in a long course of decisions explained and adumbrated the various shades; aspects and elements of a proviso.
In State of Rajasthan vs Leela Jain,( ') the following observations were made: "So far as a general principle of construction of a proviso is concerned, it has been broadly stated that the function of a proviso is to limit the main part of the section and carve out something which but for the proviso would have been within the operative part." In the case of Sales Tax Officer, Circle 1, Jabalpur vs Hanuman Prasad(2), Bhargava, J. Observed thus: "It is well recognised that a proviso is added to a principle clause primarily with the object of taking out of the scope of that principal clause what is included in it and what the legislature desires should be excluded." In Commissioner of Commercial Taxes and Ors.
vs R.S. Jhaver and Ors.,(3) this Court made the following observations: (1) [1965]1 S C.R. 276.
(2) [1967] I S.C.R. 831.
(3) [1968]1 S.C.R. 148.
665 "Generally speaking, it is true that the proviso is an exception to the main part of the section; but it is recognised that in exceptional cases a proviso may be a substantive provision itself " In Dwarka Prasad vs Dwarka Das Saraf,(l) Krishan Iyer, J. speaking for the Court observed thus: B "There is some validity in submission but if, on a fair construction, the principal provision is clear, a proviso can not expand or limit it.
Sometimes a proviso is engrafted by an apprehensive draftsman to remove possible doubts, to make matters plain, to light up ambiguous edges.
Here, such is the case If the rule of construction is that prima facie a proviso should be limited in its operation to the subject matter of the enacting clause, the stand we have taken is sound.
To expand the enacting clause, inflated by the proviso, sins against the fundamental rule of construction that a proviso must be considered in relation to the principal matter to which it stands as a proviso.
A proviso ordinarily is but a proviso, although the golden rule is to read the whole section, inclusive of the proviso, in such manner that they mutually throw light on each other and result in a harmonious construction.
In Hiralal Rattanlal etc.
vs Staie of U.P. and Anr.(2) etc.
this Court made the following observations: "Ordinarily, a proviso to a section is intended to take out a part of the main section for special treatment.
It is not expected to enlarge the scope of the main section.
But cases have arisen in which this Court has held that despite the fact that a provision is called proviso, it is really a separate provision and the so called proviso has substantially altered the main section.
" We need not multiply authorities after authorities on this point because the legal position seems to be clearly and manifestly well established.
To sum up, a proviso may serve four different purposes: (1) [1976]1 S.C.R. 128.
(2) [1973] 1 S.C.C.216.
666 (1) qualifying or excepting certain provisions from the main enactment; (2) it may entirely change the very concept of the intendment of the enactment by insisting on certain mandatory conditions to be fulfilled in order to make the enactment workable; (3) it may be so embedded in the Act itself as to become an integral part of the enactment and thus acquire the tenor and colour of the substantive enactment itself; and (4) it may be used merely to act as an optional addenda to the enactment with the sole object of explaining the real intendment of the statutory provision.
These seem to be by and large the main purport and parameters of a proviso.
So far as the Act in question is concerned, the matter does not rest only on the question of wilful default, but by an amendment (Act No. 23 of 1973) an Explanation, in the following terms, was added to the proviso to section 10 (2) of the Act: "Explanation For the purpose of this sub section, default to pay or tender rent shall be construed as wilful, if the default by the tenant in the payment or tender of rent continues after the issue of two months ' notice by the landlord claiming the rent.
" We have now to consider as to what is the impact of the Explanation on the proviso which deals with the question of wilful default.
Before, however, we embark on an enquiry into this difficult and delicate question, we must appreciate the intent, purpose and legal effect of an Explanation.
It is now well settled that an Explanation added to a statutory provision is not a substantive provision in any sense of the term but as the plain meaning of the word itself shows it is merely meant to explain or clarify certain ambiguities which may have crept in the statutory provision.
Sarathi in 'Interpretation of Statutes ' while dwelling on the various aspects of an Explanation observes as follows: "(a) The object of an explanation is to understand the Act in the light of the explanation.
667 (b) It does not ordinarily enlarge the scope of the original A section which it explains, but only makes the meaning clear beyond dispute." (P. 329) Swarup in 'Legislation and Interpretation ' very aptly sums up the scope and effect of an Explanation thus: "Sometimes an explanation is appended to stress upon a particular thing which ordinarily would not appear clearly from the provisions of the section.
The proper function of an explanation is to make plain or elucidate what is enacted in the substantive provision and not to add or substract from it.
Thus an explanation does not either restrict or extend the enacting part; it does not enlarge or narrow down the scope of the original section that it is supposed to explain .
The Explanation must be interpreted according to its own tenor; that it is meant to explain and not vice versa." (P.P. 297 298.) Bindra in 'Interpretation of Statutes ' (5th Edn.) at page 67 states thus: "An explanation does not enlarge the scope of the original section that it is supposed to explain.
It is axiomatic that an explanation only explains and does not expand or add to the scope of the original section.
The purpose of an explanation is, however, not to limit the scope o the main provision.
The construction of the explanation must depend upon its terms, and no theory of its purpose can be entertained unless it is to be inferred from the language used.
An 'explanation ' must be interpreted according to its own tenor .
" The principles laid down by the aforesaid authors are fully supported by various authorities of this Court.
To quote only a few, in Burmah Shell Oil Storage and Distributing Co.
Of India Ltd. and Anr.
vs Commercial Tax Officer and Ors.(l) a Constitution Bench decision, Hidayatullah, J. speaking for the Court.
Observed thus: "Now, the Explanation must be interpreted according to its own tenor, and it is meant to explain cl.(1)(a)of the (1) [1961] I S.C.R. 902.
668 Article and not vice versa.
It is an error to explain the Explanation with the aid of the Article, because this reverses their roles.
" In Bihta Cooperative Development Cane Marketing Union Ltd. and Anr.
v The Bank of Bihar and Ors(i).
, this Court observed thus: "The Explanation must be read so as to harmonise with and clear up any ambiguity in the main section, It should not be so construed as to widen the ambit of the section.
" In Hiralal Rattanlal 's case (supra), this Court observed thus: "On the basis of the language of the Explanation this Court held that it did not widen the scope of clause (c) But from what has been said in the case, it is clear that if on a true reading of`an Explanation it appears that it has widened the scope of the main section, effect be given to legislative intent notwithstanding the fact that the Legislature named that provision as an Explanation." In Dattatraya Govind Mahajan and Ors.
vs State of Maharashtra and Anr(2).
, Bhagwati, J. Observed thus: "It is true that the orthodox function of an explanation is to explain the meaning and effect of the main provision to which it is an explanation and to clear up any doubt or ambiguity in it.
Therefore, even though the provision in question has been called an Explanation, we must construe it according to its plain language and not on any a priori considerations.
" Thus, from a conspectus of the authorities referred to above, it is manifest that the object of an Explanation to a statutory provision is (a) to explain the meaning and intendment of the Act itself, (b) where there is any obscurity or vagueness in the main enactment, to clarify the same so a to make it consistent with the dominant object which it seems to subserve, (1) [1967]1 S.C.R. 848.
(2) [l977]2 S C.R. 790.
669 (c) to provide an additional support to the dominant object of the Act in order to make it meaningful and purposeful, (d) an Explanation cannot in any way interfere with or change the enactment or any part thereof but where some gap is left which is relevant for the purpose of the Explanation, in order to suppress the mischief and advance the object of the Act it can help or assist the Court in interpreting the true purport and intendment of the enactment, and (e) it cannot, however, take away a statutory right with which any person under a statute has been clothed or set at naught the working of an Act by becoming an hindrance in the interpretation of the same.
Having, therefore, fully discussed the main scope and ambit of a proviso and an Explanation, we shall now proceed to elucidate the various provisions of the Act and other Acts.
We have already discussed that although almost every State has its own Rent Act, neither the Explanation nor the statutory clause concerning the term 'wilful default ' is mentained therein These Acts seem to proceed only on the simple word 'default ' and perhaps to buttress their intention they have laid down certain guidelines to indicate the grounds of ejectment wherever a default takes place.
Looking generally at such Acts, they seem to have first provided statutorily a particular date or time when the tenant on being inducted under the contract of tenancy, is to pay the rent.
Such a provision may or may not be against the contract of the tenancy and if it is to that extent, it overrides the contract.
This, therefore, gives sufficient notice to any tenant inducted in any premises that he must pay the rent according to the yard stick set out by the Act, failing which he runs the risk of being evicted for default.
Some Acts, however, have provided a particular number of defaults to enable the Rent Controller or Court to find out whether such a default would entitle the landlord to get an order of eviction.
There are some other Acts which have made rather ingenious and, if we may say so, apt provisions for expediting the process of eviction in case of default by providing that whenever a suit for eviction is filed against a tenant on the ground of default, the tenant in order to show his bona fides must first deposit the entire rent, arrears and cost in the court of the Rent Controller where the action is filed on the very first date of hearing, failing which the court or the authority concern 670 ed would be fully justified in striking down the defence and passing an order of eviction then and there.
The dominant object of such a procedure is to put the tenants on their guard.
It is true that such provisions are rather harsh but if a tenant goes on defaulting then there can be no other remedy but to make him pay the rent punctually unless some drastic step is taken.
These Acts, therefore, strike a just balance between the rights of a landlord and those of a tenant.
For deciding these cases, it is not necessary for us to go either into the ethics or philosophy of such a provision because we are concerned with statutes having different kinds of provisions.
With this little preface we would now examine the working and relevant provisions of the Act alongwith similar provisions contained in the other three Acts, viz., A.P., Orissa, and Pondicherry Acts, which are almost in pari materia the proviso to section 10 (2) of the Act.
The only difference between the Act and the other Acts is that where as an Explanation is added to the proviso to section 10 (2) of the Act, no such Explanation has been added to the provisions of the other three Acts; hence we have now to consider the combined effect of the proviso taken in conjunction with the Explanation.
We may, therefore, extract the Explanation again to find out what it really means and to what extent does it affect the provisions of the Proviso: Explanation For the purpose of this sub section, default to pay or tender rent shall be construed as wilful, if the default by the tenant in the payment or tender of rent continues after the issue of two months ' notice by the landlord claiming the rent;" If we analyse the various concomitants of the Explanation, the position seems to be that (a) there should be a default to pay or tender rent, (b) the default should continue even after the landlord has issued two months ' notice claiming the arrears or rent, (c) if, despite notice, the arrears are not paid the tenant is said to have committed a wilful default and consequently liable to be evicted forthwith.
The question is; do these three conditions whittle down the effect of the proviso or merely seeks to explain the intendment of a wilful default ? One view which may be possible and which form the basis of the argument of the connsel for the tenants is that mere non 671 payment of arrears of rent after issue of two months ' notice cannot in A all circumstances automatically amount to a wilful default if the nonpayment does not fulfil the various ingredients pointed out by us while defining the term 'Wilful default '.
The other view which has been canvassed before us by the counsel for landlords is that in view of the Explanation once it is proved that after issue of two months ' notice if the tenant does not pay the arrears within the stipulated period of two months he is liable to be ejected straightaway.
Another view is that such an interpretation would be extremely harsh and penal in nature because if, after receipt of the notice, the tenant is not able to pay the arrears due to circumstances beyond his control, of which the court is satisfied it will be putting a serious premium or handicap on the right of the tenant.
In the same token, it was argued that if such an interpretation is put on the Explanation then the entire provisions of the Proviso become otiose thus rendering the said Proviso nugatory.
Another aspect that must be stressed at this stage is that where a tenant has committed default after default without any lawful or reasonable cause and the said defaults contain all the qualities of a wilful default, viz., deliberate, intentional, calculated and conscious, should he be given a further chance of locus paenitentiae ? After hearing counsel for the parties at great length, we feel that although the question is difficult one yet it is not beyond solution.
If we keep the objects of the proviso and the Explanation separate, there would be no difficulty in deciding these cases.
To begin with, section 13 (2) (i) of the Act lays down that where the Controller is satisfied that the tenant has not paid or tendered the rent within 15 days after the expiry of the time fixed in the Agreement of tenancy or in the absence of any such Agreement, by the last date of the month next following that for which the rent is payable, he (tenant) undoubtedly commits a default.
Two factors mentioned in section 10 (2) (i) seem to give a clear notice to a tenant as to the mode of payment as also the last date by which he is legally supposed to pay the rent.
This, however, does not put the matter beyond controversy because before passing an order of eviction under the proviso, it must also be proved that the default was wilful and if the Controller is of the opinion that the default in the circumstances and facts of the case was not wilful, in the sense that it did not contain any of the qualities or attributes of a wilful default as indicated by us above, he may give the tenant a reasonable time, not exceeding 15 days, to pay the entire rent and if this is complied with, 672 the application for ejectment would stand rejected.
The difficulty, however, is created by the Explanation which says that once a land lord gives a two months ' notice to his tenant for paying the arrears of rent but the tenant continues in default even thereafter, then he is liable to be evicted.
There is a good deal of force in this argument which has its own advantages.
In the first place, it protects the court from going into the intricate question as to what is a wilful default and whether or not the conditions of a wilful default have been satisfied which, if permitted would differ from case to case and court to court.
But the difficulty is that if such a blanket ban is put on the court for not examining the question of wilful default once the conditions laid down in the Explanation are satisfied then it would undoubtedly lead to serious injustice t l the tenant.
A subsidiary consequence of such an interpretation would be that even though the tenant, after receipt of the notice, may be wanting to pay the arrears of rent but is unable to do so because of unforseen circumstances like, death, accident, robbery, etc., which prevent him from paying the arrears, yet under the Explanation he has to be evicted.
Another view which, in our opinion, is a more acceptable one and flows from the actual words used by the proviso is that where the Explanation does not apply in the sense that the landlord has not issued two months ' notice, it will be for the Court to determine in each case whether the default is wilful having regard to the tests laid down by us and if the Court finds that default is wilful then a decree for eviction can be passed without any difficulty.
Another difficulty in accepting the first view, viz., if two months notice is not given, the tenant must not be presumed to be a wilful defaulter, is that in such a case each landlord would have to maintain a separate office so that after every default a two months ' notice should be given and if no notice is given no action can be taken against a tenant.
We are unable to place such an unreasonable restriction on the landlord to give two months ' notice after every default which may or may not be possible in every case.
A correct interpretation, in our opinion, would be that where (1) no notice, as required by the Explanation, is given to the tenant, the Controller or the court can certainly examine the question whether the default has been wilful and to such a case the Explanation would have no application, 673 (2) where the landlord chooses to issue two months ' notice and the rent is not paid then that would be a conclusive proof of the default being wilful unless the tenant proves his incapability of paying the rent due to unavoidable circumstances.
B The argument of the counsel for landlords was that even if a notice under the Explanation is given that does not take away the jurisdiction of the proviso to determine whether or not the default has been wilful if it contains the qualities and attributes referred to above because what the Explanation does is merely to incorporate an instance of a wilful default and is not conclusive on the point and would have to be construed by the court in conjunction with the conditions mentioned in the proviso.
We are, however unable to go to this extreme extent because that will actually thwart the object of the Explanation.
As we read the Explanation, it does not at all take away the mandatory duty cast on the Controller in the proviso to decide if a default is wilful or not.
Indeed, if the landlord chooses to give two months ' notice to his tenant and he does not pay the rent, then, in the absence of substantial and compelling reasons, the controller or the court can certainly presume that the default is wilful and order his eviction straightaway.
We are unable to accept the view that whether two months ' notice for payment of rent is given or not, it will always be open to the Controller under the proviso to determine the question of wilful default because that would render the very object of Explanation otiose and nugatory.
We express our view in the matter in the following terms: (1) Where no notice is given by the landlord in terms of the Explanation, the Controller, having regard to the four conditions spelt out by us has the undoubted discretion to examine the question as to whether or not the default committed by the tenant is wilful.
If he feels that any of the conditions mentioned by us is lacking or that the default was due to some unforeseen circumstances, he may give the tenant a chance of locus paenitentiae by giving a reasonable time, which the statute puts at 15 days, and if within that time the tenant pays the rent, the application for ejectment would have to be rejected.
(2) If the landlord chooses to give two months ' notice to the tenant to clear up the dues and the tenant does not 674 pay the dues within the stipulated time of the notice then the Controller would have no discretion to decide the question of wilful default because such a conduct of the tenant would itself be presumed to be wilful default unless he shows that he was prevented by sufficient cause or circumstances beyond his control in honouring the notice sent by the landlord.
We would, however, refer to some case law on the question of wilful default as interpreted by the Madras High Court because there appear to be three decisions of the Madras High Court taking some what contrary views.
In Rajeswari vs Vasumal Lalchand(1) it was held that non payment of rent amounted to such supine and callous in difference on the part of the tenant as to amount to a wilful default.
However, the learned Judge does not appear to have noticed the effect of the Explanation to section 10 (2) introduced in 1973.
This decision undoubtedly supports the view that a wilful default is not merely a pure and simple default but a default which is per se deliberate and intentional.
In N. Ramaswami Reddiar vs S.N. Periamuthu Nadar,(2) Explanation to the proviso to section 10 (2) of the Act was expressly considered and Ratnam, J. Observed as follows: "A reading of the Explanation indicates that it is not exhaustive of all cases of wilful default, but it specifies only one instance where the default should be construed as wilful.
If a tenant does not pay the rents at all for a considerable time and the landlord files a petition for an order of eviction on the basis that the tenant had committed wilful default without issuing any notice, then, in the absence of any other explanation by the tenant, the default should be construed as wilful, in spite of the fact that the landlord had not chosen to issue a notice to the tenant claiming the rents.
In this view, I hold that counsel for the petitioner cannot be of any assistance to him.
" We feel ourselves in complete agreement with the view taken by the learned Judge On the interpretation of the proviso read with the Explanation.
In the case of Khivraj Chordia vs G. Maniklal Bhattad.(3) Ramamurti, J. has drawn a very apt and clearcut distiction (1) AIR 1983 Madras 97.
(2) [1980] Law Weekly (vol. 93) 577 (3) AIR 1966 Madras 67 675 between a simple default and a wilful default and has pointed out A that in order to be a 'wilful default ' it must be proved that the con duct of the tenant was such as would lead to the inference that his omission was a conscious violation of his obligation to pay the rent.
In this connection, the learned Judge observed thus: "The decisions of this court have reportedly pointed B` out that there is a clear difference in law between default and wilful default and that non payment of rent within the time specified by the Act, though would amount to default, cannot by itself be treated as wilful default, and that if the rent was paid after the expiry of the time in the following month within a short time thereafter, the default cannot be said to be wilful to warrant the punishment of eviction Keeping in mind the main object of the enactment, namely, prevention of unreasonable eviction of tenants, the principle that emerges from the several decisions is that for default to be regarded as wilful default, the conduct of the tenant should be such as to lead to the inference that his omission was a conscious violation of his obligation to pay r the rent or reckless indifference.
If the default was due to accident or inadvertence or erroneous or false sense of security based upon the conduct of the landlord himself, the default cannot be said to be wilful default.
" Having, therefore, enunciated the various principles and tests to be applied by courts in deciding the question of wilful default we now proceed to decide the various appeals filed before us.
The brief facts of each appeal have already been narrated in the opening part of our judgment and we would like to sum up our conclusions flowing from the facts found by, the High Court in each case.
In civil appeal No. 1178 of 1984, it would appear that though the tenant had committed a default but he had paid the entire rent well before the filing of the suit by the landlord.
In fact, the suit for eviction was filed by the landlord not on the ground of pending arrears but to penalise the tenant for having defaulted in the past.
Such a suit cannot be entertained because once the entire dues are paid to the landlord the cause of action for filing of a suit completely vanishes.
Hence, the suit arising out of civil appeal No. 1978 of 1984 must be dismissed as being not maintainable and the order of ejectment passed by the High Court is hereby set aside.
H 676 In civil appeal No. 6211 of 1983, having regard to the tests and the criteria laid down by us there can be no doubt that wilful default in the payment of arrears to the tune of Rs. 900 has been proved and as there is nothing to show that the arrears were not paid or withheld due to circumstances beyond the control of the tenant, the order of eviction passed by the High Court is confirmed, and the appeal is allowed.
In civil appeal No. 1992 of 1982, a somewhat peculiar position seems to have arisen.
It is true that, to begin with, the tenant did not pay the rent for the months of June 1977 to January 1978 which led the landlord to issue a notice on 16.1.78 demanding payment of arrears amounting to Rs. 392.
The tenant within 15 days of receipt of the notice (on 30.1.783 sent a detailed reply to the landlord and enclosed a Bank Draft of Rs. 39.2 which was, however, not encashed by the landlord and returned to the tenant after filing of the eviction petition, for reasons best known to him.
Therefore, since the tenant had already complied with the notice within the stipulated time envisaged by the Explanation to Proviso to section 10 (2) of the Act, by no stretch of imagination could be called guilty of wilful default.
On the other hand, the conduct of the landlord in filing a suit and not encashing the Bank Draft was motivated with a view to get a decree for eviction on false excuse.
Such a state of affairs could not be countenanced by the court.
In these circumstances, we are of the opinion that the arrears having been paid through the Bank Draft, the question of eviction of the tenant did not arise nor did the question of default come into the picture merely because the landlord wanted to harass him by filing an eviction petition.
The High Court was, therefore, clearly in error in passing the decree of ejectment against the tenant.
We, therefore, allow the appeal and set aside the order of the High Court evicting the tenant.
In civil appeal No. 1659 of 1982, as it was clearly a case of wilful default on the part of the tenant we affirm the order of the High Court evicting the tenant and dismiss the appeal.
In civil appeal No. 3668 of 1982, some dispute arose between the parties as to whether the rent was to be deposited in Bank, resulting in the filing of the present suit for eviction on 1.4.80 in the court of the Rent Controller by the landlord after verifying from the Bank that the tenant had not deposited the rent for the months of January and February 1980.
This default, in our opinion, was undoubtedly deliberate, conscious and without any reasonable or rational basis 677 and the High Court was perfectly right in holding that the tenant A was guilty of wilful default and passing a decree for ejectments.
As no notice was given by the landlord, Explanation to proviso to section 10 (2) of the Act does not apply at all.
The appeal is accordingly dismissed.
In civil appeal No. 2246 of 1982, the respondent landladies had let out the premises to the tenant at a monthly rent of Rs. 105.
A petition for eviction was filed by them on 2.11.76 for non payment of rent by the tenant from January 1976 to September 1976, a period of 9 months.
But, we might state here that before filing the eviction petition, the respondents had issued a notice on 6.7.76 asking the tenant to pay the dues, which the tenant paid on 17 7.76, i.e., within 10 days of the receipt of the notice, which was accepted by the landladies without any prejudice.
The Rent Controller held that the default was not wilful as in pursuance of the notice the payment had already been made.
The Appellate Authority reversed the finding of the Rent Controller and held that the default was wilful.
The High Court in revision upheld the order of eviction O n the ground that there was no satisfactory explanation for non payment of rent for the period January to June 1976.
In coming to this finding, the High Court was clearly in error because the tenant had already deposited the entire dues including the rent from January to June, on 17.7.76.
Thus, the question of wilful default could not arise nor could it be said that the default was either conscious or deliberate or international.
Moreover, in view of the Explanation since the tenant had paid the amount within the time of the notice, there could be no question of wilful default.
This fact seems to have been completely overlooked by the High Court.
We, therefore, allow the appeal and set aside the order of the High Court directing eviction of the tenant.
In civil appeal No. 4012 of 1982, the tenant occupied the premises at a monthly rent of Rs. 325.
It appears that the tenant defaulted in payment of tent from June 1976 onwards and after repeated demands, only a sum Or Rs. 1000 was paid by him on 1.4 77.
leaving a substantial balance of arrears unpaid.
The plea of the tenant that he had made payments to the Income Tax Department has not been proved, nor did the tenant have any right under the contract to pay any amount to the Income Tax Department and if he did so on his own, he must he held responsible for his conduct.
Even so, the landlord contended that right from February 1977 to July 1978, the appellant was in arrears without any lawful cause.
This was, therefore, a clear case of wilful default where the tenant did not pay the 678 rent deliberately, consciously and intentionally.
In these circumstances, the High Court was fully justified in holding that the default was wilful and affirming the decree passed by the Appellate court.
The appeal is accordingly dismissed.
The result is that all the appeals are disposed of as indicated above but in the circumstances there will be no order as to costs in any of the appeals.
Civil Appeal No. 5769 of 1983 already stands disposed of in terms of our Order of September 12,1984.
SABYASACHI MUKHARJI, J.
With great respect to my learned brothers, I regret I am unable to agree on the construction put on the expression 'wilful default ' in the Explanation to the Proviso of sub section (2) of section 10 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960.
It may be borne in mind that The Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 hereinafter called the 'Act ' was an Act to amend and consolidate the law relating to the regulation of letting of residential and non residential buildings and the control of rents of such buildings and the prevention of unreasonable eviction of tenants therefrom in the State of Tamil Nadu.
The Act was from time to time amended and was last amended by Act 1 of 1980.
By Act 23 of 1973, an Explanation was added to the Proviso to sub section (2) of section 10 of the Act.
Section 10 of the Act deals with the eviction of tenants.
In order to appreciate the scheme of the section and the meaning of the expression 'wilful ' introduced by the Explanation to the Proviso of sub section (21 of section 10, we have to examine the provisions of section 10 and the various sub sections of the section.
As mentioned hereinbefore section 10 deals with the eviction of tenants and postulates that a tenant shall not be evicted whether in execution of a decree or otherwise except in accordance with the provisions of section 10 or sections 14 to 16.
For these appeals we are not concerned with the provisions of sections 14 to 16.
The first Proviso to sub section (l) of section 10 stipulates that the said sections 14 to 16 would not apply to a tenant whose land lord is the Government The second Proviso also provides that if the tenant denies the title of the landlord or claims right of permanent tenancy, the Controller shall decide whether the denial or claim is bona fide and if he records a finding to that effect, the landlord shall be entitled to sue for eviction of the tenant in a Civil Court and the Court may pass a decree for eviction on any of the grounds 679 mentioned in the said sections, notwithstanding that the Court finds that such denial does not involve forfeiture of the lease or that the claim is unfounded.
Sub section (2) of section 10 of the Act deals with the procedure which a landlord must follow in order to evict his tenant.
It provides that a landlord should apply to the Controller for a direction for eviction if he wants it and, if the Controller, after giving the tenant a reasonable opportunity of showing cause against the application, is satisfied with any of the various conditions which are stipulated in clause (i), (ii), (iii), (iv), (v), (vi) and (vii) then he shall make an order directing the tenant to put the landlord in possession of the building and if the Controller is not satisfied, he shall make an order rejecting the application.
The Proviso to sub section (2) of section 10 is as follows: "Provided that in any case falling under clause (i) if the Controller is satisfied that the tenant 's default to pay or tender rent was not wilful, he may, notwithstanding any thing contained in section 11, give the tenant a reasonable time, not exceeding fifteen days, to pay or tender the rent due by him to the landlord up to the date of such payment or tender and on such payment or tender, the application shall be rejected.
" The Explanation which was added by Act 23 of 1973 to the said Proviso stipulates that for the purpose of this sub section, default to pay or tender rent shall be construed as wilful, if the default by the tenant in the payment or tender of rent continues after the issue of two months ' notice by the landlord claiming the rent.
It is this Explanation that falls for consideration in these appeals.
Clause (i) of sub section (2) of section 10 of the Act requires the Controller to be satisfied that the tenant has not paid or tendered rent due by him in respect of the building within fifteen days after the expiry of the time fixed in the agreement of the tenancy with his landlord or in the absence of any such agreement, by the last day of the month next following that for which the rent is payable.
For the purpose of these appeals, it is not necessary to consider the grounds of eviction mentioned in other clauses of sub section (2) of section 10 of the Act.
If the Controller is satisfied of any of the grounds mentioned in clause (i) to clause (vii) of sub section (2) of section 10, then the shall, so the section stipulates, make an order directing the tenant to put the landlord in possession of the building and if he is not so satisfied, he shall make an order rejecting the application; the Proviso provides that in any case falling under clause (i) which we have noted 680 hereinbefore, if the Controller is satisfied that the tenant 's default to pay or tender rent was not wilful, he may, notwithstanding anything contained in section l l, give the tenant a reasonable time, not exceeding fifteen days, to pay or tender the rent due by him to the landlord upto the date such payment or tender and on such payment or tender, the application shall be rejected.
The Explanation which is the subject matter of interpretation before us and which was added, as noted before, by Act 23 of 1973 by section 10, stipulates that for the purpose of the said sub section, namely sub section (2) of section 10, default to pay or tender rent shall be construed as wilful, if the default by the tenant in the payment or tender of rent continues after the issue of two months ' notice by the landlord claiming the rent.
The question, therefore, is can the default be construed as wilful under any other circumstances apart from default continuing after the issue of two months ' notice by the landlord claiming the rent ? In other words, for the purpose of this section, will the wilful default be only when notice has been given by the landlord and two months have expired and the tenant has not paid the rent ? My learned brethren say that there may be other circumstances constituting wilful default.
With respect, I differ.
I will briefly note the reasons.
As I read the provision, it appears to me that there must be satisfaction of the Controller whether default was wilful and a default will be construed as wilful, in my opinion, only where the landlord has given notice and two months have expired without payment of such rent.
Default has been construed in various ways depending upon the context. 'Default ' would seem to embrace every failure to perform part of one 's contract or bargain.
It is a purely relative term like negligence.
(See in this connection Stroud 's Judicial.
Dictionary Vol. 1, Third Edition, page 757).
It means nothing more, nothing less, than not doing what is reasonable under the circumstances; not doing something which you ought to do, having regard to the transaction.
Similarly, default in payment imports some thing wrongful, the omission to do some act which, as between the parties, ought to have been done by one of them.
It simply means non payment, failure or omission to pay.
(See Prem 's Judicial Dictionary, Vol.
I, 1964 page 483).
Earl Jowitt defines 'default ' as omission of that which a man ought to do.
(See The Dictionary of English Law.
page 597).
The Privy Council in the case of Fakir Chander Dutt and Others 681 vs Ram Kumar Chatterji(1) observed that 'Default ' did not necessarily A mean breach of contractual obligation, but simply non payment of rent by a person capable of protecting his tenure by doing so.
Default happens in payment of rents under various contingencies and situations.
Default is a fact which can be proved by evidence.
Whether the default is willful or not is also a question of fact to be proved from evidence, direct and circumstantial, drawing inferences from certain conduct.
If the Courts are free to decide from varying circumstances whether default was wilful or not, then divergence of conclusions are likely to arise, one judicial authority coming to the conclusion from certain circumstances that the default was wilful, another judicial authority coming to a contrary conclusion from more or less same circumstances.
That creates anomalies.
In order to obviate such anomalies and bring about a uniform standard, the explanation as I read, explains the expression 'wilful ' and according to the Explanation added, a default to pay or tender rent "shall be construed", as wilful if the default by the tenant in the payment of rent continues after issue of two months ' notice by the landlord claiming the rent If that is the position, in a case where the landlord has given notice to the tenant claiming the rent and the tenant has not paid the same for two months, then the same must be construed as wilful default, whatever may be the cause for non payment bereavement on the date of payment in the family of near or dear ones or serious heart attack or other ailment of the tenant or of any person sent by the tenant to pay the rent cannot be excused and cannot be considered to be not wilful because the legislature has chosen to use the expression "shall be construed as wilful" if after a notice by the landlord for two months, failure to pay or tender rent on the part of the tenant continues, and if it is wilful then under sub section (2) clause (i) read p with the proviso as explained by the Explanation, the Controller must be satisfied and give an order for eviction.
The question is whether in other cases, that is to say, in cases where admittedly or by other facts or aliunde the Court comes to the conclusion that the default is wilful, for instance, in a case where there is chronic default, regular defaults or habitual defaults, the two months ' notice is necessary or not.
It was the argument on behalf of the respondents that in those circus stances such notice was not necessary and this is the view which has found acceptance by my learned Brethren: I am unable to agree, (1) Indian Appeals, Vol.
XXXI, p. 195.
682 with respect.
If in cases where there are genuine and bona fide reasons for failure or non payment of rent which cannot be excused after two months ' notice to pay rent, then other causes which lead to inference of wilful default cannot also be construed as 'wilful default ' in the context of the Explanation.
The legislature has provided an absolute and clear definition of 'wilful default '.
Other circumstances cannot be considered as wilful default.
In my opinion, the expression "shall be construed" would have the effect of providing a definition of wilful default in the proviso to sub section (2) of section 10.
If a definition is provided of an expression, then the Courts are not free to construe the expression otherwise unless it is so warranted by the use of the expression such as "except otherwise provided or except if the context otherwise indicates".
There is no such expression in the instant case.
There may be in certain circumstances intrinsic evidence indicating otherwise.
Here there is none.
The whole scheme of section 10 is that in order to be entitled to eviction on the ground of arrears of rent, the ingredients of which the Controller must be satisfied are; (a) default, (b) default was wilful.
Whether in a particular case default is wilful or not, must be considered in accordance with the definition provided in the Explanation to Proviso to sub section (2) of section 10 of the Act.
If it was intended that the Courts would be free to judge whether in a particular set up of facts, the default was wilful or not where no notice has been given, then in such a case there was no necessity of adding this Explanation to the Proviso which is a step to the making of the findings under clause (1 of sub section (2) of section 10 of the Act.
It is well settled that the Legislature does not act without purpose or in futility.
lt was contended on behalf of the landlords that the Legislature has not used the expression default to pay or tender rent shall be construed as wilful only if the default by the tenant in the payment or tender of rent continues after the issue of two months ' notice by the landlord claiming the rent It is true that legislature has not chosen to use language to indicate that in no other cases, the default could be considered to be wilful except one case which has been indicated in the Explanation.
683 As I read the Explanation it is not so necessary because Legislature has defined 'wilful d fault ' by the expression that 'default to pay or tender rent shall be construed ' meaning thereby that it will mean only this and no other.
My learned brethren have given instances of difficulties and hardships, if the other defaults, that is to say, default apart from tenant not paying after the expiry of notice by the landlord are not considered as wilful default.
It is true that there may be hardships and many problems might arise.
I share the apprehension of these problems and hardships but I find no justification to read that these hardships of which Legislature must have been aware, were also intended to be covered by the Explanation.
It appears to me that the meaning is clear about the purpose of introduction of the Explanation, i.e, to obviate the difficulties and divergence of judicial opinions depending upon varying circumstances, the legislature has provided a uniform definition to the concept of 'wilful default '.
It is true that where two constructions are possible, one which avoids anomalies and creates reasonable results should be preferred but where the language is clear and where there is a purpose that can be understood and appreciated for construing in one particular manner, that is to say, avoidance of divergence of judicial opinions in construing wilful default and thereby avoiding anomalies for different tenants, one judge taking a particular view on the same set of facts, another judge taking a different view on the same set of facts, in my opinion, it would not be proper in such a situation to say that this definition of wilful default was only illustrative and not exhaustive.
I cannot construe the expression used in the Explanation to the Proviso to sub section (2) of section 10 as illustrative when the Legislature has chosen to use the expression "shall be construed".
It has been observed that statutory provisions must be so construed, if it is possible, that absurdity and mischief may be avoided.
Where the plain and literal interpretation of statutory provision proviso produces a manifestly absurd and unjust result, the Court might 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 rational construction and just results.
(See vs in this connection the observations in the No. 1451 (NCE) of 1984).
Lord Denning in the case of Seaford Court Estates Ltd. vs Asher(l) has observed: "If the makers of the Act had themselves come across this 1. 164(CA) 684 ruck in the texture of it, how would they have straightened i out ? He must then do as they would have done A judge must not alter the material of which it is woven, but he can and should iron out the creases.
" Ironing out the creases is possible but not re writing the language q to serve a notion of public policy held by the judges.
Legislature must have legislated for a purpose by Act 23 of 1973 and used the expression "shall be construed" in Explanation in the manner it did.
The fact that in interpreting the statutory language, judges should avoid policy as an approach was emphasised by Lord Scarman in the decision of the House of Lords in the case of Regina vs Barnet London Borough Council Exparte Nilish Shah.(l) User of policy in interpretation of statutory language, Lord Scarman observed, was an impermissible approach to the interpretation of statutory language.
Judges should not interpret statutes in the light of their own views as to policy.
They may, of course, adopt a purposive interpretation if they can find in the statute read as a whole or in material to which they are permitted by law to refer as aids to interpretation an expression of Parliament 's purpose or policy.
In the case of Carrington and Others vs Therm a Stor Ltd,(2) the Master of the Rolls observed that "If regard is had solely to the apparent mischief and the need for a remedy, it is only too easy for a judge to persuade himself that Parliament must have intended to provide the remedy which he would himself have decreed if he had legislative power.
In fact Parliament may not have taken the same view of what is a mischief, may have decided as a matter of policy not to legislate for a legal remedy or may simply have failed to realise that the situation could ever arise.
This is not to say that statutes are to be construed in blinkers or with narrow and legalistic literalness, but only that effect should given to the intentions of Parliament as expressed in the statute, applying the normal canons of construction for resolving ambiguities or any lack or clarity.
" 1. 1983(2) Weekly Law Reports, 16 at 30.
2. 1983 (1) Weekly Law Reports 138 at 142.
685 In the aforesaid view of the matter, I would construe the expression 'wilful default ' in the Explanation to Proviso to subsection (2) of section 10 of the Act in the manner l have indicated.
In that view of the matter, I would decide the appeals accordingly, that is to say, l would agree with my learned brethren in the order passed in those cases where eviction orders have been passed after two months ' notice had been given and there was continuance of default by the tenant thereof.
Appeals which have been disposed of on the basis of wilful default as understood in the manner indicated in the aforesaid observations of mine, I respectfully agree.
Appeals which have been disposed of on wilful default other than in the manner I have indicated hereinbefore, I respectfully differ.
The individual appeals are disposed of accordingly.
There will be no order as to costs.
M.L.A. Appeals dismissed.
741 fair return on the 'capital employed ' which is to be exempted from A tax under sub section (1) of Section 80J, the owner 's capital alone should be taken into account and borrowed monies should be excluded.
Even in regard to the provisions of the above mentioned four statutes, an argument could well be advanced that borrowed monies are as much part of capital employed in the undertaking as the owner 's capital and when monies are borrowed on payment of interest by way of hire charges, they become part of the owner 's capital originally brought in by the owner and there is no reason why capital partaking of the samd characteristics as the fair return should not be allowed on it.
This has precisely been the argument advanced on behalf of the assesses in support of their contention that 'capital employed ' must include borrowed monies in sub section (1) of Section 80J.
But this argument has not prevailed with the Legislature in the enactment of any of the above mentioned four statutes and despite this argument the Legislature has chosen to exclude borrowed monies in computing the 'capital employed ' or the capital of the company for determining what should be regarded as fair return, so that profits in excess of such fair return may be subjected to additional tax.
The Central Board of Revenue cannot therefore be accused of any irrationality or whimsicality in providing that fair return on the 'capital employed ' eligible for exemption under subsection :1) of Section 80J should be calculated by applying the statutory percentage to the owner 's capital, that is, the paid up share capital and reserves without taking into account long term borrowings or for the matter of that, any borrowed monies and debts.
We cannot appreciate the contention of Mr. Palkhivala that when the Legislature was offering a tax incentive it could not have intended that the tax incentive should be measureable by reference only to the owner 's capital and that borrowed capital should b e left out of account, because that would, in the submission of Mr. Palkhivala, result in favouring the affluent assessees who are able to employ their own capital and discriminate against the indigent who have to borrow funds to finance their undertakings.
Having regard to the legislative practice and usage referred to by us, it is obvious that if the Legislature intended that the capital employed ' must include long term borrowings, the Legislature would not have used the flexible expression 'capital employed ' but would have expressed itself unambiguously by providing that the 'capital employed ' shall include long term borrowings.
It is clear from the language used by the section that the Legislature proceeded on the basis that the expression 'capital employed ' has no fixed definite meaning including or excluding long term borrowings and deliberately chose to leave it to the Central Board of Revenue to prescribe 742 how the 'capital employed ' shall be computed or in other words, what items shall be included and what items excluded in computing the 'capital employed ' and by incorporating Rule 19A with retrospective effect in Section 80J by the Finance (No. , the Legislature clearly expressed its aproval of the manner of computation of the 'capital employed ' prescribed by the Central Board of Revenue by making sub rule (3) of Rule 19A.
The consequence of this interpretation would undoubtedly be that the assessees would get relief only with reference to their own capital and not with reference to any monies which might have been borrowed by them for employment in the undertaking but that is a matter of policy which clearly falls within the province of the Executive and the Courts are not concerned with it.
It is obvious that the Central Board of Revenue intended and having regard to the retrospective amendment of Section 80J by Finance Act (No. 2) of l980 that must also be taken to be the intention of the legislature that the assessees should be given relief only with reference to their own capital and not with reference to any borrowed monies, presumably because the object of giving relief was to encourage assessees to bring out their own monies for starting new industrial undertakings and the intention was not that the assessees should be given relief with reference to monies which did not belong to them but which were borrowed from financial institutions and other parties and which would have to be repaid.
Mr. Palkhivala then contended that if sub section (1) of Section 80J were construed as leaving it to the Central Board of Revenue to prescribe what items shall be included and what items excluded in computation of the 'capital employed ' it would be vulnerable to attack on the ground of excessive delegation of legislative power and would consequently be void.
We do not think there is any substance in this contention, for there is in the present case no question of excessive delegation of legislative power.
The essential legislative policy of allowing relief to an assessee who starts a new industrial undertaking or business of a hotel and declaring the period for which such relief shall be granted, is laid down by the Legislature itself in the various sub sections of Section 80J and all that is left to the Central Board of Revenue to prescribe is the manner of computation of the 'capital employed ' with reference to which the quantum of the relief is to be calculated.
It is only the details relating to the working of the exempting provision contained in Section 80J which are left by the Legislature to be determined by the Central Board of Revenue.
This 743 is clearly permissible without offending the inhibition against excessive delegation of legislative power.
It must be remembered that Section 80J enacts an exemption in a taxing statute and a certain margin of latitude is always allowed to the Executive in working out the details of exemption in a such taxing statute.
It was laid down by this Court as far as back as 1959 in Pt.
Banaarsi Dass Bhanol vs State of Madhy a Pradesh(l).
"Now, the authorities are clear that it is not unconstitutional for the legislature to leave it to the executive to determine details relating to the working of taxation laws, such as the selection of persons on whom the tax is to be laid, the rates at which it is to be charged in respect of different classes of goods, and the like." So also in Sitaram Bishambardas and Ors.
vs State of U.P. and Ors.(Z) this Court upheld the validity of Section 3D (1) of the U.P. Sales Tax Act 1948 which authorised the levy of a tax on the turnover of first purchases made by dealer or through a deal r acting as a purchasing agent, in respect of such goods or class of goods and at such rates, subject to a maximum, as may from time to time be notified by the State Government and Hegde, J. speaking on behalf of the Court observed: E 'It is true that the power to fix the rate of a tax is a legislative power but if the legislature lays down the legislative policy and provides the necessary guidelines, that power can be delegated to the executive.
Though a tax is levied primarily for the purpose of gathering revenue, in selecting the objects to be taxed and in determining the rate of tax, various economic and social aspects, such as the availability of the goods, administrative convenience, the extent of evasion, the impact of tax levied on the various sections of the society etc have to be considered.
In a modern society taxation is an instrument of planning.
It can be used to achieve the economic and social goals of the State For that reason the power to tax must be a flexible power.
It must be capable of being modulated to meet the exigencies of the situation.
In a Cabinet form of Government, the executive (1) ; (2) ; H 744 is expected to reflect the views of the legislatures.
In fact in most matters it gives the lead to the legislature.
However, much one might deplore the "New Depotism" of the executive, the very complexity of the modern society and the demand it makes on its Government have set in motion forces which ha e made it absolutely necessary for the legislatures to entrust more and more powers to the Executive.
Text book doctrines evolved in the 1 9th century have become out of date.
Present position as regards delegation of legislative power may not be ideal, but in the absence of any better alternative, there is no escape from it.
The legislatures have neither the time, nor the required detailed information nor even the mobility to deal in detail with the innumerable problems arising time and again.
In certain matters they can only lay down the policy and guidelines in as clear a manner as possible.
" The validity of Section 3D of the U.P. Sales Tax Act 1948 was again challenged before this Court in Hiralal Ratan Lal vs State of U.P. and Anr (1) the same ground that it suffered from the vice of legislative power and again, the challenge was negatived by this Court with the following observations: "The only remaining contention is that the delegation made to the executive under section 3D is an excessive delegation.
It is true that the legislature cannot delegate its legislative function, to any other body.
But subject to that qualification, it is permissible for the legislature to delegate the power to select the persons on whom the tax is to be levied or the goods or the transactions on which the tax is to be levied.
In the Act, under section 3 the legislature has sought to impose multi point tax on all sales and purchases.
After having done that it has given power to the executive, a high authority and which is presumed to command the majority support in the legislature; to select for special treatment dealings in certain class of goods.
In the very nature of things, it is impossible for the legislature to ennumerate goods.
dealings in which Sales.
Tax or Purchase tax should be imposed.
It is also impossible for the legislature to select the goods which should be subjected to (1) ; 745 a single point sales or purchase tax.
Before making such selections several aspects such as the impact of the levy on the society, economic consequences and the administrative convenience will have to be considered.
These factors may change from time to time.
Hence in the very nature of things, these details have got to be left to the executive.
" The principles laid down in these observations from the decided cases clearly govern the present case and conclusively repel the contention or Mr. Palkhivala that if sub section (1) of Section 80J were construed in the manner suggested by the learned Attorney General on behalf of the Revenue, it would be rendered void on the ground of excessive delegation of legislative power.
the Legislature having laid down the legislative policy of giving relief to an assessee who is starting a new industrial undertaking or the business of a hotel.
had necessarily to leave it to the Central Board of Revenue to determine what should be the amount of capital employed that should be required to be taken into that account for the purpose of determining the quantum of the relief allowable under the Section.
What should be the quantum of the relief allowable to the assessee would necessarily depend upon diverse t`actors such as the impact of relief on the industry as a whole, the response of the industry to the grant of the relief, the adequacy or inadequacy of the relief granted in promoting the growth of new industrial undertakings, the state of the economy prevailing at the time, whether it is buoyant or depressed and administrative convenience.
These are factors which may change from time to time and hence in the very nature, of thin as, the working out of the mode of computation of the 'capital employed ' for the purpose of determining the quantum of the relief must necessarily be left to the Central Board of Revenue which would be best in a position to consider what should be the quantum of the relief necessary to be given by way of tax incentive in order to promote setting up of new industrial undertakings and hotels and for that purpose, what amount of the 'capital employed ' should form the basis for computation of such relief.
Moreover, it may be noticed that under Section 29(, of the Income Tax 1961 every Rule made under the Act is required to be laid before each House of Parliament so that both Houses of Parliament have an opportunity of knowing what the rule is and considering whether any modification should be made in the rule or the rule should not be made or issued and if both Houses agree in making any modification in the rule or both Houses agree that the H 746 Rule should not be made or issued, then the Rule would thereafter have effect only in such modified form or have no effect at all.
as the case may be.
Parliament has thus not parted with its control over the rule making authority and it exercises strict vigilance and control over the rule making power exercised by the Central Board of Revenue.
This is a strong circumstance which militates against the argument based on excessive delegation of legislative power.
This view receives considerable support from the decision of the Privy Council in Powell vs
Appollo Company Limited(1) where the Judicial Committee, while negativing the challenge to the constitutionality of Section 133 of the Customs Regulation Act of 1879 which conferred power on the Governor to impose tax on certain articles of import, observed as follows: "It is argued that the tax in question has been imposed by the Governor and not by the Legislature who alone had power to impose it.
But the duties levied under the Order in V Council are really levied by the authority of the Act under which the Order is issued.
The Legislature has not parted with its perfect control over the Governor, and has the power, of course, at any moment, of withdrawing or altering the power which they have entrusted to him.
In these circumstances, their Lordships are of opinion that the judgment Of the Supreme Court was wrong in declaring Section 133 of the Customs Regulation Act of 1879 to be beyond the power of the Legislature.
The same approach was adopted by this Court in D. section Grewal vs State of Punjab(2) where upholding the validity of Section 3 of the All India Services Act 1951 which was challenged on the ground of excessive delegation of legislative power, Wanchoo, J. speaking on behalf of the Court said: "Further, by section 3 the Central Government was given the power to frame rules in future which may have the effect of adding to, altering, varying or amending the rules accepted under s.4 as binding.
Seeing that the rules would govern the all lndia services common to the Central Government and the State Government provision was made by s.3 that rules should be framed only after consulting the State (1)11885]10 A.C. 282.
(2)11959] Supp. 1 S.C.R. 792.
747 Governments.
At the same time Parliament took care to A see that these rules were laid on the table of Parliament for fourteen days before they were to come into force and they were subject to modification, whether by way of repeal or amendment on a motion made by Parliament during the session in which they are so laid.
This makes it perfectly clear that Parliament has in no way abdicated its authority, but is keeping strict vigilance and control over its delegate.
It will thus be seen that there is no question of excessive delegation of legislative power in the present case and, even on the view as to interpretation taken by us, sub section (1) of Section 80J cannot be assailed as unconstitutional on the ground of excessive delegation of legislative power.
We must therefore hold that subrule (3) of Rule 19A in so far as it provided for exclusion of borrowed monies and debts and particularly long term borrowings in computation of the 'capital employed ' could not be said to be outside the rule making authority conferred on the Central Board of Revenue under sub section (1) of Section 80J and was a perfectly valid piece of subordinate legislation.
That takes us to the second point urged by Mr. Palkhivala relating to the dimension of time in regard to the expression 'capital employed '.
The argument of Mr. Palkhivala was that the concept of 'capital employed ' in respect of the previous year is a concept which compels attention to the reality of the capital used during the whole year and not merely on the first day of the computation period and therefore Rule 19A in so far as it provided for computation of the 'capital employed ' as on the first day of the computation period was ultra vires the rule making authority of the Central Board of Revenue under sub section (1) of Section.
80J This argument of Mr. Palkhivala is also unsustainable and must be rejected.
It may be noted that when sub section (1) of Section 80J speaks of 'capital employed ' in an industrial undertaking or business of a hotel, it does not refer to 'capital employed ' during the previous year but it uses the expression 'capital employed ' in respect of the previous year, There is a vital difference between the expression "during the previous year" and the expression "In connection with the previous year".
The argument of Mr. Palkhivala would have had great force if the reference in sub section (1) of Section 80J would have been to 'capital employed ' during the previous year Then it could have been contended with considerable plausibility that the 'capital employed ' 11 748 cannot be computed as on the first day of the previous year, but it should be taken to be the average amount of 'capital employed ' during the previous year.
But the expression used by the Legislature in sub section (1) of Section 80J being "capital employed. computed in the prescribed manner in respect of the previous year", the computation has to be in respect of the previous year and it need not take into account the average amount of 'capital employed ' during the previous year but it can legitimately take the first day of the previous year as the point of time at which the 'capital employed ' must be computed.
The 'capital employed ' so computed would clearly fall within the expression "capital employed. computed in the prescribed manner in respect of the previous year".
Mr. Palkhivala relied on the description given in the parenthetical portion at the end of sub section (1) of Section 80J which describes the amount calculated by applying the statutory rate of six per cent to the 'capital employed ' computed in the prescribed manner in respect of the previous year as "the relevant amount of capital employed during the previous year", but that is merely a description given to the amount calculated as provided in the main part of sub section (1) of Section 80J and in the main part, we find the words "in respect of the previous year" and not "during the previous year".
It may be pointed out that the words "in respect of the previous year" were introduced for the first time when Section 80J came to be enacted as a result of the Report of Shri section Boothalingam, where he recommended that the prevailing "base for the calculation of profits, nemely, average 'capital employed ' in the business during each year" was complicated and difficult to establish and it was therefore desirable to adopt the basis of computation of the 'capital employed ' as "at the beginning of the year but ignoring the fresh introduction of capital in the course of the year".
It was following upon the introduction of the words 'in respect of the previous year" in subsection (1) of Section 80J that Rule l9A was made providing for computation of the 'capital employed ' as on the first day of the computation period.
Moreover, if we refer to the definition of 'statutory deduction ' in sub section (8) of Section ' and Rule I of the Second Schedule of the , it would be apparent that.
according to the Legislature, the process of computation of the capital of the company includes also the specification of the point of time as on which the capital of the company shall be computed.
Therefore" even if the words "in respect of the previous year" were absent, it would have been competent to the Central Board of Revenue as the rule making authority to provide for the computation of the 'capital employed as on the 749 first day of the computation period, as was done by the Legislature in the case of the .
The words "in respect of the previous year" are facilitative of the computation of the 'capital employed ' being prescribed as on the first day of the computation period.
We cannot therefore accept the contention of Mr. Palkhivala that Rule l9A in so far as it provided for computation of the 'capital employed ' as on the first day of the computation period was outside the rule making authority of the Central Board of Revenue under sub section (1) of Section 80J.
We are therefore of the view that Rule 19A in so far as it excluded borrowed monies and debts in computation of the 'capital employed ' and provided for computation of the 'capital employed ' as on the first day of the computation period was not ultra vires Section 80J and was a perfectly valid rule within the rule making authority conferred upon the Central Board of Revenue.
So also, for the same reasons, Rule 9A in so far as it provided that the 'capital employed ' in a ship shall be taken to be the written down value of the ship as reduced by the aggregate of the amounts owed by the assessee as on the computation date on account of monies borrowed or debts incurred in acquiring that ship must be held to be valid as being within the rule making authority of the Central Board of Revenue.
Since, on the view taken by us, Rule 19A did not suffer from any infirmity and was valid in its entirety, Finance Act (No.2) of 1980 in so far as it amended Section 80J by incorporating Rule l9A in the Section with retrospective effect from 1st April 1972, was merely clarificatory in nature and must accordingly be held to be valid.
F The writ petitions will therefore stand dismissed but having regard to the importance of the questions involved in the writ petitions, we think it would be fair and just to direct each party to bear its own costs of the writ petitions.
A.N. SEN, J. I have had the benefit of reading the judgment prepared by my learned brother Bhagwati, J.
I regret I cannot pursuade myself to agree.
The material facts have been fully stated in the judgment of my learned brother.
My learned brother in his judgment has set out all the relevant provisions of the Income Tax Act and the Income Tax Rules.
He has also traced the legislative history of S.80J of the 750 Income Tax Act, 1961 and has noted the various amendments effected to that section from time to time.
It does not, therefore, become necessary to reproduce the same at any length in my judgment.
The two questions which fall for determination are : (1) Whether rule 19A of the Income Tax Act Rules insofar as the said rule excludes borrowed capital and fixes the first day of the year in the matter of computation of capital employed for the purpose of relief under section 80J is valid.
(2) Whether the amendment introduced in section 80J by the Finance (No.2) Act of 1980 incorporating in the section the provisions of the rule in relation to the exclusion of borrowed capital and the fixing of the first day of the year for the purpose of computation of the capital employed for granting relief under section 80J with retrospective affect from 1st April, 1972 is valid ? The material provisions Of Rule 19A read as follows: (1) For the purposes of section 80J, the capital employed in an industrial undertaking or the business of a hotel shall be computed in accordance with sub rules (2) to (4), and the capital employed in a ship shall be computed in accordance with sub rule 5).
(2) The aggregate of the amounts representing the values of the assets as on the first day of the computation period, of the undertaking or of the business of the hotel to which the said section 80J applies shall first be ascertained in the following manner: (i) in the case of assets entitled to depreciation, their written down value; (ii) in the case of assets acquired by purchase and not entitled to depreciation, their actual cost to the assessee: (iii) in the Case of assets acquired other wise then by purchase and not entitled to depreciation, the value of the assets when they became assets of the business; 751 (iv) in the case of assets being debts due to the person carrying on the business the nominal amount of those debts; (v) in the case of assets being cash in hand or bank, the amount thereof.
Explanation 1: In this rule, "Computation period" means the period for which profits and gains of the industrial undertaking or business of the hotel are computed under sections 28 to 43A. Explanation 2: The value of any building, machinery or plant or any part there of as is referred to in cl.
(a) or clause (b) of the explanation at the end of sub section (6) of section 80J shall not be taken into n account in computing the capital employed in the industrial undertaking or, as the case may be, the business of the hotel.
Explanation 3: Where the cost of asset has been satisfied other wise than in cash, the then value of the consideration actually given for the asset shall be treated as the actual cost of the asset.
(3) From the aggregate of the amount as ascertained under sub rule (2) shall be deducted the aggregate of the amounts, as on the first day of the computation period, of borrowed moneys and debts due by the assessee (including amount due towards any liability in respect of tax ) Rule l9A forms a part of the Income Tax Rules 1962 which have been framed by virtue of the authority conferred under section 295 of the Income tax Act 1961.
Section 295 lays down: "(1) The Board may subject to the control of the Central Government, by notification in the Gazette of India, make rules for the whole or any part of India for carrying out the purposes of this Act; 752 (2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters: xxx x It may be noted that the matters mentioned in sub section (2) do not refer to section 80J of the Act The relevant provisions of section 80J as it stood prior to the impugned amendment by the Finance Act 2 of 1980 material for the purpose of the present proceedings may be set out: "(1).
Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking or a ship or the business of a hotel, to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains (reduced by the aggregate of the deductions, if any.
admissible to the assessee under section 80H and section 80HH) of so much of the amount thereof as does not exceed the amount calculated at the rate of six per cent per annum on the capital employed in the industrial undertaking or ship or business of the hotel as the case may be, computed in the prescribed manner in respect of the previous year relevant to the assessment year (the amount calculated as aforesaid being hereafter, in this section, referred to as the relevant amount of capital employed during the previous year) (2) The deduction specified in sub section (1) shall be allowed in computing the total income in respect of the assessment year relevant to the previous year in which the industrial undertaking begins to manufacture or produce articles or to operate its cold storage plant or plants or the ship is first brought into use or the business of the hotel starts functioning (such assessment year being hereafter, in this section, referred to as the initial assessment year) and each of the four assessment years immediately succeeding the initial assessment year.
x x x (4) This section applies to any industrial undertaking which fulfills all the following conditions, namely: 753 (i) it is not formed by the splitting up, or the reconstruction, of a business already in existence; (ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose; B (iii) it manufactures or produced articles, or operates one or more cold storage plant or plants.
in any part of India, and has begun or begins to manufacture or produce articles or to operate such plant or plants, at any time within the period of (thirty three years) next following the 1st day of April, 1948, or such further period as the Central Government may, by notification in the official Gazette, specify with reference to any particular industrial undertaking; D (iv) in a case where the industrial undertaking manufactures or produces articles, the undertaking employs ten or more workers in a manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power: E Provided that the condition in clause (i) shall not apply in respect of any industrial undertaking which is formed as a result of the re establishment, reconstruction or revival by the assessee of the business of any such industrial undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section; Provided further that, where any building or any part thereof previously used for any purpose is transferred to the business of the industrial undertaking, the value of the building or part so transferred shall not be taken in to account in computing the capital employed in the industrial undertaking: Provided also that in the case of an industrial undertaking which manufactures or produces any articles specified in the list in the Eleventh Schedule, the provisions of clause (iii) shall have effect as if for the words 'thirty three years ', the word 'thirty one years ' had been substituted.
" 11 754 I propose to take up first the question of the validity of the Rule.
I consider this will be the proper course to adopt lf the Rule is held to be valid, the question of the amendment with retrospective effect may not require any consideration at all.
If, on the other hand, the Rule is held to be invalid, the question of the validity of the amendment assumes vital importance.
The invalidity of the Rule, on the basis of the arguments advanced, may also have a bearing in deciding the validity or otherwise of the amendment.
The rule must be held to be valid, if the rule is found to be in conformity with and consistent with the section If, however, the rule is found to be inconsistent with and contrary to the provisions of the section, the rule has to be pronounced invalid.
Whether the rule is in conformity with and is consistent with the section or whether the rule is inconsistent with and contrary to the provisions of the section, must necessarily be determined on a proper interpretation of the section.
Principles of construction of any statute or any statutory provision are well settled.
The purpose of interpretation of any statute is to gather the true intention of the Legislature.
It is well settled that "if the words of a statue are clear and unambiguous, they themselves indicate what must be taken to have been the intention of Parliament and there is no need to look elsewhere to discover their intention or their meaning".
(See Halsbury 's Laws of England, 4th Edn.
44 at P. 522).
When the words of a statue are clear, plain or unambiguous, it becomes the duty of the Court to expound those words in their natural and ordinary sense, as the words used themselves best declare the intent of the Legislature If on a fair reading of a section, the words used appear to be plain and unambiguous and are reasonably susceptible to one meaning only, Courts must give effect to that meaning, unless such a meaning makes a non sense of the section or leads to absurdity.
The Court is not concerned with the policy involved or with the results, injurious or otherwise, which may follow from giving effect to the language 0 used.
In Emperor vs Banoari Lal Sarma,(l) Viscount Simon, L.C. Observed at P.55: "Again and again, this Board has insisted that in enacted words we are not concerned with the policy involved (1) A.I.R. 1945 P.C.48.
755 construing or with the results, injurious or otherwise, which A may follow from giving effect to the language used".
In Kanti Lal Sur vs Paramnidhi Sadhukhan,(l) this Court at P. 910 held: "lf the words used are capable of one construction only, then it would not be open to the Courts to adopt any other hypothetical construction on the ground that such hypothetical construction is more consistent with the alleged object and policy of the Act".
If, however, the words of a statute are not clear and are ambiguous; different considerations may apply in interpreting the provisions for gathering the true intention of the law giver.
It is stated in Halsbury 's Laws of England, 4th Edn.
44, in para 858 at P. 523, as follows: "If the words of a statute are ambiguous, the intention of Parliament must be sought first in the statute itself, then in other legislation and contemperaneous circumstances and finally in the general rules laid down long ago, and often approved namely, by ascertaining (1)what was the common law before the making of the Act; (2) what was the mischief and defect for which the common law did not provide; (3) what remedy Parliament resolved and appointed to cure the disease of the commonwealth, and (4) the true reason of the remedy".
As on a fair reading of section 80J, I am satisfied that the section is sufficiently clear and the language used therein suffers from no ambiguity, it does not become necessary for me in the instant case to consider at length the principles of interpretation which are required to be observed in construing an ambiguous statute.
The material provisions of section 80J of the Income tax Act, prior to the impugned amendment by the Finance Act, 1980, have been earlier set out.
The relevant provisions of the said section provide that where the gross total income of an assessee includes profits and gains derived from an industrial undertaking or ship or the business of a hotel to which the section applies, there shall, in accordance with and subject to the provisions of the section, be allowed in (1) A.l.
R. H 756 computing total income of the assessee, a deduction from such profits and gains (reduced by the deduction, if any, admissible to the assessee under section 80HH or section 80HHA) of so much of the amount thereof as does not exceed an amount calculated @, 6 % per annum on the capital employed in the industrial undertaking or ship or business of the hotel as the case may be, computed in the manner prescribed in respect of the previous year relevant to the assessment year (the amount calculated aforesaid being hereinafter, in this connection referred to as the relevant amount of capital employed during the previous year) For qualifying for relief under this section, an assessee must derive profits and gains from an industrial undertaking or ship or the business of a hotel to which the section must be applicable.
It is not in dispute that the assessees who have approached the Court have derived profits and gains from industrial undertaking set up by them and they qualify for relief under this section.
A plain reading of the section with reference to the language used therein clearly postulates that relief as contemplated in the section is to be allowed on the capital employed in the undertaking in the previous year, producing the profits and gains of the under taking in the previous year.
An undertaking might have had capital which might not have been employed in the undertaking in previous year for earning profits and gains which were earned in the previous year.
Such capital, though forming part of the capital of the undertaking, will not be entitled to the benefit of the relief under this section.
Relief is contemplated only on the capital which was employed in the undertaking in the previous year and which produced the previous year the profits and gains of the undertaking which were included in the total income of the assessee in the previous year.
Relief under this section for the undertaking is clearly intended on the capital employed in the undertaking which produced the profits and gains of the undertaking in the previous year.
This intention is made manifestly clear, as relief has to be granted on the basis of the profits and gains earned by the undertaking in the previous year by virtue of employment of capital in the undertaking in the previous year.
The capital employed in the undertaking` which qualifies for relief under this Section clearly refers to and must necessarily be the capital employed in the undertaking in the previous year for the purpose of earning the profits.
If the capital employed in the undertaking is own capital, such capital qualifies for relief.
If capital employed is borrowed capita], such capital will equally 757 qualify for relief.
If capital employed consists of assessee 's own capital and also his borrowed capital, the capital so employed, assessee 's own and borrowed, will both qualify for the relief.
The capital employed in the undertaking in the previous year which qualifies for relief under this section has to be computed in the manner prescribed.
There is nothing in the section to suggest or indicate that in prescribing the manner of computation of the capital employed in the undertaking for the purpose of relief, any part of the capital which was employed in the undertaking for producing the profits and gains can be excluded.
If the Legislature had any such intention for excluding any part of the capital employed in the undertaking producing profits and gains of the undertaking, the Legislature would have and could have easily made suitable provisions.
The Legislature must be presumed to have known that the capital employed in an undertaking may consist of and, in fact, does consist of assessee 's own capital and also capital borrowed by the assessee.
It is common knowledge that most of the undertakings carry on their activities with borrowed capital in addition to own capital employed in the undertakings.
Inspite of the knowledge of the Legislature that undertakings are carried on with borrowed capital, the Legislature in its wisdom has in this section mentioned capital employed in the undertaking for earning profits and gains of the undertaking without making any distinction between own capital and borrowed capital and has provided for relief in respect of the capital employed in the undertaking on the basis of profits and gains of the undertaking earned by virtue of employment of such capital.
It is not disputed and cannot be disputed that profits and gains of the undertaking to be ultimately included in the total income of the assessee are produced by the capital, whether assessee 's own or borrowed, employed in the undertaking in the relevant year and while computing profits and gains of the undertaking the borrowed capital is as important as the assessee 's own capital and both play the same role in earning the profits and gains of the undertaking.
It is the capital employed in the undertaking which qualifies for relief under this section.
irrespective of the nature and source of the capital employed in the undertaking.
It is, however, to be emphasised hat the capital to qualify for relief under this section, whether borrowed or own, must be employed in the undertaking in the previous year for earning profits and gains and any capital of the undertaking, borrowed or assessee 's own which remains idle and is not employed in the undertaking for earning profits and gains dose not qualify for any relief under this section ` H 758 Sub section 4 of section 80J lays down the conditions which have to be fulfilled by an undertaking to qualify for the relief granted under this section.
Even in this sub section there is no indication that any undertaking set up with borrowed capital or with capital part of which may be borrowed will not be entitled to the benefits n of this section.
An industrial undertaking which satisfies all the conditions laid down in sub section 4 will undoubtedly be entitled to the benefits of section 80J.
An undertaking with borrowed capital can also very well satisfy the conditions of sub section (4) and qualify for the relief, as there is nothing in this sub section which prevents an undertaking set up with wholly or partly borrowed capital from fulfilling the conditions laid down in the sub section 4.
An undertaking satisfying all the conditions in sub section (4) and there by qualifying for relief if, however, set up with borrowed capital, will be denied the relief to which the undertaking in terms of the clear provisions of the section is justly entitled, merely on the ground that the rule prescribed for computing the relief excludes the borrowed ` capital in the computation of the capital employed for the purpose of granting the relief under this section.
In other words, an industrial undertaking qualifying for the relief under section 80J by virtue of the clear and unambiguous provisions made in the section will be denied the relief because of the rule, as on computation on the basis of the rule excluding borrowed capital, no relief will be available.
As the sub section in clear and unequivocal terms provides that section 80J will apply to such an undertaking, the benefit intended to be given to the undertaking under this section cannot be denied to such an undertaking by any rule which will clearly have the effect of negativing the clear and unambiguous statutory provisions.
The argument of Mr. Palkhivala that the expression 'capital employed ' is a term of art and is usually understood in business parlance and commercial circles and also in commercial accountancy in the sense that it includes not only owner 's capital but also borrowed capital, particularly if the borrowing is on a long term basis, to my mind, has considerable force.
It may be true that in different context and particularly in the context of return of capital, capital employed may not include borrowed capital.
Unless the content otherwise requires and except in the case of return of capital, the expression 'capital employed ' in its ordinary sense is understood to include borrowed capital.
It refers to the capital, whatever may be the source, which is employed in any undertaking or venture for carrying on the business for the purpose of earning the profits and gains.
759 In the instant case, the words capital employed have to be A understood and interpreted in the context the said words have been used in section 80J.
It is quite clear from the text of the section that the words capital employed have been used in the context of the capital which has been employed in the under taking for producing profits and gains of the undertaking in the relevant year.
If borrowed capital is also employed in the undertaking, capital employed necessarily and clearly includes such borrowed capital which has teen employed in the undertaking and which has contributed to the profits and gains of the undertaking.
To my mind, therefore, on a proper interpretation, section 80J is clear language postulates that capital employed in the undertaking includes own capital and also borrowed capital employed in the undertaking in the relevant year and the section plainly and unequivocally makes this intention of the Parliament manifestly clear.
As the Section is clear and unambiguous it is indeed not proper and necessary to refer to any other consideration for its construction.
It may, however, be pointed out that this interpretation not only makes perfect sense but also clearly promotes the object for which this section was incorporated.
To my mind, the object of section 80J which indeed replaces the earlier section 84 which came in place of section 15C of the earlier Income Tax Act, is to give impetus and encouragement to the setting up of new industrial undertaking by offering tax incentives or tax reliefs.
The object clearly is to encourage persons to set up new industrial undertakings for rapid industrialisation of the country by offering incentives in respect of undertakings covered by this section by way of grant of tax relief on the capital employed in such undertakings.
In the case of Textile Machinery Corporation vs Commissioner of Income tax, West Bengal,(1) this Court while considering the object of a similar provision in section 1 5C observed at page 202: The principal object of section 15C is to encourage setting up of new industrial undertaking by offering tax incentives within a period of 13 years from April 1, 1948.
Section 1 5C provides for a fractional exemption from tax of profits of a newly established undertaking for five assessment years as specified there in.
This section was inserted in the Act in 1949 by section 13 of the Taxation Laws (,Extension to (1) 760 Merged States and Amendment) Act 1949 (Act 67 of '919), extending the benefit to the actual manufacture or production of articles commencing from a prior date, namely, April 1, 1948.
After the country had gained independence in 1947 it was most essential to give fillip to trade and industry from all quarters.
That seems to be the background for insertion of section 15C.
It is also significant that the limit of the number of years for the purpose of claiming exemption has been progressively raised from the initial 3 years in 1949 to 6 years in 1953.
7 years in 1951, 13 years in 1956 and 18 years in 1968.
The incentive introduced in 1949 has been thus stopped up ever since and the only object is that which we have already mentioned.
" In the case of Rajapopalayan Mills Ltd. vs Commissioner of Income Tax Madras,(1) this Court had also held at page 783: "The law of income tax in a modern society is intended to achieve various social and economic objectives.
It is often used as an instrument for accelerating economic growth and development.
section 15C is a provision introduced in the .
Indian I.T. Act, 192, with a view to carrying out this objective and it is calculated to encourage setting up of new industrial undertakings in the country.
" The rapid industrialisation of the country for economic growth in the larger interests of the country is the main object of this section which seeks to afford an incentive or tax relief to new industrial undertakings which satisfy the requirements of the section.
To my mind, the argument of the learned Attorney General that the provision contained in the Section requiring 'the capital employed to be computed in the manner prescribed ' authorises the rule making authority to include or to exclude borrowed capital at its discretion by making appropriate provision in the rules as to exclusion of a part of the capital employed for computation of capital employed for the purpose of granting relief under the section is clearly untenable.
The section only enjoins that capital employed is to be computed in the manner to be prescribed and the (1) 761 manner of computation of the capital employed only authorises A, the rule making authority to deal with the details regarding computation of capital employed for carrying out the provisions of the section and the provision regarding the manner of computation does not empower or authorise the rule making authority to lay down which part of the capital employed or how much of it will have to be included or excluded and to what extent, if any: The question whether there should be any such exclusion or inclusion in the matter of consideration of the grant of relief, is essentially a matter of policy for the Legislature to decide and is not a matter for the rule making authority to prescribe.
The power of the rule making authority in terms of the provision contained in section 295 of the Income tax Act which confers such power is limited to the framing of rules for carrying out the purposes of the Act.
The rule making authority is not competent to prescribe any rule which will be in the nature of a substantive provision of the Act itself and more particularly, which will be in conflict with the substantive provision of the section itself and which will in any way defeat or frustrate the purpose for which any provision in the Act has been enacted.
In the instant case I am clearly of the opinion on a construction of section 80J that the said section unequivocally and in clear terms provides that capital employed for earning the profits of the undertaking is the capital which is entitled to the benefit of the relief.
The exclusion of borrowed capital by the rule making authority in the rules prescribed for computation of the relief under section 80J is inconsistent with and derogatory to the provisions of the statute.
The said rule not only fails to carry out the purpose of the said section but in fact tends to defeat the same and the rule runs clearly contrary to the provisions of the statute.
The rule excluding borrowed capital must, therefore, be held to be bad and invalid.
The argument of Mr. Palkhivala that any such rule framed by the rule making authority including or excluding any part of the capital employed in the undertaking in the absence of any guideline will also be clearly beyond the power of the rule making authority, to my mind.
is sound.
In the section itself or in any other provision of the Act it does not appear that there is any provision laying down any guideline which may entitle the rule making authority to exclude any part of the capital employed, whether it is borrowed capital or own capital.
No such provision or guideline is there in the Act.
To my mind, there could not possibly be any such provision or guideline in the Act, as the section itself clearly provides that the entire amount of capital employed for earning the profits will qualify for 762 the relief.
If it be held that the rule making authority enjoys and such power of excluding any part of the capital employed in the undertaking because of the provision in the section regarding "computation of capital employed in the manner prescribed" it must necessarily be held that the rule making authority enjoys the power of framing a rule contrary to the provision of the section.
It must further be held that the rule making authority at its discretion enjoys the power to exclude the whole or part of owner 's capital and also the whole or part of the borrowed capital.
this interpretation will mean that interpretation the power will be available with the rule making authority which at its discretion and in the absence of any guideline will be entitled to exclude any or every part of the capital employed even to an extent of rendering the section itself nugatory.
This interpretation will have the effect of justifying a delegation of power to the rule making authority to an extent which cannot be permitted.
l have no hesitation in coming to the conclusion that the rule making authority does not enjoy any such power or jurisdiction.
No such power or jurisdiction in the absence of specific provision and clear guideline in the Act could be delegated to the rule making authority.
In the case of Sales Tax Officer vs KS.
Abraham(l) this Court had the occasion to construe the meaning of the phrase "in the prescribed manner" occurring in section 84 of the Central Sales Tax Act, 1956.
In dealing with the vires of rule 6 of the Central Sales Tax (Kerela) Rules, 1967 in so far as the said rule purported to prescribe a time limit within which ' the declaration was to be filed by the registered dealer, this Court held, "In our opinion, the phrase 'in the prescribed manner ' occurring in section 8 (4) of the Act only confers power on the rule making authority to prescribe a rule stating what particulars are to be mentioned in the prescribed form the nature and value of the goods sold, the parties to whom they are sold, and to which authority the form is to be furnished.
But the phrase 'in the prescribed manner ' in section 8 (4) does not take in the time element.
In other words, the section does not authorise the rule making authority to prescribe a time limit within which the declaration is to be filed by the registered dealer.
The view that we have taken is supported by the language of section 13 (4) (g) of the Act (1) ; 763 which states that the State Government may make rules for 'the time within which, the manner in which and the authorities to whom any change in the ownership of any business or in the name, place or nature of any business carried on by any dealer shall be furnished. ' This makes it clear that the Legislature was conscious of the fact that the expression 'in the manner ' would denote only the mode in which an act was to be done, and if any time limit was to be prescribed for the doing of the act, specific words such as 'the time within which ' were also necessary to be put in the statue.
The Privy Council in the case of Utah Construction & Engineering Pvt. Ltd. and Anr.
vs Pataky,(l) observed at pages 653 654: "Their lordships now pass to section 22 (2) (g) (iv) and (v).
Sub paragraph (iv) empowers the Governor to make regulations "relating to the manner of carrying out. excavation work '.
The relevant portion of reg.
9X provides 'Every drive and tunnel shall be securely protected and made safe for persons employed therein '.
The expression 'manner of carrying out ' the work plainly envisages a system of working, and does not in their lordships view justify a regulation imposing an absolute duty of protecting the drive and tunnel or an absolute duty of ensuring the safety of persons employed in the drive or tunnal.
The relevant portion of reg. 98 does not prescribe the manner of doing the work.
Sub paragraph (iv) therefore cannot in their lordships opinion empower the making of the relevant portion of reg. 98. ' F The proposition that the rule making authority does not have any power to encroach upon any substantive provision in the statute appears to be beyond dispute.
By virtue of S 295 (1) of the Income tax Act, the rule making authority is empowered to make rules for carrying out the purposes of the Act and sub section 2 which specifically refers that such rules may provide for all or any of the matters mentioned in the said subsection does not make any reference to section 80J.
In prescribing the manner of computation of capital employed, the rule making authority, in the absence of specific provision in the section itself or in the absence of any statutory provision, cannot exclude any (1) [196513 All.
E.R. 650, 764 part of capital employed in the undertaking at its discretion under the guise of the process of prescribing the manner of computation.
The argument of the learned Attornney General that as an undertaking which employs borrowed capital gets relief because in calculating the profits and gains the interest paid on the borrowed capital is taken into account, the rule making authority in prescribing the manner of computation of capital employed is entitled to exclude borrowed capital to avoid grant of double relief to the undertaking, is without any merit.
Interest paid on borrowed capital by any undertaking, whether it is an undertaking within the meaning of S.80J J or not, is taken into account as business expenditure in calculating the profits and gains of any undertaking.
It is the prescribed mode of calculating the profits and gains of every undertaking and is no special benefit for any undertaking: and, undoubtedly it affords no incentive of special relief to a new undertaking which has necessarily to satisfy the required conditions laid down in S 80J for being entitled to the relief intended to be granted to an undertaking which comes within the purview of S.80J.
In any event, such inclusion or exclusion on any consideration will be a matter of policy to be determined by the Legislature and not a matter for the rule making authority to lay down in prescribing the mode of computation.
The decision of the Calcutta High Court in the case of Century Enka Ltd. vs I.T.0.,(1) the decision of the Madras High Court in the case of Madras Industrial Linings Ltd. vs I.T.0.(2), the decision of the Allahabad High Court in Kota Box Manufacturing Co. vs I.T.0.(3) the decision of the Punjab and Haryana High Court in the case of Ganesh Steel Industries vs I.T.0.(4), the decision of the Andhra Pradesh High Court in the case of Warner Hindustan Ltd. vs I.T.0.(5) holding the rule to the extent it excludes borrowed capital in the computation of capital employed for the purpose of granting relief under section 80J to be invalid, are correct and l have no hesitation in upholding these decisions 'The contrary view expressed .
by the Madhya Pradesh High Court in the case of Commissioner of Income Tax, M.P. Il vs Anand Bahri Steel and Wire Products(n) must necessarily be held to be erroneous.
(1) (2) (3) (4) (5) [1982] 134 lTR .158.
(6) [l982] 765 It may be noticed that the Madhya Pradesh High Court proceeded to hold the rule to be valid mainly on the ground that this rule has been in existence for a long time under S.15C of the earlier Act which subsequently came to be replaced by S.80J and the Parliament must have been aware at the time of enacting S.80J of the existence of the rule framed by the rule making authority which held the field for a long period without any challenge.
The decision proceeds on the basis that the Parliament must have, therefore, accepted the interpretation put by the rule making authority at the time the Parliament enacted S 80J.
This decision does not take into consideration the fact that the interpretation put by the rule making authority has not been the same all throughout and has undergone changes from time to time and the rule making authority has in certain years also permitted certain classes of borrowed capital to be taken into account in computation of capital employed for the purpose of relief.
The decision of the Madhya Pradesh High Court does not also take into consideration the question whether the rule seeking to include or exclude borrowed capital at the discretion of the rule making authority in the absence of any statutory provision or guideline, becomes bad on account of unjustified excessive delegation of authority.
The decision of the Madhya Pradesh High Court has not proceeded to construe S.80J correctly to gather the true intention of the Parliament before deciding the question as to whether the rule excluding borrowed capital is consistent with the intention of Parliament clearly expressed in S.80J.
In my opinion, the mere existence of an invalid rule without any challenge for any length of time does not affect the question of validity of the rule and cannot render a rule otherwise invalid to be valid only on the ground that the rule had remained in existence without any challenge for a number of years.
In the case of Proprietary Articles Trade Association vs Attorney General for Canada(l), the Judicial Committee while considering the vires of a statute namely, Combines Investigation Act R.S. Can.
1927, c. 26 passed by the Parliament of Canada observed at p. 317: "Both the Act and the section have a legislative history, which is relevant to the discussion.
Their Lordships entertain no doubt that time alone will not validate an Act which when challenged is found to be ultra vires; nor will a history of a gradual series of advances till this boundary is finally crossed avail to protect the ultimate encroachment.
" In the case of Campbell College Belfast (Governors) vs Commis (1) 766 sioner of Valuation for Northern Ireland(l), the House of Lords while considering the validity of payment of rates by fee paying public school in Northern Ireland which has continued for over 132 year. despite the terms of section 2 of the Valuation (Ireland) Act Amendment Act, 1954, held at p. 941 to 942 : " my Lords, for my part I am quite unable to apply that principle to a statute although it was passed` over 100 years ago, but its language is plain and unambiguous and it was not misconstrued until the decision in the Alexandra College case 60 years later.
True it is that fee paying schools did always pay rates in accordance with section 2, but until 1914 that was not because it was assumed that section 2 was con trolled by the proviso, and that charitable purposes bore a limited meaning.
It may have been that it was thought that if some of the pupils were free paying, section 16 of the Act of 1852 was not satisfied.
That argument is now untenable n and, as Black L.J. point out at an early part of his judgment, Campbell College is clearly for this purpose a charitable institute.
My Lords, in these circumstances I can attach no weight whatever to this long unquestioned payment when construing section 2.
To my mind, this doctrine can have no application to the circumstances of this case.
It is also well settled that even if the rules have been laid before the Parliament and there is a resolution of the Parliament approving the rules, the validity of the rules has to be declared by the Court and the Court can declare any rule placed before the Parliament and approved by the Parliament to be ultra vires the Act and invalid.
In the case of Kerala State Electricity Board.
vs Indian Aluminium(2).
, this Court held at p.576: "In India many statutes both of Parliament and of State Legislatures provide for subordinate legislation made under the provisions of those statutes to be placed on the table of either the Parliament or the State Legislature and to be subject to such modification, amendment or annulment, as the case may be, as may be made by the Parliament or the State Legislature.
Even so, we do not think that where an executive authority is given power to frame subordinate legislation within stated limits, rules made by such authority (1) [1964] I W.L.R. 912.
(2) [1976] I S.C.R.552.
767 if outside the scope of the rule making power should be deemed to be valid merely because such rules have been placed before the legislature and are subject to such modification, amendment or annulment, as the case may be as the legislature may think fit.
The process of such amendment, modification or annulment is not the same as the process of legislation and in particular it lacks the assent either of the President or the Governor of the State, as the case may be.
We are, therefore, of opinion that the correct view is that notwithstanding the subordinate legislation being laid on the table of the House of Parliament or the State Legislature and being subject to such modification, annulment or amendment as they may make, the subordinate legislation cannot be said to be valid unless it is within the scope of the rule making power provided in the statute." The other impugned provision of the rule, prescribing that capital employed should be computed on the basis of the capital employed on the first day of the year, must on a proper construction of the section be also held to be invalid.
The section clearly provides that the deduction to be allowed is to be computed in the prescribed manner in respect of the previous year relevant to the assessment year.
The deduction to be allowed is on the profits and gains of the undertaking earned in the relevant year in respect of the previous year relevant to the assessment year.
Profits and gains which are to be taken into account are the profits and gains earned in the relevant year and the year must necessarily mean and include the whole of the year and not some days or months of the year.
The capital employed for earning the posts and gains dring the whole year must necessarily be the capital which is entitled to the benefit of the section.
Capital employed on the 1st day of the year does not produce the profits of the entire relevant year, unless the very same amount of capital remains employed throughout the year.
It does not usually happen and in any event it may not happen.
Therefore, by prescribing the 1st day of the year to be the date of .
computation of the capital employed, the capital employed during the whole year is sought to be denied by the rule the benefit to which it is entitled under the section.
This provision, therefore, is clearly contrary to and inconsistent with the specific provision of the statute, as by fixing the 1st day of the year to be the date of computation of the capital employed for the year, the rule making authority is seeking to deny the benefit conferred by the statute.
Andhra Pradesh High Court in the case of Warner Hindustan H 768 Ltd. and Anr.
vs Income tax Officer and Ors.
(supra) in dealing with this question has referred to the decision of the Calcutta High Court in Century Enka Ltd. vs Income tax Officer (supra) on this very point and in agreement with the decisions of the Calcutta High Court, the Andhra Pradesh High Court held at p. 195: "As observed by a learned Judge of the Calcutta High Court in Century Enka Ltd. vs Income tax Officer(l),the main consideration upon which this question has to be resolved is (p. 132), 'whether having regard to the purpose for which provisions of section 80J of the Act was introduced, it was the legislative intent to restrict the capital employed in any manner so as to limit it to the first day of the computation period '.
So far as section 80 J is concerned, it does not give any such indication.
That apart, such computation of capital employed in an industrial undertaking would defeat the very purpose of the undertaking and would lead to incongruous and anomalous results.
While an assessee who has employed the capital in an industrial undertaking on the very first day but has withdrawn it for the major part of the year would be entitled to the full benefit, an assesses who has not employed the capital on the first day but has employed it during the major part of the previous year would be deprived of the benefit.
If the intendment of the Act is to give tax holiday for the new industrial undertaking with a view to help them find their roots and encourage entrepreneur to establish new industrial undertakings and pave the way for rapid industrial growth in the country then the purpose would be not served.
In fact, it would be defeated if the capital employed is computed with reference to the first day of the computation period and not in respect of the previous year relevant to the assessment year".
The Calcutta High Court and Andhra Pradesh High Court have both held this part of the rule fixing the first day of the year for computing the capital employed for the purpose of granting relief under section 80J to be invalid.
I find no difficulty in upholding the decision of the Calcutta High Court and of the Andhra Pradesh High Court on this question.
I know proceed to consider the other question about the validity of the amendment of section 80J introduced by the Finance (1) of 1980.
By the amendment the provisions contained in the A rule excluding borrowed capital and fixing the first day of the year for computation of capital employed for the purpose of relief under section 80J have been incorporated in the section itself with retrospective effect from 1.4.72.
On behalf of some of the assessees the amendment both with; regard to its prospective and retrospective operation has been challenged.
Dr. D. Pal, supported by other learned counsel, addressed us mainly on the aspect of prospective operation, while supplementing and supporting the submissions of Mr. Palkhivala on the aspect of retrospective operation.
Mr. Palkhivala who has been the principal spokesman for the assessees, confined his challenge to the validity of the amendment mainly to the retrospective part, although he made it clear that he was not conceding the validity of the prospective operation.
I propose to consider the submission of Dr. Pal in the first instance.
If the submission of Dr. Pal that the entire amendment is invalid is accepted, the submission of Mr. Palkhivala that the amendment in so far as it is made retrospective is also bad must necessarily succeed.
Dr. Pal has argued that the amendment seeks to make an invidious distinction between own capital and borrowed capital in the matter of granting relief under this section.
It is the argument of Dr. Pal that having regard to the object of the section which is to promote new industries and to give relief on the basis of the capital employed in such new industries by way of incentive, distinction between own capital and borrowed capital is wholly irrelevant , and does not have any nexus with the object sought to be achieved and this distinction between own capital and borrowed capital in the matter of computation of capital employed in the undertaking for the purpose of granting relief results in justified discrimination and is therefore violative of article 14 of the constitution.
To my mind, there is no merit in the submission of Dr. Pal.
It is entirely a matter for the Parliament to decide whether any relief by way of incentive should be allowed and if so to what extent and in what manner.
There is no obligation on the part of the Parliament to make any provision for granting relief to promote new industries.
The Legislature in its wisdom may decide to grant relief and may equally decide not to grant any relief.
It is essentially for the Legislature to decide as to whether any incentive for promoting industrial growth of the country is called for and if the Legislature feels that in the 770 situation prevailing in the country such incentive should be provided it will be again for the Legislature to decide what kind of incentive and in what form and to what extent the same should be provided and to pass appropriate legislation in this regard.
The Parliament would have been legally competent to withdraw the entire relief under section 80J and to abrogate the said section in its entirety, if the Parliament had considered such withdrawal to be necessary.
The Parliament is equally competent to increase or reduce the quantum of relief intended to be given under this section.
In providing that relief intended under section 80J would be allowed only to owner 's own capital and not to any borrowed capital, there can be no infringement of article 14.
No entrepreneur or businessman can claim as a matter of right that relief by way of incentive should be provided to new undertakings to be set up by him.
The Parliament provides for such relief in pursuance of a policy and policy may change from time to time in view of the situation prevailing from time to time.
The Parliament may legitimately feel that borrowing by businessman may not be encouraged and persons should be encouraged to bring their own money for setting up new undertakings and Parliament may provide for appropriate relief by way of incentive to the owner 's capital employed to the exclusion of borrowed capital in the setting up of any new industrial undertaking.
Whether it is prudent to do so is essentially a matter for the Parliament in its wisdom to decide.
It is not for this Court to sit in judgment over the wisdom of the Parliament in the framing of its policy.
The discrimination in the matter of granting relief to own capital to the exclusion of borrowed capital in pursuance of a policy cannot be said to be violative of Art 14, as the two classes of capital, though forming a part of the total capital of the undertaking, are distinct p and they stand on a different footing.
A classification between these two classes of capital for encouraging investment of own capital in setting up new industrial undertakings, cannot be held to be unreasonable and unjustified.
The contention of Dr. Pal that the amendment in discriminating between borrowed capital and owner 's own capital in the enjoyment of relief under section 80J infringes article 14, must therefore, be rejected.
Very properly in challenging the validity of the amendment in so far as it operates prospectively, no grievance in regard to violation of article 19 of the Constitution has been made.
I now pass on to the question of the validity of the amendment with retrospective effect from 1.4 1972.
It has been contended by the learned counsel for the assessees that the retrospective operation of the provision is unreasonable arbitrary and violative of articles 14 and 19 of the Constitution.
The 771 main argument is that the withdrawal of relief granted by the statute A before the present amendment and lawfully enjoyed by the assessee during all these years and thereby imposing on the assessee an unjust, unmerited and accumulated huge financial liability, cannot be considered to be reasonable; and such imposition of accumulated liability will seriously affect the financial stability of the undertakings and will further create various other difficulties which may be almost impossible for the assessees to overcome.
It has been argued that the present amendment has not been necessitated as a result of any provision of the statute being declared ultra vires for any lacuna in the statutory provision and there is no question of any liability being foisted on the Government of refunding any large sun of money collected as tax from the assessees on account of any statutory provision imposing any levy being declared invalid or unconstitutional.
It is submitted that in view of the unequivocal provision of the statute granting relief to borrowed capital which was sought to be negated and denied by an invalid rule which has been struck down, the assessees are legitimately entitled to the relief and they have rightly and justifiably arranged their affairs on the basis of the law as it stood.
The existence of an invalid rule and the tendency of appeals in this Court against the judgment of the various High Courts declaring the rule to be invalid cannot be considered to be relevant factors, particularly when the statutory provision is clear, for guiding the assessee who has to carry on its normal trading activities, in arranging its affairs.
The submission is that the withdrawal or relief lawfully granted and properly enjoyed by the assessees after this long lapse of time, when no serious prejudice is caused or is likely to be caused to the public exchequer and on the other hand a heavy unwarranted financial burden along with other difficulties and problems are created for the assessee, cannot be said to be in public interest and must be held to be unreasonable, arbitrary and violative of article 14 and 19 of the Constitution.
The learned Attorney General has submitted that retrospective operation of the provision does not suffer from any infirmity and is not arbitrary or unreasonable nor is it violative of article 14 and 19 of the Constitution.
He argues that prior to rule 19 A being considered by some of the tribunals and by various High Courts, the said rule excluding borrowed capital in the matter of computation of relief and fixing the 1st day of the year as the relevant date for the computation of relief has remained in force for a number of years.
It is his argument that after the said rule had been struck down, the validity of the decisions has been challenged and was pending appeal in this Court; and the appeal was pending at the time when the present 772 amendment came to b enacted in 1980.
The Learned Attorney General contends that as rule 19 A excluding borrowed capital and fixing the first day of the year as the date for computation of relief had remained in force for a number of years and as the decision striking down the rule is now pending appeal, the assessees were not justified in arranging their affairs on the basis of the said rule being invalid and as prudent men of business they should have so arranged their affairs as to cover every contingency and particularly the contingency of the validity of the rule being upheld by this Court.
The Learned Attorney General has submitted that the amendment has been introduced before the decision of this Court in the pending appeals, as the Parliament wanted to clarify the position in the interest of all concerned and more so in the interest of the assessees to enable the undertakings which qualified for relief under section 80J to enjoy the benefit intended to be conferred by the Section.
It is the submission of the Learned Attorney General that in the absence of any valid rule prescribing the manner of computation of relief to which the assessee may be entitled under section 80J, the benefit cannot be computed and, therefore, no benefit contemplated under section 80J may be at all available to the assessees.
He submits that if the rule is held to be valid by this Court in these appeals, the arguments of the assessee that the assessee has arranged its affairs on the basis of invalidity of the rule will be of no avail; and he further submits that if the invalidity is upheld by this Court in these appeals, the assessee in the absence of any valid rule prescribing the manner of computation of the relief will not be entitled to the benefit of any relief under the section.
It is his submission that in these circumstances the Parliament with the object of seeing that the assessee who is entitled to any relief under section 80J is not denied such relief over these years for lack of provision of a suitable rule prescribing the manner p of computation of such relief, has amended the section itself with retrospective effect from 1972 in the interest of the assessees them selves.
It is the submission of the Attorney General that as the amendment with retrospective effect has been made essentially in the interest of the assessees to enable them to enjoy the relief intended to be given under section 80J, the retrospective effect of the amendment cannot be said to be unreasonable or arbitrary and the retrospective amendment dose not violate either article 14 or 19 of the Constitution, even if the retrospective effect may operate harshly on some assessees.
Before considering the arguments advanced on behalf of the parties, I propose at this stage to refer to some of the decisions cited from the Bar on this aspect. 773 In the case of Epari Chinna Krishna Moorthy, Proprietor Epari A Chinna Moorty and Sons, Berhampur Orissa vs State of Orissa,(l) it was observed at p. 191: "Mr. Sastri also argued that the retrospective operation of the impugned section should be struck down as unconstitutional, because it imposes an unreasonable restriction on the petitioners ' fundamental right under article 19 (1) (g).
It is true that in considering the question as to whether legislative power to pass an Act retrospectively has been reasonably exercised or not, it is relevant to enquire how the retrospective operation operates.
But it would be difficult to accept the argument that because the retrospective operation may operate harshly in some cases.
, therefore, the legislation itself is invalid.
Besides, in the present case, the retrospective operation dose not spread over a very long period either.
Incidentally, it is not clear from the record that the petitioners did not recover sales tax from their customers when they sold the gold ornaments to them".
D In the case of Rai Ram Krishna & Ors.
vs State of Bihar(2).
this Court observed at pp.
914 917: "Mr. Setalvad contends that since it is not disputed that the retrospective operation of a taxing statute is a relevant fact to consider in determining its reasonableness, it may not be unfair to suggest that if the retrospective operation covers a long period like ten years, it should be held to impose a restriction which is unreasonable and as such, must be struck down as being unconstitutional.
In support of this plea, Mr. Setalvad has referred us to the observations made by Sutherland. 'Tax Statute, ' says Sutherland, "nay be retrospective if the legislature clearly so intends.
If the retrospective feature of a law is arbitrary and burdensome, the statute will not be sustained.
The reasonableness of each retrospective tax statute will depend on the circumstances of each case.
A statute retroactively imposing a tax on income earned between the adoption of an amendment making income taxestes legal and the passage of the income tax Act is not unreasonable Likewise an Income tax not retroactive beyond the year of its passage is clearly valid.
The longest (1) ; (2) [1964] I S.C.R.897 774 period of retroactivity yet sustained has been three years.
In general, income taxes are valid although retroactive, if they affect prior but recent transaction. ' Basing himself on these observations Mr. Setalvad contends that since the period covered by the retroactive operation of the Act is between April 1, 1950 and September 25, 1961, it should be held that the restrictions imposed by such retroactive operation are unreasonable, and so, the Act should be struck down in regard to its retrospective operation.
We do not think that such a mechanical test can be applied in deter mining the validity of the retrospective operation of the Act.
It is conceivable that cases may arise in which the retrospective operation of a taxing or other statute may introduce such an element of unreasonableness that the restrictions imposed by it may be open to serious challenge as unconstitutional, but the test of the length of time covered by the retrospective operation cannot, by itself, necessarily be a decisive test.
We may have a statute whose retrospective operation covers a comparatively short period and yet it is possible that the nature of the restriction imposed by it may be of such a character as to introduce a serious infirmity in the retrospective operation.
On the other hand we may get cases where the period covered by the retrospective operation of the statute, though long, will not introduce any such infirmity.
Take the case of a Validating Act.
If a statute passed by the legislature is challenged in proceedings before a Court, and the challenge is ultimately sustained and the statute is struck down, it is not unlikely that the judicial proceedings may occupy a fairly long period and the legislature may well decide to await the final decision in the said proceedings before it p uses its legislative power to cure the alleged infirmity in the earlier Act.
In such a case, if after the final judicial verdict is pronounced in the matter the legislature passes a validating Act, it may well cover a long period taken by the judicial proceedings in Court and yet it would be in appropriate to hold that because the retrospective operation covers a long period, therefore, the restriction imposed by it is unreasonable.
That is why we think the test of the length of time covered by the retrospective operation cannot by itself be treated as a decisive test".
It the case of Jawaharlal vs State of Rajasthan & Ors.(l) this Court held at p. 905: (1) [l966] 1 S.C.R.890.
775 "We have already stated that the power to make laws A involves the power to make them effective prospectively as well as retrospectively, and tax laws are no exception to this rule.
So it would be idle to contend that merely because a taxing statute purports to operate retrospectively, the retrospective operation per se involves contravention of the fundamental right of the citizen taxed under article 19(1)(f) or (g).
It is true that cases may conceivably occur where the Court may have to consider the question as to whether excessive retrospective operation prescribed by a taxing statute amounts to the contravention of the citizens ' fundamental right; and in dealing with such a question, the Court may have to take into account all the relevant and surrounding facts and circumstances in relation to the taxation".
In the case of Assistant Commissioner of Urban Land Tax vs The Buckingham & Carnatic Co. Ltd.l etc.
it was observed at P.287: "It is contended on behalf of the petitioners that the retrospective operation of the law from 1st July, 1963 would make it unreasonable.
We are unable to accept the argument of the petitioners as correct.
It is not right to say as a general proposition that the imposition of tax with retrospective effect per se renders the law unconstitutional.
In E: applying the test of reasonableness to a taxing statute it is of course a relevant consideration that the tax is being enforced with retrospective effect but that is not conclusive in itself".
In the case of M/s. Krishnamurthi & Co. Etc.
vs State of p Madras & Anr.(2j this Court observed at P. 61: "The object of such an enactment is to remove and rectify the defeat in phraseology or lacuna of other nature and also to validate the proceedings, including realisation of tax, which have taken place in pursuance of the earlier enactment which has been found by the Court to be vitiated by an infirmity.
Such an amending and validating Act in the very nature of things has a retrospective operation.
Its aim is to effectuate and carry out the object for which the earlier principal Act had been enacted.
Such an amending (1) [1970] I S.C.R. 268.
(2) 1197312 S.C.R. 54, i 11 776 and validating Act to make small repairs ' is a permissible mode of legislation and is frequently resorted to in fiscal enactments.
" Similar observations have been made by this Court in the case of Hira Lal Rattan Lal etc.
vs State of U.P. & Anr.
etc(l) at P. 511: "A feable attempt was made to show that the retrospective levy made under the Act is violative of article 19(t) (f) and (g).
But we see no substance in that contention.
As seen earlier, the amendment of the Act was necessitated because of the legislature 's failure to bring out clearly in the principal Act its intention to separate the processed or split pulses from the unsplit or unprocessed pulses.
Further the retrospective amendment became necessary as otherwise the State would have to refund large sum of money".
In the case of State of Gujarat vs Ramanalal Keshave Lal Soni(2), this Court observed at p. 62: "The Legislature is undoubtedly competent to legislate y with retrospective effect to take away or impair any vested right acquired under existing laws but since the laws are made under a written Constitution, and have to conform to do 's and don 'ts of the Constitution; neither prospective nor retrospective laws can be made so as to contravene fundamental rights.
The law must satisfy the requirements of the Constitution today taking into account the accrued or acquired rights of the parties today.
The law cannot say 20 years ago the parties had no rights, therefore, the requirements of the Constitution will be satisfied if the law is dated back by 20 years.
We are concerned with today 's rights an i not yesterday 'section A legislature cannot legislate today with reference to a situation that obtained 20 years ago and ignore the march of events and the constitutional rights accrued in the course of the 20 years.
That would be most arbitrary, unreasonable and a negation of history".
The power and competence of the Parliament to amend any (1) ; (2) [1983] 2 S.C.C. 33. 777 statutory provision with retrospective effect cannot be doubted.
Any A retrospective amendment to be valid must, however, be reasonable and not arbitrary and must not be violative of any of the fundamental rights guaranteed under the Constitution.
The mere fact that any statutory provision has been amended with retrospective effect does not by itself make the amendment unreasonable.
Unreasonableness or arbitrariness of any such amendment with retrospective effect has necessarily to be judged on the merits of the amendment in the light of the facts and circumstances under which such amendment is made.
In considering the question as to whether the legislative power to amend a provision with retrospective operation has been reasonably exercised or not, it becomes relevant to enquire as to how the retrospective effect of the amendment operates.
C In the large interest of administration and for promotion of public interest and welfare of the country power has been conferred by the Constitution on the Parliament to mobilize resources and to levy tax.
In view of the complexity of fiscal adjustment of diverse elements the Parliament necessarily enjoys a very wide discretion in the matter of fiscal legislation.
To meet various expenses for proper administration, maintenance of defense and security, for promoting peace and prosperity and for development of social, economic and all round growth of the country, the Government must have resource and sufficient funds at its disposal.
Suitable provisions have necessarily to be made for raising the revenue and for proper realisation of funds to be collected to meet such expenses.
Appropriate legislations including various fiscal laws are enacted for this purpose.
Imposition of any tax by the Parliament is therefore considered to be made in public interest.
It may so happen that any provision of any enactment imposing a particular levy may be challenged in Court and may be challenged successfully; and the particular levy may, for some reason or other, be held to be constitutionally invalid.
If any particular provision of any statute imposing any tax which has been or is being collected, is struck down as unconstitutional, the financial arrangement of the State may become upset and the Government which might have already collected and even utilised the tax, may be called upon to refund taxes so collected.
If such a situation arises the economy of the State may get unbalanced and difficulties may arise for meeting the various commitments and obligations.
Under such circumstances a Validating Act may be passed and is often enacted to remove the infirmities which might have led to the invalidation of the provision imposing the levy.
Validating Acts for meeting such situations have necessarily to be passed with retrospective operation so that the fiscal arrangement of the State and its financial commitments 778 may not in any way be in jeopardy and the State may be relieved of the liability of refunding any tax already collected.
A validating Act validating any fiscal provision with retrospective operation is usually held not to be unreasonable or arbitrary.
In the case of any Validating Act, the intention of the legislature is generally made sufficiently clear in the section or in the Act which is declared invalid on account of some flaw or defect which is within the competence of the Parliament to rectify.
Such Validating Acts, it may be observed, do not in fact have the effect of imposing a fresh tax with retrospective effect and they only legalese the levy already imposed.
There is in effect and substance no imposition of any new tax for the earlier years by virtue of the retrospective operation and the retrospective operation merely validates the levy already imposed and possibly collected.
The present amendment, has been necessitated not as a result of any part of section 80J being declared invalid.
There was no lacuna or defect in section 80J prior to the impugned amendment and the section which was perfectly valid granted relief in clear and unambiguous language to the assessee in respect of capital employed, whether assesses ' own or borrowed, in an undertaking which qualified for relief under the section.
The rule making authority by framing an invalid rule sought to deny the asks the benefit of the relief lawfully and validly granted by the section.
The rule was contrary to the clear provisions of the statute and the invalid rule has been rightly struck down.
By the present amendment the Parliament is seeking to validate not any provision of the State declared invalid because of any flaw or defect, as there was none, but is seeking to validate an invalid rule which had sought to deprive the assessee of the benefit which the Parliament had clearly bestowed on the assessee by the section.
The effect of the present amendment by seeking to incorporate the provisions of the rule declared invalid in the section itself is to withdraw with retrospective effect the relief which had been earlier granted by the Parliament in so far as the relief extends to borrowed capital employed in the undertaking and thereby to impose on the assessee a burden of tax which was not there for all these years.
As a matter of policy it may be open to the Parliament to withdraw the relief granted to borrowed capital by an amendment with prospective effect consequent on any such amendment.
To withdraw with retrospective effect the benefit of relief unequivocally granted by the section to an assessee who qualified for such relief and was lawfully entitled to enjoy the benefit of such relief and has in fact in many cases enjoyed the benefit for all these years, prior to the present amendment with retrospective effect, cannot, in my opinion, be said to on any just and valid grounds and cannot be considered to be reasonable.
If any fiscal statute grants relief to any assessee and the assessee enjoys the benefit of that relief, 779 as the assessee is legally entitled under the statute, the withdrawal of the relief validly and unequivocally granted and enjoyed by any A assessee must necessarily in the absence of proper grounds be held to be unreasonable and arbitrary.
The relief granted under section 80J before the present amendment was not merely a promise on the part of the Government relying on which the assessee might have set up new undertakings, but it was in the nature of a statutory right confer red on any assessee might have set up new undertakings, but it was in the nature of a statutory right conferred on any assessee who qualified for such relief under the section.
The withdrawal with retrospective effect of any relief granted by a valid statutory provision to an assessee, depriving the assessee of the benefit of the relief vested in the assessee, stands on a footing entirely different from the footing which may necessitate the passing of a Validating Act seeking to validate any statutory provision declared unconstitutional.
When Parliament passes an amendment validating any provision which might have been declared invalid for some defect or lacuna, the Parliament seeks to enforce its intention which was already there by removing the defect or lacuna.
The Parliament indeed seems to remedy the situation created as a result of the statutory provision being declared invalid.
As I have earlier observed, this is done in public interest for properly regulating the fiscal structure and to relieve the Government of any financial burden by way of refund of taxes collected for enabling the State to implement its budget by proper collection of revenue expected to be realised.
When the Parliament in any fiscal statute proposes to grant any relief to any assessee the Parliament must be presumed to do so in public interest.
In the instant case section 80J granted relief for the purpose of promoting the industrial growth of the country by affording incentive for the setting up of new undertakings.
As a matter of policy again the Parliament may withdraw such relief or any part thereof or modify the nature, extent and kind of relief, if Parliament may withdraw such relief or any part thereof or modify the nature, extent and kind of relief, if Parliament in its wisdom may consider any such action necessary and proper and any such act done by the Parliament must also be regarded to have been done in public interest.
However, the withdrawal or modification with retrospective effect of the relief properly granted by the statute to an assessee which the assessee has lawfully enjoyed or is entitled to enjoy as his vested statutory right depriving the assessee of the vested statutory right, has the effect of imposing a levy with retrospective effect for the years for which there was no such levy and cannot, unless there be strong and exceptional circumstances justifying such withdrawal or modification, be held to be reasonable or in public interest.
This kind of retrospective amendment, seeking to defeat an accrued statutory right 780 is likely to affect the sanctity of any statuory provision and may A create a state of confusion.
The only circumstance which appears to have led to the present retrospective amendment is the existence of the invalid rule.
The existence of any invalid rule seeking to deny an assessee a benefit clearly and unequivocally granted to an assessee by the Legislature, lawfully and properly enjoyed or to be impugned amendment in 1980 the relief granted by section 80J had been in force and had been legitimately available to the assessee.
In view of the clear provision made in the statute by Parliament itself the Parliament must be presumed to have been aware that the relief as contemplated under section 80J was available to the assessee and the assessee had been enjoying and were entitled to enjoy the benefit of the said relief.
The Parliament must have and in any event must be presumed to have arranged the financial affairs of the State on the footing that the relief allowed to an assessee under section 80J was being enjoyed and would be enjoyed by the assessee In view of the clear provision of the statute which must be held to manifest the true intention of the Parliament it will be idle to contend that Parliament could have intended that the relief so granted would not be available to the assessees who would be liable to pay a larger amount of tax.
The years for which relief had remained in force had already passed out.
It does not appear that as a result of the relief enjoyed by the assessee, the financial position of the state for all these years, had been or could be in any way affected.
The facts and circumstances also do not indicate that there will be any heavy burden on the State to sound taxes collected which may upset the economy of the State.
It appears that in the majority of the cases, the assessees have succeeded and they have been assessed after being allowed the relief and under section 80J in respect of the borrowed capital also.
On the other hand it is quite clear that if the relief granted is to be withdrawn with retrospective operation from 1972 the assessees who have enjoyed the relief for all those years will have to face a very grave situation.
The effect of the withdrawal of the relief with retrospective operation will be to impose on the assessee a huge accumulated financial burden for no fault of the assessee and this is bound to create a serious financial problem for the assessee.
Apart from the heavy financial burden which is likely to upset the economy of the undertaking, the assessee will have to face other serious problems.
On the basis that the relief was legitimately and legally available to the assessee, the assessee had proceeded to act and to arrange its affairs.
If the relief granted is now permitted to be withdrawn with retrospective operation, the assessee may be found guilty of violation provision of other state and may be visited with panel consequen 781 ces.
This position cannot be and is not disputed by the learned A Attorney General who has, however, argued that taking into consideration the peculiar facts and circumstances, penal provisions may not be enforced.
This argument does not impress me.
The assessee has, in any event, to run the risk and for no fault on his part has to place itself at the mercy of the authorities for facing consequences of violation of statutory provisions, which but for the introduction of retrospective amendment, would not have been violated by the assessee.
To establish arbitrariness or unreasonableness it does not become necessary to prove that the undertaking of the assessee will be completely crippled and will have to be closed down in consequence of the withdrawal of the relief with retrospective effect.
There cannot be any doubt about the real possibility of very serious prejudice being caused to the assessee for no fault of the assessee.
In my opinion, the possibility of very grave prejudice to the assessee by the withdrawal of the relief with retrospective effect, in the absence of any justifiable ground and any serious prejudice to the interest of revenue, establishes unreasonableness and arbitrariness of the retrospective amendment is bound to have very serious effect on the assessee and there is reasonable possibility of the business of the assessee being adversely affected and seriously prejudiced.
The retrospective amendment, therefore, is also violative of Art 19 (1) (g) of the Constitution.
The argument of the Attorney General that the amendment had to be made with retrospective effect in the interest of the assessee, as otherwise, the assessee would not be entitled to the benefit of there lief intended to be given under the section because there will be no valid rule for computing the relief, to my mind, is clearly untenable.
I see no reason as to why there should be any difficulty in the computation of relief if the invalid part of the rule is struck down.
It may be noted that the rule in so far it excludes borrowed capital and fixes the first day of the year for computation of the relief had been struck down by various High Courts years ago and the assessing authorities have found no difficulty in computing the relief and in proceeding to complete the assessment by granting the relief legally available to assessee under section 80J even after the invalid part of the rule had been struck down.
It may also be noted that the Parliament had also not considered it necessary to effect this amendment earlier inspite of the decisions of the High Courts, although the Parliament had introduced other amendments into this section.
Before concluding I wish to emphasise that the withdrawal with retrospective effect by amendment of any financial benefit or 782 relief granted by a fiscal statute must ordinarily be held to be unreasonable and arbitrary.
Such withdrawal makes a mockery of beneficial statutory provision and leads to chaos and confusion Such withdrawal in effect results in the imposition of a levy at a future date for past years for which there was no such levy in the relevant years.
The imposition of any fresh tax with retrospective effect for years for which there was no such levy is entitled to arrange and normally arranges his financial affairs on the basis of the law as it exists.
Such retrospective taxation imposes an unjust and unwarranted accumulated burden on the assessee for no fault on his part and the assessee has to face unnecessarily without any just reason very serious financial and other problems.
Imposition of any tax with retrospective effect for years for which no such tax was there, cannot also be considered to be just and reasonable from the point of view of revenue.
The years for which levy is sought to be imposed with retrospective effect had already passed and there cannot be any proper justification for imposition of any fresh tax for those years.
Such retrospective taxation is likely to disturb and unsettle the settled position; and because of such imposition of retrospective levy for the years for which there was no such levy, assessments for those years which might already have been completed and concluded will get upset.
If the State is in need of more funds, the State instead of seeking to levy any tax with retrospective effect can always take appropriate steps to collect any larger amount so required by imposition of higher taxes or by other appropriate methods.
I have already observed that Validating Acts which seek to validate the levy of any tax with retrospective effect do not in effect impose any fresh tax with retrospective effect and Validating Acts stand on an entirely different footing.
T, therefore, hold that the impugned amendment in so far as it is sought to be made retrospective with effect from the 1st day of April 1972 is invalid and unconstitutional, though the amendment in so far as it operates prospectively is valid.
In the result I dismiss the appeals filed by the Union of India against the decisions of the High Courts declaring Rule 19 A to be invalid in so far as the said rule excludes borrowed capital and fixes the first day of the year for computation of the relief to be granted to an assessee under S.80J.
I set aside the judgment of the Madhya Pradesh High Court which upholds the validity of the Rule and I allow the appeal of the assessee against the judgment of the Madhya Pradesh High Court.
I hold and declare that Rule 19 A is so far as it seeks to exclude the borrowed capital and fixes the first day of the year for the computation of relief under section 80J is invalid and unconstitutional and the same has to be struck down and has been struck down 783 by the various High Courts.
I hold and declare that the impugned amendment of 1980 incorporating the provision of the invalid rule l9 A in the section itself, excluding the borrowed capital and fixing the first day of the year for computation of the relief under section 80J is valid in its prospective operation from the date of the amendment and is unconstitutional and invalid insofar as the said amendment is sought to brought into operation retrospectively with effect from 1st B April 1972.
Accordingly, I allow the writ petitions challenging the validity of the amendment only to the extent of its retrospective operation and I dismiss the writ petitions in so far as the amendment in its entirety is sought to be challenged.
I propose to make no order as to costs.
| Section 10 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960(for short, the Tamil Nadu Act) deals with the eviction of tenants and postulates that a tenant shall not be evicted whether in acquisition of a decree or otherwise except in accordance with the provisions of s.10 or sections 14 16 Section 10(2)(i) of the Tamil Nadu Act provides for the eviction of a tenant on the ground of non payment of rent.
It lays down that where the Controller is satisfied that the tenant has not paid or tendered the rent within 15 days after the expiry of the time fixed in the Agreement y f tenancy or in the absence of any such Agreement, by the last date of the month next following that for which the rent is payable, he (tenant) undoubtedly commits a default The proviso to sub s.2 provides that in any case falling in clause (i), if the Controller is satisfied that the tenant 's default to pay or tender rent was not wilful, he may, notwithstanding anything contained in s.11, give the tenant a reasonable time, not exceeding 15 days to pay or tender the rent due by him to the landlord upto the date of such payment or tender and on such payment or tender the application shall be rejected.
The Explanation which was added by Act 23 of 1973 to the said proviso stipulates that for the purpose of sub s 2 of s 10, default to pay or tender rent shall be construed as wilful, if the default by the tenant in the payment or tender of rent continues after the issue of two months notice by the landlord claiming the rent.
In Civil Appeals Nos.
1178 of 1984, 1992 of 1982, 2246 of 1982 and 1659 of 1982, the respondents landlords issued notices to the appellants tenants demanding the amount of rent in arrears and thereafter filed eviction petitions against the appellants tenants, inter alia, on the ground of "wilful default".
All the appellants tenants complied with the notices issued by their respective landlords except the appellant tenant in Civil Appeal No. 1659 of ]982 where he made part payment only.
However in Civil Appeal 3668 of 1982 and 4012 of 1982 the respondents landlords had filed eviction petitions against the appellantstenants without issuing such notices before filing of eviction petitions.
In all the 644 appeals, the Madras High Court passed and/or confirmed, as the case may be, the orders of eviction holding that the ground of`willful ' default mentioned in section 10(2)(i) had been proved against the tenants.
Hence these appeals by special leave.
The common question of law involved in these appeals was as to what is the interpretation of the term "wilful default" in the Explanation to the Proviso of sub s.2 of section 10 of the Tamil Nadu Act.
Counsel for the appellants tenants contended (i) that despite the explanation it is open to the court on an appraisement of the circumstances of each case to determine whether or not the default]t was wilful and in doing so it cannot be guided wholly and solely by the Explanation which is merely clarificatory in nature and (ii) that mere non payment of arrears of rent after issue of two months ' notice cannot in all circumstances automatically amount to a wilful default if the non payment does not fulfil the various ingredients of the term "wilful default".
On the other hand it was argued by counsel for the respondents landlords (i) that the very purpose of the Explanation is to bring about uniformity in court decisions by laying down a conclusive yardstick in the shape of the Explanation and once it is proved that after issue of two months ' notice if the tenant does not pay the arrears within the stipulated period of two months, he is liable to be ejected straightaway.
On the question of interpretation of the terms`wilful default ' appearing in the proviso to s.l0(2) of the Tamil Nadu Act coupled with the Explanation, the Court, ^ HELD: Per Fazal Ali and A. Varadarajan JJ.
(majority) 1.
Though the Court is concerned mainly with the Tamil Nadu Act, yet in order to understand the contextual background of the words `wilful default ' and its proper setting, it Will be useful to refer to those Acts which contain the term wilful default ' either in a negative or in positive form.
These Acts are (l) A P. Buildings (Lease, Rent and Eviction) Control Act of 1960, the Orissa House Rent Control Act 1967 and the Pondichery Buildings Lease and Rent Control Act 1969, (hereinafter referred to as the A.P. Act, Orissa Act and Pondicherry Act respectively).
Although the default contemplated by these Acts is wilful yet it has been put in a negative.
Form which undoubtenly gives sufficient leeway to the tenant to get out of the rigors of the statutory provision the relevant provisions of these Acts relating to eviction of tenants on the ground of 'wilful default ' in payment of rent contemplate that a default simpliciter would not be sufficient to evict the tenant but it must further be shown that the default was not wilful.
These Acts are however, silent on the mode and the manner in which a court may decide as to what is wilful and what is wilful.
Thus these Acts have left it to the courts to decide this question.
So far as the Tamil Nadu Act is concerned, it makes a marked improvement by broadening the ambit of 'wilful default ' in the proviso to section 10(2) which is further clarified by an Explanation added to it subsequently.
Before coming to any conclusion it may be necessary to examine the exact meaning of the words 'wilful default ' as also the interpretation and the scope of the Proviso and the Explanation.
[657H; 658A] 2.
The words 'wilful default ' would mean a deliberate and intentional default knowing fully well the legal consequences thereof.
A consensus of the 645 meaning of the words `wilful default ' appears to indicate that default in order to A be wilful must be intenional, deliberated and calculated and conscious, with full knowledge of legal consequences flowing therefrom.
[660B; 661A B] `A Dictionary of Low ' by L.B. Co zon, page 361; Words and Phrases volume 11 A (Permanent Edition) page 268; Words and Phrases Vol.
45, pages 296.
Webster 's Third New International Dictionary Vol.
III page 2617 and Volume I page 590 and Black 's Law Dictionary(4th Edn.) page 1773 referred to.
The well established rule of interpretation of a proviso is that a proviso may have three e . rate functions.
Normally, a proviso is meant to be an exception to something within the main enactment or to qualify something enacted the in which but for the proviso would b. within the purview of the enactment.
In other words, a proviso cannot be ton apart from the main enactment nor can it be use, to nullify or set at naught the real object of the main enactment.
Whil interpreting a proviso sure be taken that it is used to remove special cases from the general enactment and provide for them separately In short, generally speaking a proviso is intended to limit the enacted provision so as to except something which would have otherwise been within it or in some measure to modify the enacting clause.
Sometimes a proviso may be embedded in the main provision and becomes an integral part of it so as to amount to a substantive provision itself.
To Sum up, a proviso may serve four different purposes: 1.
qualifying or excepting certain provisions from the main enactment; 2.
it may entirely change the very concept of the intendment of the enactment by insisting on certain mandatory conditions to be fulfilled in order to make the enactment workable; 3.
it may be embedded in the Act itself as to become an integral part of the enactment and thus acquire the tenor and colour of the substantive enactment itself; and 4.
it may be used merely to act as an optional addenda to the enactment with the sale object of explaining the real intendment of the statutory provision.
[661D E; 664C D; 665H; 666A C ] Craies in `Statute Law ' (7th Edn.) Page 218, Odgers in 'Construction of Deeds and Statutes ' (Fifth Edn.) 317, 318.
Sarathi in Interpretation of Statutes ' page 294 2951.
referred to.
Local Government Board vs South Stoneham Union Ishverlal Thakorelal Almala vs Motiobhai Nagjibhai [1966] I SCR 367.
Madras and Southern Maharatta Railway Co. Ltd. vs Bezwada Municipality.
AIR 1944 C71.
West Derby vs Metropolitan Life Assurance Co. Rhodda Urban district Council v Taff Vale Railway Co. and Jennings and Another v KellY referred to.
Commissioner of Income Tax, Mysore, etc vs Indo Mercantile Bank Ltd. [1959] Z Supp.
SCR 256, Shah Bhojraj Kuverji Oil Mills and Ginning Factory vs Subhash Chandra Yograj Sinha ; State of Rajasthan 646 vs Leela Jain [1965] I SCR 276, Sales Tax officer, Circle 1, Jabalpur vs Hanuman Prasad [1967] I SCR 831, commisioner of Commercial Taxes and Ors.
vs R.S. Jhaver and Ors.
[1968] I SCR 148, Dwarka Prasad v Dwarka Das Saraf [19761 1 SCC 128 and Hiralal Rattanlal etc.
vs State of U.P. and Anr. etc.
[19731 I SCC 216 relied upon.
The next question is as to what is the impact of the Explanation on the Proviso which deals with the question of wilful default It is now well settled that an explanation added to a statutory provision is not a substantive proviso,o in any sense of the term but as the plain meaning of the word itself shows, it is merely meant to explain or qualify certain ambiguities which may have crept in the statutory provision.
From a conspectus of the authorities, it is manifest that the object of an Explanation to a statutory provision is (a) to explain the meaning and intendment of the Act itself; (b) where there is any obscurity or vagueness in the main enactment, to clarify the same so as to make it consistent with the dominant object which it seems to subserve, (c) to provide an additional support to the dominant object of the Act in order to make it meaningful and purposeful; (d) an Explanation cannot in any way interfere with or change the enactment or any part thereof but where gap is left which is relevant for the purpose of the Explanation, in order to suppress the mischief and advance the object of the Act it can help or assist the court in interpreting the true purport and intendment of the enactment; and (e) it cannot, however, take away a statutory right with which any person , under a statute has been clothed or set at naught the working of an Act by becoming an hindrance in the interpretation of the same.
[666F G ; 668G H; 669A C] Sarathi in Interpretation of Statutes, p. 329; Swarup in Legislation and Interpretation ' pages 297 298 and Bindra in 'Interpretation of Statutes ' (5th Edn.) page 67, referred to.
Burmah Shell Oil Storage and Distributing Co.
Of India Ltd. and Anr.
vs Commercial Tax Officer and Ors.
[1961] I SCR 902, Bihta Cooperative Development Cane Marketing Uaion Ltd. and Anr.
vs The Bank of Bihar and Ors. ; and Dattatraya Govind Mahajan and Ors vs State of Mahararashtra and Anr ; relied upon.
Although almost every State has its own Rent Act, neither the Explanation nor the statutory clause concerning the term 'wilful default ' is mentioned therein.
These Acts seem to proceed only on the simple word default ' and perhaps to buttress their intention they have laid down certain guidelines to indicate the grounds of ejectment wherever a default takes place.
Looking generally at such Acts, they seem to have first provided statutorily a particular date or time when the tenant on being inducted under the contract of tenancy, is to pay the rent.
Such a provision may or may not be against the contract of the tenancy 647 and if it is to that extent, it overrides the contract, This, therefore, gives sufficient notice to any tenant inducted in any premises that he must pay the lent according to the yardstick set out by the Act, failing which he runs the risk of being evicted for default.
Some Acts, however, have provided a particular number of defaults to enable the Rent Controller or Court to find out whether such a default would entitle the landlord to get an order of eviction There are some other Acts which have made rather ingenious and, apt provisions for expediting the process of eviction in case of default by providing that whenever a suit for eviction is filed against a tenant on the ground of default, the tenant in order to show his bona fides must first deposit the entire rent, arrears and cost in the court of the Rent Controller where the action is field on the very first date of hearing, failing which the court or the authority concerned would be fully justified in striking down the defence and passing an order of eviction then and there.
The dominant object of such a procedure is to put the tenants on their guard.
It is true that such provisions are rather harsh but if a tenant goes on defaulting then there can be no other remedy but to make him pay the rent punctually unless some drastic step is taken.
These Acts, therefore, strike a just balance between the rights of a landlord and those of a tenant.
For deciding the present cases, it is not necessary to go either into the ethics or philosophy of such a provision because the Court is concerned with statutes having different kinds of provisions.
The relevant provisions of the A.P., Orissa and Pondichery Acts are almost in pari materia the proviso to Section 10(2) of the Tamil Nadu Act.
The only difference between the Tamil Nadu Act and the other Acts is that whereas an Explanation is added to the proviso to s.l0(2) of the Tamil Nadu Act, no such Explanation has been added to the provisions of the other three Acts.
Hence the Court has to consider the combined effect of the proviso taken in conjunction with the Explanation.
From an analysis of the various concomitants of the Explanation, the position seems to be that (a) there should be a default to pay or tender lent; E (b) the default should continue even after the landlord has issued two months ' notice claiming the arrears of rent; and (c) if, despite notice, the arrears are not paid the tenant is said to have committed a wilful default and consequently liable to be evicted forthwith.
[669E H; 670A D, F G] F 5 (ii) The Explanation, does not at all take away the mandatory duty cast on the Controller in the Proviso to decide if a default is wilful or not.
Indeed if the landlord chooses to give two months notice to his tenant and he does not pay the rent, then, in the absence of substantial and compelling reasons, the Controller or the court can certainly presume that the default is wilful and order his eviction straightaway.
There is no force in the view that whether two months notice for payment of rent is given or not, it will always be open to the Controller under the Proviso to determine the question of 'wilful default ' because that would render the very object of explanation otiose and nugatory.
[673D E] 6.
Two factors mentioned in s.10(2)(i) seem to give a clear notice to a tenant as to the mode of payment as also the last date by which he is legally supposed to pay the rent.
This, however, does not put the matter beyond controversy because before passing an order of eviction under the proviso, it must also be 648 proved that the default was wilful and if the Controller is of the opinion that the default in the circumstances and facts of the case was not wilful, in the sense that it did not contain any of the qualities or attributes of a wilful default as indicated, he may give the tenant a reasonable time, not exceeding 15 days, to pay the entire rent and if this is complied with, the application for ejectment would stand rejected.
The difficulty, however .
is created by the Explanation which says that once a landlord gives a Iwo months ' notice to his tenant for paying the arrears of rent but the tenant continues in default even thereafter, then he is liable to be evicted.
There is a good deal of force in this argument which has its own advantages.
In the first place, it protects the court from going into the intricate question as to what is a wilful default and whether or not the conditions of a wilful default have been satisfied which, if permitted would differ from case to case and court to court.
But the difficulty is that if such a blanket ban is put on the court for not examining the question of wilful default once the conditions laid down in the Explanation are satisfied then it would undoubtedly lead to serious injustice to the tenant.
A subsidiary consequence of such an interpretation would be that even though the tenant, after receipt of the notice, may be wanting to pay the arrears of rent but is unable to do so because of unforeseen circumstances like, death, accident, robbery, etc.
which prevent him from paying the arrears, yet under the Explanation he has lo be evicted.
Another difficulty in accepting the first view, viz., if two month 's notice is not given, the tenant must not be presumed to be a wilful defaulter, is that in such a case each landlord would has to maintain a separate office so that after every default a two months ' notice should be given and if no notice is given no action can be taken against a tenant.
The correct view in the matter is in the following terms.
(i) Where no notice is given by the landlord in terms of the Explanation, the Controller.
having regard to the four conditions spelt out in this judgment has the undoubted discretion to examine the question as to whether or not the default committed by the tenant is wilful, If he feels that any of the conditions mentioned is lacking or that the default was due to some unforeseen .circumstances, he may give the tenant a chance of locus paenitentiae by giving a reasonable time, which the statute puts at 15 days, and if within that time the tenant pays the rent, the application for ejectment would have to be rejected.
(ii) If the landlord chooses to give two months ' notice to the tenant to clear up the dues and the tenant does not pay the dues within the stipulated time of the notice then the Controller would have no discretion to decide the question of wilful default because such a conduct of the tenant would itself be presumed to be wilful default unless he shows that he was prevented by sufficient cause or circumstances beyond his control in honouring the notice sent by the landlord.
[671G H; 672A D; F; 673F H; 674A B] N.
Ramaswami Reddiar vs S.N. Periamuthu Nadar, 1980 Law Weekly (vol.
93) p. 577 and Khivaraj Chordia vs C. Maniklal Bhattad AIR 1966 Madras 67 approved.
Rajeswari vs Vasumal Lalchand AIR 1983 Madras 97, referred to.
In the light of the above principles and tests to be applied by courts in deciding the question of wilful default, the Court allowed Civil Appeals Nos.
1178 of 1984, 1992 of 1982 and 2246 of 1982 and dismissed rest of the appeals.
[678B] 649 Per Mukharji.j.
(dissenting) A l(i) Default has been construed in various ways depending upon the context. ' Default ' would seem to embrace every failure to perform part of one 's contract or bargain.
It is a purely relative term like negligence.
It means nothing more, nothing less.
than not doing what is reasonable under the circumstances not doing something which you ought to do.
having regard to the transaction.
Similarly, default in payment imports something wrongful, the omission to do some act which, as between the parties, ought to have been done by one of them.
It simply means non payment, failure or omission to pay.
Default happens in payment of rents under various contingencies and situations.
Whether the default is wilful or not is also a question of fact to be proved from evidence, direct and circumstantial drawing inferences from certain conduct.
If the Courts are free to decide from varying circumstances whether default was wilful or not, then divergence of conclusions are likely to arise one judicial authority coming to the conclusion from certain circumstances that the default was wilful, another judicial authority coming to a contrary conclusion from more or less same circumstances.
That creates anomalies.
In order to obviate such anomalies and bring about a uniform standard that Explanation explains the expression, wilful" and according to the Explanation added, a default to pay or tender rent small be construed", as wilful if the default by the tenant n th payment of rent continues after issue of two months ' notice by the landlord claiming the rent.
If that is the position, in a case where the landlord his given notice to the tenant claiming the rent and the tenant has not paid the same for two months, then the same must be construed as wilful default, whatever may be the cause for non payment.
Whether in a particular case default is wilful or not, must be considered in accordance with the definition provided in the Explanation to Proviso to sub section (2) of section 10 of the Act.
If it was intended that the courts would be free to judge whether in a particular set up of facts, the default was wilful or not where no notice has been given, then in such a case there was no necessity of adding this Explanation to the Proviso which is a step to the making of the findings under clause (l) of sub section (2) of section 10 of the Tamil Nadu Act.
It is well settled that Legislature does not act without purpose or in futility.
[680E G; 681B E; 682E F] _ .
_ Stroud 's Judicial Dictionary Vol. 1.
Third Edition.
page 757, Prem 's Judicial Dictionary.
1 196 t page 483.
The Dictionary of English Law page 597 Fakir Chander Datt and Other vs Ram Kumar Chatterji Indian Appeals.
Vol XXXI.
p. l9 n referred to, I(ii) If a definition is provided of an expression, then the courts are not free to construe the expression otherwise unless it is so warranted by the use of the expression such as "except otherwise provided or except if the context otherwise indicates.
" There is no such expression in the instant case.
There may be in certain circumstances intrinsic evidence indicating otherwise.
Here there is none.
[682C D] 2(i) The expression "shall be construed" would have the effect of providing a definition of wilful default in the proviso to sub section (2) of section 10.
According to the explanation, a default to pay or tender rent "shall be construed", 650 as wilful if the default by the tenant in the payment of rent continues after issue of two months ' notice by the landlord claiming the rent.
If that is the position, in a case where the landlord has given notice to the tenant claiming the rent and the tenant has not paid the same for two month 's, then the same must be construed as wilful default, whatever may be the cause for non payment.
The Legislature has chosen to use the expression "shall be construed as wilful" if after a notice by the landlord for two months ' failure to pay or tender rent on the part of the tenant continues, and if it is wilful then under sub section(2) clause (1) read with the proviso as explained by the Explanation, the Controller must be satisfied and give an order for eviction.
The Legislature has provided an absolute and clear definition of 'wilful default ' Other circumstances cannot be considered as wilful default.
It is true that Legislature has not chosen to use language to indicate that in no other cases, the default could be considered to be wilful except one default case which has been indicated in the Explanation.
But it is not so necessary be cause Legislature has defined 'wilful default by the expression that default to pay or tender rent shall be construed ' meaning thereby that it will mean only this and no other.
Therefore, a default will be construed as wilful, only where the landlord has given notice and two months have expired without payment of such rent.
[682 B R C; H; 681 D F; 683A] 2(ii)Statutory provisions must be construed, if it is possible, that absuridity and mischief may be avoided.
Where the plain and literal interpretation of a statutory provision produces a manifestly absurd and unjust result, the court might modify the language used by the Legislature or even ( 'o some violence to it so as to achieve the obvious intention Or the Legislature and produce rational construction and just results.
Ironing out the creases is possible but not rewriting the language to serve a notion of public Policy held by the judges [683C: 684B] 2(iii) Where two constructions are possible, one which avoids anomalies and creates reasonable results should be preferred but where the language is clear and where there is a purpose that can be understood and appreciated for construing in one particular manner, that is to say, avoidance of divergence of judicial opinions in construing wilful default and thereby avoiding anomalies for different tenants, it would not be proper in such a situation to say that this definition of wilful default was only illustrative and not exhaustive.
The Proviso to sub section (2) of section 10 cannot be cons trued as illustrative when the Legislature has chosen to use the expression "shall be construed".
[683D F] In the aforesaid view ot the matter, the individual appeals are disposed of accordinglY. that is to saY. OnlY those appeals of tenants are dismissed where eviction orders were passed after two months ' notice had been given and there was continuance of default, and the rest of the appeals are allowed.
1685B C] Seaford Court Estates Ltd. vs Asher [1949] 2 All E.R. 155 at pages 164 (CA), Regina vs Barnet London Borough Council Ex parte Nilish Saah, 1983 (2) Weakly Law Reports p. 16 at p. 30., Carrington and others vs Therm a Stor Ltd. 1983 (1) Weakly Law Reports p. 138 at p. 142.
referred to. 651
| 4927.txt |
N: Criminal Appeal No. 480 of 1979.
From the Judgment and Order dated 3.4.1979 of the Madhya Pradesh High Court in Criminal Appeal No. 239 of 1974.
R.C. Kohli for the Appellant.
U.N. Bachawat and Uma Nath Sing with him for the Respondent.
457 The Judgement of the Court was delivered by AHMADI,J. The appellant has been convicted under Section 302/34, IPC, for causing the murder of one Negji, son of the Parthesingh, of village Melakhedi.
The prosecution case was that the family of the appellant and the family of the deceased were at loggerheads since quite sometime and there was bad blood between them.
In 1967, Bhowansingh, a member of the complainant 's family is stated to have been murdered by the appellant 's party.
Thereupon, the deceased along with others is stated to have fatally assaulted Bhagwansingh and Bahadursingh and inflicted grievous injuries of Govardhansingh.
These three are none other than the sons of the appellant.
The deceased and his companions were, however, acquitted.
It is said the appellant, Daryao Singh was, therefore, keen to avenge the deaths of his sons.
As a sequel to the earlier incident, it is said that the incident in question occurred on 25th September, 1970 at about 4.00 p.m.
The fact that relations between the two families were strained is, therefore, not in dispute.
On 25th September, 1970, the deceased, Negji, was working in his field along with his son PW 4 Bhanwar Singh.
At that time the appellant went there in the company of Nagusingh Govardhansingh and Bapusingh.
Nagusingh was armed with a gun and a stick with dharia like blade, Govardhansingh was armed with a similar weapon, the appellant was armed with a sword and Bapusingh possessed a gun.
They lanuched an attack on the deceased Negji whereupon the the latter raised an alarm which attracted the attention of Pw 1 Bherusingh and Pw 3 Bhuwan Singh, who were working in the adjacent filed.
They reached the spot and witnessed the incident.
On their raising a hue and cry, the appellant and his companions fled away.
PW 4 had run away frightened when a shot was fired at him.
The deceased, Negji, sustained serious injuries on the head and his right leg was cut into two.
PWs 1 and 3 went in search of PW 4 but on the way met two police constables PW 8 Chhotelal and PW 10 Itratkhan.
They narrated the incident and disclosed the names of the assailants to them.
All the four returned to the place of occurrence, placed Negji in a cart and proceeded towards the police station.
But the injured passed away on the way.
The dead body appears to have been taken to the hospital on the next day at about 5.20 p.m. PW 2 Dr.
Sharma, performed the post mortem examination on 27th September, 1970 at about 7.00 a.m. Except the appellant the rest of the assailants could not be put to trial as they were reportedly absonding.
458 The prosecution mainly relies on the evidence of PW 1,3 and 4.
In addition, the prosecution seeks corroboration from the evidence of the two Police Constables PWs 8 and 10 whom the names of the assailants were disclosed immediately after the incident.
PW 8, however, turned hostile and was permitted to be cross examined by the learned Public Prosecutor.
This, in brief, is the prosecution evidence against the appellant.
The learned Trial Judge on an appreciation of the prosecutiion evidence concluded that having regard to the long standing enmity between the two families it was hazardous to place implicit reliance on the interested testimony of PWs 1,3 and 4, more so because their testimony was not corroborated in material particulars by independent evidence.
Besides, according to the Trial Judge, the evidence of DW 3 Keshav Shanker Varang established that the appellant was a physically disabled person who could not have weilded the sword with such ferocity as to cut the right leg into two pieces.
To disbelieve the prosecution case the learned Trial Judge referrd to the evidence of the hostile Constable, PW 8, but failed to take note of the evidence or PW 10.
As the three eye withnesses were closely related to the deceased, the learned Trial Judge applied the rule of prudence and thought it wise not to base a conviction on thier uncorroborated evidence.
He therefore, acquitted the appellant.
Feeling aggrieved by the order of acquittal passed by the learnd Trial Judge, the State of Madhya Pradesh preferred an appeal of the High Court which was disposed of by a Division bench by its impugned judgment and order dated 3rd, 1979.
The Division Bench held that although the three prosecution witnesses were closely related to the deceased their evidence could not be discarded solely on the ground that they were interested and partisan witnesses, but all that the rule of prudence demanded was to evaluate their evidence with caution.
On a close scrutiny of the evidence of the said three witnesses, the Hight Court found that nothing was brought out in their cross examination to doubt their credibility.
On the contrary the High Court felt that their evidence was partly corroborated by PW 10 and medical evidence.
So far as the evidence of PW 8 is concerned the High Court observed that he had turned hostile and had deliberately departed from his earlier statement to the Police as well as the entry in his police diary.
In this view of the matter, the High Court reversed the order of acquittal and convicted the appellant under section 302/34, IPC.
It is this conviction which is assailed before us in this appeal by the appellant.
459 The learned counsel for the appeallant took us through the evidence of PWs 1,3 and 4.
PWs 1 and 3 are the brothers of the deceased and PW 4 is his son.
Indisputably there was bad blood between the two families on account of past incidents which may have ignited a desire for vendatta in the appellant and his companions.
At the same time, the High Court also cautioned itself to the possibility of false involvement on account of the long standing enmity.
The Hight Court then scrutinised the evidence of the aforesaid three witnesses and found that their evidence had no been shaken by elaborate cross examination.
That means, according to both the Courts, if their evidence can be trusted as credible, it would prove the appellant 's involvement in the crime.
Therefore, if their evidence is otherwise found to be reliable there can be no doubt that a conviction can be based on their evidence, notwithstanding (i) their close relations with the deceased, and (ii) the long standing enmity between the two families.
We too have perused their evidence and taken at its face value we find no infirmity.
Even the learned counsel for the appellant did not contend that there was any intrinsic infirmity in their evidence.
All that he submitted was that it would be unwise to convict the appellant on their evidence without seeking corroboration.
Since PW 8 has deliberately departed from his earlier version and has not told the truth his evidence cannot dilute their evidence.
Immediately after the incident , while PWs 8 and 10 were passing by, they were informed of the incident and the names of the assailants were disclosed to them, in regard to which they made enteries in their respective diaries.
The contradiction brought on record in the cross examination of PW 8 shows that the names of the assailants were disclosed to him.
This was sought to be further reinforced by the entry in his diary wherein the name of the appellant appeared as one of the assailants.
The learned Trial Judge wrongly attributed this entry to the ingenuity of the investigation officer.
It is, therefore, obvious that PW 8 is not a dependable witness.
The High Court 's conclusion in this behalf is unassailable.
The learned Trial Judge made no reference to the evidence of PW 10.
The High Court has referred to his testimony.
This witness stated that while he and PW 8 were passing by, a frightened PW 1 approached them and reported that his brother was assaulted by the appellant and his companions.
The High Court has accepted the testimony of the witness and we think rightly.
The evidence of the witness, therefore, lends corroboration to the prosecution version regarding the involvement of the appellant.
This discloseure was made to PW 10 immediately after the incident before there was any time of deliberation or concoction.
the medical evidence shows that the deceased had as many as seven injuries, one of which was on the skull.
the number and nature of the 460 injuries clearly indicate that more than one person was involved in the assault.
It is, therefore, clear that the medical evidence also lends corroboration to the prosecution version to this limited extent.
Strong reliance was, however, placed by the learned counsel for the appellant on the evidence of PW 2 Dr.
Sharma.
This witness has after describing the various injuries stated that the body was cold, rigor mortis and passed off and the body was decomposed when he performed the post mortem examination on the morning of 27th September, 1970.
He also noticed blisters containing reddish fluid all over the body.
The abdomen was swollen and greenish discoloration was noticed.
In his opinion death was caused on account of the brain injury.
In paragraph 6 of his deposition he stated "the duration of injury since death was 36 to 48 hours".
In cross examination he said: "As the dead body was decomposed externally and internally blisters had formed all over the body, scrotum distented, marks of swelling on body, presence of magets on body; all these symptoms do indicate that their duration of injury since death could be 14 to 20 days also.
" On the basis of these statements made by PW 2, counsel for the appellant strongly argued that death must have taken place long before 25th September, 1970 since blisters had appeared on the body.
In this connection, he placed reliance on the table found at page 134 of Modi 's Medical Jurisprudence and Toxicology,(12th Edn.).
It read as under: Putrefactive changes Time 1 to 3 days after 1.
Greenish coloration death.
over the iliac fossae The eyeballs, soft and yielding.
Green coloration spreading 3 to 6 days over the whole abdomen, after death.
external genitals and other parts of the body.
Frothy blood from mouth and nostrils.
Abdomen distrended with gas.
Cornea 8 to 10 days fallen in and concave.
Pur after death.
lish red streaks of veins prominent on the extremities, Sphincters relaxed, Nails firm.
461 4.
Body greenish brown.
Blisters 14 to 20 days froming all over the body.
Skin after death.
peels off.
Features unrecogniz able.
Scrotum distension.
Body swallow up owing to distorsiopn Maggots on the body.
Nails and hair loose and easily detached.
Soft parts changed into a thick, semi 2 to 5 fluid, black mass.
Skull, abdomen and months thorax burst.
Bones exposed.
Orbits after empty.
death.
_______________________________________________________ It is indeed suprising that no such submission was made on behalf of defence before the Trial Court as well as the High Court.
Even in the memo of appeal no such precise contention appears.
Hoeever, we have thought it proper to examine the submission on merits rather than reject it on a technical ground.
Counsel of the appellant strongly relied on this statement of PW 2 Dr.
Sharma and contended that the presence of blisters all over the body is a sure pointer to the fact that death had taken place 14 to 20 days before the post mortem examiniation.
It may be recalled that the deceased was 45 years of age and was the victim of violent attack with lethal weapons in which he had suffered a fatal semi circular woundon the scalp 6" x 4" extended by 2" to the left mid line.
In addition thereto he had received incised wounds on his left forearm resulting in fractures.
His right leg was cut into two pieces 6" below the tibia, liquified blood was oozing out, maggots were prersent, blisters were seen all over the body and the soft cuticle peeled off easily.
There was another cut wound on the left leg exposing the tibia.
A 5" wound was seen at the right side of the mouth.
It was the scalp injury which caused the death.
It is common knowledge that after death the body starts to cool down to the surrounding temperature.
The cooling of the body is the earliest phenomenon which is followed by post mortem lividity resulting from discontinuance of blood circulation and collection of blood in certain parts under gravitational action, depending on the position of the dead body.
the stoppage of blood circulation and the inaction of the natural defensive mechanism result in the bacteria present in the body as well as those that enter from outside getting scattered in everypart of the body setting in the process of putrefaction, unless special 462 care is taken to prevent the same.
Decomposition in thus essentially the process of putrefaction which is dependent on environmental climatic conditions.
In the present case death had occurred on 25th September and the dead body lay in the police station with the wounds exposed till it was brought to the hospital at 5.20 p.m. on the next day.
The body remained in the same condition in the hospital till 7.00 a.m. on the next day when the post mortem examination was undertaken.
The bdy thus remained fully exposed to the heat and humidity of the month of September for over thirty hours and hence it is not surprising that the rigor mortis had passed off.
Ordinarily after rigor mortis has passed off, the process of putrefaction sets in but it may set in even earlier during summer depending on the heat and humidity.
Body changing colour and emitting foul smell, are the two special characteristics of the decomposition process.
The first external evidence of putrefaction is the formation of greenish discoloration of the abdominal skin over the iliac fossae which occurs within six to twelve hours in summer and spreads all over the body within twelve to eighteen hours of death.
As time passes they deepen in colour and become purple.
With the spread of bacteria, there is gradual development of gases in the intestines within twelve to eighteen hours and liquefaction also takes place and soon spreads to other parts of the body.
Putrefaction thus results in general disintegration of the tissues due to residual enzymatic activity in the cells causing widespread formation of gases emitting foul smell and if the body is exposed, as in the present case, files lay eggs on exposed wounds forming maggots.
The body gets bloated and liquified, the skin looses coherence, the superficial layers peel off easily and blisters are formed.
it is, therefore, not suprising that owning to the formation of gases the penis and the scrotum were swollen and there was the presence of maggots.
Before we answer the contention it is essential to notice a few facts.
The evidence of PWs 1,3 and 4 is that the incident occurred in the field of the deceased.
This fact is corroborated of PW 5 Motilal and PW 6 Parbatsingh.
The find of blood on the grass blades and on the earth attached under the seizure memo Exh.
p 8 confirms their testimony.
The evidence of these witnesses further shows that the injured was taken in a cart to the village and from there to the Bhakheda police station.
this is further established by PW 10 who has deposed that the vitim was brought in a cart to the village.
the circle Inspector PW 12 also deposes that the corpse was brought to the police station and from there it was sent to the hospital for post mortem examination which was undertaken on 27th September, 1970 at 7.00 a.m.
This evidence establishes the chain of events showing the movement of the dead body and rules out of the theory that death had taken 463 place many days before 25th September, 1970, a theory not put to the witnesses in cross examination.
The direct testimony, therefore, does not support the theory urged on behalf of the appellant.
Counsel for the appellant, however, emphasised that the statement of PW 2 in cross examination clearly established the existence of blisters, an objective fact, which clearly supports the defense theory that death had taken place 14 to 20 days prior to the date on which the post mortem examination was held and thereby disprove the prosecution version that the victim of assault died on the evening of 25th September, 1970.
It is interesting to note that table on which the learned counsel for the appellant relies is omitted from the 19th and 20th edition of the book.
But that apart at pages 128 129 of the bok (Twentieth Edition) it is stated as under: "From twelve to eighteen hours after death in summer the green coloration spreads over the entire abdomen and the external genitals. . .
Side by side with the appearance of the greenish patch on the abodomen the body begins to emit a nauseating and unpleasant smell owing to gradual develoment of the gases of decomposition, some of which are sulphuretted hydrogen, marsh gas, carbon dioxide, ammonia and phosphoretted hydrogen.
From twelve to eighteen hours after death in summer these gases collect in the intestine, consequently abdomen swells up.
The sphincters relax, and the urine and faeces may escape.
From eighteen to thirty six or forty eight hours after death the gases collect in the tissues, cavities and hollow viscera under considerable pressure with the result that the features become bloated and distored, the eyes are forcedout of their sockets, the tongue is protruded between the teeth, and the lips become swollen and everted.
A frothy, reddish fluid or mucus is forced from the mouth and nostrils.
Ultimately the features become obilterated and unrecognizable.
The abdomen becomes greately distended; hence on opening the cavity the gas escapes with a loud explosive noise.
Owing to the pressure of the gases the stomach contents are forced into the mouth the larynx and are seen running out of the mouth and nostrils.
The breast of female bodies are greatly distended.
The penis and scrotum become enormously swollen.
The cellular tissues are inflated throughout, so that the shole body appears stouter and older than it actually is.
464 These gases from blisters under the skin containing a reddish coloured fluid on the various parts of the body.
When these bursts, the cuticle being softened peels of easily.
These are characterised by absence of vital reaction.
It will thus be seen that blisters appear after the process of decomposition sets in whithin eighteen to fotry eight hours.
It shows that the existence of blisters does not mean that death had taken place 14 to 20 days ago.
That is why PW 2 is cautious to use the pharseology 'the duration of the injury since death could be 14 to 20 days also '.
Having regard to the nature of the direct testimony to which we have adverted earlier andthe passage reproduced above, we find it difficult to accept the belated submissions of the learnd counsel for the appellant that the opinion of the medical expert PW 2 destroys the version of the prosecution witnesses, particularly PWs 1,3,4 and 10, that the deceased suffered a fatal wound on the evening of 25th September, 1970 to which he succumbed on that very day.
We, therefore, reject this submission.
It was lastly submitted that the evidence of the radiologist.
Keshav Shanker Varang, DW 3 goes to show that the appellant was a disabled person and it was not possible for him to cause an injury so serious as to cut the leg in two parts.
In this connection, our attention was drawn to paragraph 7 of his deposition, wherein he has stated that looking to the fracture of the appellant 's leg and his chest condition he was a disabled person who could not run fast or walk quickly and, therefore, argued counsel, he could weild the sword with such ferocity as to cut the leg in to parts.
In cross examination he has admitted that he had not examined the muscle power the appellant.
He conceded that the elbow was free and, therefore, he could use the weapon but not with great force.
The High Court has considered this submission in paragraph 8 of its judgment and has rejected it.
We do not think that having regard to the fact that the appellant alone was weilding the sword, it is to rely on this opinion evidence in preference to the direct evidence of three witnesses.
High Court has rigtly rejected this submission and we need not dilate on it.
For the above reason, we see no merit in this appeal and dismiss the same.
Bail cancelled.
The appellant will surrender forthwith.
| The appellant has been convicted under Section 302/34, Indian Penal Code, by the high Court, for the murder of one Nagji, with whom he had strained relations.
According to the prosecution there was bad blood between the family of the appellant and the deceased and there have incidents in the past, the last being the murder of two sons of the appellant and inflicting of grievous injuries on the third son, by the deceased, in which case, the deceased and his companions were acquitted.
The appellant was keen to avenge the deaths of his sons and with that end in view, on 25th Septemeber, 1970, he along with three others, duly armed with guns and sticks, attacked the deceased, Negji, while he along with his son PW4 was working in his field.
The deceased Negji raised an alarm which attacted the attention of PW 1 and PW 3, who were working in the adjacent field.
They reached the spot and withnessed the incdent.
On thier raising hue and cry, the appellant and his companions fled away PW 4 had run away frightened when a shot was fired at him.
The deceased Nagaji received serious injuries on the head and his leg was cut into two peices.
PWs 1 and 3 went in search of PW 4 and on the way met two police constables PW 8 and PW 10 to whom they narrated the whole incident and disclosed the names of the assailants.
The deceased passed away, when his body was being taken to the police station.
The postmortem examination was performed on the 27th at 7 a.m.
The appellant was put up for trial, as others were abscondng.
The learned trial Judge n appreciation of the prosecution evidence held that having regard to the long standing enmity between the two families, it was hazardous to place implict reliance on the interested testimony of PWs 1,3 and 4, more so because their testimony was not corroborated in material particulars by independent evidence.
The Trial Judge applying the rule of prudence, did not convict the appellant on uncorroborated evidence of interest withnesses and accordigly acquitted the appellant.
The State preferred an appeal to the 456 High Court.
The High Court held that although the three prosecution witnesses were closely related to the deceased, their evidence could not be discards solely on the ground they were interested and partisan witnesses.
The High Court found their evidence duly corroborated and therefore reversed and order of acquittal and convicted the appellant under Section 302/34, I.P.C.
In this appeal the appellant had challenged his conviction.
Apart from the question of appraisal of evidence,the appellants has placed strong reliance on the testimony of PW 2, Dr. Sharma and argued for the first time in the Court that his testimony shws that the death must have taken place long before 25the September 1970 there being blisters containing reddish fluid all over the body.
Dismissing the appeal, this Court, HELD: Death had occurred on 25th September 1970 and the dead body law in the police station with the wounds exposed till it was brought to the hospital at 5.20 p.m. on the next day.
The body remained in the same condition in the hospital till 7.00 a.m. on the next day when the post mortem examination was undertaken.
The body thus remained fully exposed to the heat and humidity of the month of September for over thirty hours and hence it is not surprising that the rigor mortis had passed off.
Ordinarily after rigor mortis has passed off, the process of putrefaction sets in but it may set in even earlier during summer depending on the heat and humidity.[462A C] The evidence establishes the chain of events showing the movement of the dead body and rules out the theory that death had taken place many days before 25th September 1970, a theory not put to the witnesses in corss examination.[462H 463] Blisters appear after the process of decomposition sets in within eighteen to forty eight hours.
It shows that the existence of blisters does not mean that death had taken 14 to 20 days ago.[464B]
| 6664.txt |
Appeal No. 38 of 1967.
Appeal from the judgment and order dated December 1, 1966, of the Assam and Nagaland High Court in Civil Rule No. 145 of 1964.
section V. Gupte, Solicitor General and Naunit Lal, for the appellants.
612 Ram Labhaya Obhrai, I. M. Obhrai, S.K. Mehta and K. L. Mehta, for the respondent.
The Judgment of the Court was delivered by Subbarao C.J.
This appeal by certificate is directed against the order of the High Court of Assam declaring that the Assam Motor Vehicles Taxation (Amendment) Acts of 1963 and 1966 were repugnant to the Assam Motor Vehicles Taxation Act, 1936 (Assam Act 9 of 1936), hereinafter called the Principal Act, and, therefore, void as they were made in contravention of the provisions of article 254(2) of the Constitution.
The facts are in a small compass and they are as follows The Principal Act came into force on March 1, 1937.
The assent of the Governor General in Council was given under section 35 of the Government of India Act, 1935.
This Act imposes tax on motor vehicles in the Province of Assam.
In 1955 the Principal Act was amended by Assam Act IV of 1956 and it had received the assent of the President.
Subsequently the Principal Act was amended by Act 15 of 1963, but the Bill was introduced in the Assam State Assembly with the previous sanction of the President and it came into force on April 1, 1963.
Subsequent to the filing of the petition, out of which the present appeal has arisen, the Principal Act was again amended in the year 1966 and it came into force on April 1, 1966.
The tax on the stage carriage motor vehicles was gradually raised under each amendment and under the last of the amendments a sum of Rs. 56/ was imposed per seat.
Under the last amendment Act the petitioner respondent had to pay a sum of Rs. 1680/ as tax for the stage carriage she was plying.
The respondent filed a petition under article 226 of the Constitution in the High Court for declaring the amending Acts void and for other reliefs.
The petition was heard by a Division Bench of the High Court and the learned Judges delivered two separate but concurrent judgments.
They held that the Amending Acts of 1963 and 1966 were void and gave the petitioner respondent the reliefs :asked for.
Hence the present appeal.
The main question in the appeal is whether the said Amending Acts increasing the rate of tax are void for constitution incompetence.
The High Court in effect held that the provisions of the said Amending Acts were inconsistent with those of the existing law, namely, the Principal Act and, therefore, as they had not received the assent of the President, were void under article 254 of the Constitution.
This conclusion was arrived at on the ground that the Amending Acts were made in respect of the matter contained in entry 35 of the Concurrent List.
613 To appreciate the contentions it will be convenient to read at the outset the relevant Articles of the Constitution.
Entry 57 of List II of the Seventh Schedule to the Constitu tion : Taxes on vehicles, whether mechanically propelled or not, suitable for use on roads, including tramcars subject to the provisions of entry 35 of List 111.
Entry 35 of List III Mechanically propelled vehicles including the principles on which taxes on such vehicles are to be levied.
article 254 (1) If any provision of law made by the Legislature of a State is repugnant. . to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2). . the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void.
(2) Where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State. article 366(10) Existing law means any law, ordi nance or bye law, rule or regulation passed or made before the commencement of the Constitution by any Legislature, authority or person having power to make such a law, ordinance or bye law, rule or regulation.
The application of the said provisions to the subject matter of the present appeal leads to the following result.
The Principal Act was an existing law.
If the Amending Acts were made under entry 35 of the Concurrent List and if they were in conflict with any of the provisions of the existing law, to the extent of the inconsistency the said amendments would he void.
But, on the other hand, if the Amending Acts were passed under entry 57 of List 11 of the Seventh Schedule, they would fall outside the scope of article 254 of the Constitution, as article 254 would apply only to a conflict between the provisions of an "existing law" and those or the post constitution law in respect of matters enumerated in any of the entries of the Concurrent List.
The learned Solicitor General raised before us two points, namely, (i) article 254 of the Constitution posits the existence of 614 two.
parallel laws One an "existing law" and the other a post Constitutional law in respect of any one of the entries in the Concurrent List and the provisions thereof are in conflict with each other; but it has no application to a case where the State Legislature, within the scope of its legislative competency, amends an existing law so as to extinguish a part of it.
(2) The amending Acts were only made under entry 57 of List 11 and, therefore, there is no scope for invoking the provisions of article 254 of the Constitution.
Learned counsel for the respondent, on the other hand, con tended that there was no distinction between an amending Act and a new Act in the matter of.
application of article 254 of the Constitution, as in either case the provisions of the said Acts would be inconsistent with the existing law.
He further argued that the Amending Acts introduced new principles of taxation and, therefore, fell squarely within the scope of entry 35 of the Concurrent List.
As we are holding in favour of the appellant on the second point, it is not necessary to express our view on the first.
The short question, therefore, is whether any of the provisions of the Amending Acts is repugnant to any of the provisions of the existing law with respect to any of the matters enumerated in the Concurrent List.
Under the existing law, i.e., Act 9 of 1936, no motor vehicle could be used in the Assam Province unless the owner thereof had paid in respect of it a tax at the appropriate rate specified in the Schedule to the Act and, save as therein specified, such tax should thereafter be payable annually notwithstanding that the motor vehicle might from time to time cease to be used (see section 4).
As aforesaid, the Schedule annexed to the Principal.
Act was amended from time to time by different amending Acts and the rate was increased.
Under the 1963 amending Act, apart from other provisions which do not relate to any principles of taxation, a new Schedule has been substituted.
Neither the amending Act nor the Schedule laid down any principles of taxation in respect of motor vehicles.
So too, the amending Act ,of 1966 substituted the Schedule of the Act by another Schedule.
A persual of the aforesaid Schedule only disclose that different rates were fixed; that is to say, the amended Schedule does not lay down any principles on which taxes on motor vehicles are to be levied within the meaning of entry 35 of the Concurrent List; it is solely concerned with taxes on vehicles within the meaning entry 57 of List 11.
The two entries deal With two different matters though allied ones one deals with taxes on vehicles and the other with the principles on which such taxes are to be levied.
When two entries in the Constitution, whether in the same List or different Lists, deal with two subjects, if possible, an attempt 615 shall be made to harmonize them rather than to bring them into conflict.
Taxes on vehicles in their ordinary meaning connote the liability to pay taxes at the rates at which the taxes are to be levied.
On the other hand, the expression "principles of taxation" denotes rules of guidance in the matter of taxation.
We, therefore, hold that the Amending Acts do not come into conflict with the existing law in respect of any principles of taxation, 'but only deal with a subject matter which is exclusively within the legislative competence, of the State Legislature.
In this view, there is no scope for the application of article 254 of the Constitution.
Even so, learned counsel for the respondent contended that the amending Acts offend the provisions of article 301 of the Constitution.
Article 301 reads "Subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free,.
" The scope of this Article has been authoritatively defined by this Court in The Automobile Transport (Rajasthan) Ltd. vs The State of Rajasthan(1).
There the majority held that regulatory Measures or measures imposing compensatory taxes for the use of trading facilities did not hamper trade, commerce or interCourse but rather facilitate them, and, therefore, were not hit by the freedom declared by article 301.
There, by virtue of section 4 of the Rajasthan Motor Vehicles Taxation Act, 1951, read with the Schedules, no one could use or keep a motor vehicle in Rajasthan without paying an appropriate tax for it and, if he did so, be was made liable to the penalties imposed under section 11 of that Act.
This Court by majority held that such taxes were com pensatory and regulatory taxes which did not hinder the freedom of trade.
In the present case the respondent in her petition questioned the validity of the provisions, of the amending Acts on the following grounds : (i) The Act abolished the permit fee previously payable on such motor vehicles.
She alleges that as a result of the rationalisation of tax and the introduction of a single point levy, the tax fixed irrespective of road condition.
distance travelled, region catered for imposes crushing burden oil the petitioner and the other stage carriage permit bolders plying their vehicles in the short distance route and gives discriminatory weightage in favour of the State Carriage, Inter State public carriers and other vehicles plying in longer distance routes.
It will be seen that the averments are general and vague.
On the other hand, the State has filed a detailed affidavit.
The following figures show the expenditure incurred on new roads and maintenance of old roads and the income from motor vehicles for (1) [1963] 1 S.C.R.491.
616 some years.
In 1962 63 the expenditure was Rs. 671.60 lakhs and the income was Rs. 75.58 lakhs.
In 1965 66 the expend ture was Rs. 1499.77 lakhs and the income was Rs. 137.96 lakhs.
From the said figures it is clear that the State is charging from the users of motor vehicles some thing in the neighbourhood of II% and IO % respectively for the said two years of the cost it has to, incur in maintaining and making roads.
From Annexure D to the said affidavit it appears that in some cases tax under the 1963 Act had been increased by 50% under the 1966 Act and in some cases the tax under 1963 Act has been increased by 40% under 1966 Act.
It is obvious that comparatively small proportion of the general expenditure is realised through the impugned taxation.
In the circumstances, we must hold that the said Acts were only regulatory measures imposing _compensatory taxes for facilitating trade, commerce and intercourse.
The Acts are, therefore, not hit by article 301 of the Constitution.
in the result the order of the High Court is set aside and the appeal is allowed.
The petition filed by the respondent in the High Court is dismissed with costs here and in the court below.
| Under the Assam Motor Vehicles Taxation Act, 1936, no motor vehicle could be used in the Assam Province unless the owner thereof had paid in respect of it a tax at the appropriate rate specified in the Schedule to the Act.
The Schedule was amended from time to time by the substitution of new Schedules and as a result of such amendments in 1963 and 1966, the tax on stage carriage motor vehicles was gradually raised.
In a writ petition, filed by the respondent, challenging the validity of the Amending Acts of 1963 and 1966, the High Court held that the Amending, Acts were made in respect of the matter contained in Entry 35 of the Concurrent List, namely principles of taxation of motor vehicles, and, as the provisions of the Amending Acts were inconsistent with those of the existing law, namely, the 1936 Act, the Amending Acts were ,void, because, the assent of the President as required by article 254 was not received.
In appeal to this Court, HELD : (i) Taxes on vehicles connote the liability to pay taxes at &he rates at which the taxes are to be levied, while, the expression "principles of taxation" denotes rules of guidance in the matter of taxation.
The Amending Acts do not come into conflict with the existing law in respect of any principles of taxation within the meaning of Entry 35 of the Concurrent List, but only deal with a subject matter , namely, taxes on vehicles within the meaning of Entry 57 of the State List, which is exclusively within the legislative competence of the State Legislature; and as such.
there is no scope for invoking article 254.
[615A C] (ii) It is only a comparatively small proportion of the general expenditure incurred on new roads and the maintenance of the ,)Id roads that was realised through the impugned taxation.
Therefore, the Amending Acts are only regulatory measures imposing compensatory taxes for faci litating trade, commerce and intercourse.
The Acts are, hence, not hit by article 301 of the Constitution.
[616C] The Automobile Transport (Raiasthan) Ltd. vs The State of Rajasthan, [1963] 1 S.C.R. 491, followed.
| 2201.txt |
Appeals Nos. 37 & 38 of 1957.
Appeals from the judgment and order dated August 30, 1955, of the former Bombay High Court in Appeals Nos.
55 and 56 of 1955, arising out of the judgment and order dated June 23, 1955, of the said High Court in Misc.
Application No. 80 of 1955.
C. K. Daphtary, Solicitor General of India, B. Ganapathy Iyer and R. H. Dhebar, for the appellant (in C. A. No. 37 of 57) and respondent No. 6 (in C. A. No. 38/57).
section D. Vimadalal and I. N. Shroff, for the appellant (in C. A. No. 38/57) and respondent No. 6 (in C. A. No. 37/57.) Rajni Patel, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for respondents Nos.1 and 3 to 5 (in both the appeals).
section B. Naik and K. R. Chaudhuri, for respondent No. 2 (in both the appeals).
August 18.
The Judgment of the Court was delivered by GAJENDRAGADKAR J.
These two appeals arise from an industrial dispute between the Firestone Tyre and Rubber Co. of India Ltd., (hereafter called the company) and its workmen (hereafter called the respondents), and they raise a short and interesting question about the construction of section 12(5) of the 14 of 1947 (hereafter called the Act).
It appears that the respondents addressed four demands to the company; they were in respect of gratuity, holidays, classification of certain employees and for the payment of an unconditional bonus for the financial year ended October 31, 1953.
The respondents ' union also addressed the Assistant Commissioner of Labour, Bombay, forwarding to him a 229 copy of the said demands, and intimating to him that since the company had not recognised the respondents ' union there was no hope of any direct negotiations between the union and the company.
The Assistant Commissioner of Labour, who is also the conciliation officer, was therefore requested to commence the conciliation proceedings at an early date.
Soon thereafter the company declared a bonus equivalent to 1/4 of the basic earnings for the year 195253.
The respondents then informed the company that they were entitled to a much higher bonus having regard to the profits made by the company during the relevant year and that they had decided to accept the bonus offered by the company without prejudice to the demand already submitted by them in that behalf.
After holding a preliminary discussion with the parties the conciliation officer examined the four demands made by the respondents and admitted into conciliation only two of them ; they were in respect of the classification of certain employees and the bonus for the year 1952 53; the two remaining demands were not admitted in conciliation.
The conciliation proceedings initiated by the conciliator, however, proved infructuous with the result that on July 5, 1954, the conciliator made his failure report under section 12(4) of the Act.
In his report the conciliator has set out the arguments urged by both the parties before him in respect of both the items of dispute.
In regard to the respondents ' claim for bonus the conciliator made certain suggestions to the company but the company did not accept them, and so it became clear that there was no possibility of reaching a settlement on that issue.
Incidentally the conciliator observed that it appeared to him that there was considerable substance in the case made out by the respondents for payment of additional bonus.
The conciliator also dealt with the respondents ' demand for classification and expressed his opinion that having regard to the type and nature of the work which was done by the workmen in question it seemed clear that the said work was mainly of a clerical nature and the demand that the said workmen should be 230 taken on the monthly paid roll appeared to be in consonance with the practice prevailing in other comparable concerns.
The management, however, told the conciliator that the said employees had received very liberal increments and had reached the maximum of their scales and so the management saw no reason to accede to the demand for classification.
On receipt of this report the Government of Bombay (now the Government of Maharashtra) considered the matter and came to the conclusion that the dispute in question should not be referred to an industrial tribunal for its adjudication.
Accordingly, as required by section 12(5) on December 11, 1954, the Government communicated to the respondents the said decision and stated that it does not propose to refer the said dispute to the tribunal under section 12(5) " for the reason that the workmen resorted to go slow during the year 195253 ".
It is this decision of the Government refusing to refer the dispute for industrial adjudication that has given rise to the present proceedings.
On February 18, 1955, the respondents filed in the Bombay High Court a petition under article 226 of the Constitution praying for the issue of a writ of mandamus or a writ in the nature of mandamus or other writ, direction or order against the State of Maharashtra (hereafter called the appellant) calling upon it to refer the said dispute for industrial adjudication under section 10(1) and section 12(5) of the Act.
To this application the company was also impleaded as an opponent.
This petition was heard by Tendolkar J.
He held that section 12(5) in substance imposed an obligation on the appellant to refer the dispute provided it was satisfied that a case for reference had been made, and he came to the conclusion that the reason given by the appellant for refusing to make a reference was so extraneous that the respondents were entitled to a writ of mandamus against the appellant.
Accordingly he directed that a mandamus shall issue against the appellant to reconsider the question of making or refusing to make a reference under section 12(5) ignoring the fact that there was a slow down and taking into account only such reasons as are germane to the 231 question of determining whether a reference should or should not be made.
Against this decision the appellant as well as the company preferred appeals.
Chagla, C. J., and Desai, J., who constituted the Court of Appeal, allowed the two appeals to be consolidated, heard them together and came to the conclusion that the view( taken by Tendolkar J. was right and that the writ of mandamus had been properly issued against the appellant.
The appellant and the company then applied for and obtained a certificate from the High Court and with that certificate they have come to this Court by their two appeals Nos. 37 and 38 of 1957.
These appeals have been ordered to be consolidated and have been heard together, and both of them raise the question about the construction of section 12(5) of the Act.
Before dealing with the said question it would be convenient to state one more relevant fact.
It is common ground that during a part of the relevant year the respondents had adopted go slow tactics.
According to the company the period of go slow attitude was seven months whereas according to the respondents it was about five months.
It is admitted that under cl.23(c) of the standing orders of the company willful slowing down in performance of work, or abatement, or instigation thereof, amounts to misconduct, and it is not denied that as a result of the go slow tactics adopted by the respondents disciplinary action was taken against 58 workmen employed by the company.
The respon dents ' case is that despite the go slow strategy adopted by them for some months during the relevant year the total production for the said period compares very favorably with the production for previous years and that the profit made by the company during the relevant year fully justifies their claim for additional bonus.
The appellant has taken the view that because the respondents adopted go slow strategy during the relevant year the industrial dispute raised by them in regard to bonus as well as classification was not to be referred for adjudication under section 12(5).
It is in the light of these facts that we have to consider whether 232 the validity of the order passed by the appellant refusing to refer the dispute for adjudication under section 12(5) can be sustained.
Let us first examine the scheme of the relevant provisions of the Act.
Chapter III which consists of sections 10 and 10A deals with reference of dispute to Boards, Courts or Tribunals.
Section 10(1) provides that where the appropriate Government is of opinion that any industrial dispute exists or is apprehended, it may at any time by order in writing refer the dispute to one or the other authority specified in cls.(a) to (d).
This section is of basic importance in the scheme of the Act.
It shows that the main object of the Act is to provide for cheap and expeditious machinery for the decision of all industrial disputes by referring them to adjudication, and thus avoid industrial conflict resulting from frequent lock outs and strikes.
It is with that object that reference is con templated not only in regard to existing industrial disputes but also in respect of disputes which may be apprehended.
This section confers wide and even absolute discretion on the Government either to refer or to refuse to refer an industrial dispute as therein provided.
Naturally this wide discretion has to be exercised by the Government bona fide and on a consideration of relevant and material facts.
The second proviso to section 10(1) deals with disputes relating to a public utility service, and it provides that where a notice under section 22 has been given in respect of such a dispute the appropriate Government shall, unless it considers that the notice has been frivolously or vexatiously given or that it would be inexpedient so to do, make a reference under this sub section notwithstanding that any other proceedings under this Act in respect of the dispute may have commenced.
It is thus clear that in regard to cases falling under this proviso an obligation is imposed on the Government to refer the dispute unless of course it is satisfied that the notice is frivolous or vexatious or that considerations of expediency required that a reference should not be made.
This proviso also makes it clear that reference can be made even if other proceedings under the Act 233 have already commenced in respect of the same dispute.
Thus, so far as discretion of the Government to exercise its power of referring an industrial dispute is concerned it is very wide under section 10(1) but is limited under the second proviso to section 10(1).
Section 10(2) deals with a case where the Government has to refer an industrial dispute and has no discretion in the matter.
Where the parties to an industrial dispute apply in the prescribed manner either jointly or separately for a reference of the dispute between them the Government has to refer the said dispute if it is satisfied that the persons applying represent the majority of each party.
Thus, in dealing with this class of cases the only point on which the Government has to be satisfied is that the persons applying represent the majority of each party ; once that test is satisfied the Government has no option but to make a reference as required by the parties.
Similarly section 10A deals with cases where the employer and his workmen agree to refer the dispute to arbitration at any time before the dispute has been referred under section 10, and it provides that they may so refer it to such person or persons as may be specified in the arbitration agreement; and section 10A(3) requires that on receiving such an arbitration agreement the Government shall, within fourteen days, publish the same in the official Gazette.
Section 10A(4) prescribes that the arbitrator or arbitrators shall investigate the dispute and submit the arbitration award to the appropriate Government; and section 10A(5) provides that such arbitrations are outside the Arbitration Act.
Thus cases of voluntary reference of disputes to arbitration are outside the scope of any discretion in the Government.
That in brief is the position of the discretionary power of the Government to refer industrial disputes to the appropriate authorities under the Act.
The appropriate authorities under the Act are the conciliator, the Board, Court of Enquiry, Labour Court ') Tribunal and National Tribunal.
Section 11(3) confers on the Board, Court of Enquiry, Labour Court, Tribunal and National Tribunal all, the powers 30 234 as are vested in a civil court when trying a suit in respect of the matters specified by cls.(a) to (d).
A conciliation officer, however, stands on a different footing.
Under section 11(4) he is given the power to call for and inspect any relevant document and has been given the same powers as are vested in civil courts in respect of Compelling the production of documents.
Section 12 deals with the duties of conciliation officers.
Under section 12(1) the conciliation officer may hold conciliation proceedings in the prescribed manner where an industrial dispute exists or is apprehended.
In regard to an industrial dispute relating to a public utility service, where notice under section 22 has been given, the conciliation officer shall hold conciliation proceedings in respect of it.
The effect of section 12(1) is that, whereas in regard to an industrial dispute not relating to a public utility service the conciliation officer is given the discretion either to hold conciliation proceedings or not, in regard to a dispute in respect of a public utility service, where notice has been given, he has no discretion but must hold conciliation proceedings in regard to it.
Section 12(2) requires the conciliation officer to investigate the dispute without delay with the object of bringing about a settlement, and during the course of his investigation he may examine all matters affecting the merits and the right settlement of the dispute and do all such things as he thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement.
The duty and function of the conciliation officer is as his very name indicates, to mediate between the parties and make an effort at conciliation so as to persuade them to settle their disputes amicably between themselves.
If the conciliation officer succeeds in his mediation section 12(3) requires him to make a report of such settlement together with the memorandum of the settlement signed by the parties to the dispute.
Section 18(3) provides that a settlement arrived at in the course of conciliation proceedings shall be binding on the parties specified therein.
It would thus be seen that if the attempts made by the conciliation officer to induce the parties to come to a settlement succeeds and a settlement is signed by them 235 it has in substance the same binding character as an award under section 18(3).
Sometimes efforts at conciliation do not succeed either because one of the parties to the dispute refuses to co operate or they do not agree as to the terms of settlement.
In such cases the conciliation officer has to send his report to the appropriate Government under section 12(4).
This report must set forth the steps taken by the officer for ascertaining the facts and circumstances relating to the dispute and for bringing about a settlement thereof together with a full statement of such facts and circumstances and the reasons on account of which in his opinion a settlement could not be arrived at.
The object of requiring the conciliation officer to make such a full and detailed report is to apprise the Government of all the relevant facts including the reasons for the failure of the conciliation officer so that the Government may be in possession of the relevant material on which it can decide what course to adopt under section 12(5).
In construing section 12(5), therefore, it is necessary to bear in mind the background of the steps which the conciliation officer has taken under section 12(1) to (4).
The conciliation officer has held conciliation proceedings, has investigated the matter, attempted to mediate, failed in his effort to bring about a settlement between the parties, and has made a full and detailed report in regard to his enquiry and his conclusions as to the reasons on account of which a settlement could not be arrived at.
Section 12(5) with which we are concerned in the present appeals provides that if, on a consideration of the report referred to in subsection (4), the appropriate Government is satisfied that there is a case for reference to a Board, Labour Court, Tribunal or National Tribunal, it may make such reference.
Where the appropriate Government does not make such a reference it shall record and communicate to the parties concerned its reasons therefore.
This section requires the appropriate Government to consider the report and decide whether a case for reference has been made out.
If the Government is satisfied that a case for reference has been made out it may make such 236 reference.
If it is satisfied that a case for reference has not been made out it may not make such a reference; but in such a case it shall record and communicate to the parties concerned its reasons for not making the reference which in the context means its reasons for not being satisfied that there is a case for reference.
The High Court has held that the word " may in the first part of section 12(5) must be construed to mean shall " having regard to the fact that the power conferred on the Government by the first part is coupled with a duty imposed upon it by the second part.
The appellant and the company both contend that this view is erroneous.
According to them the requirement that reasons shall be recorded and communicated to the parties for not making a reference does not convert " may " into " shall " and that the discretion vesting in the Government either to make a reference or not to make it is as wide as it is under section 10(1) of the Act.
Indeed their contention is that, even after receiving the report, if the Government decides to make a reference it must act under section 10(1) for that is the only section which confers power on the appropriate Government to make a reference.
It is true that section 12(5) provides that the appropriate Government may make such reference and in that sense it may be permissible to say that a power to make reference is conferred on the appropriate Government by section 12(5).
The High Court was apparently inclined to take the view that in cases falling under section 12(5) reference can be made only under section 12(5) independently of section 10(1).
In our opinion that is not the effect of the provisions of section 12(5).
If it is held that in cases falling under section 12(5) reference can and should be made only under section 12(5) it would lead to very anomalous consequences.
Section 10(3) empowers the appropriate Government by an order to prohibit the continuance of any strike or lock out in connection with an industrial dispute which may be in existence on the date of the reference, but this power is confined only to cases where industrial disputes are referred under section 10(1).
It would thus be clear that if a reference is made only under section 12(5) independently of 237 s.10(1) the appropriate Government may have no power to prohibit the continuance of a strike in connection with a dispute referred by it to the tribunal for adjudication ; and that obviously could not be the intention of the Legislature.
It is significant that sections 23 and 24 prohibit the commencement of strikes and lock outs during the pendency of proceedings there ' in specified, and so even in the case of a reference made under section 12(5) it would not be open to the employer to declare a lock out or for the workmen to go on strike after such a reference is made ; but if a strike has commenced or a lock out has been declared before such a reference is made, there would be no power in the appropriate Government to prohibit the continuance of such a strike or such a lock out.
Section 24(2) makes it clear that the continuance of a lock out or strike is deemed to be illegal only if an order prohibiting it is passed under section 10(3).
Thus the power to maintain industrial peace during adjudication proceedings which is so essential and which in fact can be said to be the basis of adjudication proceedings is exercisable only if a reference is made under section 10(1).
What is true about this power is equally true about the power conferred on the appropriate Government by section 10(4), (5), (6) and (7).
In other words, the material provisions contained in sub sections
(3) to (7) of section 10(1) which are an integral Dart of the scheme of reference prescribed by Chapter III of the Act clearly indicate that even if the appropriate Government may be acting under section 12(5) the reference must ultimately be made under section 10(1).
Incidentally it is not without significance that even in the petition made by the respondents in the present proceedings they have asked for a writ of mandamus calling upon the appellant to make a reference under sections 10(1) and 12(5).
Besides, even as a matter of construction, when section 12(5) provides that the appropriate Government may make such reference it does not mean that this provision is intended to confer a power to make reference as such.
That power has already been conferred by section 10(1); indeed section 12(5) occurs in a Chapter dealing with the procedure, powers and duties of the 238 authorities under the Act; and it would be legitimate to hold that section 12(5) which undoubtedly confers power on the appropriate Government to act in the manner specified by it, the power to make a reference which it will exercise if it comes to the conclusion that a case for reference has been made must be found in section 10(1).
In other words, when section 12(5) says that the Government may make such reference it really means it may make such reference under section 10 (1).
Therefore it would not be reasonable to hold that section 12(5) by itself and independently of section 10(1) confers power on the appropriate Government to make a reference.
The next point to consider is whether, while the appropriate Government acts under section 12(5), it is bound to base its decision only and solely on a consideration of the report made by the conciliation officer under section 12(4).
The tenor of the High Court 's judgment may seem to suggest that the only material on which the conclusion of the appropriate Government under section 12(5) should be based is the said report.
There is no doubt that having regard to the back ground furnished by the earlier provisions of section 12 the appropriate Government would naturally consider the report very carefully and treat it as furnishing the relevant material which would enable it to decide whether a case for reference has been made or not; but the words of section 12(5) do not suggest that the report is the only material on which Government must base its conclusion.
It would be open to the Government to consider other relevant facts which may come to its knowledge or which may be brought to its notice, and it is in the light of all these relevant facts that it has to come to its decision whether a reference should be made or not.
The problem which the Government has to consider while acting under section 12(5)(a) is whether there is a case for reference.
This expression means that Government must first consider whether a prima facie case for reference has been made on the merits.
If the Government comes to the conclusion that a prima facie case for reference has been made then it would be open to the Government also to con sider whether there are any other relevant or material 239 facts which would justify its refusal to make a reference.
The question as to whether a case for reference has been made out can be answered in the light of all the relevant circumstances which would have a bearing on the merits of the case as well as on the incidental question as to whether a reference should nevertheless be made or not.
A discretion to consider all relevant facts which is conferred on the Government by section 10(1) could be exercised by the Government even in dealing with cases under section 12(5) provid ed of course the said discretion is exercised bona fide, its final decision is based on a consideration of relevant facts and circumstances, and the second part of section 12(5) is complied with.
We have already noticed that section 12 deals with the conciliation proceedings in regard to all industrial dis putes, whether they relate to a public utility service or not.
Section 12(1) imposes an obligation on the con ciliation officer to hold conciliation proceedings in regard to an industrial dispute in respect of public utility service provided a notice under section 22 has been given.
If in such a dispute the efforts at conciliation fail and a failure report is submitted under section 12(4) Government may have to act under section 12(5) and decide whether there is a case for reference.
Now, in dealing with such a question relating to a public utility service considerations prescribed by the second proviso to section 10(1) may be relevant, and Government may be justified in refusing to make a reference if it is satisfied that the notice given is frivolous or vexatious or that reference would be inexpedient.
Just as discretion conferred on the Government under section 10(1) can be exercised by it in dealing with industrial disputes in regard to non public utility services even when Government is acting under section 12(5), so too the provisions of the second proviso can be pressed into service by the Government when it deals with an industrial dispute in regard to a public utility service under section 12(5).
It would, therefore, follow that on receiving the failure report from the conciliation officer Government would consider the report and other relevant material 240 and decide whether there is & case for reference.
If it is satisfied that there is such & case for reference it may make a reference.
If it does not make a reference it shall record and communicate to the parties concerned its reasons therefore.
The question which arises at this stage is whether the word " may " used in the context means " shall ", or whether it means nothing more than " may " which indicates that the discretion is in the Government either to refer or not to refer.
It is urged for the respondent that where power is conferred on an authority and it is coupled with the performance of & duty the words conferring power though directory must be construed as mandatory.
As Mr. Justice Coleridge has observed in Beg. vs Tithe Commissioners (1)." The words undoubtedly are only empowering; but it has been so often decided as to have become an axiom, that, in public statutes, words only directory, permissory or enabling may have & compulsory force where the thing to be done is for the public benefit or in advancement of public justice ".
The argument is that section 12(5) makes it obligatory on the Government to record and communicate its reasons for not making the reference and this obligation shows that the power to make reference is intended to be exercised for the benefit of the party which raises an industrial dispute and wants it to be referred to the authority for decision.
It may be that the Legislature intended that this requirement would avoid casual or capricious decisions in the matter because the recording and communication of reasons postulates that the reasons in question must stand public examination and scrutiny and would therefore be of such a character as would show that the question was carefully and properly considered by the Government; but that is not the only object in making this provision.
The other object is to indicate that an obligation or duty is cast upon the Government, and since the power conferred by the first part is coupled with the duty prescribed by the second part " may " in the context must mean " shall ".
There is considerable force in (1) ; , 474 : ; , 185.241 this argument.
Indeed it has been accepted by the High Court and it has been held that if the Government is satisfied that there is a case for reference it is bound to make the reference.
On the other hand, if the power to make reference is ultimately to be found in section 10(1) it would not be easy to read the relevant portion of section 12(5) as imposing an obligation on the Government to make a reference.
Section 12(5) when read with section 10(1) would mean, according to the appellant, that, even after considering the question, the Government may refuse to make a reference in a proper case provided of course it records and communicates its reasons for its final decision.
In this connection the appellant strongly relies on the relevant provisions of section 13.
This section deals with the duties of Boards and is similar to section 12 which deals with conciliation officers.
A dispute can be referred to a Board in the first instance under section 10(1) or under section 12(5) itself.
Like the conciliation officer the Board also endeavours to bring about a settlement of the dispute.
Its powers are wider than those of a conciliator but its function is substantially the same; and so if the efforts made by the Board to settle the dispute fail it has to make a report under section 13(3).
Section 13(4) provides that if on receipt of the report made by the Board in respect of a dispute relating to a public utility service the appropriate Government does not make a reference to a Labour Court, Tribunal or National Tribunal under section 10, it shall record and communicate to the parties concerned its reasons therefore.
The provisions of section 13 considered as a whole clearly indicate that the power to make a reference in regard to disputes referred to the Board are undoubtedly to be found in section 10(1).
Indeed in regard to disputes relating to non public utility services there is no express provision made authorising the Government to make a reference, and even section 13(4) deals with a case where no reference is made in regard to a dispute relating to a public utility service which means that if a reference is intended to be made it would be under the second proviso to section 10(1).
Incidentally this fortifies the conclusion that whenever 31 242 reference is made the power to make it is to be found under section 10(1).
Now, in regard to cases falling under section 13(4) since the reference has to be made under section 10 there can be no doubt that the considerations relevant under the second proviso to section 10(1) would be relevant and Government may well justify their refusal to make a reference on one or the other of the grounds specified in the said proviso.
Besides, in regard to disputes other than those falling under section 13(4) if a reference has to be made, it would clearly be under section 10(1).
This position is implicit in the scheme of section 13.
The result, therefore, would be that in regard to a dispute like the present it would be open to Government to refer the said dispute under section 12(5) to a Board,, and if the Board fails to bring about a settlement between the parties Government would be entitled either to refer or to refuse to refer the said dispute for industrial adjudication under section 10(1).
There can be no doubt that if a reference has to be made in regard to a dispute referred to a Board under section 13 section 10(1) would apply, and there would be no question of importing any compulsion or obligation on the Government to make a reference.
Now, if that be the true position under the relevant provisions of section 13 it would be difficult to accept the argument that a prior stage when Government is acting under section 12(5) it is obligatory on it to make a reference as contended by the respondent.
The controversy between the parties as to the construction of section 12(5), is, however, only of academic importance.
On the respondents ' argument, even if it is obligatory on Government to make a reference provided it is satisfied that there is a case for reference, in deciding whether or not a case for reference is made Government would be entitled to consider all relevant facts, and if on a consideration of all the relevant facts it is not satisfied that there is a case for reference it may well refuse to make a reference and record and communicate its reasons therefore.
According to the appellant and the company also though the discretion is with Government its refusal to make a reference can be justified only if it records and communicates its reasons therefore and it appears that the 243 said reasons are not wholly extraneous or irrelevant.
In other words, though there may be a difference of emphasis in the two methods of approach adopted by the parties in interpreting section 12(5) ultimately both of them are agreed that if in refusing to make a reference Government is influenced by reasons which are wholly extraneous or irrelevant or which are not germane then its decision may be open to challenge in a court of law.
It would thus appear that even the appellant and the Company do not dispute that if a consideration of all the relevant and germane factors leads the Government to the conclusion that there is a case for reference the Government must refer though they emphasise that the scope and extent of relevant consideration is very wide; in substance the plea of the respondents that " may " must mean " shall " in section 12(5) leads to the same result.
Therefore both the methods of approach ultimately lead to the same crucial enquiry : are the reasons recorded and communicated by the Government under section 12(5) germane and relevant or not ? It is common ground that a writ of mandamus would lie against the Government if the order passed by it under section 10(1) is for instance contrary to the provisions of section 10(1)(a) to (d) in the matter of selecting the appropriate authority ; it is also common ground that in refusing to make a reference under section 12(5) if Government does not record and communicate to the parties concerned its reasons therefore a writ of mandamus would lie.
Similarly it is not disputed that if a party can show that the refusal to refer a dispute is not bona fide or is based on a consideration of wholly irrelevant facts and circumstances a writ of mandamus would lie.
The order passed by the Government under section 12(5) may be an administrative order and the reasons recorded by it may not be justiciable in the sense that their propriety, adequacy or satisfactory character may not be open to judicial scrutiny ; in that sense it would be correct to say that the court hearing a petition for mandamus is not sitting in appeal over the decision of the Government : nevertheless if the court is satisfied that the reasons given 244 by the Government for refusing to make a reference are extraneous and not germane then the court can issue, and would be justified in issuing, a writ of mandamus even in respect of such an administrative order.
After an elaborate argument on the construction of section 12(5) was addressed to us it became clear that on this part of the case there was no serious dispute between the parties.
That is why we think the controversy as to the construction of section 12(5) is of no more than academic importance.
That takes us to the real point of dispute between the parties, and that is whether the reason given by the appellant in the present case for refusing to make a reference is germane or not.
The High Court has held that it is wholly extraneous and it has issued a writ of mandamus against the appellant.
We have already seen that the only reason given by the appellant is that the workmen resorted to go slow during the year 1952 53.
It would appear prima facie from the communication addressed by the appellant to the respondents that this was the only reason which weighed with the Government in declining to refer the dispute under section 12(5).
It has been strenuously urged before us by the appellant and the company that it is competent for the Government to consider whether it would be expedient to refer a dispute of this kind for adjudication.
The argument is that the object of the Act is not only to make provision for investigation and settlement of industrial disputes but also to secure industrial peace so that it may lead to more production and help national economy.
Co operation between capital and labour as well as sympathetic understanding on the part of capital and discipline on the part of labour are essential for achieving the main object of the Act; and so it would not be right to assume that the Act requires that every dispute must necessarily be referred to industrial adjudication.
It may be open to Government to take into account the facts that the respondents showed lack of discipline in adopting go slow tactics, and since their conduct during a substantial part of the relevant year offended against the standing orders that was a fact which 245 was relevant in Considering whether the present dispute should be referred to industrial adjudication or not.
On the other hand, the High Court has held that the reason given by the Government is wholly extraneous and its refusal to refer the dispute is plainly punitive in character and as such is based on considerations which are not at all germane to section 12(5).
This Court has always expressed its disapproval of breaches of law either by the employer or by the employees, and has emphasised that while the employees may be entitled to agitate for their legitimate claims it would be wholly wrong on their part to take recourse to any action which is prohibited by the standing orders or statutes or which shows wilful lack of discipline or a concerted spirit of non co operation with the employer.
Even so the question still remains whether the bare and bald reason given in the order passed by the appellant can be sustained as being germane or relevant to the issue between the parties.
Though considerations of expediency cannot be excluded when Government considers whether or not it should exercise its power to make a reference it would not be open to the Government to introduce and rely upon wholly irrelevant or extraneous considerations under the guise of expediency.
It may for instance be open to the Government in considering the question of expediency to enquire whether the dispute raises a claim which is very stale, or which is opposed to the provisions of the Act, or is inconsistent with any agreement between the parties, and if the Govern ment comes to the conclusion that the dispute suffers from infirmities of this character, it may refuse to make the reference.
But even in dealing with the question as to whether it would be expedient or not to make the reference Government must not act in a punitive spirit but must consider the question fairly and reasonably and take into account only relevant facts and circumstances.
In exercising its power under section 10(1) it would not be legitimate for the Government for instance to say that it does not like the appearance, behaviour or manner of the secretary of the union, or even that it disapproves of the political 246 affiliation of the union, which has sponsored the dispute.
Such considerations would be wholly extraneous and must be carefully excluded in exercising the wide discretion vested in the Government.
In the present case it is significant that the company has voluntarily paid three months bonus for the relevant year not withstanding the fact that the workmen had adopted go slow tactics during the year, and the report of the conciliator would show prima facie that he thought that the respondents ' claim was not at all frivolous.
The reasons communicated by the Government do not show that the Government was influenced by any other consideration in refusing to make the reference.
It is further difficult to appreciate how the misconduct of the respondents on which the decision of the Government is based can have any relevance at all in the claim for the classification of the specified employees which was One of the items in dispute.
If the work done by these employees prima facie justified the claim and if as the conciliator 's report shows the claim was in Consonance with the practice prevailing in other comparable concerns the misconduct, of the respondents cannot be used as a relevant circumstance in refusing to refer the dispute about classification to industrial adjudication.
It was a claim which would have benefited the employees in future and the order passed by the appellant deprives them of that benefit in future.
Any considerations of discipline cannot, in our opinion, be legitimately allowed to impose such a punishment on the employees.
Similarly even in regard to the claim for bonus, if the respondents are able to show that the profits earned by the company during the relevant year compared to the profits earned during the preceding years justified their demand for additional bonus it would plainly be a punitive action to refuse to refer such a dispute solely on the ground of their misconduct.
In this connection it may be relevant to remember that for the said misconduct the company did take disciplinary action as it thought fit and necessary, and yet it paid the respondents bonus to which it thought they were entitled.
Besides, in considering the question 247 as to whether a dispute in regard to bonus should be referred for adjudication or not it is necessary to bear in mind the well established principles of industrial adjudication which govern claims for bonus.
A claim for bonus is based on the consideration that by their contribution to the profits of the employer the employees are entitled to claim a share in the said profits, and so any punitive action taken by the Government by refusing to refer for adjudication an industrial dispute for bonus would, in our opinion, be wholly inconsistent with the object of the Act.
If the Government had given some relevant reasons which were based on, or were the consequence of, the misconduct to which reference is made it might have been another matter.
Under these circumstances we are unable to bold that the High Court was in error in coming to the conclusion that the impugned decision of the Government is wholly punitive in character and must in the circumstances be treated as based on a consideration which is not germane and is extraneous.
It is clear that the Act has been passed in order to make provision for the investigation and settlement of industrial disputes, and if it appears that in cases falling under section 12(5) the investigation and settlement of any industrial dispute is prevented by the appropriate Government by refusing to make a reference on grounds which are wholly irrelevant and extraneous a case for the issue of a writ of mandamus is clearly established.
In the result we confirm the order passed by the High Court though not exactly for the same reasons.
The appeals accordingly fail and are dismissed with costs, one set of hearing fees.
Appeals dismissed.
| Section 2(5) of the , properly construed, does not by itself confer the power on the appropriate Government to make a reference.
That power is really contained in section 10(i) of the Act.
In deciding whether it should or should not make a reference under section 12(5) of the Act the appropriate Government need not base its decision solely on the report of the conciliation officer, but is free to take into consideration all other relevant facts and circumstances under section 10(1), and where it refused to make a reference it must record and com municate its reasons therefore to the parties concerned.
Such reasons, however, must be germane, and not extraneous or irrelevant, to the dispute.
But in exercising such wide powers as are conferred by section 10(1), the appropriate Government must act fairly and reasonably and not in a punitive spirit, and although considerations of expediency may not be wholly excluded, it must not be swayed by any extraneous considerations.
Consequently, in a case where the issues in dispute related to a claim of classification for specified employees and additional bonus and the sole ground on which the Government refused to refer the dispute for adjudication under section 12(5) was that the employees had adopted go slow tactics during the relevant year, although the company had nevertheless voluntarily paid three months ' bonus for that year and the report of the conciliation officer was in favour of the employees, Held, that the Government acted on irrelevant considerations and its decision being wholly punitive in character a clear case for the issue of a writ of mandamus was made out.
Held, further, that since the work done by the employees prima facie justified the claim for classification and it was in consonance with the practice prevailing in other comparable concerns, the misconduct of the respondents could be no ground for refusing reference as the claim was in regard to the future benefit to the employees.
228 The claim of bonus being also prima facie justified by the profits earned during the relevant year in accordance with well settled principles of industrial adjudication, the order of refusal was in the nature of a punitive action that was wholly inconsistent with the object of the Act.
| 1054.txt |
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.
| 1049.txt |
Civil Appeal No. 739 of 1991.
From the Judgment and Order dated 16.3.1990 of the Punjab and Haryana High Court in Regular Second Appeal No. 405 of 1990.
G.B. Pai, and P.N. Gupta for the Appellant.
Ashok K. Mahajan for the Respondent.
The Judgment of the Court was delivered by KANIA, J.
Leave granted.
Counsel heard.
This is an appeal by Special Leave against the decision of a learned Single Judge of the Punjab and Haryana High Court, dismissing summarily Regular Second appeal No. 405 of 1990 in that Court.
The relevant facts can be stated very shortly.
At the relevant time respondent No. 1 was an officer being the Manager in the Hardwar Branch of the appellant Bank, a Government of India Undertaking.
On April 2, 1982 a show cause notice was served on respondent No. 1 in respect of several irregularities, lapses, acts, omissions and so on.
On May 4,1982 respondent No. I submitted his reply to the said show cause notice denying the charges made against him and asking for the holding of an enquiry into the allegations.
On July 17, 1984 respondent No. 1 was promoted from Scale II to Scale Ill by the appellant.
It appears from the record that disciplinary action was contemplated against respondent No. I but in November 1984, the disciplinary proceedings contemplated against respondent No. 1 were kept in abeyance as some of the allegations against him were under investigation by the Central Bureau of Investigation (CBI) On March 11, 1988 interviews for promotion from Scale III to Scale IV were conducted and respondent No. 1 was one of the officers interviewed for promotion.
On April 27, 1988 a charge sheet was served on respondent No. 1.
On May 27, 1988 an enquiry was ordered against him and the Commissioner of Departmental Enquiries, Government of India, was appointed as the Enquiry Officer.
On June 30, 1988, respondent No. 1 filed a suit in the Court of Sub Judge, Second Class, Jallandhar 476 for a declaration that the Order dated April 27,1988 by which respondent No. I was served with charge sheet was illegal and in violation of the Service Regulations and unsustainable in law and prayed for permanent injunction restraining the appellant and others from proceeding with the enquiry on the basis of the said charge sheet.
One of the main contentions urged on behalf of respondent No. 1 in the said suit was that by reason of the promotion granted to him from Scale II to Scale Ill on July 17, 1984 as aforestated, which was after the irregularities and misconduct aileged against him had been committed and in view of the said promotion the appellant must be deemed to have condoned the earlier misconduct, if any, of respondent No. 1 and thereafter it was not open to the appellant to take any action against respondent No. I in respect of the said misconduct.
This contention found favour with learned Trial Judge who gave a declaration that the order, serving the charge sheet on respondent No. 1 was illegal and restrained the appellant and others from proceeding with the enquiry on the basis of the said charge sheet.
An appeal was preferred by the appellant against the said order in the court of learned Additional District Judge, Jallandhar but it was dismissed as learned Additional District Judge accepted the reasoning and conclusions of the learned Trial Judge.
The second appeal against the decision of learned Additional District Judge was dismissed by the High Court and this is an appeal directed against the judgment of the High Court.
It was submitted before us by Mr. Pai, learned Counsel for the appellant that the promotion granted to respondent No. 1 from Scale II to Scale Ill on July 17, 1984, could not be regarded in law as condonation of the earlier acts of misconduct committed by respondent No. 1.
It was urged by him that at that time no disciplinary proceedings had been initiated against respondent No. I and in view of this, the appellant had no option but to consider respondent No. 1 for promotion for which he was entitled to be considered and to promote him if he was found fit for promotion.
It was, on the other hand, contended by Mr.Rao, learned counsel for the respondent that the earlier acts of respondent No. 1, even if they constituted misconduct, could not be relied upon to take any disciplinary action against respondent No. I because they were condoned by reason of the aforesaid promotion.
In considering the submissions of the respective parties, we have to bear in mind that it is accepted before us that in law the mere fact that disciplinary proceedings are contemplated or under consideration against an employee does not constitute a good ground for not considering the employee concerned for promotion if he is in the zone of 477 consideration nor would it constitute a good ground for denying the promotion if the employee is considered otherwise fit for promotion.
In the present case, we find that this legal position is reinforced by clause (9) of the Promotion Policy of the appellant Bank.
Clause (9) reads as follows: "Clause 9.
Officers in respect of whom disciplinary action is in process will be permitted to take part in the promotion process, subject to the condition that the promotions (if they are selected) will be withheld until the Officer is exonerated from the charges.
In such an event the promotion will be given effect to from the date on which it would have been otherwise effective but for the disciplinary action.
The officer will not be eligible for promotion if punishment, except censure, was awarded as a result of the disciplinary action.
" On a plain reading of this clause it is clear that even if disciplinary action is in process against an officer of the appellant Bank, that would not entitle the appellant Bank to exclude from consideration for promotion the officer concerned if he is otherwise entitled to be so considered.
The only right given to the appellant in such cases is that, in case such an officer is otherwise found fit for promotion and selected for promotion, that promotion can be withheld until the officer is exonerated from the charges.
It is significant that the said clause goes to state that in case such an officer is exonerated from the charges, promotion will have to be given effect to from the date on which it would have been otherwise effective but for the disciplinary action.
This rule gives rise to the implication that till disciplinary action is in process or initiated, the officer concerned, against whom allegations of misconduct might be made, can neither be excluded from consideration for promotion if he is entitled to be considered otherwise nor can the promotion be denied to him.
In these circumstances, when the promotion from Scale II to Scale Ill was granted to respondent No. 1 on July 17, 1984, there could be no question of condonation of the earlier acts of misconduct by reason of this promotion because in law and in view of the said Regulation (9) the appellant had no option but to consider respondent No. 1 for promotion and if he was otherwise found fit for promotion to promote him.
In view of this conclusion, it must follow that the charge sheet submitted against respondent No. 1 and the disciplinary proceedings pursuant to the said charge sheet cannot be said to be bad in law and cannot be interfered with on the ground of condonation.
In our view, the courts below were 478 in error in holding that the earlier alleged acts of misconduct of respondent No. I had been condoned by the appellant and basing their conclusions thereon.
In support of his submissions relating to the question of condonation, Mr. Rao relied upon the decision of a Division Bench of the Calcutta High Court in L. W. Middleton vs
Horry Playfair, AIR (1925) Calcutta 87 and the decision of a learned Single Judge of the Nagpur High Court in District Council, Amraoti through Secretary vs Vithal, Vinayak Bapat, AIR (1941) Nagpur 125.
Both these cases lay down that once a master has condoned any misconduct on the part of servant which would have justified dismissal or a fine, he cannot, after such condonation, go back upon his election to condone and claim a right to dismiss him or impose a fine or any other punishment in respect of the offence which has been condoned.
In our view, these decisions are of no relevance in the present case.
At the time these decisions were rendered under the general law of master and servant it was open to the master to dismiss his servant or fine him on the ground of misconduct.
On the facts of both these cases the master had the option of dismissing the servant or finding him on the ground of misconduct but voluntarily did not take the action of dismissing or fining him on the ground of misconduct and it was held that thereby the master had condoned the earlier misconduct and could not thereafter rely on the said misconduct for punishing the servant.
In the case before us, however, at the time when the promotion was granted to respondent No. I on July 17, 1984, the appellant had no option but to consider respondent No. I for promotion and to promote him if he was found fit as no disciplinary proceedings had been initiated against him or could be said to be in process against him, as we have set out earlier.
In such a case, no question of condonation could arise.
The ratio of decision in Lal Audhraj Singh vs State of Madhya Pradesh, AIR 1967 M.P. 284 is also of no application to the case before us as that again was a case where the employer, namely, the State, had the option of punishing the employee and voluntarily refrained from doing so.
It was next contended by Mr. Rao that even if the disciplinary proceedings against respondent No. 1 were liable to be continued that constitutes no ground for holding up the promotion of respondent No. 1 from Scale III to Scale IV if he was otherwise found fit for promotion, as, on the date when the selections for that promotion were made, no charge sheet had been served on respondent No. I and it is the accepted position here that till the charge sheet was submitted it could not be said that disciplinary proceedings were in process or 479 had been initiated.
It was submitted by Mr. Rao that this contention was fortified by the provisions of Clause (9) of the Promotional Policy of the appellant, which we have discussed earlier.
It was urged by him that it was on this ground that the appellant had based its case regarding the validity of the disciplinary proceedings against respondent No. 1 and on the same basis respondent No. I was entitled to be promoted from Scale Ill to Scale IV as from March 1988 if he was found fit.
It was submitted by him that since the charge sheet was served on respondent No. 1 over a month after he was considered for promotion from Scale Ill to Scale IV, it was not open to the appellant to hold back the consideration of the case of respondent No. I for promotion from Scale III to Scale IV or to deny him the promotion if he was found fit.
It appears to us prima facie that the submissions of Mr. Rao in connection with promotion of respondent No. 1 from Scale Ill to Scale IV are not without substance.
However, it is unnecessary for us to decide this question because Mr. Pai, learned counsel for the appellant has agreed that without creating a precedent, the appellant will grant promotion to respondent No. 1 from Scale Ill to Scale IV if it is found that the Departmental Promotion Committee found him fit for promotion and that this promotion will be granted from the date on which he would have been promoted but for the departmental enquiry being contemplated against him.
In the result, the appeal is allowed to the extent aforestated and the impugned order of the High Court quashing the departmental proceedings is set aside.
The departmental enquiry shall be proceeded with and completed within a period of six months according to law.
As far as question of promotion of respondent No. 1 from Scale III to Scale IV is concerned, that question will be considered in the light what has been agreed to by Mr. Pai, as set out earlier.
Parties shall bear and pay their own costs throughout.
T. N. A. Appeal allowed.
| Clause 9 of the promotion policy of the Appellant Bank provides that an officer in respect of whom disciplinary action is in process will be permitted to take Part in the promotion process, subject to the condition that his promotion will be withheld until the officer is exonerated from the charges and in case such an officer is exonerated from the charges, the promotion shall take effect from the date on which it would have been otherwise effective but for the disciplinary action.
Respondent 1, a Bank Manager, was Promoted from Scale II to Scale Ill under the aforesaid clause while disciplinary proceedings were contemplated against him.
Later he was also interviewed for promotion from Scale IlI to Scale IV.
thereafter the appellant Bank charge sheeted him and initiated a departmental inquiry against him.
He challenged the legality of the bank 's action by filing a declartory suit contending that in view of the promotion granted to him, the appellant Bank must be deemed to have condoned the earner misconduct and subsequent to his promotion it was not open to the Bank to take any action against himn.
The Trial Court allowed the suit and restraied the appellant bank from Proceeding with the inquiry by holding the charge sheet illegal.
The order of the trial court was affirmed by the first appellate court and the second appeal filed by the bank was also dismissed by the High Court.
In appeal to this court, it was contended on behalf of the bank that the grant of promotion to the appellant under clause 9 cannot be regarded in law as condonation of pre promotion misconduct.
On behalf of the respondent, it was contended that even if the continuation of 474 disciplinary proceedings was valid, it was not a ground for holding up of his promotion from Scale Ill to Scale IV because on the date of interview no charge sheet was served on him.
Allowing the appeal and setting aside the order of the High Court, this Court, HELD: 1.
The mere fact that disciplinary proceedings are contemplated or under consideration against an employee does not constitute a good ground for not considering the employee concerned for promotion if he is in the zone of consideration nor would it constitute a good ground for denying the promotion if the employee is considered otherwise fit for promotion.
Clause 9 of the Promotion Policy of the Bank gives rise to the implication that the disciplinary action is in process or initiated, the officer concerned, against whom allegations of misconduct might be made, can neither be excluded from consideration for promotion if he is entitled to be considered for promotion otherwise nor can the promotion be denied to him.
In these circumstances, when the promotion from Scale II to Scale III was granted to respondent, there could be no question of condonation of the earlier acts of misconduct by reason of this promotion because in law and in view of clause 9 of the Promotion policy appellant had no option but to consider respondent for promotion and if he was otherwise found fit for promotion to promote him.
Hence the charge sheet submitted against respondent and the disciplinary proceedings pursuant to the said charge sheet cannot be said to be bad in law and cannot be interfered with on the ground of condonation.
Therefore, the courts below were in error in holding that the earlier alleged acts of misconduct of respondent had been condoned by the appellant and basing their conclusions thereon.
[476G H; 477F H; 488A] L.W. Middleton vs Horry Play Fair, AIR 1925 Cal. 87; District Council, Amraoti through Secretary vs Vithal Vinayak Bapat, AER 1941 Nagpur 125 and Audhraj Singh vs State of Madhya Pradesh, AIR.
M.P. 284; held inapplicable.
In view of the fact that the appellant bank has agreed that without creating a precedent it will grant promotion to respondent from Scale Ill to Scale IV, if the departmental promotion Committee finds him fit for promotion and that this promotion will be granted from the date on which he would have been promoted but for the departmentl inquiry being contemplated against him, it is unnecessary to express any opinion on the submission that since on the date of selection for promotion from Scale III to Scale IV, no charge sheet was served on the 475 respondent it was not open to the bank to hold back the respondent 's promotion from Scale IH to Scale IV.
[479C D]
| 6662.txt |
Appeals Nos. 224 and 225 of 1954.
Appeals from the judgment dated December 31, 1947, of the former Nagpur High Court in Misc.
(First) Appeal No. 310 of 1943, arising out of the Award dated March 31, 1943, of the Court of the Arbitrator, Addl.
and Sessions Judge, Khandwa.
Achhru Ram and Naunit Lal, for appellant (In C. A. No. 224/54) and respondent (In C. A. No. 225/54).
C. K. Daphtary, Solicitor General for India, R. Ganapathy Iyer and R. H. Dhebar, for respondent (In C. A. No. 224/54) and appellant (In C. A. No. 225/54).
August 22.
The Judgment of the Court was delivered by VENKATARAMA AIYAR J.
Both these appeals are directed against the judgment of the High Court of Nagpur passed in an appeal under section 19(1) (f) of the Defence of India Act, 1939, hereinafter referred to as the Act.
In exercise of the power conferred by section 75(A) of the Rules framed under the Act, the Central Government requisitioned on February 19, 1941, certain properties belonging to Hanskumar Kishanchand, the appellant in Civil Appeal No. 224 of 1954.
As there was no agreement on the amount of compensation payable to him, the Central Government referred the determination thereof to Mr. Jafry, Additional District Judge, Khandwa, under section 19(1) (b) of the Act.
On March 31, 1943, Mr. Jafry pronounced his award, by which lie awarded a. sum of Rs. 13,000 as annual rent for, the occupation of the premises.
Against this award, there was an appeal to the High Court of Nagpur under section 19(1) (f) of the Act, and that was heard by a Bench consisting of Grille C. J. and Padhve J.
By their judgment dated December 31, 1947, they enhanced the annual rent payable to the appellant by a sum of Its. 3,250, and they also allowed certain other sums as compensation for dislocation of the High School which 150 1180 was being run on the property.
The appellant applied for leave to appeal against this judgment to the Federal Court under sections 109 and I 10 of the Code of Civil Procedure in respect of the amounts disallowed.
A similar application was also filed by the Government with reference to the enhancement of compensation.
On August 25, 1949, both these applications were granted, and a certificate was issued that the appeals fulfilled the requirements of sections 109 and 110 of the Code of Civil Procedure.
That is how the two appeals come before us.
Hanskumar Kishanchand is the appellant in Civil Appeal No. 224 of 1954 and the Union of India, in Civil Appeal No. 225 of 1954.
At the opening of the hearing, a preliminary objection was taken by the learned Solicitor General to the maintainability of Civil Appeal No. 224 of 1954 on the ground that the judgment of the High Court passed in appeal under section 19(1) (f) was an award and not a judgment, decree or order within the meaning of sections 109 and 110 of the Code of Civil Procedure, and that accordingly the appeal was incompetent.
If this contention is right, Civil Appeal No. 225 of 1954 preferred by the Government would also be incompetent.
That, of course, does not preclude the Government from raising the objection as to the maintainability of the appeal, though the result of our upholding it would entail the dismissal of Civil Appeal No. 225 of 1954 as ' well.
We accordingly proceed to dispose of the objection on the merits.
It will be convenient at this stage to refer to the provisions of the Act bearing upon the present, controversy.
Section 19(1) provides that: " Where. any action is taken of the nature decribed in sub section (2) of section 299 of the Government of India Act, 1935, there shall be paid compensation, the amount of which shall be determined in the manner, and in accordance with the principles, hereinafter set out. . " Section 19(1) (a) provides for the amount of compensation being fixed by agreement, and section 19(1) (b) enacts that : " Where no such agreement can be reached, the Central Government shall appoint as arbitrator a 1181 person qualified under sub section (3) of section 220 of the above mentioned Act for appointment as a Judge of a High Court.
" Sub section (c) of section 19(1) provides for the appointment by the Central Government of a person having expert knowledge as to the nature of the property acquired and for the nomination of an assessor by the person to be compensated, for the purpose of assisting the arbitrator.
Sub section (e) of section 19(1) enacts that the arbitrator in making his award shall have regard to the provisions of sub section
(1) of section 23 of the Land Acquisition Act, 1894, so far as the same can be made applicable.
Then comes sub section
(f), which is important for the present purpose, and it is as follows: "An appeal shall lie to the High Court against an award of an arbitrator except in cases where the amount thereof does not exceed an amount prescribed in this behalf by rule made by the Central Government.
" Then we have sub section
(g), which is as follows: " Save as provided in this section and in any rules made thereunder, nothing in any law for the time being in force shall apply to arbitrations under this section.
" On these provisions, the contention on behalf of the Government is that the reference under section 19(1),(b) and the appeal under section 19(1) (f) are all arbitration proceedings, that the decision of the High Court in the appeal is really an award, and that it is, in consequence, not appealable under sections 109 and 110 of the Code of Civil Procedure, as they apply only to judgments, decrees or orders of Courts and not to awards.
Mr. Achbru Ram, learned counsel for the appellant does not dispute that the proceedings under section 19(1) (b) are by way of arbitration, but he contends that when once the matter comes before the High Court by way of appeal under section 19(1)(f), it becomes a civil proceeding under the ordinary jurisdiction of the Court, and that any decision therein is open to appeal under sections 109 and I 10 of the Code of Civil Procedure.
He further contends that even apart from those provisions, the appeal was competent under Cl. 29 of the Letters Patent, and that, 1182 the certificate granted by the High Court is under that provision as well.
Before discussing the authorities cited on either side in support of their respective contentions, it will be useful to state the well_established principles applicable to the determination of the present question.
When parties enter into an agreement to have their dispute settled by arbitration, its effect is to take the lis out of the hands of the ordinary Courts of the land and to entrust it to the decision of what has been termed a private tribunal.
Such an agreement is not hit by section 28 of the Contract Act as being in restraint of legal proceedings, because section 21 of the Specific Relief Act expressly provides that " save as provided by the , no contract to refer present or future differences to arbitration shall be specifically enforced ; but if any person who has made such a contract . and has refused to perform it sues in respect of any subject which he has contracted to refer, the existence of such contract shall bar the suit.
" There is a similar provision in section 28 of the Contract Act which is applicable, where the is not in force.
Where an arbitration is held in pursuance of such an agreement and that results in a decision, that decision takes the place of an adjudication by the ordinary Courts, and the rights of the parties are thereafter regulated by it.
It is true that under the law the Courts have the authority to set aside the award, , made by arbitrators on certain grounds such as that they are on matters not referred to arbitration, or that the arbitrators had misconducted themselves, or that there are errors apparently the face of the award.
But where the award is not open to any such objection, the Court has to pass a decree in terms of the award, and under section 17 of the , an appeal lies against such a decree only on the ground that it is in excess of, or not otherwise in accordance with the award.
In other words, it is the decision of the arbitrator where it is not set aside that operates as the real adjudication binding on the parties, and it is with a view to its enforcement that the, Court 'is authorised to pass a decree in terms thereof.
There is thus a sharp distinction between a 1183 decision which is pronounced by a Court in a cause which it hears on the merits, and one which is given by it in a proceeding for the filing of an award.
The former is a judgment, decree or order rendered in the exercise of its normal jurisdiction as a Civil Court, and that is appealable under the general law as for example, under sections 96, 100, 104, 109 and 110 of the Code of Civil Procedure.
The latter is an adjudication of a private tribunal with the imprimatur of the Court stamped on it, and to the extent that the award is within the terms of the reference, it is final and not appealable.
The position in law is the same when the reference to arbitration is made not under agreement of parties but under provisions of a statute.
The result of those provisions again is to withdraw the dispute from the jurisdiction of the ordinary courts and to refer it for the decision of a private tribunal.
That decision is an award, and stands on the same footing as an award made on reference, under agreement of parties.
It is for this reason that section 46 of the X of 1940 enacts that: " The provisions of this Act, except subsection (1) of section 6 and sections 7, 12, 36 and 37 shall apply to every arbitration under any other enactment for the time being in force, as if the arbitration were pursuant to an arbitration agreement and as if that, other enactment were an arbitration agreement; except in so far as this Act is inconsistent with that, other enactment or with any rules made thereunder.
" Nor does it make any difference in the legal position that the reference under the statute is to a Court as arbitrator.
In that case, the Court hears the matter not as a Civil Court but as persona designata, and its decision will be an award not open to appeal under the ordinary law applicable to decisions of Courts.
A statute, however, might provide for the decision of a dispute by a Court as Court and not as arbitrator, in which ease, its decision will be a decree or order of Court in its ordinary civil jurisdiction, and that will attract the normal procedure governing the decision of that Court, and a right of appeal will be comprehended therein.
The position therefore is that if the 1184 reference is to a Court as persona designata, its decision will not be open to appeal except to the extent that the statute so provides; but that if, on the other hand, it is to a Court as Court, its decision will be appealable under the general law, unless there is something in the statute, which abridges or takes away that incident.
It may be a question whether the reference to a Court under a particular statute is to it as a Court or as persona designata ; but when once it is determined that it is to it as persona designata, there call be no question that its decision is not open to appeal under the ordinary law.
We shall now consider the authorities hearing on the question.
On behalf of the Government, the decisions in Rangoon Botatoung Company vs The Collector, Rangoon (1), The Special Officer, Salsette Building Sites vs Dossabhai Bezonji (2), The Special Officer, Salsette Building Sites vs Dassabhai Bozanji Moti.
wala (3), Manavikraman Tirumalpad vs The Collector of the Nilgris (4) and Secretary of State for India in Council vs Hindusthan Co operative Insurance Society Limited (5) were relied on as supporting the contention that the present appeals are incompetent.
In Rangoon Botatoung Company vs The Collector, Rangoon (1), the facts were that certain properties had been acquired tinder the Land Aequistion Act of 1894, and the Collector had determined the amount of compensation payable to the quondam owners.
On their objection as to the quantum of compensation, the matter was referred to the decision of the Chief Court of Burina.
It was heard by a Bench of two Judges, who determined that a sum of Rs. 13,25,720 was payable as compensation.
Dissatisfied with this decision, the owners preferred an appeal to the Privy Council under the provisions of tile Code of Civil Procedure.
A pre limilary objection was taken to the maintainability of the appeal on the ground that the decision sought to be appealed against was not a judgment of Court but an award and was therefore not appealable.
In giving effect to this objection, the Board observed: " Their Lordships cannot accept the argument or (1) (1912) 39 I.A. 197.
(2) Bom.
(3) (4) Mad.
(5) (193I) L.R. 58 I.A. 259.
1185 suggestion that when once the claimant is admitted to the High Court he has all the rights of an ordinary suitor, including the right to carry an award made in an arbitration as to the value of land taken for public purposes up to this Board as if it were a decree of the High Court made in the course of its ordinary jurisdiction.
" Shortly after this judgment was pronounced, the question arose for determination in The special officer, Salsette Building Sites vs Dossabhai Bezonji (1), whether a decision given by the High Court in appeal under section 54 of the Land Acquisition Act was a judgment within Cl.
39 of the Letters Patent, so as to enable a party to appeal to the Privy Council under that provision.
The applicant sought to distinguish the decision in Rangoon Botatoung Company vs The Collector, Rangoon (2) on the ground that there, the decision sought to be appealed against was that of the Chief Court of Burma, and the question of maintainability fell to be decided on the terms of the, Code of Civil Procedure, whereas in the instant case, the party had a right to appeal to the Privy Council under Cl.
39 of the Letters Patent.
In rejecting this contention, the High Court referred to the observations in Rangoon Botatoung Company 's Case (2) already quoted, and observed " This passage shows that it is a mistake to suppose that the award made in such a case by the High Court is a decree within the ordinary jurisdiction to which the Civil Procedure (" 'ode refers; and it seems to me it would be equally erroneous to regard such an award as a final judgment or order within the meaning of clause 39 of the Letters Patent.
" Leave to appeal to the Privy Council was accordingly refused.
There was an application to the Privy Council for special leave in this matter, but that was also rejected, and the report of the proceedings before the Privy Council in The special Officer, salsette Building Sites vs Dassabhai Basanji Motiwala (3)shows that the interpretation put by the Bombay High Court in The Special officer, salsette Building sites vs Dossabhai Bezonji (1) was accepted as correct.
In Manavikraman Tirumalpad vs The Collector of the (1) 130m 506.
(2) (1912) L.R. 39 I.A. 197.
(3) (1913) 17 C.W.N. 42I. 1186 Niligris(1) the question was whether a judgment of the High Court passed in an appeal under the Land Acquisition Act was a judgment within the meaning of Cl. 15 of the Letters Patent so as to entitle a party to file a further appeal to the High Court under that provision, and it was held, on a consideration of the authorities above referred to, that it was not.
Secretary of State for India in Council vs Hindusthan Cooperative Insurance Society Limited (2) is a decision under the Calcutta Improvement Act, 1911.
Under that Act, there is a tribunal constituted for determining the amount of compensation payable on acquisition of land, and under the Calcutta Improvement (Appeals) Act, 1911, an appeal is provided in certain cases from the decision of the tribunal to the Calcutta High Court.
The point that arose for determination was whether the decision given by the High Court in appeal under this provision was open to further appeal to the Privy Council.
In answering it ill the negative, the Privy Council observed that in view of the decision in Rangoon Botatoung Company vs The Collector, Rangoon (3), there could be no right of appeal against the decision of the High Court.
It further held that this conclusion was not affected by the amendment of the Land Acquisition Act, 1921, providing for an appeal to the Privy Council against the decision of the High Court under section 54 of that Act, as that amendment could not be held to have been incorporated by reference in the Calcutta Improve ment Act, 1911.
The law as laid down in the above authorities may thus be summed up: It is not every decision given by a Court that could be said to be a judgment, decree or order within the provisions of the Code of Civil Procedure or the Letters Patent.
Whether it is so or not will depend on whether tile proceeding in which it was given came before tile Court in its normal civil jurisdiction, or de hors it as a persona designata.
Where the dispute is referred to the Court for determination by way of arbitration as in Rangoon Botatoung Company vs The Collector, Rangoon (3), or where it comes (1) Mad.
(2) (1931) L.R. 58 I.A. 259.
(3) (1912) L.R. 39 I.A. 197.
1187 by way of appeal against what is statedly an award as in ' The Special Officer, Salsette Building Sites vs Dossabhai Bezonji (1), Manavikraman Tirumalpad vs The Collector of the Nilgris (2) and Secretary of State for India in Council vs Hindusthan Co operative Insurance Society Limited (3) then the decision is not a judgment, decree or order under either the Code of Civil Procedure or the Letters Patent.
Now, Mr. Achhru Ram contests this last proposition, and relies strongly on the decision in National Telephone Company Limited vs Postmaster General (4), as supporting his position.
There, the question arose on the construction of certain provisions of the Telegraph (Arbitration) Act, .1909.
Section I thereof enacted that certain differences between the Postmaster General and any other person should, if the parties agreed, be referred for decision to the Railway and Canal Commission constituted under an Act of 1888 ; and section 2 provided that all enquiries under the reference should be conducted by the Commission in accordance with the Act of 1888.
Pursuant to a reference under these provisions, the Railway and Canal Commission had determined certain disputes, and the question was whether its decision was open to appeal.
Under the Act of 1888, the Commission was constituted a Court of record and an appeal lay against its decision to the Court of Appeal except on questions of fact and locus standi.
It was held by the House of Lords that as under the Act of 1888 the reference to the Commission was to it as a Court, the reference under the Telegraph (Arbitration) Act, 1909, to that tribunal must also be held to be to it as a Court and not as a body of arbitrators, and an appeal against its decision was therefore competent.
The position was thus stated by Viscount Haldane L. C.: " When a question is stated to be referred to an established Court without more, it, iii my opinion, imports that the ordinary incidents of the procedure of that Court are to attach, and also that any general right of appeal from its decision likewise attaches.
" (1) Bom.
(2) Mad.
(3) (1931) L.R. 58 I.A. 259.
(4) 151 1188 It may be noted that it was the use of the word " arbitration " in the title to the Act that furnished the ground for the contention that the proceedings before the Commission were of the nature of arbitration.
But that description, however, could not alter the true character of the reference under the Act, which was in terms to the Commission as a Court of record.
In fact, there was no element of arbitration in the proceedings.
It is true that under that Act there could be a reference only by agreement of parties.
That, however, could not make any difference in the character of the proceedings before the Commission, as a statute can provide for the jurisdiction of the Court being invoked as a Court on the agreement of parties, as for example, on a case stated under Order 36 of the Code of Civil Procedure.
There is thus nothing in National Telephone Company Limited vs Postmaster General (1), which can be said to conflict with the law as laid down in Rangoon Botatoung Company vs The Collector, Rangoon.
(2) that when the reference is to a Court as arbitrator, its decision is not open to appeal.
The distinction between the two classes of cases, where the reference is to court as court and where the reference is to it as arbitrator, was again pointed out by the Privy Council in Secretary of State for India vs Chelikani Rama Rao (3).
There, the question arose with reference to certain provisions of the Madras Forest Act, 1882.
That Act provides that claims to lands which are.
sought to be declared reserved forests by the Government are to be enquired into by the Forest Settlement Officer, and an appeal is provided against his decision to the District Court.
The point for decision was whether the decision of the District Court was open to further appeal under the provisions of the Code of Civil Procedure.
The contention was that the reference to the District Court under the Act was to it not as a Court but as arbitrator, and that therefore its decision was not open to appeal on the principle laid down in Rangoon Botatoung Company 's Case In repelling this contention, (1) (2) (1912) L.R. 39 I.A. 197.
(3) (1916) L.R. 43 I.A, 192.
1189 Lord Shaw observed that under the Land Acquisition Act the proceedings were ,from beginning to end ostensibly and actually arbitration ' proceedings ", but that the proceedings under the Forest Act were essentially different in character.
" The claim was " he said, " the assertion of a legal right to possession of and property in land; and if the ordinary Courts of the country are seized of a dispute of that character, it would require, in the opinion of the Board, a specific limitation to exclude the ordinary incidents of litigation" The principles being thus well settled, we have to see in the present case whether an appeal to the High Court under section 19(1)(f) of the Act comes before it as a Court or as arbitrator.
Under section 19(1)(b), the reference is admittedly to an arbitrator.
He need not even be a Judge of a Court.
It is sufficient that he is qualified to be appointed a Judge of the High Court.
And under the law, no appeal would have lain to the High Court against the decision of such an arbitrator.
Thus, the provision for appeal to the High Court under section 19(1)(f) can only be construed as a reference to it as an authority designated and not as a Court.
The fact that, in the present case, the reference was to a District Judge would not affect the position.
Then again, the decision of the arbitrator appointed under section 19(1)(b) is expressly referred to in section 19(1)(f) as an award.
Now, an appeal is essentially a continuation of the original proceedings, and if the proceedings under section 19(1)(b) are arbitration proceedings, it is difficult to see how their character can suffer a change, when they are brought up before an appellate tribunal.
The decisions in The Special Officer, Salsette Building Sites vs Dossabhai Bezonji (1), The Special Officer, Salsette Building Sites vs Dassabhai Basanji Motiwala (2), Manavikraman Tirumalpad vs The Collector of the Nilgris (3) and Secretary of State for India in Council vs Hindusthan Co operative Insurance Society Limited (4) proceed all on the view that an appeal against an award continues to be part of, and a (1) Bom.
(2) (3) Mad.
(5) (1931) L.R. 58 I.A. 259.
1190 further stage of the original arbitration proceedings.
ln our view, a proceeding which is at the inception an arbitration proceeding must retain its character :as arbitration, even when it is taken up in appeal, where that is provided by the statute.
The question whether an appeal under section 19(1)(f) is of the nature of arbitration proceedings, and whether the decision given therein is an award came up directly for consideration in Kollegal Silk Filatures Ltd. vs Province of Madras (1) before a Bench of the Madras High Court consisting of Patanjali Sastri and Chandrasekhara Aiyar JJ.
and it was held by them that the word "arbitration" in section 19(1)(g) of the Act covered the entire proceedings from their com mencement before the arbitrator to their termination in the High Court on appeal where an appeal had been preferred, and the High Court in hearing and deciding the appeal acted essentially as an arbitration tribunal.
We agree with this decision that the appeal under section 19(1) (f) is an arbitration proceeding.
We must therefore hold that the decision of the High Court in the appeal under that provision is not a judgment, decree or order either within sections 109 and I 10 of the Code of Civil Procedure or cl. 29 of the Letters Patent of the Nagpur High Court, which corresponds to cl. 39 of the Letters Patent of the Calcutta, Madras and Bombay High Courts, and that, therefore, the present appeals are incompetent.
Mr. Achbru Ram finally contended that even if no appeal lay under sections 109 and 110 of the Code of Civil Procedure or cl. 29 of the Letters Patent, it was, nevertheless within the competence of this Court to grant leave to appeal, and that this was a fit case for the grant of such leave.
He argued that the Privy Council had the power to grant leave to appeal against the decision of the Nagpur High Court in the appeal under section 19(1) (f), that under section 3(a)(ii) of the Federal Court (En. largement of Jurisdiction) Act I of 1948 that power became vested in the Federal Court, and under article 135 it has devolved on this Court, and that in the exercise of that power we should grant leave to appeal against (1) I.L.R. 1191 the decision now under challenge.
it is sufficient answer to this contention that the Federal Court had power under section 3(a) (ii) to grant leave only when the proposed appeal was against a judgment, and that, under the definition in section 2(b), meant a judgment, decree or order of a High Court in a civil case; and that on our conclusion that the decision in the appeal under section 19(1) (f) is not a judgment, decree or order but an award, no order could have been passed granting special leave under section 3(a) (ii).
In the result, we dismiss both the appeals as incompetent.
The parties will bear their own costs in this Court.
Appeals dismissed.
| 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.
| 619.txt |
: Criminal Appeal No. 36 of 1979.
From, the judgement and Order dated 17.11.1978 of the Madhya Pradesh High Court in Criminal Appeal No. 477 of 1973.
A.N. Mulla, Dhruv Mehta, Aman Vachher and S.K. Mehta for the Appellants.
B.Y. Kulkarni and Uma Nath Singh for Respondents.
The Judgment of the Court was delivered by section RATANAVEL PANDIAN, J.
The two appellants, namely, Chandra Mohan Tiwari and Ram Pal Singh Sengar have filed this criminal appeal challenging the correctness and legality of the judgment and order dated 17th of November 1978 of the High Court of Madhya Pradesh at Jabalpur rendered in Criminal Appeal No. 477 of 1973, whereby the High Court has allowed the appeal preferred by the State by setting aside the order of acquittal passed by the Trial Court and convicted the first appellant under Section 302 IPC and the second appellant under Section 302 read with 34 IPC and sentenced each of them to imprisonment for life.
The matrix of the case which has led to the filing of this appeal briefly stated is as follow: PW 6 Ahiwaransingh was at the material time, a compounder in the Veterinary Hospital, Budhni.
He was residing in one of the quarters situated in the compound of the Veterinary Hospital.
On the opposite side of compound there are Government quarters.
One of which was occupied by appellant Ram Pal Singh (Appellant No. 2), who was serving as Gram Sevak in the Block Development office.
He is married and distantly related to PW 6.
The first appellant Chandra Mohan Tiwari was wielding high influence in that locality and was well known to the members of the family of PW 6.
It appears that he contested the election to the Legislative Assembly from Budhni constituency.
The members of the family of PW 6 included PW 5, the Deceased Saroj aged about 16 years, who are PW 6 's wife and eldest daughter respectively.
PW 6 had settled the marriage of his daughter Saroj at Dahiyapur, Etawah District (U.P.).
On 24.5.1970 he along with his deceased daughter, Saroj, left Budhni for Bhopal enroute to Dahiyapur.
At Bhopal he stayed with his relative by name Arjun Singh.
On 25.5.1970 at 318 about 11.00 A.M. PW 6 had gone to the market leaving Saroj alone in the house.
According to the prosecution, the second Appellant came to the house of PW 6 and told Saroj that her father wanted her presence for selection of clothes.
Saroj believing the words of second appellant and without entertaining any doubt on the representation of the second appellant accompanied him in a jeep which was driven by the first appellant.
Then she was taken to a house where she was wrongfully confined for about two and a half months.
During this period both the appellants are stated to have forcibly committed sexual intercourse with Saroj.
PW 6 lost his nerve on the sudden disappearance of his daughter, but he instead of lodging a report with the police, which evidently he thought would adversely affect the future life of his daughter and her impending marriage and also bring the family in disrepute, unsuccessfully made a frantic and intensive search for his daughter.
Then he lodged a report exhibit P/10 on 3.8.1970 at the Police Station of Mangalwara, alleging that he had reason to believe that Saroj might have been kidnapped by both the appellants.
The police did not take any prompt action on the report.
By that time, the appellants, on coming to know of the lodging of the report, devised a plan fore stall any action being taken against them.
The second appellant took Saroj in a taxi to Hoshangabad and left her near the police station with an instruction to lodge a false complaint at the police station that she was kidnapped from Bhopal on 25.5.1970 by one Ramnath and Indrasen and was wrongfully confined by them.
She was also threatened that the appellants would be keeping a watch over her and that in case she divulged the truth, serious consequences would follow.
As instructed by the second appellant, Saroj lodged a complaint exhibit D/15 on 9.8.1970 at Hoshangabad Police Station.
However, when she was taken to the Police Station, Mangalwara in connection with the report, lodged by her father (PW 6) she told the entire truth to the police and her parents.
Even then no progress was made in the investigation on the report of PW 6 at Mangalwara.
So PW 6 made a fervent plea to the then Chief Minister of the State and requested him to take action in the matter.
It was only thereafter, on the instructions of the higher authorities wheels of investigation started moving on.
The police after completing the investigation filed the charge sheet before the Additional District Magistrate (Judicial) Bhopal against both these two appellants for offences punishable under Section 363, 366 and 376 IPC.
The victim Saroj, when examined before the Magistrate on 12.7.1971 stated in her statement exhibit P/25 that she was kidnapped by both the appellants and wrongfully confined and also subjected to sexual inter course and that she lodged the false report exhibit D/15 at the Hoshangabad police station under duress and as instructed by the second appellant 319 herein.
The Magistrate discharged the first appellant, and committed the second appellant alone to take his trial.
On a revision preferred against the order of discharge of the first appellant both the appellants were put up for trial before the third Additional Sessions Judge, Bhopal in Sessions Case Nos. 66 and 95 of 1972 for offences punishable under sections 363, 366 and 376 IPC.
During the said trial both appellants were on bail.
The case was fixed for recording evidence from 21.8.1972 on which date the victim Saroj was to be examined as a prosecution witness.
While the matter stood thus, according to the prosecution, on 20.6.72 Saroj lodged a report exhibit P/7 at Budhni Police Station complaining that the second appellant had forcibly entered into the backyard of her house, but took to his heels when she raised a hue and cry.
In the above background, the present occurrence had occurred on the intervening night of 20/21st August 1972.
The prosecution case is that on that fateful night the first appellant armed with a pistol and the second appellant with a `farsa ' entered into the house of PW 6 through the main door which was kept ajar by PW 5 who went out of the house of answer call of nature inside the compound and that the first appellant fired a shot which hit on the chest of the victim Saroj, who was then in her bed and caused her instantaneous death.
Both PWs 5 and 6 identified the appellants as the assailants.
PW 6 tried to chase the appellants, but he stumbled near the gate of the compound and could not apprehend them.
The distress cries of PWs 5 and 6 attracted the neighbours to the scene.
PW 6 narrated the incident to PWs 1 and 2 by mentioning the name of the appellants as the assailants and requested PW 1 to lodge a report at the police station.
Accordingly, PW 1 lodged the First Information Report exhibit P/1 at 1.30 A.M. PW 18, the investigating officer took up the investigation during the course of which he inspected the scene of the occurrence, held in quest and then sent dead body to the hospital for necropsy.
On the next day i.e. on 21.8.72 both the appellants were arrested when they had come to attend the hearing of the case of kidnaping and rape.
After completing the investigation both the appellants were put up for trial.
The Sessions Judge of Indore found both appellants not guilty of the offence of murder and consequently acquitted them.
Feeling aggrieved by the judgment of the Trial Court, the State preferred the appeal before the High Court, which for the detailed discussion made in its judgment held that the prosecution has satisfactorily established the guilt of both appellants beyond all reasonable doubts, allowed the appeal by setting aside the judgment of the Trial Court acquitting the appellants and convicted the first appellant under section 302 and the second appellant under Section 302 read with Section 34 IPC and sentenced each of them to undergo imprisonment for life.
Hence the present appeal is preferred by the appellants on being aggrieved by the impugned judgment of the High Court.
320 Mr. A.N. Mulla, the learned Sr. Counsel appearing on behalf of the appellants after taking us in detail through the judgment of the courts below, evidence of the prosecution as well as the defence witnesses and in particular exhibit D/15, the First Information Report dated 9.8.70 relating to the offence of kidnaping and rape registered on the basis of the complaint given by the deceased Saroj at Hoshangabad Police Station, vehemently submitted that the prosecution has miserably failed to prove the motive for the occurrence.
The learned counsel perfervidly advanced his argument inter alia contending that the High Court has erred in reversing the judgment of the Trial Court based on well reasoned and considered findings of fact, ignoring the settled principles of law as laid down by this Court as regards the scope of interference of the High Court in an appeal preferred against an order of acquittal, that the evidence of PWs 5 and 6 who had developed rancur and were inimically disposed towards the appellants ought not to have been accepted and implicitly relied upon as their testimony is highly tainted with interestedness, that the contents of exhibit D 15 whereby the deceased had implicated Ram Nath Singh and one Indra Sen as assailants of kidnaping belie the version of PWs 5 and 6 and negative the prosecution story as far as the motive is concerned, that the evidence of PWs 5 and 6 suffers from the vice of discrepancies and incongruities, that the non recovery of any `lota ' (a small vessel) from the place where PW 5 was easing as well as the non marking of the place where the said vessel was kept in the site plan falsify the evidence of PW 5 that she opened the door and went near the compound wall to answer call of nature , that the recovery of two bullets from the scene is an indication of the fact that there should have been two shots, that there was delay in laying the complaint, that the unchallenged claim of the appellants that they were in Bhopal clearly shows that the appellants would not have come to Budhni from Bhopal that too at the odd hours with an anticipation that the door of the scene house would be kept open.
The learned counsel further submits that had the appellants come to the scene house to assassinate the victim Saroj, they would not have exposed themselves without covering their faces so that their identity could not be established and that the life of the girl might have been put to an end by inmates of the said house, particularly her father on account of some conspiracy since the victim girl wanted to have the case of kidnaping and rape not to be proceeded with.
Before adverting to the contentions, urged by the learned counsel, we would like to briefly state the legal position regarding the right of appeal of an accused person sentenced to imprisonment for life by the High Court after reversing the order of acquittal and the scope of interference in such appeal by this court.
The present appeal is under Section 379 321 of the Code of Criminal Procedure of 1973 (hereinafter referred to as the `code ') and Section 2(a) of the of 1970 (hereinafter referred to as `the Act of 1970 ') Section 379 of the Code contemplates that where the High Court has, on appeal, reversed an order or acquittal of an accused person and convicted him and sentenced him to death or to imprisonment for life or to imprisonment for the term of ten years of more, that person may appeal to the Supreme Court.
This section in newly introduced in the Code of 1973 (Act 2 of 1974) on the recommendation of the Law Commission of India in its 41st Report.
Article 134 (1) (a) of the Constitution envisages that an appeal shall lie to the Supreme Court from any judgment, final order or sentence in a criminal proceeding of the High Court in the territory of India if the High Court has on appeal reversed an order of acquittal of an accused person and sentenced him to death.
To say in other words under Article 134 (1) (a) the absolute right of appeal to the Supreme Court is restricted only to cases where the High Court reverses an order of acquittal passed by the Trial Court and awards the sentence of death.
The right of appeal is also extended under Article 134 (1) (b) to cases where the High Court has withdrawn for trial before itself any case from any court subordinate to its authority and has in such trial convicted the accused person and sentenced him to death, which type of cases are rare and infrequent occurrence.
Under clause (c) of the above said Article an appeal lies to the Supreme Court on a certificate under Article 134 A by the High Court certifying that the case is a fit one for appeal to the Supreme Court but, of course, subject to the proviso to Article 134 (1).
In this connection, it is pertinent to note that the Government of Madras (as then called) expressed its view that the limited right of appeal now conferred in case of the persons sentenced to death by clauses (a) and (b) of Article 134 (1) should be enlarged and that in all cases in which the accused persons are sentenced to death, there should be a right of appeal to the Supreme Court without the need of a certificate from the High Court.
This view was rejected by the Law Commission of India in its 14th Report stating that even in cases not covered by clauses (a) and (b) of Article 134 (1) the High Court has the power to certify the case as a fit one for appeal to the Supreme Court under Clause (c) and further there is also the safeguard provided by the wide powers of the Supreme Court under Article 136 which confers a discretionary power on the Court to interfere by granting special leave to appeal in suitable cases including cases where the High court has refused to grant Certificate for appeal under Article 134 (A).
See the decision of the constitution Bench in Tarachand vs State of Maharashtra ; = ; and the later decision in Krishan and others vs State of Maharashtra.
322 To avoid proliferation we are not citing all the decisions on this aspect.
The reason, given by the Law Commission in its 14th Reports (Volume I at page 52) for rejecting the view of the Government of Madras is as follows: "We are not inclined to accept this view.
For over a century such cases have been dealt with by the High Courts subject to the superintendence of the Privy Council under its special leave jurisdiction and there is no reason why the High Courts should not continue to deal with such cases in the same manner.
" In 1968 a Private Member 's Bill was introduced in Parliament which proposed that the limited jurisdiction of the Supreme Court contemplated under Article 134 (1) (a) and (b) should be enlarged to cover cases where the High Court has, after reversing an order of acquittal, sentenced a person to imprisonment for life or for 10 years or more.
Be that as it may in its 41 st Report, the Law Commission expressed its view that the limitation of the right of appeal under Article 134 (1) (a) and (b) applies only to cases of death but not to cases of imprisonment for life awarded by the High Court or appeal against acquittal and that limitation "is too stringent and not easily justifiable and that the convicted persons ought to have a right of appeal in such cases".
The Law Commission, at the same time, was not in favour of extending this right of appeal in which the High Court has on appeal against acquittal sentenced a person to imprisonment for a term of 10 years or more, and proposed a new Section 417 B restricting such appeal to the Supreme Court only in cases of sentence of imprisonment for life.
While so, the Joint Select Committee by its report dated 4th December, 1972 drafted clause 379 (original clause 389) of the Code of Criminal Procedure Bill 1970 (page xxvi) which reads thus: "The amendment has been made to bring the provision of the clause in line with the provisions of the .
Vide the 14th Report of the Law Commission (at page 52) and the 41st Report of the Law Commission (paragraphs 31.65 to 31.69 at pages 281 283).
Section 2 of the Act of 1970 reads thus : 2.
Enlarged appellate jurisdiction of Supreme Court in regard to criminal matters.
Without prejudice to the powers conferred on the Supreme Court by clause (1) of article 134 of the Constitution, an appeal shall lie to the Supreme Court from any judgment, final order of sentence in a criminal proceeding 323 of a High Court in the territory of India if the High Court (a) has an appeal reversed an order of acquittal of an accused person and sentenced him to imprisonment for life or to imprisonment for a period of not less than ten years ; (b) has withdrawn for trial before itself any case from any court subordinate to its authority and has in such trial convicted the accused person and sentenced him to imprisonment for life or to imprisonment for a period of not less than ten years.
" The right of appeal under the above Section to the Supreme Court is an addition to those provided under Article 134 (1) of the Constitution.
In cases which do not come under clauses (a) and (b) of Article 134(1) or under the Act of 1970 or Section 379 of the Code an appeal does not lie as of right to the Supreme Court against any order of conviction by the High Court.
In such cases, appeal will lie only if a certificate is granted by the High Court under sub clause (c) of Article 134 (1) certifying that the case is a fit one for appeal to the Supreme Court or by way of special leave under Article 136 when the certificate is refused by the High Court.
See Mahebub Beg and others vs State of Maharashtra, (S.C.) CR.
A 120/64 dated 19.3.1965 reported in and Babu vs State of U.P. ; = ; The resultant position of law from the conjoined reading of the above provisions of the Constitution, the Act of 1970 and the Code of Criminal Procedure is as follows: (1) Under sub clause (a) of Article 134(1) an appeal lies as of right to the Supreme Court in a case where the High Court has reversed an order of acquittal of an accused person and sentenced him to death.
(2) Under sub clause (b) of Article 134 (1) an appeal lies as of right to the Supreme Court in a case where the High Court has withdrawn the case for trial before itself from any court subordinate to its authority and sentenced him to death.
(3) Under Section 2 (a) of the Act of 1970 an appeal lies as of right to the Supreme Court in a case where the High Court has reversed an order of acquittal of an accused person and sentenced him to imprisonment for life or imprisonment for a period of not less then 10 years 324 (4) Under Section 2 (b) of the Act of 1970 an appeal lies as of right to the Supreme Court in a case where the High Court has withdrawn for trial before itself any case from any court subordinate to its authority and has in such trial convicted the accused person and sentenced him to imprisonment for life or imprisonment for a period of not less than 10 years.
(5) Under Section 379 of the Code, which is now newly introduced in line with the Constitutional provisions of Article 134 (1) (a) and (b) and with Section 2 of the Act of 1970, an appeal lies as of right to the Supreme Court in a case where the High Court has on appeal reversed an order of acquittal of an accused person and convicted and sentenced him either to death or to imprisonment for life or imprisonment for a term of 10 years or more.
(6) In cases not covered by Article 134 (1) (a) and (b) or Section 2 (a) and (b) of the Act of 1970 or by Section 379 of the Code of Criminal Procedure an appeal will lie only either on a certificate granted by the High Court under Article 134 (1) (c) or by grant of special leave to appeal by the Supreme Court under Article 136.
The right of appeal given under Section 379 of the Code is in line with Article 134 (1) (a) and (b) and Section 2 (a) and (b) of the Act of 1970.
This Court in Podda Narayana and others vs State of Andhra Pradesh ; = [1975] (Supp) SCR 8 had an occasion to examine the scope of Section 2 of the Act of 1970 and held thus : "As the High Court had awarded the sentence of life imprisonment after reversing the order of acquittal passed by the Additional Sessions Judge the appeal to the Supreme Court lies even on facts and as a matter of right under Section 2 of the ".
M.H. Beg, J. as he then was, speaking for the Bench in Ram Kumar Pande vs The State of Madhya Pradesh, ; = ; observed as follow. "Strictly speaking, no certificate of the High Court is required for such an appeal where an acquittal has been converted into a conviction under section 302/34 I.P.C. and a sentence of life imprisonment imposed upon an accused person.
The appeal in, such a case, lies as a matter of right to this Court under the Act of 1970.
" 325 This Court in Rajendra Prasad vs State of Bihar, ; = ; while disposing of an appeal preferred under Section 2(a) of the Act of 1970 laid down the following dictum: "Thus when two courts, have come to a different conclusion on the same evidence, we had ourselves to go through the entire evidence carefully in order to see whether the appreciation of the evidence by the Sessions Judge was so unreasonable and unrealistic as to entitle the High Court to interfere with the same.
" In Kishore Singh and another vs The State of Madhya Pradesh, AIR 1977 S.C. 2267 = ; the following view similar to the one taken in Ram Kumar Pande 's case was reaffirmed and it read thus : "The High Court is not right in holding that a certificate is necessary under Article 134 (1) (c) of the Constitution if the appellants have a right of appeal under Section 2 of the Act." In Ram Kumar Pande 's case, the jurisdiction of the Supreme Court to interfere in a judgment of the High Court reversing the acquittal of the Trial Court and convicting the accused person and sentencing him to life imprisonment, in respect of which an appeal to the Supreme Court lies as of right was examined and the following maxim has been laid down.
"The well settled rule of practice in a case of an appeal against an acquittal is that the appellate Court should not interfere with the acquittal merely because it can take one of the two reasonably possible views which favours conviction.
But, if the view of the Trial Court is not reasonable sustainable, on the evidence on record, the Appellate Court will interfere with an acquittal.
If the Appellate Court sets aside an acquittal and convicts, we have to be satisfied, after examining the prosecution and defence case and the crucial points emerging for decisions from the facts of the case, that the view taken by the Trial Court, on evidence on record, is at least as acceptable as the one taken by the High Court, before we could interfere with the High Court 's judgment.
" Kailasam, J. speaking for the Bench in Bhajan Singh and others vs State of Punjab, ; dealing with the scope of the appeal before the Supreme Court filed under Section 2 (a) of the Act of 1970 observed thus : "as a court of appeal this Court has got to go into all the 326 questions of fact and law and decide the case on its merit.
After a right of appeal has been provided under the said section, the question, whether the High Court interfered on sufficient ground or not, will not be material, as this Court has to decide the case on its own merits.
The decisions, regarding the scope of appeal against an acquittal, the powers of the High Court to interfere in an appeal against acquittal by the State, which may be relevant when the Supreme Court is acting under Article 136, are not material in deciding an appeal by a person, whose acquittal has been set aside by the High Court, and who is entitled to prefer an appeal to this Court.
" In Dinanath Singh & others vs State of Bihar, AIR 1980 S.C. 1199 = , an appeal under Section 2 (a) of the Act of 1970 was directed against the judgement of the Patna High Court convicting the appellants therein under Section 302 read with 34 IPC and sentencing them to imprisonment for life by reversing the order of acquittal of the Trial Court.
While disposing the appeal Fazal Ali.
J. speaking for the Bench pointed out thus: "It is now well settled by the long course of decisions of this Court that where the view taken by the trial court in acquitting the accused is reasonably possible, even if the High Court were to take a different view on the evidence, that is no ground for reversing the order of acquittal." This court while disposing an appeal filed under Section 379 of the Code in Pattipati Venkaiah vs State of Andhra Pradesh, affirmed the order of conviction passed by the High Court on the ground that the judgment of the Trial court acquitting the accused was extremely perverse and no other reasonable view was possible than the guilt of the accused.
Reference also may be had to Sita Ram and Others vs State of U.P. [1979] 2 SCC 656 and Rajput Ruda Meha and Others vs State of Gujarat, This Court in a catena of decisions have dealt with the power of the High Court to review evidence and reverse order of acquittal and laid down the guidelines in exercising that power.
Though it is not necessary for us in the present case to deal with all those decisions, the following may be referred to : 327 Roop Singh and others vs State of Punjab. ; = ; ; Dargahi and others vs State of U.P., AIR 1973 S.C. 2695 = ; Barati vs State of U.P., AIR 1974 S.C.839 = ; ; G.B. Patel vs State of Maharashtra; , = ; ; and Kanwali vs State of U.P.
Having regard to the above principle of law, we shall now carefully scrutinize the entire evidence adduced by the prosecution and examine the contentions advanced by Mr. Mulla and decide the case on its merit, independent of the views expressed by the High Court in its impugned judgment : Motive for the murder: There is overwhelming evidence both oral and documentary in clearly establishing a strong motive for the appellants/accused to put an end to the life of the deceased Saroj, who when examined before the Magistrate on 12.7.1991 had deposed under exhibit P/25 that she was kidnapped by both the appellants, wrongfully confined and subjected to sexual intercourse, though she initially lodged a report under exhibit D 15 on 9.8.70 at the Hoshangabad police station against some other persons exculpating these two appellants.
Earlier to her examination before the Magistrate the deceased lodged a report exhibit P 7 on 20.6.1972 at Budhni police station complaining that the second appellant had forcibly entered into the backyard of her house and on her raising a cry he took to his heels.
The trial of the case against both the appellants before the Additional Sessions Judge, Bhopal in Sessions Case Nos. 66 and 95 of 1972 under Sections 363, 366 and 376 IPC was fixed for recording the evidence of the victim in that case, namely, the deceased herein from 21.8.1972.
Both the appellants were on bail in the case of kidnaping and rape during the period of the occurrence in question which occurred on the intervening night of 20/21st August 1972.
The learned counsel for the appellants has submitted that PWs 5 and 6 had sufficient motive to implicate both the appellants in this heinous crime of murder as these two appellants according to both PWs had spoiled the future career of their daughter, deceased Saroj by kidnaping and committing rape on her even if the identity of the real assailant/assailants was or were not known and further there was every possibility of PW 6 falsely implicating these two appellants on strong suspicion.
As stated by Fazal Ali, J. in State of Punjab vs Pritam Singh, "when the motive was equally balanced, the Court had to look to surrounding circumstances in order to find out the truth.
" 328 This is not a case solely based on circumstantial evidence, but on the other hand there are two eye witnesses to the occurrence, namely, PWs 5 and 6.
The several impelling circumstances attending the case namely, the prior incident of kidnaping and rape, the conduct of the deceased Saroj in giving her statement under exhibit P. 25 supporting the case of the prosecution registered on the complaint given by PW 1 at the instance of PW 6, the lodging of the complaint under exhibit P 7 by Saroj on 20.6.72 against the second appellant and lastly the posting of the case for recording the evidence of Saroj on 21.8.72 when taken in conjuction with the evidence of PWs 5 and 6, unevasively and unerringly show that these two appellants had strong motive to snap the life thread of the victim so that she could not give evidence on the next day in the case of kidnapping and rape.
The contents of exhibit D 15 cannot be said to have whittled down the veracity of the prosecution case as regards the motive for the occurrence.
On the other hand, the subsequent statement made by the deceased under, the exhibit P/25 explaining under what circumstances she was forced to give exhibit D 15 would also serve as a corroborating piece of evidence in establishing the motive for the occurrence.
Ocular Testimony : As per the prosecution, due to the above motive the appellants have resorted in perpetrating this dastardly and heinous crime, PWs 5 and 6 though the parents of the victim, are the natural and probable eye witnesses as the incident had occurred in the odd hours inside their house wherein these two witnesses and their 4 daughters including the deceased Saroj were the inmates.
According to these two witnesses by about 12 or 12.30 mid night PW 5 went out of the house by opening the main door to answer call of nature within the compound.
Besides moon light, there was electric light within the compound.
Added to that there was also electric light burning in the residential quarter of Doctor Sahib shedding light inside the compound of the scene house.
PW 5 sighting the two appellants yelled out.
She found the appellant Chandra Mohan Tiwari having a small gun and the second appellant Rampal Singh being armed with a farsa.
On hearing the cry of PW 5, Saroj woke up.
PW 6 who had earlier been awakened by his wife (PW 5) saw both the appellants entering into his house with their respective weapons.
The deceased Saroj on seeing the two appellants hardly uttered `Babaji '.
Suddenly the first appellants fired a shot which hit Saroj.
On receipt of the injury Saroj fell down on her cot.
Thereafter both the appellants fled away.
PW 5 witnessed both the appellants entering into the room and heard the sound of a gun shot and the 329 appellants thereafter running out of the house.
While PW 5 yelled out, PW 6 ran after the appellants up to the compound shouting that the appellants had fired a gun shot at Saroj.
On coming out of the compound, PW 6 fell down.
PWs 1, 2 and others who rushed to the scene on hearing the shrieks and shouts of PWs 5 and 6 lifted PW 6 and brought him inside the house.
PWs 1, 2 and others asked PW 6 as to what had happened.
PW 6 told them that the first appellant had fired a shot at his daughter Saroj and thereafter both the appellants had fled away from the scene.
The victim Saroj by that time was struggling for breathing and gasping.
PW 1 has testified to the fact that he arrived at the scene on hearing the shouting of PW 6 "killed, killed ' and found PW 6 lying down outside the main gate of his compound, that PW 1 and others lifted PW 6 and brought him inside the house, that on being asked PW 6 informed PW 1 and others that Sengar and "Tiwari (referring to both appellants) had shot at his daughter and that PW 6 requested him to lay a complaint at Budhni Police Station.
The Trial Court for the reasons given in its judgment observed that the evidence of PW 5 as regards to the identity of the appellants is "totally unreliable" and that of PW 6 appears to be "absurd and fantastic" and finally concluded thus: ". .
I find the two accused persons had no motive to perpetrate the crime in question, that one Gungasingh and possibly the father of the girl Ahivaransingh might have had stronger motive for perpetrating the murder, that it was impossible for the accused persons to have been present at Budhni at 12.30 that night and that it is most likely that they have been falsely implicated in the murder by the political rivals of the accused Chandra Mohan Tiwari and with the motive of preventing the accused Ram Pal Singh over getting married to Saroj." The entire prosecution as indicated ibid mainly rests on the evidence of PWs 5 and 6 who are the unfortunate parents of the victim and who speak about the motive of the occurrence and give a full detailed account of the entire incident.
In addition to the ocular testimony of PWs 5 and 6 the prosecution also relies upon the evidence of PWs 1 and 2, who came to the scene spot immediately after the occurrence and learnt from PWs 5 and 6 that the appellants were the perpetrators of the crime.
No doubt, it is true that the evidence of PWs 5 and 6 is that of the interested party in that both of them are the parents of the victim and that they had animus towards the appellants.
As dexterously emphasised by the 330 Supreme Court on many occasions that interested witnesses are not necessarily false witnesses though the fact that those witnesses have personal interest of stake in the matter must put the Court on its guard, that the evidence of such witnesses must be subjected to close scrutiny and the Court must assess the testimony of each important witness and indicate the reasons for accepting or rejecting it and that no evidence should be at once disregarded simply because it came from interested parties.
Vide Siya Ram Rai vs State of Bihar, ; Sarwan Singh vs State of Punjab, ; Birbal vs Kedar, AIR 1977 S.C.1 = ; ; Gopal Singh vs State of U.P. AIR 1979 S.C.1822 = ; Hari Obulla Reddy & Others vs State of Andhra Pradesh, [1981]3 SCC 675; and Anvaruddin & Ors.
vs Shakoor & Ors.
[1990]2 Judgements Today S.C. 83.
After carefully scanning the evidence of PWs 5 and 6, we unreservedly come to the conclusion that their evidence cannot be thrown overboard simply on the ground that their evidence is of the interested party because when the occurrence had taken place inside the house, that too at dead of night, it would be futile to expect of the prosecution to produce independent outsiders as witnesses.
It was contended by Mr. Mulla that PWs 5 and 6 could not have identified the assailants since according to PW 6 both assailants had covered their faces so that faces behind the mask could never be known to others and remain mystery for ever.
But a careful reading of the evidence of PW 6 in our opinion does not support the conclusion sought to be arrived at by the learned defence counsel.
What PW 6 had admitted in the cross examination is that both the appellants had tied a towel on their heads, but their identity was visible.
It transpired from the evidence of PWs 1, 2 and 6 that PWs 1 and 2 who immediately came to the scene of the occurrence were informed by PW 6 that the assailants were the two appellants.
The spontaneous declaration to Pws 1 and 2 by PW 6 without premeditation or any deliberation or artifice by naming the appellants as assailants can be admitted as resgestae and acted upon.
It is significant to note in this connection that PW 1 who laid the First Information Report Ex P 1 within an hour from the time of the occurrence has mentioned the names of these two appellants as having been given by PW 6 at the scene immediately after the occurrence.
The FIR has been lodged without any loss of time though it has been hesitatingly stated that there was a delay.
The chronology of events narrated and the factual conspectus recounted by PWs 5 and 6 are unshakable and the intrinsic quality of the evidence of these two witnesses compel 331 this Court to implicitly rely on their testimony and to accept the same.
In spite of the fact that these two PWs have been subjected to intensive and incisive cross examination, nothing tangible has been brought for discarding their testimony.
No doubt, the earlier conduct of the appellants in kidnaping and forcibly raping their daughter, the victim should have inflicted deeper wounds in the minds of these two witnesses, but that cannot in any way destroy the value of their evidence which is cogent and trustworthy.
PWs 3 and 4 who were examined by the prosecution to speak about the movements of the appellants near the scene at or about the time of the occurrence have resiled from their earlier statements and have not supported the prosecution case.
The evidence of Pws 5 and 6 which is corroborated by various other circumstances would in our opinion suffice of record a conviction against the appellants.
The Trial Court appears to have gone wrong in jettisoning the entire evidence in a very scanty and unsatisfactory manner with unsound reasoning.
The non recovery of `lota ' (a small vessel for taking water) and the non marking of the place where the said vessel was kept in the site plan are too tenuous and they do not in any way belittle the veracity of the prosecution case.
The recovery of the pellets below the dead body and the cork, usually fixed on cartridges from the chest of the girl under the Memo exhibit P 4 as spoken by PWs 1 and 18 amply corroborate the evidence of PW 6 and support the prosecution case that the girl was shot dead in close range while she was on her bed.
Being the parents of the victim, they would be the least disposed to falsely implicate the appellants or substitute them in place of the real culprits.
In our considered opinion, whilst the conclusion arrived at by the Trial Court abjuring the unimpeachable and reliable evidence of PWs 5 and 6 on speculative reasons and unreasonable grounds, the contrary conclusion of the High Court based on the evolution of the evidence does not suffer from any illegality or manifest error on perversity nor is it erroneous.
Further, on our independent analysis of the evidence we see absolutely no substantial and compelling reasons to brush aside the testimony of these two eye witnesses and to take a contrary finding to that of the High Court.
Based on the evidence of DW 1, an advocate at Bhopal, who defended the appellants herein in the kidnaping case and who had deposed that on the night of 20.8.72 the first appellant was with him from 9/9.30 P.M. to 12 mid night and who had filed exhibit P30, and application before the court stating that the first appellant was with him, an argument was advanced that the appellants could not have gone to the scene village 332 Budhni from Bhopal, when the distance between the two places is about 40 miles and committed the offence of murder.
In support of the evidence of DW 1 reliance has been placed on the testimony of DWs 2 to 4 of whom DW 3 was the Proprietor of Chetna Lodge, who had testified to the effect that the first appellant was in his lodge from 18th to 21st August as borne out from the entry in exhibit
A similar contention of alibi was also raised before the High Court on the basis of the evidence of the defence witnesses and the High Court after discussing and deeply examining the testimony of the defence witnesses made the following observations: 1.
"It is with regret that we have to say that the testimony of this witness (PW 1) does not inspire any confidence.
"It is surprising that the learned trial Judge should have placed reliance on the testimony of DW 2 Ramakant and D.W.7 Durgaprasad and come to the conclusion that accused Rampalsingh could not have been at the scene of occurrence as he was at Bhopal, forty miles away from the scene of occurrence, at the relevant time.
" Further the High Court was correctly rejected the finding of the Trial Court as an unreasonable one holding: ". .it is most likely that they have been falsely implicated in this murder by the political rivals of the accused Chandramohan Tiwari and with the motive of preventing the accused Rampalsingh ever getting married to Saroj.
" We also after going through the evidence of the defence witnesses are unable to accept the plea of alibi and are in total agreement with the reasons given by the High Court for rejecting not the plea of alibi but also the defence that these appellants were implicated on account of political rivalry.
Medical Evidence: PW 17 who conducted autopsy on the dead body of the deceased found a lacerated wound on the chest just left the mid line at the level of nipple over the third, fourth and fifth inter costal space.
The wound was slightly oval shaped measuring 1 1/2" x 2" deep and opening into thoraic cavity.
The surrounding skin was ecchymost, but no tattooing of gun powder was noticed.
The wound as described by the Doctor is a slit like small lacerated wound on the medial end of clavicle.
On internal examination PW 17 he found comminuted fracture of sternum and second, 333 third ribs of left side chest.
There was a punctured wound on the medial border of left lung near its appex.
He found one rounded pellet (which has been recorded as bullet, but has been clarified in the further chief examination as pellet which receives support from the evidence of PW 19, the ballistic expert) in the left cavity of the chest, embedded in the posterior wall of chest at scapular region at the level of second and third ribs.
The Medical Officer is of the opinion that the death was due to severe fatal injuries to vital organs like left lung and heart resulting in profuse bleeding and shock.
PW 19 after examining the two pellets and two wads marked as Ex.
P1 and P 2 and W1 and W2 respectively gave his opinion that the holes, found on the saree, chader (bed sheet) and the blouse were gun shot holes and there was presence of blackening surrounding the holes on the chader and that the distance of firing should have been within one yard.
The evidence of the Medical Officer (PW 17) and of the Ballistic expert (PW 19) amply corroborates the testimony of PWs 5 and 6 that the assailants whomsoever they had been should have entered into the room and shot at the victim standing within a close range.
Mr. Mulla advanced an argument that the recovery of the two pellets and two wads from the scene place is an indicative of the fact that there would have been two shots, and that the presence of only one injury on the body of the deceased as per the evidence of PW 17 falsifies the present prosecution case that the victim was shot at only once.
The presence of the pellets and two wads, of course, indicate that there ought to have been two shots, but it does not necessarily follow that both the shots, should have hit the victim, probably one of the shots must have missed target.
From the mere absence of two injuries on the body of the deceased, no conclusion would be arrived at that the entire prosecution case is liable to be rejected.
The further submission of the learned counsel that the appellants should not have come at the odd hours anticipating that the main door of the house would have been kept open does not appeal to us.
Probably, the appellants who came there with the intention of putting an end to the life of the victim by any other design should have taken this opportunity to enter into the house and shot at the deceased.
Lastly a feeble argument was put forth by the defence stating that the father of the deceased and other inmates of the house on being aggrieved at the conduct of the victim should have put an end to the life of the girl by conspiring together.
This submission has to be mentioned for 334 simply rejecting the same because had the father and other inmates of the house had already conspired to murder the girl, they would not have waited for such a long time and ultimately killed her by shooting at her chest.
No father, however grave be the provocation at the hands of his daughter would resort, in the normal course to kill his daughter or participate in any conspiracy to murder her.
Moreover, there is no circumstance in the present case even feebly or remotely indicating that the inmates of the house were responsible for the cause of the death of the deceased.
In spite of our best efforts and great deal of pondering over the matter, we find absolutely no reason, much less compelling reason to disagree with the conclusion of the High Court since the organic synthesis of the events, circumstances and facts of the case lead only to one conclusion, namely, that the prosecution has established that this preplanned and cold blooded murder, executed in very cowardly and dastardly manner at a helpless and defenceless young girl was perpetrated by the appellants.
We, quite apart from the reason of the High Court, even on our independent assessment and evaluations of the evidence hold that the finding of the Trial Court is not reasonably sustainable and that the prosecution has satisfactorily proved the guilt of the accused beyond any shadow of doubt and consequently the judgment of the High does not call for any interference.
In the result, the impugned judgment of the High Court is affirmed and the appeal is dismissed.
T.N.A Appeal dismissed.
| The appellants were alleged to have kidnapped, wrongfully confined and raped S, the daughter of PWs 5 and 6.
They were prosecuted for offences punishable under section 363, 366 and 376 of the Indian Penal Code.
S was examined before the Magistrate where she stated that because of the threat given by the appellants and as instructed by them she lodged a false report at the police station implicating some other persons, whereas infact she was kidnapped, wrongfully confined and raped by the appellants.
The Magistrate, discharged the first appellant, and committed the second appellant alone to take his trial.
On a revision preferred against the order of discharge of the first appellant both the appellants were 314 put up for trial before the third Additional Sessions Judge, Bhopal.
During the said trial both appellants were on bail.
The case was fixed for 21.8.1972 on which date the victim S was to be examined as a prosecution witness.
While the matter stood thus S lodged a report at the Police Station complaining that the second appellant had forcibly entered into the backyard of her house, but took to his heels when she raised a hue and cry.
However, it was alleged that on the night of 20.8.72, i.e. immediately before the day when the case was fixed and victim S was to be examined as a prosecution witness, the first appellant armed with a pistol and the second appellant with a `farsa ' entered into the house of S and the first appellant fired a shot causing instantaneous death of section The appellants were prosecuted for murder.
The Sessions Judge acquitted both the appellants.
The State preferred an appeal before the High Court.
The High Court allowed the appeal, set aside the acquittal order and convicted the first appellant under Section 302 and the second appellant under section 302, read with Section 34 IPC and sentenced each of them to undergo imprisonment for life.
The appellants preferred an appeal to this Court under section 379 of the Code of Criminal Procedure and Section 2 (a) of the and it was contended on their behalf (i) that the High Court erred in reviewing the evidence and reversing the order of acquittal; (ii) that the prosecution has failed to prove the motive of the crime; (iii) the victim 's parents were inimical towards the appellants and their evidence cannot be relied upon because they were interested witness.
Dismissing the appeal, this Court, HELD : 1.
The Trial Court was wrong in jettisoning the entire evidence in a very scanty and unsatisfactory manner with unsound reasoning.
Whilst the Trial Court 's conclusion was arrived at by abjuring the unimpeachable and reliable evidence of parents of the deceased on speculative reasons and unreasonable grounds, the contrary conclusion of the High Court based on the evolution of the evidence does not suffer from any illegality or manifest error or perversity nor is it erroneous.
Further, independent analysis of the evidence by this Court shows that there are absolutely no substan 315 tial and compelling reasons to brush aside the testimony of these two eye witnesses and to take a contrary finding to that of the High Court.
[331 C D; F G] 1.1 The organic synthesis of the events, circumstances and facts of the case lead only to one conclusion, namely, that the prosecution has satisfactorily proved the guilt of the accused beyond any shadow of doubt and consequently the judgment of the High Court does not call for any interference.
[334 C D E} Tarachand vs State of Maharashtra, ; = ; ; Kishan and Ors.
vs State of Maharashtra.
; ; Mahebub Beg and Ors.
vs State of Maharashtra, (S.C.) ; Babu vs State of UP.
, ; 2 S.C.R. 771; Podda Narayana and Ors.
vs State of Andhra Pradesh, ; [1975] Supp.
S.C.R. 84; Ram Kumar Pande vs The State of Madhya Pradesh, ; 3 S.C.C. 815; Rajendra Prasad State of Bihar A I R SC 10 59 = = [1977]3 SCR 68; Kishore Singh and Anr.
vs The State of Madhya Pradesh, A.I.R. 1977 S.C. 2267 = [1978] 1.S.C.R. 635; Bhajan Singh and Ors.
vs State of Punjab, [1978] 4 S.C.C. 77; Dinanath Singh & Ors.
vs State of Bihar, A.I.R. 1980 S.C. 1199 = ; Pattipati Venkaiah vs State of Andhra Pradesh ; Sita Ram and Ors.
vs State of U.P., [1979] 2 S.C.C. 656; Rajput Ruda Meha and Ors.
vs State of Gujarat, ; referred to.
Roop Singh and ors.
vs State of Punjab; , = ; ; Dargahi and ors.
vs State of U.P., A.I.R. 1973 S.C. 2695 = ; Barati vs State of U.P., ; = [1974] 3 S.C.R. 570; G.B. Patel vs State of Maharashtra, A.I.R. 1979 S.C. 135 = ; ; Kanwali vs State of U.P. ; referred to. 2.
There is overwhelming evidence both oral and documentary in clearly establishing a strong motive for the appellants to put an end to the life of the deceased.
The several impelling circumstances attending the case namely, the prior incident of kidnapping and rape, the conduct of the deceased in giving her statement supporting the case of the prosecution, the lodging of the complaint by S against the second appellant and lastly the posting of the case for recording the evidence of S when taken in conjunction with the evidence of parents of the victim unevasively and unerringly show that these two appellants had strong motive to snap the life thread 316 of the victim so that she could not give evidence on the next date in the case of kidnaping and rape.
[327 C D E; 328 A D C] State of Punjab vs Pritam Singh. ; relied on.
Interested witnesses are not necessarily false witnesses though the fact that those witnesses have personal interest or stake in the matter must put the court on its guard, that the evidence of such witnesses must be subjected to close scrutiny and the Court must access the testimony of each important witness and indicate the reasons for accepting or rejecting it and that no evidence should be at once disregarded simply because it came from interested parties.
[330 A B] Siya Ram Rai vs State of Bihar, ; Sarwan Singh vs State of Punjab, ; Birbal vs Kedar, ; = ; ; Gopal Singh v State of U.P. A I R 1979 S.C.1822=[1978] 3 S.C.C. 327; Hari Obulla Reddy & Ors.
vs State of Andhra Pradesh, ; Anvaruddin & Ors.
vs Shakoor & Ors., [1990] 2 Judgments today S.C. 83; relied on.
3.1 The evidence of parents of the deceased cannot be thrown over board simply on the ground that their evidence is of the interested party because when the occurrence had taken place inside the house, that too at dead of night, it would be futile to expect of the prosecution to produce independent outsiders as witnesses.
The parents of the victim are the natural and probable eye witnesses as the incident had occurred in the odd hours inside their house.
Being the parents of the victim, they would be the least disposed to falsely implicate the appellants or substitute them in place of the real culprit.
[330 D; 328 E; 331 E] 3.2 The chronology of events narrated and the factual conspectus recounted by the parents of the deceased are unshakable and the intrinsic quality of the evidence of these two witnesses compel this Court to implicitly rely on their testimony and to accept the same.
In spite of the fact that these two witnesses have been subjected to intensive and incisive cross examination, nothing tangible has been brought for discarding their testimony.
No doubt, the earlier conduct of the appellants in kidnapping and forcibly raping their daughter, the victim should have inflicted deeper wounds in minds of these two witnesses, but that cannot in any way destroy the value of their evidence which is cogent and trustworthy.
[330 H; 331 A B] 317
| 6918.txt |
Civil Appeal No. 2469 2471 of 1969.
292 From the Judgment and Order dated 4th/5th May, 1967 of the Gujarat High Court in SCA Nos.
1234, 1242 and 1244/65.
Dr. Y. section Chitale, K. J. John, C. D. Patel and J. Sinha for the Appellant.
M. N. Shroff for the Respondent.
The Judgment of the Court was delivered by UNTWALIA, J.
Several Writ Petitions were heard together by a Division Bench of the Gujarat High Court involving interpretation of certain provisions of the Bombay Land Revenue Code, 1879, herein after referred to as the Land Revenue Code, and The Bombay Merged Territories and Areas (Jagirs Abolition) Act, 1953, hereinafter called the Jagirs Abolition Act.
They were disposed of by a common judgment whereby all the Writ Petitions were dismissed.
In the present three appeals brought to this Court by certificate the facts and law involved are almost identical.
In our common judgment disposing of these three appeals, we shall discuss the law with reference to the facts of Civil Appeal No. 2469 of 1969.
All the three sets of appellants in the three appeals were proprietary Jagirdars under Idar State.
Survey settlement had been made in that State in the year 1936 and the land revenue payable by the Jagirdars was assessed.
In the year 1948 the Land Revenue Code was applied by the province of Bombay to the lands in question under the Extra Provincial Jurisdiction Act.
The territory comprising the lands in question was merged in the Bombay State, first by an ordinance promulgated in 1949, followed by the Merged State Lands Act, Bombay Act 6 of 1950.
The father of the appellant in Civil Appeal No. 2469, the old Jagirdar, made a settlement of certain land in village Torda with the appellant in this appeal on the 5th of June, 1949.
The Survey number of this land in Idar State was 42 but after merger it comprised of two numbers i.e. 42 B and 355.
On the Ist of August, 1954 came into force the Jagirs Abolition Act abolishing the Jagirs.
According to the case of the appellant he became an occupant of the land together with the forest trees standing thereon.
Before 1965 the appellant was allowed to cut and remove the forest trees in his land but after the decision of this Court in Shri U. R. Mavinkurve vs Thakor Madhavsinghji Gambhirsingh and others the authorities concerned changed their view and took the stand that the forest trees had vested in the State and the appellant was not entitled to cut or remove them.
The Divisional Forest Officer intended to sell the trees by a public auction.
293 The appellant set a telegram to him on the 15th of October, 1965 protesting against his proposed action and eventually along with many others filed his Writ Petition in the High Court on the 4th of November, 1965.
Some of the Writ Petitioners in the High Court were contractors from the ex jagirdars.
But we are not concerned with their cases.
As stated above in these three appeals we are concerned with the land which at one time was in the proprietary Jagir of the Jagirdars of the Idar State.
The facts in these three appeals do not admit of any controversy.
The trees were a part of the private forest.
Neither it was a reserved forest nor a protected forest within the meaning of the .
Mr. M. N. Shroff appearing for the State of Gujarat drew our attention to the Gujarat Private Forests (Acquisition) Act, 1972 which was passed during the pendency of these appeals whereunder, it appears the appellants ' right, title or interest in the forest seems to have been acquired.
We have not examined the provisions of the said Act and its effect on the right of the appellants.
We, however, proceed to decide these appeals dehors the said Act and leave the parties for settlement of their disputes, if any, under the 1972 Act to a different forum.
When proprietary Jagir was granted by the former ruler of Idal State to the Jagirdar the lands became alienated lands.
They were unalienated so long as the land revenue in respect of those lands was collected by the ruler.
Under clause (xviii) of Section 2 of the Jagirs Abolition Act "proprietary Jagir" means a jagir in respect of which the jagirdar under the terms of a grant or agreement or by custom or usage is entitled to any rights or interest in the soil.
As a consequence of that it has been provided in section 5(1) (b) of the Jagirs Abolition Act: "In a proprietary jagir village, . . . (b) in the case of land other than Gharkhed land, which is in the actual possession of the jagirdar or in the possession of a person other than a permanent holder holding through or from the jagirdar, such jagirdar. . . . . . 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 an occupant under the Code or any other law for the time being in force. . ." The term 'occupant ' is defined in section 3 (16) of the Land Revenue Code to mean "a holder in actual possession of unalienated land, 294 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.
" The effect of the two provisions aforesaid, therefore, was that the appellant became an occupant that is to say a holder in actual possession of the land directly under the State.
Thus he was in actual possession of unalienated land.
Section 3 (4) of the Land Revenue Code says: " "Land" includes benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth, and also shares in, or charges on, the revenue or rent of villages, or other defined portions of territory.
" On reading these provisions simpliciter one could say that the trees attached to the earth formed part of the land and the appellant became occupant of the land alongwith the trees.
Under section 8 of the Jagirs Abolition Act all public roads etc.
situate in Jagir villages vest in the Government.
Indisputably the land or the trees in question are not covered by section 8.
Under section 9 "the rights to trees specially reserved under the , or any other law for the time being in force. shall vest in the State Government. . ." In the present case neither the rights to trees were specially reserved under the nor was it a case where the State Government by any notification in the official gazette had declared any trees or class of trees in a protected forest to be reserved from a date fixed by notification.
In the case of Mavinkurve (supra) it appears the State Government had issued a notification under section 34A (State Amendment) of the declaring all uncultivated lands in the 39 villages in question in that case to be forests for the purposes of Chapter V of the Forest Act.
No such thing seems to have been done in the present case.
But the matter does not stop there.
The High Court following the decision of this Court in Mavinkurve 's case held that there was no Survey settlement of any of the lands in question before the High Court and hence the ratio of the case fully applied and the former Jagirdars or their settlees did not acquire any right or interest in the forest trees.
This is on the basis of the view that under section 5 (1) (b) of the Jagirs Abolition Act a person who becomes an occupant of the land is entitled to all the rights and liable to all the obligations in respect of such land under the Land Revenue Code.
And in absence of a Survey settlement the person aforesaid could not fall back upon any provision of the Land Revenue Code, such as, section 40 or section 41 for claiming a right in the trees.
In our opinion the view so expressed by the High Court 295 is not correct and the cases of the appellants in these three appeals are clearly distinguishable from the decision of this Court in Mavinkurve 's case.
We shall presently show that there has been a Survey settlement in these cases.
Along with the Writ Petition in the High Court was annexed a copy of the Jamabandi disposal Registrar of village Torda which showed that the land had been surveyed in the year 1936 under the ruler of the Idar State and permanent assessment had been made.
Sub section (2) of section 216 of the Land Revenue Code, which corresponded to subsection (4) of the earlier law, says: "All survey settlements heretofore introduced in alienated villages shall be valid as if they had been introduced in accordance with the provisions of this section.
" Sub section (1) says that "the provisions of Chapters VIII, VIII A, IX and X shall be applicable to all alienated villages and alienated shares of villages subject to the following modifications.
" Distinguishing Mavinkurve 's case the argument put forward by Dr. Y. section Chitley on behalf of the appellants was that if a survey settlement was carried out by some other authority not under the provisions of the Land Revenue Code and it was accepted and acted upon by the State Government it became a survey settlement under the Code itself and there being no reservation of any trees made at the said survey settlement or at any time thereafter the trees belonged to the former Jagirdars or their settlees.
In the State of Gujarat and another vs Ibrahim Akabarali and Other, a Division Bench of the Gujarat High Court pointed out at pages 67 68 that the survey settlements carried out by the Chhotaudepur State and recognised, accepted and acted upon by the State of Bombay could not be said to be a survey settlement contemplated under section 112 of the Land Revenue Code.
But it would be so in view of the provisions contained in section 216 (2).
The High Court says: "This section refers to the introduction of survey settlements in alienated villages.
The relevant provisions of the Bombay Land Revenue Code relating to survey settlements have reference to unalienated villages.
In order, therefore, to provide for the introduction of survey settlements in alienated villages, sub section (2) of Section 216 was enacted.
Chimli and Kosum were alienated villages in Chhotaudepur State and if Chhotaudepur State had introduced survey settlements in those alienated villages we see no reason to take the view that they would not be valid under the provisions of the Bombay Land Revenue Code by virtue of Sub section (2) 296 of section 216.
Kosum and Chimli were alienated villages in Chhotaudepur State and they were alienated villages in the State of Bombay until 1st August 1954.
On the abolition of Jagirs under the Jagir Abolition Act with effect from the said date they became unalienated villages.
Therefore, we are not inclined to take a narrow view of the matter so as to lay down that alienated villages contemplated by sub section (2) of section 216 were alienated villages merely of British India and not alienated villages which in course of time came to be a part of the State of Bombay prior to the promulgation of record of rights in respect of them.
" We think the above is a correct enunciation of law and we approve of the same.
The High Court in the present cases has taken too narrow a view of the procedure for survey settlement and when the attention of the learned Judges was drawn to sections 107, 112, 117R and 216 of the Land Revenue Code to press the point that there was a survey settlement in the cases before the High Court the point was rejected on the ground of lack of pleading to that effect.
But in the Writ Petitions with which we are concerned in these appeals there was not only a specific averment and it was not specifically denied but documents had been filed along with the Writ Petitions to show that there was a survey settlement in the Idar State in the year 1936.
That being so, we hold that there being no reservation of the trees in favour of the State, the occupant became entitled to the same on the abolition of Jagirs.
Section 40 of the Land Revenue Code reads as follows: "In villages, or portions of villages, of which the original survey settlement has been completed before the passing of this Act, the right of the Government to all trees in unalienated land, except trees reserved by the Government or by any survey officer, whether by express order made at, or about the time of such settlement, or under any rule, or general order in force at the time of such settlement, or by notification made and published at, or at any time after, such settlement, shall be deemed to have been conceded to the occupant.
But in the case of settlement completed before the passing of Bombay Act I of 1865 this provision shall not apply to teak, black wood or sandal wood trees.
The right of the Government to such trees shall not be deemed to have been conceded, except by clear and express words to that effect.
297 In the case of villages or portions of villages of which the original survey settlement shall be completed after the passing of this Act, the right of the Government to all trees in un alienated land shall be deemed to be conceded to the occupant of such land except in so far as any such rights may be reserved by the Government, or by any survey officer on behalf of the Government, either expressly at or about the time of such settlement, or generally by notification made and published at any time previous to the completion of the survey settlement of the district in which such village or portion of a village is situate.
When permission to occupy land has been, or shall hereafter be, granted after the completion of the survey settlement of the village or portion of a village in which such land is situate, the said permission shall be deemed to include the concession of the right of the Government to all trees growing on that land which may not have been, or which shall not hereafter be, expressly reserved at the time of granting such permissions, or which may not have been reserved, under any of the foregoing provisions of this section, at or about the time of the original survey settlement of the said village or portion of a village.
Explanation.
In the second paragraph of this section, the expression "In the case of villages or portions of villages of which the original survey settlement shall be completed after the passing of this Act" shall include cases where the work of the original survey settlement referred to therein was undertaken before the passing of this Act as well as cases where the work of an original survey settlement may be undertaken at any time after the passing of this Act.
" This case is not covered by para 1 extracted above.
But by legal fiction as introduced in section 216(2) the survey settlement should be deemed to have been completed in 1936, which was after the passing of the Land Revenue Code in the year 1879.
The alienated lands became unalienated on the abolition of the Jagirs.
Therefore, the right to own the trees must be deemed to have been conceded to the occupant of such land as there was no reservation made by the Government or the Survey Authority.
In Mavinkurve 's case from the facts stated in the beginning of the judgment of this Court it would appear that the dispute related to cutting of teak and Pancharao trees standing in the forest lands, that is to say, special kind of trees in respect of which a notification under 298 section 34A of the had been issued.
The High Court in that case had expressed the view that the occupants on the abolition of the Jagirs became entitled to trees standing on the forest lands.
But this Court did not countenance that view stating at page 184: "In our opinion, the rights of the occupants under the Bombay Land Revenue Code do not include the right to cut and remove the trees from the forest lands.
The reason is that the 36 villages in dispute have not been surveyed or settled and until there is completion of the survey and settlement there is no question of concession on the part of the State Government of the right to the trees in favour of the occupants.
Section 40 of the Bombay Land Revenue Code provides that in the case of villages of which the original survey settlement has been completed before the passing of the Act, the right of the Government to all trees in un alienated land, except trees reserved by the Government or by any survey officer, whether by express order made at, or about the time of such settlement, or under any rule, or general order in force at the time of such settlement, or by notification made and published at, or at any time after, such settlement, shall be deemed to have been conceded to the occupant.
The second para of section 40 deals with concession of Government rights to trees in case of settlements completed after the passing of the Act.
The second para states that in the case of villages or portions of villages of which the original survey settlement shall be completed after the passing of the Act, the right of the Government to all trees in unalienated land shall be deemed to be conceded to the occupant of such land except in so far as any such rights may be reserved by the Government, or by any survey officer on behalf of the Government, either expressly at or about the time of such settlement, or generally by notification made and published at any time previous to the completion of the survey settlement.
We distinguish this case on the ground that there was survey settlement in the cases before us and the occupants are entitled to the benefit of para 2 of section 40.
In passing we may also refer to another decision of this Court in The State of Gujarat vs Kumar Shri Ranjit Singhji Bhavansinghji and others where Shah J., as he then was, delivering the judgment on 299 behalf of the Court pointed out that the High Court rightly held that the respondent was entitled to receive compensation in respect of the trees because the restriction on the power of alienation put upon the absolute grantee "did not limit the title of the respondent in the lands and in things attached thereto.
" Mavinkurve 's case was distinguished on the ground that in that case "the State of Bombay which had at the relevant time jurisdiction issued a notification under Section 34 A of the , declaring all uncultivated lands in the villages of the Jagir to be forests for the purposes of Chapter V of that Act.
On that account the forests were deemed protected forests and the Jagirdar had no right to cut and remove trees from the forest lands as owner and that under the Bombay Land Revenue Code, 1879, the rights of occupancy did not carry the right to cut and remove trees from forest lands.
" Lastly we may just note that Mr. Chitley with reference to para 3 of section 40 of the Land Revenue Code argued that on the abolition of the Jagir the occupant was given permission to occupy the land, whether the permission was as a matter of law or in fact is immaterial and such permission shall be deemed to include the concession of the right of the Government to all trees growing on that land.
We do not think that reliance on para 3 of section 40 by learned counsel for the appellant is correct.
Permission means factual permission and not giving the right to a person as an occupant under section 5(1) (b) of the Jagirs Abolition Act.
For the reasons stated above, we allow these three appeals, set aside the decision of the High Court in them and allow the Writ Petitions filed by the appellants and declare that the appellants became occupants of the land in question together with the forest trees standing thereon and governmental authorities had no right to interfere with the appellants ' dealing with the forest trees, at any rate before the passing of the Gujarat Private Forests (Acquisition) Act, 1972.
In the special circumstances of these cases we shall make no order as to costs.
P.B.R. Appeals allowed.
| The lands in dispute, which were part of a former Princely State, were unalienated lands so long as the land revenue in respect of them was collected by the Princely State.
They became alienated lands when the Princely State granted proprietary jagir to the jagirdars.
The jagirdars made settlement of the lands in dispute with the appellants in 1949.
In the year 1936 survey settlement was made in the State and the land revenue payable by the jagirdars was assessed.
When the State territory was merged with the province of Bombay the Land Revenue Code was made applicable to the lands in dispute.
In 1953 Jagirs were abolished by the Bombay Merged Territories and Areas (Jagir Abolition) Act, 1953.
A proprietary jagir, as defined by this Act, is a jagir in respect of which the jagirdar was entitled to any right or interest in the soil.
Section 5(1)(b) of the Act made the jagirdar primarily liable to the State Government for the payment of land revenue due in respect of such land as an occupant under the Land Revenue Code or any other law for the time being in force.
The term "occupant" is defined in the Code to mean "a holder in actual possession of unalienated land other than a tenant".
As a result of these two provisions the appellant, having been in actual possession of unalienated land, became "occupant", (that is to say, holder in actual possession of the land under the State).
After the land was settled by the ffiagirdar upon the appellant, new survey numbers were given to the lands in place of the old.
With the coming into force of the Jagirs Abolition Act the appellant claimed that he became an "occupant" of the land together with the forest trees standing thereon.
Before the year 1965, he was allowed to cut and remove the forest trees in his land; but after the decision of this Court in U. R. Mavinkurve vs Thakor Madhav singhji Gambhirsingh & Ors. ; the authorities concerned took the stand that the forest trees had vested in the State and that the appellant was not entitled to cut or remove them.
The appellant filed a writ petition in the High Court.
Purporting to follow the decision of this Court in Mavinkrve the High Court held that there being no survey settlement of any of the lands, the former Jagirdars or their settles did not acquire any right or interest in the forest trees.
The High Court also took the view that under section 5(1)(b) of the Jagirs Abolition Act a person who became an occupant of the land was entitled to all the rights and liable to all the obligations in respect of such land under the Land Revenue Code and since there was no settlement, the appellant could not fall back upon any provision of the Land Revenue Code for claiming a right in the trees.
291 In appeal to this Court it was contended that if a survey settlement was carried out by some authority, though not under the provisions of the Land Revenue Code and was accepted and acted upon by the State Government, it became a survey settlement under the Code itself.
No reservation of any trees having been made at the survey settlement or at any time thereafter the trees belonged to the former jagirdars or their settles.
Allowing the appeals, ^ HELD: (a) The appellant became occupant of the land in question together with the forest trees standing thereon and the governmental authorities had no right to interfere with the appellants dealing with the forest trees, at any rate, before the passing of the Gujarat Private Forests (Acquisition) Act, 1972.
(b) The High Court has taken too narrow a view of the procedure for survey settlement In the writ petitions there was not only a specific averment that there was a survey settlement but documents had been filed to show that there was a survey settlement in the State in 1936.
There being no reservation of the trees in favour of the State the occupant became entitled to the same on the abolition of the jagirs.
[296C D] (c) By legal fiction as introduced in section 216(2) of the Code the survey settlement should be deemed to have been completed in 1936 which was after the passing of the Land Revenue Code in 1879.
The alienated lands became unalienated on the abolition of the jagirs.
Therefore, the right to own the trees must be deemed to have been conceded to the occupant of such land as there was no reservation made by the Government or the Survey Authority.
[297 F G] State of Gujarat and another vs Ibrahim Akabarali and others AIR 1974 Gujarat, 54 approved.
(d) The case of Mavinkurve is distinguishable.
In that case the dispute related to cutting of teak and other trees standing in the forest land, that is to say, a special kind of trees in respect of which a notification under the Indian Forest Act had been issued.
The view of the High Court that the occupants, on the abolition of the jagirs, became entitled to trees standing on the forest lands was rejected by this Court.
In the instant case there was survey settlement and the occupants were entitled to the benefit of para 2 of section 40 of the Land Revenue Code.
[297H] The State of Gujarat vs Kumar Shri Ranjit Singhji Bhavansinghji and others 3 S.C.C. 891 referred to. 2.
There is no force in the contention that on the abolition of the jagirs the occupant was given permission to occupy the land and such permission shall be deemed to include the concession of the right of the Government to all trees growing on that land.
Permission means factual permission and not giving a right to a person as an occupant under section 5(1)(b) of the Abolition Act.
[299 D E]
| 4054.txt |
Criminal Appeal No. 393 of 1979.
From the Judgment and Order dated 26.4.1979 of the Tamil Nadu High Court in Criminal Appeal No. 197 of 1978 and Crl.
Revision Case No. 833 of 1977.
U.R. Lalit and K.R. Choudhary for the Appellants.
K.V. Venkataraman for the Respondent.
The Judgment of the Court was delivered by KULDIP SINGH, J.
Parusuraman @ Velladurai, Karuppaiah, Nagasundaram and four others (hereinafter referred to as A1 to A7) were tried for the murder of one Jawahar.
Three charges were framed against them.
A7 was charged under Section 302 read with Section 109, I.P.C. for instigating A1 to 6 to commit the murder.
The second charge related to rioting wherein A1, A2, A4, A5 and A3, A6 were tried under Sections 147 and 148 I.P.C. respectively.
The third charge under Section 302 read with Section 149, I.P.C. was against Al to A6 on the allegations that Al, A2, A4 and A5 armed with sticks, A3 armed with aruval (bill hook) and A6 armed with vel stick (spear stick), attacked Jawahar at about 8.30 A.M. on January 2.8, 1977 and caused him multiple injuries as a result of which he died on the same day.
All the ac cused persons were acquitted by the learned Trial Judge.
On appeal the High Court maintained the acquittal of A4 to A7 but reversed the findings in respect.
of A1to A3.
Believing the prosecution evidence, the High Court came to the conclusion that the commission of offence by A1 to A3 was proved.
They were convicted under Section 304 Part I read with Section 34, I.P.C. and were sentenced to undergo rigor ous imprisonment for five years.
This appeal by A1 to A3 via special leave petition is against the judgment of the High Court.
While granting special leave to appeal this Court by its order dated August 10, 1979 allowed bail to the appel lants.
We have heard learned counsel for the parties.
We agree with the High Court that the participation of the appellants in the occurrence which resulted in the death of Jawahar has been proved beyond doubt.
We are, however, of the view that keeping in view the nature of injuries on the person of the deceased and the facts and circumstances of this case the 3 offence committed by the appellants come within the mischief of Section 325 read with 34, I.P.C. Thirteen external in juries were found on the dead body of Jawahar.
Out of those 11 were on lower legs and arms.
The High Court while consid ering the nature of offence observed as under: "These accused and their associates who be set themselves on Jawahar could never have intend ed to cause the death of Jawahar for, if such was their intention, they could have certainly killed him especially after carrying him into the cholam field and left him dead there instead of merely causing simple and grievous injuries to him.
Even with reference to the aspect whether the accused persons could have, intended to cause such injuries as would be sufficient, in the ordinary course of nature, to cause death, we are not able to give a finding in favour of the prosecution.
Even according to Jawahar 's statement (Exhibit P 6) all that first accused had remarked was that the attack on him was in retaliation for the injuries Jawahar had caused on the first accused a few weeks earlier.
" Agreeing with the above observations of the High Court we are of the opinion that the intention of the appellants was to cause grievous hurt and as such the offence committed by them comes within the parameters of Section 325, I.P.C. We, therefore, set aside the conviction and sentence of the appellants under Section 304 Part I, I.P.C. read with Sec tion 34, I.P.C. and instead convict them under Section 325, I.P.C. read with Section 34, I.P.C. We impose the sentence of imprisonment already undergone by the appellants.
We also impose the sentence of Rs. 7,000 each as fine on the appel lants.
The appellants shall deposit Rs. 7,000 each before the Trial Court within four months from today.
In the event of non payment of fine the appellants shall undergo rigorous imprisonment for five years.
The amount of Rs. 21,000 rea lised as fine from the appellants be paid to the father/mother of deceased Jawahar.
In the event of none of them surviving the amount shall be paid to Indra sister of deceased Jawahar.
The appeal is disposed of in the above terms.
V.P.R Appeal disposed of.
| Three charges were framed against the appellants A1 to A7.
A7 was charged under Section 302 read with Section 109, I.P.C. for instigating A1 to 6 to commit the murder Al, A2, A4, A5 and A3, A6 were tried under Sections 147 and 148 IP.C., respectively and the third charge under section 302 read with Section 149, I.P.C. was against A1 to A6 on the allegations that Al, A2, A4 and A5 armed with sticks, A3 armed with/ aruval (bill hook) and A6 armed with vel stick (spear stick), attacked the deceased at about 830 A.M. on January 28, 1977 and caused him multiple injuries, as a result of which he died on the same day.
All the accused persons were acquitted by the learned Trial Judge, against which when appeal was filed, the High Court maintained the acquittal of A4 to A7 but reversed the findings in respect of A1 to A3 and were convicted under Section 304 Part I read with Section 34, I.P.C. and were sentenced to undergo rigorous imprisonment for five years, against that, this appeal was filed by the appellants A1 to A3 via Special Leave Petition.
Disposing the appeal, by modifying the sentence, this Court, HELD: 1.
Thirteen external injuries were found on the dead body of the deceased.
Out of these 11 were on lower legs and arms.
The intention of the appellants was to cause grievous hurt and as such the offence committed by them comes within the parameters of Section 325, I.P.C. Keeping in view the nature of injuries on the person of the deceased and the facts and circumstances of this case the offence committed by the appellants comes within the mischief of Section 325 read with 34, I.P.C. and convicted them under Section 325, I.P.C. read with Section 34, I.P.C. imposing the sentence of imprisonment already undergone by them, and the sentence of Rs. 7,000 each as fine, to be deposited before the Trial Court, within four months, which be paid to the father/mother of deceased. 2 In the event of non payment of fine the appellants shall undergo rigorous imprisonment for five years.
[3A, 3D F]
| 6823.txt |
Civil Appeals Nos.159 and 160 of 1958.
Appeals by special leave from the Award dated September 4, 1958, of the Industrial Tribunal, Bombay, in Reference (IT) Nos. 138 and 35 of 1958.
N. A. Palkhivala, section N. Andley, J. B. Dadachanji and Rameshwar Nath, for the appellant.
C. L. Dudhia and K. L. Hathi, for respondents No. 1 and 2. 1959.
October 16.
The Judgment of the Court was delivered by WANCHOO J.
These two appeals by special leave arise out of two references made by the Government of Bombay in connection with a dispute between the appellant company and two sets of its workmen, namely, clerical staff and staff other than clerical.
The clerical staff had raised four questions which were referred to the Industrial Tribunal, Bombay for adjudication.
of these, only two points survive in the present appeal, namely, retirement age and gratuity.
The non clerical staff had raised two questions of which only one relating to gratuity arises before us.
It appears that the appellant company is an all India concern but the major part of its business is concentrated in Calcutta.
The number of non clerical staff outside Calcutta is very small as compared to the 53 non clerical staff in Calcutta while the clerical staff outside Calcutta is much less than the clerical staff in Culcutta.
The company had a gratuity scheme in force which applied to both clerical and non clerical staff, though there were differences in the scale of payment depending upon whether the basic salary drawn by workmen other than operatives was more than Rs. 100 or less.
In case of operatives, there was a uniform scale equal to the scale for workmen other than operatives drawing less than Rs. 100 per mensem.
The clerical and non clerical staff in Bombay raised disputes and their main contention was that the scale fixed by the scheme in force was low and should be raised.
As for the retirement age, the clerical staff claimed that it should be raised from 55 years to 60.
The case of the appellant company before the tribunal was that as the large majority of the staff both clerical and non clerical was in Calcutta and as the gratuity scheme and the retirement age were enforced by virtue of an agreement arrived at between the appellant company and its workmen both clerical and others in Calcutta who are a large majority of its total workmen, they should not be changed at the instance of a small minority of workmen both clerical and others in Bombay.
The tribunal did not accept this contention and raised the age of retirement from 55 years to 60.
It also made changes in the gratuity scheme by which the scale was raised and made uniform both for clerical staff and others.
Thereupon the appellant applied for and obtained special leave from this Court; and that is how the matter has come up before us.
Shri Palkhivala appearing for the appellant has raised only two points before us, relating to the raising of the retirement age and the change in the scale of gratuity, and we shall confine ourselves to these two points only.
It is conceded by him that the Industrial Tribunal has jurisdiction to order the changes which it has ordered.
But his contention is that though the jurisdiction may be there, the tribunal should take into account the special position of an all India concern and should not make changes particularly at the 54 instance of a small minority of workmen as that would lead to industrial unrest elsewhere.
He further contends that the scale of gratuity and the age of retirement are matters which are independent of local conditions and therefore should be uniform thought India in concerns which have an all India character.
He points out that the conditions of service in the appellant company are uniform throughout India and were arrived at by agreement with the unions of workmen at Calcutta where the large majority of the workmen are employed, and in these special circumstances, the tribunal at Bombay should not have made any changes in the retiring age or in the gratuity scheme at the instance of the small minority of workmen in Bombay.
There is no doubt that in the case of an all India concern it would be advisable to have uniform conditions of service throughout India and if uniform conditions prevail in any such concern they should not be lightly changed.
At the same time it cannot be forgotten that industrial adjudication is based, in this country at least, on what is known as industry cumregion basis and cases may arise where it may be necessary in following this principle to make changes even where the conditions of service of an all India concern are uniform.
Besides, however desirable uniformity may be in the case of all India concerns, the tribunal cannot abstain from seeing that fair conditions of service prevail in the industry with which it is concerned.
If therefore any scheme, which may be uniformity in force throughout India in the case of an all India concern, appears to be unfair and not in accord with the prevailing conditions in such matters, it would be the duty of the tribunal to make changes in the scheme to make it fair and bring it into line with the prevailing conditions in such matters, particularly in the region in which the tribunal is functioning irrespective of the fact that the demand is made by only a small minority of the workmen employed in one place out of the many where the all India concern carries on business.
Before we come to consider the two questions raised before us, we may as well point out that the 55 scale of gratuity and the retirement age were originally fixed by an agreement arrived at in 1956, between the appellant company and its workmen in Calcutta who form a large majority.
That agreement was for a period of two years ending with December, 31, 1957.
Thereafter it was replaced by another agreement also for two years beginning from 1st January, 1958.
In that agreement it was specifically provided that no further major issues would be raised excepting those relating to medical aid, retirement age, and retirement benefits.
It is clear therefore that even the workmen in Calcutta had reserved the right to raise a dispute with respect to retirement age and gratuity, if necessary.
The reason for this is that the references out of which those appeals have arisen were pending before the tribunal in Bombay and the unions in Calcutta wished to await the decision of the Bombay tribunal before finally agreeing to continue the rules relating to retirement age and gratuity.
The appellant company also agreed to make this reservation in the said agreement arrived at between it and the unions in Calcutta.
Therefore, strictly speaking, it cannot be said in this case that there was a final agreement in force with respect to these two matters between the appellant and large majority of its workmen in September, 1958 when the Bombay Tribunal gave its award.
In any case the Bombay Tribunal was bound to go into the merits of the matter with respect to these two items, namely, retirement age and gratuity, keeping in mind the all India character of the concern and the previous agreement of 1956, and this is what the tribunal has actually done.
We shall first take the question of retirement age.
The tribunal found that retirement age was fixed between 55 years and 60 in various concerns in Bombay.
It was also of opinion that 55 years was too low an age to be fixed for retirement for the clerical staff and that the trend in all the awards had in recent times been to fix it at 60 years.
It, therefore, ordered that so far as the clerical staff was concerned retirement age should be fixed at 60 years instead 56 of 55.
We may in this connection refer to a recent decision of this Court in Guest Keen, Williams (Private) Limited, Calcutta vs P. J. Sterling and Others (1), where the age of superannuation of employees in service before the Standing Orders came into force, in that concern was fixed at 60 years.
In these circumstances if the tribunal thought that it would be fair to fix 60 years as the age of retirement for clerical staff in spite of the fact that in the agreement of 1956 the retirement age was fixed at 55 years, it cannot be said that the tribunal 's order was not in accord with the prevailing conditions in many concerns in that region.
In these circumstances we are of opinion that no interference is called for in this matter.
We now come to the question of gratuity.
The gratuity scheme in force in the appellant company on the basis of the agreement of 1956, provided for threequarters of one month 's average basic salary for each completed year of continuous service for staff other than operatives drawing up to Rs. 100 per menses and thereafter half a month 's average basic salary for each year.
It also provided three weeks ' average basic wages for each completed year of continuous service for operatives.
Three years service was the minimum period for eligibility to gratuity under special circumstances like death, physical and mental incapacity and 15 years service in all other cases.
There was also a provision for "deducting some amount in lieu of provident fund credited by the company in 1941 in respect of service prior to 1st July, 1941.
The tribunal was of the opinion that the scheme was not adequate and contained features which were not usual in other prosperous concerns it pointed out that the scale of gratuity for clerks was on a lower basis than for operatives and that this was against the general conditions of things prevailing in that region.
It further pointed out that the clerical and the supervisory staff had a higher standard of living, and had to meet heavier expenses of education of their children who get employment at a late age as compared to operatives.
It was, therefore, of opinion that a uniform scale of gratuity should be fixed for all (1) ; 57 including those getting wages above Rs. 100 per menses.
It also pointed out that the requirement of a minimum service of three years in case of death and physical and mental incapacity was another unusual feature of this scheme and held that it should be changed.
It was further of opinion that the usual provision in such schemes was a scale of one month 's basic salary for each completed year of continuous service in case of death, physical and mental incapacity and after 15 years ' continuous service and that some gratuity at a lower scale was provided usually even in case of termination of service before the completion of 15 years ' service.
It therefore provided for half a month 's basic salary for each completed year of continuous service after 5 years but upto ten years and three fourths of basic monthly salary for each year of completed service after ten years but less than fifteen years continuous service and one month 's basic salary for each year for the rest.
Finally, it took into account the fact that there was a supplementary gratuity scheme in force in the company with respect to the employees in the employ of the company from before September 1, 1946, and with respect to them it provided that those employees should either opt for the scheme as framed by it or continue in the gratuity scheme of the company along with the supplementary gratuity scheme.
It appears therefore from the gratuity scheme finally sanctioned by the tribunal that it removed those features from the scheme in force in the appellant company which were unusual and unfair and not in consonance with the prevailing conditions for such schemes in that region.
In these circumstances we are of opinion that the tribunal was not bound merely because this is an all India concern to refrain from altering the gratuity scheme which in its opinion had certain unusual features and was not in accord with the prevailing conditions in that region.
The appellant 's contention therefore on this head also fails.
The appeals are hereby dismissed with one set of costs.
| The appellant company was an all India concern and carried on the major part of its business in Calcutta.
Its clerical and non clerical staff in Bombay raised disputes relating to gratuity and age of retirement and contended that the scale of gratuity for both the clerical and non clerical staff provided by the existing scheme of the company was low and should be raised and that the age of retirement for the clerical staff should be raised from 55 to 60.
The company resisted the claim on the ground that the existing scheme having been enforced on the basis of an agreement between the company and the large majority of its staff, both clerical and non clerical, working in Calcutta, the same could not be changed at the instance of a small minority.
The tribunal rejected this contention and raised the age of retirement to 60.
It also raised the scale of gratuity and made it uniform for the clerical and non clerical staff.
The appellant reiterated its contention in this Court.
Held, that although it was advisable for an all India concern to have uniform conditions of service 'throughout the country, that were not to be lightly changed, industrial adjudication in 52 India being based on an industry cum region basis, cases might arise where it would be necessary to change the uniform scheme so that it might accord with the prevailing conditions in the region where the Industrial Tribunal functioned, in order to ensure fair conditions of service.
Consequently, in the instant case, where the Industrial Tribunal found that the existing scheme was neither adequate nor in accord with the prevailing conditions in the region, it was not bound to refrain from altering either the age of retirement or the gratuity scheme on the ground the appellant 's concern was an all India one.
Nor could the decision of the Tribunal to raise the age of retirement of the clerical staff to 60 be said to be an improper one.
Guest, Keen, Williams (Private) Limited, Calcutta vs P. J. Sterling and Others, ; referred to.
| 794.txt |
Appeal No. 4702 of 1991.
From the Judgment and Order dated 26.8.88 of the Bombay High Court in W.P. No. 2264 of 1984.
T. Andharujina, F.H. Talyarkha, R.F. Nariman, R. Narain, Ashok Sagar and Ms Amrita Mitra for the Appellants.
K.K. Singhvi, B.N. Singhvi and Anil K. Gupta for the Re spondents.
The Judgment of the Court was delivered by 451 V. RAMASWAMI, J.
Leave granted.
The First appellant Tara Engineering and Locomotive Company Limited (hereinafter called the 'Company ') is a. company registered under the Indian Companies Act, 1913 and the second appellant is one of its Directors.
The Company is carrying on business of manufacture and sale of motor vehi cles and spare parts of motor vehicles and excavators.
Their manufacturing units are at Pune and Jamshedpur outside the Thane Municipal Corporation limits.
They have a bonded warehouse within the municipal limits in which they bring and stock motor vehicles parts 'and excavators parts from their own factories at Pune and Jamshedpur.
They also bring in parts manufactured by their ancillaries within India and also parts imported from aboard.
These products or parts are brought in bulk and thereafter taken or sent out from the Municipal limits in smaller packings depending on the re quirements of the customers in various parts of the country.
It is stated that the parts imported or purchased from others and brought in are relatively very small in quantity and the major portion of the activity related to their own factory produced parts.
On and from 1 st October, 1982 with the notification under Section 3 of the Bombay Provincial Municipal Corpora tion Act, 1949, the Thane Municipal Council became a Munici pal Corporation (hereinafter called the Corporation).
Prior to the constitution of the Corporation it was a municipality and were governed by the Thane Municipal Council constituted under the Maharashtra Municipality Act, 1965.
Prior to 1 st October, 1982 the Thane Municipal Council had granted to the Company current account facilities in respect of payment of octroi under the Maharashtra Municipalities Act, 1965 and the Maharashtra Municipalities (Octroi) Rules, 1968 made thereunder.
The Municipal Council had also granted permis sion under Rule 10 (2) to the Company for maintaining a godown or warehouse of their own.
Their is no dispute that even after the coming into existence of the Thane Municipal Corporation the appellants were permitted to have a ware house of their own and keep a current account facility without the requirement of immediate payment of octroi at the Octroi Naka.
In terms of granting those facilities the Company had made as security a cash deposit of Rs. 7 lakhs with the Corporation and had also given a Bank Guarantee for an equivalent amount as agreed to between the Company and the Corporation.
However, there is some dispute as to what were the formalities that were dispensed with in the matter of claiming refund of the octroi when the goods were export ed.
But suffice it to say at this stage that the appellants were permitted to carry out their activities of imports and exports under the current account procedure with a facility of unpacking the bulk, repacking and exporting.
452 During the period 1st January, 1983 to 31st March, 1964 it is stated that the appellants had made 1182 claims for refund.
All these claims were rejected by the letters of the Corporation dated 31.8.1983, 12.1.
1984, 5.4.1984 and 6.4.1984.
They were rejected on the following two grounds: (1) the Company had "sold" the spare parts within the octroi limit (which is co terminus with the Corporation limit) in contravention of Rule 25 (3) (d) of the Maharashtra Munici palities (Octroi) Rules, 1968 (hereinafter called the "Rules"), (2) the procedure prescribed for export and the claim of refund had not been strictly followed.
The non compliance with)the procedure prescribed referred to in the second ground according the Corporation were: (i) Form 4 of the Octroi Rules and the original invoices were not submit ted, or (ii) Forms 11 and 12 filed were incomplete and all the required information were not given or (iii) certificate of the Octroi exit Naka Officer had not been obtained.
The rejection of the claim was either on one or more than one or all the grounds mentioned above.
The appellants filed a writ petition under Article 226 in the High Court of Judicature at Bombay contending that the action of the Municipal Corpo ration in refusing refund is unconstitutional and illegal and for certain other reliefs.
The Division Bench of the High Court which heard the same dismissed the writ petition on the 26th August, 1988.
It is against this judgment that the present appeal has been filed.
It appears that during the hearing of the writ petition the learned counsel appearing for the Corporation did not counter the contention of the Company that the rejection under Rule 25 (3) (d) was not correct and the learned Judges have also recorded the same in the judgment.
But the learned counsel for the respondent before us stated that it is not correct to say that he had conceded any point and that since he could not argue that point in view of the decision of another Division Bench of the same High Court in Khandelwal Trader Akola vs The Akola Municipal Council, AIR 1985 Bombay 218 which was binding on the Bench which heard the writ petition and also in view of certain observations of this Court in Burmah Shell Company vs Belgaum Municipal, [1963] Suppl.
2 SCR 216 and Hiralal Thakorlal Dalai vs Brash Broch Municipality, he did not press the point.
We have therefore, permitted the point to be argued in this appeal.
Before we discuss the points in controversy we may state that in the counter affidavit filed in the writ petition the respondents have admitted that the Company was enjoying the current account facility prior to 1.10.
1982 and the re spondent Corporation had also given the said facility to the Company even after 1st October, 1982 on their making a cash deposit of Rs. 7 Lakhs and furnishing a Bank Guarantee for a like sum as security 453 for grant of that facility.
The respondent had also admitted that the Company had been given permission under Rule 10 (2) to maintain their own godown from 12th December, 1982.
Broadly stated under the current account facility granted, no octroi duty is recoverable in cash from the appellants at the entry octroi naka point.
However, the Company was re quired to submit a statement of goods imported in Form 5 before the 10th of the following month.
The officers of the respondent after scrutiny of the statement so filed deter mine the octroi duty payable thereon and debit the amount in the current account kept and send a demand notice to the company.
The Company is required to pay the amount to the Corporation within 15 days of the determination of duty.
The first submission of Mr. Andharujina, learned counsel for the appellants was that the sales were not for consump tion or use within the octroi limits and that the parts were sold to parties outside the octroi limits and also for consumption or use outside such limits and therefore the rejection of the claims on the ground that the spare parts were sold within the municipal limits and that it amounted to a contravention of Rule 25 (3) (d) of the Rules is ille gal.
Mr. K.K. Singhvi, the learned counsel for the Corpora tion on the other hand contended that the meaning of words "sales therein" in the definition of octroi in the Acts and in Entry 52 of List II could not be limited to sales of the goods for purposes of consumption or use within the munici pal limits.
When an importer wants to export dutiable goods tempo rarily detained by him in his own godown he shall present an intimation cumapplication for written permission in Form 11 to the Superintendent of Octroi to export such goods.
Rule 25 (3) (d) states that no such intimation shall be accepted unless: .LM15 "the exporter and the importer of these goods are one and the same person and such articles have not undergone change of ownership" .LM0
The case of the Corporation was that there was a change in the ownership of the goods since a sale in law had taken place inside the octroi limits though the purchaser was residing and carrying on business outside the octroi limits and under the sale the goods were intended to be and in fact exported for the purpose of consumption and use outside the octroi limits.
Section 127 of the Bombay Provincial Municipal Corporation Act,1949 and the corresponding section 105 of the Maharashtra Municipalities Act,1965 authorises the Muncipality to levy "Octroi".
Both these Acts define 454 octroi as meaning a tax on the entry of goods into the municipal area "for consumption, use or sale therein".
The Maharashtra Municipalities (Octroi) Rules 1968 made under the Maharashtra Municipalities Act, 1965, provides for the levy, collection and refunds of octroi duty on the goods specified in the schedule thereunder and the procedure for the same.
These Rules were in force in Thane Municipality before Thane was declared as "City" under the Bombay Munici pal Corporations Act LIX of 1949.
However these Rules are continued in the Thane Municipal Corporation by virtue of paragraph 5 of Appendix IV to the Act LIX of 1949.
The legislative entry relating to the constitutional power to levy this tax is found in List II Entry 52 of the 7th Schedule to the Constitution which reads: "52.
Taxes on the entry of goods into a local area for consumption, use or sale therein".
The Bombay Municipal Boroughs Act, 1925 which was in force prior to the enactment of the Maharashtra Municipali ties Act, 1965 also contained a similar provision in section 73 enabling the Municipalities covered by that Act to levy "Octroi on animals or goods or both brought within the octroi limits for consumption or use therein".
This provi sion was amended by Amending Act 35 of 1954 by substituting the words "use or sale" for the words "or use" with effect from May 5, 1954.
In other words before 1954 the word "sale" was not included in the provision of octroi on goods which the Municipality was authorised to impose.
After the amend ment the Municipality could levy octroi on goods brought within the octroi limits "for consumption, use or sale therein".
This provision came up for consideration in Burmah Shell case (supra).
Two of the categories of transactions which were considered in this case related to transactions under which (1) goods were sold by the Company through its dealers or by itself and consumed within the octroi limits by persons other than the Company and (2) goods sold by the Company through its dealers or by itself inside the octroi limits to other persons but consumed by them outside the octroi limits.
The Company contended that the tax could not be collected on goods which were merely sold but not con sumed inside the octroi limits.
In connection with this con tention this Court considered the meaning of words "consump tion, use or sale therein" and observed: "It is not the immediate person who brings the goods into a local area who must consume them him self, the act of consumption may be post poned or may be performed by someone else but so long as the goods have been brought into the local 455 area for consumption in that sense, no matter by whom, they satisfy the requirements of the Boroughs Act and octroi is payable". " . .
The goods must be regarded as having been brought in for purposes of consumption when a person brings them either for his own use or consumption, or to put them in the way of others in the area, who are to use and consume".
And concluded holding: "In our opinion, the Company was liable to pay octroi tax on goods brought into local area (a) to be consumed by itself or sold by it to consumers direct and (b) for sale to dealers who in their turn sold the goods to consumers within the municipal area irrespective of whether such consumers bought them for use in the area or outside it.
The Company was, however, not liable to Octroi in respect of goods which it brought into the local area and which was re exported".
The ratio is thus not a mere sale inside that attracts octroi but a sale intended for consumption of the goods inside the octroi area though ultimately the person to whom it was sold for consumption does not consume the goods inside but does the same outside the limit.
After consideration of the judgment in Burmah Shell Company 's case (supra) the Gujarat High Court in one of the cases arising for refund of octroi duty paid, took the view that octroi leviable on goods brought within the octroi limits 'for consumption, use or sale therein ' and that the word 'sale ' could not be given the narrow meaning of a sale for consumption to the ultimate consumer within the octroi limits.
Accordingly if the goods were sold within the octroi limits by the importer even if it resulted in export and consumption was also outside the octroi limit, octroi duty paid is not refundable.
This decision came up in appeal before this Court and the decision of this Court is reported in Hiralal Thakorlal Dalai vs Brash Broach Municipality, On facts that case related to a con signment sale and the goods were despatched to destination outside octroi limits for consumption there.
A plea for review of the decision in Burmah Shell Company s case (supra) was also made in this case.
However a Constitution Bench rejected the request for reconsideration and held that the word "sale" in the colloquium of the words "consumption, use or sale therein" means sale for consumption within the octroi limits.
The ratio of these two decisions was consid ered by the Bombay High Court in Khandelwal Traders Akola 's case (supra), which was referred to in the Judgment under appeal.
It was held in this case also 456 that where a dealer imports goods within the octroi limits not for ultimate consumption or sale for consumption within the limits but for the purpose of export and obtain permis sion for export he is not liable to pay octroi on such goods notwithstanding that in the larger sense for purposes of export he sells the goods within the octroi limits, that is to say even where the situs of the sale could be fixed within the octroi limit.
The matter is now put beyond any pale of doubt by the latest decision of this Court in Munic ipal Council, Jodhpur vs M/s. Parekh Automobiles Ltd. & Ors., ; Rule 13 (4) of the Rajasthan Munici pal Octroi Rules, 1962 which was one of the provisions considered in this case provided that "In cases provided for in sub rule (3) (that is who is given the account current facility)amount of octroi duty payable shall be based on the total amount of the octroi as shown by the entry passes less the total amount of goods transported outside the munic ipal limits as shown by the transport passes: Provided that in computing the octroi duty payable under subsection (4), the goods trans ported outside the municipal limits shall be lessened only if such goods have not been sold within the municipal limits and if they have been exported out of such limits within a period of six months from the date of their import in such limits".
Relying on this provision the municipality in that case contended that if the sale had taken place within the octroi limits though the sale was not for consumption or use within the octroi limits, duty was payable and no refund could be claimed.
The learned Single Judge who heard the matter in the High Court did not permit the importer to raise the question that the sale took place only outside the octroi limits of Jodhpur and proceeded on the footing that the sale of product in question took place within the octroi limits of Jodhpur.
He however accepted the contention of the Indian Oil Corporation (importer) that the sale to the dealer was for the purpose of export and the dealer did export the goods outside the octroi limits and that, therefore, even if the sale was said to have been effected within the octroi limits no octroi was leviable.
Since admittedly the goods had been sold in Jodhpur octroi limits only for their on wards transmission for use and consumption in Dangia was outside the octroi limits he held that no octroi duty was payable.
This view of the learned Single Judge was confirmed on appeal by the Division Bench of the High Court.
On appeal this Court confirmed this view and held that the Indian Oil Corporation (importer) who had the current account facility and gov 457 erned by the terms of rule 13 was entitled to go on paying octroi duty "on to basis of the goods brought by it within the municipality less the goods transported outside the municipality even where the transport outside the municipal ity may be in pursuance of a sale within the municipality so long as such sale is in pursuance of an intention that the goods should be consumed or used outside the municipal limits".
In the present case the sales were to person who were carrying on business outside the limits of the Corporation and the goods were also intended to be consumed or used outside such limits and in fact the goods were also export ed.
The ratio of the decisions above referred clearly, therefore, governs this case, even if it were to be assumed that the sale in the general sense took place inside the municipal limits.
However we may state that it was the contention of the learned counsel for the appellant that the sale in fact took place outside the municipal limits and in support of this contention he relied on the following facts among others.
The spare parts were consigned by the Company to out station purchasers.
The goods were transported by the Company them selves across the octroi limits.
The consignment or lorry receipt mentioned the consignee as self.
The bills for collection were sent through Bank and the goods were not to be delivered to the consignee until the payment was made by the consignee through the Bunk.
Right of disposal expressly reserved with the vendor.
On the other hand on behalf of the Corporation it was contended that orders were both received and accepted in Thane, goods were despatched from Thane and challans were also made in the name of the buyers and the property in the goods passed within Thane.
The sale had in fact taken place within municipal area.
In fact he further contended that being a question of fact we are not entitled to go into the same in view of the finding of the High Court.
It is not necessary for us, however, to consider this aspect and we would for the purpose of this case proceed on the assumption that technically the sale in law had taken place inside the municipal limits.
Since the goods were sold by the Company to outside purchasers and the goods under the transactions of sale, were intended to be exported and were in fact exported, for consumption or use outside the municipal limits no octroi duty was leviable and the octroi duty paid on entry into the municipal limits was, therefore, liable to be refunded.
Accordingly the rejection of the refund claims on the ground that Rule 25 (3) (d) had not been strictly complied with is illegal and could not be sustained.
Such of those claims which were rejected only on the grounds of contravetion of 458 Rule 25 (3) (d) shall now be taken up by the respondent and passed for payment.
In the case of impost of octroi the taxable event is the entry of goods which are meant to reach an ultimate user or consumer in the area.
Mere physical entry into the octroi limits would not attract levy of octroi.
When the goods are brought in not for consumption within the area but for temporary detention and eventual export, octroi is not leviable.
But in order to ensure, in such circumstances, that the goods are exported and to prevent evasion of octroi on goods consumed inside the octroi limit, Rules provide for deposit of a certain sum of money or the actual octroi duty payable subject to a right to get a refund of the same when the goods are exported.
When the goods in respect of which octroi was paid are exported, the octroi became refundable and that is the very scheme of the ' levy of octroi.
The octroiable event in such a case shall be deemed not have happened.
Right to refund arises because the goods are not consumed inside the area but exported and the tax becomes not leviable.
The rules merely regulate the system on which refunds shall be allowed.
The procedure prescribed and the need to adhere to the procedure shall have to be considered in the light of these legal incidence and nature of octroi duty.
Before we deal with the question whether the Company had not followed any of the procedure prescribed and the right of the Corporation to deny refund of octroi on non compli ance with any of those provisions in the Rules, it is neces sary to broadly set out the different types of procedures prescribed, depending on different purposes of imports and exports, contemplated under the Rules.
This may be broadly classified into five categories, (i) goods imported for Consumption, use or sale in the municipal area, (ii) goods imported not for consumption, use or sale within the munici pality but for immediate export, (iii) goods intended to be temporarily detained within the municipality in the bonded warehouse maintained by the Corporation and eventual export; (iv) goods intended for temporary detention in the private licensed bonded wharehouse of the importer and eventual export; and (v) goods imported by any person, mercantile firm or body which has been permitted by the municipal Corporation to keep an current account.
In the first case, since octroi is attracted on arrival of the dutiable goods at the Octroi Naka the importer pays the amount of octroi assessed by the octroi officer and takes the goods inside the municipal limits.
In the second case, the importer gives a declaration cum application that the goods are not being imported in the municipal limits for consumption, use or sale but are intended for immediate export outside the octroi limits.
He is required to deposit an amount in 459 accordance with the scale fixed under clause (b) of sub rule (1) of Rule (5).
On such deposit being made a receipt is given in the form prescribed by the Entrance Naka Inspector and a written permission cum transit pass issued by the Octroi Officer.
On arrival of the goods at the exit Naka and on surrender of the written permission cum transit pass the deposit amount is refunded.
In the third category of cases, the importer makes an application to the Octroi officer at the Entrance Naka for a written permission to deposit such goods at the bonded warehouse maintained by the Corporation.
The Octroi Officer then makes an entry on the application that the importer is allowed to proceed with the goods to the bonded warehouse.
The Officer in charge of the bonded warehouse will receive the goods and keep them in the bonded warehouse until exported.
When the importer wants to export the goods he is required to apply for a written permission cum export pass in the prescribed form and also deposit an amount equal to the octroi leviable therein.
On such deposit made a written permissioncum export pass is issued.
When the goods are taken out of the municipal limits the Officer Incharge of the Exit Naka endorses the export pass certify ing the export and the refund of the deposit is claimed thereafter producing the certificate issued by the Exit Naka Officer.
In the fourth category, the importer gives a decla ration in Form 4 that the goods are meant for temporary detention with him at his own warehouse for eventual export.
After verification of the particulars furnished in that form with the invoices and other documents produced he is re quired to deposit at the Entry Octroi Naka point itself an amount equal to the amount of full octroi duty thereon as deposit.
A receipt is given by the Octroi Inspector stating that the said amount "on account of deposit" has been recov ered.
When he wants to export the dutiable goods detained with him he presents an intimation cum application in Form 11 for written permission to export the goods.
He is also required to produce the goods at the Central Octroi officer along with the application.
On satisfaction that all the conditions prescribed have been fulfilled and after verifi cation of the goods a written permission cum refund export pass in Form No. 12 is given to the importer.
On presenta tion of these documents the Octroi officer at the Exit Naka gives a certificate that the goods mentioned therein have passed octroi limits and with that the refund application is made and refund obtained.
The instant case falls under the fifth category.
The Company has been permitted by the Municipal Corporation to keep the dutiable goods in a bonded warehouse of their own with a current account facility.
The rules which were relied on by the Respondent and some of which are said to have not been complied with by the Company may be set out: "10.
Maintenance of Bonded Warehouses.
460 (1) x x x (2) A Council may permit any importer to maintain a private Bonded Warehouse for keep ing goods which are imported by such importer for temporary detention and eventual export and grant a licence to such importer for that purpose subject to the conditions and restric tions laid down in such licence.
A fee shall be charged for such licence at the rates specified in the bye laws relating to the grant of such licence." "14.
Declarations to be made by importer, etc. (1) On arrival of any dutiable goods at the Octroi Naka, the Octroi Officer shall call upon the importer or the driver of the Vehicle or conveyance or the person incharge of the pack animal or other persons bringing the goods (a) X X X X (b) X X X X (C) X X X X (d) to make a declaration in Form 4, in respect of the goods intended for temporary detention with himself and eventual export; (e) to make a declaration in Form 5, in respect of the goods imported by, or on behalf of, any person, mercantile firm or body which has been permitted by the Council to keep an account current under Section 142; "15.
Procedure for assessment and recovery of octroi.
(4) On receipt of a declaration in Form 5 under the last preceding rule, the Octroi Officer shall ascertain whether the name of the person, mercantile firm or body on whose behalf the goods are being imported is on the list of persons, firms or bodies allowed to keep an account current, and if so, check the goods with the details entered in the declara tion and fill up the certificate below the declaration and issue a pass in Form 6.
The Octroi Officer shall forward all such declara tions together with a list in duplicate there of to the Central Octroi Officer for further action in accordance with the provisions of Section 142.
"24.Procedure for temporary detention of dutiable goods meant for eventual export, with importer himself.
(1) Where dutiable goods intended for temporary detention within the octroi 461 limits and eventual export are to be detained by the importer at his residence or a Bonded Warehouse licensed under sub role (2) of rule 10 within the octroi limits, he may do so on giving a declaration to the Octroi officer in Form 4, and on payment of an amount equal to the amount of full octroi due thereon as deposit either in cash or in the form of Bank Guarantee at the Entrance Naka.
(2) In case the importer cannot export the goods without breaking bulk or without assem ble and testing in the case of machinery, he shall do the same only with the sanction of the Superintendent of Octroi in the presence of an officer deputed for this purpose by the said Superintendent.
Such goods, if necessary shall be formed into packages, which may be sealed and marked by the Officer so deputed.
"25.Procedure for export of dutiable goods temporarily detained with importer. (1) When the importer wants to export dutiable goods detained with him, he shall present an intima tion cum application for written permission in Form 11 to the Superintendent of Octroi to export such goods, giving necessary details; and produce such goods for verification on any working day during the hours fixed by the Chief Officer at the Central Octroi Office or at any other Branch Office, as may be estab lished by the Council for the purpose.
(2) A separate intimation cum application shall be given by each importer or his own goods.
One such intimation cumapplication shall be sufficient for a single consignment.
When such consignment contains goods of dif ferent descriptions, full details shall be given separately in the intimation cum appli cation.
Not more than one intimation cum application for export can be given by an importer for goods passing through an Exit Naka in a day.
(3) No such intimation cum application shall be accepted unless (a) it is complete in all respects and signed by the importer himself or by a person authorised by him in writing in this behalf; (b) it is supported by the receipt for the deposit paid at the time of import and is accompanied by the original invoice, if any, filed at the time of import; 462 (c) the goods produced for inspection and intended to be exported are, subject to the provisions of sub rule (2) of the last preced ing rule, identical with what they were at the time of import.
(d) the exporter and the importer of these goods are one and the same person and such articles have not undergone change of ownership.
The requirement of clause (c) shall not be applicable in the case of dutiable goods to which sub rule (3) or (4) of the last preceding rule applies.
(4) On receipt of such intimation cum applica tion and on arrival of the goods intended for export, at the Central Octroi Office or Branch Office, the Superintendent of Octroi or any officer authorised by him shall (a) satisfy himself that all the condi tions prescribed above are fulfilled; (b) verify that the goods actually pro duced for inspection are as described in the intimation cum application and in the relevant import invoice, if any, or in the import declaration in Form 4, and seal and mark such goods whenever deemed necessary; and (c) issue a written permission cum refund export pass in Form 12 after obtaining a specimen signature of the importer or his authorised agent on such pass.
(5) The importer accompanied by an escort, if provided by the Council, shall then take the goods beyond the octroi limits through the Exit Naka within the time limit and by the route specified in the pass.
Before crossing the Exit Naka, the impoter shall present the goods to the Octroi Officer at the Exit Naka for inspection, with the pass.
The time limit shall be fixed with due regard to the distance of the Exit Naka from the Central Octroi Office or the Branch office, but in no case it shall exceed 12 hours from the time of issue of the permission cumrefund export pass.
(6) The Octroi Officer at the Exit Naka, on presentation of such goods as well as the pass, shall satisfy himself that (a) the pass as well as the goods are presented within the specified time limit; 463 (b)the seals or marks, if any, are inact; and (c) the goods actually tally with those men tioned in the pass.
On being so satisfied, he shall make relevant entries in the register maintained for the purpose, obtain signature of the importer thereon, sign a certificate as given on the pass, deliver the same to the importer and allow the goods to pass beyond the octroi limits.
Provision for refund of deposit. (1) When any goods for which a deposit has been paid under rule 24 at the time of their import are exported, the amount of deposit recovered shall, subject to the provision of sub rule (2), be refunded.
(2) The refund shall be admissible, if all the conditions below are satisfied. (a) The refund is applied for within one month from the date of e x port.
(b) The goods are exported out of the octroi limits within a period of six months of their import.
(c) The application for refund is supported by a duly certified written permission cum refund export pass.
(d) All the conditions in sub rule (3) of rule 25 are fulfilled.
(e) The amount claimed as refund is with drawn within three months from the date of intimation to the importer to receive the amount.
(f) The goods exported were declared to be intended for temporary detention with the importer and eventual export at the time of import: Provided that the said period of six months shall not apply to goods imported by the Food Corporation of India established under section 3 of the Food Corporation Act, 1964.
Procedure for refund.
(1) The Applica tion for refund of deposit shall be made in Form 13 by the importer himself or by his duly authorised agent in this behalf in writing on any working day during the hours fixed for money transactions by the Council at the Central Octroi Office within one month from the date of the actual export.
If the last day for claiming refund falls on a public holiday such application shall be accepted on the next working day.
464 (2) Such application shall be accompanied by the duly certified relevant written permis sion cure refund export pass and shall contain reference to the connected export intimation cum application already given by the importer.
There shall be a separate application for each written permission cure refund export pass.
(3) If the refund application is in order and satisfies all the conditions specified in the last preceding rule, the amount of the refund shall be correctly determined subject to the limitation prescribed in the next succeeding rule".
Value, weight, etc.
of goods for purposes of refund.
When the refund is claimed in respect of goods on which duty is leviable ad valorem, the value for the purposes of refund shall be the value as per invoice on the strength of which the duty was originally paid together with such cost of carriage and other incidental charges that were then deter mined.
Where the value was determined in the absence of invoice on the basis of market rate prevalent on the day of import, that value only should be considered and not the market price prevalent in the local market on the day of export".
FORM 4 (Rules 14, 24 and 25) Declaration in respect of the dutiable goods imported into the Municipal octroi limits, which are intended for temporary detention with the importer and eventual export.
To The Octroi Officer, Octroi Naka No. . . . .
Municipal Council.
I, . . . . (insert full name and address of the importer) hereby declare that the below mentioned goods are meant for temporary detention with me at . . (specify address at which to be kept) for eventual export outside the octroi limits.
I am willing to pay an amount equal to the amount of full octroi due thereon as deposit either in cash or in the form of Bank Guarantee and may claim refund according to the rules if these goods are exported outside limits within six months from the date of their import.
The below mentioned details are true and according to the original invoice, true copy of which is filed herewith.
The said invoice covers all the goods im ported by me as per Bill of Entry/Railway Receipt/Goods Transport Memo/Air consignment Note No. . .dated . . 465 Sr.
No No.and Description Weight Value Senders Rem No &date descri of the or plus all name& arks of ption of goods goods incidental address import packages charges in full document which are to given seper ately 1 2 3 4 5 6 7 8 Full residential/business address of the importer.
Date . .
Signature of the Importer I have checked the above particulars with the invoice and verified the goods, which are found to be correct.
True copy of the invoice appended is verified and found to be correct.
The weight or quantity or value, together with the incidental charges declared, is correct.
The taxable weight/quantity/value of the goods is . . and the rate of octroi . . Date. .
Inspector/Clerk.
The amount of Rs. . on account of deposit has been recovered under receipt No. . . dated . . . Date . .
Inspector/Clerk. FORM5 (Rules 14 and 15) Declaration in respect of the dutiable goods imported on behalf of person, firm, or body allowed to keep an account current.
To, The Cetroi Officer, Octroi Naka No. . Municipal Council.
I,. . . . (insert the full name and address of the importer) hereby declare that the below mentioned goods are being imported into the Municipal Octroi limits on behalf of . . . (insert the name of persons, firm or body allowed to keep an account current) and that the below mentioned value and weight/quantity of the goods is true and correct and is according to the original invoice, true copy of which is filed herewith.
The said invoice fully covers all the goods imported by me today as per Bill of Entry/Railway Receipt/Goods Transport Memo/Air Consignment Note No. . dated . . , I further undertake to produce the said invoice for your inspection whenever demanded by you within one year from today.
466 To be filled in by the importer To be filled in at the Central Octroi Office 1.Sr.
No. 2.
Bill of Entry 'Railway Receipt ' Goods Transport Memo/ Air Consignment Note.
Number description of packages.
Goods.
Value plus incidental charges which are to be given seperately.
7.Rate of Ovctroi.
Amount of Octroi recoverable.
Date. .Signature of the importer Dues entered in I have checked the above particulars Account Current with the invoice and verified the goods, Date . . which are found to be correct.
True Octroi copy of the invoice appended is Superintendent verified and found to be correct.
The weight or quantity or value, together with the incidental charges declared, is correct.
Issued pass No . dated . Date . . .
Inspector/Clerk FORM6 (Rule 15) Pass for goods imported on behalf of person, firm or body allowed to keep an account current .
Municipal Council:. .Municipal Council Book No. Entrance Naka No. : Book No. En trance Naka No. Counterfoil of pass Pass for goods imported by in account current . (Name of Person, firm or body) Description No. and Description Weight, Description of the quantity of packages goods or value 1 2 3 Dated . . Dated . .
Entrance Naka Inspector/Clerk Entrance Naka Inspector/Clerk 467 Form 11 (Rules 25 and 26) Intimation cum application for written permission for Export of Goods Temporarily detained with the Importer To The Superintendent of Octroi, . .
Municipal Council.
Sir, I. . . . . (insert the full name and address of the importer) hereby declare my intention to export the goods to. . .through
Naka No. . as detailed below.
The certified copy of original invoice/invoices under which these goods were imported are appended herewith.
I have produced the goods for actual verification.
Kindly grant me the permission to carry the goods to the said Naka.
Description Quantity Date of Import Deposit Gross No. of the (Number of Import invoice receipt weight goods bags or & No. of No. and number & cases) entrance date date Naka 1 2 3 4 5 6 7 Value Amount to be Number of Name and How Remarks refunded Refund Export address of exported pass granted the consignee 8 9 10 11 12 13 Date . . .
Signature of Importer Verified the contents and the weight as above and found correct.
Countersigned.
Octroi Officer.
Signature of the Refund Inspector/Clerk.
Receipt No. . 468 FORM Rule 25) Written Permission cum Refund Export Pass Receipt No. . . Date . . . 19 Sl.
Month Name and Name and Description Quantity Gross No. and address of address of of the (number of weight date the impoter the consignee goods bags or cases) 1 2 3 4 5 6 7 Value Deposit How Exist Date & time by Whether Remarks to be exported Naka which the goods goods refunded No. should reach the sealed or Export Naka escort given 8 9 10 11 12 13 14 *Fee for Written Permission Cum Refund Pass Rs . .
Miscellaneous Receipt No. . , dated. . , Signature of the importer Signature of Octroi Officer I hereby certify that the goods mentioned above have passed outside the octroi limits this day the. . of the month. . 19 Time. . . a.m./p.m.
in my presence Railway receipt. . /Vehicle No. .
The seals, if any, thereon were intact when the goods were presented to me for verification.
Date . . .
Signature of the Exist Naka Officer Naka No. . *This fee should be levied in accordance with the bye laws framed under section 338 for granting permission to take the goods from the Central Octroi Office or Branch Office to the Exist Naka.
FORM13 (Rule 29) Application for Refund of Deposit To The Superintendent of Octroi, . .
Municipal Council.
469 Sir, I, . . . the resident of. . hereby apply for refund of deposit as per enclosed Written Permis sion cum Refund Export Pass No. . .dated. . , as the goods mentioned in the pass were exported on. .under my intimation cum application, dated. . , I therefore, request you to grant the refund of Rs. . and oblige.
Enclosure: Date. .
Signature of Importer On a reading of these rules it appears to be that Rules 24, 25 and 28 in terms would apply only to cases failing under category four, stated above.
The declaration in Form 4 referred to in Rule 24 and deposit of the amount equivalent to octroi duty payable at the entry point, production of the goods for verification at the Central Octroi Office are all consistent with its being applicable to a case where dutia ble goods are imported for temporary detention and eventual export by a person having a bonded warehouse of his own contemplated in Rule 14 (1) (d) and not Rule 14 (1) (e).
However, Rules 29 and 30 are general in terms and may be invoked in both the cases falling under Rule 14 (1) (d) and (e).
Sub rule (3) of Rule 29 refers to the compliance of the conditions in Rule 28 and that is how it may be said that the provisions of Rule 28 are attracted to the cases of a person having a bonded warehouse and the facility of account current.
However, the Rules have to be read and applied in such way that they do not conflict with but are consistent with the facility of current account given to the Company.
Form 5 which is applicable to a case falling under Rule 14 (1) (e) does not require the Company (importer) to give a declaration at the time of arrival of the goods at the entry Naka point that the "goods are meant for temporary detention with" the Company at its warehouse "for eventual export outside the octroi limits".
The Company need not also make any deposit with the Naka Inspector at the point of entry.
An amount equivalent to the octroi duty payable in respect of the goods is only entered in the account current after the goods have reached the warehouse and verified by the Octroi Officer.
Form 4is not applicable to the case of the Company which has got a current account facility.
The Compa ny, is, therefore, bound to give a declaration only in Form 5, and need not give a declaration as in Form 4 nor is there any obligation to deposit an amount equivalent to the full octroi duty with the Octroi Inspector at the Entry Naka Point.
Further reference to original invoices/in Forms 4 and 5 is only for the purpose of checking the particulars en tered into in the forms.
The production of an invoice is not, having regard to the 470 purpose of such production, to be insisted blindly.
If the particulars furnished in the form including weight/quantity or value could be established satisfactorily by other docu ments, we have no doubt that will be sufficient compliance with the Rules.
Column 5 of Form 11 also refers to invoice and the date of invoice.
This is again to correlate the goods exported with the goods imported.
If the identity of the goods could be established by evidence other than the production of invoices that should satisfy the Rules.
The invoice as such has no bearing on the liability of the goods for octroi or the right of the Company for refund.
So far as the production of the original invoices are concerned, the learned counsel for the Company pointed out that the goods are brought from their own manufacturing units at Pune and Jamshedpur and it will only be a stock transfer and this requirement of producing original invoice could not be complied with and is not applicable.
Under the current account procedure the invoices, if any and all the other documents are verified when the goods reach the ware house with reference to the description of the goods, weight/quantity, value and other particulars and it is only after verification the octroi duty leviable is determined and amount is debited in the account current and the demand also is issued.
The learned counsel for the appellant also referred to certain documents to show that for every category of arti cle, the Company has given a distinctive number and the goods are easily identifiable and the number of items or quantity imported are all record in the register and com puterised for easy verification.
It is these identifying numbers of the articles that are mentioned in the intima tion cure application for written permission for export.
He also relied on the fact that the Company has no manufactur ing unit within the Thane Municipality.
Similarly, Column 6 of Form II also could not be complied with as it is not applicable to a person who is having current account facili ty.
So far as the value is concerned the learned counsel for the appellants have fairly stated that the respondent was taking 72% of the list price of the articles for determining octroi payable, for which he has no objection.
In fact, he has suggested that since the Company publishes the price list periodically and that which shows the current price at any point of time may be taken as the basis for such valua tion.
The Octroi Exit Naka Officer had refused to give the certificate of export pass on the ground that the particu lars in Columns 5 and 6 of Form 11 could not be verified as the original invoices and the deposit receipts were not produced.
Since these columns could be filled only to the extent possible by a person having an account current facil ity and there is no dispute about the export of the goods mentioned therein the refusal to give the export pass cer tificate.
by the Exit Naka Officer could not be sustained.
471 The next point to be considered is the procedure to be followed when the importer wants to "breaking the hulk" and repack the goods in smaller quantities and also the proce dure relating to filling up Forms 11 and 12 and the refund applications in such circumstances.
Rules 24 (2.) states that for breaking the bulk and repacking in smaller pack ages, sanction of the Superintendent of Octroi is necessary and the "breaking bulk" shall also be done in the presence of an officer deputed for this purpose.
Rule 62 of Chapter VIII of the Schedule to the Bombay Provincial Municipal Corporation Act, 1949 provides that subject to the standing orders not less than 90% of the octroi paid on any goods shall be refunded if such goods are exported beyond the limits of the city within six months of payment: "provided that. (C) in the case of goods which have been broken bulk prior intimation has been given to the officers specified in this behalf in the standing orders and the place or places of storage have been reported to him from time to time".
Paragraph 5 of Appendix IV to this Act which we have noticed earlier states that the rules flamed under the Municipal Act shall "in so far as it is not inconsistent with the provisions of this Act, continue in force".
Rule 62 of Chapter VIII forms part of the Act.
The learned counsel for the appellant, therefore, contended that Rule 62 shall prevail and prior intimation of the intention to 'breaking bulk ' shall be enough and there was no necessity for the Company to get the sanction of the Superintendent of Octroi or break the bulk in the presence of an officer deputed for the purpose as required under sub rule (2) of Rule 24.
In other words according to the learned counsel Rule 24 (2) of the Octroi Rules is inconsistent with Rule 62 of Chapter VIII of the Schedule to the Act and to the extent. _ of inconsistency it shall be deemed to be not applicable.
On the other hand the learned counsel for the respondent con tended that Rule 62 (c) deals with prior intimation and Rule 24 (2) deals with the sanction and breaking of the bulk in the presence of an officer deputed for that purpose and both the rules can stay together and operate and there is no inconsistency.
We are not impressed with the argument that there is an inconsistency between Rule 62 and Rule 24 (2).
The intimation contemplated in Rule 62 imply that the break ing the bulk shall be done with the knowledge of the octroi authorities.
But it Cannot be said that the rules further provide that after intimation the breaking of the bulk shall be done in the presence of the officers and after sanction that would in any case be inconsistent.
Both the rules thus can stand together.
In H.M.M. Limited vs Administrator, ; this Court had occasion to consider the effect of non com pliance with this require 472 ment of a similar provision, on the right to get refund.
Shortly stated the facts in that case were these: The appel lant brought into the municipal limits Horlicks in bulk containers (large steel drums) for being packed in unit containers (glass bottles) at the packing station in Banga lore and thereafter exported outside the municipal limits.
In respect of the milkfood so exported in glass bottles the appellants sought refund of octroi on the ground that there was no consumption, use or sale within the municipal limits and the goods were exported.
Rule 24 of the Octroi Rules that were in force in Bangalore city provided: "24. 0n all articles on which octroi duty has been paid and which are subsequently exported beyond the octroi limits without breaking bulk, refunds shall, subject to the following rules, be granted at the rate originally charged at the time of import; provided that no such refunds shall, except in the ease of timber imported and re exported in log be granted unless such goods are exported within three months from the date on which octroi was levied".
Relying on this provision it was contended by the Munic ipality that breaking the bulk amounted to "use" within the municipal limits attracting levy of octroi and no refund was permissible.
The refund application had also not been made within three months from the date on which octroi was levied.
It was admitted that the appellants had not followed that procedure prescribed in Rule 24.
This Court held that mere transferring of a bulk product in small containers like packets or bottles for the purpose of sale does not amount to use of the goods in the sense the word is used in rela tion to levy of octroi.
It was further held that the words "without breaking bulk" is not an expression of art and that meant only transferring the product from the drums by break ing the seal of the drums, to the bottles for the purpose of exporting or for taking them out of the municipal limits, and that would not amount to either use or consumption of the Horlicks powder within the municipal limits attracting the levy of octroi.
The ratio of the judgment clearly is that merely on the ground that the goods are not exported in bulk as originally imported, the levy does not become valid or that the import er who exported the goods loses his right to a refund of the octroi paid.
The goods neither loose their identity nor cease to be identifiable.
Once we reach the conclusion that there is no consumption or use, octroi is not attracted and if any levy has been made and the amount collected, the same becomes legally refundable even when the goods are exported in parts and in smaller packages.
This is particu 473 larly so because in the case of goods not consumed or used within the octroi area but exported there is a constitution al bar for the levy of octroi.
In this connection we may also refer to another decision reported in Municipal Committee, Khurari vs Dhannalal Sethi & Ors., [1969] I SCR 166.
The rules considered in that case also provided that an application for refund was to be made in the prescribed form and that the exporter after filling in the particulars had to present his application at the office appointed for that purpose.
There were other rules which provided an elaborate procedure to be followed at the time of export of the goods.
These rules related to the octroi officers satisfying himself that the goods brought for export agree with those mentioned in the application, presentation of the claim within the prescribed time, iden tifying of the goods exported with those imported and other matters.
This Court held that: "these rules do provide a procedure which an exporter wishing to claim refund has to fol low.
But the question is whether in a case where an exporter has not done so, is he disentitled from claiming the refund.
The real difficulty in the way of the appellant Commit tee is that though the rules lay down a proce dure which such an applicant has to follow, they do not provide at the same time that an applicant for refund who has failed to follow the procedure laid down in r.r. 35 to 39 would be disentitled to claim the refund.
In the absence of such a provision coupled with the categorical language of r. 27 giving a right to an exporter of dutiable goods to claim 7/8th of the duty paid on such goods on their import, it becomes difficult to uphold the denial by the appellant Committee of the right of respondents 1 and 2 such a refund.
We are, therefore, of the opinion that in the present state of the rules, the appeal must fail though for reasons different from those given by the Board of Revenue and the High Court".
It may be pertinent to mention that the Maharashtra Municipalities (Octroi) Rules, 1968 also do not contain any specific provision that an applicant for refund who has failed to follow the procedure would be disentitIed to claim the refund.
It may be noted that the amount collected which is equivalent to the octroi duty payable on the goods, on entry into the octroi limits while in detention in the warehouse is only as a deposit pending export of the goods.
The other aspect is that once octroi is not leviable the deposit made by the importer pending export is in the nature of a trust and refundable in the event of the export of the goods.
Further in a given set of facts, whether the rules have been complied with will have 474 to be tested having regard to the nature of the particular transaction and whether the object of the procedure provided is otherwise fully satisfied.
` Rule 28 also merely states that the refund shall be admissible if all the conditions in sub rule 2 of that Rule are satisfied.
The object of requiring intimation or sanction and presence of an officer when breaking the bulk in the scheme of octroi levy and refund is to ensure that dutiable goods do not escape the assessment and refunds are made only in respect of goods exported.
In other words the whole requirement relates to the identification of the goods.
In that sense if the same is otherwise complied with the right to refund cannot be denied.
These rules cannot be read as enabling the municipality to levy and collect octroi even in cases where the goods have not been imported for consumption or use.
As held by this Court in Kirpal Singh Duggal vs Municipal Board, Ghaziabad, ; the octroi rules are intended to regulate the system on which the refunds shall be allowed and paid.
What are merely matters of procedure which the municipality was entitled to require compliance with in granting refund cannot be treated as condition precedent for the entitlement of the refund itself.
The Constitution prohibits levy of tax except in accordance with law.
When the goods are not imported for consumption or use within the octroi area the municipality ceases to have any constitutional right to levy octroi.
If the goods therefore have merely entered into the octroi limits and passed out of the same no octroi duty is attracted.
The concept of octroi as held by this Court in Burma Shell s case (supra) may include "the bringing in of goods in a local area so that the goods come to a repose there".
It is this concept that is reflected in Rule 28 (2) Co) when it requires evidence that the goods were exported out of the octroi limits within a period of six months of their im ports.
The learned counsel for the appellants Mr. Andharuji na had expressed certain difficulties in satisfying the Corporation that the goods imported were exported within the period of six months as provided in the rules in view of certain peculiar circumstances in this case.
He pointed out the goods received in bulk are small small items and there are about 16000 distinctive types of articles and when the bulks are broken and each of the categories items are mixed up together it becomes difficult for him to individually identify when the goods were received and when they were exported.
However, he was sure that the goods were exported before six months.
When this difficulty was pointed out during the pendency of the appeal, as an interim direction this Court by Order dated 1.5.
1989 directed the parties to proceed on the basis that the goods which came in first had gone out first unless some factors or features indicate otherwise.
This is not equitable principle unknown to law.
Even as early as in 1816 with reference to money paid on account to a creditor, in Clayton 's case (1814) 475 23 All.
E.R. Rep. P. 1, it was held that in the absence of an agreement to the contrary, in the case of current account containing debit and credit entries there is a presumption that the first item on the credit side of the account is intended to be applied in the payment of the first item on the debit side of the account.
This is an equitable princi ple which could be followed in the instant case and it may be presumed that the goods which came in first have gone out first and the six months period could be determined on that basis.
In any case in view of the interim direction given by this Court on May 1,1989 that may be usefully be followed for the future also in this case.
To sum up: Having regard to the nature and incidence of octroi unless the octroiable goods are consumed or used or are meant to reach an ultimate user or consumer in the octroi area no octroi is leviable.
The words 'sale therein in the words "consumption, use or sale therein in the defi nition octroi means sale of octroiable goods to a person for the purpose of consumption or use by such person in the octroi area.
If sale was intended for consumption or use in the octroi area whether the purchaser actually consumed inside or outside octroi area is irrelevant.
Rules 24 to 30 and the forms in the system of levy of octroi are intended to regulate the procedure for collection, identification of dutiable goods and correlation of goods exported with the goods imported for the purpose of refunds of octroi collect ed.
In view of constitutional bar octroi is not leviable if the goods are not brought into the octroi area for purposes of consumption or use in the area but for export and in fact exported by the importer himself or the sale by him occa sions the export.
Compliance with the procedure prescribed in the Rules for filing claims of refunds are not condition precedent for the right or eligibility for refund or the liability to refund but are provisions regarding proof of export of the goods imported and are not meant to be exhaus tive either.
They are to be interpreted and understood in that sense.
The object of the Rules fixing a period of limitation for export however is different.
The export cannot be put in perpetual doubt and the goods may be con sidered to have come to a repose if they were not exported within a particular period provided in the rules.
Applying these principles to the instant case, on facts the rejection of refund applications on the ground that Rule 25 (3) (d) had not been complied with was illegal.
Since the rejection of the claims for refund was merely on the ground that either Form 4 and original invoices were not produced or columns 5 and 6 of Form 11 or the corresponding columns in Form 12 had not been filled with reference to an original invoice or Form 4 or deposit receipt and the refusal to issue export pass certificates on those very grounds which we have stated are untenable the other orders of rejections are also invalid.
If the goods are mixed up and unidentifia ble 476 due to breaking bulk and repacking in smaller and assorted packages before export the principle that the first export was of the goods first imported, subject to any evidence available to the contrary, may be applied and the six months period prescribed for export may be determined accordingly.
When these appeals were pending by way of interim ar rangement this Court by order dated 25.4.1990 directed that in order to obviate the difficulty of identifying the goods at the time of export by reason of the breaking of the)bulk and in order avoid doubts, the respondent Corporation may depute their officer or officers on all working days at the warehouse of the Company to supervise the breaking of the bulk subject to the Company reimbursing the entire monthly payments and other allowances to be paid to the said officer or officers as per bill or pay slips sent by the Corporation to the Company.
We think that this procedure could be con tinued and followed in future also so that while the pur poses of the rules are served the free trade and commerce of the Company which is stated to have a large turnover is also not affected.
The learned counsel for the respondent then contended that the appellants have recovered the amounts paid by them by way of octroi duty from the dealers or the customers to whom they had sold the goods and therefore they are in any case not entitled to get a refund.
The argument was that if refund is ordered it would amount to allowing the appellants to unjustly enrich themselves at the cost of the public to whom the burden had already been passed.
This argument is based on the ground that in the selling price the company had merged the octroi duty originally paid as deposit and if a refund is made the company would be getting an additional amount over and above normal price which they would have charged but for the fact that they were initially asked to deposit octroi.
There is no evidence that any of the arti cles sold by the Company is subject to any price control by the Government or that the Company had charged any octroi separately in the bills, Invoices and the other documents of sale to the outside purchasers produced before us do not also show that any octroi was separately charged and col lected by the Company.
It may be mentioned that in the rejoinder filed by the appellant in the writ petition they have specifically denied that they "have recovered the amount paid by them by way of octroi duty from the dealers to whom they had sold the goods or that the dealers in turn have recovered the octroi duty from the customers".
In view of this the question of unjust enrichment does not arise.
477 This appeal is accordingly allowed on the above terms.
There will 'however be no order as to costs.
T.N.A. Appeal allowed.
| The appellant company was carrying on business of manu facture and sale of motor vehicles, spare parts of motor vehicles and excavators.
Their manufacturing units were located outside the municipal limits of the respondent corporation.
Pursuant to the permission granted by the Respondent Corporation under Rule 10(2) of 446 the Maharashtra Municipalities (Octroi) Rules, 1968 the appellant company was maintaining a bonded warehouse within the municipal limits of the Respondent Corporation.
The motor vehicles parts and excavators parts brought from the Company 's own factories as well parts imported from abroad were stored in this warehouse.
These products were brought in bulk and thereafter taken or sent out from the Municipal limits in smaller packings depending on the requirements of the customers in various parts of the country.
The appellants were also granted current account facilities without the requirement of immediate payment of octroi at the Octroi Naka.
Accordingly, the appellants were carrying out their activities of imports and exports under the current account procedure with facility of unpacking the bulk, repacking and exporting.
Under the Octroi Rules the octroi becomes refundable when the goods in respect of which octroi was paid are exported out of octroi limits within 6 months of their im port.
During the period 1st January, 1983 to 31st March, 1984 the appellant Company made 1182 claims for refund of octroi which were rejected by the Corporation on the grounds: (1) the Company had "sold" the spare parts within the octroi limits of the Corporation in contravention of Rule 25(3) (d) of the Maharashtra Municipalities (Octroi) Rules, 1968; (2) the procedure prescribed for export and the claim of refund had not been strictly followed.
The appellants filed a writ petition under Article 226 in the High Court of Bombay contending that the action of the Municipal Corporation in refusing refund was unconstitu tional and illegal.
The Division Bench of the High Court dismissed the writ petition.
The Company filed an appeal in this Court against the decision of the High Court.
In appeal to this Court it was contended on behalf of the appellant (i) since the sales were not for consumption or use within the octroi limits and that the parts were sold to parties outside the octroi limits and also for consump tion or use outside such limits the rejection of the claims by the Respondent Corporation on the ground that the sales were within the municipal limits in contravention of rule 25(3) (d) of the Rules is illegal; (ii) Under Rule 62 of Chapter VIII of the Schedule to Bombay Provincial Municipal Corporation Act, 1949, prior intimation of the intention to 'break the bulk ' is enough and there is no necessity for the company to get the sanction 447 of Superintendent of Octroi or break the bulk in the presence of an officer deputed for the purpose as required under sub rule (2) of Rule 24 of the Maharashtra Municipali ties (Octroi) Rules, 1968; Rule 24(2) of the Octroi Rules is inconsistent with Rule 62 and to the extent of inconsistency it shall be deemed to be not applicable.
On behalf of the respondent Corporation it was contended (i) that the meaning of words "sales therein" in the defini tion of octroi in the Acts and in Entry 52 of List II of VII Schedule to the Constitution could not be limited to sales of the goods for purposes of consumption or use within the municipal limits; (ii) there was a change in the ownership of the goods since a sale in law had taken inside the octroi limits though the purchaser was residing and carrying on business outside the octroi limits and under the sale the goods were intended to be and in fact exported for the purpose of consumption and use outside the octroi limits; (iii) that while Rule 62 (c) deals with prior intimation Rule 24(2) deals with the sanction and breaking of the bulk in the presence of an officer deputed for that purpose and both the rules can stay together and operate and there is no inconsistency; (iv) since the appellants have recovered the amounts paid by them by way of octroi duty from their deal ers or customers they are not entitled to refund; ordering of refund would amount to allowing the appellants to unjust ly enrich themselves at the cost of the public to whom the burden had already been passed.
Allowing the appeal, this Court, HELD: 1.
In the case of impost of octroi the taxable event is the entry of goods which are meant to reach an ultimate user or consumer in the area.
Mere physical entry into the octroi limits would not attract levy of octroi.
When the goods are brought in not for consumption within the area but for temporary detention and eventual export, octroi is not leviable.
The octroiable event in such a case shall be deemed not to have happened.
This is particularly so because in the case of goods not consumed or used within the octroi area but exported there is a constitutional bar for the levy of octroi.
In view of the constitutional bar, octroi is not leviable if the goods are not brought into the octroi area for purposes of consumption or use in the area but for export and in fact exported by the importer himself or the sale by him occasions the export.
[458 B C, 472 H, 473 A, 475 E] 1.1 Having regard to the nature and incidence of octroi unless the octroiable goods are consumed or used or are meant to reach an 448 ultimate user or consumer in the octroi area no octroi is leviable.
The words 'sale therein ' in the words 'consump tion, use or sale therein ' in the definition octroi means sale of octroiable goods to a person for the purpose of consumption or use by such person in the octroi area.
If sale was intended for consumption or use in the octroi area whether the purchaser actually consumed inside or outside octroi area is irrelevant.
Therefore octroi rules cannot be read as enabling the municipality to levy and collect octroi even in cases where the goods have not been imported for consumption or use.
[475 C, 474 B] Burmah Shell Co. vs Belgaum Municipal, ll963I Suppl.
2 S.C.R. 216; Hira Lal Thakur Lal Dalai vs Brash Broach Munic ipality, ; Municipal Council of Jodhpur vs Parekh Automobiles Ltd. & Ors., ; and H.M.M. Ltd. vs Administrator, ; , relied on.
Khandelwal Traders Akola vs The Akola Municipal Council, AIR 1985 Born.
218, approved.
1.2 Since the goods were sold by the Company to outside purchasers and the goods under the transactions of sale were intended to be exported and were in fact exported, for consumption or use outside the municipal limits no octroi duty was leviable and the octroi duty paid on entry into the municipal limits was, therefore, liable to be refunded.
Accordingly the rejection of the refund claims on the ground that Rule 25(3) (d) had not been strictly complied with is illegal and could not be sustained.
[457 G H] 2.
Once octroi is not leviable the deposit made by the importer pending export is in the nature of a trust and refundable in the event of the export of the goods.
[473 G H] 2.1 Under the octroi scheme, when the goods in respect of which octroi is paid are exported, the octroi becomes refundable.
Right to refund arises because the goods are not consumed inside the area but exported and the tax becomes not leviable.
[458 C] 2.2 If there is no consumption or use, octroi is not attracted and if any levy has been made and the amount collected, the same becomes legally refundable even when the goods are exported in parts and in smaller packages.
[472 H] 3.
The rules merely regulate the system on which refund shall 449 be allowed.
In a given set of facts, whether the rules have been complied with will have to be tested having regard to the nature of the particular transaction and whether the object of the procedure provided is otherwise fully satis fied.
[458 D, 473 H, 474 A] 3.1 The object of requiring intimation or sanction and presence of an officer when breaking the bulk in the scheme of octroi levy and refund is to ensure that dutiable goods do not escape the assessment and refunds are made only in respect of goods exported.
In other words the whole require ment relates to the identification of the goods.
In that sense if the same is otherwise complied with the right to refund cannot be denied.
[474 A B] 3.2 Rules 24 to 30 of the Maharashtra Municipalities (Octroi) Rules, 1968 and the forms in the system of levy of Octroi are intended to regulate the procedure for collection identification of dutiable goods and correlation of goods exported with the goods imported for the purpose of refunds of octroi collected.
[475 D] The rules do not contain any specific provision that an applicant for refund who has failed to follow the procedure would be disentitled to claim the refund.
[473 G] 3.3 Compliance with the procedure prescribed in the Rules for filing claims of refunds are not conditions prece dent for the right or eligibility for refund or the liabili ty to refund but are provisions regarding proof of export of the goods imported and are not meant to be exhaustive ei ther.
They are to be interpreted and understood in that sense.
[475 E F] Municipal Committee Khurari vs Dhannalal Nethi & Ors., ; ; Kirpal Singh Duggal vs Municipal Board, Ghaziabad, ; , applied.
3.4 Since the rejection of the claims for refund was merely on the ground that either form 4 and original in voices were not produced or columns 5 and 6 of Form 11 or the corresponding columns in Form 12 had not been filled with reference to an original invoice or Form 4 or deposit receipt and the refusal to issue export pass certificates on those very grounds are untenable the orders of rejection are invalid.
1475 G H] 4.
The object of the Rules fixing a period of limitation for 450 export however is different.
The export cannot be put in perpetual doubt and the goods may be considered to have come to a repose if they were not exported within a particular period provided in the rules.
[475 F] 4.1 However an equitable principle could be followed in this regard and it may be presumed that the goods which came in first have gone out first.
If the goods are mixed up and unidentifiable due to breaking bulk and repacking in smaller and assorted packages before export the principle that the first export was of the goods first imported, subject to any evidence available to the contrary, may be applied and the six months period prescribed under Rule 28(2) (b) for export may be determined accordingly.
[475 A B, H, 476 A] Clayton 's case; , , applied.
There is no inconsistency between Rule 62 and Rule 24(2).
The intimation contemplated in Rule 62 imply that the breaking the bulk shall be done with the knowledge of the octroi authorities.
But it cannot be said that the rules further provide that after intimation the breaking of the bulk shall be done in the presence of the officers and after sanction that would in any case be inconsistent.
Therefore, both the rules can stand together.
[471 F G] 6.
There in no evidence that any of the articles sold by the Company is subject to any price control by the Gov ernment or that the Company had charged any octroi separate ly in the bills.
Documentary evidence do not also show that any octroi was separately charged and collected by the Company.
Therefore the question of unjust enrichment does not arise.
[476 F H]
| 6946.txt |
vil Appeal Nos.
1052 53 of 1990.
90 From the Judgment and Order dated 4,7.1986 of the Orissa High Court in OJC.
1007 and 1008 of 1983.
A.K. Panda for the Appellants.
Kundan Lal Jagga and K.K. Gupta for the Respondents.
The following Order of the Court was delivered: ORDER Special leave granted.
Agruments heard.
These two appeals on special leave arise out of the common judgment of the High Court of Orissa made in O.J.C. Nos.
1007 and 1008 of 1983 decided on July 4, 1986 whereby the High Court set aside and quashed the impugned orders made by the Special Officer, Land Reforms, Central Division, Cuttack in O.L.R. Revision No. 131 of 1982 as well as O.L.R. No. 142 of 1982.
The matrix of the case in O.J.C. No. 1007 of 1983 is that on July 30, 1977, the respondent No. 2, Paramanand Sethi filed case No. 85 of 1977 under section 22 of the Orissa Land Reforms Act, against S/Shri B. Mohapatra, Pra fulla Kumar Pati and Gadadhar Pati (Respondent Nos. 1, 3 and 4) for restoration of lands sold to respondent Nos. 1, 3 and 4 on the ground that respondent No. 2 was a member of the Scheduled Caste (Dhoba Community) and the sales in question were hit by the provisions contained in section 22 of the Orissa Land Reforms Act, 1960.
The respondent No. 2 filed a caste certificate of the Additional Tehasildar, Betanoti wherein the respondent No. 2 was shown as belonging to 'Dhoba ' by caste which is recognised as a Scheduled Caste.
He also filed the record of rights in the name of Arjun Sethi, father of respondent No. 2 which showed the caste of Arjun Sethi as 'Dhoba '.
The respondent No. 5, Smt.
Nilamani Sethi, wife of Late Bhanu Sethi also filed O.L.R. Misc.
Case No. 21 of 1979 under Section 22 of the Orissa Land Reforms Act stating inter alia that the sale made by her in favour of respondent No. 1 who admittedly belonged to Brahmin Caste is void as the said sale was made without the permission of the Revenue Officer as mandatorily required under the provisions of the aid Act.
She produced the Caste certificate issued by tile Tehasildar, Betanoti which showed that she belonged to 'Dhoba ' caste 91 which is recognised as a scheduled caste.
She further filed two caste certificates issued by the two M.L.As.
which certified that she belonged to a scheduled caste, (Dhoba).
The Revenue Officer, vide his order dated March 19, 1979 rejected the case No. 85 of 1977 filed by the respondent No. Paramanand Sethi.
The respondent No. 2 filed O.L.R. Appeal No. of 1979 in the court of Additional District Magistrate, Mayutbhanj and the same was allowed vide judgment and order dated December 1980.
The Additional District Magistrate while allowing the appeal observed as follows: "It is a known fact that there is no community called 'Raj aka ' community which is different from Dhoba community.
Rajaka is only a literary word for the common term Dhoba.
While mentioning his caste as 'Rajaka ' the appellant has not ceased to be a 'Dhoba '.
The certificate given by the Addl.
Tehasildar, Betanoti and the entry in the R.O.R. confirm the assertion of the petitioner that he is a Dhoba by caste.
In the circumstances, the petitioner must be held to be a S.C, person and for that matter, his brothers and mother are also the members of a S,C, According to Section 22 of the Orissa Land Reforms Act previous permission from the Revenue Offi cer should have been obtained by them before transferring their lands to the respondents.
Since this statutory re quirement has not been met, the transfers are illegal.
The suit land must, therefore, be restored to the transferors.
" Against the said judgment and order, the respondent No. 1 filed O.L.R. Revision No. 131 of 1982 before the Special Officer, Land Reforms, Central Division, Cuttack, The said Revision Case was dismissed vide judgment and order dated March 4, 1983 on the finding that there were records of competent authorities like Addl.
Tehasildar, Betanoti and the record of rights showing that the caste of Paramanand Sethi is 'Dhoba '.
it has been further observed that: "As per the Oriya Bhasakosha the definition of 'Dhoba ' is 'Rajaka Washerman '.
Hence, there is no conflict regarding what is the meaning of 'Rajaka '.
It is merely a synonym of the word 'Dhoba '.
The Sanskrit lot 'Dhoba ' is 'Rajaka '.
Just because the word 'Rajaka ' does not find mention in the Presidential Order does not exclude it from the purview 92 of such an order. 'Dhobas ' are Scheduled Castes and 'Rajaka ' is a synonym of 'Dhoba '.
Now, that the High Court has so eloquently laid down the law in this regard, there is no reason to deny protection to the weaker sections on a mere technicality. 'This denial would be contrary to the spirit of the Orissa Land Reforms Act, itself." O.L.R. Misc.
Case No. 21 of 1979 filed by the respondent No. 5, Smt.
Nilamani Sethi was allowed vide order dated March 10, 1980 by the Revenue Officer directing the restora tion of the suit lands to respondent No. 5 under Section 23 of the Orissa Land Reforms Act.
The respondent No. 1 filed O.L.R. Appeal No. 42 of 1980 in the Court of Additional District Magistrate, Mayurbhanj. 'The said appeal was dis missed vide judgment and order dated February 21, 1981 holding that the transferor had amply proved that she was Dhoba which is a Scheduled Caste by producing documentary evidence.
She, therefore, does not cease to be a Dhoba even if she has described herself in the various deeds as Rajaka.
Since the transfer of the suit lands had been made to the respondent No. 1, Prafulla Kumar Pati who is a brahmin by caste without obtaining prior written permission of the Revenue Officer as required under Section 22 of the Orissa Land Reforms Act, the transactions had been rightly declared as void by the Revenue Officer. 'The suit lands must there fore, be restored to the possession of the respondent No. 5.
Against this order, respondent No. 1 filed O.L.R. Revi sion No. 142 of 1982 before the Special Officer, Land Re forms, Central Division, Cuttack and the same was dismissed vide judgment and order dated February 2, 1983.
The respondent No. 1 thereafter filed two writ petitions called O.J.C. Nos. 1007 and 1008 of 1983 against the judg ments and orders dated March 4, 1983 and February 2, 1983 respectively passed by the Special Officer, Land Reforms, Central Division, Cuttack.
Both these writ petitions were heard and disposed of by a common judgment impugned in these two appeals on special leave whereby the High Court, Orissa set aside and quashed the judgments and orders passed by the Special Officer, I.and Reforms, Central Division, Cuttack and allowed the writ petitions observing inter alia that: "Considering the cases in hand in the light of the above discussions, I have no hesitation to come to the conclusion that the Revenue Authorities have committed a serious 93 error of law in coming to the conclusion that 'Rajaka ' caste was included within the notified caste/community of 'Dhoba ' as their nature of work was similar.
Although it is unneces sary to make any further discussion, I must point out that even on a reference to the Bhashakosha it could not be categorically said that 'Rajaka ' was a caste which could not be said to be a class of washerman as the Bhashakosha itself gives other meanings of this word.
" Against this judgment and order, the instant appeals on special leave have been filed.
Before proceeding to decide the question whether the respondent Nos. 2 and 5, the trans ferors belonged to the scheduled caste Dhoba Community as mentioned in item No. 26 of the List of Scheduled Castes in the Scheduled Caste Order, 1950 in the State of Orissa, it is relevant to refer to the provisions of Section 22 and Section 23 of the Orissa Land ,Reforms Act, 1960 (Orissa Act 16 of 1960): Section 22: Restriction on alienation of land by Scheduled 'Tribes.
(1) Any transfer of a holding or part thereof by a raiyat, belonging to a Scheduled Tribe shall be void except where it is in favour of (a) a person belonging to a Scheduled Tribe; or (b) a person not belonging to a Scheduled 'Tribe when such transfer is made with the previous permission in writing of the Revenue Officer: Provided that in case of a transfer by sale the Revenue Officer shall not grant such permission unless he is satis fied that a purchaser belonging to a Scheduled Tribe willing to pay the market price for the land is not available, and in case of a gift unless he is satisfied about the bona fides thereof.
(2) The State Government may having regard to the law and custom applicable to any area prior to the date of commence ment of this Act by notification direct that the restric tions provided in sub section (1) shall not apply to lands situ ated in such area or belonging to any particular tribe throughout the State or in any part of it.
94 (3) Except with the written permission of the Revenue Offi cer, no such holding shall be sold in execution of a decree to any person not belonging to a Scheduled Tribe.
(4) Notwithstanding anything contained in any other law for the time being in force where any document required to be registered under the provisions of Cl.
(a) to Cl.
(e) of sub section (1) of section 17 of the (16 of 1908) purports to effect transfer of a holding or part thereof by a raiyat belonging to a Scheduled Tribe in favour of a person not belonging to a Scheduled Tribe, no register ing officer appointed under that Act shall register any such document, unless such document is accompanied by the written permission of the Revenue Officer for such transfer.
(5) The provisions contained in sub Ss. 1 to 4 shall apply, mutatis mutandis, to the transfer of a holding or part thereof of a raiyat belonging to the Scheduled Castes.
(6) Nothing in this section shall apply (a) to any sale in execution of a money decree passed, or to any transfer by way of mortgage executed, in favour of any scheduled bank or in favour of any bank to which the Orissa Co operative Societies Act, 1962 (Orissa Act 33 of 1962) applies; and (b) to any transfer by a member of a Scheduled Tribe within a Scheduled Area.
Section 23: Effect of transfer in contravention of section 22.
(1) In the case of any transfer in contravention of the provi sions of sub section (1) of section 22 the Revenue Officer on his own information or on the application of any person interest in the land may issue notice in the prescribed manner calling upon the transferor and transferee to show cause why the transfer should not be declared invalid.
Section 22 clearly enjoins that a person belonging to Scheduled Tribe can not make a valid transfer of his lands in favour of a person not belonging to the Scheduled Tribe without obtaining the previous 95 permission in writing of the Revenue Officer to such trans fer.
Subsection 5 of the said section further provides that the provisions contained in sub section 1 to 4 shall apply, mutatis mutandis to the transfer of a holding or part there of a raiyat belonging to the Scheduled Castes.
Section 23 B of the said Act further provides that if the validity of the transfer of any holding or part thereof is in question, the burden of proof that the transfer was valid shall, notwith standing anything contained in any other law for the time being in force, lie on the transferee.
In this case, the transfers made by the respondent Nos. 2 and 5 in favour of respondent No. 1, Prafulla Kumar Pati who admittedly belongs to Brahmin caste are hit by the provisions of Section 22 of the said Act in as much as the previous permission in writing of the Revenue Officer had not been obtained to the alleged transfers.
It has been submitted on behalf of the respondent Nos. 2 and 5 that they belong to Dhoba (Dhobi) community which is one of the Sched uled Caste in the State of Orissa under the Scheduled Caste Order, 1950.
It has been further contended that the father of the respondent No. 2 has been recorded as belonging to Dhoba community in the finally published record of rights which has been annexed as Annexure 'B ' to these appeals.
It has also been submitted on behalf of the respondent Nos. 2 and 5 that the caste certificates granted by the Tehsildar, Betanoti as well as by the two local M.L.As.
clearly estab lished that the respondent Nos. 2 and 5 belong to Dhoba community and as such they are Scheduled Castes.
Much argu ment has been advanced on the mentioning of the caste of these two respondents as 'Rajaka ' in the alleged deeds on the ground that the caste 'Rajaka ' as mentioned in the sale deeds did not find place in the List and instead the Caste 'Dhoba ' appears in Item 26 of the List of Scheduled Castes in the State of Orissa under the Constitution of Scheduled Caste Order, 1950 as made under Article 341 of the Constitu tion of India.
It has been urged in this connection that the Caste 'Rajaka ' as mentioned in the deeds can not be taken to be synonym of caste 'Dhoba ' and no evidence can be adduced to that effect to prove that 'Rajaka ' included within the notified caste, commentary of 'Dhoba ' as held by the High Court.
We are unable to accept this contention advanced on behalf of the respondent Nos. 1, 3 and 4 on the ground that the caste of the respondent No. 2 and 5 was mentioned in the caste certificates granted by the Tehsildar, Betanoti as 'Dhoba '.
Moreover, in the finally published record of rights the caste of the father of respondent No. 2 had been record ed also as 'Dhoba ' which undoubtedly is a Scheduled 96 Caste under the Scheduled Castes Order, 1950 issued under the provisions of Article 341 of the Constitution of India.
It is also pertinent to mention that 'Rajaka ' is the literal synonym for the word 'Dhoba ' and according to the Puma Chandra Oriya Bhasakosha which is a recognised authority, the definition of 'Dhoba ' is Rajaka washerman.
As such, the submission that the caste 'Rajaka ' is different from caste 'Dhoba ' is not at all sustainable.
It is pertinent to refer in this connection to the observations of the Supreme Court in B. Basavalingappa vs D. Munichinnappa, ; at 320 wherein it has been observed that: "Ordinarily therefore it would not have been open in the present case to give evidence that the Voddar caste was the same as the Bhovi caste specified in the Order for Voddar caste is not mentioned in brackets after the Bhovi caste in the Order.
But that in our opinion does not conclude the matter in the peculiar circumstances of the present case.
The difficulty in the present case arises from the fact (which was not disputed before the High Court) that in the Mysore State as it was before the re organisation of 1956 there was no caste known as Bhovi at all.
The Order refers to a scheduled caste known as Bhovi at the Mysore State as it was before 1956 and therefore it must be accepted that there was some caste which the President intended to include after consultation with the Rajpramukh in the Order, when the Order mentions the caste Bhovi as a scheduled caste.
It cannot be accepted that the President included the caste Bhovi in the Order though there was no such caste at all in the Mysore State as it existed before 1956.
But when it is not disputed that there was no caste specifically known as Bhovi in the Mysore State before 1956, the only course open to courts to find out which caste was meant by Bhovi is to take evidence in that behalf.
" In the instant case, referring to this decision even though the respondent Nos. 2 and 5 i.e. the transferors mentioned in the deeds of transfer their caste as 'Rajaka ', there is no such caste mentioned in the Constitution of Scheduled Caste Order, 1950.
In such circumstances, relying on the aforesaid observation of this Court, it is necessary and also incumbent on the Court to consider as to what caste the respondent Nos. 2 and 5 belong to.
Moreover, considering the record of 97 rights as well as the various certificates issued by the revenue authorities and the local M.L.As.
referred to here inbefore wherein the transferors have been described as belonging to 'Dhoba ' community, the irresistible conclusion that follows is that the respondents transferors belong to 'Dhoba ' caste which is one of the Scheduled Caste in the State of Orissa.
In the premises aforesaid the judgment and order of the High Court referred to in O.J.C. Nos. 1007 and 1008 of 1983 are liable to be set aside.
We, therefore, set aside the same and affirm the order of the Special Officer, Land Reforms, Central Division, Cuttack passed in O.L.R. Revision No. 131 of 1982 and O.L.R. No. 142 of 1982.
The respondent Nos. 1, 3 and 4 are directed to restore the lands in ques tion to the possession of the respondent Nos. 2 and 5 forth with.
The appeals are allowed without any order as to costs.
T.N.A. Appeals allowed.
| Respondent No. 2, a scheduled caste, filed a case for restoration of lands sold to respondent Nos. 1, 3 and 4, non scheduled castes, on the ground that the sale was in viola tion of section 22 of the Orissa Land Reforms Act, 1960 as the requisite permission of the Revenue Officer was not obtained.
In the sale deed the transferor Respondent was described as 'Rajaka ' while in the caste certificate he was mentioned as ' Dhoba '.
The Revenue Officer rejected the ease.
Respondent No. 2 filed an appeal which was allowed by the Additional District Magistrate.
Against the order of Additional District Magistrate a revision was preferred by respondent No. 1 which was dismissed by the Special Officer, Land Reforms by holding that merely because the word 'Raja ka ' does not find mention in the Scheduled Caste Order, 1950 does not exclude it from the purview of such an order.
In the connected appeal respondent No. 5 filed a case for restoration of land sold to respondent No. 1 which was allowed by the Revenue Officer.
The appeal filed by respond ent No. 1 was dismissed by the Additional District Magis trate.
A Revision preferred by Respondent No. 1 was also dismissed by the Special Officer Land Reforms.
Respondent No. 1 filed writ petitions in the High Court which quashed the orders made by the Special Officer, hold ing that the Revenue Authorities committed a serious error of law in holding that 89 'Rajaka ' caste was included within the notified caste/commu nity of Dhoba '.
In these appeals it was contended on behalf of transfer ee respondents that the Caste 'Rajaka ' mentioned in the sale deeds cannot be taken to be synonym of caste 'Dhoba ' men tioned in Item 26 of the List in Scheduled Castes Order, 1950.
Allowing the appeals, this Court, HELD: 1.
Though the respondent Nos. 2 and 5 i.e. the transferors mentioned in the deeds of transfer their caste as 'Rajaka ' there is no such caste mentioned in the Consti tution (Scheduled Castes) Order, 1950.
In such circum stances, it is necessary and also incumbent on the Court to consider as to what caste they belong to.
[96B] B. Basavalingappa vs D. Munichinnappa, [1965] 1 S.C.R. 316, followed.
2. 'Rajaka ' is the literal synonym for the word 'Dhoba ' and according to the Purna Chandra Oriya Bhasakosh a which is a recognised authority, the definition of 'Dhoba ' is Rajaka washerman.
Therefore the submission that the caste 'Rajaka ' is different from caste 'Dhoba ' is not at all sustainable.
[96A] 3.
In the record of rights as well as the various cer tificates issued by the revenue authorities and the local M.L.As the transferors have been described as belonging to 'Dhoba ' community.
The irresistible conclusion that follows is that the respondent transferors belong to 'Dhoba ' caste which is one of the Scheduled Caste in the State of Orissa.
[96H, 97A] 3.1 Therefore the transfers made by respondent Nos. 2 and 5 in favour of respondent No. 1, who admittedly belongs to Brahmin caste, are hit by the provisions of Section 22 of the Orissa Land Reforms Act, 1960 in as much as the previous permission in writing of the Revenue Officer had not been obtained to the alleged transfers.
[95C] [The transferee respondents directed to restore the lands in question to the possession of the transferor respondents forthwith.] [97C]
| 6308.txt |
il Appeals Nos.
78 to 83 of 1959.
Appeals by special leave from the judgment and orders dated July 28, 1954, of the U. P. Board of Revenue in Second Appeals Nos.
430 435 of 1953 54, arising out of the judgment and orders dated April 28, 1954, of the Court of the Additional Commissioner, Meerut Division, Meerut, in Appeals Nos.
455 460 of 1954 against the judgment and orders dated March 16, 1954, of the Addl.
District Magistrate, Meerut, in Cases Nos.
389 394 of 1950.
B. C. Misra, for the appellants.
section N. Andley, J. B. Dadachanji and Rameshwar Nath, for the respondent.
April 24.
The Judgment of the Court was delivered by SUBBA RAO, J.
These six appeals, by special leave were filed against the judgment of the Board of Revenue dated July 28, 1954.
The respondent was a Zamindar of Gadhi, Baghu and Santokpore Villages in Uttar Pradesh.
He claimed that the plaint schedule lands were his Sir.
The appellants set up a dispute claiming that they were admitted by the respondent as hereditary tenants and that they were in possession of the said lands.
As the dispute was likely to cause breach of the peace, the Sub Divisional Magistrate, Baghpat, took proceedings under section 145, Code of Criminal Procedure, and attached the disputed lands on October 8, 1948, and directed them to be placed in possession of a superdgidar pending disposal of those proceedings.
After 800 making the necessary enquiry, by an order dated March 20, 1950, he found that the appellants were in possession of the said lands and declared that they were entitled to be in possession thereof until evicted therefrom in due course of law.
On June 30, 1950, the respondent filed six suits in the Revenue Court (Additional Collector, Meerut) against the appellants under section 180 of the U. P. Tenancy Act (U. P. 17 of 1939), hereinafter called the Act, for evicting them from the said lands and for damages.
He alleged therein that the disputed lands were his Sir lands and that the appellants trespassed on the same on the basis of a wrong order of the Criminal Court.
The appellants pleaded, inter alia, that they had been admitted as hereditary tenants by the respondent after receiving from them a sum of Rs. 40,000 towards premium.
The suits were consolidated, but were stayed on August 14, 1951, under r. 4 of the Rules made under the U. P. Ordinance No. III of 1951.
On September 22, 1952, on an application made by the respondent, the Revenue Court ordered under r. 5 for restarting the trial of the suits.
After the said order, the Revenue Court transferred the suits to the Civil Court for retrial, but the first Additional Munsif, Ghaziabad, to whom the suits were transferred, held that the said suits were triable only by the Revenue Court and retransferred the same to that Court.
The Additional Collector, Meerut, held, on evidence, that the said lands were Sir and Khud kasht of the respondent and that the appellants were not admitted thereto as hereditary tenants.
The appellants preferred six appeals against the decrees of the Additional Collector in the six suits to the Court of the Commissioner at Meerut.
The Additional Commissioner, who heard the appeals, held that one of the appeals filed by the legal representatives of Jahana, the plaintiff in the suit which gave rise to that appeal, had not been properly presented on the ground that Shri Brahmanand Sharma, Vakil, did not file in the suit any vakalat given to him by the legal representatives of the deceased and therefore the appeal had abated, and that as all the suits were consolidated with the 801 consent of the parties, the decision in the suit became final and operated as res judicata in the other appeals.
On the merits, he agreed with the trial Court in holding that the lands in dispute were Sir and that the appellants were not hereditary tenants.
Thereafter, the appellants preferred six second appeals against the said order of the Additional Commissioner to the Board of Revenue at Allahabad.
The Board of Revenue accepted the findings of the two Courts, and also it negatived the plea raised by the appellants for the first time to the effect that the suits were not maintainable in the Revenue Court.
In the result, the appeals were dismissed.
The present appeals were filed against the order of the Board of Revenue.
The learned Counsel for the appellants raised before us the following contentions: (1) The appeal by the legal representatives of Jahana against the order of the Additional Collector, Meerut, was properly presented to the Court of the Commissioner; (2) assuming that the said appeal had abated, the decision of the Additional Collector in the suit giving rise to the said appeal would not operate as res judicata in the connected appeals; (3) the Revenue Court had no jurisdiction to try the suits ; (4) as the suits had been stayed under r. 4 of the Rules made under the U. P. Zamindari Abolition and Land Reforms Act, 1950, hereinafter called the Rules, they had abated under r. 5 of 'the said Rules; (5) the finding on issue one, namely, that the appellants were not hereditary tenants, was vitiated by errors of law ; and (6) the finding on issue two, namely, to what damages, if any, was the plaintiff entitled was contrary to law inasmuch as the Additional Collector gave damages though neither the witnesses deposed to it nor the Advocate advanced any argument thereon.
The first two contentions need not detain us.
As we are rejecting the contentions of the learned Counsel for the appellants on all the other points, the correctness of the decision of the Revenue Board on the said two points would not affect the result of the appeals.
We do not, therefore, propose to express our opinion thereon.
101 802 We shall take the fifth contention next.
That contention raises the question whether the appellants were hereditary tenants of the disputed lands.
The three Courts have concurrently held on a consideration of oral and documentary evidence that they were not hereditary tenants.
The learned Counsel for the appellants made an attempt to reopen the said finding by contending that it was vitiated by the following errors of law: (i) Though the appellants filed a certified copy of the khatauni of 1355 fasli, the Courts did not draw the presumption, which they were bound to do, to the effect that the said certified copy was a genuine document and that the person who purported to have signed it had held the official character which he claimed to hold in the said document; (ii) as the Magistrate made an order in favour of the appellants under section 145 of the Code of Criminal Procedure, the Courts should have thrown the burden of proof on the respondent; (iii) the material evidence adduced on the side of the appellants was ignored; (iv) the Courts applied different standards of proof to the appellants and the respondent in regard to the certified copies of khatauni and khasra prepared by the same patwari, Ahmed Ali; and (v) the Courts also ignored the rights accrued to the appellants and ss: 10, 16 and 20 of the U. P. Tenancy Act.
For convenience of reference and to distinguish the alleged errors of law from the main contentions, we shall refer to the former as points.
The first point, in the manner presented before us, does not appear to have been raised in any of the three Courts.
Section 79 of the Evidence Act reads: " The Court shall presume to be genuine every document purporting to be a certificate. . which is by law declared to be admissible as evidence of any particular fact, and which purports to be duly certified by any officer of the Central Government or of a State Government. . . . . . . .
Provided that such document is substantially in the form and purports to be executed in the manner directed by law in that behalf.
The Court shall also presume that any officer by whom any such document purports to be signed or 803 certified, held, when he signed it, the official character which he claims in such paper ".
Under this section a Court is bound to draw the presumption that a certified copy of a document is genuine and also that the officer signed it in the official character which he claimed in the said document.
But such a presumption is permissible only if the, certified copy is substantially in the form and purported to be executed in the manner provided by law in that behalf.
Section 4 of the Evidence Act indi cates the limits of such a presumption.
The relevant part of that section reads: " 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 ".
To put it differently, if a certified copy was executed substantially in the form and in the manner provided by law, the Court raises a rebuttable presumption in regard to its genuineness.
The khatauni of 1355 fasli with which we are concerned, gives the relevant details and purports to have been signed by Ahmed Ali, the patwari of the village.
It cannot be disputed that the patwari was an officer appointed by the State Government and that he was authorized to issue certified copies of the record of rights.
The U. P. Land Records Manual gives the rules prescribing the form and the manner in which a certified.
copy of the record of rights should be issued.
Paragraph 26 of the Manual confers upon him the power to give to the applicants certified copies from his record; and tinder el.
(d) of the said paragraph he should enter in his diary a note of such extracts.
He should also note the amount of fee realised by him in the diary as well as on the extract.
In this case neither the diary was produced to prove that the procedure prescribed was followed nor the extract to disclose that the officer made any note of payment.
It cannot, therefore, be said that the certified copy was issued by the patwari in substantial compliance with the provisions of law governing such issue.
If so, it follows that the Court is not bound to draw the presumption in regard to its genuineness.
804 That apart, a Court is bound to draw only a rebuttable presumption in regard to its genuineness.
In this case the three Courts rejected the document on the ground that it was not genuine on the basis of not only the internal evidence furnished by the document but also on other evidence.
They have given convincing reasons for doing so, and even if there was any rebuttable presumption, it was rebutted in the present case.
Nor is there any merit in the second point either.
The order of the Magistrate under section 145 of the Code of Criminal Procedure may, at best, throw the burden of proof on the plaintiff ; but in the present case the question of burden of proof is not material, for the findings of the three Courts were arrived at on a consideration of the entire evidence.
Though the learned Counsel says that material evidence has been ignored by the Courts, he has not been able to point out what evidence has been excluded.
The Courts have considered the entire evidence placed before them and the findings were based on an appreciation of the said evidence.
We are also unable to appreciate the contention that different standards of proof have been applied by the Courts in respect of the different parties.
This argument is based upon the fact that the Additional Commissioner, while rejecting the certified copy of the khatauni of 1355 fasli filed by the appellant, relied upon the certified copy of khasra dated June 28, 1948, filed by the respondent, though both of them were issued by the same patwari, Ahmed Ali.
We do not see any incongruity in the action of the Additional Commissioner.
He rejected the former as, for other reasons, he held that it was not genuine, and he relied upon the latter as he accepted its genuineness.
The last of the points has not been made in any of the Courts below and indeed it does not arise on the finding that the appellants are not tenants.
Sections 10, 16 and 20 of the U. P. Tenancy Act presuppose that the person claiming rights thereunder is a tenant, and, on the finding that the appellants are not tenants, there is no scope for invoking the said provisions.
Presumably for that very reason, 805 no question on the basis of those sections was raised in the Courts below.
The concurrent finding of the three Courts to the effect that the appellants are not hereditary tenants is essentially one of fact and is not vitiated by any error of law.
Following the usual practice of this Court, we must accept the finding.
The sixth contention, in our view, is not open to the appellants at this stage.
The Additional Collector gave damages though he noticed the fact that no witness deposed in regard to damages and though the.
respondent 's Counsel did not argue on that point.
Notwithstanding the said fact, he gave damages on the basis of the annual rent of the holdings.
The correctness of this finding was not canvassed either in the first appellate Court or in the second appellate Court; nor does the statement of case filed in this Court disclose any grievance on that score.
In the circumstances, we do not feel justified to allow the appellants to raise that plea in this Court.
We may now advert to the main and substantial contention of the appellants, namely that the suits are not maintainable in a Revenue Court.
This question turns upon the interpretation of section 180 of the Act.
Before reading the section, it would be convenient and useful to notice briefly the scheme of the Act relevant to the question raised.
The Act, as the preamble shows, was passed to consolidate and amend the laws relating to Agricultural tenancies (proprietary cultivation).
It regulates the relationship between the landlords and the tenants in respect of the agricultural holdings.
It confers exclusive jurisdiction on Revenue Courts in respect of rights inter se between the landlord and the tenant.
It also reconciles the con flicting jurisdictions of Revenue and Civil Courts.
Briefly stated, all disputes between a landlord and his tenant in respect of tenancy are exclusively made triable by Revenue Courts and all disputes in respect of proprietary rights are left to the decision of Civil Courts.
Incidentally, if a question exclusively falling within the jurisdiction of a Revenue Court arises in a suit in a Civil Court, that suit is stayed and the relevant issue is submitted for decision of the Revenue.
806 Court.
So too, if a question of proprietary right arises in a proceeding before a Revenue Court, that issue is submitted for the decision of a Civil Court.
Jurisdiction is expressly conferred on Revenue Courts to entertain, among others, suits for ejectment under certain circumstances on specified grounds.
Section 180 of the Act is one of the fasciculus of sections dealing with ejectment.
Sections 155 to 179 provide for suits for ejectment against tenants on specified grounds.
Then comes section 180, the material part of which reads: " (1).
A person taking or retaining possession of a plot of land without the consent of the person entitled to admit him to occupy such plot and otherwise than in accordance with the provisions of the law for the time being in force, shall be liable to ejectment under this section on the suit of the person so entitled, and also to pay damages which may extend to four times the annual rental value calculated in accordance with the sanctioned rates applicable to hereditary tenants.
Explanation II.
A tenant entitled to sublet a lot of land in accordance with the provisions of the law for the time being in force may maintain a suit under this section against the person taking or retaining possession of such plot otherwise than in the circumstances for which provision is made in section 183.
(2) If no suit is brought under this section, or if a person in possession shall become a hereditary tenant of such plot, or if such person is a co sharer, he shall become a khudkasht holder, on the expiry of the period of limitation prescribed for such suit or for the execution of such decree, as the case may be." Section 242 says that suits of the nature specified in the fourth schedule shall be heard and determined by Revenue Courts.
Schedule 4, Group B, gives succintly the description of the suits and the periods of limitation and the court fee payable thereon.
Serial No. 8 relates to a suit under section 180 of the Act.
Against that 807 serial number, the nature of the suit is described in the following terms: " For the ejectment of a person occupying land without title and for damages.
" The period of limitation for instituting such a suit is also prescribed thereunder.
Under section 180 of the Act, a person entitled to admit another to a plot of land can file a suit in a Revenue Court to eject him.
The latter can defend the suit only on two grounds, namely, (1) that he has taken possession or retained possession of the said plot with the consent of the former; and (2) that he took possession or retained possession in accordance with the provisions of law for the time being in force.
If no suit was brought against the occupier or if the decree obtained against him was not executed, he would become a hereditary tenant after the period of limitation prescribed in the fourth Schedule to the Act.
On the findings of the Courts below, the appellants did not take possession of the lands with the consent of the respondent, but it is said that they had taken possession of the lands in accordance with the provisions of the law for the time being in force.
To substantiate this contention, reliance is placed firstly on the recitals in the plaints, and, secondly, on the provisions of section 145 of the Code of Criminal Procedure.
In the plaints it was stated that the Criminal Court had declared on March 20, 1950, the appellants ' possession for some reason, and after the order of the said Court, they had forcibly reaped the crops raised by the respondent.
The cause of action was alleged to have accrued after March 20, 1950, or near about the date of their taking possession of the said lands.
The allegations in the plaints do not support the appellants.
The respondent did not admit that possession was taken in execution of the order made by the Magistrate; but lie averred that taking advantage of a wrong order declaring the appellants ' possession, they trespassed upon his lands ' If the allegations were assumed to be correct, the appellants did not take possession in accordance with the provisions of the law for the time being in force.
808 Can it be said that the appellants had taken possession in accordance with the provisions of section 145 of the Code of Criminal Procedure ? The short answer is that section 145 of the said Code does not confer on a Magistrate any power to make an order directing the delivery of possession to a person who is not.
in possession on the date of the preliminary order made by him under section 145(1) of the Code.
Under section 145(1) of the Code, his jurisdiction is confined only to decide whether any and which of the parties was on the date of the preliminary order in possession of the land in dis pute.
The order only declares the actual possession of a party on a specified date and does not purport to give possession or authorise any party to take possession .
Even in the case of 'any party who has been forcibly and wrongfully dispossessed within two months next before the date of the preliminary order, the Magistrate is only authorised to treat that party who is dispossessed as if lie had been in possession on such date.
If that be the legal position, the appellants could not have taken possession of the disputed lands by virtue of an order made under the provisions of section 145 of the Code of Criminal Procedure.
They were either in possession or not in possession of the said lands on the specified date, and, if they were not in possession on that date, their subsequent taking possession thereof could not have been under the provisions of the Code of Criminal Procedure.
If the appellants did not take possession of the disputed lands, did they retain possession of the same in accordance with the provisions of the law for the time being in force ? The dichotomy between taking and retaining indicates that they are mutually exclusive and apply to two different situations.
The word " taking " applies to a person taking possession of a land otherwise than in accordance with the provisions of the law, while, the word " retaining " to a person taking possession in accordance with the provisions of the law but subsequently retaining the same illegally.
So construed, the appellants ' possession of the lands being illegal from the inception, they could not be described as persons retaining possession of the said 809 lands in accordance with the provisions of any law for the time being in force, so as to be outside the scope of section 180 of the Act.
But the contention may be negatived on a broader basis.
Can it be said that the possession by virtue of an order of a Magistrate under the provisions of section 145 s of the Code of Criminal Procedure is one in accordance with the provisions of the law for the time being in force ? It appears to us that the words " possession in accordance with the law for the time being in force " in the context can only mean possession with title.
The suit contemplated by the section is one by a landlord against a person who has no right to possession.
The preceding sections, as we have already indicated, provided for evicting different categories of tenants on specified grounds.
Section 180 provides for the eviction of a person who but for the eviction would become a hereditary tenant by efflux of the prescribed time.
If there is any ambiguity we find none it is dispelled by the heading given to the section and also the description of the nature of the suit given in the Schedule.
The heading reads thus: " Ejectment of person occupying land without Title ".
" Maxwell On Interpretation of Statutes ", 10th Edn., gives the scope of the user of such a heading in the interpretation of a section thus, at p. 50 : "The headings prefixed to sections or sets of sections in some modern statutes are regarded as preambles to those sections.
They cannot control the plain words of the statute but they may explain ambiguous words.
" If there is any doubt in the interpretation of the words in the section, the heading certainly helps us to resolve that doubt.
Unless the person sought to be evicted has title or right to possession, it cannot be said that his possession is in accordance with the provisions of the law for the time being in force.
If so, the appellants must establish that the order of the Magistrate issued under the provisions of section 145 of the Code of 102 810 Criminal Procedure conferred a title or a right to pos session on them.
This leads us to the consideration of the legal effect of the order made by the Magistrate under section 145 of the Code of Criminal Procedure.
Under section 145(6) of the Code, a Magistrate is authorized to issue an order declaring a party to be entitled to possession of a land until evicted therefrom in due course of law.
The Magistrate does not purport to decide a party 's title or right to possession of the land but expressly reserves that question to be decided in due course of law.
The foundation of his jurisdiction is on apprehension of the breach of the peace, and, with that object, he makes a temporary order irrespective of the rights of the parties, which will have to be agitated and disposed of in the manner provided by law.
The life of the said order is conterminous with the passing of a decree by a Civil Court and the moment a Civil Court makes an order of eviction, it displaces the order of the Criminal Court.
The Privy Council in Dinomoni Chowdhrani vs Brojo Mohini Chowdhrani (1) tersely states the effect of orders under section 145 of the Code of Criminal Procedure thus: "These orders are merely police orders made to prevent breaches of the peace.
They decide no question of title. . . " We, therefore, hold that a provisional order of a Magistrate in regard to possession irrespective of the rights of the parties cannot enable a person to resist the suit under section 180 of the Act.
This leaves us with the fourth contention based upon the U. P. Zamindari Abolition and Land Reforms Rules.
To appreciate this contention some relevant facts may be recapitulated.
On August 14, 1951, the six suits were stayed in view of the U. P. Government Notification dated August 9, 1951, issued under Ordinance No. III of 1951.
Thereafter the suits continued to remain stayed under r. 4 of the said Rules.
The appellants filed an application under subrule (3) of r. 5 for restarting the trial of the suits, and an order directing the restarting of the suits was made by the Additional Collector, Meerut, on September 22, (1) (1901) L.R. 29 I.A. 24, 33.
811 1952.
The appellants preferred a revision against that order to the Board of Revenue.
It was contended before the Board of Revenue that the suits had abated under cl.
(v) of r. 4 of the Rules, but the Board of Revenue rejected their contention on the ground that the suits fell within the exception to r. 5.
It, may also be mentioned that the rules were amended on October 8, 1952, i. e., after the order directing the restarting of the proceedings.
On the said facts, the first question is whether r. 5 of the amended Rules would apply to a case which was restarted under the provisions of the original Rules.
The following are the relevant rules from the two sets of Rules, i. e., the original Rules and the amended Rules: Original Rules as publish As amended on 8 10 1952.
ed in Gazette dated 30 6 1952.
Stay of certain suits and proceedings.
All suits and proceedings whether of the first instance, appeal or revision of the nature as hereinafter specified in respect of the area for which a notification under section 4 has been issued pending in any court on the date of vesting, . shall be stayed: 4(v).
Suits, applications and proceedings including appeals, references and revisions under section 180 of the U. P. Tenancy Act, 1939.
As amended on 8 10 1952.
All suits and proceedings whether of the first instance, appeal or revision of the nature as hereinafter specified in respect of the area for which a notification under section 4 has been issued pending in any court for hearing on the date of vesting. . . . . shall be stayed: 4(v).
Suits, applications and proceedings including appeals, references and revisions under section 180 of the U. P. Tenancy Act, 1939, or of similar nature pending in a civil court, except where the plaintiff is a tenant or where the land was the Sir, khudkhast or grove of an intermediary and in which rights 812 5(1).
Disposal of suits and proceedings stayed under rule 4(a)(1).
Every suit or proceeding whether of the first instance, appeal or revision stayed under clauses (i) to (iv) of rule 4 shall be abated by the court or the authority before which it may be pending after notice to the parties and giving them an opportunity to be heard.
The abatement of any suit or proceeding under sub rule (1) shall not debar any person from establishing his right in a court of competent jurisdiction in accordance with the law for the time being in force in respect of any matter in issue in such suit or proceeding.
Where a suit has been stayed under clause (v) of rule 4 any party to the suit may within six months from the date of vesting apply to the court concerned to restart the issue.
have not accrued ' to the defendant under section 16 or any other section of the U.P. Zamindari Abolition and Land Reforms Act, 1950.
Disposal of suits and proceedings stayed under rule 4 (a)(1): Every suit or proceeding, whether pending in the court of first instance, or in appeal or revision stayed under clauses (i) to (v) of rule 4, shall together with the appeals or revision, if any, be abated by the court or the authority before which it may be pending after notice to the parties and giving them an opportunity to be heard.
The abatement of any suit or proceeding under sub rule (1) shall not debar any person from establishing his right in a court of competent jurisdiction in accordance with the law for the time being in force in respect of any matter in issue in such suit or proceeding.
813 From a comparative study of the aforesaid rules, it will be seen that there are two fundamental differences B relevant to the present enquiry, namely, (i) while under the original Rules, all suits under section 180 of the Act are stayed, under the corresponding rules of the amended Rules an exception is made in the case of lands which are Sir, Khudkast or grove of an intermediary in which rights have not accrued to the defendant under section 16 or any other section of the U. P. Zamindari Abolition and Land Reforms Act, 1950; and (ii) while under the original Rules, there is a procedure for restarting a suit stayed under r. 4, there is no such procedure under the amended Rules.
In the present case, the suits were restarted under the old Rules and thereafter no stay order was made under the amended Rules.
The position, therefore, is that there was neither a subsisting stay under the old Rules nor any stay order made under the new Rules.
If so, r. 5 of the amended Rules cannot be invoked, for under that rule only a suit stayed under r. 4 (a)(i) shall be abated thereunder.
We, therefore, hold that r. 5 of the amended Rules cannot be invoked in the present case.
That apart, cl.
(v) of sub rule (2) of r. 4 of the amended Rules does not in terms apply to a land which is Sir unless rights have accrued to a person in possession thereof under section 16 or any other section of the U. P. Zamindari Abolition and Land Reforms Act, 1950.
On the findings arrived at by the Courts, namely, that the appellants were trespassers on the Sir land, it cannot be disputed that they have not acquired any rights under the aforesaid provisions.
As the operation of r. 5 is conditioned by cl.
(v) of sub rule (2) of r. 4, there is no scope for invoking the former provisions unless cl.
(v) of sub rule (2) of r. 4 applies to a given case and also an order of stay has been made thereunder.
In this case, as the suit lands are found to be Sir lands and as the appellants have not acquired any of the rights mentioned in cl.
(v) of sub rule (2) of r. 4, the said sub rule cannot apply, and, therefore, r. 5 cannot also be invoked.
Further, this contention was raised in the revision 814 petitions filed by the appellants to the Revenue Board, and the latter by its order dated September 6, 1953, held against them and that order has become final.
For the said reasons, we must hold that the suits could not be abated under r. 5 of the amended Rules.
In the result, the appeals fail and are dismissed with costs.
Appeals dismissed.
| 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.
| 733.txt |
Civil Appeal No. 1110 (NT) of 1986 From the Judgment and Order dated 24.11.1984 of the High Court of Madhya Pradesh, Indore Bench, passed in M.P. NO. 104 of 1984.
Gobind Das, Mrs. Sushma Suri, Mrs. Indra Sawhney and C.V.S. Rao for the Appellants.
Dr. Y.S. Chitale, Sanjay Sarin, Abdul Chitale and S.K. Gambhir, for the Respondents.
The Judgment of the Court was delivered by KANIA, J.
This is an appeal against the judgment of a Division Bench of the Madhya Pradesh High Court, Jabalpur (Indore Bench) in M. Petition No. 104 of 1984.
The appeal is filed at the instance of the 841 Union of India, Collector of Central Excise, Indore and two other excise officers.
The respondents are the original petitioners in the aforesaid petition.
We propose to refer to the parties by the description in the petition.
The facts necessary for the disposal of this appeal can be shortly stated.
The petitioner No. 1 is a Company manufacturing spun yarn.
According to the petitioners, in the manufacture of the said product they use as raw material cellulosic fibres and non cellulosic fibres.
Some time prior to 7th July, 1983, the petitioners 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 (referred to hereinafter as the "Central Excise Act").
The said schedule is generally referred to as the "Central Excises Tariff".
This classification was on the basis that the spun yarn was manufactured by them out of non cellulosic 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.
The petitioners were clearing the goods on the basis of aforesaid classification lists.
It appears that samples were drawn out of the spun yarn manufactured by the petitioners and sent for chemical examination.
There are some reports submitted by the Chemical Analyser, with the details of which we are not concerned.
Without giving any show cause notice or affording any opportunity to the petitioners to be heard, on 7th February, 1984, the Superintendent of Central Excise issued a notice of demand for a total sum of Rs.26,47,749.39 against the petitioner No. 1 on the footing that there was short payment of excise duty.
This was done on the ground that the yarn manufactured by the petitioners had been manufactured out of waste of synthetic fibres in blend of viscose fibres (of noncellulosic origin) and hence the said goods manufactured by them were liable to be classified under Central Excises Tariff Item No. 18(III)(ii).
It is an admitted position that the yarn manufacturing process used by the petitioners was with the aid of power.
The petitioners filed the aforesaid writ petition in the High Court of Madhya Pradesh challenging the validity of the said notice of demand dated 7th February, 1984.
The High Court granted an interim stay of the operation of the demand notice on 9th February, 1984.
On the same day, namely, 9th February, 1984, an order was passed by the Assistant Collector of Central Excise modifying the approval granted to the aforesaid classification lists submitted by the petitioners which had been approved 842 as aforesaid and classifying the aforesaid product under Item No. 18(III) (ii) of Schedule 1 of the Central Excises Act.
On 10th February, 1984 a notice was issued by the Superintendent, Central Excise on the petitioner No. 1 reciting inter alia that the Assistant Collector had modified the approval of the classification lists on 9th February, 1984 and calling upon the petitioner No. 1 to show cause why the 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 petitioner No. 1 wrote to the excise authorities pointing out that in view of the aforesaid writ petition filed by the appellant, the adjudication proceedings should be stayed till writ petition was disposed of.
This request was turned down on 5th March, 1984 and orders of adjudication were passed by the Assistant Collector modifying the classification lists and confirming the demand made under the aforesaid notice of demand.
The petitioners thereupon amended the aforesaid writ petition filed by them and challenged the two show cause notices as well as the said orders of adjudication dated 5th March, 1984.
The petitioners also filed an appeal before the Collector of Central Excises (Appeal) against the orders of adjudication dated 5th March, 1984.
On 24th November, 1984 by the impugned judgment, the Madhya Pradesh High Court allowed the aforesaid writ petition in part.
Mulye, J. held by his judgment that the writ petition was allowed to the extent that the demand for recovery of Rs.26,47,749.39 for the period 15th August, 1983 to 6th February, 1984, which was the period referred to in the demand notice was quashed.
However, the learned Judge directed the Collector, Central Excise before whom the appeal filed by the petitioners was pending to decide the appeal in respect of the demand made by the excise authorities for the subsequent period.
Giani, J., the other learned judge, in his concurring judgment set aside the two roders issued by the Assistant Collector, Central Excise, Ujjain Division both dated 5th March, 1984 as set out earlier.
Copies of these adjudication orders are at Annexure R/10 and R/11 respectively to the writ petition.
Very shortly put, both the Judges held that the notice of demand and the orders modifying the classification list served on the petitioners were bad in law and ordered that the same be quashed.
A perusal of the judgment also clearly indicates that the Division Bench directed that the Collector, Central Excise (Appeal) should hear the appeal of the petitioners on merits after giving the petitioners an adequate opportunity to put their case and their evidence before him in respect of the period from 7th February, 1984 onwards.
Thus, the Division Bench took the view that the show cause notice served on the petitioners could be treated as valid and effective only in respect of the period 843 from 7th February, 1984 onwards and not retrospectively from 15th August, 1983 to 6th February, 1984 being the period for which the demand has already been made in the demand notice dated 9th February, 1984.
As far as the relevant items in the First Schedule of the Central Excises Act are concerned, it is not necessary to set out the same in detail.
It will be enough to point out that 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.
The relevant portion of Section 11 A of the Central Excises Act runs as follows: "When any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded, a Central Excise Officer may, within six months from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short levied or short paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice: Provided that where any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded by reason of fraud, collusion or any wilful mis statement or suppression of fact, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by such person or his agent, the provisions of this sub section shall have effect, as if for the words "Central Excise Officer", the words "Collector of Central Excise" and for the words "six months", the words "five years" were substituted.
" A perusal of the aforesaid provisions shows that 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.
It is the admitted position in the present case that no such notice was served.
It would thus appear that the aforesaid demand notice dated 7th February, 1984 was in violation of the provisions of Section 11 A and is bad in law.
Mr. Govind Das, learned 844 counsel for the appellant, however, contended that although the aforesaid Section provides that no demand could be made against a person thereunder without affording that person an adequate opportunity to show cause against the same, in the present case, though no prior show cause notice was given and the petitioners were not given an opportunity to be heard before the notice of demand was issued, such a notice was issued and an opportunity to show cause was given after the demand was made and the demand confirmed after hearing and hence it must be regarded as valid.
It was submitted by him that a post facto show cause notice should be regarded as adequate in law.
In support of this contention Mr. Govind Das tried to place reliance on certain decisions where a view has been taken that in cases where urgent and emergent action is required, an opportunity to be heard can be given after the order affecting a person adversely is passed and that where a particular Act does not provide for any such opportunity to be heard being given before an adverse order is passed, a post facto opportunity to be heard might, in certain cases, be regarded as adequate compliance with principles of natural justice.
We are of the view these cases have no relevance in considering the questions before us because it is quite apparent that in the present case no urgent or emergent action was required and Section 11 A of the Central Excises Act clearly provides that prior show cause notice must be issued to the person against whom any demand on ground of short levy or non levy of payment of excise duty is proposed to be made.
In Gokak Patel Vokkart Ltd. vs Collector of Central Excise, Belgaum, ; this Court has held that the provisions of Section 11 A(1) & (2) of make it clear that the statutory scheme is that in the situations covered by sub section (1), a notice of show cause has to be issued and sub Section (2) requires that the cause shown by way of representation has to be considered by the prescribed authority and then only the amount has to be determined.
The scheme is in consonance with the rules of natural justice.
An opportunity to be heard is intended to be afforded to the person who is likely to be prejudiced when the order is made before making the order.
Notice is thus a condition precedent to a demand under sub Section (2).
In view of the aforesaid decision the submission of Mr. Govind Das must be rejected and it must be held that the aforesaid notice of demand was clearly bad in law and the High Court was fully, with respect, justified in quashing the same.
The next submission of Mr. Govind Das was that, in any event, 845 as the Collector of Central Excise (Appeals) had been directed to examine the merits of the matter in respect of alleged short levy or non levy and the modification of the classification lists after allowing adequate opportunity to the petitioners to show cause in respect of the period from 7th February, 1984, onwards, the question as to whether there was short levy or non levy in respect of the period from 15th August, 1983 to 6th February, 1984 should even also be allowed to be decided by the Collector.
It was submitted by Mr. Govind Das that although the notice of demand may be set aside the notice to show cause dated 9/10th February, 1984 should be treated as a valid and effective notice in respect of the period from 15th August, 1983 to 6th February, 1984 as well as the period from 7th February, 1984 onwards.
In this connection, it is the submission of Dr. Chitale that this notice merely asked the petitioners to show cause against calculation or determination of the amount of short levy and not against the alteration in the classification lists on the basis of which short levy was alleged and hence, in respect of the said period from 15th August, 1983 to 6th February, 1984 the show cause notice is liable to be struck down.
In our view the submission of Dr. Chitale deserves to be accepted.
The opening paragraph of the show cause notice refers to the service of notice of demand dated 7th February, 1984 for Rs.26,47,749.39 on the petitioner.
Paragraphs 2 and 3 of the said notice run as follows: "AND whereas the Assistant Collector Central Excise, Ujjain under his letter C.N. V(18)III/I/1/83/371 1374 dated 9th Feb., 84 has modified approval of the classification lists of the party and has directed that the short levied should be quantified by the Inspector, Central Excise, Biaora/Superintendent Central Excise, Ujjain and confirmation or otherwise of such short levied and recoveries if any would be ordered by him (Assistant Collector Central Excise, Division Ujjain) after following the prescribed procedure.
THEREFORE, in accordance with the said order of the Assistant Collector, Central Excise Division, Ujjain, you are called upon to show cause to the Assistant Collector, Central Excise, Ujjain within 10 days of the receipt of this show cause notice as to why the short levies of Rs.26,47,749.39 should not be recovered from you, under Section 11 A of the Central Excise and Salt Act, 1944.
" A reading of these paragraphs clearly shows that the notice set 846 out as an established fact that the classification lists submitted by the petitioners had been modified by the Assistant Collector, Central Excise, Ujjain and the only matter with respect to which the petitioners were asked to show cause was with regard to the quantification of the amount of the short levy and consequently, the amount which was liable to be recovered from the petitioner No. 1.
This notice, therefore, cannot be regarded as a show cause notice against the modification of the classification lists in respect of the aforesaid period.
In these circumstances, the show cause notice is bad in law and of no legal effect as far as the said earlier period is concerned.
Under Section 11 A of the Central Excise Act, the notice can relate only to a period of six months prior to the issue of that notice except in cases where it is alleged the short levy or short 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 made by the period concerned, as contemplated in the proviso to sub Section (1) of Section 11 A.
No such case has been sought to be made here in the said show cause notice.
The result is that the said show cause notice must be struck down in so far as period upto 6th February, 1984 is concerned, and can be regarded as a proper show cause notice only in respect of the subsequent period from 7th February, 1984 onwards.
We are, therefore, of the view that under the said show cause notice the question of short levy or non levy of excise duty prior to 6th February, 1984 cannot be gone into by the Collector and the High Court was right in the view which it took.
In the result, the appeal fails and is dismissed with costs.
S.L. Appeal dismissed.
| 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.
| 5708.txt |
Civil Appeal No. 503 of 1978.
Appeal by Special Leave from the Judgment and order dated )76 of the Punjab and Haryana High Court at Chandigarh in L.P.A. No. 484/74.
section K. Mehta, J. section Chawla, P. N. Puri and P. Balakrishnan for the Appellant B;shamber Lal (for State) and Hardev Singh for the RR 1 4 and 6.
521 P. N. Lekhi and Girish Chandra for Respondent No. 17.
The Judgment of the Court was delivered by CHANDRACHUD, C.J.
The appellant, Gurdial Singh Fijji, was selected for the Punjab Civil Service (Executive Branch) in 1953 and was appointed as an Executive Magistrate on June 8, 1954.
Respondents 8 to 15 are also members of the same Service, namely, the P.C.S., but they were selected and appointed to that Service after the appellant.
They are all governed, in the matter of conditions of their service, by the Punjab Civil Service (Executive Branch) Rules 1930, as amended from time to time by the competent authority.
The appellant was confirmed in the cadre on May 8, 1958 while respondents 8 to 15 were confirmed on diverse dates thereafter.
In the gradation list circulated by the Government from time to time, respondents 8 to 15 were shown as junior to the appellant.
In the year 1966, as a result of the reorganisation of the erst while State of Punjab, the appellant and respondents 8 to 16 were allocated to the State of Punjab.
In 1966 67 an adverse entry was made in the confidential record of the appellant while he was working under one Shri Sewa Singh, District and Sessions Judge, Amritsar.
That entry was communicated to the appellant whereupon, he made a representation against it but that has still not been disposed of, for one reason or another.
The State Government forwarded the representation to Shri Sewa Singh, who declined to express his views upon it unless asked by the High Court to do so.
Nothing further has been done in the matter and no decision has yet been taken on the question whether the adverse entry was justified and whether the various contentions raised by the appellant in his representation are well founded.
The appellant worked in various capacities after 1966 67, earning good reports all along.
He was permitted to cross the first efficiency bar under an order of the State Government dated June 14, 1966 and the second efficiency bar on July 20, 1971.
By an order dated July 3, 1971 published in the Punjab Government Gazette on July 23, the Government promoted respondents 8 to 12 to the selection grade of the Punjab Civil Service cadre.
Respondent 15 was similarly promoted on December 19, 1970, respondent 16 on January 1, 1971 and respondents 13 and 14 on July 27, 1971.
On March 14, 1972, the appellant was also promoted to the selection grade with effect from January 15, 1972.
He made a representation to the Government against the orders promoting res 522 pondents to the selection grade prior to him but it was rejected by an order dated June 20, 1973.
A Committee consisting of respondents 2 to 7 was constituted under Regulation 3 of the Indian Administrative Service (Appointment by Promotion) Regulations 1955, for selecting persons from the Punjab Civil Service cadre for the purpose of bringing them on the select list of the Indian Administrative Service.
The Committee held its meeting at Chandigarh on May 11, 1973 after which it prepared a list under Regulation 5 selecting respondent 9 for being brought on the select list for the purpose of promotion to the Indian Administrative Service.
It would appear that the appellant 's name was not put on the select list since respondent 2, the Chief Secretary to the Government of Punjab, had refused to give an 'integrity certificate ' to him.
Appellant made a representation against his non inclusion in the select list and that representation having been rejected, he filed a Writ Petition (No. 3315 of 1973) in the High Court of Punjab and Haryana, challenging the promotion of respondent to the selection grade, the refusal of the Chief Secretary to issue an 'integrity certificate ' to him and his non inclusion in the Select List of the Indian Administrative Service.
The appellant 's Writ Petition was allowed partly by a learned single Judge of the High Court by his judgment dated August 19, 1974 whereby the order dated July 27, 1971 of the State Government granting seniority to two junior officers over the appellant in the selection grade was quashed.
The learned Judge directed the State Government to reconsider the case of the appellant along with that of three other officers regarding the grant of selection grade with effect from June 25, 1971.
The appellant filed a Letters Patent Appeal (No. 484 of 1974) against the decision of the learned Single Judge which was disposed of by the High Court on November 19, 1976.
It was held in appeal that the requirement of Resolution No. 1.1 as regards the production of the 'integrity certificate ' was in the nature of a mere executive instruction, that it went beyond the scope of the statutory regulations, that the provision requiring the production of the 'integrity certificate ' was unguided and was likely to lead to arbitrariness and unreasonableness and that therefore, Resolution No. 1.1 was ultra vires of Regulations 4 and 5.
The entire record of the Selection Committee was placed by the State Government before the High Court in the Letters Patent Appeal, from a perusal of which the High Court came to the conclusion that the decision of the 523 Commttee not to include the appellant 's name in the Select List was not based solely on the ground that he was unable to produce the integrity certificate and that the Committee had given another cogent reason for its decision viz., that the appellant was not suitable for being placed on the Select List otherwise also.
Since inclusion in the select list for the purposes of promotion to the Indian Administrative Service was to be made on the basis of merit cum seniority, the Committee, according to the High Court, was justified in not including the name of the appellant in that list if, in its opinion, he was not otherwise suitable.
The Letters Patent Appeal was accordingly dismissed by the High Court, against which the appellant has filed this appeal by special leave.
We will first deal with the question whether resolution No. 1.1.
is ultra vires regulations 4 and 5 of the Indian Administrative Service (Appointment by Promotion) Regulations, 1955.
These regulations aree framed by the Central Government in pursuance of sub rule 1 of rule 8 of the Indian Administrative Service (Recruitment) Rules, 1954 in consultation with the State Governments and the Union Public Service Commission.
Regulations 3 to 7 provide for bringing members of the State Civil Service on the select list for promotion to the Indian Administrative Service.
Regulation 3 deals with the constitution of the committee for making selections.
Regulation 4 which deals with conditions of eligibility for promotion provides that each committee shall meet at intervals, ordinarily not exceeding one year, and consider the cases of all substantive members of State Civil Service who on the first day of January of that year had completed not less than eight years of continuous service, whether officiating or substantive, in a post of Deputy Collector or any other post or posts declared equivalent thereto by the Government.
By Clause (2) of regulation 4, the committee shall not ordinarily consider the cases of members of the State Civil Service who have attained the age of 52 years on the first day of January of the year in which the meeting of the committee is held, provided that a member of the State Civil Service whose name appears in the select list in force immediately before the date of the meeting of the committee shall be considered for inclusion in the fresh list to be prepared by the committee, even if in the meanwhile he has attained the age of 52 years.
Regulation 5 reads thus: "5.
Preparation of a list of suitable officers (1) The committee shall prepare a list of such members of the State Civil Service as satisfy the condition 524 specified in regulation 4 and as are held by the committee to be suitable for promotion to the service.
The number of members of the State Civil Service included in the list shall not be more than twice the number of substantive vacancies anticipated in the course of the period of twelve months commenceing from the date of the preparation of the list, in the posts available for them under rule 9 of the recruitment rules or 10 per cent of the senior duty posts borne on the cadre of the State or group of States whichever is greater: Provided that in the year ending on the 31st December, 1969, the maxmimum limit, imposed by this sub regulation, may be exceeded to such extent as may be determined by the Central Government in consultation with the State Government concerned.
(2) The selection for inclusion in such list shall be based on merit and suitablity in all respects with due regard to seniority.
(3) The names of the officers included in the list shall be arranged in order of seniority in the State Civil Service: Provided that any junior officer who in the opinion of the committee is of exceptional merit and suitability may be assigned a place in the list higher than that of officers senior to him.
(4) The list so prepared shall be reviewed and revised every year.
(5) If in the process of selection, review or revision it is proposed to supersede any member of the State Civil Service, the Committee shall record its reasons for the proposed supersession.
" The All India Services Manual, Part II, which is issued under the authority of the Government of India, Cabinet Secretariat, (Department of Personnel and Administrative Reforms), sets out under appropriate regulations the "Government of India 's Decisions" which are, for convenience, referred to by the High Court as "resolutions".
525 Resolution 1.1 which incorporates a decision taken by the Government of India reads thus: "1.1.
On the basis of the recommendations of the Committee on the Prevention of Corruption, it has been decided that the following certificate should be recorded by the Chief Secretary to the State Government who is the sponsoring authority in respect of all eligible officers whose cases are placed before the Selection Committee for consideration: "The State Government certify the integrity of Shri with reference to the entries in his annual confidential reports".
Resolution 1.2 which is on the same subject says: "1.2.
The Selection Committee should also consider the question of suitability of the officers for selection with reference to their integrity and should specifically record in their proceedings that they were satisfied from the remarks in the confidential reports of the officers, selected by them for inclusion in the Select List, that there was nothing against their integrity.
" The learned Single Judge of the High Court rejected the appellant 's contention that resolution 1.1 is ultra vires of regulations 4 and 5.
The Letters Patent Bench of the High Court different from him and quashed the resolution, observing: "Regulations 3 to 7 are self contained regulations prescribing the whole procedure for the constitution of the selection committee, qualifications for the eligibility, preparation of list of suitable candidates etc.
It is evident from the plain reading of these regulations that integrity certificate is not the requirement for eligibility for promotion.
Integrity certificate is the requirement of resolution 1.1 which is only an executive instruction.
The regulations are quite detailed and the whole mode of selection is given and merit cum seniority is the main basis for bringing the persons on the select list.
It is nowhere laid down in the regulations that integrity certificate is also required for eligibility for promotion.
Hence this requirement under the executive instruction goes counter to the statutory regulations.
It has put restrictions and limitations on the committee in its discretion.
Moreover, it is nowhere laid down as to how the integrity certificate is to be issued.
No 526 criteria is mentioned in resolution 1.1.
No guideline is provided.
Hence it can lead to arbitrariness and unreasonableness in certain cases. .
I have, therefore, no hesitation in holding that resolution 1.1 contravenes the regulations, which cannot legally be sustained and is struck down as ultra vires of regulations 4 and 5.
" We find it impossible to sustain this conclusion and are of the opinion that the learned Single Judge of the High Court was right in upholding the validity of resolution 1.1 on the ground that it is not inconsistent with any of the regulations.
Clause (2) of Regulation 5 provides that selection for inclusion in the Select List shall be based on merit and suitability in all respects, with due regard to seniority.
In other words, the test for inclusion in the Select List is merit cum seniority.
Neither the Indian Administrative Service (Recruitment) Rules, 1954 under which the Regulations are framed nor indeed the provisions of the All India Services Act, 61 of 1951, under which the Rules are made, furnish any guidelines for assessing merit or suitability of a candidate for inclusion in the Select List or provide for the consideration of any particular data before a candidate can be brought on the Select List.
Every executive authority is charged with the obligation of organising its services so as to ensure maximum efficiency.
The ideal of maximum efficiency cannot be achieved unless persons who are selected for public offices possess integrity in as high a measure as ability.
Integrity is indeed the sine qua non of merit and suitability: no person can be considered as possessing merit and suitability if he lacks in character and integrity.
If, as provided by Regulation 5, selection for inclusion in the Select List has to be based on merit and suitability in all respects, and the Rules and Regulations do not furnish guidelines for a proper assessment of these requirements, the government would have the power to prescribe the criteria for determining whether the requirements are fulfilled by any particular candidate.
The prescription of the Regulation for inclusion in the Select List is merit cum seniority.
The executive decision which is contained in resolutions 1.1 and 1.2 effectuates the purpose of that prescription.
Undoubtedly the government in the exercise of its executive authority cannot supersede a statutory rule or regulation but it can certainly effectuate the purpose of a rule or regualtion by supplementing it.
Resolution 1.2 provides that the Selection Committee should consider the question of suitability of officers with reference to their integrity and should specifically record in its proceedings, that it is satisfied from the remarks in the confidential reports of the officers selected by it for inclusion in the Select List, 527 that there was nothing against their integrity.
Resolution 1.1 requires the Chief Secretary of the concerned State Government, who is the sponsoring authority, to record a certificate in respect of all eligible officers, whose cases are placed before the Selection Committee for consideration, that the State Government certifies the integrity of the officers with reference to the entries in their annual confidential reports.
These resolutions of the Government of India do not transgress the requirement of the Regulations but are in furtherance thereof.
The circumstance that the Chief Secretary has to record a certificate does not confer upon him unguided or unfettered discretion to assess the integrity of the officers by granting or refusing the integrity certificate at his sweet will.
The State Government has to certify the integrity of the eligible candidate "with reference to the entries in his annual confidential reports".
We are, therefore, quite clear that the Letters Patent Bench of the High Court was in error in striking down resolution 1.1 as being ultra vires of Regulation 5.
Both the resolutions 1.1 and 1.2, are in our opinion within the scope of the Regulations and are valid.
Though the High Court was of the opinion that Resolution 1.1 is ultra vires of Regulation 5, it did not quash the decision of the Selection Committee because, having perused the record and proceedings of the Selection Committee (which were made available to it during the hearing of the Letters Patent Appeal), it found that the non selection of the appellant was not based solely on the ground that the Chief Secretary had not issued an integrity certificate in his favour.
The proceedings of the Selection Committee, according to the High Court, disclosed that the appellant was not selected for the reason also that he was "not found suitable otherwise".
The course adopted by the High Court has cause to the appellant an amount of injustice which has to be rectified.
It is clear that the Chief Secretary, Punjab, did not grant integrity certificate in favour of the appellant because of the adverse report in his confidential roll for the year 1966 67.
One of the reasons which evidently weighed with the Selection Committee in not putting the appellant 's name on the Select List was that the Chief Secretary had not issued the integrity certificate in his favour.
Thus, the non inclusion of appellant 's name in the Select List and the non issuance of the integrity certificate are closely linked, whether or not there was another reason also for which the Selection Committee kept him out from the Select List.
528 In so far as the non issuance of the integrity certificate is concerned, it is undisputed that its only justification is the adverse report in the confidential roll of the appellant for the year 1966 67.
The circumstances surrounding the adverse entry may therefore bear examination for seeing whether such preponderating importance could, on the facts to which we will immediately advert, be given to the particular entry.
The counter affidavit filed on behalf of the Government of Punjab by Shri Phuman Singh, Under Secretary in the services department, shows that after the adverse remarks were communicated to the appellant, he submitted a representation requesting that the remarks be expunged.
That representation was referred by the Government to Shri Sewa Singh, retired District and Sessions Judge, who had made the particular remarks.
Shri Sewa Singh desired that the reference which was made to him by the Government should be routed through the High Court.
The Government then made a reference to the High Court of Punjab and Haryana requesting it to obtain the comments of Shri Sewa Singh.
The High Court replied that it was not its practice to call for comments of District and Sessions Judges on the representation of an officer against whom adverse remarks were made.
The High Court was once again requested by the Government that the Chief Justice and the Judges may communicate their views to the Government on the representation made by the appellant.
As the High Court did not express its view, the Government asked the appellant to submit a detailed representation along with documentary evidence in order to show that the adverse entry was made mala fide as alleged by him.
The appellant submitted his representation again on December 19, 1971, as desired by the Government.
After a detailed examination of that representation, it was decided by the Government that since the comments of the Reporting Officer of the High Court on the representation made by the appellant were not available, which was necessary for the proper disposal of the representation, a suitable note may be placed on the appellant 's character roll alongwith the confidential report for the year 1966 67.
An attested copy of that note is annexed to Shri Phuman Singh 's affidavit as annexure 1.
After setting out the facts and circumstances narrated above, that note says that in the absence of necessary comments of the authority concerned, it was not possible for the Government to take any decision on the merits of the representation made by the appellant.
The principle is well settled that in accordance with the rules of natural justice, an adverse report in a confidential roll cannot be 529 acted upon to deny promotional opportunities unless it is communicated to the person concerned so that he has an opportunity to improve his work and conduct or to explain the circumstances leading to the report.
Such an opportunity is not an empty formality, its object, partially, being to enable the superior authorities to decide on a consideration of the explanation offered by the person concerned, whether the adverse report is justified.
Unfortunately, for one reason or another, not arising out of any fault on the part of the appellant, though the adverse report was communicated to him, the Government has not been able to consider his explanation and decide whether the report was justified.
In these circumstances, it is difficult to support the non issuance of the integrity certificate to the appellant.
The chain of reaction began with the adverse report and the infirmity in the link of causation is that no one has yet decided whether that report was justified.
We cannot speculate, in the absence of a proper pleading, whether the appellant was not found suitable otherwise, that is to say, for reasons other than those connected with the non issuance of an integrity certificate to him.
We may also indicate, since the High Court saw the file and discovered that the appellant was not brought on the Select List because he was "not found suitable otherwise", that regulation 5 which deals with the preparation of a list of suitable officers provides by clause 7 that "if in the process of selection, review or revision it is proposed to supersede any member of the State Civil Service, the Committee shall record its reasons for the proposed supersession".
While dealing with an identical provision in clause 5 of regulation 5 of the same Regulations as they stood then, this Court observed in Union of India vs Mohan Lal Capoor & Others(1) that "rubberstamp" reasons given for the supersession of each officer to the effect that the record of the officer concerned was not such as to justify his appointment "at this stage in preference to those selected", do not amount to "reasons for the proposed supersession" within the meaning of clause 5.
"Reasons", according to Beg J. (with whom Mathew J. concurred) "are the links between the materials on which certain conclusions are based and the actual conclusions".
The Court accordingly held that the mandatory provisions of regulation 5(5) were not complied with by the Selection Committee.
That an officer was "not found suitable" is the conclusion and not a reason in support of the decision to supersede him.
True, that it is not expected that the Selection Committee should give anything approaching the judgment of a Court, but it must at least state, as 530 briefly as it may, why it came to the conclusion that the officer concerned was found to be not suitable for inclusion in the Select List.
In the absence of any such reason, we are unable to agree with the High Court that the Selection Committee had another "reason" for not bringing the appellant on the Select List.
In matters of this nature, particularly when the Select Lists have to be prepared and reviewed from year to year, it becomes difficult to work out the logical consequences of holding that the case of any particular officer ought to be reconsidered.
But, inevitably, for reasons mentioned above, the case of the appellant shall have to be considered afresh by the Selection Committee.
How best to do it has to be left to its wise discretion in the matter of details, but in order to eliminate, in so far as one may, chance of yet another litigation we ought to indicate the broad frame work within which the Committee should act and the preliminary steps which the Government must take in order to facilitate the Committee 's task.
In the first place, the State Government shall consider and dispose of within two months from to day the representations made by the appellant on January 23, 1969 and December 19, 1971 in regard to the adverse report in his confidential roll, for the year 1966 67.
We are hopeful that the High Court will co operate with the Government in the disposal of the representations.
The Selection Committee will, within three months thereafter, decide whether the appellant should be included in the Select List as of May 11, 1973.
That question has to be decided in accordance with the relevant regulations by applying the test of merit and suitability cum seniority.
For deciding the question of appellant 's merit and suitability, the Selection Committee will take into consideration the Government 's decision on his representations and his service record up to date.
If the Committee decides that he is not suitable for inclusion in the Select List and should therefore be superseded, it shall record its reasons for the proposed supersession.
If, on the other hand, the Committee decides to include his name in the Select List, he will be entitled to rank in that list in accordance with his seniority as of May 11, 1973 unless, in the opinion of the Committee, there is a junior officer of exceptional merit and suitability who may be assigned a higher place.
The Selection Committee will review the list for 1973 in accordance with these directions.
The Union Public Service Commission will thereafter be consulted in accordance with the regulations.
The Select List as finally approved by the Commission will form the Select List of the members of the State Civil Service.
531 We may indicate that the Writ Petition filed by the appellant and his appeal to this Court cannot be considered to have become infructuous on the ground that the Union Public Service Commission has already approved of the Select List.
The learned Single Judge of the High Court had stayed the final publication of the list by his order dated September 24, 1973 and had directed by his order dated February 11, 1974 in C.M. 994 of 1974 that the publication of the Select List will be subject to the result of the Writ Petition.
With these modification, the appeal is allowed but there will be no order as to costs.
N.V.K. Appeal allowed.
| The Indian Administrative Service (Appointment by Promotion) Regulations, 1955 formulates the procedure for selecting persons from the State Civil Service Cadre for the purpose of bringing them on the select list of the Indian Administrative Service.
Regulation 5 which deals with the preparation of the list of suitable officers provides by cl.
(2) that the selection for inclusion in such list shall be based on merit and suitability in all respects with due regard to seniority, while cl.
(5) provides that if it is proposed to supersede any member of the State Civil Service, the Selection Committee shall record its reasons for the proposed supersession.
The "Government of India 's Decisions" under the regulations have been published by the Govt.
in the All India Services Manual, Part II.
Resolution 1.1 requires the Chief Secretary to the State Government who is the sponsoring authority to record a certificate in respect of every eligible officer whose case is placed before the Selection Committee, that the State Government certifies the integrity of the officer with reference to the entries in his annual confidential reports.
Resolution 1.2 provides that the Selection Committee should specifically record in its proceedings that it is satisfied from the remarks in the confidential reports of the officers selected by it for inclusion in the Select List that there was nothing against their integrity.
The appellant and respondents 8 to 15 were members of the Punjab Civil Service (Executive Branch), the respondents being junior to the appellant.
In 1966 67, an adverse entry was recorded in the confidential report of the appellant by the District and Sessions Judge.
No decision was taken by the Government as to whether the adverse entry was justified and whether the contentions raised by the appellant in his representation to the same were well founded.
After 1966 67, the appellant worked in various capacities, earned good reports and was allowed to cross the first and second efficiency bars.
However, respondents 8 to 15 were promoted to the selection grade of the service prior to the appellant.
His representation in this regard was rejected by the Government.
Respondents 2 to 7 who constituted the committee for selecting persons from the Punjab Civil Service cadre for the purpose of bringing them on the select list of the Indian Administrative Service, selected respondent No. 9.
The 519 Appellent 's name was not put on the select list, since respondent No. 2, the Chief Secretary to the State Govt.
had refused to give an 'integrity certificate ' to him.
His representation against the non inclusion having been rejected, he approached the High Court.
The High Court rejected the appellant 's contention that resolution 1.1 was ultra vires of regulations 4 and 5; but quashed the order of the State Government granting seniority to two junior officers over the appellant in the selection grade.
In appeal by the appellant, the High Court held that it is nowhere laid down that integrity certificate is the requirement for eligibility for promotion.
Integrity certificate is the requirement of resolution 1.1 which is only an executive instruction.
No criteria is mentioned, nor guidelines provided as to how the integrity certificate is to be issued.
The executive instruction, therefore, went beyond the scope of the statutory regulation, the provision requiring the production of the integrity certificate was unguided and was likely to lead to arbitrariness and unreasonableness and that therefore resolution 1.1 was ultra vires of regulations 4 and 5.
The High Court held further that the records of the Selection Committee reveal that the decision not to include the appellant 's name in the select list was not based solely on the ground of non availability of the integrity certificate and that the Committee had given another cogent reason, that the appellant was not suitable otherwise also Allowing the further appeal to this Court, ^ HELD: 1.
(i) The Letters Patent Bench of the High Court was in error in striking down, resolution 1.1 as being ultra vires of regulation 5.
Both resolutions 1.1 and 1.2 are within the regulations and are valid.
[527 C] (ii) Under cl.
(2) of Regulation 5 selection for inclusion in the select list has to be based on merit and suitability in all respects with due regard to seniority.
Neither the 1954 Rules nor the 1951 Act furnish any guidelines for assessing merit and suitability.
The Government would therefore, have the power to prescribe the criteria for determining whether the requirements of merit and suitability are fulfilled by any particular candidate, The Executive decision which is contained in resolution 1.1 and 1.2 effectuates the purpose of that prescription.
[526 C, F, G] (iii) The Government in the exercise of its executive authority cannot supersede a statutory rule or regulation but it can certainly effectuate the purpose of a rule or regulation by supplementing it.
These resolutions of the Government of India do not transgress the requirement of the Regulations but are in furtherance thereof.
It, therefore, cannot be stated that the Chief Secretary had been conferred with an unguided or unfettered discretion to assess the integrity of the officers by granting or refusing the integrity certificate at his sweet will.
[526 H, 527 B] (iv) Every Executive Authority is charged with the obligation of organising its services so as to ensure maximum efficiency.
The idea of maximum efficiency cannot be achieved unless persons who are selected for public offices possess integrity in as high a measure as ability.
Integrity is, therefore, the sine qua non of merit and suitability.
No person can be considered as possessing merit and suitability if he lacks in character and integrity.
[526 E] 520 2.
One of the reasons which evidently weighed with the Selection Committee in not putting the appellant 's name on the select list was that the Chief Secretary had not issued the integrity certificate in his favour.
The non inclusion of appellant 's name in the select list and the non issuance of the integrity certificate are thus closely linked, whether or not there was another reason also for which the Selection Committee kept him out from the select list.
[527 G H] 3.
An adverse report in a confidential roll cannot be acted upon to deny promotional opportunities unless it is communicated to the person concerned so that he has an opportunity to improve his work and conduct or to explain the circumstances leading to the report.
Such an opportunity is not an empty formality, its object, partially, being to enable the supeurior authorities to decide on a consideration of the explanation offered by the person concerned, whether the adverse report is justified.
[528 H 529 B] In the instant case for one reson or another not arising out of any fault on the part of the appellant though the adverse report was communicated to him the Government has not been able to consider his explanation and decide whether the report was justified.
In such circumstances it is difficult to support the non issuance of the integrity certificate to him.
The chain of reaction began with the advese report and the infirmity in the link of causation is that no one has yet decided whether that report was justified.
[529 C] 4.
In the absence of a proper pleading it cannot be speculated that the appellant was not found suitable for reasons other than those connected with the non issuance of an integrity certificate to him.
[529 D] 5.
The High Court saw the file and discovered that the appellant was not brought on the select list because he was 'not found suitable otherwise '.
Regulation 5(7) provides that the Committee shall record its reasons if it is proposed to supersede any member of the State Civil Service.
That an officer was "not found suitable" is the conclusion and not a reason in support of the decision to supersede him.
In the absence of any reason, this Court cannot agree with the High Court that the Selection Committee had another "reason" for not bringing the appellant on the select list.
[529 E, G, 530 A] [Directed that the case of the appellant be considered afresh by the Selection Committee indicating the broad frame work within which the Committee should act and the preliminary steps the Government should take in order to facilitate the Committee 's task.] Union of India vs Mohan Lal Capoor & Ors., ; referred to.
| 3998.txt |
Appeal No. 2354 of 1966.
Appeal from the judgment and order dated July 1963 of the Punjab High Court in Civil Writ No. 1559 of 1962.
M.C. Chagla and Janardan Sharma, for the appellants.
B.C. Misra, S.K. Mehta and K.L. Mehta, for respondent No. 3. 211 The Judgment of the Court was delivered by Sikri, J.
This appeal by certificate granted to the appellants by the High Court of Punjab under article 133(1)(c) of the Constitution raises one point, namely, whether a sub tenant is entitled to purchase the land from the land owner under section 18 of the Punjab Security of Land Tenures Act (Punj.
Act X of 1953) hereinafter referred to as the Act.
It would be sufficient to give few facts.
The appellants, Jaimal and Ram Singh, applied under section 18 of the Act to.
the Assistant Collector, 1st Grade, Hissar, to purchase 280 kanals 4 marlas of land situate in village Mehnda, Tehsil Hansi, District Hissar.
The land was originally owned by respondents.
4 to 10, who had given this land on lease to Sheo Parshad, respondent No. 3.
It is not in dispute that the appellants and their fathers had been in occupation of the land in dispute for the last 30 years, as sub tenants under Sheo Parshad, respondent No. 3.
During the pendency of the application, respondents Nos. 4 to.
10 sold the land in dispute, on October 25, 1957, to.
Sheo Parshad, and also in favour of his two.
The Assistant Collector, by his order dated November 30, 1959, accepted the application of the appellants and allowed them to purchase 274 kanals of land for Rs. 6,730/ .
On appeal, the Collector varied the order but the variation is not material for the purpose of this appeal.
appellants then preferred an appeal to the Commissioner and Sheo Parshad filed Revision Petition to him against the order of the.
Collector.
The Commissioner upheld the claim of the appellants to purchase the land under section 18 of the Act at the price assessed by the Assistant Collector, but he modified the order in respect of 85 kanals 8 marlas which had been sold to the sons of Sheo Parshad.
The final order in the proceedings was passed by the Financial Commissioner who, by his order dated August 27, 1962, held that the appellants.
were not entitled to purchase the land under section 18 of the Act.
Thereupon the appellants filed a petition under article 226 of the Constitution, seeking to quash the order of the Financial Commissioner.
The High Court was also of the opinion that the appellants being sub tenants were not entitled to apply under section 18 of the Act.
The answer to the question whether the appellants are entitled to apply under section 18 of the Act depends upon the interpretation.
of section 18, which reads as follows: "18.
Right of certain tenants to purchase land.
(1) Notwithstanding anything to the contrary contained in any law, usage or contract, a tenant of a land owner other than a small land owner 121 (i) who has been in continuous occupation of the land comprised in his tenancy for a minimum period of six years, or (ii) who has been restored to his tenancy under the provisions of this Act and whose periods of continuous occupation of the land comprised in his tenancy immediately before ejectment and immediately after restoration of his tenancy together amount to six years or more, or (iii) who was ejected from his tenancy after the 14th day of August, 1947, and before the commencement of this Act who was in continuous occupation of the land comprised in his tenancy for a period of six years or more immediately before his ejectment, shall be entitled to purchase from the land owner the land so held by him but not included in the reserved area of the land owner, in the case of a tenant falling within clause (i) or clause (ii) at any time, and in the case of a tenant falling within clause (iii) within a period of one year from the date of commencement of this Act: Provided that no tenant referred to in this subsection shall be entitled to.
exercise any such right in respect of the land or any portion thereof, if he had sublet the land or the portion, as the case may be, to any other person, during any period of his continuous occupation, unless during that period the tenant was suffering from a legal disability or physical infirmity, or if a woman, was a widow or was unmarried; Provided further that if the land intended to be purchased is held by another tenant who is entitled to preempt the sale under the next preceding section, and who is not accepted by the purchasing tenant, the tenant in actual occupation shall have the right to pre empt the sale.
(2) A tenant desirous of purchasing land under sub section (1) shall make an application in writing to an Assistant Collector of the First Grade, having jurisdiction over the land concerned, and the Assistant Collector, after giving notice to the landlord and to all other persons interested in the land and after making such inquiry as he thinks fit, shall determine the value of the land which shall be the average of the price obtaining for similar land in the locality during 10 years 213 immediately preceding the date on which the application is made.
(3) The purchase price shall be three fourth of the value of land as so determined.
(4) (a) The tenant shall be competent to pay the purchase price either in a lump sum or in six monthly instalments not exceeding ten in the manner prescribed.
(b) On the purchase price or the first instalment thereof, as the case may .be, being deposited, the tenant shall be deemed to have become the owner of the land, and the Assistant Collector shall, where the tenant is not already in possession, and subject to the provisions of the Punjab Tenancy Act (XVI of 1887), put him in possession thereof.
(c) If a default is.
committed in the payment of any of the instalments, the entire outstanding balance shall on application by the person entitled to receive it, be recoverable as arrears of land revenue.
(5) If the land is subject to a mortgage at the time the purchase, the land shall pass to the tenant unencumbered by the mortgage but the mortgage debt shall be a charge on the purchase money.
(6) If there is no such charge as aforesaid the Assistant Collector shall, subject to any 'direction which he may receive from any court, pay the purchase money to the landowner.
(7) If there is such a charge, the Assistant Collector shall, subject as aforesaid, apply in the discharge of the mortgage debt so much of the purchase money as is required for that purpose and pay the balance, if any, to the land owner, or retain the purchase money pending the decision of a civil Court as to the person or persons entitled thereto." "Land owner" is defined in section 2( 1 ) of the Act to mean person defined as such in the Punjab Land Revenue Act, 1887 (Act XVII of 1887) and shall include an "allottee" and "lessee".
as defined in clauses (b) and (c) respectively, of section 2 of the East Punjab Displaced Persons (Land Resettlement)Act, 1949 (Act XXXVI of 1949), hereinafter referred to as the "Resettlement Act".
The explanation to section 2 (1) reads: "In respect of land mortgaged with possession, the mortgagee shall be deemed to be the land owner.
" The word "tenant" is defined in section 2 (6) as follows: 214 "Tenant" has the meaning assigned to it in the Punjab Tenancy Act, 1887 (Act XVI of 1887) and includes a sub tenant and self cultivating lessee, but shall not include a present holder, as defined in section 2 of the Resettlement Act." In the Land Revenue Act, 1887, "land owner" has been defined as follows,in s.3 (2) "land owner" does not include a tenant or an assignee of land revenue, but does include a person to whom a holding has been transferred, or an estate or holding has been let in farm, under this Act for the recovery of an arrear of land revenue or of a sum recoverable as such an arrear and every other person not hereinbefore in this clause mentioned who is in possession of an estate or any share or portion thereof, or in the enjoyment of any part of the profits of an estate.
" It will be noticed that before a person can apply under section 18 of the Act he must be a tenant of a land owner other than a small land owner.
There is no dispute that the land owner in this case is not a small land owner.
The only question is whether the appellants, who were sub tenants, can be said to be tenants of the land owner within the meaning of section 18.
If we look at the definitions of the words "tenant" and "land owner", it seems clear that a tenant of a tenant cannot be a tenant of the land owner, because the definition expressly says that a land owner does not include a tenant.
Apart from this, the first proviso to sub section
( 1 ) of section 18 makes it clear that a tenant who has sublet the land or a portion, as the case may be, to any other person during the period of his continuous occupation is disabled from applying under section 18 unless during the period of his continuous occupation the tenant was suffering from legal disability or physical infirmity or if a woman was a widow or was unmarried.
In other words, for example, a tenant who is a widow would be entitled to apply under section 18 even though she had sublet the land which she desired to purchase.
No satisfactory answer was given by the learned counsel for the appellants as to what would happen if both the sub tenant and the widow applied to purchase.
Both sides have relied on the scheme of the Act, but it seems to us that the scheme of the Act and the objects underlying the Act do not assist us in determining this question.
It is well known that the main objects of the Act were to provide security to the tenants.
settle tenants on land declared surplus and fix a ceiling on the total holding of land owners and tenants.
It is also well known that it was a measure of agrarian reform.
But these matters do 215 The answer must depend upon the language of section 18, fairly construed.
If it was intended that a sub tenant should be entitled to purchase under section 18, we would have expected some provision in the Act to solve the difficulties which would arise if there was competition between the tenant and the sub tenant.
There was some debate before us whether a tenant who has sublet would be treated to be in continuous occupation of the land during the period of sub tenancy within section 18 ( 1 ) (i), but we think that the proviso to section 18 (1 ) proceeds on the basis that the tenant is in continuous occupation even though he has sublet the land.
It will again be noticed that under sub section
(4)(b) of section 18 on the purchase price being deposited, the tenant becomes owner of the land.
If the contention of the appellant was correct, the subtenant would become the owner under sub section
(4)(b); but what will happen to the rights of the tenant ? No satisfactory answer was given to this question.
Again it will further be noticed that sub section
(5) of section 18 talks of the mortgage of the land but it does not speak of the mortgage the rights of a tenant.
It seems to us that the High Court was right in holding that the legislature did not intend to confer any rights under section 18 on the sub tenant.
The fact that by sub letting the tenant is also not able to apply under section 18 by virtue of the first proviso to sub section
(1 ) cannot confer rights on the sub tenant because he must himself be a tenant of land owner within section 18 of the Act.
Mr. Chagla says that it is a very hard case for the appellants have been in possession for over 30 years, but if it is a hard case it is for the legislature to intervene and provide for such hard cases.
In the result the appeal fails and is dismissed.
There will be no order as to costs.
Y.P. Appeal dismissed.
| The appellants, who had been in occupation of certain agricultural lands for more than 30 years as sub tenants., applied under section 18 of the Punjab Security of Land Tenures Act, 1953 to purchase the lands.
The final authority under the Act, held that the 'appellants were not entitled to purchase the land.
The appellants flied a writ petition in the High Court.
The High Court held that the appellants being sub tenants were not entitled to apply under section 18 of the Act.
Dismissing the appeal, this Court, HELD: The Legislature did not intend to confer any rights under section 18 on the sub tenant.
The word 'landowner ' is defined in section 2(1) of the Act to mean a person defined as such in the Punjab Land Revenue Act, 1887.
Under the latter Act, a landowner does not include a tenant.
The definitions of the words 'tenant ' and 'land owner ', make it clear that 'a tenant of a tenant cannot be a tenant of the land owner, Further, [213 G; 214 E] (a) The first proviso to sub section
(1) of section 18 makes it clear that a tenant who has sublet the land or a portion, as the case may be.
to any other person during the period of his continuous occupation is disabled from applying under section 18 unless during the period of his continuous occupation the tenant was suffering from legal disability or physical infirmity or if a woman was a widow or was unmarried; [214 E F] (b) If it was intended that a sub tenant should be entitled to purchase under section 18, some provision in the Act would have been there to solve the difficulties which would arise if there was competition between the tenant and the sub tenant; [215 A B] (c) If the contention of the appellant was correct, the sub tenant would become the owner of the land under section 18(4)(b) on the purchase price being deposited.
No satisfactory answer was given 'as to what will then happen to the rights of the tenant; and [215 C] (d) Section 18(5) refers to mortgage of the land but it does not refer to the mortgage of the rights of a tenant.
[215 D]
| 2471.txt |
Appeals Nos.
148 to 150 of 1960.
Appeals by special leave from the judgment and order dated October 31, 1956, of the former Nagpur High Court in Misc.
Civil Case No. 184 of 1953.
K. N. Rajagopala Sastri and D. Gupta, for the appellants.
J. M. Phakar, section N. Andley, J. B. Dadachanji and Bameshwar Nath, for the respondents.
March 7.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
These appeals, by special leave, have been filed by the Commissioner of Income tax, Madhya Pradesh, against the assessee, an individual, by name Seth Khushal Chand Daga.
The assessee was a partner in a firm, Messrs. R. B. Bansilal Abirchand of Nagpur.
In the year of account ending Diwali, 1941, he received his share of assets and property from this firm, and started business of his own.
In the same year, his sources of income were speculation, allowance from Government as treasurer, house property and dividends.
The assessee had received some profits from his share in an unregistered firm against which were set off his losses in his individual business, and the Income tax Officer, who made the assessment, determined the loss to be carried forward, at Rs. 53,840.
The assessee appealed against the assessment, but did not question the loss which had been determined.
For the year, 1942 43, the assessee claimed to reopen the question of the loss to be carried forward, stating that it was Rs. 2,11,760.
This contention was not accepted by the Department, and on appeal, by the Tribunal.
The contention was, however, raised again by him in the assessments for the years, 194849 and 1949 50.
In these years, he had profits from 188 his share in the unregistered firm, Rs. 1,82,773 and Rs. 1,39,922 respectively, against which were set off his losses in his individual business, Rs. 1,18,913 and Rs. 60,589 respectively.
The contention of the assessee was that the profits which he had derived.
from the unregistered firm could not be set off against the loss in his individual business, as the profits of the unregistered firm had borne tax not in his hands but in those of the firm.
This contention was rejected by the Department; but on appeal to the Tribunal, it was accepted.
On the Tribunal being moved to make a reference, it referred four questions.
Two of those questions dealt with matters also arising out of these assessments, but they have not been mentioned by us in this judgment.
The two questions pertaining to these appeals were: "(1) Whether the assessee was competent in law to raise a question with regard to the determination of loss for the assessment year 1941 42 as finally determined in appeal, in the course of proceedings for the assessment year 1942 43 when the loss brought forward from 1941 42 was being set off ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the loss suffered by the assessee from his personal business (including his share of . loss from another firm) cannot be set off under Section 24(1) against his taxed share income from an unregistered firm?" These questions were answered by the High Court against the Commissioner, who has now appealed, with special leave.
It was conceded by the learned counsel for the Commissioner that the second question has now been decided by this Court in Seth Jamnadas Daga vs The Commissioner of Income Tax (1), and that the answer must be against the Department.
That portion of the case was thus not argued.
As regards the first question, the only contention raised was that the loss which had been determined and ordered to be carried forward must be deemed to (1) ; 189 have become final, because no appeal was filed against that determination.
But it appears that the procedure laid down by a. 24(3) under which the Income tax Officer has to notify to the assessee by order in writing the amount of the loss as computed by him for the purposes of that section was not followed.
No doubt, under section 30 an appeal lies, if the assessee objects to the amount of loss computed and notified under section 24; but inasmuch as the Income tax Officer had not notified the loss computed by him by order in writing, an appeal could not be taken on that point.
In our opinion, the assessee was, therefore, entitled to have the loss re determined in a subsequent year.
Learned counsel for the Commissioner stated that the Department was not very anxious for the decision, because this particular assessee has had only losses in the years following, and no loss would be occasioned to the Revenue, if the losses brought forward be redetermined.
But that is a matter, with which we are not concerned.
In our opinion, the judgment of the High Court impugned before us was correct in the circumstances of the case.
The appeals fail, and are dismissed with costs.
One hearing fee.
Appeals dismissed.
| For the accounting year 1941 the assessee 's profits from his share in an unregistered firm were,.
set off against his losses in the individual business and the Income Tax Officer determined the loss to be carried forward at RS.
53,840, but did not notify to the assessee by order in writing the amount of the loss as computed by him as required by section 24(3) of the Act.
The assessee appealed against the assessment but did not question the amount of the loss which had been determined.
In the year 1942 43 the assessee claimed to reopen the question of the loss to be carried forward stating that it was RS.
2,116760.
This contention was rejected by the Tribunal.
The contention was again raised by the assessee in the assessment years 1948 49 and 1949 50.
The question was whether the loss which had been determined and ordered to be carried forward must be deemed to have become final because no appeal was filed against that determination.
Held, that computation of the amount of loss under section 24 Of the Income tax Act does not become final unless the Income tax Officer notifies by order in writing, the amount of the loss as computed by him to the assessee.
The assessee was entitled to have 187 the loss redetermined in a subsequent year though he had not filed an appeal against the determination of the loss but no appeal could be filed in the absence of an order in writing.
Seth jamnadas Daga vs The Commissioner of Income tax, ; , applied.
| 1165.txt |
Civil Appeal No. 575 of 1970.
From the Judgment and Decree dated 17 2 1966 of the Allahabad High Court in Special Appeal No. 92 of 1960.
section section Javali and B. R. Aggarwal for the Appellant.
R. K. Garg and V. J. Francis for the Respondent.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
Hulas Chand and Bilas Chand, original owners of a certain plot of land in Saharanpur, granted a permanent lease of the land to Patel Mills Ltd., in May, 1930.
The annual rent 823 was Rs. 75/ .
The lease was empowered to use the land for any purpose whatsoever.
The rights of the lessee were expressly made transferable.
Though the lease was permanent, there was a condition that the lessor could forfeit the lease if the lessee failed to pay rent for three consecutive years.
On November 1, 1932 Hulas Chand and Bilas Chand transferred their interest to Budh Singh and Jialal.
Jugal Kishore, became entitled to the rights of Budh Singh and Jialal by purchase under sale deeds dated April 17, 1943 and May 11, 1943.
But, Shankerlal and Piareylal (present plaintiff) filed a suit for presumption against the vendors and Jugal Kishore and as a result of the decree passed in the suit, they became entitled to the lessor 's interest in the suit plot of land on August 13, 1945.
Meanwhile the lessee Patel Mills went into liquidation and Mehra was appointed voluntary liquidator of the company on May 11, 1937 by a special resolution at a meeting of the creditors of the company.
Benaras Bank Ltd., was the biggest creditor of the Company.
So the liquidator negotiated the sale of all the assets of the Company to the Benaras Bank Ltd., for a sum of Rs. 70,000/ and on February 23, 1939 executed an agreement of sale after receiving the consideration.
The lease hold interest in the suit plot was also included as one of the assets in the agreement of sale.
As a meeting held on May 4, 1939 the creditors accepted the final report of the voluntary liquidator.
The report was sent to the Registrar of Joint Stock Companies, and registered on September 9, 1939.
The company thus stood dissolved with effect from December 9, 1939.
Subsequently on March 1, 1940 the Benaras Bank Ltd, itself went into liquidation.
The Official Liquidator of the Benaras Bank Ltd. found that there was no duly executed deed of transfer executed by the voluntary liquidator of the company in favour of the Benaras Bank Ltd. in respect of the lease hold interest in the suit plot of land.
At the instance of the official liquidator of the bank, Shri Mehra the erstwhile voluntary liquidator of the company executed a deed of sale on January 28, 1941 and had it duly registered.
On March 9, 1943 the official liquidator transferred the lease hold interest in the suit plot of land to the defendant appellant.
We have mentioned that Patel Mills Ltd., stood dissolved with effect from December 9, 1939.
Budh Singh and Jialal had earlier, i.e. on April 12, 1939, accepted rent from the voluntary liquidator of the company.
After the dissolution of the company and the transfer of the lease hold interest by the voluntary liquidator to the Benaras Bank Ltd. Budh Singh and Jialal sent a notice dated January 11, 1941 to the liquidator of the Benaras Bank Ltd. through their lawyer demanding payment of arrears of rent for four years and asserting that the 15 91SCI/80 824 lease was forfeited consequent on the lessee 's failure to pay rent for a continuous period of three years.
The liquidator denied the claim of right of the lessor to forfeit the lease but admitted the claim for rent.
Rent was accordingly paid and was accepted by Budh Singh and Jialal.
Later, on March 21, 1946, Jugal Kishore who had purchased the rights of Budh Singh and Jialal also accepted rent from the official liquidator of the Benaras Bank Ltd. Shankerlal and Piarey Lal who became entitled to the lessor 's interest in the suit plot of land as a result of the decree from pre emption which they obtained against Jugal Kishore and his vendors, filed the suit out of which the appeal arises to recover possession of the land.
Their case was that the lease hold interest in the land was not validly transferred by the voluntary liquidator and therefore, the defendant acquired no right in the land.
Several defences were raised.
It was claimed that the voluntary liquidator had the authority in law to execute the deed of sale and formally complete a transaction which had already taken place.
It was also claimed that the predecessors in the interest of the plaintiffs having accepted rent from the official liquidator of the bank, the plaintiffs were estopped from contending that the transfer in favour of the bank was not valid.
Section 53A Transfer of Property Act was also invoked as a defence to the action of the plaintiffs.
It was lastly pleaded that the plaintiffs had no right to sue for possession as the lease hold interest in the land had escheated to the Government on the dissolution of the Company.
The suit was dismissed by the Trial Court.
The judgment and decree of the Trial Court were affirmed by the 1st Appellate Court and a learned single Judge of the High Court in second appeal.
The learned Single Judge found in favour of the defendant on the question of estopped, escheat and authority of the voluntary liquidator to execute the sale deed but found against the defendant on the applicability of section 53A of the Transfer of Property Act.
On appeal by the plaintiffs under clause 10 of the Letters Patent a Division Bench of the High Court reversed the judgment and decree of the Subordinate Courts and decreed the suit.
The Division Bench held that the voluntary liquidator had no authority to execute the deed of sale after the dissolution of the company and that there was neither estopped nor escheat.
The Division Bench also held that section 53A of the Transfer of Property Act did not protect the defendant.
The defendant has preferred this appeal after obtaining a certificate from the High Court under article 133(1)(b) of the Constitution.
The submissions of Shri Javali learned counsel for the appellant on the question of applicability of section 53A of the Transfer of Property 825 Act and the authority of the voluntary liquidator after the dissolution of the company to execute the deed of sale may be easily disposed of.
We do not think that section 53A of the Transfer of Property Act is attracted to the facts of the present case.
The right under section 53A is available against the transferor (effecting the incomplete transfer) and any person claiming under him.
It is difficult to understand how the successor in interest of a lessor can ever be said to a person claiming under a lessee making an incomplete transfer of the lease hold interest.
Nor do we find force in the submission of the learned counsel that the voluntary liquidator had legal authority, after dissolution of the company to execute the deed of sale so as to formally complete the transaction which had already been entered into.
Reliance was placed by the learned counsel for the appellant on the decision of Farwell, J., in Pulsford vs Demanish(1).
In that case a liquidator was guilty of gross dereliction of duty.
In the words of Farwell J., "A more gross dereliction of duty by a liquidator I have seldom heard of".
Though in possession of sufficient assets of the liquidating company to pay all its debts in full the liquidator took no steps to ascertain the creditors of the liquidating company or to see that they were paid.
Instead he sold the business and assets of the company to a purchasing company who covenanted to pay all the debts and liabilities of the liquidating company.
The purchasing company did not pay the debts.
The liquidating company was dissolved.
The creditors had no remedy by which they could recover their debts.
A creditor of the liquidating company sued the liquidator for recovery of damages.
It was held that the liquidator was guilty of negligence in the discharge of his statutory duty and was liable in damages to the unpaid creditors of the liquidating company.
What was decided in the case was not that a liquidator could represent the erstwhile company after it was dissolved but that a liquidator could be sued in damages for breach of a statutory duty which he had failed to perform while functioning as liquidator.
We do not think that this case is of any assistance to the appellant.
We are unable to appreciate how after the company was dissolved the liquidator could still claim to represent the company and execute a registered deed of sale.
Once the company was dissolved it ceased to exist and the liquidator could not represent a non existing company.
If the liquidator was to discharge any duty or perform any function on behalf of the dissolved company he should have express statutory authority.
The Companies Act 1913 contained no provision enabling the liquidator to do any act on behalf of a dissolved company.
section 209(H) of the Companies Act, 1913 enjoined the liquidator as soon as the affairs of the company were wound up to make up an account of the winding up and to call a gene 826 ral meeting of the company and a meeting of the creditors for the purpose of laying the accounts before the meetings.
The liquidator was then required to send to the Registrar a copy of the account and to make a return to him of the holding of the meetings.
The Registrar on receiving the accounts and the returns was required to register them an on the expiration of three months of registration the company was to be deemed as dissolved.
The only duty cast upon the liquidator thereafter was that under section 244(B).
It was that the liquidator should on the dissolution of the company pay into the Reserve Bank of India, to the credit of the Central Government in an account called the Companies Liquidation Account any money representing unclaimed dividend or any undistributed assets in his hands on the day of dissolution.
No other duty was stipulated to be performed by the liquidator under the provisions of the Companies Act, 1913, after the dissolution of the company.
We are, therefore, unable to agree with the submission of the learned counsel that the liquidator had the jurisdiction to execute the deed of sale dated January 28, 1941 after the company had been dissolved.
The next question which we must consider is what was the effect of the dissolution of the company on the lease hold interest which the company had in the land.
No term of the lease has been brought to our notice by which the lease would stand extinguished on the dissolution of the company.
If the company had a subsisting interest in the lease on the date of dissolution such interest must necessarily vest in the Government by escheat or as bona vacantia.
In India the law is well settled that the property of an intestate dying without leaving lawful heirs and the property of a dissolved Corporation passes to the Government by escheat or as bona vacantia.
Of course such property will be subject to trusts and charges, if any, previously effecting its vide M/s. Pierce Leslie & Co. Ltd., vs Violat Ouchterlong Wapshare & Ors.(1).
It is also to be noticed here that section 244(B) of the Companies Act 1913, as well as section 555(2) of the expressly enjoin a duty on the liquidator to deposit, on the dissolution of the company, into an account in the Reserve Bank of India known as the Companies Liquidation Account any money representing unpaid dividend or undisputed assets lying in his hands at the time of dissolution.
The learned counsel for the appellant relied upon the decisions of the Allahabad High Court in Tulshi Ram Sahu & Anr.
vs Gur Dayal Singh & Anr.(2) and Mussamat Ramman Bibi vs Mathura Prasad & Anr.(3).
Both were cases of fixed rate tenancies.
As pointed out 827 by the Full Bench in Tulsi Ram Sahu & Anr.
vs Gur Dayal Singh & Anr.,(1) one of the incidents of a fixed rate tenancy was that provided by section 18 of the Agra Tenancy Act 1901 which prescribed that a right of occupancy would stand extinguished when a fixed rate tenant died leaving no heir entitled under the Act to inherit the right of occupancy.
It followed therefrom that the land had to revert to the landlord and could not go to the Government by escheat.
On the other hand in Sonet Kooer vs Himmat Bahadur & ors.(2).
The Privy Council held that on the failure of heirs to a tenant holding land under Mukerrori Tenure there was nothing in the nature of the tenure which prevented the Crown from taking the Mukerrori by escheat, subject to the payment of rent to the Zamindar.
If the lease hold interest of the company in the land became vested in the government on the dissolution of the company it must follow that the suit at the instance of the plaintiffs was not maintainable.
The next question for consideration is whether the plaintiffs were estopped from denying the validity of the sale in favour of the Benaras Bank Ltd., and the character of the possession of the Benaras Bank.
Ltd., and its successors in interest.
As already mentioned by us Budhsingh and Jialal sent a notice dated January 11, 1941, through their lawyer demanding of the liquidator of the Benaras Bank Ltd., payment of arrears of rent for four years and asserting that the lease was forfeited consequent on the lessee 's failure to pay rent for a continuous period of three years.
The liquidator denied the claim of right of the lessor to forfeit the lease but admitted the claim for rent.
The liquidator paid the rent and it was accepted by Budh Singh and Jialal.
Later also the evidence shows that Jugal Kishore the purchaser from Budh Singh and Jialal also accepted rent from the official liquidator of the Benaras Bank Ltd. This course of conduct of Budh Singh and Jialal and their successor Jugal Kishore clearly indicates the acceptance, by them, of the position that the Benaras Bank Ltd. had succeeded to the rights of the company in the lease hold interest.
Further, the official liquidator of the Benaras Bank Ltd. said first tried to sell the lease hold interest by public auction.
When that sale did not fructify because of the failure of the highest bidder to deposit the sale price, the lease hold interest was sold to the defendant with the sanction of the Company Judge.
At no point of time did the predecessors in interest of the plaintiffs raise the slightest objection to the sale of the leas hold interest.
It was thereafter that the defendant obtained the permission 828 of the Municipal Board, Saharanpur, and raised construction on the land.
The plaintiffs themselves admittedly reside near about the land in dispute.
They did not raise any objection to the raising of the constructions.
The plaintiffs as well as the defendants appeared to proceed on the common understanding that the defendants had succeeded to the interest of Patel Mills Ltd., in the lease hold interest.
We are, therefore, of the view that the plaintiffs were estopped from contending that the defendant had no interest in land.
The amount only right of the plaintiffs was to receive the rent.
The result of our discussion is that the appeal is allowed and the suit is dismissed with costs throughout.
It is, however, made clear that the plaintiffs have the right to receive rent from the defendants.
P.B.R. Appeal allowed.
| The original owners of the land in dispute granted a permanent lease of the land to a company.
The lessee could use the land for any purpose and could also transfer the leasehold interest.
Though a permanent lease the lessor could forfeit the lease if the lessee failed to pay rent for three consecutive years.
The lessors interest changed hands twice and by virtue of a decree in a suit for pre emption filed by the respondents they became entitled to such interest.
In the meanwhile the company went into voluntary liquidation and the liquidator executed an agreement of sale of all its assets including the leasehold interest in favour of a Bank which was the biggest creditor of the Company.
Immediately thereafter the Bank itself went into liquidation.
Sometime later the official liquidator of the Bank found that no deed of transfer was executed by the voluntary liquidator in favour of the Bank, the erstwhile voluntary liquidator therefore executed a deed of sale in favour of the Bank.
Thereafter the official liquidator of the Bank transferred the lease hold interest in the land to the defendant appellant.
Before the company went into liquidation the first transferee of the land accepted rent from the voluntary liquidator.
After the transfer of the leasehold interest to the Bank the second transferee demanded from the official liquidator arrears of rent for four years and claimed that the lease was forfeited by reason of the Bank 's failure to pay rent for a continuous period of three years in terms of the lease.
The official liquidator denied the right to forfeit the lease.
He, however, paid rent which was accepted by the lessors.
Even subsequently rent was accepted by the lessors.
The respondent sued to recover possession of the suit land on the ground that the lease hold interest was not validly transferred by the voluntary liquidator and that therefore neither the Bank nor the defendant acquired any right in the land.
The defendants contended that the voluntary liquidator had the authority in law to execute the deed of sale and formally complete a transaction which had already taken place, that the predecessors in interest of the plaintiff having accepted rent from the official liquidator were estopped 822 from contending that the transfer in favour of the Bank was not valid and that the lease hold interest in the land had escheated to the Government on the dissolution of the company.
The suit was dismissed by the Trial Court and the Appellate Court.
On second appeal, the High Court decreed the suit holding that the voluntary liquidator had no authority to execute the deed of sale after the dissolution of the company and that there was neither estopped nor escheat.
Allowing the appeal, ^ HELD: 1.
The High Court was right in holding that the liquidator had no jurisdiction to execute the deed of sale after the company had been dissolved.
Once the company was dissolved in accordance with the procedure laid down in the Indian Companies Act, 1913 it ceased to exist and therefore the voluntary liquidator could not represent a non existent company.
If the liquidator was to discharge any duty or perform any function on behalf of the dissolved company he should have express statutory authority to do so, which he did not have under the Act.
[826 D, 825 G] 2.
If the company had a subsisting interest in the lease on the date of dissolution, such interest must necessarily vest in the Government by escheat or bona vacantia.
It is well settled that the property of an intestate dying without leaving lawful heirs and the property of a dissolved corporation passes to the Government by escheat or bona vacantia.
If the lease hold interest of company became vested in the Government on its dissolution, a suit at the instance of the plaintiffs was not maintainable.
[826 E, 827 G] 3.
The successors in interest of the original lessors accepted rent from the official liquidator indicating that they accepted the position that the Bank had succeeded to the rights of the company in the lease hold interest.
The official liquidator sold the land to the defendant with the permission of the Company Judge only when he failed to get the highest bid in public auction.
At no point of time did the predecessors in interest of the plaintiffs raise an objection to the sale of the lease hold interest.
When the defendant obtained permission of the Municipal Board and raised constructions on the land, the plaintiffs who resided near about the land did not raise any objection to the constructions.
In the circumstances the plaintiffs were estopped from contending that the defendant had no right in the land.
Their only right is to receive rent.
[827 F 828 B]
| 4168.txt |
SDICTION: Writ Petition (Criminal) No.248 of 1988.
(Under Article 32 of the Constitution of India).
WITH Special Leave Petition (Crl.) No. 1492 of 1988.
From the Judgment and Order dated 29.4.88 of the Gujarat High Court in Special Criminal Application No. 886 of 1986.
U.R. Lalit, M.G. Karmali, J.B. Patel and K.M.M. Khan for the petitioner in W.P. Crl.
No. 248/88 and S.L.P. (Crl.) No. 1492/88.
T.U. Mehta, Mrs. Hemantika Wahi and M.N. Shroff for the State of Gujarat in W.P. Crl.
No. 248/88 and S.L.P. (Crl.) No. 1492/ 88.
869 Kuldip Singh, Additional Solicitor General C.V.S. Rao and A. Subba Rao for the Respondents in W.P. Crl.
No. 248/88 and S.L.P. (Crl.) No. 1492/88.
The following Orders of the Court were delivered: PATHAK, CJ.
This writ petition under Article 32 of the Constitution and the Special Leave Petition under Article 136 of the Constitution arises out of proceedings for pre ventive detention taken under the .
One of the substantial points which arises in these cases is whether the period of detention is a fixed period running from the date specified in the detention order and ending with the expiry of that period or the period is automatical ly extended by any period of parole granted to the detenu.
In case where the High Court allows a habeas corpus petition and directs the detenu to be released and in consequence the detenu is set free, and thereafter an appeal filed in this Court results in the setting aside of the order of the High Court, is it open to this Court to direct the arrest and detention of the detenu if meanwhile the original period of detention intended in the detention order has expired? Four decisions of this Court have been placed before us in sup port of the contention that the period of detention intended by the detention order is not,a fixed period but can be correspondingly extended if the detenu absconds before he can be apprehended and detained or the period of detention is interrupted by an erroneous judgment of a High Court and the detenu is set free.
Those cases are State of Gujarat vs Adam Kasam Bhaya; , ; State of Gujarat vs Ismail Juma & Ors., ; ; Smt.
Poonam Lata vs M.L. Wadhawan and others, A.I.R. 1987 SC 1383 and Pushpa devi M. Jatia vs M.L. Wadhavan, ; We find some difficulty in accepting the view taken by the learned Judges of this Court who decided those cases.
It seems to us prima facie that what is important is that we are concerned with cases of preventive detention, cases where the detain ing authority is required to apply its mind and decide whether, and if so for how long.
, a person should be de tained.
It is preventive detention and not putative deten tion.
Preventive detention invariably runs from the date specified in the detention order.
In the case of punitive detention, no date is ordinarily specified from which the detention will commence, and all that is mentioned is the period of detention.
In case of preventive detention the detaining authority applies it subjective judgment to the material before it and determines what should be the period for which the detenu should be detained, that is to say, the period during which he should be denied his liberty in order to prevent him from 870 engaging in mischief.
It seems to us prima facie that one possible view can be that if parole is granted the period of parole should be counted within the total period of deten tion and not outside it.
As regards the problem raised by the release of a detenu pursuant to an erroneous decision of the High Court, and the subsequent reversal of that decision by this Court, the remedy probably lies in the enactment of legislation analogous to section 5(1) and section 15(4) of the Admin istration of Justice Act, 1960 in the United Kingdom.
The question is an important one affecting as it does on the one hand the need for effective measures of preventive detention and on the other the liberty of the subject and his fight to freedom from detention beyond the period intended by the statute.
As the matter is of great public importance, and most cases of preventive detention are bound to be affected, we refer these cases to a Bench of five Hon 'ble Judges for reconsideration of the law on the point.
ORDER Although I agree with the view expressed in the State of Gujarat vs Adam Kasam Bhaya, ; and the other cases mentioned in the order of the learned Chief Justice, I agree that in view of the great public importance of the point involved, these cases may be heard by a Bench of five Hon 'ble Judges.
| The petitioner filed a writ petition and a special leave petition challenging the detention order passed under the .
It was contended on behalf of the respondents that the period of detention intended by the detention order was not a fixed one but could be correspond ingly extended if the detenu absconded before he could be apprehended and detained or the period of detention was interrupted by an erroneous judgment of a High Court and the detenu was set free.
Referring the cases to a larger Bench, this Court, HELD: By the Court. ' As the matter is of great public importance, these cases are referred to a Bench of five Judges of this Court.
[870C] Per Pathak, C J: Preventive detention invariably, runs from the date specified in the detention order, and the period of deten tion is determined by the detaining authority, applying its subjective judgment to material before it.
[869G H] In the case of grant of parole, one possible view can be that the period of parole should be counted within the total period of detention and not outside it.
As regards the problem raised by release of a detenu pursuant to an errone ous decision of the High Court, and the subsequent reversal of the decision by the Supreme Court the remedy probably lies in the enactment of legislation analogous to section 5(1) and section 15(4) of the 868 Administration of Justice Act, 1960 in the United Kingdom.
[870A B] As the question is of great public importance affecting, on the one hand, the need for affective measures of preven tive detention and, on the other, the liberty of the subject and his right to freedom from detention beyond the period intended by the statute, and since most cases of preventive detention are bound to be affected, these cases are referred to a five Judge Bench for reconsideration of the law on the point.
[870B C] State of Gujarat vs Adam Kasam Bhaya, ; ; State of Gujarat vs Ismail Juma & Ors., ; ; Smt.
Poonam Lata vs M.L. Wadhawan and Others, AIR 1987 SC 1383 and Pushpadevi M. Jatia vs M.L. Wadhavan, ; ; dissented from.
Per Sharma, J (Concurring): In view of the great public importance involved, these cases may be heard by a five Judge Bench.
[870E] State of Gujarat vs Adam Kasam Bhaya, ; ; State of Gujarat vs Ismail Juma & Ors., ; ; Smt.
Poonam Lata vs M.L. Wadhawan and Others, AIR 1987 SC 1383 and Pushpadevi M. Jatia vs M.L. Wadhavan, ; ; affirmed.
| 6059.txt |
il Appeal No. 861 of 1975.
(Appeal by Special Leave from the Judgment and Order dated 1 3 1975 of the Allahabad High Court (Lucknow Bench) in writ petition No. 405 of 1974.) A.K. Sen and S.K. Bisaria, for the appellant.
C.P. Lal for respondents 1 3.
Yogeshwar Prasad and R.N. Trivedi, for respondents.
No. 8.
The Judgment of the Court was delivered by JASWANT SINGH, J.
This appeal by special leave is di rected against the judgment and order dated March 31, 1975, of Lucknow Bench of 65 the Allahabad High Court dismissing the writ petition No. 405 of 1974 filed by the appellant challenging the recommen dation made by a Selection Committee of the Lucknow Univer sity (hereinafter referred to as 'the University ') for appointment of respondent No. 8 as Professor of Anthropology in the Faculty of Arts of the University.
The facts giving rise to this appeal are: towards the end of the year 1973, the University put up an advertisement inviting applications from candidates possessing the follow ing qualifications to fill up a vacant post of Professor of Anthropology : "Essential: First or high second class Master 's degree and Doctorate in the subject con cerned with a good academic record, experience of teaching post graduate classes not less than 7 years and/or having conducted and successfully guided research work for 7 year 's in recognised institution and having published work of high standard in the subject concerned.
" Preferential: High academic distinctions.
" The appellant and( respondent No. 8 were the only two candidates who applied for the post in response to the advertisement.
Their respective qualifications are as set out hereunder : S.No.
Name Age Qualifications & Experience 1.
Dr. G. Sarana, 38 years H.S. (U. P. Bd) 1949 1 Div.
Head of Deptt.
Inter (B.H.U.) 1951 1 Div.
of Anthropology, B.A. (L.U.) 1953 I Div.
Karnatak University, M.A. (L. U.) 1965 I Div.
Dharwar.
Ph. D. (Harvard (U) 1966.
Published 28 research papers and 3 books.
Worked as : (1) Temp.
Lecturer in Anthro pology L.U. July, 1955 April, 1962.
(2) Lecturer in Anthropol ogy Punjab U April August, 1962.
(3) Visiting Lecturer Univ.
of California at Santa Barbara July 1965 June 1966.
(4) Karnatak Univer sity (September 1966 upto date as Reader and since 27 June 1970) as Profes sor.
66 S.No.
Name Age Qualifications & Experience 2.Dr.
K.S. Mathur, 44 years H.S. (U. P. Bd) 1944 1 Divn.
Reader and Head of the Inter (U. P. Bd) 1946 I Divn.
Deptt.
of Anthropology, B. Com (L. U.) 1950 I Divn.
Lucknow University.
Ph.D. (Australian National U) 1960.
Published several research papers, Worked as: (1) Lecturer in Anthropology L.U. 1951 64.
(2)Reader in Anthropology L.U. 1964 continuing (3) Sociologist National Council of Appl.
Economic Research, New Delhi March ' September 1960.
On February 27, 1974,, a Selection Committee consisting of Shri A.K.K. Mustafi, Vice Chancellor of the University, Dr. K.N. Shukla, Dean, Faculty of Arts and Professor & Head of the Department of Hindi of the University, and three experts viz., Dr. S.C. Dube, Dr. S.R.K. Chopra and Dr. T.B. Mayak, respondents 3, 4, 5, 6 and 7 respectively met to interview the candidates and to make their recommendation to the Executive Council of the University.
After interviewing the aforesaid two candidates, the Selection Committee re solved to recommend respondent No. 8 herein for appointment to the aforesaid post of Professor of Anthropology.
On coming to know of the recommendation, the appellant filed the aforesaid petition 'under Article 226 of the Constitution challenging the recommendation mainly on the ground that two out of the aforesaid three experts viz., Dr. S.C. Dube and Dr. S.R.K. Chopra were biased against him and in favour of respondent No. 8.
It was alleged by the appel lant that the respondent had close relations with the afore said two.
experts as he was instrumental in obtaining many remunerative assignments for them.
It was.
further averred by the appellant that whenever Dr. Dube visited Lucknow, he stayed with respondent No. 8.
It was also averred by the appellant that Dr. Chopra had strained relations with him on account of straight election contest between him and the latter for the office of the President of Anthropology Section of the Indian Science Congress for 19574.
The appellant further averred that in 1968 when he was serving in the Punjab University as a Lecturer in the Department of Anthropology headed by Dr. Chopra, the latter stubbornly opposed his application for leave to avail of the offer of fellowship from Harvard University and stopped forwarding his salary bills to the Executive, Council with the ulterior object of depriving him of the opportunity to attain higher academic qualification and thereby better his future pros pects with the result that he was compelled to resign his job and surrender three months ' salary in lieu of notice to avail of the offer.
67 The petition was vigorously contested by respondent No. 8.
On consideration of the material placed before it, the High Court, however, dismissed the application holding that though respondent No. 8 was the head of the department of Anthropology, he was not the only person responsible for bestowing various assignments either on Dr. Dube or on Dr. Chopra and that it was the Executive Council and the Academic Council which were responsible for giving those assignments to Dr. Dube and Dr. Chopra.
It was further held by the High Court that there was nothing unusual in Dr. Dube and Dr. Chopra 's knowing and enjoying the hospitality of respondent No. 8.
The fact that the appellant had an elec tion contest with Dr. Chopra was also, in the opinion of the High Court, of no significance, as such like contests were very common and ' it could not be said that Dr. Chopra had developed such a degree of ill will and hostility against the appellant for the latter 's standing as a candidate against him so as to render him incapable of acting impar tially when the task of selecting the best candidate was assigned to him and that it was not possible to.
presume that Dr. Dube and Dr. Chopra were in a position to influence the decision of the entire Selection Committee by injection bias in the minds of the other members.
The High Court finally held that from the facts relied upon by the appel lant, bias could not be spelt out.
In arriving at its decision, the High Court relied upon the following observa tions made by Frank, J. of the United States of America in re. Linahan.(1) "If, however, "bias" and "partiality" be defined to mean the total absence of preconceptions in the.
mind of the Judge, then no one has ever had a. fair triaL,, and no one ever will.
The human mind, even at infancy, is no blank piece of paper.
We are born with predispositions and the processes of education, formal and informal, create attitudes which precede: reasoning in particular instances and which, therefore, by definition, are preju dices.
" The High Court also held that the appellant having submitted to the jurisdiction of the Selection Committee, he could not be permitted to turn round and denounce the con stitution of the Committee.
Counsel for the parties have reiterated before us the contentions raised on behalf of their clients before the High Court.
In addition, it has been contended by counsel for respondent No. 8 that the impugned recommendation being in the nature of an interlocutory proceeding,, neither the writ petition nor the appeal arising therefrom could be maintained.
It is needless to emphasize that the principles of natural justice which are meant to .prevent miscarriage of justice are also applicable to domestic enquiries and admin istrative proceedings (See A.K. Karipak vs Union of India(2).
It cannot also be disputed that one of the funda mental principles of natural justice is that in case of quasi judicial proceedings, the authority empowered to decide the dispute (t) [1943], 138F. 2nd 650 at 652.
(2) :[1970] 1 S.C.R. 457 :A.I.R. 1970 S.C. 150.
68 between opposing parties must be one without bias by which is meant an operative prejudice, whether conscious or uncon scious towards one side or the other in the dispute.
(See Nageswara Rao vs
A.P. State Road Transport Corporation(1) and Gullapalli Nageshwar Rao v State of A.P.(2).
It would be advantageous at this stage to refer to the following observations made by this Court in Manak Lal vs Prem Chand(3).
"Every member of a tribunal that sits to try issues in judicial or quasi judical proceedings must be able to act.
judicially; and the essence of judicial decisions and judicial administration is that judges should be able to act impartially, objectively and without any bias.
In such cases the test is not whether in fact a bias has affected the judgment; the test always is and must be wheth er a litigant could reasonably apprehend that a bias attributable 'to a member of the tribunal might have operated against him in the final decision of the tribunal.
It is in this sensethat it is often said that justice must not only be done but must also appear to be done." Again as held by this Court in A. K. Karipak 's case (supra), reiterated in section Parthasarthi vs State of Andhra Pradesh(4) and followed by the High Court of Jarainu & Kashmir in Farooq Ahmed Pandey and Ors.
vs Principal Regional Engineering College & Anr.(5) the real question is not whether a member of an administrative Board while exercising quasi judicial powers or discharging quasi judicial functions was biased, for it is difficult to prove the mind of a person.
What has to be seen is whether there is a reasonable ground for believing that he was likely to have been biased.
In decid ing the question of bias, human probabilities and ordinary course of human conduct have to be taken into consideration.
In a group deliberation and decision like that of a Selection Board, the mem bers do not function as computers.
Each member of the group or board is bound to influence the oth ers, more so if the member concerned is a person with special knowledge.
His bias is likely to operate in a subtle manner.
At page 156 of "Principles of AdministratiVe Law" by J.A.G. Griffith and H. Street (Fourth Edition), the position with regard to bias is aptly and succinctly stated as follows : "The prohibition of bias strikes against factors which may improperly influence a judge in deciding in favour of one party.
The first of the three disabling types of bias is bias on the sub ject matter.
Only rarely will this bias invalidate proceedings.
"A mere general interest in the general object to be pursued would not disqualify," said Field J., holding that a magistrate who sub scribed to the Royal Society for the Prevention of Cruelty to Animals was not thereby disabed (1) [1959] Supp. 1 S.C.R. 319 :A.I.R. 1959 S.C. 308.
(2) ; (3) ; (4) (5) 69 from trying a charge brought by that body of cruel ty to a horse.
There must be some direct connec tion with the litigation.
If there is such preju dice, on the subject matter that ,the court has reached fixed and unalterable conclusions not founded on reason or understanding, so that there is not a fair hearing, that is bias of which the courts wilt take account, as where a justice an nounced his intention of convicting anyone coming before him on a charge of supplying liquor after the permitted hours . . .
Secondly, a pecuniary interest, however, slight will disqualify, even though it is not proved that the decision is in any way affected.
The third type of bias is personal bias.
A Judge may be a relative, friend or business associ ate of a party, or he may be personally hostile as a result of events happening either before or during the course of a trial.
The courts have not been consistent in laying down when bias of this type will.
invalidate a hearing.
The House of Lords in Frome United Brewering vs Bath Justices(1) approved an earlier test of whether "there is a real likelihood of bias.
" the House of Lords has since approved a dictum of Lord Hewart that "justice should not only be done,, but should manifestly and undoubtedly be seen to be done" al though it did not mention another test suggested by him in the same judgment: Nothing is to be done which creates even a suspicion that there has been an improper interference with the course of jus tice.
" At page 225 of his Treatise on "Judicial Review of Administrative Action" (Third Edition), Prof. S.A. De Smith, has stated as follows with regard to Reports and Preliminary decisions : "The case law on the point is thin, but on principle it would seem that where a report or determination lacking final effect may nevertheless have a seriously judicial effect on the legally protected interests of individuals (e.g. when it is a necessary prerequisite of a final order) the person making the report or preliminary decision must not be affected by interest or likelihood of bias.
" From the above discussion, it clearly follows that what has to be seen in a case where there is an allegation of bias, in respect of a member of an administrative Board or body is whether there is a reasonable ground for believing that he was likely to have been biased.
In other words whether there is substantial possibility of bias animating the mind of the member against the aggrieved party.
We do not, however, consider it necessary in the present case to go into the question of the.reasonableness of bias or real likelihood or bias as despite the fact that, the appellant knew all the relevant facts, he did not before appearing for the interview or at the time of the (1) 70 interview raise even his little finger against the consti tution.
of the Selection Committee.
He seems to have voluntarily appeared before the Committee and taken a chance of having a favourable recommendation from it.
Having done so, it is not.
now open to him to turn round and question the constitution of the Committee.
This view gains strength from a decision of this Court in Manak Lal 's case (Supra) where in more or less similar circumstances, it was held that the failure of the appellant to take the identical plea at the earlier stage of the proceedings created an effective bar of waiver against him.
The following observations made therein are worth quoting: "It seems dear that the appellant wanted to take a chance to secure a favourable report from the tribunal which was constituted and when he found that he was confronted with an unfavourable report, he adopted the device of raising the present technical point.
" It is also difficult to understand how the writ petition or for that matter the present appeal before us is maintain able when the recommenlation of the Selection Committee has still to be scrutinzed by the Excutive Council of the Uni versity and either accepted or rejected by t and other remedies by way of representation to.
the Executive Council and an application for reference of the matter under section 68 of the Uttar Pradesh Universities (Reenactment and Amendment) Act, 1974, 0 the Chancellor are still open to the appellant and have not been.
exmusted.
For the foregoing reasons, we find ourselves unable to allow the appeal.
In the result, the appeal fails and is hereby dismissed but in the circumstances of the case with out any order as to costs.
M.R. Appeal dismissed.
| The appellant and respondent No. 8 applied for the vacant post of Professor of Anthropology in the Faculty of Arts, in answer to an advertisement put up by the Lucknow University.
A selection committee of five persons including three experts, interviewed them and recommended respondent No. 8 for the post.
The appellant 's writ petition challeng ing the recommendation was dismissed by the High Court.
The appellant contended before this Court that two of the expert members of the selection committee were unduly biased against him and in favour of respondent No. 8.
The appeal was contested on two grounds.
Firstly, that by submitting to the jurisdiction of the selection committee, the appellant had waived his right to denounce its constitution and sec ondly, that the impugned recommendation being an interlocu tory proceeding against which remedies were available, the writ petition was not maintainable.
Dismissing the appeal, the Court, HELD: 1.
Despite the fact that the appellant knew all the relevant facts,he seems to have voluntarily appeared before the committee and taken a chance of having a favourable recommendation from it Having done so it is no now open to him to turn round and question the constitution of the committee.[70 A B] Manak Lal vs Prem Chand ; 1957 S.C. 425, applied.
Linahan 650; A. K. Karipak vs Union of India ; Nageshwar Rao vs State of A.P. ; 1959 SC 1376; section Partha rarathi vs State of Andhra Pradesh ; Farooq Ahmad Bandey and Ors.
vs Principal Regional Engineering College & Anr.
[1975] I&K L.R. 427; Principles of Adminis trative Law by I.A.G. Griffith and H. Street (4th edition) and Judicial Review of Administrative Action ' (3rd Edition) by Prof. S.A. De Smith, referred to. 2.
The recommendation of the selection committee has still to be scrutinised by the Executive Council of the University and either accepted or rejected by and other remedies by way of representation to the executive council and an application for reference of the matter under section 68 of the Uttar Pradesh Universities (Reenactment and Amendment) Act, 1974, to the Chance or are till open to the appellant and have not been exhausted The writ petition or he present appeal before us is not maintainable.
[70 C D]
| 3524.txt |
Civil Appeal No. 1381 of 1980 Appeal by Special leave from the Judgment and order dated the 7th July, 1980 of the Punjab and Haryana High Court in Civil Writ Petition No . 1917 of 1980.
And Civil Appeal No. 2667 of 1983.
Appeal by Special leave from the Judgment and order dated the 8th July, 1980 of the Punjab and Haryana High Court in Civil Writ No. 2349 of 1980.
Jawahar Lal Gupta, Janendralal and B.R. Agarwal for the Appellant.
Randhir Jain for the Respondents.
The Judgment of the Court was delivered by VARADARAJAN, J.
These appeals by special leave are by the Punjab University and directed against two Division Bench judgments of the Punjab and, Haryana High Court in writ Petitions 1917 of 1980 and 2349 of 1980, allowing those Writ Petitions without any order as to costs W P. 2319 of 1980 was allowed at the motion stage on 18.7.1980 as being covered by the decision in W P. 1917 of 1980 which was disposed of on 7.7.1980.
Kulwant Singh Tiwana, J. is a party to both the judgments and he sat with Harbans Lal, J for hearing W.P. 1917 of 1980 and with M.M. Punchi, J. for hearing W.P. 2349 of 1980.
In these circumstances, it is necessary to state only the facts relating to W.P. 1917 of 1980 alone briefly.
The system known as "10 plus 2 plus 3 system" was introduced in the educational institutions in the country some years ago.
The Association of Indian Universities decided the equivalence of this 10+2+3 system with the old 11+3 years degree course system which was prevalent in some States and it suggested that in all States where the pattern of education is such as to require 14 years for the first degree, i e. 11+3 years, the new plus 2 stage of the Central Board of Secondary Education be treated as equivalent to a pass in the first year of the three years degree course or for admission to the first year of the two years degree course.
This suggestion was 818 conveyed by the Association of the Indian Universities to the Chairman of the Central Board of Secondary Education by a letter dated 18.4.1978.
The appellant, Punjab University, decided on 10.2.1977 that the 12th standard examination conducted by the Boards/Universities under the new 10+2+3 system by recognised as equivalent to the Pre Medical/Pre Enginerering/B.A. Part I/B.Sc.
Part I/B.Com Part I examination according to the combination of the subjects.
Subsequently, on 4.6.1978 the Punjab University decided to treat the 11th standard of the new 10+2+3 system as equivalent to the pre University examination of the university.
Copies of those decisions dated 10.2.1977 AND 4.6.1978 were Annexures P. 2 and P. 3 respectively in W.P. 1917 of 1980.
These recognitions of the equivalence of those two examinations continued till the beginning of the year 1980.
But on 18.4.1980 the Punjab University decided that the first year student of the plus 2 course in the 10+2+3 system of the Central Board 's schools who does not take a public examination at the end of the first year should not be considered as equivalent to the student who has passed the pre University examination of the Punjab University for joining the Pre Medical/Pre Engineering/B.A. Part I/B. Sc.
Part I/B.Com.
Part I of the University.
On 7.5.1980, the Punjab University decided that the 12th Standard Examination in the new 10+2+3 system conducted by any recognized Board/Council/University shall be treated as equivalent to the pre University Examination of the University.
These decisions dated 18.4.1980 and 7.5.1980 are Annexures R 2 and R 3 respectively in W.P. 1917 of 1980.
Petitioners 1 to 37 in W.P. 1917 of 1980 had passed the 12th standard examination in the 10+2+3 system of the Central Board of Education and petitioners 38 to 92 in the Writ Petition had been promoted from the 11th standard to the 12th standard in that system.
These 92 petitioners filed W.P. 1917 of 1980 challenging the Punjab University 's decisions (Annexures R 2 and R 3) dated 18.4.1980 and 7.5.1980 contending that in view of the earlier decisions of the University, namely, Annexures P. 2 and P. 3 dated 10.2.1977 and 4.6.1978 respectively they had joined the classes in the plus 2 course with object of joining in the colleges affiliated to the University in the next class of equivalence as also Engineering and Medical Colleges and that the University cannot, therefore, change those decisions by the subsequent decisions, Annexures R 2 and R 3 to their deteriment.
They invoked the doctrine of promissory estoppel in regard to that ground of attack on those two decisions.
The second ground of attack by the petitioners 819 in W.P. 1917 of 1980 was that the decisions Annexures R 2 and R 3 are retrospective in operation and they have taken away their vested right and that the University has no power, either under the Punjab University Act or under any statute, regulation or rule to make any regulation, rule or ordinance adversely affecting their vested rights retrospectively.
The defence of the appellant University was that the decisions, Annexures R 2 and R 3 were taken in the place of the earlier decisions, Annexures P. 2 and P. 3 in the interest of eduction on the ground that the 11th standard examination in the new 10+2+3 system was not a public examination and the standard of education in the schools where that system was in vague was low and even the marking system in the examination was lenient.
The University further contended that even the syllabi in the equivalent examination in the schools and colleges were not the same.
The University stated that the Committee of Experts which was constituted by the Vice Chancellor of the University when the students in the engineering colleges started an agitation, went into the question and submitted a report suggesting the change in regard to equivalence in view of the difference in the syllabi and the deficiency in the teaching imparted in some subjects in the schools.
The University, therefore contended that the new decisions Annexures R. 2 and R. 3 were taken bonafide and are only prospective in operation and that the doctrine of promissory estoppel pleaded by the petitioners in the Writ Petitions does not apply to the University.
The decisions Annexures P. , R. 2 and R. 3 are of the Syndicate which has power to make rules etc under section 20 (5) of the Punjab University Act in the same manner as the Senate has similar power under section 31 of that Act.
The learned Judges of the Division Bench rejected the contention of the petitioners before them that the Syndicate has no power which the Senate has under section 31 of the Act and held that the Syndicate has similar powers under section 20 (5) of the Act They rejected the further contention that there is any bar of promissory estoppel against the University in regard to the.
matter and, however, held that petitioners 1 to 37 had joined the 10+2 course in the Central Schools lying within the territorial jurisdiction of the Punjab University in 1978 and passed the 12th Standard Examination and had planned their education in a particular manner to join the colleges affiliated to the Punjab University in the second year of the 3 year degree course and other courses after passing the 12th standard examination in the plus 2 820 system.
They found that similar is the case of petitioners 38 to 92 in W.P. 1917 of 1980 who had been promoted from the 11th to the 12th standard in the plus 2 system.
They held that Annexure R. 3 will deprive petitioners 1 to 37 and Annexure R. 2 will deprive petitioners 38 to 92 of the right to seek admission in Engineering and Medical Colleges after passing the 12th Standard in the 10+2 system, and Annexures R. 2 and R. 3 take away that right and are retrospective in nature.
In coming to this conclusion the learned Judges of the Division Bench relied very strongly upon the decision of a full Bench of the Punjab and Haryana High Court in Punjab University vs Subhash Chander.
The learned Judges accordingly allowed W.P. 1917 of 1980 on the sole ground, namely, that Annexures R. 2 and R. 3 are bad as being retrospective in operation without an order as to costs and held that Annexures R. 3 and R. 2 will not stand in the way of petitioners 1 to 7 and 38 to 92 respectively before them from seeking admission to higher classes or in Engineering and Medical Colleges on the basis of the old decisions, Annexures P. 2 and P. 3.
The Other Division Bench which heard W.P. 2349 of 1980 allowed that petition without any order as to costs as being covered by the decision in W P. 1917 of 1980.
We are of the opinion that these appeals have to be allowed.
The learned Judges of the High Court allowed the Writ Petitions only on the ground that the new decisions Annexures R. 2 and R. 3 are retrospective in operation and that they cannot affect the writ petitioners before them from seeking admission to higher classes or in Engineering or Medical Colleges on the basis of tile earlier decisions Annexures P. 2 and P. 3, relying mainly upon the decision of the Full Bench in Punjab University vs Subhash Chander (supra).
We have, in our separate judgment delivered today in C.A. 2828 of 1977, which arose out of that Full Bench decision, reversed that decision and held that there is nothing retrospective in the order challenged in that case.
In that case one Subhash Chander was admitted to the integrated M.B.B.S course in the Daya Nand Medical College, Ludhiana in the year 1965.
At the time of his admission, under Regulation 25 read with r. 7.1, a student who fails in one subject/paper was entitled to grace marks at 1 per cent of the total aggregate marks of all the subjects for which he appeared.
But in 1970 the rule was amended to the effect that the grace marks will be 1 per cent of the total aggregate marks for any particular subject of the examination in which he has failed Subhash Chander appeared for the Final M.B.B.S. examination in 1974 and secured 821 106 out of 200 marks in the practical examination and 95 out 200 marks in the theory examination in Midwifery, which was one of the four subjects for which he appeared.
at that time.
He had passed the examinations in the other three subjects for which the total aggregate was 1200 marks.
Under the old rule he would have been entitled to 16 grace marks at 1 per cent of the total aggregate of all the four subjects, namely, 1600 marks.
But he was allowed only 4 grace marks under the new rule being 1 per cent of, the aggregate for the subject in which he had failed namely, Midwifery.
The High Court accepted his contention that amendment of the rule made in 1970 was retrospective in operation though it was made applicable to Subhash Chander only in 1974 merely because he had joined the integrated course in 1965 when the rule regarding the award of grace marks was more liberal.
In allowing the appeal against the judgment of the Full Bench we have held that (there was no question of the rule having any retrospective operative as it was framed in 1970 and it did not say that it was operative from any earlier date and it was applied to Subhash Chander only in 1974.
It could not be stated to be retrospective ill operation merely because it was applied to Subhash Chander who had joined the course in 1965 before the amendment was made in 1970.
In the present case also the new decisions are prima facie prospective in operation and they did not become.
retrospective merely because they subsequently appl ed to students who had already started their educational careers.
We, therefore, allow these appeals but without any order as to costs and set aside the judgments of the High Court and dismiss the Writ Petitions.
However, this decision will not effect the right which might have been granted to the petitioners in the writ petitions on the basis of the judgments of the High Court which have been reversed in these appeals.
S.R. Appeals allowed.
| With the introduction of the system known as "10 plus 2 plus 3" in the educational institutions in the country, the Association of the Indian Universities decided the equivalence of this 10+2+3 system with the old 11+3 years degree course system still prevalent is some.
States and it suggested that in all States where the pattern of education is such as to require 14 years for the first degree i.e. 11+3 years the new plus 2 stage of the Central Board of Secondary Education be treated as equivalent to a pass in the first year of the three years degree course or for admission to the first year of the two years degree Course.
The appellant Punjab University, decided on 10.2.1971 that the 12th standard examination conducted by the Boards/Universities under the new 10+2+3 system be recognised as equivalent to the Pre Medical/Pre Engineering/B.A. Part I/B.Sc.
Part I/B. Com.
Part I examination according to the combination of the subjects.
Subsequently, on 4.6.1978 the Punjab University decided to treat the 11th standard of the new 10+2+3 system as equivalent to the Pre University examination of the University.
These recognitions of the equivalence of these two examinations continued till the beginning of the year 1980.
But on 18.4.1980 the Punjab University decided that the first year student of the plus 2 course in the 10+2+3 system of the Central Board 's schools who does not take a public examination at the end of the first year.
should not be considered as equivalent to the student who has passed the pre University examination of the Punjab University for joining the Pre Medical/Pre Engineering/B.A. Part I/B. Sc.
Part II B. Com.
Part I of the University.
On 7.5.1980, the Punjab University decided that the 12th Standard Examination in the new 10+2+3 system conducted by any recognised Board/Council/University shall be treated as equivalent to the pre University Examination of the University.
The respondents in CA 1977/80, namely 1 to 37 who had passed the 12th Standard Examination in the 10+2+3 system of the Central Board of Education and respondents 38 to 92 who had been promoted from the 11th Standard to the 12th Standard in that system challenged the two decisions 816 of the Punjab University dated 18.4.1980, and 7.5.1980 by filing W.P. 1917 of 1980 contending that in view of the earlier decisions of the University namely, Annexures P. 2 and P. 3 dated 10.12.1977 and 4.6.1978 respectively they had joined the classes in the plus 2 course with the object of joining the colleges affiliated to the University in the next class of equivalence as also Engineering and Medical Colleges and that the University cannot, therefore, change those decisions by the subsequent decisions, (Annexures R. 2 and R. 3) to their detriment.
They invoked the doctrine of promissory estoppel in regard to that ground of attack on those two decisions.
The second ground of attack by the petitioners in W.P. 1917 of 1980 was that the decisions Annexures R. 2 & R. 3 are retrospective in operation and they have taken away their vested right and that the University has no power, either under the Punjab University Act or under any statute, regulation or rule to make any regulation rule or ordinance adversely affecting their vested rights retrospectively.
The learned Judges of the Division Bench rejected the contention of the petitioners before them that the Syndicate has no power which the Senate has under section 31 of the Act and held that the Syndicate has similar powers under section 20 (5) of the Act.
They rejected the further contention that there is any bar of promissory estoppel against the University in regard to the matter and, however, held that petitioners 1 to 37 had joined tho 10+2 course in the Central School lying within the territorial jurisdiction of the Punjab University in 1978 and had passed the 12th Standard Examination and had planned their education in a particular manner to join the colleges affiliated to the Punjab University in the second year of the 3 year degree course and other courses after passing the 12th standard examination in the plus 2 system.
They held that Annexure R. 3 will deprive petitioners I to 31 and Annexure R. 2 will deprive petitioners 38 to 92 of right to seek admission in Engineering and Medical Colleges after passing the 12th Standard in the 10+2 system.
and Annexures R. 2 and R. 3 take away that right and are retrospective in nature.
In coming to this conclusion the learned Judges of the Division Bench relied very strongly upon the decision of the Full Bench of the Punjab & Haryana High Court in Punjab University vs Subhash Chander, In view of their decision in W.P. 1911 of 1980, another Bench allowed another W P. 2349 of 1980 filed by the respondents in C.A. 2667/83.
Hence the appeals by the University.
Allowing the appeal, the Court.
^ HELD: 1.
The decisions dated 10.12.1977, 4.6.1978, 18.4.1980 and 7.5.1980 respectively are intra vires the powers of the Syndicate to make rules etc.
under section 20(5) of the Punjab University Act in the same manner as the Senate can do under section 31 of that Act.
[819F] 2.
In view of the decision of the Supreme Court dated 17.5 1984 rendered in Subhash Chander vs Punjab University (Civil Appeal No. 2828/ 1977 arising out of and reversing the said decision of the Punjab High Court relying on which the two Judgments now under 817 appeal, were passed, in the present case also the two impugned decisions are prima facie prospective in operation and they did not become retrospective merely because they subsequently applied to students who had already started their educational careers.
However, this decision will not effect the right which might have been granted to the petitioners in the writ petitions on the basis of the Judgments of the High Court which have been reversed in these appeals [820F; 821E F]
| 4812.txt |
ivil Appeal No. 1446 of 1987.
From the Judgment and Order dated 2.1.1985 of the Guja rat High Court in L.P.A. No. 94 of 1984.
K.N. Bhatt, P.H. Parekh and M.K.S. Menon for the Appellants.
S.C. Patel for the Respondent.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
The short question which arises for consideration in this case is whether the rate of, interest chargeable on the amount payable under an order passed under section 32 of the , 195 1 (63 of 195 1) (hereinafter referred to as 'the Act ') from the date of the said order is governed by section 34 of the Code of Civil Procedure, 1908 (hereinafter referred to as 'the Code ') or whether it is payable at the contractual rate.
The Appellant No.1 M/s.
Everest Industrial Corporation Private Limited, Baroda and its Directors had borrowed from the Gujarat State Financial Corporation (hereinafter re ferred to as 'the Corporation ') a sum of Rs.6 lakhs for the acquisition of fixed assets, namely, land bearing original Survey No. 163 and now bearing Survey No. 949 of Baroda measuring 1 acre and 3 gunthas and the factory building to be constructed thereupon and for purchasing plant and addi tional machinery under a deed of hypothecation dated April 24, 1970 hypothecating all machinery and equipment situated at the factory premises situated on Survey No. 949.
They also created an equitable mortgage mortgaging the said land and factory building by depositing the original title deeds of the properties with the Corporation by signing the letter evidencing the said deposit of title deeds.
Under the said transaction the loan of Rs. 6 lakhs had to be repaid within a period of 8 years by half yearly instalments, such first half yearly instalment of 1/13th of the loan being payable at the end of 24 months of the disbursement of the first instalment of the loan and subsequent half yearly instal ments of 1/13th of the loan to be paid.
each half year and 610 the last half yearly instalment of 1/13th of the loan to be paid on 24.4.1978.
According to the said agreement the first instalment of Rs.46,153 was to be paid on 27.4.1972 and second instalment of Rs.46,153 was to be paid on 27.10.1972.
The appellants were liable to pay interest at 8.5 per cent per annum and that was to be calculated and charged at the end of every half year and was payable on the 31st of March and 30th September in each year.
The appellants committed default in payment of instalments and interest due to the Corporation.
Hence the Corporation filed an application on 9th August, 1973 under section 31 of the Act before the District Judge, Baroda in Civil Miscellaneous Application No. 123 of 1973 claiming that in view of the default, the entire outstanding loan, interest and commitment charges amounting to Rs.6,73,390.42 paise had become due and pay able.
In the said proceedings the appellants having admitted the claim of the Corporation a compromise was arrived at under which the 1st Appellant M/s.
Everest Industrial Corporation undertook to pay a sum of Rs.15,000 every month towards the claim of the Corporation and further agreed that if there was a default in payment of any two instalments at a time, then the Corporation could recover the entire out standing amount then due forthwith.
On the basis of the above compromise an order was passed on 29.4.1977 by the learned Joint Judge, Baroda before whom the case was pending at that time.
The operative portion of the order read as follows: "ORDER Claim of the applicant is decreed.
Opponent No. 1 to pay the amount of Rs.15,000 (fifteen thousand) per month through the Bank of Maharashtra to the applicant towards his claim.
If two instalments of Rs.15,000 each at a time are not paid by Opponent No. 1, then the applicant shall be entitled to recover the remaining amount then due, at a time.
Decree to be drawn on payment of Court fees by the applicant.
2/3 of the Court fee amount be refunded to the applicant advocate.
Costs to be borne by Opponent No. 1.
Costs to be assessed after deducting the amount of court fees refundable to the applicant.
" Because the 1st Appellant failed to pay the amount as ordered by the Court an application was filed by the Corpo ration under section 32(8) of the Act before the District Judge, Baroda requesting that the property hypothecated in favour of the Corporation be directed to be sold by the Commissioner appointed by the Court and the amount so 611 realised might be appropriated towards the dues of the Corporation.
Accordingly an order directing the sale of the properties was passed on 8.2.1980.
Before the property could be sold the appellants raised an objection regarding the actual amount which could be realised by the Corporation by the sale of the properties mortgaged in its favour.
The objection which related to the amount of interest payable by the appellants was formulated thus.
Since under the order dated 29.4.1977, which was described as a decree, the Court had not expressly directed payment of any interest on the decretal amount, the Corporation was not entitled to recover any amount by way of interest due on the principal amount for the period subsequent to the date of the order.
It was further submitted that since the question of payment of interest on the amount due for the period subsequent to the date of the decision of the Court is governed by section 34 of the Code the appellants were not liable to pay any inter est because the Court had not ordered payment of any amount by way of interest to be paid as required by that section.
In other words the contention of the appellants was that when the "decree" was silent about the payment of interest for the period between the date of the "decree" and the date of payment the Corporation was not entitled to recover it.
It may be mentioned that the Corporation had claimed inter est at the rate agreed upon under the transaction, i.e., 8.5 per cent per annum and that had not been disputed by the borrowers.
The said objection was overruled by the Joint Judge by his Order dated February 25, 1983.
He determined that Rs.9,35,547.84 paise was due as on February 8, 1983 and that thereafter interest at the rate of Rs.178.60 paise per day would be accruing.
Aggrieved by the order of the Joint Judge, the appellants filed an appeal in First Appeal No. 1474 of 1983 before the High Court of Gujarat.
That appeal was dismissed by the learned Single Judge on February 2, 1984.
Under the Letters Patent Appeal No. 94 of 1984 filed by the appellants, a Division Bench of the High Court af firmed the judgment of the learned Single Judge by its decision dated January 2, 1985.
This appeal by special leave is filed against the judgment of the Division Bench of the High Court.
The main contention urged on behalf of the appellants before this Court is that a proceeding under section 31 of the Act is in the nature of a suit, an order made thereon under section 32 thereof is a decree and since by sub sec tion (6) of section 32 of the Act the District Judge is required to investigate the claim of the Corporation in accordance with the provisions of the Code insofar as the said provisions would be applicable thereto, section 34 of the Code which governs the question of levy of interest on the amount due from the date of the suit 612 to the date of the decree and from the date of the decree to the date of payment would be attracted to the proceedings instituted under section 31 of the Act also.
It is urged that since the "decree" passed in this case is silent on the question of payment of any interest on the principal sum from the date of the decree to the date of payment, the Court should be deemed to have refused such interest by virtue of subsection (2) of section 34 of the Code.
In support of the above contention of the appellants, reliance is placed on the decision of the High Court of Karnataka in Karnataka State Financial Corporation, Bangalore vs Sri Nithyananda Bhavan and another, A.I.R. 1982 Karnataka 179 in which the High Court had applied section 34 of the Code to a proceeding instituted under section 31 of the Act.
In that case the District Judge had awarded future interest at 6 per cent per annum on the amount payable under a transaction under the Act from the date of the application to the date of payment.
The Karnataka State Financial Corporation which was aggrieved by the order of the District Judge filed an appeal against that order before the High Court.
In the said appeal the Karnataka State Financial Corporation claimed interest on the principal amount due from the date of the application at the rate of 18 per cent per annum.
In decid ing the said case the High Court did not go into the ques tion whether section 34 of the Code would be applicable to a proceeding under the Act.
It was assumed on all hands that section 34 of the Code was applicable.
Ultimately, the High Court increased the rate of interest to 11 per cent per annum which was the contractual rate of interest treating that as a reasonable rate of interest that could be awarded under section 34 of the Code.
It may be mentioned here that an earlier decision of this Court in Gujarat State Financial Corporation ' vs M/s Natson Manufacturing Co. (P) Ltd. & Ors., ; in which the nature of a proceed ing instituted under section 31 of the Act and of the order passed thereon under section 32 thereof had been considered was not brought to the notice of the High Court.
In Gujarat State Financial Corporation vs M/s. Natson Manufacturing Co. (P) Ltd. & Ors.
(supra) no doubt the question involved was whether court fee was payable on an application made under section 31 of the Act on an ad valorem basis as if the proceeding was a suit or not.
But this Court after analysing the provisions of the Act held that an application for any of the reliefs that can be granted under the Act was not certainly a plaint in a suit for recovery of mortgage loan and that it was not even something akin to a suit by a mortgagee to recover mortgage money by sale of the mortgage property.
The Court held that the applicant in such a case could not pray 613 for a preliminary decree for sale of the property or a final decree for the payment of the money nor it could seek to enforce any personal liability even if such a liability had been incurred under the contract of mortgage as the law stood then.
This Court held that the form of the relief to be granted under the Act did not attract Article 1 or Arti cle 7 of Schedule 1 of the Bombay Court Fees Act, 1959 which required payment of court fee on ad valorem basis on any plaint or application in the nature of a plaint instituted for recovery of mortgage amount.
Accordingly it held that the demand for payment of ad valorem court fee was unsus tainable.
In the course of its judgment the Court rejected the contention based on sub section (6) of section 32 of the Act which required a District Judge to apply the procedure of the Code to applications made under section 31 of the Act and ultimately held that the substantive relief in any claim under section 31(1) of the Act was something akin to the relief that could be granted on an application for attach ment of property for execution of a decree at a stage poste rior to the passing of the decree.
The Court further ob served that "we are unable to appreciate the view taken by the High Court that the proceeding is not in the nature of execution of the decree because the question of enforcement of the order of attachment or sale would only arise after the same is made absolute under sub section (7).
" Even though in the above decision the question which arose for consideration was whether ad valorem court fee was payable on an application under section 31 of the Act as if it was a suit, the Court has decided the said question after deter mining the true nature of a proceeding instituted under section 31(1) of the Act on a detailed analysis of the provisions of the Act.
If as held by this Court the proceeding instituted under section 31(1) of the Act is something akin to an application for attachment of property in execution of a decree at a stage posterior to the passing of the decree no question of passing any order under section 34 of the Code would arise since section 34 of the Code would be applicable only at the stage of the passing of the decree and not to any stage posterior to the decree.
It may also be mentioned here that even under the Code the question of interest payable in mortgage suits filed in civil courts is governed by order 34 rule 11 of the Code and not by section 34 of the Code which may be applicable only to cases of personal decrees passed under order 34 rule 6 of the Code.
The High Court was right in holding that interest would be payable on the principal amount due in accordance with the terms of the agreement between the parties till the entire amount due was paid as per the order passed under section 32 of the Act.
We hold that the decision of the Karnataka High 614 Court, referred to above, which has applied section 34 of the Code to a proceeding instituted under section 31(1) of the Act is not correctly decided.
It was lastly urged on behalf of the appellants that the amount due and payable to the Corporation has not been properly calculated by the Joint Judge.
We do not have all the material before us to enable us to determine the actual amount due.
It is also seen that subsequent to the date of the order passed by the Joint Judge a sufficiently long time has elapsed.
In the circumstances we feel that the Joint Judge before whom the proceeding for recovery of the amount by sale of the properties has been instituted should be directed to redetermine the amount due and payable to the Corporation in this case.
We accordingly affirm the judgment of the High Court holding that section 34 of the Code of Civil Procedure, 1908 is not applicable to this case but remand the matter to the Joint Judge to redetermine the actual amount due and payable to the Corporation in these proceedings calculating the same as per contract between the parties before directing the sale of the properties.
We direct the Joint Judge to deter mine the amount payable by the appellants within one month from the date of the receipt of a copy of the order of this Court.
Both the parties are directed to file their state ments of accounts before the Joint Judge within one week from the date of receipt of the copy of this order by the Joint Judge to enable him to decide the case as directed above.
The appeal is accordingly disposed of.
There shall, however, be no order as to costs.
P.S.S. Appeal disposed of.
| The appellants had borrowed from the respondent Corpora tion a certain sum for the acquisition of fixed assets under a deed of hypothecation.
They also created an equitable mortgage, mortgaging the land and factory building by depos iting the original title deeds of the properties with the Corporation.
The loan had to be repaid within a period of 8 years by half yearly instalments.
The appellants were liable to pay interest at 8.5 per cent per annum and that was to be calculated and charged at the end of every half year.
The appellants committed default in payment of instal ments and interest due to the Corporation.
The Corporation filed an application under section 31 of the before the District Judge claiming the entire outstanding loan, interest and commitment charges.
The appellants having admitted the claim of the Corporation, an order of compromise was passed by the Court under which the appellants undertook to pay a sum of Rs.15,000 every month towards the claim of the Corporation.
The appellants failed to pay the amount as ordered by the Court.
The respondent thereupon filed an application under section 32(8) of the Act requesting that the property hypothecated in favour of the Corporation be directed to be sold by the Commissioner appointed by the Court and the amount so rea lised be appropriated towards the dues.
The appellants raised an objection that since the Court had not in 608 its order expressly directed payment of any interest on the amount, the Corporation was not entitled to recover any amount by way Of interest due on the principal amount for the period subsequent to the date of the order, and since payment of interest subsequent to the date of the decision of the Court was governed by section 34 of the Code of Civil Procedure, the appellants were not liable to pay any inter est.
The first appeal and the Letters Patent Appeal filed by the appellants were dismissed by the High Court.
In this appeal by special leave, it was contended for the appellants that a proceeding under section 31 of the Act is in the nature of a suit, an order made thereon under section 32 thereof is a decree, and since by subs.
(6) of section 32 of the Act, the District Judge was required to investigate the claim of the Corporation in accordance with the provisions of the Code, section 34 of the Code would be attracted to the proceeding instituted under section 31 of the Act also, and that since the decree passed in this case is silent on the ques tion of payment of any interest on principal sum from the date of the decree to the date of payment, the Court should be deemed to have refused such interest by virtue of sub section
2 of section 34 of the code.
Disposing of the appeal, HELD: 1.
The High Court was right in holding that inter est would be payable on the principal amount due in accord ance With the terms of the agreement between the parties till the entire amount due was paid as per the order passed under section 32 of the .
[613GH] 2.
Section 34 of the Code of Civil Procedure, 1908 is not applicable to this case.
A proceeding instituted under section 31(1) of the Act is something akin to an application for attachment of property in execution of a decree at a stage posterior to the .passing of the decree.
That being so, no question of passing any order under section 34 of the Code would arise since that provision would be applicable only at the stage of the passing of the decree and not to any stage posterior to the decree.
Even under the Code, the question of interest payable in mortgage suits filed in civil courts is governed by Order 34 rule 11 of the Code and not by section 34 of the Code which may be applicable only to cases of person al decrees passed under Order 34 rule 6 of the Code.
[614C, 613F] 3.
In the instant case, the Joint Judge is to redeter mine the actual amount due and payable to the Corporation as per the contract between the parties before directing sale.
[614D] 609 Karnataka State Financial Corporation, Bangalore vs Sri Nithyananda Bhavan & Anr., A.I.R. 1982 Karnataka 179 and Gujarat State Financial Corporation vs M/s Natson Manufac turing Co. (P) Ltd. & Ors., ; , referred to.
| 5391.txt |
Civil Appeal No. 79 (NT) 1974.
From the Judgment and Order dated 29.2.1972 of the Madras High Court in Tax Case No. 209 of 1966.
S.C. Manchanda and Miss A. Subhashini for the Appellant.
T.A. Ramachandran and Mrs. Janki Ramachandran for the Respondent.
The Judgment of the Court was delivered by TULZAPURKAR, J.
The question raised for our determination in this appeal is whether on the facts and in the circumstances of the case the amount of Rs. 3 lakhs transferred by the deceased to his three grand nephews in equal shares was includible in the estate of the deceased that passed on his death? Substantially the answer thereto depends upon whether sec.10 of the is attracted to the case or not.
The facts giving rise to the question may briefly be stated.
The deceased, Sri Bankatlal Lahoti was a partner in the firm of M/s Dayaram Surajmal, which carried on business as a Bankers.
With a view to give Rs.1 lakh each to his three minor grand nephews (three grand sons of his deceased brother) the deceased on 4th October 1952 issued a cheque for Rs.3 lakhs in favour of the firm; this amount was debited in the account of the deceased in the firm and credited in the accounts of the three minors in equal proportion.
The said sum thus transferred to the three nephews continued to stand in their respective accounts 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 deceased died on 21st February 1956.
After the death of the deceased, his widow Smt.
Godavari Bai as the accountable person filed an account of the 353 assessee 's estate declaring the value thereof at Rs.2,60,702.
This did not include the sum of Rs.3 lakhs transferred by the deceased to the three grand nephews on 4th October 1952.
The assessee contended that these transfers were not gifts but amounted to transfer of actionable claims made in conformity with s.130 of the Transfer of Property Act by effecting entries in the books of account.
Alternatively it was contended that the transfer amounted to a novation which did not require an instrument signed by the transferor.
The Deputy Controller negatived both the contentions; the first on the ground that there was no valid transfer of actionable claims because it was not effected by an instrument in writing signed by the transferor as required by s.130 of the Transfer of Property Act while the alternative contention on the ground that the transaction did not amount to a novation inasmuch as there was no substitution of one debt for another.
In this view of the matter the Deputy Controller held that the sum of Rs.3 lakhs was includible in the estate of the deceased that passed on his death.
In the appeal preferred by the assessee the self same contentions were urged on her behalf before the Appellate Controller of Estate Duty while the Deputy Controller justified the assessment on the additional ground that the sum of Rs.3 lakhs was also includible in the Estate of the deceased that passed on his death under s.10 of the .
The Appellate Controller rejected the assessee 's contentions and accepted those of the Deputy Controller and confirmed the inclusion of the amount in the estate of the deceased.
In the further appeal preferred to the Appellate Tribunal since it was admitted on behalf of the assessee that apart from the cheque issued by the deceased in favour of M/s Dayaram Surajmal and the entries made in the books of that firm debiting the deceased 's account and crediting the accounts of the donees there was no other document to evidence the transfer the Tribunal presumed that the tansfer was effected as a result of oral instructions which must have been given by the deceased to the firm.
Counsel for the assessee, however, urged that notwithstanding the absence of an instrument in writing signed by the assessee the transfer was valid under s.130 of the Transfer of Property Act and in that behalf reliance was placed on Ramaswamy Chettiar and Ors.
vs K.S.M. Manickam Chettiar and Ors., and Seetharama Ayyar and Anr.v.
Narayanaswami Pillai and Anr.
47 Indian Cases 749 but the Tribunal did not accept the 354 contention and held that the plain reading of s.130 showed that the transfer of an actionable claim became complete and effectual only upon the execution of an instrument in writing signed by the transferor or by his duly authorised agent; 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.
The alternative contention that the transfer was in the nature of a novation was also rejected on the ground that the donees were not indebted to the firm nor was the deceased indebted to the donees and therefore, the entries made in the account books of the firm could not be understood as a substitution of one debtor in the place of another.
The Tribunal also held that this amount of Rs.3 lakhs was includible in the estate of the deceased under s.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.
At the instance of the assessee the Tribunal referred the following question of law to the High Court for its opinion: "Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the amount of Rs.3 lakhs transferred by the assessee to his grand nephews was includible in the estate of the deceased that passed on his death.
" On a consideration of the entire material on record the High Court took the view that the entries made in the books of the firm by debiting the account of the deceased in the sum of 355 Rs.3 lakhs and crediting the said amount in equal proportion in the three accounts of the donees (grand nephews) might or might not constitute a valid gift of money but proceeding on the basis that it was gratuitous transfer of an actionable claim the interposition of a cheque issued by the deceased in favour of the firm made all the differene inasmuch as the transfer of an actionable claim represented by a negotiable instrument like a cheque was governed by s.137 in preference to s.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 the minors was valid, complete and effectual.
After coming to this conclusion the High Court proceeded to consider the question whether to this transaction of gift of an actionable claim s.10 of the Act was applicable or not and relying upon the decision in the leading case of Munro vs Commissioner of Stamp Duties, ; as well as its two earlier decisions in Controller of Estate Duty vs C.R. Ramachandra Gounder, and Controller of Estate Duty vs N.R. Ramarathanam, the High Court held that the donor had been completely excluded from the subject matter of the gift and as such s.10 was not applicable.
In other words differing from the view taken by the Tribunal, the High Court held that the transaction involved in the case was a gratuitous transfer of an actionable claim and that there was in law a valid, complete and effectual gift thereof in favour of the three minor grand nephews and since s.10 was not attracted the sum of Rs.3 lakhs was not includible in the value of the estate of the deceased that passed on his death.
It, therefore, answered the question in the negative in favour of the assessee.
The Revenue has come up in appeal.
Counsel for the Revenue did not assail the High Court conclusion in regard to their being a valid gift of the actionable claim in favour of the minors resulting from the issuance of the cheque accompanied by oral instructions and followed by the making of the requisite debit and credit entries in the firm 's books but vehemently criticised the view that s.10 was inapplicable to this transaction of gift.
He urged that possession and enjoyment of the subject matter of the gift was neither assumed by the donees nor retained by 356 them to the entire exclusion of the donor inasmuch as the donor as a partner of the firm had control over the said sum of Rs.3 lakhs which continued to lie with the firm for being used as the firm 's property and this position continued to obtain till the death of the deceased and in fact till the dissoiution and as such s.10 was clearly attracted.
Strong reliance was placed by counsel for the revenue on the ratio of the Privy Council decision in Chicks vs Commissioner of Stamp Duties of New South Wales, 37 I.T.R. E.D. 89 which was followed by this Court in George Da Costa vs Controller of Estate Duty, Mysore, and Controller of Estate Duty, Madras vs Smt.
Parvati Ammal, as also two decisions of the Gujarat High Court in a Shantaben section Kapadia vs Controller of Estate Duty, Gujarat, and in Controller of Estate Duty, Gujarat vs Chandravadan Amratlal Bhatt, On the other hand counsel for the assessee supported the view of the High Court by placing reliance on the decision in Munro 's case (supra) which had been followed by this Court in C.R. Ramachandra Gounder 's, N.R. Ramarathanam 's case Controller of Estate Duty vs R.V. Vishwanathan & Ors., and Controller of Estate duty vs Kamlavati, Having regard to the rival contentions urged before us it is clear that the answer to the question raised in this appeal depends upon a proper analysis of s.10 of the Act and whether the instant case falls within the doctrine enunciated in Munro 's case (supra) or within the ratio of Chicks ' case (supra)? Relevant portion of s.10 of the Act runs thus "Property taken under any gift, whenever made, shall be deemed to pass on the donor 's death to the extent that bona fide possession and enjoyment of it was not immediately assumed by the donee and thenceforward retained to the entire exclusion of the donor or of any benefit to him by contract or otherwise. ." The object under lying a provision like s.10 of the Act was explained by Issacs J. in the case of John Lang vs Thomas Prout Webb, ; decided by the High Court of Australia in the following words : 357 "The owner of property desiring to make a gift of it to another may do so in any manner known to the law.
Apparent gifts may be genuine or colourable, and experience has shown that frequently the process of ascertaining their genuineness is attended with delay, expense and uncertainty all of which are extremely embarrassing from a public revenue standpoint.
With a view to avoiding this inconvenience, the legislature has fixed two standards, both of them consistent with actual genuineness, but prima facie indicating a colourable attempt to escape probate duty.
One is the standard of time.
A gift, however, real and bona fide, if made within twelve months before the donor 's death is for the purpose of duty regarded as not made.
The other is conduct which first sight and in the absence of explanation is inconsistent with the gift.
The prima facie view is made by the legislature conclusive.
If the presies to the transaction choose to act so as to begin apparent conflict with its purport, they are to be held to their conduct.
The validity of the transaction itself is left untouched, because it concerns themselves alone.
But they are not to embarrass the public treasury by equivocal acts.
" The conditions specified in s.10 will have to be understood by keeping in view the aforesaid object with which the section has been enacted.
In George Da Costa vs Controller of Estate Duty, Mysore (supra) this Court has analysed the conditions on the fulfilment of which the section gets attracted, thus: "The crux of the section lies in two parts; (1) 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) the donee must have retained such possession and enjoyment of the property to the entire exclusion of the donor or of 358 any benefit to him by contract or otherwise.
As a matter of construction we are of opinion that both these conditions are cumulative.
Unless each of these conditions is satisfied, the property would be liable to estate duty under s.10 of the Act.
" The second part of the section, as observed in the afore said decision, 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.
Therefore, the question that arises for our determination in this appeal is whether the aforementioned two cumulative conditions requisite for attracting s.10 are satisfied in this case or not? Whether immediately upon the gift the donees had bona fide assumed possession and enjoyment of the property, which was the subject matter of the gift, to the exclusion of the donor and whether they had retained such possession and enjoyment thereof to the entire exclusion of the donor or of any benefit to him by contract or otherwise? 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 s.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 s.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 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 359 deceased donor limits the interest he is parting with and 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 s.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 (supra).
As we shall indicate presently Chick 's case falls within the first category while Munro 's case falls within the other category.
In Chick 's case the question arose under s.102 of the New South Wales Stamp Duties Act, 1920 56 which was similar to s.10 of our Act and the facts were these: In 1934 a father transferred by way of gift to one of his sons a pastoral property, the gift having been made without reservation or qualification or condition.
In 1935, some 17 months after the gift, the father, donee son and another son entered into an agreement to carry on in partnership the business of graziers and stock dealers.
The agreement provided, inter alia that the father should be the manager of the business and that his decision should be final and conclusive in connection with all matters relating to its conduct that the capital of the business should consist of the livestock and plant then owned by the respective partners that the business should be conducted on the respective holdings of the partner and such holdings should be used for the purposes of the partnership only that all lands held by any of the partners at the date of the agreement should remain the sole property of such partner and should not on any consideration be taken into account as or deemed to be an asset of the partnership and any such partner should have the sole and free right to deal with it as he might think fit.
Each of the three partners owned property, that of the donee son being that which had been gifted to him by his father in 1934, and each partner brought into partnership livestock and plant, and their three properties were thenceforth used for the depasturing of the partnership stock and this arrangement continued up to the death of the father in 1952.
The Privy Council held that the value of the property given to the son in 1934 was to be included in computing the value of the father 's estate for the purpose of death duty.
While it was not disputed that the son had assumed bona fide possession and enjoyment of the property immediately upon the 360 gift to the entire exclusion of the father he had not, on the facts, thenceforth retained it to the father entire exclusion, for under the partnership agreement and what ever force and effect might be given to that part of it which gave a partner the sole and free right to deal with his own property, the partners and each of them were in possession and enjoyment of the property so long as the partnership subsisted.
The Judicial Committee observed that where the question was whether the donor had been entirely excluded from the subject matter of the gift, that was the single fact to be determined, and, if he had not been so excluded the eye need look no further to see whether his non exclusion had been advantageous or otherwise to the donee.
In its opinion it was irrelevant that the father gave (if he did give) full consideration for his right as a member of the partnership to possession and enjoyment of the property that he had given to his son.
Inter alia two or three points emerge clearly from the decision that need to be emphasised: (a) there was initially an outright gift of the property not of the property shorn of any rights, (b) the deceased donor was not in fact excluded from the property, but as a partner enjoyed rights over it and (c) that it was immaterial that the donor gave full consideration for enjoying his rights over the property as a partner.
It was these aspects that brought the gifted property within the mischief of the taxing statute.
The other decisions of this Court on which Counsel for the revenue has relied are clearly cases falling within this category and hence the ratio of chick 's case was correctly applied in each of them.
On the other hand in Munro 's case the facts were these M, who was the owner of 35,000 acres of land in New South Wales on which he carried on the business of a grazier, verbally agreed with his six children in 1909 that thereafter the business should be carried on by him and them as partners under a partnership at will and the business was to be managed solely by M and each partner was to receive a specified share of profits.
In 1913, by six registered transfers M transferred by way of gift all his right title and interest in the portions of his land to each of his four sons and to trustees for each of his two daughters and their children.
The evidence showed that the transfers were taken subject to the partnership agreement and on understanding that any partner could withdraw and work his land separately.
In 1919 M and his 361 children entered into a formal partnership agreement, which provided that during the life time of M no partner should withdraw from the partnership.
On the death of M in 1929 the land transferred in 1913 was included in assessing his estate to death duties under the Stamp Duties Act, 1920 1931 (N.W.W.), on the ground that they were gifts dutiable under s.102(2a) of that Act.
The Privy Council held that the property comprised in the transfers was the land separated from the rights therein belonging to the partnership and was excluded by the terms of s.102, sub s 2(a), from being dutiable, because the donees had assumed and retained possession thereof, and any benefit remaining in the donor was referable to the partnership agreement of 1909 and not to the gifts.
It was urged that the transfer deeds did not mention the rights of the partnership and therefore under s.42 of the Real Property Act, 1900 (N.S.W.) the transfers gave a title free from those rights but the Judicial Committee negatived the contention on the ground that substance of the transactions and not the forms employed had to be ascertained and so ascertained the substance showed that the transfers were shorn of rights in favour of the partnership and the benefit remaining in the donor was referable to such rights of the partnership subject to which the gifts had been made.
Thus this decision clearly enunciates the principle that if the subject matter of the gift is property shorn of certain rights and if 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 the subject matter of the gift will not be deemed to pass on the death of the deceased donor.
The ratio of this decision has been followed and applied by this Court in Ramachandra Gounder 's case, N.R. Ramarathanam 's case, R.V. Vishwanathan 's case and Kamlavati 's case (supra).
Having regard to the undisputed facts and facts found by the High Court it seems to us clear that the instant case falls within the principle enunciated in Munro 's case.
Admittedly the deceased donor was a partner in the banking firm of M/s Dayaram Surajmal, whereas the minor donees were never admitted to the benefits of the partnership firm.
An extract of account filed by the assessee before the High Court brought out the procedure followed for effecting the transaction in question the deceased had his account comprising his capital contribution and advances made by him to the firm; he 362 drew a cheque for Rs.3 lakhs against his account with the firm which was made out in the name of the firm as a result whereof the firm could pay itself but the account of the deceased was debited with the sum of Rs.3 lakhs and on the same day simultaneously three accounts of the minor donees with the said firm were credited with the sum of Rs.1 lakh each.
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.
From these facts the High Court rightly inferred that "in effect the cheque was issued in favour of the firm, but for the benefit of the minors" and that "in such a situation the firm shall be treated as a trustee or an agent holding the money for the benefit of the minors." Clearly, in this view of the matter, the transaction in question amounted to a gratuitous transfer of an actionable claim to which s.137 in preference to s.130 of the Transfer of Property Act applied and there was a valid gift thereof to the minor donees.
Further undisputed facts were that 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 with the gifted property.
In our view the transaction in question, therefore, clearly fell within the ratio of the decision in Munro 's case and the High Court was right in coming to the conclusion that to such transaction s.10 was inapplicable.
We would like to point out that the facts of the instant case are almost similar to the facts that obtained in Controller of Estate Duty vs Jai Gopal Mehra, a companion matter that was decided and disposed of by this Court by a common judgment in Kamlavati 's case (supra) where it was held 363 that the transaction of gift was one to which s.10 was inapplicable.
In the result the appeal is dismissed with no order as to costs.
M.L.A. Appeal dismissed.
| 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.
| 5061.txt |
minal Appeal No.70 of 1968.
Appeal by special leave from the judgment and order dated October 6, 1967 of the Allahabad High Court, Lucknow Bench in Criminal Appeal No. 164 of 1966.
R.K. Garg, S.C. Agarwal and Uma Dutta, for the appellants.
O.P. Rana, for the respondent.
238 The Judgment of the Court was delivered by Jaganmohan Reddy, J.
This appeal by special leave is directed against the judgment of the Allahabad High Court setting aside the conviction of Hori Lal and Bisram under section 307 read with section 34 of the I.P.C. and instead convicting them under section 326 read with section 34 I.P.C. and sentencing each of them to rigorous imprisonment for 5 years.
The appellants.
who are the residents of Bhitwa Gadan Khera are friends belonging to the same party.
It was alleged that on June 14, 1964 Bisram 's cattle strayed into the field and damaged the crop of Deo Dutt who is the nephew of Sagar Singh and Jeer Bahadur.
In respect of this damage Deo Dutt and his partner Ram Bharose.
complained to Bisram who along with some other persons went to the house of Deo Dutt and threatened him and the members of his family including Jeet Bahadur and Sagar Singh.
Thereupon Deo Dutt lodged a complaint in the police station.
Because of this complaint relations between the parties became strained as a result of which the accused stopped working for Jeet Bahadur and Sagar Singh and even asked the other members of his beradari to follow suit.
On March 29, 1965 at about 5.30 p.m. Jeet Bahadur P.W. 2 along with his laborer Sri Pal deceased was reaping the harvest.
The field of Sagar Singh P.W. 1 is situate just adjacent to the field of Jeer Bahadur with only a chak road between their fields.
It is the prosecution case that on that day both the accused armed with kantas went to the field of Jeet BahAdur and challenged him.
Immediately thereafter they began to deal kanta blows on Jeet Bahadur.
Jeer Bahadur P.W. 2 cried out whereupon Sagar Singh P.W. 1 hearing the shouts rushed to his aid.
Maya Ram P.W. 3 and Himachal and Ram Pal who were nearby also rushed to the aid of Jeet Bahadur.
Accused Bisram is said to have fired a revolver at Sagar Singh but he did not receive any inquiry.
Thereafter the accused ran away towards the village.
As Jeet Bahadur was injured, Sagar Singh P.W. 1 took him to the police station and there lodged a report exhibit Ka 1 at about 9.55 p.m. on March 29, 1965.
The investigation officer Bhanu Prakash Sharma, P.W. 5 investigated the crime,.
prepared site plan, recorded statements of the witnesses and seized blood stained mud.
Jeet Bahadur was admitted to the District hospital at Unnao.
Dr. Srivastava examined him on March 30, 1965 at 8.30 a.m. and found as many as 10 injuries of which injuries 2 to 7 were incised wounds, injuries 1 and 9 contusions and injuries 8 and 10 abrasions.
All the incised injuries except No. 7 showed that the bones had been cut.
These injuries are as follows : "2.
Incised wound .13" X 1" X bone vertically on the right half forehead just above the right eye brow.
239 3.
Incised wound 1 1/4" ><1/2">( bone cutting the underlying bone lower p art left humerus just above the left elbow on the back of left arm.
Incised wound obliquely 5" X 2" X bone cutting the underlying radius and above left in the middle of the left forearm back.
Incised wound 5"X I"X bone on the back of the left forearm lower I/3rd.
Slightly obliquely cutting both the bones of left forearm.
Incised wound 4 1/2"X 1" bone on the left leg middle back and laterally cutting the underlying tibia bone shaft.
" The defence of the accused is that they had been falsely implicated.
The prosecution examined Sagar Singh P.W. 1, Jeet Bahadur P.W. 2 and Maya Ram P.W. 3 as eye witnesses and since Sri Pal one of the eye witnesses died after his evidence was recorded by the committing magistrate, his deposition was admitted and treated as evidence under section 33 of the Evidence Act (exhibit Ka 11).
The learned Sessions Judge.
believed the eye witnesses and relying upon exhibit Ka 3 convicted the accused under section 307 read with section 34.
The learned Judge however acquitted them of the second charge of attempting to murder P.W. 1 with pistol.
In this appeal Mr. S.C. Agarwala learned counsel for the appellants contends firstly, that the injuries as found by the doctor do not justify the conviction of the appellants of grievous hurt inasmuch as there is no evidence that any of the bones was fractured or that the injured person was disabled for 20 days or more; secondly, that the contusions found on P.W. 2 would clearly belie the evidence of the eye witnesses that the injuries were inflicted by a kanta, and thirdly, that the deposition of Sri Pal ought not to have been admitted in evidence under section 33 because the death of Sri Pal has not been strictly proved.
The main question which requires to be determined in this case is whether there is sufficient evidence to establish that ,he appellant had caused the injuries found on P.W. 2, and if so, having regard to the injuries what is the offence which the appellants have ' committed.
It appears to us that there is sufficient credible evidence of the eye witnesses to prove beyond doubt that the appellants had caused injuries to P.W. 2.
Even if the evidence of P.W. 1 and P.W. 2 who.
are brothers, of whom P.W. 2 is the victim, is for the moment not considered, there is no reason why the evidence of P.W. 3 Maya Ram ought not 240 to be relied upon.
According to Maya Ram, he was in the Kallian when he heard the cries of Jeet Bahadur and rushed.
He says, "it was the time of about 5 or 5.30 ' p.m.
I heard an .alarm raised in the field of Jeet Bahadur.
I and Himachal ran to that side.
Ram Pal was coming up running from the western side.
In the field of Jeet Bahadur, I saw Bisram and Hori Lal accused present in court beating Jeet Bahadur with kantas.
We raised alarm.
After assaulting Jeet Bahadur Hori Lal and Bisram accused went away towards the east.
Sagar Singh was coming up running from his chak.
Sagar Singh was raising alarm.
Bisram accused fired the pistol at Sagar Singh, but Sagar did not sustain any injury.
I saw injuries on the body of Jeet Bahadur.
After it we took Jeer Bahadur to Hasanganj on a cot.
" The witness was cross examined at length but now here has it been suggested that he is an interested witness or he is speaking untruth.
Both the Sessions Court as well as the High Court relied upon his evidence which according to them fully corroborated the evidence of P.Ws. 1 and 2.
The fact that some contusions and abrasions were found on P.W. 2 does not impair the evidence of these witnesses because the doctor was not asked whether the injuries were possible if kanta blows are given.
It is quite possible to find contusions where two persons are giving blows with kantas which have also blunt asides.
Unless definite suggestions are made and the impossibility of finding any such injuries with kanta blows is elicited, we will not be justified merely on a submission from the bar to accept it and discard the evidence of the eye witnesses.
We, therefore, find no valid reason in not accepting the concurrent findings of both the courts that the appellants had caused injuries to P.W. 2 as spoken to by the witnesses.
these circumstance.s, it is unnecessary for us to express any view on the question whether the evidence of the investigating officer Bhanu Prakash Sharma that 'it has been learnt that Sri Pal has died ' is sufficient to prove the death of Sri Pal in order to admit the deposition of Sri Pal in the Committal Court under section 33 of the Evidence Act.
It now remains to consider whether the conviction of the appellants under section 326 for grievous hurt is justified.
The answer to this question would depend on the nature of the injuries which have been found on P.W. 2, namely, whether they are simple or grievous.
In order to justify conviction under section 326.
injuries on P.W. 2 must satisfy the requirements of cl. 7 or cl. 8 of section 320 of the Indian Panel Code, otherwise they will be treated as simple injuries.
Clauses 7 and 8 of section 320 I.P.C. provide that an injury could only be designated as grievous if it is (l) a fracture or dislocation of a bone or tooth, or (2) any hurt which 241 endangers life or which causes the sufferer to.
be ,during the space of twenty days in severe bodily pain, or unable to follow his ordinary pursuits.
It is contended by the learned counsel for the appellant that none of the injuries 2 to 6 which were inflicted on P.W. 2 discloses that there is a fracture or dislocation of any bone.
These injuries, it is said, at the most show that the particular bones on which the injuries were inflicted were cut which however does not amount to a fracture.
It is true that fracture has not been defined in the penal code.
It is sometimes thought as in the case of Po Yi Maung vs Ma E Tin(1) that the meaning of the word fracture would imply that there should be a break in the bone and that in the case of a skull bone it is not merely sufficient that there is a crack but that the crack must extend from the.
outer surface of the skull to the inter surface.
In Mutukdhar Singh vs Emperor(2) it was observed that if the evidence is merely that a bone has been cut and there is nothing whatever to indicate the extent of the cut, whether a deep one or a mere scratch on the: surface of the bone, it will be difficult to infer that the injury is a grievous hurt within the meaning of section 320 of the Panel Code.
In our view, both these assumptions are misleading.
It is not necessary that a bone should be cut through and through or that the crack must extend from the.
outer to the inner surface or that there should be displacement of any fragment of the bone.
If there is a break by cutting or ,splintering of the bone or there is a rupture or fissure in it, would amount to.
a fracture within the meaning of el. 7 of section 320.
What we have to see is whether the.
cuts in the bones noticed in the injury report are only superficial or do they effect a break in them.
The nature of the injuries as spoken to by the doctor in his evidence, discloses the length, breadth and depth of each injury.
far as the depth of the injuries Nos. 3, 4, 5 and 6 is concerned, each one of the injuries shows that it is bone deep and they are described as cutting the underlying bone.
in injury 3 left humerus, in injury 4 radius, in injury 5 both the bones of the left forearm and in injury 6 the tibia bone shaft have been cut which would show that they are fractures.
Apart from this the doctor as noticed earlier has in his evidence said that these injuries are grievous.
It is contended that the doctor has not disclosed the reason why he thinks that the injuries were grievous.
But in our view the doctor would not be unaware of what injuries are grievous or what are simple.
At any rate, the nature of the injuries considered with the evidence of the doctor would undoubtedly establish that all the aforesaid" ' (1) A.I.R. (1937 ') Rang 253.
(2) A.I.R. (1942) Pat.
242 injuries were grievous.
these injuries were inflicted by kantas which are dangerous weapons and hence the conviction under section 326 is fully justified.
The appeal fails and it is dismissed.
Y.P. Appeal dismissed.
| The appellants gave kanta blows resulting in a number of injuries to a person.
Some of injuries were incised wounds, some contusions, and some abrasions.
All the incised4 injuries except one showed that the bones had been cut.
On the question whether the conviction of the appellants under section 326, I.P.C. for grievous hurt was justified or not; HELD: The conviction under section 326 was fully justified.
In order to.
justify conviction under section 326, the injuries must satisfy the requirements of cl. 7 Dr cl. 8 of section 320 of the Indian Penal Code, otherwise they will be treated as simple injuries.
Clauses 7 'and 8 of section 320 I.P.C., provide that an injury could only be designated as grievous if it is (1) a fracture or dislocation of a bone or tooth, or (2) any hurt which endangers life or which causes the sufferer to be during the space of twenty days in severe bodily pain, or unable to follow his ordinary pursuits.
Fracture has not been defined in the Penal Code.
It is not necessary that a bone should be cut through and through or that the crack must extend from the outer to the inner surface or that there should be displacement of any fragment of the bone.
If there is a break by cutting or splintering of the bone or there is a rupture or fissure in it, would amount to a fracture within the.
meaning of cl. 7 of section 320.
What has to be seen is whether the cuts in the bones noticed in the injury report are only superficial or do they effect a break in them.
[242 H; 243 D F] In the present case, some of the incised injuries show that they were bone deep and were described as cutting the underlying bone, which would show that they were fractures.
Apart from this the doctor said that the injuries were grievous.
These injuries were inflicted by Kantas which are dangerous weapons.
Observations contra in Po Yi Maung vs Ma E Tin, A.I.R. (1937) Rang.
253 and Mutukdhar Singh vs Emperor, A.I.R. (1942) Pat. 376, disapproved.
| 2714.txt |
Civil Appeal No. 4380 of 1991.
From the Judgment and Order dated 10.4.1991 of the Madras High Court in Writ Appeal No. 38 of 1991.
K. Parasaran, K.V. Vijaya Kumar and V. Bala Chandran for the Appellants.
C.T. Selvamani and P.P. Tripathi for the Respondents.
The Judgment of the Court was delivered by K. RAMASWAMY, J.
Special Leave is granted.
This appeal is against the judgment dated April 4, 1991 of the Madras High Court.
A sum of Rs. 12,163.50 p. was alleged to have been misappropriated by the appellant (now he was acquitted of the charge of misappropriation) and for the recovery thereof his 13.07 acres of coffee estate situated in Semmanthaputhur village was brought to sale under the Tamil Nadu Revenue Recovery Act, 1894 (for short 'The Act ').
On March 30, 1979 the sale by auction was held by the Tahsildar.
The first respondent purchased for a sum of Rs. 12,225 and deposited a sum of Rs.2,000 being 15 per cent of the sale price.
Under Sec.
36 of the Act, the first respondent should have deposit ed the balance consideration within 30 days from the date of the auction.
On October 23,1981 the sale was confirmed and the balance amount was deposited on November 4, 1981.
The appellant filed an application but by proceed ing dated October 23, 1981, the Revenue Divi sional Officer overruled the objections and dismissed the application.
On appeal the Addl.
Distt.
Collector, Salem set aside the sale on October 13,1982.
The first respondent filed writ petition 184 No. 246 of 1984 in the High Court.
The learned Single Judge by judgment dated August 21, 1990 quashed the order of the Addl.
Collec tor.
On writ appeal, the Division Bench dis missed it.
Thus this appeal.
The formidable objection raised by the appellant is that it is mandatory under Sec.36 that the date and place of sale shall be published in the Gazette and that the publica tion did not mention the place of sale.
There fore, the sale is invalid in law.
It is also his further plea that it is equally mandatory that the balance sale consideration of 85% should be deposited within 30 days from the date of sale which was done only on November 4, 1981 long after one year and eight months of the date of sale.
The sale and Confirmation thereof are, therefore, illegal.
The learned Single Judge and the Division Bench held that Form 7A of the forms prescribed under the Act read with relevant provisions of the Board Standing Order No.41 does not prescribe the place of sale and that, therefore, the omis sion to specify the place of sale does not render the sale invalid nor an irregularity.
Shri Selvamam, the first respondent in person (himself a practising Advocate) contended that it is Form 7 and not Form 7A that would be applicable to the facts of the case.
Form 7 contains the place of sale and that it was complied with.
Therefore, the sale is not illegal.
It is also contended that the deposit was made after protracted correspondence and that, therefore, the non deposit within 30 days from the date of sale is not illegal.
At any rate, having accepted the amount, the authority acquiesced to the deposit/Therefore, the confirmation of the sale is not illegal.
We find no substance in either of the conten tions.
The contention that Form 7 and not Form 7A would be applicable to the facts, is not the case set up or argued either before the authorities or the courts below.
For the first time he cannot raise that plea in this Court.
That apart specifically the High Court (learned Single Judge and the Division Bench) held that it is form 7A that is applicable and that it does not prescribe publication of place of sale and therefore, the omission thereof does not render the sale invalid.
The High Court wholly misconceived of Sec.36.
A reading of Sec.
36 manifests that the word 'shall ' is mandatory in the context.
The publication is an invitation to the intending bidders to prepare and participate at the bid.
Unless there is a due publication of the date and place of sale, the intending purchasers cannot be expected to run after the Sale Officer to find out the date and place of sale and to participate thereat.
The Sale officer has a statutory duty and a responsi bility to have the date and place of sale men tioned in the notice and given due publication in terms of the Act and the Rules.
Public auction is one of the modes of sale intending to get highest competitive price for the property.
Public auction also ensures fairness in actions of the public authorities or the sale 185 officers who should act fairly, objectively and kindly.
Their action should be legitimate.
Their dealing should be free from suspicion.
Nothing should be suggestive of bias, favouri tism, napotism or beset with suspicious fea tures of underbidding detrimental to the legitimate interest of the debtor.
The fair and objective public auction would relieve the public authorities or sale officers from above features and accountability.
Any infraction in this regard would render the sale invalid.
It is settled law that the word 'shall ' be construed in the light of the purpose the Act or Rule that seeks to serve.
It is not an invariable rule that even though the word 'shall ' is ordinarily mandatory but in the context or if the intention is otherwise, it may be construed to be directory.
The construc tion ultimately depends upon the provisions itself, keeping in view the intendment of the enactment or of the context in which the word 'shall ' has been used and the mischief it seeks to avoid.
Where the consequence of failure to comply with any requirement of a provision is provided by the statute itself, the consequence has to be determined with reference to the nature of the provision, the purpose of enactment and the effect of non compliance thereof.
In its absence the conse quence has to be determined with reference to the effect of the non compliance of the provi sion of the legislature.
Mere use of the word 'shall ' need not be given that connotation in each and every case that the provision would be invariably interpreted to be mandatory or directory.
But given due consideration to the object, design, purpose and scope of the legislation the word shall be construed and interpreted in that design and given due emphasis.
See.36 obligates the Sale Officer (Tahsildar) that he shall publish the date and place of sale.
The object thereby is an invita tion to the public at large that the notified property would be brought to sale at that specified time and place and that they are invited to participate, if they so desire.
To reiterate for emphasis and continuity that the object of the sale is to secure the maximum price and to avoid arbitrariness in the proce dure adopted before sale and to prevent under hand dealings in effecting sale and purchase of the debtor 's property.
As a responsibility as sale officer and a duty towards the debtor, the sale officer should conduct the sale strictly in conformity with the prescribed procedure under the statute and the rules as the case may be.
Such due and wide publicity would relieve the debtor from the maximum liability he owes and payable to the creditor.
This responsibility is not only salutory to vouchsafe bonafides in the conduct of the sale officer but also to ensure fairness in the procedure adopted in bringing the property of the debtor to sale.
Considered from this perspective the non compliance of Sec.35 i.e., omission to mention the place of sale world visit with deprivation of the property to the debtor 186 for an inadequate sale consideration due to absence of competing bidders.
Thus, we hold that specification of the date and place of sale shall be mandatory.
The forms either 7 or 7A are only procedural and they should be in conformity with Sec. 36.
The form cannot prevail over the statute.
The omission of specification of the place of sale in the form renders the sale not merely irregulate but also invalid.
Equally the second objection is insur mountable.
It is mandatory that "the balance of the sale amount shall be remitted within 30 days from the date of auction" and if not the earnest money deposited is liable to forfei ture.
Confirmation of the sale should precede the deposit of the sale amount.
36 man dates remittance of the balance of 85% of the sale consideration within 30 days from the date of auction.
It is obligatory on the purchaser to deposit the amount within that period unless he is prevented by an order of the court or tribunal from so making depos it.
The 'non compliance renders the 15% depos it liable to forfeiture.
Therefore, the con firmation of the sale without compliance is illegal.
We hold that the sale is vitiated by manifest error of law and rightly set aside by the Addl.
Collector, Salem (Appellate Authority).
The High Court, both the learned Single Judge and the Division Bench committed menifest error of law in interfering with the order of the appellate authority.
The appeal is accordingly allowed.
The writ petition stands dismissed and that of the order of the Addl.
Distt.
Collector, Salem restored, but in the circumstances parties are directed to bear their own costs throughout.
S.B. Appeal allowed.
| The appellant was alleged to have misap propriated a sum of Rs. 12,163.50 [though acquitted of the charge of misappropriation] and for the recovery thereof his 13.07 acres of coffee estate was brought to sale under the Tamil Nadu Revenue Recovery Act, 1894.
On March 30,1979 the sale by public auc tion was held by the Tehsildar.
The first respondent purchased the said estate for a sum of Rs. 12,225 and deposited a sum of Rupees 2000 being 15% of the sale price.
Under sec tion 36 of the Act, he should have deposited the balance consideration within 30 days from the date of the auction.
This sale was con firmed on October 23,1981 and the balance amount was deposited on November 4, 1981.
So the appellant filed an application to set aside the sale but the Revenue Divisional Officer overruled the objections and dismissed the application.
On appeal to Additional District Collector on October 13, 1982, the sale was set aside.
So the first respondent filed writ petition in the High Court and the single High Court Judge quashed the order of the Additional District Collector.
The writ appeal by the appellant to the Division Bench was also dismissed.
Hence the appellant came to this Court.
The appellant urged that under section 36 of the Act it is mandatory that the date and place of sale 'shall ' be published in the Gazetee and that the publication did not mention the place of sale so the sale is invalid in law.
It was further submitted that it was equally mandatory that the balance sale consideration of 85% should be deposited within 30 days from the date of sale which was done by the first respondent only on November 4, 1981 long after one year 182 and eight months of the date of sale and therefore illegal.
While the first respondent contended that it was Form 7 and not Form 7A that would be applicable to the facts of the instant case and that Form 7 contains the place o[ sale and that it was complied with.
Therefore, the said sale is not illegal.
It was further submitted that the deposit was made after protracted correspondence and that the non deposit within 30 days from the date of sale is not illegal since the deposit was accepted by the authority.
Therefore the confirmation of the sale is not illegal.
Granting the special leave, dismissing the writ Petition, setting aside the Judgment of the High Court, and restoring the order of the Additional District Collector, the Court HELD: That in the instant case, the High Court has wholly misconceived section 36 of the Act.
A reading of the said section mani fests that the word 'shall ' is mandatory in the context.
The publication is an invitation to the intending bidders to prepare an partic ipate at the bid.
Unless there is due publica tion of the date and the place of sale, the intending purchasers cannot be expected to run after the sale officer.
The sale officer has a statutory duty and a responsibility to have the date and place of sale mentioned in the notice giving due, publication in terms of the Act and the Rules.
Public auction is one of the modes of sale intending to get highest competitive price for the property and it also ensures fairness in actions of the public authorities or the sale officers who should act fairly objectively and kindly.
Nothing should be suggestive of bias favouritism nepotism or beset with suspicious features of under bidding detrimental to the legitimate interest of the debtor.
[184 F, G 1 85 A] Further it is settled law that the word 'shall ' be construed in the light of the purpose of the Act or Rule that seeks to serve.
Even though the word 'shall ' be ordi narily mandatory but in the context or if the intention is otherwise it may be construed to be directory.
The construction ultimately depends upon the provision itself.
Considered from this prospective of non compliance of section 35 that is comission to mention the place of sale would visit the deprivation of the property to the debtor for an adequate consideration due to absence of competing bidders.
Hence the specification of the date & place of sale 'shall ' be mandatory.
The forms either 7 or 7A are only procedural and they should be in conformity with section 36.
The form cannot prevail over the statute.
The omission of specification of the place of sale in the form renders the sale not merely irreg ular but also invalid.
[185 C; H 186 B] 183 Equally the second objection is insur mountable.
It is mandatory that the balance of the sale amount shall be remitted within 30 days from the date of auction and if not the earnest money deposited is liable to forfei ture.
Section 36 mandates remittance of the balance of 85% of the sale consideration within 30 days from the date of auction.
It is obligatory on the purchaser to deposit the amount within the period unless prevented by an order of the Court or Tribunal.
So the confirmation of sale without compliance is illegal and the sale is vitiated by manifest error of Law & rightly set aside by the Addi tional District Magistrate.
The High Court has committed error in law in interfering with the order of the appellate authority.
[186 B D]
| 6883.txt |
Civil Appeal No. 5933 1983.
From the Judgment and Order dated 19.2.
1980 of the Allahabad High Court in Civil Misc.
Petition No. 5860 of 1978.
R.K. Jain, Ms. Abha R. Sharma and R.P. Singh, for the Appellant.
M .C. Dhingra for the Respondents.
This appeal by special leave involves the question as to the interpretation of the provisions of Section 29 A of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (hereinafter referred to as 'the Act ').
967 The Act was enacted by the U .P.
State legislature to provide, in the interest of the general public, for the regulation of letting and rent of, and the eviction of tenants from certain classes of buildings situated in urban areas, and for matters connected therewith.
The Act, as originally enacted, was confined in its application to buildings only.
It was amended by U.P. Act XXVIII of 1976 whereby Section 29 A was inserted with a view to give pro tection against eviction to certain classes of tenants of land on which building exists.
The relevant provisions of Section 29 A read as under: "(2) This Section applies only to land let out, either before or after the commencement of this Section, where the tenant, with the landlord 's consent has erected any perma nent structure and incurred expenses in execution thereof.
XXX XXX XXX (4) The tenant of any land to which this Section applies shall be liable to pay to the landlord such rent as may be mutually agreed upon between the parties, and in the absence of agreement, the rent determined in accordance with sub section (5).
(5) The District Magistrate shall on the application of the landlord or the tenant determine the annual rent payable in respect of such land at the rate of ten per cent per annum of the prevailing market value of the land, and such rent shall be payable, except as provided in sub section (6) from the date of expiration of the term for which the land was let or from the commencement of this Section, whichever is later.
XXX XXX XXX (7) The provisions of this section shall have effect, not withstanding anything to the contrary contained in any contract or instrument or in any other law for the time being in force.
" The appellant is the owner of a plot of land measuring 30 x 65 sq.
situated at Garhmukteshwar Road (Azad Road) Meerut.
The said plot of land was let out by the appellant to the respondent No. 1 on March 20, 1957 at an annual rent of Rs. 170.
After the said plot of 968 land had been let out to him, respondent No. 1 with the consent of the appellant constructed a building over the said plot in 1965.
After the enactment of Section 29 A the appellant submitted an application on September 29, 1976, before the District Supply Officer/Delegated Authority, Meerut, for fixation of appropriate rent for the plot of land under sub section (5) of Section 29 A.
The said appli cation of the appellant was dismissed by the District Supply Officer Delegated Authority by order dated April 14, 1978 on the view that the provisions of sub section (5) of Section 29 A for fixation of rent are applicable to those cases only in which there is no agreed rent and that in this case both the parties have accepted that the rent of land is Rs. 170 per year has been fixed on the basis of mutual agreement and, therefore, the question of re fixation of rent does not arise.
Feeling aggrieved by the said order of the District Supply Officer the appellant filed a writ petition in the High Court of Judicature at Allahabad under Article 226 of the Constitution of India.
The said writ petition was dis missed by a Division Bench of the said High Court by order dated February 19, 1980.
The learned Judges have held that under Section 29 A the District Magistrate has jurisdiction to determine the rent only in those cases where there is no agreement relating to rent and if there is an agreement between the landlord and the tenant then the District Magis trate has no jurisdiction to determine the rent.
The learned Judges have further found that in the instant case admitted ly an agreement existed between the appellant and the tenant that the tenant shall pay rent at the rate of Rs. 170 per annum to the appellant and as such there could be no en hancement of the rent under sub section (5) of Section 29 A. Feeling aggrieved by the said decision of the High Court the appellant has filed this appeal after obtaining special leave to appeal.
Shri R.K. Jain, the learned counsel for the appellant has urged that sub section (4) of Section 29 A postulates determination of rent in accordance with sub section (5) in cases where the rent has not been mutually agreed upon between the parties.
The submission of Shri Jain is that the expression "such rent as may be mutually agreed upon between the parties" in sub section (4) of Section 29 A means rent which has been mutually agreed upon after the enactment of Section 29 A and any agreement prior to the said enactment would not preclude determination of rent under Section 29 A of the Act.
In support of this submission Shri Jain has invited our attention to the decision of the Full Bench of the Allahabad High Court in Trilok Chand vs Rent Control and Eviction Officer and Another, [ 969 In Trilok Chand vs Rent Control and Eviction Officer case (supra) a Full Bench of the High Court has considered the correctness of the decision of the Division Bench in the present case and has construed the provisions of Section 29 A of the Act.
In that case it has been held that sub section (4) of Section 29 A precludes determination of rent only in those cases where the agreement fixing the rent was entered into subsequent to the coming into force of Section 29 A.
It has been observed: "The reason is this, sub section (4) applies to the land to which Section 29 A applies.
It provides that the tenant shall be liable to pay to the landlord such rent as may be agreed between the parties.
In the absence of such agreed rent, the sub section further provides that the tenant is liable to pay the rent determined in accordance with subsec tion (5).
These terms are clear enough and indicate that the agreement envisaged thereunder is not the agreement, existed prior to coming into force of Section 29 A.
It refers to subsequent agreement only.
The words "such rent as may be mutually agreed upon between the parties" refers to future agreement and not the past agreement.
Subsection (4) again emphasises "such rent".
Such rent, in the context means the rent to be mutually agreed upon by parties.
Sub section (4) further states that in the absence of agreement, the rent has to be determined in accordance with sub section (5)." (p. 636) "Yet another reason to support our view could be found from sub section (7).
It provides that notwithstanding anything to the contrary contained in any contract or instrument or in any other law for the time being in force, the provisions of Section 29 A shall have effect.
It means clearly that the agreement if any existing on the date of coming into force of Section 29 A is no bar for enforcing the rights under sub section (5).
Sub sections (4) and (5) shall prevail and not the antecedent agreement, if any." (p. 636) The learned Judges of the Full Bench have overruled the decision of the Division Bench in the present case.
We are in agreement with the view propounded by the Full 970 Bench in Trilok Chand 's case (supra).
In our opinion, the words "such rent as may be mutually agreed upon between the parties" in subsection (4) of Section 29 A envisage an agreement with regard to rent entered by the landlord and tenant after the coming into force of Section 29 A. An agreement prior to the commencement of Section 29 A would not preclude determination of rent under sub section (5) of Section 29 A.
In this context it may be mentioned that the words "may be" used in sub section (4) of Section 29 A are much oftener used with reference to the future than the past or the present (Pollock C.B. in Brown vs Batchelor, 25 L .J. exhibit 299, Stroud 's Judicial Dictionary, 5th Edn. P. 1575).
In sub section (4) of Section 29 A the words "may be" are preceded by the word "as" and are followed by the words "mutually agreed upon" which indicate that the words are used with reference to the future.
The provisions of sub section (7) which give overriding effect to the provisions of Section 29 A over an existing contract also lend support to this construction.
We are, therefore, unable to uphold the view of the learned Judges of the Division Bench of the High Court in this case that there could be no enhancement of the rent under sub section (5) of Section 29 A in view of the agreement between the appellant and the tenant that the tenant shall pay rent at the rate of Rs. 170 per annum.
The appeal is, therefore, allowed.
The judgment and order of the High Court dated February 19, 1980 as well as the order dated April 14, 1978, passed by the District Supply Officer/Delegated Authority, Meerut, are set aside and the matter is remanded to the District Supply Officer/Delegated Authority, Meerut for consideration of the application submitted by the appellant for fixation of rent under Section 29 A of the Act in accordance with law.
No order as to costs.
G.N. Appeal allowed.
| In 1957, the appellant let out a plot of land to Re spondent No. 1 at an annual rent of Rs. 170.
Respondent No. 1 constructed a building on the plot of land in 1968, with the consent of the appellant.
After the insertion in 1976 of Section 29 A in the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972, appellant filed an application before the delegated authority under the Act for fixation of appropriate rent for the said land under Section 29 A(5) of the Act.
The application was dismissed by the authority on the ground that Section 29 A(5) was applicable only to those cases in which there was no agreed rent and since the parties, by mutual agreement, have accepted the annual rent at Rs. 170 there was no question of refixation of the rent.
Aggrieved, the appellant filed a Writ Petition in the High Court, which was dismissed.
The appellant has preferred this appeal, by special leave, against the said order of the High Court.
Allowing the appeal, HELD: 1.
The words "such rent as may be mutually agreed upon between the parties" in sub section (4) of Section 29 A of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 envisage an agreement with regard to rent entered by the landlord and tenant after the coming into force of Section 29 A. An agreement prior to the com mencement of Section 29 A would not preclude determination of rent under sub section (5) of Section 29 A.
Generally, the words 'may be ' are much oftener used with reference to the future than the 966 past or present.
In sub section (4) of Section 29 A the words 'may be ' are preceded by the word 'as ' and are allowed by the words 'mutually agreed upon ' which indicate that the words are used with reference to the future.
The provisions of sub section (7) which give overriding effect to the provisions of section 29 A over an existing contract also lend support to this construction.
The High Court was not correct in holding the view that there could be no enhance ment of the rent under subsection (5) of Section 29 A in view of the agreement between the appellant and the tenant that the tenant shall pay rent at the rate of Rs. 170 per annum.
[970A D] Trilok Chand vs Rent Control and Eviction Officer & Anr., ; approved.
Brown vs Batchelor, ; referred to.
Stroud 's Judicial Dictionary,, 5th Edn.
p. 1575; re|erred to.
The Judgment and order of the High Court dated Febru ary 19, 1990 as well as the order dated April 14, 1978 passed by the Delegated Authority are set aside and the matter is remanded to the Delegated Authority for considera tion of the application submitted by the appellant |or fixation of rent under Section 29 A of the Act in accordance with law.
[970E F]
| 6539.txt |
Civil Appeal No. 793 of 1966.
Appeal by special leave from the judgment and order dated August 21, 1964 of the Bombay High Court, Nagpur Bench in Special Civil Application No. 353 of 1963.
M.N. Phadke, Naunit Lal and B.P. Singh, for the appellant.
D.D. Verma and Ganpat Rai, for respondent No. 1.
The Judgment of the Court was delivered by Shelat, J.
This appeal, by special leave, is directed against the order of the High Court of Bombay (Nagpur Bench) which set aside the orders of the Assistant Commissioner of Labour and the Industrial Court, Nagpur and remanded the case to the Assistant Commissioner.
The appellant firm conducts a number of bidi factories at various places in Vidharba including the one at Kamptee.
Its head office is also situate there.
The factory at Kamptee and the head office have always been treated as separate entities though owned by the same firm.
Consequently, the head office was registered under the Central Provinces & Berar Shops and Establishment Act, 1947 and the factory at Kamptee was registered under the Factories Act.
The factory has also its own standing orders certified under the Central Provinces & Berar Industrial Disputes Settlement Act, 1947.
Respondent 1 was originally employed in the factory at Kamptee.
Two or three years thereafter he was directed to work at the head office and worked therein for about six years prior to the impugned order of dismissal passed against him by the munim of the head office.
Aggrieved by the order he flied 274 an application under section 16 of the C.P. & Berar Industrial Disputes Settlement Act alleging that the said order was incompetent and illegal.
The appellant firm contended that at the material time Respondent 1 was employed as a clerk in the head office, that the head office was a separate entity, that the dismissal order had not been passed 'by the appellant firm as the owner of the said factory, that the firm, as such owner, was wrongly impleaded and that the application was misconceived.
The Assistant Commissioner dismissed the application holding that Respondent 1 at the material time was not the employee in the factory, but was employed in the firm 's head office.
He relied on the fact that the head office and the factory had separate rules, that Respondent 1 used to sign his attendance in the register of the head office, that he was being paid his salary by the head office, and lastly, that his name was not on the muster roll of the factory.
He also found that whereas the staff of the head office was governed by the C.P. & Berar Shops & Establishments Act, the factory was governed by the C.P. & Berar Industrial Disputes Settlement Act.
Against the dismissal of his ,application, Respondent 1 filed a revision application before the Industrial Court, Nagpur.
The Industrial dismissed the application holding that the only question raised before it was whether Respondent 1 was the employee of the head office and that that being purely a question of fact, he could not interfere with the finding of fact arrived at by the Assistant Commissioner.
Respondent 1 thereafter filed a writ petition in the High Court challenging the said orders.
The High Court held that it was possible in law for an employer to have various establishments where different kinds of work would be done, in which case an employee in one establishment would be liable to be transferred to another establishment.
But the High Court observed that unless it was established that the employment of Respondent 1 in the factory was legally terminated it could not be assumed, merely because he was directed to work in the head office, that his employment was changed and the head office was substituted as his employer in place of the said factory.
As the order passed by the Assistant Commissioner was not clear on this question, the High Court remanded the case for disposal according to law.
Mr. Phadke for the appellants, raised the following contentions against the High Court 's order: (1) that the High Court made out a new case for Respondent 1, in that Respondent 1 had never challenged the validity of the order of dismissal on the ground that there was no change of employment, and that therefore, the head office was incompetent to order his dismissal, (2) that the facts of the case justified the conclusion that Respondent 1 had ceased to be the employee of the factory, and (3) that in any event he must be held to have given an implied consent to 275 his being treated as the employee of the head office.
In support of these contentions he relied upon the fact that Respondent 1 had worked at the.
head office for the last six years without any protest, that his name was on the attendance register of the head office, that it was the head office which paid his salary, and lastly, that he worked in the head office under the direction and control of the munim of that office.
As to the first contention, it would not be correct to say that the High Court made out a new case for the first time for Respondent 1 which was not pleaded by him before the Assistant Commissioner.
In para 1 of his application he had expressly averred that about three years after his employment in the factory he had been ordered to work in the head office.
In reply to the application the appellants conceded that though Respondent 1 was first employed in the factory and had worked there for about three years, he had thereafter been transferred to and been working as a clerk in the head office.
There was, however, no averment in that reply that the contract of service of Respondent 1 with the said factory was at any time put an end to or that when he was directed to work in the head office a fresh contract of service was entered into.
between.
him and the head office.
The Assistant Commissioner in his said order held that the head office and the factory were two separate establishments registered under two different Acts, and, therefore, subject to different provisions of law.
He further held that since Respondent 1 was not actually working in the factory and his name did not figure in the factory 's muster roll and was not paid his wages by the factory, the applicant could not be said to be an employee of the said factory.
In his revision application before the Industrial Court, Respondent 1 made an express plea that when he was directed to work in the head office, he had received no notice from the factory that his services were terminated there or that he had henceforth become the employee of the head office.
It is clear from these pleadings that it was not for the first time in the High Court that Respondent 1 contended as to the incompetence of the head office to take disciplinary action against him and to pass the order of dismissal.
The first contention of Mr. Phadke, therefore, cannot be accepted.
As regards the second and the third contentions, there is no dispute that though the head office and the said factory belong to the same proprietors, they were always treated as two distinct entities registered under two different Acts, that Respondent 1 was employed first in the factory where he worked for 2 or 3 years and was thereafter ordered to work at the head office where admittedly he worked for about six years before the impugned order terminating his services was passed.
The question, therefore, which the Assistant Commissioner and the Industrial Court had to decide, in view of the pleadings of the parties, was whether 276 Respondent 1 had ceased to be the employee of the factory and was in the employment of the head office at the time when the impugned order was passed, or whether his services were simply lent to the head office and he continued all along to be the employee of the factory ? The general rule in respect of relationship of master and servant is that a subsisting contract of service with one master is a bar to service with any other master unless the contract otherwise provides or the master consents.
A contract of employment involving personal service is incapable of transfer.
Thus, where a businessman joins a partnership firm and takes his personal staff with him into the firm, his staff cannot be made the staff of the firm without the consent of the other partners.
Mersey Docks and Harbour Board vs Coggins & Griffith (Liverpool) Ltd.(1).
In certain cases, however, it is.
possible to say that an employee has different .employers, as when the employer, in pursuance of a contract between him and a third party, lends or hires out the services of his employee to that third party for a particular work.
Such an arrangement, however, does not effect a transfer of the contract of service between the employer and his employee, but only amounts to a transfer of the benefit of his services.
Century Insurance Co. Ltd. vs Northern Ireland Road Transport Board(").
In such cases where a third party engages another person 's employee it is the general employer who is normally liable for the tortuous acts committed by the employee and his liability is not affected by the existence of a contract between him and the third party under which the services of the employee are lent or hired out for a temporary period to such third party.
In order to absolve the employer from the liability and to make the person who.
temporarily engages the employee or hires his services it is necessary to prove that the relationship of master and servant was temporarily constituted between such third party and the employee, and that it existed at the time when the tortuous act was committed by the employee.
There is, however, a presumption against there being such a transfer of an employee as to make the hirer or the person on whose behalf the employee is temporarily working and a heavy burden rests on the party seeking to establish that the relationship of master and servant has been constituted pro hac vice between the temporary employer and the employee of.
Mersey Docks and Harbour Board vs Coggins & Griffith (Liverpool) Ltd.(1).
In cases where an employer has hired out or lent the services of his employee for a specific work and such an employee has caused damage to another person by his tortuous act, the question often arises as to who of the two, i.e. the employer or the person to whom such services are hired out or lent, is ; at 17.
(2) ; 277 vicariously responsible for such damage.
In cases commonly known as cranes and carriage cases, courts in England evolved the rule of the employee being temporarily the employee of such third party to impose the responsibility on him if it was established that in the matter of the act, in the performance of which the tortuous act was committed, such third party had exercised control and direction over the performance of the act in question and the manner in which it was to be performed.
The classic case commonly cited and in which this rule was applied is Quarman V. Burnett (1) of.
also Jones vs Scullard(2) where Lord Russel applied the test of the power to, direct and control the act in performance of which damage was caused to another person.
The position in law is, therefore, clear that except in the case of a statutory provision to the contrary, a right to the service of an employee cannot be the subject matter of a transfer by an employer to a third party without the employee 's consent.
Thus, in Nokes vs Doncaster Amalgamated Collieries, Ltd. (3) where an order was made under section 154 of the Companies Act, 1929 transferring all the assets and liabilities of a company to another company.
Viscount Simon held that such an order did not mean that contracts of service between the appellant and the transferer company also stood transferred.
The principle that even in cases where the services of an employee are lent to a third party temporarily for a particular work, the employee still remains the employee of the employer is illustrated in Denham vs Midland Employees Mutual Assurance Ltd.(4).
There Eastwoods Ltd. employed Le Grands to make test borings on their property.
Le Grands provided two skilled drillers with plant and tackle to carry out the borings and Eastwoods Ltd. agreed to provide one of the labourers, one Clegg to assist those skilled men free of charge to Le Grands.
While the said work .was being carried out, Clegg was killed in circumstances in which Le Grands were liable to pay damages to his widow on the ground that his death was caused on account of the negligence of Le Grands or their servants.
Le Grands sought to be indemnified by their insurers against their said liability.
They were covered by two policies, one with the Midland Employers Mutual Assurance Ltd. in respect of their liability to the employees and the other with Lloyds in respect of their liability to the public in general.
The policy issued by the Midland Employers Mutual Assurance Ltd. provided that if any person "under a contract of service" with the insured were to sustain any personal injury by accident caused during the period of employment, and if the insured became liable to pay damages for such injury the association would indemnify the insured against all sums for which he would be so liable.
The policy issued by the Lloyds indemnified Le Grands for any sums for which they might become liable to (1) ; (2) (3) [1940] 3 All England Law Reports 549.
(4) [1955] 2 Q.B.437.
278 pay in respect of death or accidental bodily injury to persons and loss or damage to.
property arising in or out of the business of borings carried out by Le Grands.
The question was whether at the time of his death Clegg was the servant of Le Grands and under "a contract of service" with them as provided in their policy with the Midland Assurance Ltd. Dealing with that question, Denning, L.J. observed that the difficulty which surrounded such a subject arose because of the concept that a servant of a general employer may be transferred to a temporary employer so as to become for the time being his .servant.
Such a concept was, he said, a very useful device to place liability on the shoulders of the one who should properly bear it, but did not affect the contract of service itself.
No contract of service can be transferred from one employer to another without the servant 's consent and such consent is not to be raised by operation of law but only by the real consent in fact of the man express or implied.
He further observed: "In none of the transfer cases which has been cited to us had the consent of the man been sought or obtained.
The general employer has simply told him to go and do some particular work for the temporary employer and he has gone.
The supposed transfer, when it takes place, is nothing more than a device a very convenient and just device, mark you to put liability on to the temporary employer; and even this device has in recent years been very much restricted in its operation.
It only applies when the servant is transferred so completely that the temporary employer has the right to.
dictate, not only what the servant is to do, but also how he is to do it.
" Applying these principles to the facts before him, he observed that he had no doubt that if a third person had been injured by the negligence of Clegg in the course of his work, Le Grands and not Eastwoods would be liable to such third person.
also, when Clegg himself was killed, Le Grands were liable to his widow on the same footing that they were his masters and not merely invitors.
These results were achieved in law by holding that Clegg became the temporary servant of Le Grands.
He further observed that there was no harm in thus describing him so long as it was remembered that it was a device designed to cast liability on the temporary employer.
However, on the question whether Clegg was "under a contract of service" with Le Grands, he held that he was not, for his contract of service was with Eastwoods.
They had selected him and paid his wages and they alone could suspend or dismiss him.
Clegg was never asked to consent to a transfer of the contract of service and he never did so.
If he was not paid his wages or if he was wrongfully dismissed from 279 the work, he could sue Eastwoods for the breach of contract and no one else.
If he failed to turn up for work, Eastwoods alone 'could sue him.
He could, therefore, see no trace of a contract of service with Le Grands except the artificial transfer raised by law so as to make Le Grands liable to others for his faults or liable to him for their own faults and that the artificial transfer so raised cannot be said to be a contract of service within the said policy of assurance.
Le Grands, therefore, were not entitled to 'be indemnified by the Midland Assurance Company under the employers ' liability policy but were entitled to be indemnified by Lloyds under their public liability policy.
A contract of service being thus incapable of transfer unilaterally, such a transfer of service from one employer to another can only be affected by a tripartite agreement between the employer, the employee and the third party, the effect of which would be to terminate the original contract of service by mutual consent and to make a new contract between the employee and the third party.
Therefore, so long as the contract of service is not terminated, a new contract is not made as aforesaid and the employee continues to be in the employment of the employer.
Therefore, when an employer orders him to do a certain work for another person the employee still continues to be in his employment.
The only thing that happens in such a case is that he carries out the orders of his master.
The employee has the right to claim his wages from the employer and not from the third party to whom his services are lent or hired.
It may be that such third party may pay his wages during the time that he has hired his services, but that is because of his agreement with the employer.
That does not preclude the employee from claiming his wages from the employer.
The hirer may also exercise control and direction in the doing of the thing for which he is hired or even the manner in which it is to be done.
But if the employee fails to carry out his directions he cannot dismiss him and can only complain to the employer.
The right of dismissal vests in the employer.
Such being the position in law, it is of the utmost importance in the present case that the appellants at no time took the plea that the contract of employment with the factory was ever terminated or that the respondent gave his consent, express or implied, to his contract of service being transferred to the head office, or that there was a fresh contract of employment so brought about between him and the head office.
Unless, therefore, it is held from the circumstances relied upon by Mr. Phadke that there was a transfer of the contract of service or that Respondent 1 gave his consent, express or implied, to such a transfer, Respondent 1 would continue to be the servant of the factory.
Since the case has been remanded to the Assistant Commissioner, we refrain from making any observations as regards the effect of the admissions 280 said to have been made by Respondent 1 and relied on by the Assistant Commissioner.
Mr. Phadke, however, relied on Jestamani Gulabrai Dholkia vs The Scindia Steam Navigation Company(1) in support of his contention that there was a transfer of the contract of employment and that it was not a mere transfer of the benefit of the services of Respondent 1.
In that case the appellants were originally in the service of the Scindia Steam Navigation Company.
In 1937 Air Services of India Ltd. was incorporated.
In 1943, the Scindias purchased the ASI and by 1946 ASI became a full fledged subsidiary of the Scindias.
Between 1946 to 1951 the Scindias transferred several of their employees including the appellants to the ASI.
The Scindias had a number of such subsidiary companies and it was usual for them to transfer their employees to such companies and also to recall them whenever necessary.
In 1953, the Government of India decided to nationalise the airlines operating in India with effect from June 1953.
On April 6, 1953 the appellants wrote to the Scindias to recall them to their original posts but the Scindias refused to do so as they were not in a position to absorb them.
They pointed out that a Bill, called the Air Corporation Bill, 1953, was pending before Parliament, that under cl. 20 thereof persons working with ASI on the appointed day would become the employees of the Corporation, that under that clause they had the option to resign if they did not wish to join the Corporation and that if the appellants exercised that option.
the Scindias would treat them as having resigned from their service.
The Act was passed on May 28, of the Act provided that every employee of an existing air company employed by such company prior to July 1, 1952 and still in its employment immediately before the appointed day, shall, in so far as such employee is employed in connection with the undertaking which has vested in the Corporation by virtue of the Act, become, as from the appointed date, the employee of the Corporation in which the undertaking has vested.
On june 8, 1953 the appellants made a demand that if the Corporation were to retrench any persons from the staff loaned to ASI within the first five years, the Scindias should take them back.
The Scindias refused.
None of the appellants had exercised the option provided by section 20 (1 ).
On August 1, 1953 ASI became vested in the Corporation and section 20( 1 ) came into force as from that date.
The appellants contended inter alia that the contract of service between them and the Scindias was not transferable.
The contention was rejected on the ground that by reason of section 20(1) the contract of service of the appellants stood transferred to the Corporation and that though the appellants were not originally recruited by ASI and were transferred by the Scindias to the said company, (1) ; 281 they were the employees of ASI and were such employees on the appointed day and since they had not exercised the option under section 20( 1 ) they became the employees of the Corporation by operation of that provision.
The Scindias, therefore, were no longer concerned with them.
It is true that the appellants were transferred to ASI on condition that they would receive the same remuneration and other benefits as they were getting in the Scindias and further that it was possible to contend that Scindias alone could dismiss them.
But the learned Judges explained that these were special terms applicable to the appellants.
But in spite of them they still had become the employees of the ASI and were such employees on the appointed day.
It seems that this conclusion was reached on the footing that since ASI was the subsidiary company of the Scindias like several other subsidiary companies, and it was.
usual for the Scindias to transfer any of their employees to such subsidiary companies, the appellants on their transfer were deemed to have consented to become the employees of ASI in spite of the right of the Scindias to recall them whenever necessary and further that the appellants continued to be and were the employees of the ASI on the appointed day and were, therefore, governed by section 20(1 ) if the Act.
It is clear that this was a case of employees becoming the employees of the Corporation by virtue if the operation of a statute.
The decision, therefore, is not an authority for the proposition that an employer can transfer his employee to a third party without the consent of such employee or ' without terminating the contract of employment with him.
That being the position, the case of Jestamani vs The Scindia Steam Navigation(x) cannot assist Mr. Phadke.
In our view the High Court was, right in setting aside the order of the Assistant Commissioner and the Industrial Court on the ground that unless a finding was reached on the facts of the case that the contract of service with the said factory came to an end and a fresh contract with the head office came into being Respondent 1 continued to be in the employment of the factory and the head office, therefore, was not competent to dismiss him.
The appeal, therefore, fails and is dismissed with costs.
G.C. Appeal dismissed.
| The appellant firm had a number of factories including one at Kamptee in Vidharba.
Its head office was also situated there,.
The factory at Kamptee and the head office were treated as separate establishment.
the factory being registered under the Factories Act and the Head Office under the C.P. and Berar Shops and Establishments Act, 1947.
Respondent No. 1 was originally employed at the aforesaid factory but later he was directed to work at the head office.
When the Head Office dismissed him from service he challenged the order of dismissal by an application under section 16 of the C.P. & Berar Industrial Disputes settlement Act.
The Assistant Commissioner dismissed the application holding that Respondent No. 1 at the material time was not an employee of the factory but was employed in the Head Office.
The Industrial Court refused, in revision, to interfere with the Assistant Commissioner 's order.
Respondent No. 1 filed a writ petition under article 226 of the Constitution.
The High Court observed that unless it was established that the employment of Respondent No. 1 in the factory was legally terminated it could be assumed merely because he was direct to work in the head office, that his employment was changed and the head office was substituted as his.
employer in place of the said factory.
, As the order passed by the Assistant Commissioner was not clear on this question the High Court remanded the case for disposal according to law.
The firm appealed to this Court.
HELD: (i) A contract for service is incapable of transfer unilaterally.
Such a transfer of service from one employer to another can only be effected by a tripartite agreement between the employer, the employee and the third party, the effect of which would be to terminate the original contract of service by mutual consent and to.
make a new contract between the employee and the third party.
So long as the contract of service is not terminated, a new contract is not made as aforesaid, and the employee continues to be in the employment of the employer.
Therefore, when an employer orders him to: do certain work for another person the employee still continues to be i.n his employment.
The only thing that happens in such a case is that he carries out the orders of his master.
employee has the right to claim his wages from the employer and not from the third party to whom his services are lent or hired.
It may be that such a third party may pay his wages during the time that he has hired his services, but that is because of his agreement with the employer.
that does not preclude the employee from claiming his wages from the employer.
the hirer may also.
exercise control and direction in the doing of the thing for which he is hired or even the manner in which it is to be done.
But if the employee fails to.
carry out his direction he cannot 273 dismiss him and can only complain to the employee.
The 'right of dismissal vests with the employer.
[279 &F] Such being the position in law, in the present case the High Court was right in setting aside the order of the Assistant Commissioner and the Industrial Court on the ground that unless a finding was reached on the facts of the case that the contract of service with the said factory came to an end and a fresh contract with the head office came into being, Respondent No. 1 continued to be in the employment of the factory and the head office therefore was not competent to dismiss him.
[281 F] Mersey Docks and Harbour Board vs Coggins & Griffith (Liverpool) Ltd. ; at 17, Century Insurance Co. Ltd. vs Northern Ireland Road Transport Board, [1942] A.C. 509, Quarman vs Burnett, ; , Jones vs Scullard, , Nokes vs Doncaster Amalgamated Collieries, Ltd. [1940] 3 All England Law Reports 549 and Denham vs Midland Employees Mutual Assurance Ltd., , referred to.
Jestamani Gulabrai Dholkia vs The Scindia Steam Navigation Company ; , distinguished.
| 2482.txt |
Civil Appeal No. 631 of 1973.
Appeal by Special Leave from the Judgment and Order dated 14/16th November, 1970 of the Gujarat High Court in Sales Tax Reference No. 9/69.
R. P. Bhatt and section P. Nayar for the Appellant.
Appeal Set down ex Parte against respondent.
The following Judgments were delivered.
BHAGWATI, J. I have had the advantage of reading the judgment prepared by my learned brother Sen and I entirely agree with the conclusion reached by him, but I would like to state briefly my 873 own reasons for arriving at that conclusion.
The facts giving rise to this appeal have been stated with admirable succinctness by my learned brother Sen and I need not repeat them.
The facts in deed are not material, because only one single question of law arises for determination in this appeal and it does not depend on any particular facts.
The question is a very simple one, namely, whether the expression 'Registered dealer ' in sec.8(ii) of the Bombay Sales Tax Act, 1959 as applicable to the State of Gujarat (hereinafter referred to as the Bombay Act) means only a dealer registered under section 22 of that Act or it also comprises a dealer registered under the (hereinafter referred to as the Central Act).
Since the decision of this question turns on the true interpretation of the expression 'Registered dealer '.
in sec.8(ii) of the Bombay Act, we may reproduce that section as follows: "Sec.8: There shall be levied a sales tax on the turn over of sales of goods specified in Schedule C at the rate set out against each of them in column 3 thereof, but after deducting from such turnover (i) * * * * (ii) resales of goods purchased by him on or after the appointed day from a Registered dealer if the goods at the time of their purchase were goods specified in Schedule C".
This section has obviously been enacted to prevent multiple point taxation on goods specified in Schedule C.
Where goods specified in Schedule 'C ' are sold by a dealer and obviously he must be a dealer registered under section 22 of the Bombay Act, if he is liable to pay tax under that Act the turnover of these sales is liable to be taxed at the rate specified against each category of goods in that Schedule, but if the sales in question are re sales of goods purchased by the dealer on or after the appointed day from a 'Registered dealer ', they would be liable to be excluded from the turnover, because the 'Registered dealer ' from whom they are purchased would have paid tax under the main part of section 8 and the goods having already borne tax in the hands of the selling 'Registered dealer ', the legislative intent is that they should not suffer tax again.
Now the expression 'Registered dealer ' is defined in section 2(15) of the Bombay Act to mean "a dealer registered under section 22" and therefore, ordinarily, the expression 'Registered dealer ' as used in section 8(ii) must carry the same meaning, namely, a dealer registered under section 22 of the Bombay Act.
But, as the opening part of section 2 shows, the definitional meaning is subject to anything repugnant in the subject or 874 context.
The context in which the defined word occurs may clearly indicate that it is used in a sense different from that given in the definition clause.
We must therefore see whether there is anything in section 8(ii) or in the context in which it occurs which should compel us to place on the expression 'Registered dealer ' as used in that section a meaning different from that given to it in section 2(15).
We are afraid we do not find anything in the subject or context of sec.8(ii) which would persuade us to depart from the definitional meaning of the expression 'Registered dealer '.
The subject and context in fact re enforce the view that the expression 'Registered dealer ' in sec.8(ii) is used to mean a dealer registered under sec.22 of the Bombay Act, and does not include a dealer registered only under the Central 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 surely could not have been the intendment of the legislature in enacting section 8(ii).
It would indeed frustrate the object of section 8(ii) which is to provide for imposition of single point tax on the goods specified in Schedule 'C '.
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 it is difficult to see why the Gujarat State should 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 sec.
8 of the Central Act and if that be so, it is impossible to understand why the Legislature should have insisted, for attracting the applicability of section 8(ii), that the goods resold by the dealer should at the time of their first sale be goods specified in Schedule 'C '.
The requirement that the goods at the time of their first sale by the 'Registered dealer ' should be of one of the categories specified in Schedule 'C ', is a clear pointer that the 'Registered dealer ' contemplated in this provision is a dealer registered under section 22 of the Bombay Act, because it is only with reference to such a dealer liable to pay tax under the Bombay Act that this 875 requirement of the goods sold by him being goods specified in Schedule 'C ' can have any meaning and significance.
We are, therefore, clearly of the view that 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 Act and it does not include a dealer registered under the Central Act.
The Revenue, however, relied on section 4 of the Bombay Act and tried to project it in the interpretation of the expression 'Registered dealer ' in section 8(ii).
We fail to see how section 4 can at all help in throwing light on the true interpretation of the expression 'Registered dealer '.
That section provides: "Sec. 4(1): Notwithstanding anything in section 3, a dealer who is registered under the , but who is not liable to pay tax under the said section 3, shall nevertheless be liable to pay tax (a) on Sales of goods is respect of the purchase of which he has furnished a declaration under sub sec.
(4) of section 8 of the , and (b) on sales of goods in the manufacture of which the goods so purchased have been used; and accordingly, the provisions of sections 7 to 12 (both inclusive) shall apply to such sales, as they apply to the sales made by a dealer liable to pay tax under section 3.
(2) Every dealer who is liable to pay tax under sub section (1) shall, for the purposes of sections 32, 33, 35, 36, 37, 38, 46, 47 and 48 be deemed to be a Registered dealer.
" It is obvious that 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 question then would be: if the dealer is not registered under the Bombay Act, how to recover the tax from him? The dealer not being registered under the Bombay Act, the machinery of the Bombay Act would not of itself apply for 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 purposes of sections 32 to 38 and 46 876 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.
This legal fiction 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).
Section 4 has, in fact, nothing to do with section 8(ii).
They are distinct and independent provisions operating on totally different areas, and it is difficult to see how section 4 can be availed of for the purpose of interpreting the expression "Registered dealer" in section 8(ii).
I would therefore set aside the judgment of the High Court under appeal and answer the question referred by the Tribunal in favour of the Revenue and against the assessee.
There will be no order as to costs of the appeal.
SEN, J.
This appeal, by special leave, is from a judgment of the Gujarat High Court, upon a question of law referred to it under sub s.(1) of s.61 of the Bombay Sales Tax Act, 1959 (hereinafter referred to as 'the Act ').
By that judgment the High Court answered the question referred in the affirmative and in favour of the assessee.
The point involved is of considerable importance.
The facts giving rise to the reference were these: Messrs Union Medical Agency, Ahmedabad was, at all material times, carrying on business in spirit and alcohol, and was a dealer registered under s.22 of the Act (hereinafter referred to as 'the assessee ').
In the assessment year 1964 65, the corresponding accounting year of which was the year ending March 31, 1965, the assessee claimed deduction from its turnover in respect of resales of certain goods purchased from one Motibhai Gopalbhai Patel of Baroda who, at the relevant time, was a dealer registered under s.7 of the (hereinafter referred to as 'the Central Act '), but was not a dealer registered under section 22 of the Act.
The Sales Tax Officer rejected the claim of the assessee for such deduction on the ground that the said Motibhai Gopalbhai Patel from whom the goods were purchased was not a registered dealer within the meaning of cl.(ii) of s.8 of the Act inasmuch as he was not registered as a dealer under s.22 of the Act.
The assessee appealed to the Assistant Commissioner of Sales Tax, the only material ground being that the expression 'registered dealer ' in cl.
(ii) of section 8 of the Act was wide enough to 877 include a registered dealer under the but the Assistant Commissioner affirmed the disallowance of the deduction.
On further appeal, the Gujarat Sales Tax Tribunal agreeing with the Sales Tax Authorities, held that in order to claim deduction from the turnover of sales of goods under cl.
(ii) of section 8 of the Act, what was required to be shown was that the goods were purchased by the dealer on or after the appointed day from a 'registered dealer ' under the Act, and that in view of the definition of the expression 'registered dealer ' in sub s.(25) of s.2 of the Act, such dealer had to be a dealer registered under s.22 of the Act.
The Tribunal accordingly held that since Motibhai Gopalbhai Patel, the Baroda dealer, from whom the assessee had purchased the goods, was not a registered dealer under the Act, therefore the requirements of cl.(ii) of s.8 of the Act were not fulfilled, and the claim for deduction made by the assessee had been rightly disallowed.
On the application of the assessee, the Tribunal referred the following question of law to the High Court under sub section
(1) of section 61 of the Act, for its opinion, namely: "Whether for the purpose of allowing deduction from the turnover of sales under clause (ii) of section 8 of the Bombay Sales Tax Act, 1959, purchases of goods made by a dealer registered under the Bombay Sales Tax Act, 1959 from a dealer registered under the but not registered under the Bombay Sales Tax Act.
1959 can be said to be purchases of goods made from a registered dealer within the meaning of clause (ii) of section 8 of the Bombay Sales Tax Act, 1959.
" It appears that the High Court was not satisfied at this formulation as it felt that the statement of the case as made by the Tribunal did not bring out the real question of law arising out of its order.
At the instance of the assessee, it re framed the question in the following terms: "Whether for the purpose of allowing deduction from the turnover of sales under clause (ii) of section 8 of the Bombay Sales Tax Act, 1959, purchases of goods made by a dealer registered under the Bombay Sales Tax Act, 1959 from a dealer who is registered under the and who is liable to pay tax under section 4 of the Bombay Sales Tax Act, 1959 though not registered under the Bombay Sales Tax Act, 1959 can be said to be purchases of goods made from a registered dealer within the meaning of clause (ii) of section 8 of the Bombay Sales Tax Act, 1959.
" 878 We feel that the High Court was not justified in re framing the question as referred.
It is nobody 's case that Motibhai Gopalbhai Patel, the Baroda dealer from whom the assessee had purchased the goods, had ever paid any tax on the sales effected by him under s.4 of the Act.
Nor is there any material on record to suggest that any proceedings were started against the Baroda dealer for subjecting the transactions to tax.
In answering the reference in the affirmative, in favour of the assessee and against the Commissioner of Sales Tax, the High Court observes: "The result of the foregoing discussion is that having regard to the context, collocation and the object of the expression 'registered dealer ' in clause (ii) of section 8 of the Bombay Act, and having regard to the policy of the Act, the said expression would also include a dealer registered under the Central Act on whom special liability to pay sales tax has been imposed under section 4 of the Act.
A dealer who purchases goods from a dealer registered under the Central Act, who is liable to pay sales tax on the sale of the said goods by virtue of the provisions of section 4 of the Bombay Act, would, therefore, be entitled to deduct from his turnover of sales of goods, resales of goods so purchased by him on or after the appointed day if the goods, at the time of their purchase, were goods specified in Schedule C." This conclusion of the High Court can hardly be supported.
The short question that falls for determination in the appeal is whether the expression 'registered dealer ' in cl.(ii) of s.8 of the Act must bear the meaning that is assigned to it in section 2(25) which is the definition section, or the said expression is capable of bearing an enlarged meaning, in view of the subject and context in which it is used in cl.(ii) of s.8 of the Act.
The decision of the appeal must turn on the construction of cl.(ii) of s.8 of the Act, which provides: "8.
There shall be levied a sales tax on the turnover of sales of goods specified in Schedule C at the rate set out against each of them in column 3 thereof, but after deducting from such turnover: (i) * * * * * * * (ii) resales of goods purchased by him on or after the appointed day from a Registered dealer if the goods at the time of their purchase were goods specified in Schedule C." 879 In the Act, the expression 'registered dealer ' is defined in section 2(25) in these terms: "2.
In this Act, unless the context otherwise requires, (25) "Registered dealer" means a dealer registered under section 22.
" The error in the decision of the High Court lies in its misunderstanding of the scope and effect of section 4 of the Act, which it has tried to project into cl.
(ii) of section 8 and it reads as follows: "4.
(1) Notwithstanding anything in section 3, a dealer who is registered under the , but who is not liable to pay tax under the said section 3, shall nevertheless be liable to pay tax (a) on sales of goods in respect of the purchase of which he has furnished a declaration under sub section (4) of section 8 of the , and (b) on sales of goods in the manufacture of which the goods so purchased have been used, and accordingly, the provisions of sections 7 to 12 (both inclusive) shall apply to such sales, as they apply to the sales made by a dealer liable to pay tax under section 3.
(2) Every dealer who is liable to pay tax under sub section (1) shall, for the purposes of sections 32, 33, 34, 35, 36, 37, 38, 46, 47 and 48 be deemed to be a Registered dealer.
" Sub section (3) of section 7 reads: "7.(3) In order to ensure that after the date of the coming into force of section 15 of the , tax shall not be levied on the sales or purchases of Declared goods at more than one stage, it is hereby provided that if under this Act or any earlier law, any tax has been levied or is leviable on the sale or purchase of such goods then no further tax shall be levied under this Act on any subsequent sale or purchase thereof; and accordingly, for the purpose of arriving at the taxable turn over of sales or purchases of a dealer, there shall be deducted from his total turnover of sales, or as the case may be, of purchases, the sales or purchases of such declared goods as have borne tax at any earlier stage.
" There is no obscurity in the language of cl.
(ii) of section 8 of the Act.
It is clear from the terms of cl.
(ii) of section 8 that no deduction is claimable in respect of resales 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 880 expression 'registered dealer ' in cl.
(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.
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 s.2(25) of the Act as having a particular meaning, i.e., a dealer registered under section 22 of the Act, it is that meaning alone which must be given to it in interpreting cl.
(ii) of s.8 of the Act, unless there is anything repugnant to the context.
It was not permissible for the High Court to ignore a statutory definition and give to the expression a wider meaning independent of it.
There is nothing to suggest that the expression 'registered dealer ' is used in cl.
(ii) of s.8 of the Act in any different sense from that in ' which it is defined.
It is significant to notice that whenever the legislature wanted that the expression 'registered dealer ' should have a different meaning, it has expressly said so.
Thus in sub s.(1) of s.4 it mentions of 'a dealer who is registered under the '.
The distinction between the two classes of dealers is, therefore, clearly maintained.
The High Court was obviously wrong in not interpreting the expression 'registered dealer ' in the context of cl.
(ii) of s.8 but with reference to the other provisions of the Act, particularly in the light of section 4 of the Act, to give effect to the so called legislative intent for the levy of a single point tax.
It was in error in making an exposition ex visceribus actus and in relying upon the leading cases of Bywater vs Brandling, Rein vs Lane, Jobbins vs Middlesex Country Council Craies on Statute Law, 6th ed., 99, and Maxwell on Interpretation of Statutes, 8th ed., 30.
The High Court expresses the view that the legislative intent in enacting cl.
(ii) of s.8 of the Act is two fold (1) to restrict the levy 881 of sales tax to a single point and to avoid multiple levy of sales tax on goods, and (2) that sales tax should be levied at the stage of the first sale and should be recovered from the registered dealer who effects the first sale and that all subsequent sales of such goods should not be subjected to sales tax over again.
In the light of this so called legislative intention and the policy of the Act, the High Court observes that 'having regard to the context, collocation and the object of the expression 'registered dealer ' in cl.(ii) of s.8 of the Act ', and 'having regard to the legislative intent, namely, to levy a single point tax under sub s.(3) of s.7 of the Act ', the expression 'registered dealer ' in cl.
(ii) of s.8 would also include a dealer registered under the , on whom a special liability to pay sales tax has been imposed under s.4.
Upon that view, it held that a dealer who purchased goods from a dealer registered under the Central Act, who was liable to pay sales tax on the sale of such goods by virtue of the provisions of s.4 of the Act, would be entitled to deduct from his turnover of sales of goods, resales of goods so purchased by him on or after the appointed day if the goods at the time of their purchase, were goods specified in Schedule C of the Act.
It accordingly held that the meaning of the expression 'registered dealer ' in cl.(ii) of s.8 was not limited only to a dealer registered under the Act but it was wide enough to also include a dealer registered under the Central Act.
There is no dispute with the proposition that 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, 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.
The authorities relied upon by the High Court are, therefore, not applicable.
While accepting that sub s.(3) of s.7 of the Act was to give effect to cl.(a) of s.15 of the Central Act, and therefore cannot control the interpretation of cl.(ii) of s.8, the High Court commits the mistake of interpreting the expression 'registered dealer ' appearing therein, in the context of s.4 of the Act.
The provisions of s.4, sub s.(3) of s.7 and cl.(ii) of s.8 of the Act operate in three different fields.
882 While s.4 of the Act provides that a registered dealer under the Central Act who may not be liable to pay tax under s.3 of the Act may nevertheless in certain contingencies be liable to pay tax, sub section
(3) of s.7 provides for the levy of single point tax on sales in the course of inter state trade and commerce of declared goods, to bring the Act in conformity with cl.(a) of s.15 of the Central Act.
The object and purpose of enacting the provisions of s.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 s.8 allows for deduction of resales from the turnover of such registered dealer when the goods are purchased from a registered dealer, i.e., a dealer registered under s.22 of the Act.
In effect, s.8 deals with transactions of sale or purchase taking place within the State.
There is a fallacy in the reasoning of the High Court.
It seems that the High Court was obsessed with two factors, namely (1) the concept of a single point tax under sub s.(3) of s.7 of the Act, and (2) the fact that a registered dealer under the Central Act who may not be liable to pay tax under s.3 of the Act may nevertheless in certain contingencies be liable to pay tax.
It failed to appreciate that cl.(ii) of s.8 which allows for deduction of sales by one registered dealer to another, deals purely with inside sales.
The expression 'registered dealer ' in cl.(ii) of s.8 is sought to be given an enlarged meaning by stretching, in effect, the legal fiction contained in sub s.(2) of s.4.
After observing that the legal fiction in sub s.(2) of s.4 is created for a limited purpose, it goes on to observe: "It would, therefore, have been inappropriate or at any rate wholly inartistic for the legislature to provide in sub section (2) of section 4 that every dealer who is liable to pay tax under sub section (1) shall be deemed to be a registered dealer for the purpose of clause (ii) of section 8 since the latter section provides for the levy of sales tax on sales of goods of an altogether different dealer after making certain deduction from the turnover of sales of goods of such dealer.
The legislature could have made a specific provision, if any, in this behalf only in clause (ii) of section 8 and not in sub section (2) of section 4." The High Court proceeds on the hypothesis that the transactions in question must have been brought to tax in the hands of the Baroda dealer and, therefore, it became necessary to avoid multiple levy of sales tax.
On that assumption, it felt that it was necessary to give to the assessee the benefit of s.8(ii) of the Act although the Baroda dealer was not a registered dealer within the meaning of 883 section 2(25) i.e., registered as a dealer under section 22 of the Act.
We regret to say that in reaching that conclusion, the High Court has proceeded on mere conjectures and surmises.
For aught we know, the Baroda dealer at the relevant time, might not be engaged in the business of selling goods in the State of Gujarat and was, therefore, not a dealer liable to pay tax at all.
Perhaps he was primarily engaged in effecting sales in the course of inter State trade and commerce, or it may be that the inside sales effected by him did not exceed the taxable limits.
Both the parties proceeded upon the basis that the purchases effected by the assessee were not subjected to tax.
It was, therefore, not right for the High Court to hold that the disallowance of deduction claimed by the assessee under cl.(ii) of s.8 of the Act would result in double taxation of the same goods.
It is evident that the High Court has completely misdirected itself.
The transactions of sales effected by the Baroda dealer to the assessee who was a dealer at Ahmedabad, were clearly inside sales.
While it is true that the Baroda dealer being a dealer registered under s.7 of the was, in certain contingencies, liable to pay tax under s.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 cl.(ii) of s.8 should take within its ambit a dealer registered under the , upon whom liability to pay sales tax is imposed by s.4 of the Bombay Act, it would have said so in clear words.
It would have made necessary provision in that behalf in sub s.(2) of s.4 which provides that every dealer liable to pay tax under sub s.(1) shall be deemed to be a registered dealer for purposes of certain sections of the Bombay Act viz., sections 32, 33, 34, 35, 36, 37, 38, 46, 47 and 48.
It is thus apparent that the legal fiction in sub s.(2) of s.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 s.(2) of s.4 of the Act cannot be stretched any further.
For these reasons, the judgment of the High Court answering the reference in favour of the assessee is set aside.
The question referred by the Tribunal is answered in the negative and in favour of the Revenue.
There shall be no order as to costs.
S.R. Appeal allowed.
| 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]
| 4301.txt |
Appeals Nos. 31 and 32 of 1968.
Appeals by special leave from the judgment and order dated January 25, 1967 of the Mysore High Court in Writ Petitions Nos. 774 and 2171 of 1965.
R. H. Dhebar, Shyamala Pappu and section P. Nayar, for the appellants (in both the appeals).
section section Javali and M. Veerappa for respondent No. (in both the appeals).
364 The Judgment of the Court was delivered by Bachawat, J.
On the reorganisation of States on November 1, 1956, the services of Syed Mahmood and Bhao Rao were allotted to the State of Mysore and they were employed there as junior statistical assistants.
On January 16, 1958 the Head of the Department of Statistics under the directions of the Government of State of Mysore prepared a tentative seniority list of nongazetted staff of that department treating junior statistical assistants and senior statistical inspectors of the former State of Hyderabad, junior statistical assistants and senior compilers of the former State of Mysore, statistical assistants and statistical inspectors from Bombay and the head compiler of Coorg as holding the equivalent posts of junior statistical assistants in the State of Mysore.
In 1959, before revising this tentative seniority list the State Government directed that all the statistical assistants and statistical inspectors of Bombay State and the head compiler of Coorg, should be treated and promoted as senior statistical assis tants.
As a result of this direction officers ranking below Syed Mahmood and Bhao Rao in the seniority list published on January 16, 1958 were promoted to the higher posts.
In makintheir promotions, the State Government did not consider the fitness of Syed Mahmood and Bhao Rao for promotion at all.
At a much later date, they were promoted as senior statistical assistants.
On May 3, 1963, the State Government published a revised seniority list placing inspectors from Bombay and head compilers from Coorg in the catecory of senior statistical assistants.
Syed Mahmood and Bhao Rao filed separate writ petitions in the High Court of Mysore asking for appropriate writs quashing the seniority list published on May 3, 1963, and directing the State Government to consider their case for promotion as senior statistical assistants with retrospective effect.
As the .objections to the seniority list published on May 3, 1963 were still under consideration by the State Government the High Court refused to quash this seniority list but it directed the State Government to promote Syed Mahmood and Bhao Rao as from the respective dates on which respondents junior to them were promoted as senior statistical assistants and to treat such promotions as effective up to May 3, 1963.
The State of Mysore has filed the present appeals from the orders directing the promotion of Syed Mahmood and Bhao Rao after obtaining special leave.
Promotion to the posts of senior statistical assistants is made from the cadre of junior statistical assistants and progress assistants.
Rule 4(3)(b) of the Mysore State Civil Services General Recruitment Rules, 1957 requires such promotions to be made by selection on the basis of seniority cum merit, that is seniority subject to the fitness of the candidate to discharge the duties of the post from among persons eligible for promotion.
In 1959 365 the seniority of junior statistical assistants was governed by the seniority list published on January 16, 1958.
Syed Mahmood and Bhao Rao were junior statistical assistants.
While making selections for promotion to the posts of senior statistical assistants from the cadre of junior statistical assistants in 1959, the State Government was under a duty to consider whether having regard to their seniority and fitness they should be promoted.
But without considering their case at all, the State Government promoted junior statistical assistants ranking below them in point of senio rity.
The promotions were irregularly made and they were, therefore , entitled to ask the State Government to reconsider their case.
In the circumstances, the High Court could issue a writ to the State Government compelling it to perform its duty and to consider whether having regard to their seniority and fitness they should have been promoted on the relevant dates when officers junior to them were promoted.
Instead of issuing such a writ, the High Court wrongly issued writs directing the State Government to promote them with retrospective effect.
The High Court ought not to have issued such writs without giving the State Government an opportunity in the first instance to consider their fitness for promotion in 1959.
Mr. Javali submitted that Syed Mahmood and Bhao Rao by virtue of their seniority were entitled to promotion at the time when persons junior to them were promoted.
The argument overlooks the fact that promotion to the post of senior statistical assistant was based on seniority cum merit.
In spite of their seniority officers junior to them could be promoted if they were unfit to discharge the duties of the post.
Promotion could not be claimed as a matter of right by virtue of seniority alone.
Mr. Javali argued that even in the case of promotion based ,on seniority cum merit, an officer is entitled to promotion by virtue of seniority alone, and he relied on the decision in State of Mysore vs H. M. Bellary(1).
In that cast, an officer of the Bombay Government was sent on deputation from his parent department to another department.
After long and satisfactory service and a number of promotions in the new department, he was reverted to his parent department and was posted in a lower grade though in the meantime an officer next below him in the parent department had been promoted to a higher grade.
The promotion to the higher grade was based on seniority cum merit.
The Court held that under r. 50(b) of the Bombay Civil Services Rules and the circular of the Government of Bombay dated October 31, 1950, an officer on deputation in another department on reversion to his parent department was entitled to be restored to the position he would have occupied in his parent department had he not been deputed.
Rule 50(b) treated the service of an (1) ; 366 officer on deputation in the new department as equivalent to service in the parent department.
As he rendered satisfactory service and was considered fit for obtaining increments and promotions in the new department, he should be deemed to be fit for promotion in the parent department and was entitled to promotion in that department when an officer next below him there was getting promotion based on seniority cum merit.
In official language, this is the "next below rule" under which an officer on deputation is given a paper promotion and shown as holding a higher post in the parent department if the officer next below him there is being promoted.
In our opinion, this case is entirely distinguishable.
It decided that under the relevant service rules the fitness for promotion of an officer on deputation in the new department was equivalent to fitness for promotion in the parent department and the officer was entitled to promotion in the parent department when the officer next below him there was obtaining promotion based on seniority cum merit.
But it is not an authority for the proposition that the officer on deputation is entitled to promotion in either the new or the parent department as a matter of right by virtue of his seniority alone, or that he should be deemed to be promoted whenever the officer next below him is being promoted.
Where the promotion is based on seniority cum merit the officer cannot claim promotion as a matter of right by virtue of his seniority alone.
If he is found unfit to discharge the duties of the higher post, he may be passed over and an officer junior to him may be promoted.
We are of the opinion that the State Government should be directed at this stage to consider the fitness of Syed Mahmood and Bhao Rao for promotion in 1959.
If on such examination the State Government arbitrarily refuses to promote them, different considerations would arise.
The State Government would upon such consideration be under a duty to promote them as from 1959 if they were then fit to discharge the duties of the higher post and if it fails to perform its duty, the Court may direct it to promote them as from 1959.
In the result, we allow the appeals and set aside the orders passed by the High Court.
We direct the State Government to consider whether Syed Mahmood and Bhao Rao should have been promoted to the posts of senior statistical assistants on the relevant dates when officers junior to them were promoted, and if so, what consequential monetary benefits should be allowed to them.
While granting special leave, this Court directed that the appellants shall pay the costs of the respondents in any event.
Accordingly, the appellants are directed to pay the costs of these appeals to the respondents.
One hearing fee.
Y.P. Appeals allowed.
| Rule 4(3)(b) of the Mysore State Civil services General Recruitment Rules, 1957 requires promotion to be made by selection on the basis of seniority cum merit, that is seniority subject to the fitness of the candidate to discharge the duties of the Post from among persons eligible for promotion.
While making selections for promotions to the posts of senior statistical assistants from the cadre of junior statistical assistants, the State Government did not consider the case of the respondents who were junior statistical assistants, and published a list promoting persons ranking below them in point of seniority.
The respondents filed writ petitions, in which the High Court refused to quash the seniority list but directed the appellant State to Promote the respondents as from the dates on which their juniors were promoted and treat their promotion as effective from that date.
Allowing the appeal, this Court, HELD : While making selections for promotion to the posts of senior statistical assistants from the cadre of junior statistical assistants in 1959, the State Government was under a duty to consider whether having regard to their seniority and fitness they should be promoted.
The promotions were irregularly made and they were, therefore, entitled to ask the State Government to reconsider their case.
In the circumstances, the High Court could issue a writ to the State Government compelling it to perform its duty and to consider whether having regard to their seniority and fitness they should have been promoted on the relevant dates when officers junior to them were promoted.
Instead of issuing such a writ, the High Court wrongly issued writs directing the State Government to promote them with retrospective effect.
The High Court ought not to have issued such writs without giving the State Government an opportunity in the first instance to consider their fitness for promotion in 1959.
[365 B D] Promotion to the post of senior statistical assistant was based on seniority cum merit.
In spite of their seniority, officers junior to them could be promoted if they were unfit to discharge the duties of the post.
Promotion could not be claimed as a matter of right by virtue of seniority alone.
[366 C D] State of Mysore vs H. M. Ballary, [1964] 7 S.C .R. 471, distinguished.
| 2363.txt |
ivil Appeal Nos.
10574 10583 of 1983.
From the Judgment and Order dated 7.7.1980 of the Alla habad High Court in I.T.R. No. 948 of 1975.
V.Gourishanker, B.V. Desai, S.K. Aggarwal and Ms. Vinita Gharpade for the Appellants.
S.C. Manchanda, B.B.Ahuja, Manoj Arora and Ms. A. Subha shini (N.P.) for the Respondent.
The Judgment of the Court was delivered by RANGANATH MISRA, CJ.
Radhasoami Satsang, an assessee under the Income Tax Act in these appeals by special leave assails the decision of the Allahabad High Court on refer ence under Section 256 of the Income tax Act.
The following question had been referred by the Tribunal to the High Court: "Whether on the facts and in the circumstances of the case Tribunal is justified in holding that the income derived by the Radha Swami Satsang, a religious institution, is entitled to exemption under sections 11 and 12 of the income Tax Act, 1961 '." ' The ambit and purport of the question would not be properly appreciated unless the background is indicated.
The assessee is the Radhasoami Satsang, Agra.
This sect was founded by Swami Shiv Dayal Singh in 1861.
The tenets of this faith, inter alia, accept the position that God is represented on earth by a human being who is called the Sant Satguru.
The first of such gurus .was the thunder himself and he was popularly known as 'Soamiji Madharaj ' The second Satguru (1889 1898) was Rai 315 Bahadur Salig Ram and he was known as 'Bazoor Maharaj '.
The third sant Satguru was Pandit Brahma Shanker Misra (1898 1907) and was widely known as 'Maharaj Sahib '.
These three Satgurus have been regarded as the real exponents of the creed.
Out of donations and offerings made to the Satgurus, large funds were built up and properties were acquired over the years.
During the time of the third Satguru, in 1902, the members of the creed at a largely attended convention established a Central Council and the right, title and interest of all the properties movable and immovable which had by then been collected were vested in the Council under the directions of Maharaj Sahib.
In June, 1904 the constitution and bye laws of the Central Council of Radhasoami Satsang were drawn up in a formal way and a body by the name 'Radhasoami Satsang Trust ' was set up.
A trust deed was executed by some members of the Central Council in October, 1904.
A set of bye laws were also framed.
On the death of third Satguru which took place in Octo ber 1907, the oread split into two and came to be known as Swami Bagh Sect and the Dayal Bagh Satsangis respectively.
Disputes arose as to the management of the shrines and the administration of the properties which had vested in the trustees under the Trust Deed of 1904.
The Dayal Bagh Sat sangis claimed that all the properties were held in a trust for a public purpose of a charitable and religious nature and prayed for a decree by going to the Civil Court The litigation had started in the form of an application under section 3 of the Charitable and Religious Trusts Act, 1920 but was converted into a regular suit and eventually ended with the decision of the Privy Council in the case of Patel Chhotahhai and Ors.
vs Jnan Chandra Basic and Ors., AIR 1935 Privy Council 97.
The Judicial committee reversed the deci sion of the High Court and held that even if the trust came into existence it was difficult to hold that it was of a public, charitable or religious character as contemplated by the Charitable and Religious Trust Act, 1920.
The question of assessing the income for the first time arose in the assessment year 1937 38.
The Income Tax Officer relied upon the observations of the Privy Council and com pleted assessments for two years being 1937 38 and 1938 39 treating the then Satguru, Sri Madho Prasad Sinha as the assessee.
He was a retired Assistant Accounts Officer and was earning a pension.
His pension as also the income from the institution were tagged together for assessment.
The Appellate Assistant Commissioner confirmed the assessments.
Assessee then filed applications under section 66(2) of the Income tax Act of 1922 for reference.
The Commissioner took the view that the offerings though made to the Satgurus were not used for their personal benefit and held that even though no formal 316 trust had been created by the donors in respect of offer ings, the guru impressed the offerings with trust character at the time of receipt, and treated the offerings as held in trust.
He was, therefore, of the view that such offerings were exempt under section 4(3)(1) of the Income tax Act, 1922 and directed that the offerings be deleted from the assessment for the two years.
He accordingly held that no reference under Section 66(2) was necessary to be made.
an application under section 35 of the Act was later filed for ratification by pointing out that offerings received by the Satgurus consisted of interest income, property income, and income derived from sale of books and photographs etc.
and the same should also be excluded.
On 8.12.1945 the Commis sioner directed deletion thereof.
For the year 1939 40, the income tax Officer did not grant exemption under section 4(3)(1) of the Act but the appeal challenging the assessment was accepted by the Appel late Assistant Commissioner in September, 1947 upholding the assessee 's claim of exemption.
Nothing substantial happened until the assessment year 1963 64.
During this period refund applications of the Satsang were accepted by the department on the basis that the income was exempt and as tax had been deducted at source the same was refundable.
For the first time claim for refund in the years 1964 65, 1965 66 and 1966 67 was not allowed and the assessee was treated as an association of persons and taxed; subsequentiy for the assessment years 1966 67, 1967 68 and 1968 69 and 196970 assessments were also com pleted.
The Income tax Officer did not accept the assessee 's claim of exemption and proceeded to hold that the donations and contributions had been received voluntarily and had been limited to religious use but there was no obligation to do so.
The assessee appealed but the appellate authority upheld the assessments for the years referred to above.
The asses see then appealed to the Tribunal.
The Tribunal examined the matter from various aspects and held: "So far as the Radhasoami sect is concerned its properties were held only for the further ance of the object of the Satsang and this object was to propagate the religion known by the name of Radhasaomi.
This was a purely religious purpose as held by the Privy Council and therefore the objects of the assessee are clearly religious objects.
" While the Tribunal did not accept that the words 'held under trust ' merely meant a consideration of the factual position and that if the income had been applied for reli gious purpose it was unnecessary to find out whether in law a trust had been created or not.
But the Tribunal was of 317 the opinion that the words legal obligation were much wider and the activities of the Satsang could be brought within the purview of that expression.
It finally held that the assessee was entitled to the exemption claimed under section 11.
The High Court did not accept the conclusions of the Tribunal by heavily relying upon the revocability of the trust as clearly specified in the document and accepting the stand of the Revenue that exemption under section 11 was subject to the provisions of ss.60 to 63 of the Act and on the finding that the trust was revocable it upheld liability, Section 11(1) of the Act, as far as relevant, provides: "Subject to the provisions of sections 60 63, the following income shall not be included in the total income of the previous year of the person in receipt of the income: (a) income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India; and Co) where any such income is accumulated or set apart for application to such purposes in India, to the extent to which the income so accumulated or set apart is not in excess of 25% of the income from such property;. " The conditions which have to be satisfied to entitle one for exemption, therefore, are: (a) the property from which the income is derived should be held under trust or other legal obligation.
(b) the property should be so held for charitable or religious purposes which enure for the benefit of the public.
It is well settled that no formal document is necessary to create a trust.
The reference itself accepts the position that the assessee is a religious institution.
There has been some amount of debate in the forums below as to whether Radha soami Satsang is a religion.
This Court in Acharya Jagdish waranand ,Avadhuta & Ors.
vs Commissioner of Police, Calcut ta & Anr.
; , while examining the claim of Anand Marg is to be treated as a separate religion indicat ed: "The words 'religious denomination ' in Article 25 of the Constitution must take their colour from the word 'religions ' and 318 this be so the expression religious denomina tion must also satisfy three conditions: (i) it must be a collection of individu als who have a system of beliefs of doctrines which they regard as conductive to their spiritual well being, that is, a common faith, (ii) common organisation; and (iii) designation by a distinctive name." In that case Anand Marg was held to be a 'religious denomination ' within the Hindu religion.
It is not necessary for us to decide whether Radhasoami Satsang is a denomina tion of the Hindu religion or not as it is sufficient for our purposes that the institution has been held to be reli gious and that aspect is no more in dispute in view of the frame of the question.
The question of assessment to income tax arose only following the decision of the Privy Council in the dispute between the two factions.
The Judicial Committee found that the properties which were the subjectmatter of the suit were acquired with the moneys presented to the Sant Satguru in the form of bhents or other contributions by the followers of the Radhasoami faith.
The Judicial Committee found that it was almost inconceivable that the followers of the faith when making their gifts to the Sant Satguru intended to create a trust within the meaning of the Act 14 of 1920 of which they, the donors and the worshippets, should be the beneficiaries.
The Privy Council further also found that it could not be said that the donors of the gifts were the authors of the alleged public trust.
The question was exam ined keeping the provisions of the 1920 Act in view.
The requirements of section 11 of the Income Tax Act are considerably different from what the Judicial Committee of the Privy Council was required to consider.
We have already pointed out that after 1907 the denomi nation got divided.
The claim of Dayalbagh group for exemp tion under the IncomeTax Act came for consideration before the Allahabad High Court in the case of The Secretary of State for India in Council vs Radha Swami ,Sat Sang, There it was found that the offerings made by the Dayalbagh Satsangis to Sahebji Maharaj and the property which had grown out of them and which admittedly stood in the name of the Sabha and the property which at all material times had stood in the name of the Sabha vested in the Sabha for the benefit of the Satsangis and Sahebji Maharaj had no beneficial or personal interest in that.
What has been found for the Dayalbagh Satsangis on this score is fully applica ble so far as the assessee is concerned, There is no dispute that the properties of the assessee are 319 also recorded in the name of the Sabha (Central Council) and there is no personal interest claimed by the Sant Satguru in such property.
Ever the years the Satguru has never claimed any title over, or beneficial interest in, the properties and they have always been utilized for the purpose of the religious community.
The test applied by the Privy council in the case of A 11 India Spinners ' Association vs Commis sioner of Income Tax.
Bombay is indeed applica ble to the facts of the present case and the result would then be in favour of the assessee.
We would like to point out that even if the trust was revocable, the property was not to go back to the Satguru on revocation.
The constitu tion and the bye laws on record indicate in clause 1(b): "1.
The constitutional powers of the Central Council Radhasoami Satsang . . . . are as below: (b) to collect, preserve and administer the properties movable and immovable that have been or may hereafter be dedicated to Radha soami Dayal or that may be acquired for or presented to the Radhasoami Satsang for the furtherance of the objects of the Satsang.
" This envisages that where the property was given to the Sant Satguru, it was intended for the common purpose of further ing the objects of the Sant Satguru and the Central Council had the authority to manage the property.
Clause 9 of the document stipulated that the properties would vest in the trust and clause 25 provided that the trust shall be revoca ble at the discretion of the Council and the trustees shall hold office at its pleasure.
Upon revocation the property was not to go back to the Satguru and at the most.
in place of the trust, the Central Council would exercise authority.
It is on record that there has been no Satguru long before the period of assessment under consideration.
As a fact, therefore, the Tribunal was justified in holding that the property was subject to a legal liability of being used for the religious or charitable purpose of the Satsang.
This aspect had not been properly highlighted before the High Court.
One of the contentions which the learned senior counsel for the assessee appellant raised at the hearing was that in the absence of any change in the circumstances, the Revenue should have felt bound by the previous decisions and no attempt should have been made to reopen the question.
He relied upon some authorities in support of his stand.
A full Bench of the Madras High Court considered this question in T.M.M Sankaralinga Nadar & Bros. & Ors, vs Commissioner of Income Tax, Madras, After dealing with the con cession the Full Bench expressed the following opinion: 320 "The principle to be deducted from these two cases is that where the question relating to assessment does not vary with the income every year but depends on the nature of the property or any other question on which the rights of the parties to be taxed are based, e.g., whether a certain property is trust property or not, it has nothing to do with the fluctua tions in the income; such questions if decided by a Court on a reference made to it would be res judicata in that the same question cannot be subsequentiy agitated.
" One of the decisions referred to by the Full Bench was the case of Hoystead &Ors.
vs Commissioner of Taxation Speaking for the Judicial Committee Lord Shaw stat ed: "Parties are not permitted to begin fresh litigations because of new views they may entertain of the law of the case, or new versions which they present as to what should be proper apprehension by the Court of the legal result either of the construction of the document or the weight of certain circum stances.
If this were permitted litigation would have no end, except when legal ingenuity is exhausted.
It is a principal of law that this cannot be permitted, and there is abun dant authority reiterating that principle.
Thirdly, the same principle namely, that of setting to rest rights of litigants, applies to the case where a point, fundamental to the decision, taken or assumed by the plaintiff and traversable by the defendant, has not been traversed.
In that case also a defendant is bound by the judgment, although it may be true enough that subsequent light or ingenuity might suggest some traverse which had not been taken.
" These observation were made in a case where taxation was in issue.
This Court in Parashuram Pottery Works Co. Ltd. vs Income Tax Officer, Circle 1, Ward A, Rajkot, at p. 10 stated: "At the same time, we have to bear in mind that the policy of law is that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi judicial controversite as it must in other spheres of human activity.
" Assessments are certainly quasi judicial and these observations equally apply.
321 We are aware of the fact that strictly speaking resjudi cata does not apply to income tax proceedings.
Again, each assessment 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 allowed 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.
On these reasonings in the absence of any material change justifying the Revenue to take a different view of the matter and if there was not change it was in support of the assessee we do not think the question should have been reopened and contrary to what had been decided by the Com missioner of Income Tax in the earlier proceedings, a dif ferent and contradictory stand should have been taken.
We are, therefore, of the view that these appeals should be allowed and the question should be answered in the affirma tive, namely, that the Tribunal was justified in holding that the income derived by the Radhasoami Satsang was enti tled to exemption under sections 11 and 12 of the Income Tax Act of 1961.
Counsel for the Revenue had told us that the facts of this case being very special nothinng should be said in a manner which would have general application.
We are inclined to accept this submission and would like to state in clear terms that the decision is confined to the facts of the case and may not be treated as an authority on aspects which have been decided for general application.
We direct the parties to bear their respective costs.
V.P.R. Appeals allowed.
| 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.
| 6943.txt |
ivil Appeal Nos.
143 147 of 1970.
From the Judgment and Order dated 17 2 1967 of the Calcutta High Court in Appeal from Original Order Nos.
123 127 of 1966.
D. N. Mukherjee and G. section Chatterjee for the Appellants.
section Balakrishnan and M. K. D. Namboodry for the Respondent.
B. Sen and D. N. Mukherjee for the Intervener.
The Judgment of the Court was delivered by KOSHAL, J.
By this judgment we shall dispose of Civil Appeals Nos.
143 to 147 of 1970, all five of which have been filed by certificates granted under article 133(1)(a) of the Constitution by the High Court of Calcutta and are directed against its common judgment dated the 17th February, 1967 accepting five Letters Patent Appeals and, in reversal of the judgment of a learned Single Judge, issuing a writ of mandamus directing the Land Acquisition Collector, Burdwan and the State of West Bengal to cancel or withdraw a notification dated November 3, 1961 and another containing a declaration dated June 20, 1963 issued under sections 4 and 6 of the Land Acquisition Act (hereinafter referred to as the Act) respectively.
575 2.
The facts leading to the litigation covered by the appeals before us may be briefly stated.
On February 12, 1960 a notification (later in this judgment called the first notification) was issued by the Government of West Bengal under section 4 of the Act stating that a piece of land delineated in the plan available in the Office of the Special Land Acquisition Officer, Burdwan, as well as in that of the Director of M/s Sen Raleigh Industries India Ltd. (hereinafter referred to as the Company) at Kanyapur in District Burdwan was likely to be needed for a public purpose (not being a purpose of the Union) namely, for expansion of the factory of the Company and "for construction of quarters for its workers and staff and for providing other amenities directly connected therewith, such as school, play grounds, hospitals, markets, police out posts, etc., in the villages of Sarakdih, Nadiha, Garui, Hatgaruy and Panchgachhia, jurisdiction lists Nos. 1, 2, 3, 42/3 and 34 respectively, Police Stations Asansol and Barabani, Pargana Shergarh, District Burdwan. " at the expense of the Company.
An area totalling 17.20 acres and belonging to the respondents was included in the land covered by the notification.
The respondents preferred objections to the proposed acquisition under section 5A of the Act to the effect that the land was not acquired for any public purpose, that the real purpose was to benefit the Company and that the first notification was a fraudulent exercise of the power conferred by the Act on the State Government.
A fresh notification (second notification for short) under section 4 of the Act was issued on November 3, 1961 in respect of land measuring 146.90 acres which was the same land as was covered by the first notification, except for a small area.
The second notification stated that the land was likely "to be needed for a public purpose, not being a purpose of the Union, namely, for industrial development at Asansol in the villages of Sarakdih, Nadiha, Garui, Hatgaruy and Panchgachhia, jurisdiction list Nos. 1, 2, 3, 78 and 34 respectively, Police Stations Asansol and Barabani, Pargana Shergarh, District Burdwan. at public expense." The area of 17.20 acres mentioned above was included in the land covered by the second notification also and the respondents filed objections under section 5A of the Act over again contending that although the ostensible purpose of the acquisition was a public purpose, the land was really sought to be acquired for a private purpose, i.e., for the benefit of the Company.
The first notification was cancelled by an order dated the 26th April 1962 and, on the 20th June, 1963, the impugned notification 576 containing the declaration under section 6 of the Act (the third notification for brevity) was made.
About three months later the respondents were served with notices under section 9 of the Act informing them that the State Government was taking steps to secure possession of the acquired lands and that they could submit their claims for compensation.
Further representations were made by the respondents in an effort to have the acquisition proceedings dropped but without success and it was then that each one of them filed a petition under Article 226 of the Constitution asking for the issuance of a writ which was ultimately granted to them by the impugned judgment.
The grounds of challenge taken in all the petitions were identical and were to the following effect: (a) Full particulars of the public purpose for which the land was sought to be acquired were not stated in the second and third notifications.
(b) Both those notifications were issued in colourable or malafide exercise of the power conferred by the Act.
Before the learned Single Judge ground (b) was not pressed at the hearing.
In relation to ground (a) he held that the industrial development of a particular area was in itself a public purpose and no further details of such purpose need be given in the notifications issued under the Act.
Reliance in this connection was placed on Barkya Thakur vs State of Bombay(1).
It was further observed by the learned Single Judge that the proceedings under section 5A of the Act in relation to the impugned notifications had not been completed, that it would be open to the respondents might possibly have another cause of action in case the supply of information was refused and that the petitions under Article 226 of the Constitution were, therefore, pre mature.
All the five petitions were in the result dismissed by the learned Single Judge.
In the Letters Patent Appeals decided by the impugned order the argument advanced on behalf of the respondents before us that the purpose of the acquisition as stated in the impugned notifications suffered from vagueness and that they had in consequence been deprived of the right to make effective objections under section 5A of the Act was held to be untenable.
The Division Bench noticed that the learned Single Judge had erred in assuming that the objections filed by the respondents under the section last mentioned had not been decided by the time of his judgment.
The ground that the real purpose of the proposed acquisition was not a public purpose at all but 577 was to benefit the Company and that the impugned notifications were, therefore, issued in colourable exercise of the powers conferred on the State Government by the Act was strongly put forward before the Division Bench and was considered by it at length.
Relying upon Somawanti vs State of Punjab(1), it held that although a declaration made under section 6 of the Act was final and conclusive not only in regard to the need for acquisition but also in regard to the purpose being a public purpose if it was so stated therein, it was open to a person whose land was acquired to challenge it on the ground of colourable exercise of power.
The Division Bench referred to the pleadings of the parties and took note of the fact that although the respondents had clearly taken up the position that the real purpose of the acquisition was not a public purpose but was to benefit the Company, the Land Acquisition Collector had not in his affidavit taken any specific stand on the point but had only made an evasive denial of the plea put forward by the respondents and that while it was open to the State Government to produce documentary evidence showing that the purpose for which the land was acquired was a public purpose and not merely to benefit the Company it had failed to adopt that course.
Refusing to hold, however, that there had been a colourable exercise of power on the part of the State Government the Division Bench held that the presumption that if such evidence had been produced it would be unfavourable to the State Government was available to the respondents in the present case.
In this connection it further observed: "After all, when the proposed acquisition is impugned as acquisition in colourable exercise of power and there is a specific allegation of the real purpose of the acquisition, it is for the respondents to disclose, except for good reasons, the relevant material or information, to enable the Court to pronounce on the matter and not to maintain a meaningful silence or indulge in equivocations and double standards, rely on the doctrine of onus of proof and defect the course of justice.
For the Court to permit this to be done with success, will be to stultify itself, abdicate its functions and abjure its duties.
" and on this finding accepted all the five Letters Patent Appeals.
After hearing learned counsel for the parties we find that the learned Judges of the Division Bench seriously erred in accepting the Letters Patent Appeals in view of the finding arrived at by them that malafides or a colourable exercise of power on the part of the State Government could not be held established.
Not only had their attention been drawn to the dictum in Somawanti 's case (supra) but they 578 had in the impugned judgment extracted certain observations made therein by Mudholkar, J., to the effect that a declaration made under section 6 of the Act and published in the Official Gazette shall be conclusive evidence that the land is needed for a public purpose and that to this rule there was only one exception, namely, that the declaration could be challenged on the ground of malafide or colourable exercise of power.
It was thus clear that the third notification had to be taken at its face value in so far as the purpose was concerned unless the exception was established.
It further goes without saying that the onus of proving that the declaration contained in the third notification fell within the exception would be on the party claiming the benefit of the exception, namely, the respondents.
While criticizing the attitude of the State Government for not having produced the documentary evidence from which the purpose of the acquisition could be ascertained, section K. Mukherjee, J., who delivered the judgment on behalf of the Division Bench, repeatedly stated that he did not intend to say that the land of the respondents was not sought to be acquired for a purpose which was a public purpose as declared in the third notification or that that notification was necessarily vitiated by any malafides or colourable exercise of power.
He further observed that according to the rules of evidence it was for the respondents to satisfy the Court that there had been a colourable exercise of power because the onus of proof in that behalf was on them.
In this situation we do not see how the respondents could be given any relief whatsoever.
The acquisition could be struck down only if the declaration contained in the third notification was proved to be vitiated by malafides or colourable exercise of the power.
On the other hand.
if it was not established that such exercise of power was so vitiated, the declaration had to be taken at its word.
On the findings of fact arrived at by the Division Bench, therefore, the Letters Patent Appeals merited nothing but dismissal.
Learned counsel for the respondents urged that they were really entitled to a finding of malafides on the part of the State Government but we find ourselves wholly unable to agree with him.
The burden, as he concedes, was squarely on the respondents to prove colourable exercise of power.
In the face of the conclusive presumption which the Court has to raise under sub section (3) of section 6 of the Act about the nature of the purpose stated in the declaration being true.
the onus on the respondents to displace the presumption was very heavy indeed and we do not think that the same could be said to have been discharged by a mere allegation in that behalf which has been denied by the State.
If we accept the argument that it is for the State to satisfy the Court about the nature of the purpose for which the land is sought to be acquired, the whole object of the provi 579 sion under which the conclusive presumption has to be raised in regard to the nature of the purpose would be defeated.
We cannot, therefore, hold merely on the strength of the absence of production of documentary evidence by the State that the onus (which rested heavily on the respondents) to prove malafides or colourable exercise of power on the part of the State Government, has been discharged.
Even so the respondents have produced no material to show that the assertion about the public purpose as stated in the third notification was incorrect for the reason that the acquired land was not suitable for any industry or that no industrial activity except that by the Company had been undertaken in the neighbourhood of the acquired area.
On the other hand, there is a clear averment to the contrary by the State in paragraph 1 of each of the applications dated August 26, 1967, for the grant of certificates under Article 133 of the Constitution.
That averment reads: "That the Asansol Sub Division within the District of Burdwan is a highly developed industrial area having a number of big industrial concerns, viz.
The Indian Iron & Steel Co., Indian Aluminium Corporation and several collieries, etc., etc.
It is within the industrial belt of Durgapur Asansol area where besides the above mentioned industries, there are Hindustan Steel, Durgapur Projects Graphite Company and a number of other very big industries." This averment which was supported by affidavit was never controverted by the respondents and cuts at the root of their plea of malafides or colourable exercise of power.
Mr. Balakrishnan, learned counsel for the respondents raised a preliminary point to the effect that the second notification was void inasmuch as it had been issued while the first notification was still in force.
We do not see any reason for entertaining the point when it was not raised on behalf of the respondents at any stage before the High Court.
In the result all the five appeals succeed and are accepted.
The impugned judgment is set aside and the petitions made by the respondents to the High Court are dismissed.
There will, however, be no order as to costs in any of the appeals.
P.B.R. Appeals allowed.
| The State Government issued a notification under Section 4 of the Land Acquisition Act stating that the land referred to therein was needed for a public purpose, namely, for expansion of the factory of a Company at the expense of the company.
On the respondents ' objections that the purported purpose was not a public purpose in that the land was being acquired for the benefit of a company, the State Government issued another notification in respect of the same land as also some more land stating that the land was needed for industrial development at public expense.
Objections were again raised by the land owners that though ostensibly the purpose was a public purpose in truth it was a private purpose, namely, for the benefit of a company.
In cancellation of the first notification the Government issued another notification under section 6.
Dismissing the respondents ' writ petitions under Article 226 a single Judge of the High Court held that the industrial development of a particular area was in itself a public purpose and no further details need be given in the notifications.
On appeal, a Division Bench of the High Court held that although a declaration under section 6 was final and conclusive as to the need for acquisition and as to the purpose being a public purpose, the aggrieved party could challenge a declaration only on the ground of mala fides and colourable exercise of power and that in the instant case no such allegation had been made out.
The appeals were, however, allowed on the ground that the State Government failed to produce evidence that the land was being acquired for a public purpose and not for the benefit of a company.
Allowing the appeals.
^ HELD: The High Court erred in accepting the appeals in view of its finding that mala fides or colourable exercise of power on the part of the State Government had not been established.
It is well settled law that a declaration under section 6 of the Act shall be conclusive evidence that the land is needed for a public purpose, the only exception to this being that the declaration was issued mala fide or in colourable exercise of power.
The third notification 574 in this case had to be taken at its face value in so far as the purpose was concerned.
[577B; 578B] 2.
The burden of proving mala fides or colourable exercise of power is on the party claiming the benefit of the exception, namely the respondents.
This burden could not be held to have been discharged by a mere allegation in that behalf.
[578H] 3.
If the argument that it is for the State to satisfy the Court about the nature of the purpose for which the land is sought to be acquired is accepted the whole object of the provision under which the conclusive presumption has to be raised in regard to the nature of the purpose would be defeated.
It cannot, therefore, be held merely on the strength of the absence of production of documentary evidence by the State that the onus (which rested heavily on the respondents) to prove mala fides or colourable exercise of power on the part of the State Government has been discharged.
[578 H, 579 A B] 4.
The respondents have produced no material to show that the assertion about the public purpose as stated in the third notification was in correct for the reason that the acquired land was not suitable for any industry or that no industrial activity, except that by a company, had been undertaken in the neighbourhood of the acquired area.
There is a clear averment to the contrary by the State which was not controverted by the respondents and that cuts at the root of their plea of mala fides or colourable exercise of power.
[579 B C; E]
| 4272.txt |
Appeal No. 437 of 1965.
479 Appeal from the judgment and order dated April 15, 1964 of the Madhya Pradesh High Court in Misc.
Petition No. 90 of 1964.
M. section Gupta, for the appellant.
G. section Pathak, Y. section Dharmadhikari and A. G. Ratnaparkhi, for respondent No. 1.
The Judgment of the Court was delivered by Hidayatullah, J.
This appeal arises from an election petition filed after the last General Election to the Madhya Pradesh Legislative Assembly, in respect of the election from the Kasdol Legislative Assembly constituency held on May 4, 1963.
The first respondent was declared elected and the appellant challenged his election alleging several acts of corrupt practices, publication of false statements, filing of false accounts etc.
The election petition was supported by an affidavit sworn before K. section Moghe, Officer for Administering Oaths on Affidavits, Jabalpur.
Moghe was the Clerk of Court in the District Court, Jabalpur.
The first respondent objected that the affidavit was not sworn before the proper authority as required by rule 94 A of the Conduct of Election Rules, 1961, and it was, therefore, prayed that the election petition should be dismissed or the allegations about corrupt practices should be struck out.
The Election Tribunal, by an order dated October 31, 1963 accepted the objection but allowed the filing of a proper affidavit and a fresh affidavit was taken on record.
No action was taken against that order.
It appears that the Election Tribunal had framed two issues for determination.
They were: "Issue No. 18 : Whether the affidavit filed by the petitioner in support of his petition is bad in law, as not properly sworn before a competent Officer duly authorised to attest and authenticate an affidavit and does not also comply with the provisions of Section 83 of the Representation of the People Act and the Rules made thereunder.
If so, whether the petition is liable to be dismissed on this ground." "Issue No. 20 : Whether the various alleged acts of corrupt practices mentioned in the petition are duly supported by an affidavit as required under Section 81(3) of the Representation of People Act ? If not, what is its effect on this petition?" 480 On February 14, 1964 the first respondent filed an application drawing attention to the latter part of issue No. 20 and asked inter alia for a finding whether the election petition was not liable to be dismissed when the affidavit was not proper The Tribunal by an order passed on February 24, 1964 rejected the last contention and held that as a fresh affidavit was filed the petition could proceed to trial.
On March 2, 1964 the first respondent filed a petition under Articles 226 and 227 of the Constitution in the High Court of Madhya Pradesh challenging both the orders and asked that they be quashed.
The High Court, by its order now under appeal by certificate, quashed the two orders and the Tribunal was directed to deal further with the petition in the light of the order of the High Court.
The High Court in an elaborate order has considered whether the provisions of rule 94 A were mandatory or directory but it did not address itself to the question whether the first affidavit was proper or not.
This was, perhaps, due to the fact that the appellant seems to have conceded before the Tribunal that the first affidavit was not proper.
This concession was sought to be withdrawn in this appeal by the appellant and on looking into the record we were satisfied that the concession was wrongly made and should be allowed to be withdrawn.
We accordingly heard arguments on the question whether the original affidavit did not satisfy the Conduct of Election Rules and the Representation of the People Act.
We are satisfied that the first affidavit was proper and the second affidavit was not necessary.
Before we give our decision on this point we shall first set down the relevant provisions.
Section 83 of the Representation of People Act provided that "83 (1) an election petition (a) Shall contain a concise statement of the material facts on which the petitioner relies; (b) Shall set forth full particulars of any corrupt practice that the petitioner alleges, including as full a statement as possible of the names of the parties alleged to have committed such corrupt practice and the date and place of the commission of such practice; and 481 (c) Shall be signed by the petitioner and verified in the manner laid down in the Code of Civil Procedure, 1908 (5 of 1908) for the verification of pleadings. "Provided that where the petitioner alleges any corrupt practice, the petition shall also be accompanied by an affidavit in the prescribed form in support of the allegation of such corrupt practice and the particulars thereof.
(2) Any schedule or annexure to the petition shall also be signed by the petitioner and verified in the same manner as the petition.
" Rule 94 A of the Conduct of Election Rules, 1961 next provides: "94 A. The affidavit referred to in the, proviso to Sub section (1) of Section 83 shall be sworn before a Magistrate of the First Class or a Notary or a Commissioner of Oaths and shall be in Form 25.
" Form 25 need not be reproduced but the endorsement of the officer before whom the affidavit is sworn may be reproduced "Form 25.
Solemnly affirmed/sworn by Shri/Shrimati . . at. thisday. of 196 Before me.
.Magistrate. .of.
First Class Notary/Commissioner of Oaths".
The relevant rules of the High Court and the notifications issued by the Government have been placed in our hands. 'Me High Court has framed Rules relating to the Civil Procedure Code and rule 20 dealing with affidavits reads : "20.
All Courts dealing with affidavits should make calls for affidavits at I I a.m. and 2 p.m. every day.
If ,the Clerk of Court or other ministerial officer is appointed a Commissioner for administering oath of affidavits, he will discharge that function at such time as may be fixed by the District Judge in this behalf." 482 Rule 34 says : "34.
The Officer administering the oath shall make the following endorsement on every affidavit sworn before him and shall date, sign and seal the same.
"Sworn before me on the day of . . 19 by son of . . who is personally known to me (or) who has been identified by whose signature is/signatures are hereto appended.
SEAL Signature Designation".
The affidavit which was sworn before Moghe bore the above endorsement and Moghe described himself as "Officer for Administering Oaths on Affidavits, Jabalpur, Madhya Pradesh".
On February 16, 1959 the Government of Madhya Pradesh had issued a notification under District Judges were empowered under section 139(c) of the Code of Civil Procedure to appoint Commissioners to administer oaths on affidavits made under the said Code and the District Judge, Jabalpur in exercise of the powers so conferred appointed, among others, the Clerk of Court attached to his office to be ex Officio Commissioner for the purpose of administration of oaths on affidavits made under the Code of Civil Procedure.
It may be pointed out that subsequently in May 1960 the first notification was amended and in place of the words in the first notification "empowers all the District Judges to appoint Commissioners to administer oaths on affidavit made the words "generally empowers the Court of District Judges to appoint officers to administer oaths to deponents in cases of affidavits" where substituted.
This change does not affect the present matter because the appointment of Moghe was tinder the first notification and not under the second.
The contention of the first respondent is that the affidavit did not comply with the requirements of rule 94 A because Moghe was not a Commissioner of Oaths but was an officer for Administration of Oaths for the purpose of section 139(c) of the Code.
We shall refer to that provision presently.
The rule does not state before which Commissioner the affi davit must be sworn.
It must, therefore, be read as including all Commissioners of Oaths duly appointed.
The election petition is verified as a plaint but the affidavit is needed additionally 483 when allegations of a particular type are made.
The rule really requires an affidavit so that action for perjury may be based on it if the allegation is found to be false.
We enquired whether, in the State of Madhya Pradesh, there was any other provision under which Commissioners of Oaths could be appointed but none was shown.
The Indian Oaths Act, no doubt, consolidates the law relating to judicial oaths and for other purposes.
Section 4 of that Act gives authority to "all courts and persons having by law or consent of parties authority to receive evidence", "to administer, by themselves or by an officer empowered by them in this behalf, oaths and affirmations in discharge of the duties or in exercise of the powers imposed or conferred upon them respectively by law.
" This is a general provision and it mentions generally persons having by law authority to receive evidence.
It is difficult to say that the Clerk of Court answers this description.
But there are other provisions of law under which oaths may be administered for purposes of affidavits.
Section 139 of the Code of Civil Procedure, under which the Clerk of Court was given this jurisdiction, provides : "139.
Oath on affidavit by whom to be administered.
In the case of any affidavit under this Code (a) any Court or Magistrate, or (b) any officer or other person whom a High Court may appoint in this behalf, or (c) any officer appointed by any other Court which the Provincial Government has generally or specially empowered in this behalf, may administer the oath to the deponent".
Similarly, section 539 of the Code of Criminal Procedure provides.
Courts and persons before whom affidavits may be sworn.
Affidavits and affirmations to be used before any High Court or any officer of such Court may be sworn and affirmed before such Court or the Clerk of the State, or any Commissioner or other person appointed by such Court for that purpose, or any Judge, or any Commissioner for taking affidavits in any Court of Record in India, or any Commissioner to administer oaths in England or Ireland, or any Magistrate authorized to take affidavits or affirmations in Scotland.
" 484 It is therefore not necessary that an appointment with reference to the Oaths Act had to be made.
The Clerk of Court was appointed a Commissioner of Oaths under section 139(c) quoted above.
It is contended that the powers of such a Commissioner were to administer oaths for purposes of affidavits under the Code of Civil Procedure and this meant Or.
XIX of the Code.
It is pointed out that none of the conditions under which the affidavit is required under that Order applies here.
It is argued that Commissioners appointed under one statute cannot swear affidavits prescribed under another statute, and section 539 of the Code of Criminal Procedure is also cited as an instance.
This may be so.
It may be that an affidavit sworn by a District Clerk of Court may not be good for the purposes of the Code of Criminal Procedure and vice versa but that is because the restriction is to be found in section 139 of the one ,Code and section 539 of the other.
Rule 94 A makes no such condition and makes receivable an affidavit sworn before a Commissioner of Oaths without specifying of what kind.
In this view of the matter the affidavit sworn before the District Clerk of Court, who undoubtedly is a Commissioner of Oaths can only be excluded by taking an extreme and technical view which, in our ,opinion, is not justified.
The appeal must therefore succeed on this short ground and it is not necessary to discuss whether the rule is mandatory or directory for, in any event, its requirements have been met.
The appeal is allowed but as the appellant had earlier conceded the point on which the appeal succeeds, there shall be no order about costs.
The case will now go back to Tribunal for decision on merits.
Appeal allowed.
| An election petition was filed by the appellant against the first respondent challenging his election on May 4, 1963 to the Madhya Pradesh Legislative Assembly.
A number of allegations including those of corrupt practice were made against the first respondent in the petition.
The affidavit filed in support of the allegations of corrupt practice as required by Rule 94A of the Conduct of Election Rules, 1961, was sworn by the petitioner before the Clerk of Court in the District Court of Jabalpur.
The first respondent in his objections before the Election Tribunal raised the question whether the affidavit under Rule 94A was sworn before a proper authority.
The Election Tribunal accepted the objection but allowed the appellant to file a second affidavit sworn before a proper authority.
The orders of the Tribunal were challenged by the first respondent before the High Court under article 226 and article 227 of the Constitution and the High Court, holding that the fresh affidavit could not be called and that there was no proper affidavit, quashed the orders of the Tribunal and directed the Tribunal to pass an order according to law.
The appellant appealed to this Court on certificate of fitness granted by the High Court.
Although the appellant had conceded before the High Court that his first affidavit was not proper he was allowed to withdraw his concession in this Court.
It was contended on behalf of the appellant that the clerk of Court before whom his first affidavit bad been sworn had been duly appointed ex officio Commissioner of Oaths under section 139(c) of the Code of Civil Procedure and an affidavit sworn before him complied with r. 94A.
The respondent however contended that a Commissioner of Oaths appointed under section 139(c) was for the purpose of affidavits under the Civil Procedure Code only, just as a Commissioner appointed under section 539 of the Criminal Procedure Code could swear affidavit under that Code only.
HELD : There is no analogy between an affidavit sworn under section 539 Cr. P. C. and the affidavit sworn here.
An affidavit sworn by a district Clerk of Court may not be good for the purpose of the Code of Criminal Procedure and vice versa but that is because the restriction is to be formed in section 139 of the one Code and section 539 of the other.
Rule 94A makes no such condition and makes receivable an affidavit before a Commissioner of Oaths without specifying of what kind.
In this view of the matter the affidavit sworn before the District Clerk of Court who undoubtedly was a Commissioner of Oath could only be excluded by taking an extreme and technical view which was not justified.
[484 B D]
| 1995.txt |
Appeal No. 830 of 1963.
Appeal by special leave from the judgment and decree dated March 3, 1960 of the Allahabad High Court in Special Appeal No. 3 of 1956.
G. section Pathak and section P. Varma, for the appellants.
781 O.P. Rana, for the respondents.
K. Srinivasan and R. Gopalakrishnan, for the intervener.
The Judgment of the Court was delivered by Shah J.
The appellants public limited Company having its registered office at Calcutta, was, with effect from October 5, 1946, appointed sole agent for sale of goods manufactured by the Swadeshi Cotton Mills Company Ltd. On March 20, 1952, the Sales Tax Officer, Kanpur issued a notice under section 21 of the U.P. Sales Tax Act, 1948 calling upon the appellant Company to file a return of its turnover for the assessment year 1948 49 on the ground that the turnover had escaped assessment.
On March 31, 1952, the Sales Tax Office. made a "best judgment" assessment and determined the taxable turnover of the appellant Company, at Rs. 50 lakhs for the year 1948 49 and determined the appropriate tax liability.
In the appeal to the Judge (Appeals) Sales Tax, the order passed by the Sales Tax Officer, was set aside, that authority holding that the appellant Company was not a dealer within the meaning of section 2(c) of the Act.
But the order of the appellate authority was set aside by the Judge (Revisions) Sales Tax, by order dated March 28, 1955 and the case was remanded to the Sales Tax Officer for "fresh assessment".
In the view of the Judge (Revisions) Sales Tax, it was necessary to determine "the ownership of the goods at the time of their sale".
The Sales Tax Officer then issued a notice calling, upon the appellant Company to produce its books of account and other relevant documents on July 23, 1955 for the purpose of assessment for the year 1948 49.
The appellant Company contended that as the original assessment under section 21 had been set aside by the Judge (Revisions) Sales Tax, no proceeding in connection with that assessment was pending and re assessment was barred because more than three year had elapsed since the end of the year of assessment.
The Sales Tax Officer rejected the contention of the appellant Company and insisted that the books of account and other documents be produced as directed earlier.
The appellant Company then petitioned on September 2, 1955 to the High Court of Allahabad under article 226 of the Constitution for a writ in the nature of prohibition restraining the Sales Tax Officer, Kanpur, from proceeding with the assessment of the appellant Company for the assessment year 1948 49 and for a writ of certiorari quashing the order dated September 2, 1955 of the Sales Tax Officer, Kanpur and the proceeding taken for re assess 782 ment in pursuance thereof.
Chaturvedi J., held that assessment sought to be made by the Sales Tax Officer pursuant to the order of the Judge (Revisions) Sales Tax "was clearly barred by the law of limitation" prescribed in that behalf by section 21 of the U.P. Sales Tax Act.
It was in the view of the learned Judge immaterial whether assessment was being made by the Sales Tax Officer suo motu or under the direction of a superior authority if at the time of making the re assessment the period prescribed by section 21 had expired.
The order passed by Chaturvedi J., was reversed in appeal by a Division Bench of the High Court.
The High Court held that the Sales Tax Officer was competent in view of the order of remand which directed "fresh assessment" to commence fresh assessment proceedings against the appellant Company and in commencing and continuing those proceedings he was acting in compliance with the directions given under sections 9 and 10 of the Act which he was bound to carry out and to such assessment proceedings the period of limitation prescribed by section 21 of the Act did not apply.
Against the order passed by the High Court reversing the order passed by Chaturvedi J., this appeal has been preferred with special leave.
The material provisions of the U.P. Sales Tax Act are briefly these : section 9 conferred a power upon the designated authority to entertain an appeal against the order passed by the Sales Tax authority, and by sub section
(3) of section 9 it was provided: "The appellate authority may, after giving the appellant a reasonable opportunity of being heard, (a) confirm, reduce, enhance or, annul the assessment, or (b) set aside the assessment and direct the assessing authority to pass a fresh order after such further inquiry as may be directed, or (c) .
By sub section
(3) of section 10 as it stood at the relevant time, it was provided: " The Revising Authority may in his discretion at any time suo motu or on the application of the Commissioner of Sales Tax or the person aggrieved, call for and examine the record of any order made by any Appellate or Assessing Authority under this Act, for the purpose of satisfying himself as to the legality or propriety of such order and may pass such order as he thinks fit: 783 Provided that no such application shall be entertained in any case where an appeal lay against the order, but was not preferred.
" Section 21 as it stood at the relevant time provided: "Where the whole or any part of the turnover of a dealer has, for any reason, escaped assessment to tax in any year, the Assessing Authority "may, at any time within three years from the expiry of such years, and after issuing notice to the dealer and making such enquiry as may be necessary, assess the tax payable on such turnover." In the view of the High Court section 21 which imposed upon the Assessing Authority duty to exercise his power to assess turnover which escaped assessment within three years from the end of the year of assessment applied only to the order which the Assessing Authority made suo motu : where, he was directed to, proceed by an order of the appellate or revisional authority under sections 9 and 10 of the Act to re assess, the period of limitation has no application.
In our view the High Court was in error in so limiting the operation of section 21.
That section imposes a restriction upon the power of the Sales Tax Officer: that officer is competent within three years next succeeding the date to which the tax relates to assess tax payable on the turnover which has escaped assessment.
But the section does not provide expressly, nor is there any implication, that the period within which re assessment may be made applies only to those cases where the Sales Tax Officer acts on his own initiative and not pursuant to the directions of the appel late or the revisional authority.
In our view the principle of the judgment of the Privy Council in Commissioner of Income tax, Bombay Presidency and Aden vs Khemchand Ramdas (a firm) (1) applies to this case.
In Khemchand 's case(1) the tax payer was assessed as a registered firm to income tax by order dated January 17, 1927 for the year 1926 27 under section 23(4) of the Income tax Act.
Under the Act as it then stood, a registered firm was not liable to pay super tax and was liable to income tax at the maximum rate.
On January 9, 1928 the Commissioner of Income tax In exercise of powers of revision under section 33 of the Act issued a notice to the assessee requiring him to show cause why the order of the Income tax Officer granting registration of the firm and assessing it on that footing should not be set aside, and by order dated February 13, 1928 ordered cancellation of registration and (1) (1938) L.R. 65 T.A. 236.
784 .directed the Income tax Officer to take necessary action thereupon.
On May 4, 1929, the Income tax Officer assessed to super :tax the assessee on the footing that its registration was cancelled.
authority of the Income tax Officer to assess was challenged.
It was held by the Judicial Committee that as the Income tax Officer had made the order imposing super tax on the assessee more than one year after the earlier demand in respect of income tax, the ,order was without jurisdiction.
The Judicial Committee pointed out that once a final assessment has been made, it cannot be ,reopened by the Income tax Officer of his own motion, or at the direction of the Commissioner exercising his powers under section 33 of the Indian Income tax Act, 1922, except in the circumstances and within the time prescribed by sections 34 and 35 of the Act.
They observed that sections 34 and 35 were exhaustive and prescribed the only circumstances in which, and the only time in which, such fresh assessments could be made and fresh notices of demand could be issued.
As the Income tax Officer took no fresh step within one year under the statute, he was "hopelessly out of time whichever of the two sections was applicable".
But the order of the High Court must still be confirmed, because during the pendency of the proceeding in the High Court section 21 was extensively amended.
The section as amended by Act 19 of 1956 from May 28, 1956 reads as follows: "(1) If the assessing authority has reason to believe that the whole or any part of the turnover of a dealer has, for any reason, escaped assessment to tax for any year, the assessing authority may, after issuing notice to the dealer, and making such enquiry as may be necessary, assess or re assess him to tax: Provided that the tax shall be charged at the rate at which it would have been charged had the turnover not escaped assessment, or full assessment, as the case may be.
Explanation.
Nothing in this sub section shall be deemed to prevent the assessing authority from making an assessment to the best of its judgment.
(2) No order of assessment under sub section (1) or under any other provision of this Act shall be made for ,any assessment year after the expiry of four years from the end of such year.
Provided that where the notice under sub section (1) has been served within such four years the assessment or re assessment to be made in pursuance of such 785 notice may be made within one year of the date of the service of the notice even if the period of four years is thereby exceeded: Provided further that nothing contained in this section limiting the time within which any assessment or re assessment may be made, shall apply to an assessment or re assessment made in consequence of, or to give effect to, any finding or direction contained in an order under section 9, 10, or 11.
Explanation.
Under the terms of section 21 (1) as amended where the assessing authority has reason to believe that any part of the turnover has or any reason escaped assessment to tax for any year, he may make Assessment within four years from the end of the year in which the turnover has escaped assessment.
The rule is, however, subject to two exceptions: (i) when notice under sub section
(1) has been served within four years the assessment or re assessment to be made in pursuance of such notice may be made within one year of the date of the service of the notice even if the period of four years is thereby exceeded; and (ii) that, nothing contained in s 21 which limits the time within which any assessment or re assessment is to be made applies to assessment or re assessment made in consequence of, or to give effect to, any finding or direction contained in an order under sections 9, 10 or 11.
Therefore where the Sales Tax Officer proceeds in pursuance of a direction given by the appellate or revising authority or under an order made by the High Court in a reference under section II, the period of limitation prescribed by sub section
(2) of section 21 does not apply.
This section was incorporated in the Act by section 15 of the amending Act, which enacted: "For section 21 of the Principal Act the following shall be and be always deemed to have been substituted: " The amended section was therefore to be deemed to be in operation at all material times since the enactment of the U.P. Sales Tax Act 15 of 1948.
The Legislature has given a clear retrospective operation to the amended section as from the date on which the principal Act came into operation, and correctness of the order of the Sales Tax Officer holding that there was no bar of limitation to the making of a fresh assessment pursuant to the order of the appellate or revising authority had to be adjudged in the light of section 21 as amended by Act 19 of 1956.
The words used by the Legislature are precise and admit of only one interpretation that 786 proceedings taken for assessment or re assessment in consequence of, or to give effect to an order of the appellate or revising authority or an order passed by the High Court under section 11 may be taken notwithstanding the expiry of the period prescribed by sub section
(2) of section 21.
Mr. Pathak on behalf of the appellant Company pleaded that even if that be the true interpretation of section 21 as amended, the section could only apply to proceedings which were pending at the date on which the Act was amended, but in law no proceeding was pending because the Judge (Revisions) Sales Tax had no power to direct after the expiry of the period prescribed under section 21 as it originally stood to make a fresh assessment in respect of the year 1948 49.
There are two clear answers to this plea, either of which is sufficient to reject it.
The revisional authority had under section 10(3) power to make such order as he thought fit after calling for and examining the record of any order made by an appellate or an assessing authority and after satisfying himself as to the legality or propriety of such order.
Even assuming that the revisional authority came to a conclusion which was erroneous in law, it was still an order which he had jurisdiction to make and that order unless set aside in a proper proceeding could not be ignored on the ground of lack of jurisdiction.
There was, therefore, a proceeding pending before the Sales Tax Officer in pursuance of the direction given by the Judge (Revisions) Sales Tax who had directed the Sales Tax Officer to make a fresh assessment.
Whether in pursuance of this direction, a fresh assessment could be made under section 21 before it was amended, need not detain us.
We are concerned with the jurisdiction of the revising authority to make the order that he did under the section as it stood amended, and not with the competence of the assessing authority to pass an order for assessment under the statute before it was amended.
The other ground is also equally decisive.
By section 15 of Act 19 of 1956, section 21 of the Act as amended, must be deemed to have been on the statute book on the date on which the revising authority passed his order, and under that amended provision the power of the assessing authority to assess or re assess pursuant to an order of the revising authority was not lost when the period prescribed by sub section 2 of section 21 for assessment or re assessment expired.
Under section 21, before it was amended, there could be no order of assessment or re assessment either by the Sales Tax Officer suo motu, or pursuant to the direction of the appellate or revising authority after the expiry of the period of three years prescribed by the statute, but under section 21 as amended, the power may be exercised by the Sales Tax Officer suo motu within four years for assessment or 787 re assessment.
That power could be exercised under the first proviso within a further period of one year if a notice under sub section
(1) was served within four years of the end of the year of assessment and without limit of time when it was made in consequence of, or to give effect to, any finding or direction contained in an order of the appellate or revisional authority or under an order of the High Court under section 11.
In initiating proceeding for assessment, pursuant to the direction of the revising authority, the Sales Tax Officer was, by virtue of section 21 as amended, subject to no restrictions as to the period within which the order of assessment could be made.
The order passed by the High Court must therefore be confirmed.
The appeal fails and is dismissed with costs.
Appeal dismissed.
| The sales tax officer made a best judgment assessment with respect to the turnover of the appellant under section 21 of the U.P. Sales Tax Act, 1948.
The order was set aside by the appellate authority.
The revisional authority revised the appellate order and remanded the case to the sales tax officer for making a fresh assessment.
When the officer issued a notice for assessment, in pursuance of that order, the assesee contended that as the original assessment had been set aside, no proceeding in connection with it was pending, and that reassessment was barred because, more than three years had elapsed since the end of the year of assessment.
The office,,rejected the contentions.
The assessee filed a writ petition in the High Court and it was allowed by a Single Judge.
The State appealed to the Division Bench.
While the appeal was pending, section 21 was extensively amended in 1956 and the legislature gave retrospective operation to the amended section.
As a result of the amendment, it was provided that when the officer proceeded in pursuance of a direction given by the revisional authority, no period of limitation applied.
The Division Bench, however, relied upon the unamended section and set aside the order of the Single Judge, holding, that even under the unamended section, no period of limitation applied when the assessing officer was directed to proceed by an order of the revisional authority.
The assessee appealed to the Supreme Court.
HELD:The appeal should be dismissed.
Though the High Court was in error in its interpretation of the unamended section on the principle of Commissioner of Income tax, Bombay Presidency and Aden vs Khemchand Ramdas, (L.R. 65 I.A. 236) still the order of the High Court must be confirmed because of the amendment of 1956.
The words used by the legislature in the amended section are precise and admit of only one interpretation, namely, that nothing contained in the section limits the time from the year of assessment within which proceedings should be taken for assessment or reassessment in consequence of or to give effect to an order of the revisional authority.
[783 E G; 784 D E; 785 H; 786 B] Even assuming that the amended section applied only to pending proceedings, when the revisional authority made an order after examining the record directing the assessing officer to make a fresh assessment, there was a proceeding pending before such officer in pursuance of such direction.
[786 E]
| 1866.txt |
roviso will take in more than one residential house, if the assessee is able to establish that all the houses are occupied by him for purposes of his own residence.
[15A B] & CIVIL APPELLATE, JURISDICTION: Civil Appeals Nos. 1488 to 1491 of 1969.
Appeals from the judgment and order dated August 1, 1968 of the Punjab and Haryana High Court in Income tax reference No. 20 of 1964.
K. C. Puri, section K. Mehta and K. L. Mehta, for the appellant (in all the appeals).
B. Sen, P. L. Juneja and R. N. Sachthey, for the respondent (in all the appeals).
The Judgment of the Court was delivered by Vaidialingam, J.
These four appeals, on certificate, are directed by the assessee against the judgment and order dated August 1, 1968 of the High Court of Punjab and Haryana at Chandigarh in Income tax Reference No. 20 of 1964.
Two questions of law were referred bY the Income tax Appellate Tribunal, Delhi Bench 'C ' to the high Court.
, Both 3 the questions were answered in favour of the Revenue and against the assessee.
The appellant assessee was the Ruler of Faridkot and he was assessed in the status of an individual for the assessment years 1957 58 to 1960 61, corresponding to the accounting years being the period ending 12 4 1957, 12 4 1958, 12 4 1959 and 12 4 1960 respectively.
The assessee had executed a registered trust deed dated April 1, 1955 marked Annexure "A" whereunder he had transferred the United Kingdom Government 's Securities of the face value of pound 1,80,000 to the Grindlays Bank, London, as trustee, to be held in trust in accordance with the terms and conditions set out therein.
As there is no dispute that these Government securities were transferred to the Bank and also regarding the provisions contained therein for distribution of the income accruing from the securities, it is not necessary for us to set out the various clauses in the trust deed.
By clause (2) the trustee was directed to divide the trust property into two equal parts.
By clause (3) the trustee, after meeting all outstanding and contingent liabilities, was required to pay the balance income to all or any of the children of the Settlor other than his eldest son, living at the respective dates of payment in equal shares.
Similarly, under clause (4) the trustee after meeting all outstanding and contingent liabilities, was directed to pay the balance income to the eldest son of the Settlor Tikka Harmohinder Singh of Faridkot, during his life.
Clauses 3(b) and 4(c) provided that at the termination of the period of distribution, the Bank shall stand possessed of the capital and income of both parts upon trust for the person who, at the date of such termination, shall be the successor of the Settlor according to the Rule of Primogeniture applicable to the dynasty of the Settlor absolutely.
Clause (5) defined the period of distribution to be the life of the Settlor and the children of the Settlor living at the date thereof and the lives and life of the survivors and survivor of them and the period of 21 years after the death of such survivor.
The assessee owned a house known as Faridkot House situated at Lytton Road, New Delhi, during the assessment year 1960 61.
During the same period, the assessee also owned a second property known as Faridkot House, situated in Diplomatic Enclave, New Delhi.
Rajkumari Maheepinder Kaur, minor daughter of the assessee received from the trustee as per the provisions of the trust deed dated April 1, 1955, Rs. 15,570/ , Rs. 15,570/ .
Rs. 12,446/ and Rs. 10,310/ during the relevant accounting years, corresponding to the assessment years 1957 58 to 1960 61.
In the assessment of the assessee as an individual during the ' said 4 assessment years, the Income tax Officer District 'A ' Ward, Bhatinda, notwithstanding the objections raised by the assessee, included the amounts received by the minor daughter in the total assessable income of the appellant for each of the assessment years under section 16 (3) (b) of the Indian Income tax Act, 1922 (hereinafter to be referred to as the Act).
The order of assessment for the assessment year 1957 58 was passed on April 27, 1959 and for the other three assessment years on March 23, 1961.
On appeal by the assessee, the Appellate Assistant Commis sioner of Income tax, Rohtak Range, confirmed the orders of the Income tax Officer.
The order of the Appellate Assistant Commissioner for the assessment year 1957 58 is dated July 25, 1961 and for the remaining years, the orders were passed on November 4, 1961.
The Appellate Assistant Commissioner accepted the contention of the appellant that section 16(1)(c) of the Act has no application, but agreed with the view of the Income tax Officer that the income received by the minor daughter is to be included in the total taxable income of the assessee under section 16(3) (b).
The assessee carried the matter in further appeal before the Income tax Appellate Tribunal, Delhi Bench 'C ', in Income tax Appeals Nos.
6075, and 8423 8425, all of 1961 62, regarding the assessment years 1957 58 to 1960 61 respectively.
The Appellate Tribunal agreed with the view of the lncome tax Officer and the Appellate Assistant Commissioner that the inclusion of the minor daughter 's income under section 16(3)(b) was correct.
The order of the Appellate Tribunal for all the assessment years is dated August 7, 1962, though a separate order has been passed in respect of the assessment year 1960 61.
From the narration of the above facts, it will be seen that the Income tax Officer, the Appellate Assistant Commissioner and the Appellate Tribunal have all held that the income received by the minor daughter of the assessee under the trust deed has to be included under section 16(3) (b) of the Act in 'the total taxable income of the assessee for each of the assessment years.
We have earlier referred to the fact that the appellant owned two houses in New Delhi, both known as Faridkot House, one at Lytton Road and the other in Diplomatic Enrlave, during the accounting year ending April 12, 1960.
The assessee claimed reduction of the annual letting value in respect of both these houses on the ground that they were, used as his residence.
This claim regarding the houses arises only in the assessment year 1960 61, The Income tax Officer allowed the reduction in the, annual letting value only in respect of one house at Lytton Road.
5 There is no discussion in the order as to, why the claim for the second house at Diplomatic Enclave was rejected.
The Appellate Assistant Commissioner held that as deduction has already been given by the Income tax Officer in respect of the Faridkot House in Lytton Road, the assessee is not entitled to a further allowance in respect of the house at Diplomatic Enclave.
It is the further view of the Appellate Assistant Commissioner that under section 9 (2) of the Act, the assessee is not entitled to a further allowance in respect of the second house and that both the houses occupied for residential purposes have to be treated as one unit.
On this ground he rejected the claim of the assessee regarding the allowance in respect of the Faridkot House in Diplomatic Enclave.
The Appellate Tribunal, when dealing with 'the appeal relating to the assessment year 1960 61 dealt with this claim of the assessee a little more elaborately.
After a reference to the provisions of section 9 (2) of the Act, the Appellate Tribunal held that there is nothing in the said provision which entitles the assessee to claim benefit in respect of more residential houses than one.
But the Appellate Tribunal was prepared to accept the position that the second proviso to section 9(2) indicates that the property referred to in the first proviso may consist of more than one residential houses, but that by itself does not lead to the conclusion that the benefit under the first proviso can be claimed in respect of more than one property.
In this view, the Appellate Tribunal also agreed with the rejection, by the two officers, of the claim made by the appellant in respect of the house situated in Diplomatic Enclave.
The assessee filed four applications before the Appellate Tribunal praying to refer to the High Court, with a statement of case, two questions of law one relating to the inclusion in the four assessment years of the income received by the minor daughter in the total income of the assessee; and the other relating to the rejection by the Revenue, of the assessee 's claim for allowance for the assessment year 1960 61 in respect of the Faridkot House in Diplomatic Enclave.
The Income tax Appellate Tribunal ' accordingly, referred, for the opinion of the High Court the following two questions of law : "(1) Whether on the facts and in the circums tances of the case, the amounts of Rs. 15,570, 15,570, 12,446 and 10,310 received by the assessee 's minor daughter Rajkumari Maheepinder Kaur in the assessment years 1957 58, 1958 59, 1959 60 and 1960 61 under the terms of the Trust Deed dated the 1st April, 1955 have been rightly included in the hands of the assessee under Section 16 (3) (b) of the Indian Income tax Act, 1922 ? 6 (2) Whether on the facts and in the circums tances of the case the assessee is entitled to the reduction of the annual letting value of the Faridkot House in Diplomatic Enclave New Delhi, by Rs. 1,800/ under the first proviso to Section 9(2) of the Income tax Act, 1922 notwithstanding the fact that the annual letting value of the Faridkot House situated at Lytton Road, New Delhi, is already reduced by Rs. 1,800/ ?" The High Court, by its judgment and order under attack, has answered the first question in the affirmative and the second in the negative.
The answers in respect of both the questions given by the High Court are against the assessee.
Before the High Court, the appellant appears to have urged that section 16 (1 ) (c) of the Act is the only provision that could apply in the present case of settlement and that, as such, the amounts received by the minor daughter of the assessee under the trust deed could not be added to the income of the assessee under section 16 (3) (b) of the Act.
The High Court rejected this contention of the assessee.
The assessee further contended before the High Court that section 16 (3) (b)will apply only if assets had been transferred for the benefit of the wife or minor child and that as the wife or minor child was not entitled to the corpus of the trust property, that provision does not apply.
This contention was also rejected by the High Court.
The further contention of the assessee was that to attract section 1 6 ( 3 ) (b) the transfer should be one exclusively for the benefit of the wife or minor child and that the said provision will have no application when the benefit that is sought to be conferred, takes in as in the case of the present trust deed other persons like the major children.
This contention again was rejected by the High Court.
The last contention on this aspect that was urged appears to have been that, in any event, under section 16 (3) (b) what could be included is only so much of the income of any person or association of persons to whom the property had been transferred for the benefit of the wife or the minor child and not the income received by the minor child.
This contention again was not accepted by the High Court.
The High Court ultimately held that the amounts received by the minor daughter of the assessee under the trust deed have been rightly included under section 16 (3) (b) of the Act in the total assessable income of the appellant in all the four assessment years.
Regarding the deduction claimed during the assessment year 1960 61 in respect of the house situated at Diplomatic Enclave, the High Court is of the view that the assessee can claim such a benefit by way of allowance under section 9 (2) only in respect of one house.
Such allowance having been given by the Revenue in 7 respect of the residential house at Lytton Road, New Delhi, it is the view of the High Court that the appellant 's claim with regard to the house at Diplomatic Enclave has been rightly rejected by the Revenue.
Before we refer to the contentions of the counsel for the assessee and the Revenue, it is necessary to refer to the relevant provisions of the Act in respect of the two points arising for consideration, one relating to the amounts received by the minor daughter and the other relating to an allowance in respect of a second residential house.
Though the relevant provision in respect of the 1st aspect is only clause (b) of section 16(3), it is desirable to quote all the provisions of section 16(3) which run as follows : section 16.
(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 in directly 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.
" 8 The relevant provisions bearing on the claim in respect of the house in Diplomatic Enclave, are the to provisos in section 9(2).
Section 9(2) with the relevant two provisos is as follows "9(2) For the purposes of this section, the annual value of any property shall be deemed to be the sum for which the property might reasonably be excepted to, let from year to year.
Provided that, where the property is in the occupation of the owner for the purposes of his own residence, the annual value thereof shall first be determined in the same manner as if the property had been let to a tenant and the amount so determined shall be reduced by one half of it or eighteen hundred rupees, whichever is less, so however that where the sum so reduced exceeds ten per cent of the total income of the owner the annual value of the property shall be deemed to be ten per cent of such total income.
Provided further that where the property referred to in the preceding proviso consists of one residential house only and it cannot actually be occupied by the owner by reason of the fact that owing to his employment, business, profession or vocation carried on at any other.
place, he has to reside at that other place in a building not belonging to him and the residential house is not actually let and no other benefit therefrom is derived by the owner, the income of such property under this section shall, if the property was not occupied during the whole of the previous year be taken to be nil and if it was occupied for a part of the previous year be computed proportionately, so however that the income in respect of such property shall in no case be a loss.
" We will first deal with the point covered by question No. 1 regarding the inclusion in the relevant assessment years in the taxable income of the appellant, the amounts received by his minor daughter under the trust deed dated April 1, 1955.
Though several contentions have been raised before the High Court and the Appellate Tribunal, Mr. K. C. Puri, learned counsel for the appellant, has raised before us only two contentions, namely, (1) the assets of pound 1,80,000 covered by the trust deed not having been transferred to the wife or minor daughter in question, but to the Grindlays Bank, as trustee, section 16(3) (b) of the Act has no application; and (2) even if section 16(3) (b) of the Act applies, what is to be included in computing the total income of the assessee is not the income that has been received by the minor 9 daughter under the trust deed, but only so much of the income of any person or association of persons (in this case the trustee) to whom the assets have been transferred for the benefit of the wife or the minor child.
The counsel referred to the decisions of this Court in Commissioner of Income tax, Bombay vs Manilal Dhanji(1); Commissioner of Income tax, Gujarat vs Keshavlal Lallubhai Patel(2) and Commissioner of Income. tax, West Bengal III vs Prem Bhai Parekh and others(3) and urged that section 16(3) of the Act created an artificial income and had to be construed strictly.
That is, according to the learned counsel, the wordings of section 16 (3) (b) have to be construed strictly and literally.
On the basis of such a strict and literal construction, the counsel urged that the two propositions urged by him earlier are ample borne out by section 16(3) (b).
It is no doubt true that the above decisions lay down the proposition that section 16 (3) of the Act creates an artificial income and it must receive a strict construction.
We may also point out that the first decision, referred to above dealt with a case under section 16(3) (b) and has specifically laid down the proposition that the said provision creates an artificial liability to tax and must be strictly construed.
But in construing section 16(3)(b) the Courts cannot ignore the clear and unambiguous expressions contained therein and all those expressions must receive a proper interpretation.
Taking the first contention of Mr. Puri, according to him the corpus of the property covered by the trust (in this case the Government Securities) should have been transferred for the benefit of the wife or the minor child.
The minor daughter, in this case, was not entitled to the corpus of the trust property, namely, the securities.
We understood Mr. Puri to urge that section 16 (3) (b) of the Act will apply only to those cases where ultimately the corpus of the trust property is also transferred to the wife or the minor child, as the case may be.
We have no hesitation in rejecting this contention of Mr. Puri.
The provisions of section 16(3)(b) are very clear and the only requirement, so far as this aspect is concerned, is that the assets must be transferred to any person or association of persons and that transfer of assets must be for the benefit of the wife or the minor child or both.
In this connection it is pertinent to note the wordings of section 16 (3) (b)(iii) and section 16 (3) (a) (iv).
The former provision clearly refers to assets transferred directly or indirectly to the wife by the husband and the latter provision refers to assets transferred directly or indirectly to the minor child not being a married daughter.
But in cl.
(b) of section 16(3) the transfer of assets is not to the wife or the minor child or both but to (1) (2) (3) 2 L256Sup CI/72 10 any person or association of persons.
Therefore, it is clear that when the legislature intended to provide for a direct transfer of assets either to the wife or to the minor child, it has used the expressions as are found in section 16(3) (a) (iii) and section 16(3) (a) (iv).
The different phraseology used in cl.
(b) of section 16(3) makes it clear that the transfer of assets need not be to the wife or the minor child.
Nor does the said clause require that the corpus of the property, so transferred to any person or association of persons, should ultimately vest in the wife or the minor child.
Mr. Puri quite frankly admitted that there is no decision to support his contention.
On the other hand, we find that there is a decision of the Bombay High Court in Commissioner of Income tax, Bombay vs Sir Mahomed Yusuf Ismail(1) which is against the contention advanced by Mr. Puri.
In that decision one of the questions that arose for consideration was whether the income received by the wife of the assessee under a deed of wakf can be included in the assessment of the husband under section 16(3) (b).
The assessee therein had executed a deed of wakf.
Under the terms of the said deed, the assessee 's wife was to get 21% of the income accruing from the property which was the subject of the wakf deed.
It was contended that as no part of the assets or the corpus had been transferred to the wife, the income received by the latter cannot be included in the taxable income of her husband, the assessee.
A Division Bench of the Bombay High Court rejected this contention and held that as assets had been transferred, under the wakf deed, to the trustees and as the transfer was beneficial to the wife and that as she had, got 21 % of the income from the properties, section 16 (3) (b) of the Act was properly applied by the Revenue.
We are in agreement with this decision of the Bombay High Court and as such the first contention of Mr. Puri will have to be rejected.
Coming to the second contention, according to Mr. Puri under section 16 (3) (b) of the Act, only so much of the income of the person or association of persons to whom the property has been transferred for the benefit of the wife or the minor child and not the income received by the minor that can be included in the taxable income of the assessee.
According to the counsel, what has been done by the Revenue is to include in the assessment Of the appellant 's the income received by the minor daughter in the relevant accounting years.
That procedure is opposed to section 16 (3) (b) of the Act.
Here again, the contention of the learned counsel cannot be accepted.
If this contention is accepted, the position will be that the Revenue might have included the whole of the income arising from the assets transferred to the Grindlays Bank and not merely that portion of the income which has been received by the minor daughter.
Such a construction (1) 11 in totally opposed to the clear provisions of the scheme of section 16 (3) and in particular the clear wording of cl.
(b) of section 16(3) of the Act.
From a plain reading of section 16(3) (b) it is clear that what is to be included, in computing the total income of the assessee, is that part of the income of the trust which is received for the benefit in this case of the minor daughter.
It is the share income which has accrued to or has been received by the minor daughter under the trust deed, in the relevant accounting year, that has to be included in the total income of her father, the assessee.
The expression "so much of the income" occurring in this clause also makes it clear that the said provision relates to the share income of the minor daughter, in this case, and not that of the Grindlays Bank, the trustee.
Section 16 sub section
(3) of the Act provides specifically for assets transferred to the wife or the minor child.
The income from assets transferred to the wife is still to be included in the total income of the husband, if the assets have been transferred directly or indirectly to the wife by the husband other wise than ,for adequate consideration [vide sub section (3) (a) (iii)].
Again so much of the income of any person or association of persons, as arises from assets transferred, otherwise than for adequate con sideration, to the person or association, by the husband, for the benefit of his wife has to be included in the husband 's taxable income.
, [vide sub section (3) (b)].
The same sub section (3) of section 16 of the Act provides for the income, from the assets transferred by a father to his minor child, to be included in the total income of the father, if the assets have been transferred, directly or indirectly to the minor child, not being a married daughter, otherwise than for adequate consideration [vide sub section (3) (a)] (iv) 1.
Again, 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 the father, for the benefit of his minor child has to be included in the father 's taxable income.
[vide sub section (3) (b)].
The above is the scheme of section 1 6 (3) of the Act.
It must also be noted that under section 16(3) (a) sub clauses (iii) and (iv) and also clause (b) of sub section 3, the transfer contemplated thereunder should have been "otherwise than for adequate consideration.
" The words "adequate consideration" denote consideration, other than mere love and affection.
There is no controversy, in the case before us, that the transfer, by way of trust, is one "otherwise than for adequate consideration.
" It is true that when assets are transferred to the trustees, as in the case before us, there was income in the hands of the trustees and the latter were liable to pay tax thereon.
That, however, is not the question before us.
The question before us is whether the income, representing the share 12 of the minor daughter, which has accrued in the, hands of the trustee, or was received by the said minor could be included in the total income of the appellant under cl.
(b) of sub section
(3) of section 1 6.
For a proper appreciation of cl.
(b) of section 16(3), in our opinion, that clause must be read in the context of the scheme of s.16; and the two clauses (a) and (b) of sub section (3) of section 16, must be read together.
So read, the reasonable interpretation to be placed on cl.
(b) appears to be that the scheme of the section requires that an assessee can only be taxed, on the income, from a trust fund created for the benefit of his wife or minor child or both, provided that in the year of account, the wife or the minor child, or both, have derived some benefit under the trust deed.
That is, the wife or the minor child, either has received the income or the income has accrued to them or they have a beneficial interest, in the income in the relevant year of account.
From this it follows, that if no income accrues or benefit is derived and there is no income at all, so far as the minor child, in the case before us, is concerned, then it is not consistent with the scheme of section 16, that the income or the benefit which is nonexistent, so far as the minor child is concerned, is to be included in the income of his or her father.
In the case before us, there is no controversy that the minor daughter has received the income in all the relevant accounting years.
Mr. B. Sen, learned counsel for the Revenue, has drawn our attention to the two decisions of this Court, wherein it has been held that section 16 (3) (b) of the Act applies, to cases of trust, like the one before, us, and that under such circumstances, what is to be included in the total income of the assessee is the share of the income that has accrued to or has been received by the assessee 's wife or minor child, or both.
The first decision is Tulsidas Kilachand and others vs Commissioner of Income tax, Bombay City I(1).
In this case A, the husband, had created a trust in respect of certain shares owned by him in two companies.
Under the said trust the wife of A was to receive the income.
A sum of Rs. 30,404/ was received by the wife, as dividend income, in respect of the shares, regarding which a trust had been created.
This amount was added to the taxable income of the husband under section 16 (3) (b).
This Court held that as the transfer of the shares by way of trust, had been effected and as there was a provision for payment of the income accruing from the shares to the wife, and as the latter had received the dividend income, during the relevant accounting year, that amount had been rightly included by the Revenue in the taxable income of the husband.
(1) 13 This Court further held that such a case falls squarely within the special rules concerning the wife and the minor child as laid down in section 16 (3) (b) of the Act.
The second decision referred to by Mr. Sen is Commissioner 'Of Income tax, Bombay vs Manilal Dhanji(1).
In that decision the assessee had created a trust in 1953 in respect of a, sum of Rs. 25,000/ and the trustees had also been nominated for the purpose of administration of the trust.
Under the trust deed, it was provided that the interest accruing on the, trust amount of Rs. 25,000/ was to be accumulated and added to the corpus Of the trust and that a minor daughter of the assessee was to receive the income from the corpus increased by addition of interest, every year, on her attaining the age of 18 years.
It was further provided that after attaining the age of 18 years, the daughter was to receive the income during her life time; and after her death the corpus was to go to certain other persons.
The daughter, in that case, was to attain the age of 18 years only on February 1, 1959.
In the accounting year 1953 54, a sum of Rs. 410/ was received as interest income on the trust fund and it was added by the trustees, in accordance with the provisions of the trust deed, to the corpus.
The Income tax Authorities.
however, included this interest income of Rs. 410/ in the total income of the father, the assessee under section 16 (3) (b) of the Act.
The High Court held that on a true construction of cl.
(b) of section 16(3) of the Act, as no benefit has accrued to the minor daughter in the year of account, the sum of Rs. 410/ could not be included in the total income of the assessee.
This Court agreed with the view of the High Court.
It is clear from the above two decisions that when a trust is created, though the income is, in the hands of the trustees, the underlying principle of cl.
(b) of section 16(3) is that so much of the income as represents the shares of the wife or the minor child, as the case may be, is to be included in computing the total income of the husband or the father.
This is consistent with the ,scheme of section 16 and in particular sub section (3) thereof, which is intended to foil an individual 's attempt to avoid or reduce the extent of tax, by transferring his assets to his wife or minor child.
From the above discussion it follows, that the second contention ,of Mr. Puri cannot also be accepted.
Now coming to the second question, referred to the High Court, which relates to the reduction claimed by the assessee of the annual letting value of Faridkot House in Diplomatic Enclave, New Delhi, we have already pointed out that the said claim has been rejected by the Revenue, as well as by the High (1) 14 Court.
It is admitted by the Revenue as well as the assessee that the claim of the appellant in this regard in respect of the residential house in Lytton Road, New Delhi, has been allowed by the Revenue.
The question regarding the house in Diplomatic Enclave arises only for the assessment year 1960 61.
The Income tax Officer has not given any reason for rejecting the claim of the assessee.
The Appellate Assistant Commissioner has held that as the appellant has been granted the usual allowance in respect of Faridkot House in Lytton Road, he is not entitled to any further allowance in respect of another house.
In fact the officer has said that both the houses have to be treated as one unit for purposes of computing the annual letting value.
But there is one finding, in the order of the Appellate Assistant Commissioner, which is to be noted, namely, that the houses in Lytton Road and Diplomatic Enclave are used and occupied by the assessee for residential purposes.
The Income tax Appellate Tribunal has not differed from the finding of the Appellate Assistant Commissioner that both the houses are used and occupied for residential purposes by the assessee.
But the Appellate Tribunal has also ' taken the view that the assessee is entitled to the necessary allowance only in respect of one residential house, under the first proviso to section 9(2) and that the second proviso thereto does not help the assessee.
According to the Appellate Tribunal, the second proviso to section 9 (2) of the Act will take in cases where the property, in the occupation of an assessee for purposes of residence, consists of more than one residential house, but so situated as to form one property.
The Appellate Tribunal has given an illustration of a palace or a bungalow with various out houses.
In such a case, according to the Appellate Tribunal, all the buildings situated in one compound are to be treated 'Collectively, as one property, for the purpose of the first proviso.
In this view, the Appellate Tribunal also rejected the claim of the assessee in respect of the house in Diplomatic Enclave.
The High Court has very summarily rejected the claim of the appellant in this regard.
After referring to the contention of the assessee that the second proviso to section 9 (2) clearly indicates that the first proviso contemplates an assessee having more than one residential houses, it has held that the said contention cannot be accepted.
Mr. K. C. Puri, learned counsel for 'the appellant has urged that the finding of the Appellate Assistant Commissioner that the two houses in Lytton Road and Diplomatic Enclave are used for residential purposes by the assessee, has not been departed from by either the Appellate Tribunal or the High Court.
On this basis, Mr. Puri urged that a reading of the first and second provisos, 15 to section 9 (2) of the Act clearly shows that the allowance, to an assessee, is not confined only to one residential house, as held by the Revenue and the High Court.
A reading of the second proviso to sub section (2) clearly, in our opinion, indicates that the first proviso will take in more than one residential houses, if the assessee is able to establish that all the houses are occupied by him for purposes of his own residence.
So far as this is concerned, we have already pointed out that the finding is in favour of the assessee.
Mr. B. Sen, learned counsel for the Revenue, found conside rable difficulty in supporting the order of the High Court, answering question No. 2 in the negative and against the appellant.
But he attempted to argue that the question, whether the assessee is actually occupying the house in Diplomatic Enclave also for, purposes of his own residence, has not been investigated.
We are not inclined to accept this contention of Mr. Sen.
We have already referred to the finding of the Appellate, Assistant Commissioner to the effect that both the houses one in Lytton Road and the other in Diplomatic Enclave are used and occupied by the appellant for purposes of his own residence.
This finding has not been disturbed either by the Appellate Tribunal or by the High Court.
If so, on a proper construction of the first proviso to sub section (2) read with its second proviso clearly supports the contention of Mr. Puri that the view of the Revenue and 'the High Court that the assessee can claim allowance only for one residential house, is erroneous.
To conclude, we are in agreement with the view of the High Court when it answered the question No. 1 in the affirmative and against the assessee.
But we answer the question No. 2 in the affirmative in favour of the assessee.
Our answer to question No. 2 will be substituted, in the place of that given by the High Court.
The judgment and order of the High Court are modified to the extent indicated above, and the appeals are, allowed in part.
The parties will bear their own costs.
G.C. Appeals partly.
allowed.
| The appellant created a trust in 1955 by transferring certain securities held by him to a bank as trustee.
One of the beneficiaries of the trust was the appellant 's minor daughter M.
The income accruing to M under the trust during the previous years relevant to the assessment years 1957 58, 1958 59, 1959 60 and 1960 61 was included in the assessments made on the appellant as an individual for those years by applying the provisions of section 16(3)(b) of the Indian Income Tax Act 1922.
In the assessment for the year 1960 61 the Income tax Officer had also to deal with the appellant 's claim for the allowance under section 9(2) off the said Act in respect of two separate houses owned by the appellant and maintained by him for residential purposes in New Delhi.
The Income tax Officer allowed the claim only in respect of one of the houses.
The appellant 's appeals.
before the authorities under the Act failed.
The High Court decided the questions referred to it against the appellant.
In appeals before this Court on certificate the contentions of the appellant which fell for consideration were : (i) (a) that section 16(3) (b) must be strictly construed; (b) that the assets covered by the trust deed not having been transferred to the wife or minor daughter but to a bank as trustee, section 16(3) (b) of the Act had no application; (c) even if section 16(3) (b) of the Act applied, what was to be included in computing the total income of the appellant was not the in come that had been received by the minor daughter under the trust deed but only so much of the income of the trustee as arose from the assets transferred to the trustee for the benefit of the minor child; (ii) that a reading of the first and second provisos to section 9(2) of the Act clearly showed that the allowance to an assessee is not confined only to one residential house HELD : (i) (a) it is true that section 16(3) (b) creates an artificial liability and must therefore be strictly construed.
But in construing section 16(3)(b) Courts cannot ignore the clear and unambiguous expressions contained therein and all those expressions must receive a proper interpretation.[9 C D] C.I.T. Bombay vs Manual Dhanji, , C.I.T.,.
Gujarat vs Keshavlal Lallubhai Patel, and; C.I.T., West Bengal II vs Prem Bhai Parekh (b) The contention that section 16(3) (b) applies only to those cases where ultimately the corpus of the trust property is also transferred to the wife or the minor child, must be rejected.
The provisions of section 16(3)(b) are very clear, and, the only requirement so far as this aspect is concerned is that the assets Must be transferred.
to, any person or association of persons and that transfer of assets must be for the benefit of the wife or the 2 minor child or both.
In this connection it is pertinent to note the wordings of section 16(3) (a) (iii) and section 16(3) (a) (iv).
The former provision clearly refers to assets transferred directly or indirectly to the wife by the husband and the latter provision refers to assets transferred directly or indirectly to the minor child not being a married daughter.
But in cl.
(b) of section 16(3) the transfer of assets is not to the wife or the minor child or both but to any person or association of persons.
Therefore it is clear that when the legislature intended to provide for a direct transfer of assets either to the wife or to the minor child, it has used the expressions as are found in section 16(3) (a) (iii) and section 16(3) (a) (iv).
The different phraseology used in cl.
(b) of section 16(3) makes it clear that the transfer of assets need not be to the wife or the minor child.
Nor does the said clause require that the corpus of the property so transferred to any person or association of persons should ultimately vest in the wife or the minor child [9G 1OB] C.I.T. Bombay vs Sir Mahomed Yusuf Ismail, [1944] 12 I.T.R. 8 approved.
(c) From a plain reading of section 16(3) (b) it is clear that what is to be included in computing the total income of the assessee is that part of the income of the trust which is received for the benefit in this case of the minor daughter.
It is the share income which has accrued to or has been received by the minor daughter under the trust deed in the relevant accounting year, that has to be included in the total income of the father, the assessee.
The expression "so much of the income" occurring in this clause also makes it clear that the said provision relates to the share income of the minor daughter, in this case, and not that of the trustee bank.
[11 B C] Tulsidas Kilachand and ors.
vs C.I.T. Bombay City 1, and C.I.T. Bombay vs Manilal Dhanji, applied.
(ii)A reading of the second proviso to sub section (2) of section
| 3006.txt |
ivil Appeal No. 11 of 1950.
Appeal from the judgment and decree of the High Court of Bombay (Bhagwati and Dixit JJ.) dated 16th December, 1948, in Second Appeal No. 1226 of 1945 confirming a judg ment and decree of the District Judge of Dharwar in Appeal No. 123 of 1943.
The facts of 404 the case and the arguments of the counsel appear in the judgment.
B. Somayya and Sanjiva Rao Naidu (N. C. Shaw, with them) for the appellant.
M.C. Setalvad, Attorney General for India, (V. N. Lokur, with him) for the respondents Nos. 1 and 2.
M.C. Setalvad, Attorney General for India, (G. N. Joshi, with him) for respondent No. 3 (the State of Bombay.) 1952.
January 30.
Judgment was delivered by BOSE J. PATANJALI SASTRI C.J. and DAS J. agreed with Bose J. Bose J.
The plaintiff appeals.
The suit relates to a Saranjam estate in the State of Bombay.
The plaintiff claims to be the sole Saranjamdar and seeks certain declarations and other reliefs appropriate to such a claim.
The first and second defendants are members of the plaintiff 's family while the third defendant is the State of Bombay (Province of Bombay at the date of the suit).
The only question is whether the suit is barred by section 4 (a) of Bombay Act X of 1876 (Bombay Revenue Juris diction Act).
The following genealogical tree will show the relation ship between the parties: Bhujangrao Appasaheb (British grantee) Daulatrao I (died 24 7 1864) Bhujangrao I Malojirao Yeshwantrao alias (died 1881 ) : Annasaheb : : : (widow) Krishnabai Daulatrao III Bhujangrao II Daulatrao II (Del. 1) (Def. 2) (died 8 5 1931) : Bhujangrao III (Plaintiff) 405 The facts are as follows.
A common ancestor of the present parties was given the Gajendragad estate as a Saran jam some time before the advent of the British.
When they arrived on the scene they decided, as far as possible, to continue such Saranjams, jagirs and inams as had been grant ed by the earlier rulers, and accordingly they framed rules under Schedule B, Rule 10 of Bombay Act XI of 1852 (The Bombay Rent Free Estates Act of 1852) to regulate the mode of recognition and the succession and conditions of tenure to Saranjams, which are analogous to jagirs.
In compliance with this, the common ancestor shown at the head of the genealogical tree set out above was recognised by the Brit ish Government as the Saranjamdar of the Gajendragad estate.
He may for convenience be termed the British Grantee.
The Register exhibit P 53 shows that the estate consisted of 26 villages.
We do not know the date of the British recognition but the nature of the tenure is described as follows : "Continuable to all male legitimate descendants of the holder at the time of British conquest, viz., Bhujangrao Appasaheb, the first British Grantee, son of Bahirojirao Ghorpade.
" On the death of the British Grantee (Bhujangrao Appa saheb) he was succeeded by his son Daulatrao I who died on the 24th of July, 1864.
This Daulatrao I left three sons, Bhujangrao I, Yeshwantrao and Malojirao.
In the year 1866 Bhujangrao I and his brother Yesh wantrao alias Annasaheb sued Malojirao for possession of this Saranjam.
A question of impartibility was raised but the Bombay High Court declared that the property in British India was partible.
They further declared that Bhujangrao I was the head of the family and as such was entitled to a special assignment which was not to exceed a quarter share, for the expenses and duties which might devolve on him by virtue of his position, and that after this had been set aside each of the three brothers was entitled to an equal one third Share in the landed property in India.
This judgment 406 is reported in The duties enumerated at page 170 included the "keeping up of armed retainers for the fort of Gajendragad, and for the improvement of that vil lage, which was the chief seat of this branch of the Ghor pade family, and also to enable him to distribute on ceremo nial occasions the customary presents to the junior members of the family.
" The judgment is dated the 12th of October, 1868.
As a consequence a division of the property was ef fected.
Malojirao separated himself from his brothers and was allotted seven villages.
The other two brothers continued joint and took the remainder.
But this was only with respect to property situate in British India.
The parties also had property in the State of Kolhapur.
That was left undivided.
Bhujangrao I died in 1881 and his younger brother Yesh wantrao (alias Annasaheb) claimed to succeed as the sole heir.
The Political Department of the Government of India refused to recognise this claim and permitted Bhujangrao I 's widow Krishnabai to adopt a a boy from the family and recog nised him as the heir in respect of that portion of the estate which lay within the Principality of Kolhapur.
This was on the 3rd of February, 1882.
The Bombay Government followed a similar course regarding the property in British India.
On the 26th of April, 1882, they passed a Resolution embodying the follow ing decision: (1) The adoption was to be recognised and the adopted son was to occupy the same position as his adoptive father, that is to say, he was to get one third of the property plus the assignment given to him as head of the family.
(2) Malojirao who had already taken his share of the estate was to continue in possession.
(3) Yeshwantrao (alias Annasaheb) was given the option of remaining joint with the adopted boy or separating.
Finally, the Resolution Concluded 407 ``The two brothers will hold their respective shares as their private property in virtue of the decree of the High Court and the Jahagir will henceforth be restricted to the portion awarded by the High Court to Bhujangrao which the adopted son will now inherit.
It should however be clearly understood that the decision of the High Court is not to be held as a precedent and that no partition of the Jahagir Estate to be continued to the adopted son will ever be allowed.
" This position was emphasised by Government in the same year on the 22nd August, 1882.
Krishnabai, who had been allowed by Government to adopt Daulatrao II, asked that her husband 's one third share in the estate be also treated as private property in the same way as the shares of the other two brothers.
This prayer was refused and Government stat ed: "It should be plainly understood that Government allow the adoption to be made by her only in consideration of Bhujangrao 's one third share as well as the portion assigned to him as head of the family being continued to the adopted son as indivisible Jahagir Estate descending in the line of male heirs in the order of primogeniture and subject to no terms whatsoever as to the enjoyment of the same by Krishna bai during her lifetime.
" The position was re examined by Government in 1891 and its decision was embodied in the following resolution dated the 17th of March, 1891: "It appears to Government that the whole Gajendragad Estate is a Saranjam continuable as hereditary in the full est sense of the word as interpreted by the Court of Direc tors in paragraph 9 of their Despatch No. 27 dated 12th December, 1855.
It is continuable to all male legitimate descendants of the holder at the time of the British con quest; and should Government ever sanction an adoption the terms of sanction would be those applicable to Saranjamdars.
The property should be dealt with like Other Saranjams in the Political Department.
" 53 408 In the year 1901 the adopted son Daulatrao II sued Yeshwantrao 's son Bhujangrao II for partition.
It will be remembered that in the litigation of 1866, which ended in the Bombay High Court 's judgment reported in 5 Bom.
H.C.R. 161, Malojirao alone separated and the other two brothers continued joint.
The litigation of 1901 put an end to that position.
High Court 's judgment dated the 12th of March, 1908, makes it clear that as Government was not a party to that litigation its rights against either or both of the parties were not affected.
But as between the parties inter se they were bound by the previous decision and so the adopted son was entitled to partition and separate posses sion of such properties as might fall to his share.
After this decision was given the two partitioned the property between themselves amicably.
In or about the year 1930 a Record of Rights was intro duced in fourteen of the villages in the Gajendragad Jaha gir and a dispute arose again between the three branches of the family.
The District Deputy Collector, after inspecting the records, found that "the name of the Khatedar Saran jamdar alone has found place in the village Inam register, in the Saranjam list and the land alienation register," while in the other village records the various members of the family were entered according to the "actual wahivat or enjoyment." After due consideration he thought that the interest of Government and the Saranjamdar would be sufficiently safeguarded by allowing the same position to continue.
He ordered the entries to be made accordingly.
The order also discloses that the matter had been referred to the Legal Remembrancer to the Bombay Government.
In the meanwhile, on the 5th of May, 1898, a set of Rules framed under Schedule B, Rule 10, of the Bombay Rent Free Estates Act of 1852 were drawn up and published in the Bombay Gazette.
These Rules were republished, probably with some modification, in the Gazette of 8th July, 1901.
The portions applicable here were as follows: 409 "I. Saranjams shall ordinarily be continued in accordance with the decision already passed by Government in each case.
A Saranjam which has been decided to be hereditarily continuable shall ordinarily descend to the eldest male representative, in the order of primogeniture, of the senior branch of the family descended from the first British Gran tee or any of his brothers who were undivided in interest.
But Government reserve to themselves their rights for suffi cient reason to direct the continuance of the Saranjam to any other member of the said family, or as an act of grace, to a person adopted into the same family with the sanction of Government.
V. Every Saranjam shall be held as a life estate.
It shall be formally resumed on the death of the holder and in cases in which it is capable of further continuance it shall be made over to the next holder as a fresh grant from Gov ernment, unencumbered by any debts, or charges, save such as may be specially imposed by Government itself.
No Saranjam shall be capable of sub division.
Every Saranjamdar shall be responsible for making a suitable provision for the maintenance of. "(certain members of the family enumerated in the Rule).
If an order passed by Government under Rule VII is not carried out, Government may, whatever the reason may be, direct the Saranjam, or a portion of it, to be resumed. .
Provision for the members of the Saranjam dar 's family entitled to maintenance shall then be made by Government out of the revenues of the Saranjam so resumed.
" After the District Deputy Collector 's orders were passed on the 20th of May, 1930, Daulatrao II died on the 8th of May, 1931, and the matter was again taken up by Government.
This time it passed the following 410 Resolution on the 7th of June, 1932.
The Resolution was headed, "Resumption and regrant of the Gajendragad Saranjam standing at No. 91 of the Saranjam List.
" It reads "Resolution : The Governor in Council is pleased to direct that the Gajendragad Saranjam should be formally resumed and regranted to Bhujangrao Daulatrao Ghorpade eldest son of the deceased Saranjamdar Sardar Daulatrao Bhujangrao Ghorpade and that it should be entered in his sole name in the accounts of the Collector of Dharwar with effect from the date of the death of the last holder.
The Collector should take steps to place the Saranjamdar in possession of the villages of the Saranjam estate which were in possession of the deceased Saranjamdar.
The Governor in Council agrees with the Commis sioner, Southern Division, that the assignments held by the Bhaubands as potgi holders should be continued to them as at present.
" The Bhujangrao mentioned in the Resolution is the plain tiff who is shown as Bhujangrao III in the genealogical tree.
The defendants were evidently aggrieved by this, for they filed Suit No. 23 of 1934 against the present plaintiff and the Secretary of State/or India in Council praying inter alia "that the properties in that suit, viz., the villages allotted to their shares, were their independent and private properties and in case they were held to be Saranjam proper ties, they be declared as independent Saranjams, separate and distinct from the one held by the present plaintiff.
" This suit was withdrawn with liberty to bring a fresh suit on the same cause of action against the present plain tiff but not against the Secretary of State for India in Council.
According to defendants 1 and 2, this was pursuant to an arrangement between the Government and themselves that Government would issue a fresh Resolution in terms of the earlier Resolution dated the 17th of March, 1891.
411 This was done.
On the 25th of February, 1936, Government passed the following Resolution : "Resolution : After careful consideration the Governor in Council is pleased to confirm the decision in Government Resolution (Political Department) No. 1769 dated the 17th of March, 1891,and to declare that the whole of the Gajendragad Estate shall be continuable as an inalienable and impartible Saranjam on the conditions stated in the said Resolution.
Having regard, however, to the manner in which different portions of the estate have been held by different branches of the family, the Governor in Council, in modification of the orders contained in Government Resolution No. 8969 dated the 7th June, 1932, is pleased to direct that the portions of the said estate held by Sardar Bhujangrao Daulatrao Ghorpade, Daulatrao Malojirao Ghorpade and Bhujangrao Yeshwantrao Ghorpade, respectively, shall henceforth be entered in the Revenue Records as de facto shares in the said estate held by the said persons as representatives, respectively, of three branches of the Ghorpade family.
Each of the said de facto shares shall be continuable hereditarily as such as ii it were a separate Saranjam estate in accordance with the rules made for the continuance of Saranjams by the Governor in Council in exercise of the powers referred to in the rules framed under the Bombay Rent Free Estates Act, 1852, and section 2 (3) of the Bombay Summary Settlement Act (VII of 1863) and such special orders as the Governor in Council may make in regard to the Gajendragad Estate as a whole or in regard to the said share.
The recognition of the aforesaid shares and their entry in the Revenue Records as separate shares shall not be deemed to amount to a recognition of the estate of Gajendragad as in any manner partible or alienable and shall not in any way affect the right of Government to treat the said estate as an entire impartible and inalien able Saranjam estate.
The Governor in Council further directs that the aforesaid shares shall in no case be capable of 412 sub division and shall not in any way be alienated or encum bered except in accordance with the rules and orders re ferred to above. " The present suit is an attack on the action of Govern ment in passing this Resolution.
The first and second defendants are the present representatives of the other branches of the family and the third defendant is the Prov ince of Bombay (now the State of Bombay).
The plaint states "9.
Government can have no jurisdiction to deprive the plaintiff at any rate during his lifetime of the full bene fit of all the rights and privileges appertaining to the holder of a Saranjam.
The Order of Government of the 8th February, 1936 is, therefore, ultra vires and in no way binding on the present plaintiff. 10.
Defendants 1 and 2, therefore, are not entitled to any rights or privileges claimable by the holder of a Saran jam which according to the G.R. is continuable 'as an inali enable and impartible Saranjam ', such as for example in the matter of appointment of the village officers in any of the 27 villages appertaining to the Gajendragad Saranjam.
The cause of action arose in April 1938 and the resolution and the entry being ultra vires is not binding. 12.
As this is a suit claiming for relief primarily against defendants 1 and 2, defendant 3 is made a party to the suit in order to enable Government (defendant 3) to give proper effect to the decision of Government of the 17th March, 1891, and of 7th June, 1932, as against defendants 1 and 2 who have no right to the position which they claim. " The reliefs prayed for are "(a) That it be declared that defendants 1 and 2 have no right to go behind the order of the Government as per Reso lution No. 8969 of 7th June, 1932, under which plaintiff is entitled to be recognised as the sole Saranjamdar in the Revenue Records, and that the assignments held by defendants 1 and 2 are held by them as mere potgi holders.
413 (b) That in consequence of his position of a sole Saran jamdar the plaintiff alone at any rate during his lifetime has the sole right to the rights and privileges appertaining to the post of a sole Saranjamdar, to wit, to be consulted in the appointment of the village officers in all the villages appertaining to the Saranjam estate, but assigned to defendants 1 and 2 for potgi. (c) Defendants 1 and 2 be restrained from doing any acts or taking any steps in contravention of the aforesaid right of the plaintiff.
(d) That it be declared that defendant 3 (Government) have no right to change the Resolution No. 8969 of 7th June, 1932, and at any rate during the lifetime of the plaintiff.
" The first Court dismissed the plaintiff 's claim on the merits holding that Government had the right to amend its Resolution in the way it did.
The lower appellate Court also dismissed the suit on three grounds: (1) that the two previous decisions of 1868 and 1908 operate as res judicata, (2) that the impugned Resolution is intra vires and (3) that section 4 (a) and (d) of the Revenue Jurisdiction Act bars the jurisdiction of the Court.
In second appeal the High Court only considered the question of jurisdiction and, agreeing with the lower appel late Court on the point, dismissed the appeal but it granted the plaintiff leave to appeal to this Court.
The only question we have to consider is the one of jurisdiction.
Section 4 of the Bombay Revenue Jurisdiction Act, 1876 (Bombay Act X of 1876), runs Subject to the exceptions hereinafter appearing, no Civil Court shall exercise jurisdiction as to (a). claims against the Crown relating to lands. held as Saranjam. " It was strenuously contended that this is not a claim against the Crown but one against the first and second defendants.
That, in my opinion, is an idle contention in view of paragraphs 9 and 12 of the plaint and reliefs (a)and (d).
In any event, Mr. Somayya was asked whether he would strike out the third defendant 414 and those portions of the plaint which sought relief against it.
He said he was not prepared to do so.
I cannot see how a plaintiff can insist on retaining a person against whom he claims no relief as a party.
I am clear that this is a suit against the "Crown" within the meaning of section 4(a).
The next question is whether, assuming that to be the case, it is also one "relating to lands held as Saranjam.
" So far as the reliefs sought against Government are concerned, that is clearly the case.
Paragraph 9 of the plaint challenges Government 's jurisdiction to deprive the plaintiff of the full benefit of all rights and privileges appertaining to the holder of a Saranjam.
These rights cannot exist apart from the lands which form part of the Saranjam estate and the implication of the prayer is that Government has, for example, no right to resume the Saranjam either under Rule V on the death of the last Saran jamdar or under Rule IX during his lifetime.
It is to be observed that a resumption under Rule IX can only be of the land because the rule directs that when the Saranjam is resumed Government itself shall make provisions for the maintenance of those entitled to it "out of the revenues of the Saranjam so resumed.
" These revenues can only come out of the land.
Relief (d) in the prayer clause seeks a declaration that Government has no right to change Resolution No. 8969 dated the 7th of June, 1932.
That Resolution directly relates to the land because it directs that the Gajendragad Saranjam be resumed and the Collector is directed to take steps to place the Saranjamdar in possession of the villages of the Saran jam estate etc.
It is impossible to contend that this is not a claim relating to lands held as Saranjam.
It was next argued that if that be the case the claim against Government can be dismissed and the plaintiff can at least be given the reliefs claimed against the other two defendants.
These, it was contended, do not relate to land and in any event are not claims against the "Crown".
415 In my opinion, this is not a suit in which the rights claimed against the other defendants can be divorced from the claim against Government and considered separately.
That is evident enough from paragraph 10 of the plaint.
In para graph 9 the power of Government to deprive the plaintiff of the rights he claims is challenged and in paragraph 10 the plaintiff explains that "therefore" the first and second defendants are not entitled to any of the rights and privileges of the Saranjamdar.
One of those rights, as we have seen from Rules VII and IX, is to take the revenues of the entire estate in order that he might fulfil his obligation regarding the payment of maintenance to certain members of the family; and if the defendants claim to hold their lands under the orders of Government and the plaintiff insists on retaining Government as a party in order that it may be bound by the decree he wants against the other defendants it is obvious that his claim against these defendants cannot be separated from his claim against the Government.
In any event, if the claim against Government is to be ignored it can only be on the basis that its orders cannot be challenged and if the orders stand it is evident that the plaintiff can have no hope of success because both sides hold their respective properties on the basis of those orders.
There are two decisions of the Bombay High Court which have taken this view.
Basalingappagouda vs The Secretary of State for India(1) was a Watan case.
Government had recog nised the second defendant as the Watandar.
Plaintiff sued Government and the second defendant and sought a declaration and injunction.
On being faced with the dilemma that the suit against Government did not lie because of section 4 (a) (3) of the Bombay Revenue Jurisdiction Act of 1876, he asked the Court, as here, to leave the Government out of consider ation and decree his claim against the second defendant alone.
The learned Judges held that that would amount to striking out the main relief sought against both the defend ants and would entirely (1) 28 Born.
L.R. 651.
54 416 change the character of the suit and added that "as long as the Secretary of State is a party to the suit, such a decla ration could not be granted.
" In the other case, Basangauda vs The Secretary State(1), Beaumont C.J. and Baker J. took the same view.
They said "Mr. Gumaste, who appears for the appellant, says that his claim is not a claim against the Government but in that case he ought to strike out the Government.
He is not pre pared to strike out the Government, because if he does they will not be bound by these proceedings and will follow the decision of their revenue tribunals.
Therefore, he wants to make the Government a party in order that they may be bound.
But, if they remain a party, it seems to me that there is a claim against them relating to property appertaining to the office of an hereditary officer, although no doubt it is quite true that the appellant does not desire to get any order against the Government as to the way in which the property should be dealt ' with or anything of the sort, and he only wants a declaration as to his title which will bind Government." They held that the jurisdiction of the courts was oust ed.
It was next contended, on the strength of a decision of the Judicial Committee of the Privy Council reported in Province of Bombay vs Horrnusji Manekji(2).
that the courts have jurisdiction to decide whether Government acted in excess of its powers and that that question must be decided first.
In my opinion, this decision does not apply here.
Their Lordships were dealing with a case falling under section 4 (b) of the Bombay Revenue Jurisdiction Act of 1876.
That provides that ". no Civil Court shall exercise jurisdiction as to. . (b) objections to the amount or incidence of any assess ment of land revenue authorised by the Provincial Govern ment.
" (1) (2) 74 I A. 103 417 As pointed out by Strangman K.C., on behalf of the plaintiff respondent, "authorised" must mean "duly autho rised," and in that particular case the impugned assessment would not be duly authorised if the Government Resolution of 11 4 1990 purporting to treat the agreement relied on by the respondent as cancelled and authorising the levy of the full assessment was ultra vires under section 211 of the Land Revenue Code.
Thus, before the exclusion of the Civil Court 's jurisdiction under section 4 (b) could come into play, the Court had to determine the issue of ultra vires.
Consequently, their Lordships held that that question was outside the scope of the bar.
But the position here is different.
We are concerned here with section 4 (a) and under that no question about an authorised act of Government arises.
The section is general and bars all "claims against the Crown relating to lands. held as Saranjam.
" That is to say, even if the Government 's act in relation to such lands was ultra vires, a claim impugning the validity of such an act would fall within the scope of the exclusion in clause (a) provided it relates to such land.
There is a difference of opinion in the Bombay High Court as to whether section 4 is attracted if the only relief sought against Government is a declaration.
One set of decisions holds that that does not amount to a "claim against Government.
" Dattatraya Vishwanath vs The Secretary of State for India(1) is typical of that view.
On the other hand, Daulatrao vs Government of bombay(2), a case relating to the Gajendragad estate, took the other view.
In my opin ion, the latter view is correct.
In my opinion, the decision of the High Court was right and I would dismiss the appeal with costs.
PATANJALI SASTRI C.J. I agree.
S.R. DAS J. I agree.
Appeal dismissed.
Agent for respondents Nos. 1 & 2: M.S.K. Sastri.
Agent for respondent No. 3; P.A. Mehta.
(1)I.L.R. 1948 Born.
809 at 820.
| The position of the Gajendragad estate which had been recognised by the British Government as a saranjam and which had been declared by the Bombay High Court in 1868 to be partible, was re examined in 1891 and Government passed a Resolution in 1891 that "the whole of the Gajendragad estate was a saranjam continuable as hereditary in the fullest sense of the word.
It is continuable to all male legitimate descendants of the holder at the time of the British con quest." In 1932 by another Resolution Government formally resumed the grant and re granted it to the plaintiff who belonged to the first branch of the family of the original grantee with a direction that it should be entered in his sole name in the accounts of the Collector.
The other two branches felt aggrieved and in 1936 Government passed anoth er Resolution which confirmed the Resolution of 1891 and modified the Resolution of 1932, by declaring that the portions of the 403 estate held by the branches shall be entered as de facto shares and that each share shall be continuable hereditarily as if it were a separate saranjam estate.
The plaintiff instituted a suit impleading the representatives of the other two branches as defendants 1 and 2, and the Province of Bombay as the 3rd defendant, alleging that the Resolution of 1936 was ultra vires and praying (A) for a declaration (i) that the defendants 1 and 2 had no right to go behind the Resolution of 1932 under which the plaintiff was recog nised as the sole saranjamdar and that the assignments held by defendants were held by them as mere potgi holders, (ii) that the plaintiff had the sole right to all privileges appertaining to the post of saranjamdar, and (iii) that the Government had no right to change the Resolution of 1932, and (B) for restraining the defendants 1 and 2 from doing any acts in contravention of the aforesaid right of the plaintiff.
Held, (i) that the suit was a suit "against the Crown" and also a suit "relating to lands held as saranjam" within the meaning of sec.
4 of the Bombay Revenue Jurisdiction Act, 1876, and the Civil Courts had no jurisdiction to entertain the suit; (ii) that the plaintiff could not be given even the reliefs claimed against defendants 1 and 2 alone, as the rights claimed against these defendants could not be di vorced from the claim against the Government and considered separately; (iii) in any event if the claim against the Government was to be ignored it can only be on the basis that its orders could not be challenged and if the orders stood, the plaintiff could not succeed because both sides held their respective properties on the basis of those orders.
Basalingappagowda vs Secretary of State (28 Born.
L.R. 651) and Basangauda vs Secretary of State (32 Bom.
L.R. 1370) approved.
Province of Bombay vs Hormusji Maneklal (74 I.A. 03) distinguished.
Held also, that see.
4 of the said Act would apply even if the only relief claimed in the suit against the Govern ment was a declaration.
Dattatreya Viswanath vs Secretary of State for India (I.L.R. disapproved.
Daulatrao vs Government of Bombay approved.
| 69.txt |
Appeal No. 82 of 1957.
Appeal from the judgment and decree dated April 4, 1955, of the Calcutta High Court in Appeal from Appellate Decree No. 1224 of 1953.
G. section Pathak and D. N. Mukherjee, for the appellant.
H. N. Sanyal, Additional Solicitor General of India and P. K. Chatterjee, for the respondents.
February 10.
The Judgment of the Court was delivered by SHAH, J.
Of the premises relating to which this dispute arises No. 5, Raja Rajkissen Street, Calcutta the respondents are the owners and the appellant was a contractual tenant from June 15, 1917, till June 15, 1947, under three successive tenancies for 10 years each.
Under the first tenancy, the appellant paid rent at the rate of Rs. 84,15,0,per month, under the second tenancy at the rate of Rs. 180 per month 815 and under the third tenancy at the rate of Rs. 225 per month.
The tenancy was in respect of buildings used for manufacturing " tin canisters " and open land.
On September 30, 1946, the Governor of Bengal issued the Calcutta Rent Ordinance, V of 1946, making certain provisions for control of rent of premises in the town of Calcutta.
By section 12 of the Ordinance, it was provided in so far as it is material that notwithstanding, anything contained in the Transfer of Property Act, the Presidency Small Cause Courts Act or the Indian Contract Act, no order or decree for the recovery of possession of any premises shall be made as long as the tenant pays rent to the full extent allowable by the Ordinance and performs the conditions of the tenancy.
By the proviso, the landlord was, notwithstanding the protection granted entitled, if the conditions specified therein were fulfilled, to obtain possession of the premises.
This Ordinance was replaced by Act I of 1947 which contained substantially the same provisions.
By the West Bengal Act V of 1948, the provisions of Ordinance V of 1946 and Act I of 1948, were continued.
Thereafter on December 1, 1948 the West Bengal Premises Rent Control (Temporary Provisions) Act XXXVIII of 1948 was brought into operation and by this Act, the West Bengal Act V of 1948 was repealed, but the protection granted to the tenants was con tinued.
This Act was repealed by the West Bengal Premises Rent Control Act, 1950, and by section 12 of the latter Act protection to tenants, including tenants whose tenancies had expired, against eviction was granted by prohibiting courts from passing decrees or orders for recovery of possession of any premises in favour of landlords.
It was provided by that Act that the landlord shall be entitled to obtain a decree in ejectment, inter alia, where the premises are reasonably required by, him either 1 for the purpose of building or rebuilding or for his own occupation.
By letter dated May 15, 1957, the respondents called upon the appellant.
to vacate and deliver possession on the expiry of the period of tenancy.
Possession was however not delivered by the appellant 816 and he continued to pay the stipulated amount and the same was accepted by the respondents.
In an application under section 9 of the West Bengal Premises Rent Control (Temporary Provisions) Act, 1948, the Controller fixed the standard rent of the premises at Rs. 455 per month.
After the enactment of the West Bengal Premises Rent Control Act, 1950, another application was submitted by the appellant and the standard rent was reduced to Rs. 247,8,0.
On October 10, 1950, the respondents served a notice upon the appellant requiring him " to quit, vacate and deliver possession of the premises occupied ", which the appellant was described as holding as " monthly tenant ", on the expiry of the 31st of Chaitra, 1357 B. section, i.e., April 14, 1951.
The ground for eviction, it was claimed, was that the premises were reasonably required by the landlords for putting up now buildings thereon.
The appellant having failed to vacate the premises, the respondents sued in the Court of Small Causes, Calcutta, for a decree in ejectment.
The Court of Small Causes decreed the suit filed by the respondents.
In appeal to the Special Bench, Court of Small Causes, the decree passed by the court of first instance was reversed.
The appellate court held that by acceptance of rent after determination of the tenancy in June, 1947, the appellant continued to be " a tenant holding over " and as the purpose of the tenancy was manufacturing, it could be determined only by a notice of six months, expiring with the year of tenancy and as no such notice was served, the tenancy was not determined and the suit was liable to fail.
In appeal to the High Court of Judicature at Calcutta, the decree passed by the Special Bench was reversed and the decree passed by the court of first instance was restored.
With certificate of fitness under article 133(1)(c) of the Constitution this appeal is preferred by the appellant against the order of the High Court.
The contractual tenancy in favour of the appellant was determined by efflux of time on June 15, 1947, and since that date there has been between the parties no fresh contractual tenancy.
The respondents were, 817 it appears, anxious to obtain possession of the premises let out to the appellant, but they were unable to obtain assistance of the court in view of the protection afforded to the appellant by the successive rent control Acts.
In the meanwhile, the appellant continued to pay every month amounts equal to the contractual rent, and later the rent declared to be the statutory rent.
Does the acceptance of the amounts paid by the appellant confer upon him the right of a tenant holding over within the meaning of section 116 of the Transfer of Property Act? Section 116 of the Transfer of Property Act in so far as it is material provides that if a lessee of property remains in possession thereof after the determination of the lease granted to him and the lessor accepts rent from the lessee or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year or from month to month according to the purpose for which the property is leased as specified in section 106.
It is, however, well settled that where a con tractual tenancy to which the rent control legislation applies has expired by efflux of time or by determination by notice to quit and the tenant continues in possession of the premises, acceptance of rent from the tenant by the landlord after the expiration or determination of the contractual tenancy will not afford ground for holding that the landlord has assented to a new contractual tenancy.
It was observed by B. K. Mukherjee, J. (as he then was), in Kai Khushroo vs Bai Jerbai (1): " On the determination of a lease, it is the duty of the lessee to deliver up possession of the demised premises to the lessor.
If the lessee or a sub lessee under him continues in possession even after the determination of the lease, the landlord undoubtedly has the right to eject him forthwith; but if he does not, and there is neither assent or dissent on his part to the continuance of occupation of such person, the latter becomes in the language of English law a tenant on sufferance who has no lawful title to (1) , 270,273.
818 the land but holds it merely through the laches of the landlord.
If now the landlord accepts rent from such person or otherwise expresses assent to the continuance of his possession, a new tenancy comes into existence as is contemplated by section 116, Transfer of Property Act, and unless there is an agreement to the contrary, such tenancy would be regarded as one from year to year or from month to month in accordance with the provisions of section 106 of the Act.
" It was further observed ". . . in cases of tenancies relating to dwelling houses to which the Rent Restriction Acts apply, the tenant may enjoy a statutory immunity from eviction even after the lease has expired.
The landlord cannot eject him except on specified grounds mentioned in the Acts themselves.
In such circumstances, acceptance of rent by the landlord from a statutory tenant whose lease has already expired could not be regarded as evidence of a new agreement of tenancy, and it would not be open to such a tenant to urge, by way of defence, in a suit for ejectment brought against him, under the provisions of Rent Restriction Act that by acceptance of rent a fresh tenancy was created which had to be determined by a fresh notice to quit.
" Under the Calcutta Rent Ordinance, 1946, and the subsequent legislation which culminated in the West Bengal Premises Rent Control Act, 1950, in the expression "tenant" was included any person who continued in possession after termination of his tenancy.
Section 12 of the West Bengal Premises Rent Control Act, 1950, expressly protects a tenant whose lease has expired.
By the Rent Restriction Statutes ' at the material time, statutory immunity was granted to the appellant against eviction, and acceptance of the amounts from him which were equivalent to rent after the contractual tenancy had expired or which were fixed as standard rent did not amount to acceptance of rent from a lessee within the meaning of section 116, Transfer of Property Act.
Failure to take action which was consequent upon a statutory prohibition 819 imposed upon the courts and not the result of any voluntary conduct on the part of the appellant did not also amount to " otherwise assenting to the lessee continuing in possession.
" Of course, there is no prohibition against a landlord entering into a fresh contract of tenancy with a tenant whose right of occupation is determined and who remains in occupation by virtue of the statutory immunity.
Apart from art express contract, conduct of the parties may undoubtedly justify an inference that after determination of the contractual tenancy, the landlord had entered into a fresh contract with the tenant, but whether the conduct justifies such an inference must always depend upon the facts of each case.
Occupation of premises by a tenant whose tenancy is determined is by virtue of the protection granted by the statute and not because of any right arising from the contract which is determined.
The statute protects his possession so long as the conditions which justify a lessor in obtaining an order of eviction against him do not exist.
Once the prohibition against the exercise of jurisdiction by the court is removed, the right to obtain possession by the lessor under the ordinary law springs into action and the exercise of.
the lessor 's right to evict the tenant will not unless the statute provides otherwise, be conditioned.
The High Court was in our judgment right in holding that by merely accepting rent from the appellant and by failing to take action against him, the appellant did not acquire the rights of a tenant holding over.
It is true that in the notice dated October 10, 1950, the appellant is described as a " monthly tenant ", but that is not indicative of conduct justifying an inference that a fresh contractual tenancy had come into existence.
Within the meaning of the West Bengal Premises Rent Control Act, 1950, the appellant was a " tenant " and by calling the appellant a tenant the respondents did not evince an intention to treat him as a contractual tenant.
The use of the adjective monthly " also was not indicative of a contractual relation.
The tenancy of the appellant was determined by efflux of time an subsequent occupation by him 820 was not in pursuance of any contract express or implied, but was by virtue of the protection given by the successive statutes.
This occupation did not confer any rights upon the appellant and was not required to be determined by a notice prescribed by is.
106 of the Transfer of Property Act.
In that view of the case, this appeal fails and is dismissed with costs.
Appeal dismissed.
| The appellant was a contractual tenant of certain premises in the town of Calcutta of which the respondents were the owners.
The respondents called upon the appellant to vacate and deliver possession of the premises on the expiration of the period of tenancy but possession was not delivered and the respondents were unable to obtain possession in view of the protection afforded to the tenants by the successive rent control Acts passed by the State.
In the meantime the 814 appellant continued to pay every month amounts equal to the contractual rent, and later the rent declared to be the statutory rent and the respondent accepted the same.
The question arising for decision was whether the acceptance of the amounts by the respondents conferred upon the appellant the right of a tenant holding over within the meaning of section 116 of the Transfer of Property Act.
Held, that where a contractual tenancy to which the rent control legislation applied, had expired by efflux of time or by determination by notice to quit and the tenant continued in possession of the premises, acceptance of rent from the tenant by the landlord after the expiration or determination of the contractual tenancy will not afford ground for holding that the landlord had assented to a new contractual tenancy.
Kai Khushroo vs Bai Jerbai , followed.
Acceptance by the landlord from the tenant of amounts equivalent to rent after the contractual tenancy had expired or amounts which were fixed as standard rent did not amount to acceptance of rent from a lessee within the meaning of section 116 of the Transfer of Property Act.
Occupation of the appellant after the determination of tenancy was not in pursuance of any contract express or implied but was by virtue of protection granted by the successive statutes and such occupation was not required to be determined in the manner prescribed by section 106 of the Transfer of Property Act.
| 1136.txt |
Civil Appeal No. 440 (N) of 1970.
Appeal by special leave from the judgment and order dated the 18th June 1969 of the Bombay High Court in Misc.
Civil Appln.
No. 139 of 1968.
290 Naunit Lal, for the Appellant.
A.G. Ratnaparkhi for Respondents Nos.
M.N. Shroff, for Respondents Nos.
17 19.
The Judgment of the Court was delivered by PATHAK, J.
This appeal by special leave is directed against the judgment of the Nagpur Bench of the Bombay High Court quashing the grant of Nazul land to the appellants on a writ petition filed by the respondents Nos. 1 to 16.
The respondents Nos. 1 to 16 applied on March 15, 1963 for the grant of sixteen plots of land included in Government Nazul Plot No. 31/1 (Sheet No. 49 D) in Yeotmal Town for the purpose of constructing shops thereon.
They alleged that they had not been allotted any land yet for carrying on business at Yeotmal, and inasmuch as land sites were being released to refugees or displaced persons they claimed that having been compelled to migrate from West Pakistan to India during the partition of 1947 they were entitled to the grant of such plots.
The appellants made a similar application on May 16, 1964 and it is their case that they had also applied earlier in the same behalf on February 27, 1962.
There were applications from other claimants also.
The State Government, acting on the report of the Commissioner, Nagpur Division, rejected all the applications.
The appellants say that they sought a review of the order of the Government, and on June 28, 1965 the Government reversed its order and decided to grant plots on permanent lease to the appellants.
The Collector, Yeotmal submitted a report to the Government pointing out that each plot would be 192 sq.
in area and having regard to its market value each allottee should be required to pay a premium of Rs. 960.
The State Government granted the plots to the appellants as shop sites in Bhumidhari right without auction on payment of premium, and the decision was conveyed in a Memorandum dated March 3, 1966.
The allotment was assailed by the respondents, and they represented to the State Government that after further inquiry the land should be reserved for deserving claimants.
The respondents filed a writ petition before the Nagpur Bench of the Bombay High Court challenging allotment made by the Government in favour of the appellants.
They urged that no reason 291 able opportunity had been given to them to press their claims for grant of plots after the Government had reversed its earlier decision not to grant land, that the appellants had been unduly favoured and that the order was bad in law because the plots had been granted without holding an auction.
It was also contended that the power to grant the plots was vested in the Collector and not the State Government.
During the pendency of the writ petition a statement was made on behalf of the State Government that it was prepared to consider the claims of the respondents.
The appellants, however, maintained that they had acquired a right to the land in terms of the order dated March 3, 1966 and that they could not be divested of those rights.
By its judgment dated March 14, 1968 the High Court allowed the writ petition, quashed the order granting plots to the appellants and directed the State Government and its officers to take appropriate action on the several claims for allotment of land.
The High Court held that in view of sub section
(2) section 149 read with sub section
(3) of section 164 of the Madhya Pradesh land Revenue Code, 1954, as applied to the Vidharba region of Maharashtra, and rules 22 and 26 framed under the Code, it was not open to the State Government to dispose of the plots without holding a public auction unless there were reasons recorded in writing for doing so, and that after initially deciding not to grant the plots the subsequent decision to allot them to the appellants was contrary to law inasmuch as the claims of others had not been considered.
In this appeal, it is urged by the appellants that the High Court erred in applying sub section
(3) of section 164 and rule 26, and therefore in holding that the lease of the plots without auction and without recording any reasons was invalid.
When the Government decided to grant land to the appellants, it thought that the grant should take the form of a permanent lease in their favour.
The Collector was requested to frame suitable proposals and to submit them to the Government.
The Collector submitted a report dated November 23, 1965 suggesting the allotment of plots for the construction of shops on the footing that each plot would measure 192 sq.
and its market value, worked out on the basis of recorded sale transactions, and taking into regard the commercial purpose for which the land was intended, indicated a premium of Rs. 960.
He recommended further that the plots may 292 be granted without auction and in Bhumidhari right on payment of premium for constructing shops thereon for carrying on business.
On March 3, 1966 the State Government made an order accordingly.
Now section 149 of the Madhya Pradesh Land Revenue Code 1954 provides: "149.
(1) Subject to rules made under this Code, land belonging to the State Government, not being land herein after mentioned in sub section (2), shall be disposed of in Bhumidhari or Bhumiswami rights by the Deputy Commissioner who may require payment of a premium for such right or sell the same by auction.
(2) The land referred to in sub section (1) shall be the following, namely: (a) land situate in the bed of a river of a tank; (b) land reserved for communal purposes such as common grazing ground and cremation grounds; (c) land given out on favourable terms for the promotion of religious, charitable, educational, public or social purposes; (d) land given out to persons on the condition that it shall be used only for grazing cattle; (e) land given out for temporary purposes or for limited periods or for mining and purposes subsidiary thereto or for industrial or commercial purposes; (f) land given out to persons on favourable terms for rendering service as a kotwar; (g) any other land which the State Government may, by notification issued in this behalf, specify.
" Section 164 of the Code may also be set forth: 293 "164.
(1) Every person who holds land from the State Government or to whom a right to occupy land is granted by the State Government or the Deputy Commissioner and who is not entitled to hold land as a tenure holder shall be called a Government lessee in respect of such land.
(2) The Government lessee shall, subject to any express provision in this Code, hold his land in accordance with the terms and conditions of the grant which shall be deemed to be a grant within the meaning of the .
(3) The State Government or the Deputy Commissioner may, subject to rules made under this Code, dispose of the right to occupy the land specified in sub section (2) of section 149 on payment of a premium or by auction or on such terms and conditions as may be prescribed.
" It is apparent that the grant cannot be attributed to clause (c) of sub section
(2) of section 149.
The land was disposed of in Bhumidhari right.
Moreover, it was not given on favourable terms to the appellants; the market value of the plots was taken for fixing the premium.
From the nature of the grant, it is clear that action under sub section
(1) of section 149 was intended.
Now Part III of the Notification No. 1118 1832 55 XXVIII dated May 22, 1956 sets forth the rules framed with reference to sub section (1) of section 149.
These rules provide for the grant of Bhumiswami and Bhumidhari rights in nazul land for dwelling houses and ancillary purposes.
Rule 24 defines the expression "Nazul Land" to mean land belonging to the State Government which is used for building on, or for roads, markets and other public purposes.
Rule 26 applies the provisions of rules 18 to 36 contained in Part V of the Notification No. 1119 1832 55 XXVIII dated May 22, 1956 to the disposal of nazul land under Part III.
The provise to rule 26 declares that where nazul land is put to auction it should normally be granted in Bhumiswami right, and where it is disposed of without auction it should normally be granted in Bhumidhari right.
Rule 22 of Part V defines the power of the State Government and of the Collector to dispose of nazul plots with or without auction.
Rule 22 provides: 294 "22.
Power to dispose of nazul plots with or without auction shall be exercised in accordance with these Rules (1) by the State Government in the case of (i) plots of which the freehold market value is not less than Rs. 5,000; (ii) plots within the limits of the Municipal Corporation of the City of Nagpur, whether or not included in the Schemes of Nagur Improvement Trust; (iii) plots reserved for specific purposes under rule 20; (iv) strips of land not being independent plots to be settled with the occupants of adjoining land where the freehold value of the strip is not less than Rs. 5,000; (v) small strips of land adjacent to occupied plot, which cannot be disposed of as a separate site and in respect of which there is a difference of opinion between the Collector and the Officer in charge, Town Planning and Valuation: (vi) independent plots not included in the approved lists where there is a difference of opinion between the Collector and the Officer in charge, Town Planning and Valuation; (vii) plots granted without auction.
(2) by the Collector, in case of the other plots.
" Sub rule (1) of rule 26 in Part V declares: "26. (1) Leasehold rights in nazul land shall be disposed of by public auction except when in any particular case the State Government or as the case may be, the Collector thinks for reasons to be recorded in writing that there is good reason for granting the land without auction." 295 It seems indisputable that under the Rules as a general principle leasehold rights in nazul land are to be disposed of by public auction.
If in any particular case the State Government or, as the case may be, the Collector considers that there is good reason for granting the land without auction the reasons must be recorded in writing.
The existence of good reason for departing from the general principle, and the recording of the reason in writing are essential prerequisites which must be satisfied before leasehold rights are granted without auction.
It is pointed out that under clause (vii) of sub rule (1) of rule 22 the State Government is empowered to dispose of nazul plots without auction.
We have no doubt it can do so, but only after full compliance with sub rule (1) of rule 26.
The sub rule (1) controls the power of the State Government conferred by clause (vii) of sub rule (1) of rule 22.
To hold otherwise would be to confer an arbitrary power on the State Government to dispose of nazul plots.
It would be in the absolute discretion of the State Government to decide whether nazul plots should be granted with auction or without auction.
If that construction is accepted, it is clear that sub rule (1) of rule 26 would be negatived.
The only reasonable construction, it seems to us, is to read the two provisions together.
In the present case there is no evidence that the State Government has recorded any reasons in writing for preferring the mode of disposing of the land without auction and we are not satisfied that it had good reason for favouring that mode.
In the circumstances the grant of land to the appellants has been rightly quashed by the High Court.
There is also sufficient justification in the grievance of the respondents that the State Government did not consider the claims of other persons, including the respondents, when making an allotment of the plots.
The State Government had decided earlier, as a matter of policy, not to allot nazul land to displaced persons, and pursuant to that decision all the applications for allotment were rejected.
The applications were not rejected on the merits of the respective claims set out therein.
Subsequently when the State Government made an allotment of the plots to the appellants, it was consequent to a decision which analytically must be regarded as a composite of two decisions, one, a policy decision to throw open 296 the land to allotment in reversal of the earlier policy and, two, to allot the land to the appellants.
It will be remembered that the applications of the respondents for allotment of plots were rejected on the ground that the land was not available for allotment.
That was a policy decision.
When it was reversed, it was incumbent on the State Government to reconsider those applications or to notify that the land was available for allotment and to invite fresh applications in that behalf.
It was not open to the State Government to allot the plots to the appellants in disregard of the claims of others who had also applied for allotment.
In quashing the order granting plots to the appellants and directing the State Government or its appropriate officers to consider the several claims for allotment the High Court, in our opinion, did that which was plainly right.
The appellants say that the respondents must be taken to have accepted the rejection of their applications for allotment, and it was only the appellants who pursued the matter and obtained a reversal of the order of the Government and therefore the appellants alone were entitled to the allotment of plots.
The submission would have had force but for the circumstance that the State Government effected what was a change of general policy.
The change of policy altered the situation completely, and all the claimants were entitled to the benefit of that change.
By adopting the new policy, the State Government must be taken to have declared that the land was now open to allotment to the claimants who were found most deserving.
There were several applicants for allotment, and a selection had to be made.
It cannot be contended, as indeed it is urged before us, that the appellants constitute a distinct and separate class from the respondents only because the appellants agitated against the rejection of their applications while the respondents did not.
The controversy which remains is whether it is the State Government or the Collector who has power to dispose of the plots in view of their market value.
That is a matter on which we need express no opinion, having regard to the quashing of the entire allotment proceeding from its inception.
It will be for the Govern 297 ment or the appropriate authority to decide what should be the nature of the rights to be conferred on the allottees and, therefore, what should be the premium to be fixed.
In the result, the appeal is dismissed with costs.
N.V.K. Appeal dismissed.
| Respondents Nos. 1 to 16 applied for the grant of plots of land for purposes of constructing shops, alleging that they were displaced persons and entitled to the grant of plots.
The appellants also made a similar application.
There were applications from other claimants.
The State Government acting on the report of the Commissioner rejected all the applications.
Subsequently the Government at the instance of the appellants who had sought a review, reversed its earlier order and decided to grant plots on permanent lease to the appellants.
The decision was conveyed in a memorandum by the State Government, who granted the plots to the appellants as shop sites in Bhumidhari rights without auction on payment of premium.
The allotment was assailed by the respondents and they represented to the State Government that only after further inquiry should the land be reserved for deserving claimants.
The respondents filed a writ petition in the High Court challenging the allotment made by the Government in favour of the appellants contending that no reasonable opportunity had been given to them to press their claim for grant of plots, after reversal of the earlier decision not to grant land, that the appellants had been unduly favoured, and that the power to grant plots was vested in the Collector and not in the State Government.
The appellants contested alleging that they had acquired a right to the land that they could not be divested of those rights.
The High Court quashed the order granting plots to the appellants and directed the State Government to take appropriate action on the several claims for allotment of land.
It held that under sub section (2) of section 149 read with sub section (3) of section 164 of the Madhya Pradesh Land Revenue Code, 1954, and rules 22 and 26 framed under the Code it was not open to the State Government to dispose of the plots without holding a public auction unless there were reasons recorded in writing for doing so and that after initially deciding not to 289 grant the plots, the subsequent decision to allot them was contrary to law as the claims of others had not been considered.
Dismissing the appeal, ^ HELD :1.
The High Court was right in quashing the order granting plots to the appellants and directing the State Government to consider the several claims for allotment.
[296 C D] 2.
The grant cannot be attributed to clause (c) of sub section (2) of section 149.
The land was disposed of in Bhumidhari right.
It was not given on favourable terms to the appellants, the market value of the plots was taken for fixing the premium.
From the nature of the grant, it was clear that action under subsection (1) of section 149 was intended.
[293 E] 3.
Under Rules 24 to 26 of the Land Revenue Code, lease hold rights in nazul land are to be disposed of by public auction.
If in any particular case the State Government or the Collector considers that there is good reason for granting the land without auction the reasons must be recorded in writing.
The existence of good reason for departing from the general principle and the recording of the reason in writing are essential prerequisites which must be satisfied before lease hold rights are granted without auction.
[295 A C] In the instant case there is no evidence that the State Government has recorded any reasons in writing for preferring the mode of disposing of the land without auction.
It had also no good reason for favouring that mode.
In these circumstances the grant of land to the appellants was rightly quashed by the High Court.
[295 E F] 4.
The State Government had decided earlier, as a matter of policy, not to allot nazul land to displaced persons, and pursuant to the decision all the applications for allotment were rejected.
The applications were not rejected on the merits of their respective claims.
Subsequently, when the State Government made an allotment of the plots to the appellants, it was consequent to a decision, which must be regarded as a composite of two decisions, one a policy decision to throw open the land to allotment in reversal of the earlier policy and, two, to allot the land to the appellants.
The applications of the respondents for allotment of plots were rejected on the ground that the land was not available for allotment.
That was a policy decision.
When it was reversed it was incumbent on the State Government to reconsider those applications or to notify that the land was available for allotment and to invite fresh applications in that behalf.
It was not open to the State Government to allot the plots to the appellants in disregard of the claims of others who had also applied for allotment.[295 G H; 296 A B]
| 4510.txt |
iminal Appeal No. 83 of 1959.
Appeal from the judgment and order dated July 25, 1958, of the Patna High Court in Criminal Revisions Nos. 593 and 594 of 1958 arising out of the judgment and order dated March 3, 1958, of the Additional Sessions Judge, Monghyr, in Criminal Appeal No. 286 of 1956.
D. P. Singh and R. H. Dhebar, for the appellant.
C. P. Lal, for the respondent.
October 14.
The Judgment of the Court was delivered by KAPUR J.
This is an appeal brought in pursuance of a certificate under article 134(1)(c) of the Constitution against the judgment and order of acquittal of the High Court of Patna.
There were certain disputes between the workmen and the Management of Mankatha Distillery of which the proprietor is the respondent.
On November 23, 1953, a petition was submitted on behalf of the workmen of the Distillery to the Assistant Labour Commissioner, Bhagalpur, which was signed by one Banarsi Choudhuri on behalf of himself and for and on behalf of the workmen of the Distillery.
In this petition, certain grievances of the workmen were set out.
Con ciliation proceedings were started, and there was an agreement on December 5, 1953, which the High Court has described as 'some sort of agreement '.
On January 12, 1954, an application was made for the registration of the Union of the workmen of the Distillery under the Indian Trade Unions Act, and the same was registered on March 23, 1954, under the 3 name and style of Mankaths Distillery Mazdoor Panchayat.
The Distillery was closed and the workmen were discharged, and thereafter on February 19, 1954, the General Secretary of the Mankatha Distillery Mazdoor Panchayat, even though it was not registered at the time, sent a letter to the Management, protesting against the discharge of the workmen without payment of compensation and objecting to the inten tion of the employers to re start the factory after employing other workmen.
It was also stated therein that the workers who had been discharged, had been working for some years and a list of such workmen was attached to the letter.
The following portion of the letter is relevant for the purposes of this appeal: " All the persons, named below, shall work in the factory in legal manner, on monthly salary on permanent basis.
It is not only hoped, rather fully believed that you would consider the above facts and gladly accept the same.
On getting a stisfactory reply, all the workers, who had been working in your factory since years, would report themselves to duty and work according to your orders ".
Although it is addressed to the proprietors of the Dis tillery, it seems to have been sent to the Assistant Commissioner of Labour, Bhagalpur, where it was received on February 25, 1954.
The following endorsements were made on this letter: " Discussed with you.
The management is re.
quested to attend conciliation proceeding on 10th March, 1954, at 11 a.m.
The Union is also informed accordingly ".
Another petition dated March 5,1954, was sent by the General Secretary of the Distillery Mazdoor Panchayat to the Assistant Labour Commissioner, in which the names of all the persons who had been freshly employed by the proprietors, were mentioned and it was prayed that those who were discharged at the time of the closing of the factory, may be reinstated and wages paid, and a request was made to the Assistant Labour 4 and get the workmen reinstated.
The order on this petition was: ", The parties have been called to morrow in my office for conciliation.
The result of the proceeding may be awaited.
" On March 18, 1954, a settlement was arrived at between the management and the workers which is signed by the Conciliation Officer appointed under section 4 of the (Act 14 of 1947) (hereinafter termed, for the sake of brevity, the Act).
This document was signed by the proprietor and the manager of the Distillery and by Banarsi Choudhuri, General Secretary of the Workers ' Panchayat and also by six other members of the Panchayat who were evidently the members of the Executive Committee of the Panchayat.
The terms of the settlement were as follows: " 1.
It is agreed that the workers ' named in Schedule " A " shall be taken to jobs without break in their services.
The new hands appointed after the closure of the factory shall be discharged.
If three shifts will start and any other increased opportunity of employment will be available in the factory, the management shall employ only those workers who are left to day and who had worked in August 1953 and September 1953 in order of seniority.
Shri Banarsi Choudhry, Balmiki Singh, Bhaso Singh and Kaltu (?) Singh are accused in a case pending before the Court at Monghyr.
The Management agrees that if they will be acquitted from the court, they will be given jobs.
All the workers will be put in permanent basis as they were previously.
The order putting them in the temporary basis after the opening of the Mill is cancelled.
The arrears will be paid on monthly basis as before instead of weekly basis as at present after the re opening of the factory.
The grievances raised by the workers and covered by the agreement dated the 5th December, 5 1953, will be decided by the Labour Commissioner Bihar, Patna and his decision shall be acceptable to and final for the parties.
The work of the factory will be resumed immediately.
The workers will continue to have all the benefits and privileges which are guaranteed by law or usage and custom.
The workers will not be victimised for their Trade Union activities".
The prosecution case is that the terms of the settlement were not carried out in that the old workmen were not re employed and the newly employed workmen were not discharged.
Thereupon, the respondent and the manager of the Distillery, one Ram Narain Lal were prosecuted on a complaint filed by the Labour Superintendent, Mr. L. D. Singh, after sanction of the Government of Bihar had been obtained.
Both the accused persons were convicted and sentenced to a fine of Rs. 150 each or, in default, one month 's simple imprisonment.
The learned Magistrate held that there was an industrial dispute within the meaning of the Act, and that the conciliation settlement dated March 18, 1954, was a valid settlement and the respondent failed to implement the first term of the settlement.
Against this order, an appeal was taken to the Sessions Court and the Third Add1.
Sessions Judge dismissed the appeal.
He confirmed the findings of the learned Magistrate.
Against this order of the Sessions Judge, an appeal was taken to the High Court by the respondent only, and the High Court set aside the order of conviction and acquitted the accused.
It held that there was no recognised Union, though there was " some kind of a vague Union " existing, and that because the Conciliation Officer had visited the Distillery without giving a reasonable notice, the " decision of the Conciliation Officer on 18 3 1954, must, therefore, be deemed to be without jurisdiction ", and that there was no agreement arrived at between the proprietor on one side and the " labourers " as a whole on the other, and ": it is preposterous to suppose that because some labourers 6 had signed the settlement that it bound all the labourers.
It seems to me that there is a serious defect in this settlement which is described as a decision of the Conciliation Officer dated 18 3 1954 ".
On the ground, therefore, that the settlement was not a settlement which was binding on the respondent, the conviction was set aside.
It would be an erroneous view if it were said that for a dispute to constitute an industrial dispute it is a requisite condition that it should be sponsored by a recognised union or that all the workmen of an industrial establishment should be parties to it.
A dispute becomes an industrial dispute even where it is sponsored by a union which is not registered as in the instant case or where the dispute raised is by some only of the workmen because in either case the matter falls within section 18(3)(a) and (d) of the Act.
See also Newspapers Limited, Allahabad vs The State Industrial Tribunal, Uttar Pradesh (1).
The settlement of March 18, 1954, arrived at during the conciliation proceedings was signed by the General Secretary and members of the executive committee of the Union though it was unregistered at the time.
We cannot therefore give our accord to the decision that the settlement of March 18, 1954, was not a settlement binding between the parties.
The scope and effect of section 11(2) was raised before us and it was argued that because the conciliation officer did not give any reasonable notice before he came to the Distillery on March 18, 1954, the settlement was not a legal settlement and consequently was not binding on the parties and its breach could not fall within the penal consequences of section 29 of the Act.
Now, section 11(2) provides: " A conciliation officer or a member of a Board or Court or the presiding officer of a Labour Court, Tribunal or National Tribunal may for the purpose of inquiry into any existing or apprehended industrial dispute, after giving reasonable notice, enter the premises occupied by any establishment to which the dispute relates ".
(1) at 38.
7 Section 11 only deals with the procedure and powers of the conciliation officers and sub section 2 authorises the conciliation officer to enter the premises occupied by any establishment to which the dispute relates after giving a reasonable notice.
This notice is only for the purpose of entering the premises to make an enquiry into any existing industrial dispute or an apprehended industrial dispute, and is merely to apprise the establishment that it is the conciliation officer who is coming and not an absolute stranger who has no connection at all with the machinery set up for the purposes of the Act.
The absence of a notice under section 11(2) therefore does not affect the jurisdiction of the Conciliation Officer.
As to what the conciliation officer can and should do, is contained in section 12 of the Act.
Sub section 1 empowers the conciliation officer to hold conciliation proceedings in the case of a public utility service after notice under section 22 whereby a mandatory duty is cast upon him to do so, and in other disputes it is 'his discretion to hold conciliation proceedings in the prescribed manner.
Under sub section
(2) he has to investigate without delay the dispute in all matters affecting the merits of the dispute, and he can do such things as he thinks necessary for inducing the parties to come to a fair and amicable settlement.
Sub section (3) provides that if a settlement of the dispute is arrived at, a report thereof shall be sent to the appropriate Govern ment, and sub section
(4) also provides for the sending of a similar report to the appropriate Government if no settlement is arrived at.
Sub section
(5) deals with the powers of the Government when a report is received as to the non settlement of the dispute, and sub section
(6) which was relied upon provides: section 12(6) " A report under this section shall be submitted within fourteen days of the commencement of the conciliation proceedings or within such shorter period as may be fixed by the appropriate Government.
Provided that the time for the submission of the report may be extended by such period as may be agreed upon in writing by all the parties to the dispute.
" 8 It was argued that because the report had not been sent to the Government within fourteen days of the commencement of the conciliation proceedings, the settlement arrived at was invalid and was not binding.
This contention must be repelled because any contravention of section 12(6) may be a breach of duty on the part of the conciliation officer; that does not affect the legality of the proceedings which terminated as provided in section 20(2) of the Act.
It was so held by this Court in Andheri Marol Kurla Bus Service vs The State of Bombay (1).
It cannot be said, therefore, that the settlement which was arrived at on March 18, 1954, was not a legal settlement and that a breach of it would not attract the penal provisions of section 29 of the Act.
After the case was decided by the Judicial Magistrate the parties arrived at a fresh settlement on October 6, 1956, which recited: " That this settlement made this day the 6th October, 1956, at Patna, settles all the pending grievances and/or demands of workmen whatsoever ".
As a result of this out of the discharged workmen 25, whose names are given in Appendix A attached to the compromise, were reinstated with effect from October 8, 1956.
The claim with regard to the other discharged workmen was withdrawn.
This settlement was accepted by the Industrial Tribunal by an order dated October 10, 1956.
This shows that all disputes between the parties have been settled and workmen have been reinstated.
In view of this in the words of Subba Rao, J., in the State of Bihar vs Hiralal Kejrilal (2) " public interest does not require that the stale matter should be resuscitated ".
Therefore we do not think it necessary to interfere under article 136 with the order of the High Court.
The appeal is therefore dismissed.
Appeal dismissed.
(1) [1969] Supp. 2 S.C.R. 734.
(2) [1960] :S.C.R. 726, 736.
| A settlement was arrived at between the management of Mankatha Distillery and the workmen 's union before the con ciliation officer.
The Union was not registered under the Indian Trade Unions Act on the date of the said settlement.
The terms of the settlement not having been carried out by the management the respondent, who was the proprietor, and the manager of the said distillery were prosecuted and were convicted by the Magistrate.
The Sessions Court, on appeal by the respondent, confirmed the Magistrate 's order.
On an appeal to the Patna High Court by the respondent the High Court set aside the order of conviction and acquitted the respondent holding that there was no recognised union and that because the conciliation officer had visited the Distillery without giving a reasonable notice, on 18 3 1954 there could be no agreement between the proprietor on one side and the workmen as a whole on the other on the date and it was wrong to suppose that because somu workmen had signed the settlement that it bound all the workmen: Held, that for a dispute to constitute an industrial dispute it is not a requisite condition that it should be sponsored by a recognised union or that all the workmen of an industrial establishment should be parties to it.
A settlement arrived at in course of conciliation proceedings falls within section 18(3)(a) and (d) of the Industrial Disputes Act and as such binds all the workmen though an unregistered union or only some of workmen may have raised the dispute.
The absence of notice under section 11(2) by the Conciliation Officer does not affect the jurisdiction of the conciliation officer and its only purpose is to apprise the establishment that the person who is coming is the conciliation officer and not a stranger.
Any contravention of section 12(6) in not submitting the report within 14 days may be a breach of duty on the part of the conciliation officer ; it does not affect the legality of the proceedings which terminated as provided in section 20(2) of the Act.
1 2 Where a fresh settlement is arrived at between the parties and all disputes are settled, then " public interest does not require that the stale matter should be resuscitated ".
Newspapers Limited, Allahabad vs State Industrial Tribunal, Uttar Pradesh, , referred to.
Andheri Marol Kurla Bus Service vs The State of Bombay, A.I.R. and State of Bihar vs Hiralal Kejrilal, [1960] 1 S.C.R. 726, approved.
| 972.txt |
Civil Appeals Nos.
56 & 57 of 1954.
Appeal from the judgment and order dated the 25th day v of March 1951 of the Madras High Court in Case Referred Nos. 32 of 1948 and 31 of 1950.
K.S. Krishnaswami Iyengar, (K. R. Choudhry, with him) for the appellants.
G.N. Joshi and P. G. Gokhale, for, the respondent.
May 9.
The Judgment of the Court was delivered by VENKATARAMA AYYAR J.
The appellant is a firm which was constituted under a deed of partnership dated 10 2 1941, and consists of two partners, Subba Rao and Hariprasada Rao.
On 21 3 1942 it was registered under section 26 A of the Indian IncomeTax Act No. XI of 1922, hereinafter referred to as the Act, for the assessment year 1942.
Sometime thereafter, one of the partners, Subba Rao, is stated to have left on a long pilgrimage, and the affairs of the partnership were then managed by Hariprasada Rao as his agent under a general power of attorney dated 1 7 1940.
Hariprasada Rao then applied under rules 2 and 6 of the rules framed under section 59 of the Act, for renewal of the registration certificate for the year 1942 43, and the application was signed by him for himself and again as the attorney of Subba Rao.
Those rules provide that an application for registration of a firm under section '26 A and for renewal of registration certificate "shall be signed personally by all the partners" '.
The Income tax Officer rejected the application for renewal on the ground that it was not personally signed by one of the partners, Subba Rao, and that the signature of Hariprasada Rao as his agent was not valid The order was taken in appeal, and was ultimately the subject of a reference under section 66(1) of the Act to the High Court of Madras, which held that the word "personally" in rule 6 required that the partner 579 should himself sign the application, and that the principles of agency under the general law were exclude.
(Vide Commissioner of Income tax vs Subba Rao(1)).
While these proceedings were pending, Hariprasada Rao filed the two applications, out of which the present appeals arise, for renewal of the registration certificate for the assessment years 1943 44 and 1944 45.
Both of them were signed by him for himself and as attorney for Subba Rao.
At the hearing of these petitions the appellant, apart from maintaining that rules 2 and 6 did not, on their true construction, exclude signature by an agent on behalf of a partner, raised a further contention that the rules themselves were ultra vires the powers of the rulemaking authority.
The Income tax Officer overruled both these contentions, and rejected the applications, and his orders were confirmed on appeal by the Appellate Assistant commissioner and then by the Appellate Tribunal.
Thereafter, on the application of the appellant, the Tribunal referred the following questions for the decision of the High Court: "(1) Whether the word 'personally ' in the Income tax Rules, as framed under section 59 of the Income tax Act would exclude a duly authorised agent of a partner from signing an application on behalf of the partner under section 26 A of the Income tax Act? (2)If the answer to the above question is in the affirmative, whether rules 2 and 6 are ultra vires the rule making authority?" The reference was heard by Satyanarayana Rao and Viswanatha Sastry, JJ.
Following the decision in Commissioner of Income tax vs Subba Rao(1), they answered the first question in the affirmative.
On the second question, however, they differed.
Satyanarayana Rao, J. held that the rules were ultra vires, and that the applications were in order, and ought to have been granted.
Viswanatha Sastry, J. was of the contrary opinion, and held that the rules were intra vires, and that the applications were properly (1) I.L R. ; 580 rejected as not being in accordance with them.
The learned Judges, however, granted a certificate under section 66 A of the Act, and that is how the appeals come before us.
The first question whether the word "personally" would exclude signature by an authorised agent on behalf of the partner was answered in the affirmative by the Madras High Court in Commissioner of Incometax vs Subba Rao(1).
This was one of the decisions quoted with approval by this Court in Commissioner of Agricultural Income tax vs Keshab Chandra Mandal(2), where the question was whether a rule framed under the Bengal Agricultural Income tax Act that the declaration in the return should be signed by the individual himself required that he should sign it personally, and it was held that it did so require.
Sri K. section Krishnaswami Ayyangar, learned counsel for the appellant, did not urge any grounds for differing from the above conclusion, and we must therefore hold, in agreement with the views expressed in the above decisions, that the signature which is pres cribed by the rules is that of the partner himself, and that they are not complied with by the agent signing on his behalf.
Then we come to the second question and that is the substantial question that arises for our determination in this appeal whether rules 2 and 6 are ultra Vires the rule making authority.
The argument of the appellant in support of its contention that the rules are ultra Vires may thus be stated: Under the common law of England, a person has the right to do through an agent whatever he can do himself, and that right has also been conferred on him in this country by section 2 of the Powers of Attorney Act VII of 1882, which runs as follows: "The donee of a power of attorney may, if he thinks fit, execute or do any assurance, instrument or thing in and with his own name and signature, and his own seal, where sealing is required, by the authority of the donor of the power; and every assurance, (1) I.L.R. I.T.R. 232.
(2) ; 581 instrument and thing so executed and done, shall be as effectual in law as if it had been executed or done by the donee of the power in the name, and with the signature and seal, of the donor thereof "This section applies to powers of attorney created by instruments executed either before or after this Act comes into force".
Section 26 A of the Act confers on a partner the right to apply for registration of the firm, and that right could be 'exercised both under the common law and under section 2 of the Powers of Attorney Act through an authorised agent.
The sovereign legislature might, if it so chooses, abrogate the rule of common law, and repeal section 2 of the Powers of Attorney Act,.
and enact that the application to be presented under section 26 A should be signed by the partner himself and not by any other person; but it has not done so either expressly or by necessary implication, and, therefore, the application which was signed by Hariprasada Rao is as good as if it had been signed by Subba Rao.
The Rules no doubt require that the signature should be that of the partner and not that of ' his agent.
But in prohibiting what would be lawful under the section, the Rules go beyond the ambit of the authority conferred by section 26 A on the rule making authority, which is limited to framing Rules for giving effect to the principles laid down in the statute.
They are therefore ultra vires.
In the alternative, assuming that the mandate given to the rule Making authority under section 26 A is of sufficient amplitude to authorise the making of the Rules in question, even then, they must be held to be ultra vires, as they have the effect of abrogating the common law and of repealing section 2 of the Powers of Attorney Act, which confer on a person the right to act through an agent, and that being a legislative function cannot be delegated to a rule making authority.
and section 26 A, if it is to be construed as conferring such power on an outside authority, must be struck down as constituting an unconstitutional delegation by the legislature of its legislative function.
582 It is the correctness of these contentions, that now falls to be considered.
According to the law of England and that is also the law under the Indian Contract Act, 1872 "every person who is sui juris has a right to appoint an agent for any purpose whatever and that be can do so when he is exercising a statutory right no less than when he is exercising any other right".
Per Stirling, J. in Jackson and Co. vs Napper: In re Schmidts ' Trade Mark(1).
This rule is subject to certain well known exceptions as when the act to be performed is personal in character, or is annexed to a public office, or to an office involving fiduciary obligations.
But apart from such exceptions, the law is well settled that whatever a person can do himself, he can do through an agent.
It has accordingly been held that "at common law.
, when a person authorizes another to sign for him, the signature of the person so signing is the signature of the person authorizing it".
Per Blackburn, J. in The Queen V. Justices Of Kent(").
The appellant is therefore right in his contention that unless the statute itself enacts otherwise, an application which a partner has to sign would be in order and.
valid, if it is signed by his authorised agent.
The question then is whether there is anything in the Act, which requires that an application under section 26 A should be signed by the party personally.
Section 26 A is as follows: "(I) Application may be made to the Incometax Officer on behalf of any firm, constituted under an instrument of partnership specifying the individual shares of the partners, for registration for the purposes of this Act and of any other enactment for the time being in force relating to income tax or super tax.
(2) The application shall be made by such person or persons, and at such times and shall contain such particulars and shall be in such form, and be verified in such manner, as may be prescribed; and it shall (1) , 172.
(2) , 307.
583 be dealt with by the Income tax Officer in such manner as may be prescribed".
The section does not, it should be noted, provide that the application for registration should be signed by the partner personally, and it is this that forms the foundation of the contention of the appellant that the right which a person has under the general law and under section 2 of the Powers of Attorney Act to act through an agent has not been taken away or abridged by the section.
He relies in support of his contention on the following rules of construction: (1) Statutes which encroach on the rights of a subject should be interpreted if possible so as to respect such rights.
[Vide Maxwell on Interpretation of Statutes, 10th Edition, page 285; Craies on Statute Law,, 5th Edition, pages Ill to 114).
The law is thus stated by Lord Justice Bowen in In re Cuno: Mansfield vs Mansfield(1): "In the construction of statutes, you must not construe the words so as to take away rights which already existed before the statute was passed, unless you have plain words which indicate that such was the intention of the legislature".
(2)In the absence of clear and unambiguous language, an intention to alter the existing law should not be imputed to the legislature.
(Vide Craies on Statute Law, 5th Edition, pages 114 and 115).
(3)The law does not favour repeal of a statute by implication, and therefore a later statute should not be construed as repealing an earlier one without express words or by necessary implication.
(Vide Maxwell on Interpretation of Statutes, 10th Edition, page 170;.
Craies on Statute Law, 5th Edition, page.
"If it is possible", observed Farwell, J., "it is my duty so to read the section as not to effect an implied repeal of the earlier Act": Be Chance(2).
"Unless two Acts are so plainly repugnant to each other, that effect cannot be given to both at the same time, a repeal will not be implied".
Per A. L. Smith, J. in Kutner vs Phillips(3).
(1) , 17.
(2) , 270.
(8) , 272.
584 In the light of these principles, it is contended that the true scope of section 26 A is that it confers a right on a partner to register the firm, and leaves the modus of the exercise thereof to be regulated by the existing law, and that, therefore, far from showing an intention either to alter the general law as to the right of a person to act through his agent or to repeal section 2 of the Powers of Attorney Act, the section depends on their continued operation for its implementation.
Now, the rules of construction on which the appellant relies are well established.
But then, it should not be overlooked that they are only aids to ascertain the true intention of the legislature as expressed in the statute., and the question ultimately is, what in the context do the words of the enactment mean? The following passage from Crawford on "The Construction of Statutes", 1940 Edition, page 454 cited by the appellant may be usefully referred to in this connection: "Why should a statute be subjected to a strict or a liberal construction, as the case may be? The only answer that can possibly be correct is because the type of construction utilized gives effect to the legislative intent.
Sometimes a liberal construction must be used in order to make the legislative intent effective.
, and sometimes such a construction will defeat the intent of the legislature.
If this is the proper conception concerning the rule of construction to be adhered to, then a strict or a liberal construction is simply a means by which the scope of a sta tute is extended or restricted in order to convey the legislative meaning.
If this is the proper position to be accorded strict and liberal constructions, it would make no difference whether the statute involved was penal, criminal, remedial or in derogation of common right, as a distinction based upon this classification would then mean nothing".
That being the correct position, the question is whether on its true interpretation, the statute intended that an application under section 26 A should be ' signed by the partner personally, or whether it could 585 be signed by his agent on his behalf To decide that, we must have regard not only to the language of section 26 A but also to the character of the legislation, the scheme of the Act and the nature of the right conferred by the section.
The Act is, as stated in the preamble, one to consolidate and amend the law relating to income tax.
The rule of construction to be applied to such a statute is thus stated by Lord Herschell in Bank of England v: Vagliano(1): "I think the proper course is in the first instance to examine the language of the statute, and to ask what is its , natural meaning, uninfluenced by any considerations derived from the previous state of the law and not to start with inquiring how the law previously stood, ' and then, assuming that it was probably "intended to leave it unaltered. . . . . " We must therefore construe the provisions of the Indian Income tax Act as forming a code complete in itself and exhaustive of the matters dealt with therein, and ascerta in what their true scope is.
Turning then to the provisions of the Act, considerable light is thrown on their true import by the decision of this Court in Commissioner of Agricultural Income tax vs Keshab Chandra Mandal(2).
There, the question was as to the meaning of Rule I 1 framed under the Bengal Agricultural Income tax Act, 1944 read with Form No. 5, which required that the declaration in the return should be signed "in the case of an individual, by the individual himself".
It was held by this Court on a review of the provisions of the statute that the intention of the legislature as expressed therein was to exclude the common law rule, qui facit per alium facit per se, and the declaration to be valid must be signed by the assessee personally.
It is argued for the appellant that Commissioner of Agricultural Income tax vs Keshab Chandra Mandal(2) was a decision only on the interpretation of Rule No. 11 and not on its validity, and that the question whether the rule was ultra vires or not was not in issue.
That is so, but the materiality of the (1) , 141.
(2) ; , 76 586 decision to the present controversy lies in this that the interpretation which was put on Rule 11 as requiring personal signature was based on the conclusion which this Court reached on a consideration of the relevant provisions of the Bengal Agricultural Income tax Act that the intention of the legislature was to exclude the rule of the common law on the subject.
Now, the provisions of the Bengal Act which were construed in Commissioner of Agricultural Income tax vs Keshab Chandra Mandal(1) as indicative of the above intention, are identical in terms with the corresponding provisions in the Indian Income tax Act, and are, in fact, based on them and it would therefore be logical to construe the latter as expressing an intention to discard the rule of common law on the subject.
The relevant provisions of the Bengal Agricultural Income tax Act may now be noticed.
Section 25(1) of the Bengal Act provides that if.
the Income tax Officer is not satisfied that the return made is correct and complete, he may require the assessee by notice either to attend at the Income tax office or to produce or cause to be produced any evidence on which he might rely.
This corresponds to section 23(2) of the 'Indian Income tax Act.
The point to be noted with reference to this section is that it contains an express provision for production of evidence by the assessee through his agent, a provision which would have been wholly unnecessary if the common law was intended to apply.
Sections 35 and 36 of the Bengal Act contain provisions as to who can represent the assessee and in what proceedings, and they follow section 61 of the Indian Income tax Act and form a code complete in themselves.
Then again, both the Bengal Act and the Indian Income tax Act provide that certain provisions of the Civil Procedure Code are applicable to the proceedings under the Act.
The provisions of Order 3 of the Civil Procedure Code enacting that parties may appear and act through recognised agents are not among them.
To cut the discussion short, the effect of the provisions of the (1) ; 587 Bengal Act is thus summarized in Commissioner of Agricultural Income tax vs Keshab Chandra Manda`(1): "The omission of a definition of the word 'sign ' as including a signature by an agent, the permission under section 25 for production of evidence by an agent and under sections 35 and 58 for attendance by an agent and the omission of any provision in the Act applying the provisions of the Code of Civil Procedure relating to the signing and verification of pleadings to the signing and verification of the return while expressly adopting the provisions of that Code relating to the attendance and examination of witnesses, production of documents and issuing of commission for examination and for service of notices under sections 41 and 60 respectively, cannot be regarded as wholly without significance".
This reasoning applies with equal force to the provisions of the Indian Income tax Act, and goes far to support the contention of the respondent that the common law is not intended to apply to proceedings under the Act.
Another factor material for the determination of this question is the nature of the right conferred by section 26 A. Under the common law of England, a firm is not a juristic person, the firm name being only a compendious expression to designate the various partners constituting it.
But, as pointed out by this Court in Dulichand Laxminarayan vs Commissioner of Income tax, Nagpur(2), inroads have been made by statute s into this conception, and firms have been regarded as distinct entities for the purpose of those statutes.
One of those statutes is the Indian IncomeTax Act, which treats the firm as a unit for purposes of taxation.
Thus, under section 3 of the Act the charge is imposed on the total income of a firm, the partners as such being out of the picture, and accordingly under section 23 of the Act, the assessment will be on the firm on its total profits.
Section 23(5) enacts an exception to this in the case of firms registered under the Act, and provides that, "(a). . the sum payable by the firm itseIf shall (1) ; (2) A.I.R. 1956 S.C. 354.
588 not be determined but the total income of each partner of the firm, including therein his share of its income, profits and gains of the previous year, shall be assessed and the sum payable by him on the basis of such assessment shall be determined".
Thus, if a firm is registered, it ceases to be a unit for purposes of taxation and the profits earned by it are taken, in accordance with the general law of partnership, to have been earned by the individual partners according to their shares, and they are taxed on their individual income including their share of profits.
The advantages of this provision are obvious.
The rate of tax chargeable will not be on the higher scale provided for incomes on the higher levels but on the lower one at which the income of the individual partner is chargeable.
Thus, registration confers on the partners a benefit to which they would not have been entitled but for section 26 A, and such a right being a creature of the statute, can 'be claimed only in accordance with the statute which confers it, and a person who seeks relief under section 26 A must bring himself strictly within its terms before he can claim the benefit of it.
In other words, the right is regulated solely by the terms of the statute, and it would be repugnant to the character of such a right to add to those terms by reference to other laws.
The statute must be construed as exhaustive in regard to the conditions under which it can be claimed.
Thus, considering the question with reference to the character of the legislation, the scheme of the statute and the nature of the right conferred by section 26 A, the conclusion is irresistible that rules of common law were not intended to be saved, and that the right to apply for registration.
under that section is to be determined exclusively by reference to the prescriptions laid down therein.
If that is the true construction, in authorising the rule making authority to frame rules as to who can apply for registration under section 26 A, and when and how, the statute has.
merely directed that authority to fill in details in the field of legislation occupied by it, and it is not denied that Rules a and 6 are within the mandate conferred 580 by the section.
In this view, section 59 (5) of the Act which enacts that "Rules made under this section shall be published in the official Gazette, and shall thereupon have effect as if enacted in this Act" directly applies, and the vires of the Rules is beyond question.
Vide the observations of Lord Herschell in Institute of Patent Agents vs Lockwood(1).
Then, there is the contention of the appellant that the Rules in question are repugnant to section 2 of the Powers of Attorney Act VII of 1882, and are therefore ultra wires.
In addition to the reasons given above in support of the conclusion that the rule of the common law was not intended to operate in the field occupied by section 26 A, there is a further and a more compelling reason why this contention should not be accepted.
It is that there is, in fact, no conflict between the two statutory provisions.
To un derstand the scope of section 2 of the Powers of Attorney.
Act, it is necessary to refer to the history of this legislation.
Under the common law of England, an agent having authority to execute an instrument must sign in the name of the principal if he is to be bound.
If the agent signs the deed in his name albeit as agent, he is the person who is regarded as party to the document and not the principal. , It is the agent alone that can enforce the deed, and it is be that will be liable on it.
Vide In re International Contract Company(2); Schack vs Antony(3), Halsbury 's Laws of England, 3rd Edition, Volume 1, page 217, and Bowstead on Agency, 10th Edition, page 93.
To remove the hardships resulting from this state of the law, the Conveyancing and Law of Property Act, 1881 (44 and 45, Vict, Chapter 41) enacted section 46, which is as follows: "(1) The donee of a power,of attorney may, if he thinks fit execute or do any assurance, instrument, or thing in and with his own name and signature and his own seal, where sealing is required, by the authority of the donor of the power; and every assurance, instrument, and thing so executed and done shall be (1) , 351.
(2) (3) I M. & section 573; ; 590 as effectual in law, to all intents, as if it had been executed or done by the donee of the power in the name and with the signature and seal of the donor thereof (2) This section applies to powers of attorney created by instruments executed either before or after the commencement of this Act".
The Indian Legislature immediately followed suit, and enacted the Powers of Attorney Act VII of 1882 incorporating in section 2 therein word for word, section 46 of the English Act.
The object of this section is to effectuate instruments executed by an agent but not in accordance with the rule of the common law and the enactment is more procedural than substantive.
It does not confer on a person a right to act through agents.
It presupposes that the agent has the authority to act on behalf of the principal, and protects acts done by him in exercise of that authority but in his own name.
But where the question is as to the existence or the validity of authority, the section has no operation.
Thus., the fields occupied by the two enactments are wholly distinct.
Section 26 A says that a partner cannot delegate the exercise of his rights under that section to an agent.
Section 2 of the Powers of Attorney Act says that if there can be and, in fact there is, delegation, it can be exercised in the manner provided therein.
There is accordingly no conflict between the two sections, and no question of repeal arises.
To sum up, the Indian Income tax Act is a self contained code exhaustive of the matters dealt with therein, and its provisions show an intention to depart from the common rule, qui facit per alium facit per se.
Its intention again is that a firm should be given benefit of section 23(5) (a), only if it is registered under section 26 A in accordance with the conditions laid down in that section and the rules framed thereunder.
And as those rules require the application to be signed by the partner in person, the signature by an agent on his behalf is invalid.
In the view which we have taken, the further queson raised by the appellant that the power to repeal 591 a law being a legislative function, can be exercised only by the legislature duly constituted and not by any outside authority, and that the delegation of such a power to an outside authority is unconstitutional.
, does not arise for decision.
In the result., we agree with Viswanatha Sastry, J. that rules 2 and 6 are intravires the powers of the rule making authority, and dismiss the appeals with costs.
| Rules 2 and 6 of the Rules framed under section 59 of the Indian Income Tax Act provide that an application for registration of a firm under section 26 A of the Act and for renewal of registration certificate "shall be signed personally by all the parties".
Held that the word 'personally ' in the Income Tax Rules, as framed under section 59 of the Income Tax Act would exclude a duly authorised agent of a partner of a firm signing an application on behalf of the partner under section 26 A of the Income Tax Act.
(2) That Rules 2 and 6 are not ultra vires the rule making authority.
To decide the question whether on its true interpretation the Indian Income Tax Act intended that an application under section 26 A should be signed by the partner personally, or whether it could be signed by his agent on his behalf the Court must have regard not only to the language of section 26 A but also Lo the character of the legislation, the scheme of the Act and the nature of the right conferred by the section.
The Indian Income Tax Act is a self contained code exhaustive of the matters dealt with therein, and its provisions show an intention to depart from the common rule, qui facit per alium tacit per se.
Its intention again is that a firm should be given benefit of section 23(5)(a), only if it is registered.
under section 26 A in accordance with the conditions laid down in that section and the rules framed thereunder.
And as those rules require the application to be signed by the partner in person, the signature by an agent on his behalf is invalid.
Commissioner of Agricultural Income tax vs Keshab Chandra Mandal, ([1950] S.C.R. 435), relied upon.
commissioner of Income tax vs Subba Rao, ([1947] I.L.R. Mad.
167) approved.
Other case law referred to.
75 578
| 429.txt |
Appeal No. 330 of 1960.
Appeal from the judgment and decree dated March 18, 1954, of the Calcutta High Court in Appeal from Original, Decree No. 80 of 1947.
section T. Desai and B. P. Maheshwari, for the appellants.
B. Sen, N. R. Ghosh, Salil K. Datt and P. K. Ghosh, for the respondents Nos. 1 and 2.
January 13, 1964.
The Judgment of the Court was delivered by AYYANGAR J.
This is an appeal preferred, by virtue of a certificate of fitness granted by the Calcutta High Court, against its judgment, by which the decree passed by the Subordinate Judge of Darjeeling was substantially affirmed.
The plaintiffs are the appellants before this Court.
The suit out of which the appeal arises was brought by the appellants claiming title to and the recovery of possession of a property known as the Azambad Tea Estate which comprised about 378 acres of land in Touzi No. 911 of the Darjeeling Collectors.
This property was set out in Schedule A to the plaint and besides a claim was also made to certain other items of the movable and certain other tenures, but this appeal is not concerned with these others which were set out.
in Schs.
B and C to the plaint.
195 One Kazi Azam Ali was admittedly a full owner of this entire property and the proceedings giving rise to the appeal are concerned with the rights of his heirs to it.
The plain tiffs claim their title on the basis of various purchases from the heirs of this Azam Ali.
The contesting defendants were the Azamabad Tea Co. who also claim the entire property as transferees from the National Agency Co. Ltd., who too have been impleaded as defendants.
The National Agency Co. Ltd. claim to have purchased the entire 16 as.
interest in the property at a Court sale in pursuance of a decree obtained by them against Kazi Mohammed Ismail, the eldest son of Azam Ali.
Various contentions were raised by the plaintiffs in challenge of the validity of the transactions by which the defendants claimed their title.
But the learned Subordinate Judge repelled the plaintiffs ' claim and held that the purchase by the National Agency Co. Ltd. was valid and extended to the entire interest in the property and that in consequence the plaintiffs ' vendors had no title to convey to them any interest in the property.
The plaintiffs ' claim of the property in respect of Sch.
A was therefore dismissed.
The plaintiffs preferred an appeal to the High Court and the learned Judges upheld the title of the plaintiffs to an 8 pies share in the property mentioned in Sch.
A to the plaint but confirmed the decree of the Subordinate Judge as regards the rest.
The learned Judges however granted a certificate of fitness to the plaintiffs on the strength of which the present appeal has been filed.
The history of the transactions before the suit occupies a period of over 20 years and the facts in relation thereto are at once long, voluminous and complicated.
But, for the disposal of the appeal and the points urged before us it is wholly unnecessary to set these out and we shall therefore confine ourselves to a narration of the bare outlines of the case along with those facts which are necessary to appreciate the contentions raised in support of the appeal.
The property covered by the Tea Estate was granted by Government by way of lease to one Mudir and another for 30 years, the term to start on the 1st of April 1898.
The grantees effected transfers of their lease hold and after several successive transfers the property was purchased in 196 1913 by one Kazi Azam Ali who got his name registered as a proprietor.
It was Azam Ali who started the tea garden.
constructed the requisite factories as accessories thereto and named it the Azamabad Tea Estate.
Azam Ali had several children and among them 8 daughters and in consideration of gifts made to them, these daughters by a registered deed executed in 1909 relinquished their rights of succession to Azam Ali.
They thus faded away from the picture and no more notice need be taken of them.
Besides these 8 daughters, Azam Ali had 8 sons who survived him and were among his heirs, when he died on June 8, 1917.
Mohammed Ismail was the eldest of these sons.
Azam Ali also left behind him a daughter who was born after ' the relinquishment of 1909 and three widows.
Admittedly the sons of Azam Ali, his widows and his last daughters were all his heirs entitled to his estate in the shares as prescribed by Muslim Law.
On Azam Ali 's death his eldest son Ismail had his name entered in the Government records as the next in succession and at the time the thirty years term of the lease expired, the lease continued to remain in the name of Ismail alone.
We now proceed to the transactions as a result of which the contesting defendants claim to have obtained the full title to the Tea Estate.
Ismail made large borrowings and among them were some from the National Agency Co. Ltd. and for securing the loan he deposited with them the title deeds of the Tea Estate.
It may be mentioned that the deposit was on the footing that he was the full owner of the 16 as.
share of the property mortgaged.
The amount due under the mortgage was not paid in time and the mortgagee filed a suit for the enforcement of its mortgage and prayed for the sale of the property for the realisation of the mortgage money.
The suit was decreed as prayed for and the property was sold in execution of the final decree and was purchased by the mortgage decree holder on September 24, 1931.
The sale was confirmed on November 13, 1931.
This decree holder purchaser sold the property to the Azamabad Tea Estate the principal respondent before is.
There was some little controversy as regards the reality and effectiveness of the transfer of the property from the National Agency Co. Ltd. to the Azamabad Tea Estate, 197 but nothing turns on this, for even if that transfer was not effective that would not help the plaintiffs so long as they could not displace the title of the National Agency Co. Ltd. under the latter 's court auction purchase.
The case of the plaintiffs rested on the fact that Ismail who got himself registered as if he were a full proprietor of the lease hold interest in Touzi 911 was merely one of several co sharers of Azam Ali 's estate to whom it passed on his death.
The lease hold which was his property was according to them inherited by all his heirs including Ismail, the seven other sons, the three widows and the daughter born after 1909.
The term of the lease granted by the Government expired in 1928 and a renewed lease was granted in the name of Ismail alone.
Rival contentions were urged as regards the effect of this circumstance on the right of Ismail.
It was the case of the contesting respondents that the lease granted in 1928 in favour of Ismail was his sole and individual pro perty and even if for any reason the other heirs of Azam Ali had an interest in the previous lease hold, they did not have any such interest in the property covered by the fresh lease.
On the other hand, the case of the plaintiffs was that by the renewal of the lease, Ismail obtained qua his co heirs the same interest as he formerly had in the lease of 1898.
The renewal, they stated, was for the benefit not merely of Ismail but for everyone of his co heirs who still retained his or her interest in Azam Ali 's estate.
On this basis the plaintiffs raised the contentions that when by the sale in execution of the mortgage decree obtained by the National Agency Co. they purchased the property mortgaged, it was only the interest of Ismail that passed to them and not those of his co sharers who were no parties to the mortgage, There is one further transaction to which we must advert before passing on to the next stage of the proceedings.
After the mortgage by deposit of title deeds in favour of the National Agency Co., Ismail transferred his entire interest in the mortgaged property, that is, in the equity of redemption, to his wife Mst.
Nazifannessa, by a deed dated May 6, 1930.
Notwithstanding this deed and this transfer of the equity of redemption Mst.
Nazifannessa was not made a party to the 198 mortgage suit by the National Agency Co. The plaintiffs who claim to have acquired Mst.
Nazifannessa 's interest contended that by reason of the failure to implead Nazifannessa in the mortgage action, her right to redeem the mortgage was still in tact in spite of the mortgage decree and the sale in pursuance thereof, and on this footing made a claim in the alternative to redeem the mortgage in favour of the National Agency Co. and obtain possession after re demption.
To complete the narrative of the relevant facts, very soon after the purchase in Court auction in execution of the mortgage decree, the heirs of Azam Ali brought a suit (58 of 1931) to set aside the decree and the sale in favour of the National Agency Co. Ltd. on various grounds collusion, fraud, the circumstance that Ismail was merely a co sharer entitled to about 2 1/2 as.
share in the property and so could not mortgage more than that share, and that the decree could not bind a larger interest nor the sale convey anything more than that share, even if it conveyed any title to the property.
This suit however did not proceed to trial, but was dismissed for default, in that the plaintiffs did not appear in Court on the date fixed for trial.
The only other matter to be mentioned is that the plaintiffs have, by their purchases, acquired from the several co heirs, directly or mediately, the entire 16 as.
share in the property assuming that their vendors had any such right.
Armed with these purchases the plaintiffs filed this suit for the reliefs already indicated.
The defences raised to the suit were three fold: (1) That Ismail was the sole proprietor of the Tea Estate at the date of the mortgage and consequently the entire interest was the subject of mortgage and so passed at the court sale.
This was based on the provisions of the Crown Grants Act, now the Government Grants Act.
It would be recollected that the thirty years lease of Touza 911 was renewed in 1928 and this renewal was made in the name of Ismail alone.
Based on this feature a contention was raised that the grant of the lease created a new title in the grantee since the original lease in 199 which alone the heirs of Azam Ali might have had a share was extinguished by the termination of that lease by efflux of time.
(2) The second line of defence was that Ismail, even if in fact or law was not the full owner, was an ostensible owner of the entire interest in the property and that the co heirs were estopped from questioning the validity of the mortgage of the entire interest effected by him under section 41 of the Transfer of Property Act and that in conse quence the sale in execution passed the entire 16 as.
share to the purchaser.
(3) Lastly, it was urged that the plaintiffs ' suit was liable to be dismissed by reason of the provisions of 0.
IX, r. 9 of the Civil Procedure Code as the earlier Original Suit 58 of 1931 brought by the co heirs to set aside the sale under the mortgage decree had been allowed to be dismissed for default.
The learned Judges of the High Court rejected the first two of the defences but held that except to the extent of an eight pies share which represented the interest of a co heir which was not affected by the proceeding in Suit 58 of 1931, the plaintiffs were precluded by 0.
r. 9, Civil Procedure Code from disputing the sale in execution of mortgage decree by reason of the dismissal for default of Suit 5 8 of 1931.
Before proceeding to set out the arguments addressed to us by Mr. Desai, learned counsel for the appellants, it might be convenient to dispose of the submissions made to us by Mr. Sen, learned counsel for the respondents, seeking to ,sustain the first two defences which were repelled by the High Court.
The first of them was that by reason of the renewal of the lease in 1928 in the name of Ismail and the entry of his name as sole lessee in the revenue records, the leasehold became his sole property.
Apart from the arguments about Ismail being the ostensible owner of the entire 16 as.
share in the lease hold under the lease of 1898 which we shall consider a little later Mr.
Sen did not dispute that 200 Ismail 's co heirs were entitled to their fractional shares in the property under the original lease.
The acceptability of this argument regarding the renewed lease has to be determined on the basis of two factors first the intention of the parties, and here primarily of the grantor, as to the nature and quantum of the title intended to be conferred on or obtained by Ismail and, second, the provisions of the Crown, Grants Act which governed the grant on which reliance was placed as leading to that result.
First, as to the intention of the parties.
The original lease of 1898 was due to expireon March 31, 1928.
On July 20, 1928 Mohd. Ismail made a petition to the Deputy Commissioner, Darjeeling by which after drawing the latter 's attention to the date on which the lease was to expire, he "respectfully solicited the favour of ' kindly granting a further lease of the said Estate for a further period of 30 years.
" The Deputy Commissioner replied by letter dated August 10, 1928 sending Ismail the draft of the renewed lease for his approval and return adding "in the record of rights the following names have been recorded: 1.
Kazi Mohammed Ismail 2 as.; 2.
Kazi Isahaque 2 as.; 3.
Kazi Yakub 2 as.; 4.
Kazi Samoddoha 2 as.; 5.
Kazi Nurul Huda 2 as.; 6.
Kazi Badarudduza 2 as.; 7.
Kazi Insaf Ali 2 as.; 8.
Kazi Asfaque 2 as.
; Please mention the name in whose favour the lease will have to be issued." Ismail returned the draft lease with his approval but desired that the lease should be issued according to the name in the land register.
We are unable to read this request as meaning that Ismail, contradicting what the Government said, wanted that the leasehold interest should be his sole property in which his co heirs who had interest in the earlier lease were to be denied all beneficial interest.
It was thereafter that the lease was executed on February 1, 1929 in the name of Ismail to be operative from April 1, 1928 and was in terms in renewal of the previous 201 lease.
In the circumstance, we are satisfied that the Gov ernment intended to grant a lease in favour of his co sharers as well, though the lease deed was in the name of Ismail alone.
If Ismail intended to benefit himself at the expense of his co sharers and as we have said, we do not read his reply to the Deputy Commissioner as disclosing such an intention, the same was not made known to the Government.
We are therefore unable to accept Mr. Sen 's submission based on the intention of the parties.
He, however, submitted that whatever be the intention of the parties, by reason of section 3 of the Crown Grants Act Ismail 's title to the full 16 as.
share in the leasehold could not be disputed.
This section reads: "3.
All provisions, restrictions, conditions and limitations over contained in any such grant or transfer as aforesaid shall be valid and take effect according to (their tenor, any rule of law, statute or enactment of the Legislature to the contrary notwithstanding.
" If, as we have held.
it was the intention of the Government in granting the renewal that the co heirs too should have the benefit of the lease we do not see how these provisions affect their beneficial interest in the lease.
Nor are thereany clauses in the lease which preclude the existence of abeneficial interest in persons other than the lessee named.
This point is therefore without substance and is rejected.
The next point urged was based on section 41 of the Transfer of Property Act.
It was said that Ismail was by reason of the entry in the revenue registers, which the co heirs did nothing to correct, ostensibly the full owner of the property and hence the mortgage by him as full owner and the sale in court auction in execution of the decree by the National Agency Co. Ltd. passed the full title to the Tea Estate and that the co heirs were consequently estopped from disputing the defendant 's right to the full 16 as.
share in the property.
In order that section 41 of the Transfer of Property Act could be attracted, the respondents should prove that Ismail was the ostensible owner of the property with the consent of his co sharers and besides that they took reason able care 202 to ascertain whether Ismail had the power to make a transfer of the full 16 as.
interest.
Now, the facts however were that except the property being entered in the revenue records in Ismail 's name, and that the management of the property was left by the co sharers with Ismail, there is not an iota of evidence to establish that Ismail was put forward by them as the ostensible owner of the property.
It is manifest that the conduct of co sharers in permitting one of them to manage the common property does not by itself raise any estoppel precluding them from asserting their rights.
The learned Judges have also pointed out that even the least enquiry by the mortgagee would have disclosed that Ismail was not the full owner and this finding was not seriously challenged before us.
In this view it is unnecessary for us to consider the submissions made to us by Mr. Desai that section 41 was inapplicable to cases of sales in court auctions for the reason that what the court is capable of selling and what is sold in execution of a decree is only the right, title and interest of the judgment debtor and nothing more.
We, therefore, hold that the learned Judges of the High Court rightly held that section 41 of the Transfer of Property Act afforded no defence to the respondents.
The next and the only point remaining for consideration is whether the appellants ' suit is barred under the provisions of 0.
r. 9, Civil Procedure Code.
The part of this provision material for our purpose runs: "Where a suit is wholly or partly dismissed under rule 8, the plaintiff shall be precluded from bringing a fresh suit in respect of the same cause of action.
" The learned Judges of the High Court have held that this provision barred the plaintiffs ' claim in the present suit except to the extent of an 8 pies share in the estate which belonged to Azifunnessa and Najifennessa, two of the daughters of Azam Ali, who on the death of their mother became entitled to that share.
These two were not the parties to suit No. 58 of 1931 and hence the learned fudges held that their share (which was purchased 'by the plaintiffs) was unaffected by the dismissal of that suit.
203 The decision of the High Court in regard to this 8 pies share has become final and thus is outside controversy.
The ,only question is whether the plaintiffs appellants are entitled to anything beyond this share.
The suit, 58 of 1931, was instituted by 7 plaintiffs Ashfaq, Shamsuzzoha, Nurul Huda, Mohd. Yakub, these four being the sons of Azam Ali, two of his daughters Mahbuba Khatun and Habiba Khatun and one of his widows Bibi Marium.
There were two defendants the National Agency Co. Ltd. the purchaser in court sale of the property under the mortgage decree, whose title was challenged and against whom reliefs were claimed and Mohd. Ismail who was a pro forma defendant.
Ashfaq, The first plaintiff, died after the institution of the suit and certain of the parties already on record were recorded as his legal representatives.
The allegations in the plaint briefly were that the 2nd defendant Mohd. Ismail was not tile sole proprietor or owner of the Azamabad Tea Estate and that for that reason, the mortgage in favour of the 1st defendant, the mortgage decree obtained by it and the sale thereunder passed to it no title except to the extent of 2 1/2 as.
share belonging to Mohd. Ismail.
The plaintiffs therefore prayed for a decree declaring (1) that Mohd. Ismail had only 2 1/2 as.
share in the property and the remaining 132 1/2 as.
share belonged to the plaintiffs; (2) that only 2 1/2 as.
share was sold under the mortgage decree and purchased by the National Agency Co. Ltd. at the court sale.
The suit was instituted on 28th November, 1931 and after the issues were settled, the suit was posted for trial on 22nd August, 1932, on which date the plaintiffs were absent, no witnesses on their behalf were present, and their pleader reported no instructions.
The suit was therefore directed to be dismissed with costs in favour of the National Agency Co. Ltd. who was the only party present in Court.
It may be mentioned that Mohd. Ismail never appeared during the hearing of the suit.
204 Before taking up for consideration certain points urged before us by Mr. Desai regarding the construction of 0.
IX r. 9 C.P.C. we might dispose of a contention raised by him that Suit No. 58 of 1931 was filed fraudulently and collusively and the dismissal was the result of a settlement brought about collusively in order to defeat the plaintiffs ' rights.
We consider that there is no factual basis to sustain, this plea for he could point to no definite proof in support, and the most he could do was to refer us to certain suspicious circumstances.
We cannot obviously base any decision or rest any finding, on mere suspicion and we have no hesitation in saying that the submission does not deserve serious consideration.
The next submission was that even the 212 as.
share of Ismail did not pass under the sale in execution of the mortgage decree, because it was said Ismail had been, adjudicated an insolvent in Insolvency Case 38 of 1931 by the Dist.
Judge Purnia, as a result of which the properties which were the subject of the court sale had vested in the official receiver before the relevant date.
Though, no doubt, an allegation regarding this matter was made in the plaint and this was denied by the plaintiffs there is nothing in the judgments of the courts below or in the, evidence to indicate that the necessary facts were proved or that this point was urged with any seriousness at any stage of the proceedings until in this Court.
We have therefore nothing beyond the bare allegations and denials and as the full facts in relation to this matter were not placed before the Court we hold that this plea is devoid of merits and does not merit consideration.
It was next said that two of the plaintiffs in suit No. 58 of 1931, Nurul Huda and Habiba Khatun, a son and a daughter of Azam Ali were really adults but were shown in the cause title as minors represented by their respective natural guardians as their next friends and that as these adults could not in law be represented by persons purporting to act as their guardians they could not be held to be parties to the suit and hence their interests could not be affected by the dismissal of the suit.
This also is one of the matters in respect of which the plaintiffs beyond a mere pleading which was denied, made no grievance in the courts 205 below and the facts in relation to this issue, namely, the age ,,of the two plaintiffs at the date of the plaint not having been clearly proved, we do not find it possible to entertain the plea at this stage.
Mr. Desai, then submitted that Ashfaq who had figured as the first plaintiff in suit No. 58 of 1931 had already on April 18, 1931 transferred his 2 as.
13 gandas and odd share in Touzi No. 911 to one Pir Baksh from whom the plaintiff obtained a conveyance by a deed dated September 2, 1943 of what he had purchased from Ashfaq.
For this reason he urged that on the findings on the merits of the title in favour of the plaintiffs on the first two defenses we have dealt with earlier the plaintiffs should have been granted .a decree to this share of Ashfaq in addition to the 8 pies share decreed to them by the High Court.
No doubt, if this transaction were made out and was real, it would stand on the same footing as the 8 pies share in regard to which a decree was granted in favour of the plaintiffs by the judgment now under appeal.
We shall however consider this matter after dealing with the point urged as regards the construction of 0.
r. 9, Civil Procedure Code, which was his main submission and which, if upheld, would entirely eliminate the bar under this provision of law.
On this the first submission was that the rule which spoke of the "plaintiff" being precluded from bringing a fresh suit created merely a personal bar against the plaintiff in the first suit and that in the absence of words referring to the representatives of the plaintiff or those claiming under the plaintiff as in section 11 or section 47 of the Civil Procedure Code, the bar was not attracted to cases where the subsequent suit was by the heirs and assigns of that plaintiff.
In support of this submission Mr. Desai invited our attention to the observations of Das J. in Gopi Ram vs Jagannath Singh(1) where this argument was characterised as a weighty one and examined elaborately.
Though the learned Judge decided this matter on quite a different line of reasoning, he referred to various earlier decisions which appeared to him to favour the view submitted to us by Mr. Desai and expressed his hesitation in (1) L.L.R. 9 Pat. 447 at P. 454.
206 rejecting that construction.
We are not however impressed by the argument that the ban imposed by 0.
r. 9 creates merely a personal bar or estoppel against the particular plaintiff suing on the same cause of action and leaves the matter at large for those claiming under him.
Beyond the absence in 0.
r. 9 of the words referring "to those claiming under the plaintiff" there is nothing to warrant this argument.
It has neither principle, nor logic to commend it.
It is not easy to comprehend how A who had no right to bring a suit or rather who was debarred from bringing a suit for the recovery of property could effect a transfer of his rights to that property and confer on the transferee a right which he was precluded by law from asserting.
There are, no doubt, situations where a person could confer more rights on a transferee than what he possessed but those are clearly defined exceptions which would not include the case now on hand.
This argument was addressed to the High Court and the learned Judges characterised it as startling, a view which we share.
The rule would obviously have no value and the bar imposed by it would be rendered meaningless if the plaintiff whose suit was dismissed for default had only to transfer the property to another and the latter was able to agitate rights which his vendor was precluded by law from putting forward.
Aga in to say that an heir of the plaintiff is in a better position than himself and that the bar lapses on a plaintiff 's death, does not appeal to us as capable of being justified by any principle or line of reasoning.
In our opinion, the word "plaintiff ' in the rule should obviously, in order that the bar may be effective, include his assigns and legal representatives.
It was next urged that 0.
r. 9 precluded a second suit in respect of "the same cause of action" and that the cause of action on which Suit 58 of 1931 was laid and the present suit Title suit 18 of 1943 was not the same and so, the bar was not attracted.
In view of this argument it is necessary to examine them cause of action on which the present suit has been filed and compare and contrast with that in Suit 58 of 1931.
Closely analysed the material allegations to found the cause of action on which reliefs were claimed in the present suit 207 were (i) That the Tea Estate was originally the property of Azam Ali.
When he died his estate was inherited by his 8 sons, his widows and a daughter.
That the registration of the estate in the name of Md. Ismail was as a co sharer, the property belonging beneficially to all the heirs.
This position was not altered by the termination of the first lease and its renewal in 1928 for a further period of 30 years.
All the co heirs lived as a joint family with a common mess and hence there was no question of any adverse possession by Md. Ismail whose possession was not as sole proprietor or exclusive.
The suit on the mortgage was fraudulent and collusive, by Ismail colluding with the mortgagee to defraud his co heirs.
Details were mentioned as evidence of the fraud and collusion.
The sale in pur suance of the decree which was passed ex parte was also fraudulent.
On the date of the auction Ismail had no title even to the 2 1/2 as.
share because of his adjudication as an insolvent earlier.
The manner in which the 8 pies share of the daughters was obtained by the plaintiff was set out, and similarly the purchase by them through Pir Baksh of the share of Ashfaq.
The other purchases by the plaintiffs whereby they claimed to have obtained the 16 as.
share in the Tea Estate were set out.
The plaint then went on to refer to suit 58 of 1931 and set out their case as regards the nature of that litigation and its effect.
Lastly, they pleaded that they had obtained possession of the Tea gardens on October 10, 1934 and that on the next day the defendants moved the Magistrate for an order under section 144, Criminal Procedure Code and that the Magistrate had made an order against the plaintiffs restraining them from interfering with the possession of the defendants which necessitated their bringing the suit for the reliefs we have set out earlier.
We have already summarised the material allegations which were made in Suit 58 of 1931.
The material difference between the cause of action alleged in the present suit consists only in the addition of the allegations about the possession and dispossession in October, 1934.
This suit is based on the title of the plaintiffs by reason of their purchases and admittedly their vendors would have nothing to convey if the court sale conveyed, as it purported to 208 convey, the full 16 as.
interest in the Tea garden to the National Agency Co. Ltd. It was because of this that allegations were made to sustain their title and this could be done only if they established want of title to the extent of 16 as share in Ismail, the consequent ineffectiveness of the mortgage effected by Ismail and of the decree obtained in pursuance thereof and of the court sale in execution of that decree, being confined at the most to 2 1/2 as.
share belonging to Ismail.
These allegations which were fund amental to the plaintiffs ' case were identical with those which had been made in suit No. 58 of 1931.
Bearing these features in mind, the proposition that Mr. Desai submitted for our acceptance was briefly this.
A cause of action is a bundle of facts on the basis of which relief is claimed.
If in addition to the facts alleged in the first suit, further facts are alleged and relief sought ,on their basis also, and he explained the additional facts to be the allegations about possession and dispossession in October, 1934, then the position in law was that the entire complexion of the suit is changed with the result that the words of 0.
r. 9 "in respect of the same cause of action" are not satisfied and the plaintiff is entitled to reagitate the entire cause of action in the second suit.
In support of this submission, learned counsel invited our attention to certain observation in a few decisions to which we do not consider it necessary to refer as we do not see any substance in the argument.
We consider that the test adopted by the Judicial Committee for determining the identity of the cause of action in the two suits in Mohammed Khalil Khan and Ors.
Mahbub Ali Mian and Ors.
(1) is sound and expressescorrectly the proper interpretation of the provision.
In that case Sir Madhavan Nair, after an exhaustive discussion of the meaning of the expression "same cause of action" which occurs in a similar context in para (1) of O. 11 r. 2 of the Civil Procedure Code, observed: "In considering whether the cause of action in the subsequent suit is the same or not, as the cause of action in the previous suit, the test (1)75 1. A. 121. 209 to be applied is: are the causes of action in the two suits in substance not technically identical?" The learned Judge thereafter referred to an earlier decision of the Privy Council in Soorijamonee Dasee vs Suddanund(1) and extracted the following passage as laying down the approach to the question : "Their Lordships are of opinion that the term 'cause of action ' is to be construed with re ference rather to the substance than to the form of action. . .".
Applying this test we consider that the essential bundle of facts on which the plaintiffs based their title and their right to relief were identical in the two suits.
The property sought to be recovered in the two suits was the same.
The title of the persons from whom the plaintiffs claimed title by purchase, was based on the same facts viz., the position of Md. Ismail quoad his co heirs and the beneficial interests of the latter not being affected or involved in the mortgages, the mortgage decree and the sale in execution thereof.
No doubt, the plaintiff set up his purchases as the source of his title to sue, but if as we have held the bar under 0.
r. 9 applies equally to the plaintiff in the first suit and those claiming under him, the allegations regarding the transmission of title to the plaintiffs in the present suit ceases to be material.
The only new allegation was about the plaintiffs getting into possession by virtue of purchase and their dispossession.
Their addition, however, does not wipe out the identity otherwise of the cause of action.
It would, of course, have made a difference if, without reference to the antecedent want of fun title in Ismail which was common to the case set up in the two plaints in Suit 58 of 1931 and Suit 18 of 1943, the plaintiffs could, on the strength of the possession and dispossession or the possessory title that they alleged, have obtained any relief.
It is, however, admitted that without alleging and proving want of full title in Md. Ismail the plaintiffs could be granted no relief in their present suit.
(1) ,315.
134 59S.C 14 210 The question is whether the further allegations about possession in October, 1934 have really destroyed the basic and substantial identity of the causes of action in the two suits.
This can be answered only in the negative.
The learned Judges of the High Court therefore correctly held that the suit was substantially barred by O. IX.
It now remains to consider the claim of the plaintiffs to the 2 annas 13 odd gundas share of Ashfaq.
In paragraph 52 of their plaint the plaintiffs stated that by a registered sale deed executed on April 18, 1931 Ashfaq, the son of Azam Ali sold the entire interest which he possessed in the Azamabad Tea Estate to Pir Baksh in pursuance of a Bainama dated April 7, 1930 and put him in possession, and in the succeeding paragraph they set out their purchases of this share by a Kabala dated September 2, 1943.
In the joint written statement filed on behalf of the defendants 1 and 2 these allegations were controverted.
The execution of the sale deed in favour of Pir Baksh was denied and it was further stated that even if the sale deed were proved to have been executed it was a sham and nominal transaction and therefore inoperative to pass title.
Though no specific issue in relation to this sale to Pir Baksh was raised, there was a general issue (Issue No. 8) which related to the plaintiff 's acquiring title to the Tea Estate.
Ile sale deed by Ashfaq was filed and marked as exhibit 12(i) and the sale in favour of the plaintiffs by Pir Baksh as exhibit 12(c).
The effect however of this sale to Pir Baksh on the rights of the plaintiffs to relief does not appear to have been raised before the learned trial Judge.
It may be pointed out that the learned trial Judge held that Ismail was the full owner of the property under the lease granted in 1928, by reason of the provisions of the Crown Grants Act and even if this were not so, he held that his co heirs had consented to put him forward as the ostensible owner of the property with the result that they were ' estopped from impeaching the mortgage and the sale of the property in execution of the mortgage decree.
It is therefore possible that because of the view which the learned trial Judge was inclined to take of the title of Md. Ismail, the plaintiffs did not seriously put forward their rights under their purchase from Pir Baksh, because if the learned trial Judge was right, the sale by Ashfaq to Pir Baksh even if real 211 would not have helped the plaintiffs to obtain any relief.
In this connection it may be pointed that the plaintiffs claim to the 8 pies share which was allowed in their favour by the High Court, was not pressed in the trial court.
Even in the High Court, however, the point arising from the sale by Ashfaq to Pir Baksh does not seem to have been pressed.
We shall presently advert to and examine the submissions made to us by Mr. Sen as regards the merits of this claim to the share of Ashfaq, but before doing so we must refer to a point raised by Mr. Sen which necessitated a prolonged adjournment of the appeal after the main arguments were heard.
After pointing out that the plaintiffs did not agitate or press before the courts below any special right based on the purchase of Ashfaq 's share through Pir Baksh, he submitted that this might possibly have been because the property covered by the sale deed exhibit 12 (i) did not comprise Touza No. 911 the Azamabad Tea Estate.
There was scope for this submission because in the record as printed for the use of this Court, the Schedule annexed to the sale deed exhibit 12(i) was not printed but only the portion containing the description of the parties and the words of conveyance, with the result that Mr. Desai was unable to make out whether as a fact Ashfaq 's interest in the suit property was sold under exhibit 12(i).
To make matters worse the Schedule to the sale deed of 1943 executed by Pir Baksh was also not translated and printed in the record prepared for the appeal.
In view, however, of the categorical statement in the plaint as regards the indentity of the property conveyed under exhibit 12(i) with Ashfaq 's share in the Azamabad Tea Estate, we considered that the appellant 's submission could not be rejected as frivolous.
We therefore acceded to the request of Mr. Desai and called foe the original of exhibit 12(i) from the High Court so that counsel might make submissions to us as regards the identity of the property conveyed.
The document was accordingly obtained 'and translated for the use of the Court and when the appeal was again placed before us Mr. Sen admitted that the property conveyed by exhibit 12(i) was Ashfaq 's 2 as.
13 gundas odd interest in Touza No. 911.
212 Coming now to the merits of the plaintiff 's claim, it is common ground that if the sale by Ashfaq were real and intended to pass title to Pir Baksh, the plaintiffs would be entitled to a decree for a declaration that in addition to the 8 pies share granted to them by the High Court, they would be entitled to a further 2 as. 13 gundas share of Ashfaq in the plaint A Schedule property.
Mr. Sen 's submission, however, was that we should not entertain or give effect to this claim, because several circumstances throw grave suspicion on the reality of the transaction, and that in any event the claim could not be accepted without careful scrutiny of the facts.
Having regard to the definite case raised in the pleadings, we are not disposed to reject the claim merely because the same was not pressed in the courts below.
Besides we cannot ignore the circumstance that the sale deeds exhibit 12(i) and 12(c) on which the claim was based were filed in the trial court, and Pir Baksh was examined to formally prove these deeds as the 31st witness for the plaintiff.
Moreover, even though as regards certain other transfers, the trial Judge recorded findings that they were nominal, there was no such finding as regards the sale by Ashfaq.
In view of these features, we have decided not to reject the claim of the plaintiffs based on this ground.
There are, however, certain features which throw some suspicion on the reality of the transaction which Mr. Sen pressed before us which have led us to desist from ourselves passing a decree for this additional share in their favour.
The circumstances to which Mr. Sen drew our attention were these; (i) though Ashfaq executed the sale deed exhibit 12(i) on April 18, 1931, he figured as the first plaintiff in Suit 58 of 1931 which was filed on 28th November, 1931, without adverting to the sale, a piece of conduct certainly not consistent with the sale being real and intended to pass title; (2) though in the plaint the necessary averments were made regarding their obtaining the share of Ashfaq through Pir Baksh, the claim under this head was not pressed before the trial court; (3) when the plaintiffs preferred an appeal to the High Court from the total dismissal of the suit, they did not raise any specific ground touching their right to this share, nor were any argument 213 addressed to the High Court on this point; and (4) there had been no mutation in the revenue records when this sale was effected and Pir Baksh who was examined as a witness admitted this fact.
These circumstances are certainly capable of explanation, but they show that the claim of the plaintiffs cannot be accepted by us straightaway and a decree passed in their favour.
In these circumstances, we consider that the proper order to pass would be to remit the matter to the trial Court for recording a finding as regards the reality of the sale on the evidence already on the record and to pass an appropriate decree in the suit, that is, if the sale under exhibit 12(i) were held to be real, the plaintiffs would be entitled in addition to the 8 pies share decreed to them by the High Court, to a further 2 as 13 gondas odd share belonging to Ashfaq which they obtained under exhibit 12(c) through Pir Baksh, and in the event of the sale not being held to be real to no more than what the High Court has decreed.
With this modification, the appeal is dismissed with costs.
Appeal dismissed.
| The property covered by the Tea Estate was granted by the Government by way of lease in 1898 for 30 years.
In 1913 it was purchased ' by Azam Ali.
When he died in 1917, he left behind 8 sons, 9 daughters and 3 widows.
The name of Ismail, his eldest son, was entered in the official records as next in succession.
Ismail borrowed considerable sums from National Agency Co. Ltd., and for securing the same, deposited the title deeds of the Tea Estate on the footing that he was its full owner.
As the amount under the mortgage was not paid, a suite was filed for realisation of the amount by sale of mortgage property.
193 The suit was decreed and in execution the property was auctioned and sale was confirmed in 1931 in favour of the decree holder who sold the same to Azamabad Tea Estate, the principal respondent in this case.
The heirs of Azam Ali brought suit No. 58 of 1931 to set aside the decree and sale in favour of the National Agency Co. Ltd., on ,various grounds but that suit was dismissed for default.
The suit out of which the present appeal has arisen was filed subsequently.
The plaintiffs appellants who claimed title under purchasers 'for the heirs of Azam Ali challenged the validity of the transactions by which the National Agency Co. Ltd. claimed to have purchased the entire 16 annas interest in the property at the court sale in pursuance ,of a decree obtained by them against Ismail.
The trial Court held that the purchase made by the National Agency Co. Ltd. was valid and extended to the entire interest in the property and hence the venders of the plaintiffs had no title to convey to them any interests in the property.
The High Court in appeal disagreed with this finding but dismissed the appeal on other grounds except to the extent of an 8 pies share in the property.
The appellants came to this Court on a certificate of fitness granted by the High Court.
The points raised before this Court were whether the High Court was right in holding that the present suit was barred by O. IX, r. 9 on the ,ground that when suit No. 58 of 1931 was dismissed in default, no action was taken to get it restored, this was raised by the respondent and whether in any event their claims to the 2 as 13 odd gundas share of Ashfaq, son of Ismail, should not have been decreed.
HELD (i) that the suit was substantially barred by 0.
TX, r. 9.
The essential bundle of facts on which the plaintiffs based their title and their right to relief were identical in the two suits the property sought to be recovered in the two suits was the same.
The title of the ,persons from whom the plaintiffs claimed title by purchase was based ,on the same facts.
The additional allegation about possession in October 1934 did not really destroy the basic and substantial identity of the ,causes of action in the two suits.
The ban imposed by 0.
IX, r. 9 does not create merely a personal bar or estoppel against the particular plaintiff suing on the same cause ,of action and does not leave the matter at large for those claiming under him.
The word "plaintiff" in the rule includes his assigns and legal representatives.
(ii)that when the Government granted the lease in 1928, the lease was granted not only in favour of Ismail but also in favour of the ,other co sharers although the name of Ismail alone was mentioned in the lease deed.
The provisions of section 3 of the Crown Grants Act did not affect the beneficial interest in the lease.
Section 41 of the Transfer of Property Act did not help the respondent as there was no evidence to show that Ismail was put forward by 134 159 S.C. 13 194 the other co sharers as the ostensible owner of the property.
The conduct of the co sharers in permitting Ismail to manage the common property did not by itself raise any estoppel precluding them from asserting their rights.
Even a cursory enquiry by the mortgagee would have disclosed that Ismail was not the full owner.
As regards the contention of the appellants that they should have been granted a decree to the extent of 2 As.
13 odd gundas share of Ashfaq in addition to the 8 pies share decreed to them by the High Court, the case was ordered to be remitted to the trial Court for giving its finding regarding the reality of the sale by Ashfaq.
Gopi Ram vs Jagannath Singh, I.L.R. 9 Pat.
447, Mohammad Khalil Khan vs Muhbub Ali Mian, 75 I.A. 121 and Soorijomonee Dasee vs
Suddanund, (1873) 12 Ben.
L.R. 304, referred to.
| 1702.txt |
Appeals Nos. 575 and 576 of 1966.
Appeals by special leave from the judgment and order dated October 5, 1963 of the Patna High Court in Misc.
Judicial Cases Nos. 1274 and 1275 of 1960.
D.Narasaraju, section K. Aiyar, R. N. Sachthey and B. D. Sharma, for the appellants (in both the appeals).
M.C. Chagla and U. P. Singh, for the respondent (in, both the appeals).
The Judgment of the Court was delivered by Shah, J.
The respondent Ramniklal Kothari carried on busi ness in diverse lines as a partner in four different firms.
He received from time to time income from the different registered firms as his share of profits.
For the assessment year 1955 56 the respondent declared his share of profits from the four firms at Rs. 77,027/ and he claimed an allowance of Rs. 13,283/ being payment of salary and bonus to staff, expenses for maintenance and depreciation of motor car, travelling expenses and interest.
The Income tax Officer, Hazaribagh, allowed the claim for interest as a permissible deduction and disallowed the rest.
In the view of the Income tax Officer since the respondent did not carry on any independent business, the amount, except interest, were not claimable by the respondent on his own account; if at all, the amounts should have been claimed as business ex incurred in the accounts of the four firms.
For the assessment year 1956 57 the respondent declared Rs. 53,540 as his share of the profits 'in the four firms and claimed an aggregate amount of Rs. 19,380 as admissible deduction on various grounds including Rs. 1,956 as interest paid by him.
The Income tax Officer allowed the claim for interest and disallowed the rest of the claim.
The Appellate Assistant Commissioner confirmed the orders of the Income tax Officer.
But the Income tax Appellate Tribunal set aside the orders passed by the Income tax Officer and remanded the cases for examination of the nature of expenditure claimed to have been incurred by the respondent.
In the view of the Tribunal share of the profits received by the respondent from the firms was taxable as business income, and appropriate deductions admissible under section 10(2) of the Income tax Act, 1922, were allowable in commuting the taxable income of the respondent, 862 The Tribunal then referred the following question in the two cases to the High Court of Patna for opinion under section 66(1) of the Indian Income tax Act, 1922: "Whether the expenses incurred by the assessee (who was not carrying on any independent business of his own), in earning income from various firms in which he was a partner, are allowable in law as deductions ?" The High Court of Patna answered the reference in favour of the respondent.
With special leave granted by this Court, these two appeals have been preferred by the Commissioner of Incometax.
Where a person carries on business by himself or in partner ship with others, profits and gains earned by him are income liable to be taxed under section 10 of the Indian Income tax Act, 1922.
Share in the profits of a partnership received by a partner is " profits and gains of business" carried on by him and is on that account liable to be computed under section 10, and it is a matter of no moment that the total profits of the partnership were computed in the manner provided by section 1 0 of the Income tax Act and allowances admissible to the partnership in the computation of the profits and gains were taken into account.
Income of the partnership carrying on business is computed as business income.
The share of the partner in the taxable profits of the registered firms liable to be included under section 23(5)(a)(ii) in his total income is still received as income from business carried on by him.
Counsel for the Commissioner accepted, and in our judgment counsel was right in so doing, that the share of the respondent from the profits of the firm was income from business carried on by the partner.
Business carried on by a firm is business carried on by the partners.
Profits of the firm are profits earned by all the partners in carrying on the business.
In the individual assessment of the partner, his share from the firm 's business is liable to be taken into account under section 10(1).
Being income from business, allowances appropriate under section 10(2) are admissible before the taxable income is determined.
Section 23(5)(a)(ii) provides that the share of the partner in the profits and gains of a registered firm shall be included in the total income of the partner; and section 16(1)(b) requires that salary, interest, commission or other remuneration payable by the firm beside the share in the balance of profits is to be taken into account in determining the total income.
But it is not thereby implied that expenditure Properly allowable in earning the profits, salary, interest, commission or other remuneration is not to be allowed in determining the taxable total income of the partner.
The receipt by the partner is business income for the, purpose of 863 s.10(1), and being business income, expenditure necessary for the purpose of earning that income and appropriate allowances are deductible therefrom in determining the taxable income of the partner.
The legal principles which we have endeavoured to set out are well settled by several decisions.
In Shantikumar Narottam Morarji vs Commissioner of Income tax, Bombay City(1) the High ' Court of Bombay held that it is not correct as a general legal proposition that a, partner in a registered firm is not entitled to claim any deduction against the share of the profits included in his total income, the share having been arrived at on the assessment of the firm with regard to its profits.
It would be open to the partner to claim a deduction provided he satisfies the taxing authority that such deduction represents necessary expenditure, the expenditure being incurred in order to enable him to earn the profits which are being subjected to tax.
In Basantlal Gupta vs Commissioner of Income tax, Madras(2) the High Court of Madras held that in determining the income of an assessee who is a partner, deduction under section 10(2) of the Income tax Act may be made from his share of income in the firm even after the share has been ascertained.
An allowance under section 10(2) will be permissible in proper cases even after the share has been ascertained if the expenditure sought to be deducted was incurred by the partner solely and exclusively for the purpose of earning his share in the income of the firm.
In a case decided by the High Court of Patna in Jitmal Bhu ramal vs Commissioner of Income tax, Bihar & Orissa(3) a Hindu undivided family which was a partner in a firm claimed that the salary paid to its members for attending to the business of the firm was incurred as a matter of commercial expediency and for the purpose of earning profits from the partnership business.
The Court held that in the assessment of the Hindu undivided family the expenditure would be properly claimed as an allowance under section 10(2) (xv) of the Indian Income tax Act, 1922.
Jitmal Bhuramars case(4) was brought in appeal to this Court : see Jitmal Bhuramal vs Commissioner of Income tax, Bihar & Orissa(4).
It was observed by this Court that a Hindu undivided family will be allowed to deduct salary paid to members of the family, if the payment is made as a matter of commercial or business expediency, but the service rendered must be to the family in relation to the business of the family.
Counsel for the Commissioner relied upon an unreported judgment of the High Court of Calcutta in Messrs. Iswardas Subh (1) (2) (3) (4) (sc.) 864 karan vs Commissioner of Income tax, West Bengal(1).
In that case a Hindu undivided family entered into a partnership agreement with third parties for the purpose of carrying on a rice mill business.
It was not possible for any of the members of the family to attend personally to that business and, therefore, the family employed a Munim to look after its interest.
Salary paid to the Munim was claimed as an allowance in determining the taxable income out of the share of the partnership income.
Chakravartti, C.J., delivering the judgment of the Court was of the opinion that since the Munim did not look after the interest of the assessee in the firm 's business, but only as a servant of the assessee, the amount paid to the Munim was not an allowance admissible in determining the taxable income.
In any event, observed the learned Chief Justice, the profits which have come to the assessee from the partnership have come as net profits, and after they have so come, there cannot be any further deduction on account of expenditure incurred not by the partnership but by the partner who received the share or incurred on any account whatsoever.
We are unable to agree with the view expressed by the learn ed Chief Justice.
The case was apparently not fully argued and counsel for the assessee conceded that the amount paid to the Munim was not a permissible deduction in assessing the taxable income of the family out of the share of the profits received from the firm.
The appeals fail and are dismissed with costs.
One hearing fee.
V.P.S. Appeals dismissed.
| The respondent was carrying on business in diverse lines as a partner in four different firms.
For the assessment years 1955 56 and 1956 57 he declared his share of profits from the four firms and claimed deductions made up of salary and bonus to staff, expenses for maintenance and depreciation of motor car, travelling expenses and interest.
The Incometax Officer and the Appellate Assistant Commissioner allowed only the claim for interest as a permissible deduction.
The Tribunal set aside the orders and remanded the cases for the two years for an examination of the nature of expenditure claimed to have been incurred by the respondent, as, in its view, deductions admissible under section 10(2) of the Incometax Act, 1922 were allowable in computing the taxable income of the respondent.
On the question, whether expenses incurred by the respondent (who was not carrying on any independent business of his own), in earning income from the various firms in which he was a partner, were allowable in law as deductions, the High Court held in favour of the respondent.
In appeal to this Court, HELD : Section 23 (5) (a) (ii) of the Income tax Act, 1922 provides that the share of the partner in the profits and gains of a registered firm shall be included in the total income of the partner.
The share so received by the partner is 'profits and gains of business ' carried on by him and is on that account liable to be computed under section 10.
The receipt being business income for the purpose of section 10(1) expenditure necessary for the purpose of earning that income and allowances appropriate under section 10(2) are deductible therefrom in determining the taxable income of the partner.
The facts that in computing the total profits of the partnership allowances admissible to the partnership in the computation of its profits and gains were taken into account, in the manner provided by section 10, or that section 16(1)(b) requires that salary, interest, commission or other remuneration payable by the firm besides the share in the balance of profit is to be taken into account, do not imply that in determining the taxable income of the partner, expenditure incurred by the partner in earning the profits, salary, interest.
commission or other remuneration is not to be allowed.
[862 C.H] Shantikumar Narottam Morarji vs Commissioner of Income tax, Bombay City, , Jitmal Bhuramal vs Commissioner of Incometax, Bihar & Orissa, and Basantlal Gupta vs Commissioner of lncome tax, Madras, , approved.
M/s. Iswardas Subhkaran vs Commissioner of Income tax West Bengal, Income tax Reference No. 38 of 1952 dated June 2, 1953, of the Calcutta High Court, disapproved.
| 2596.txt |
Tax Reference Case No. 4 of 1978.
Tax Reference Under Section 257 of the Income Tax Act, 1961 made by the Income Tax Appellate Tribunal, Bombay (Bench 'C ').
D. V. Patel, T. A. Ramachandran & Miss A. Subhashini for the Appellant.
The Judgment of the Court was delivered by PATHAKJ, J.
The Judgment of the Court was delivered by PATHAKJ.
J.
In this tax reference made under section 257 of the income Tax Act, 1961, we are called upon to express our opinion on the following question of law: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in confirming the order of the Appellate Assistant Commissioner that the loss suffered by the assessee was not a loss incurred in a speculative transaction within the meaning of Sec. 43 (5) of the Income tax Act, 1961 ?" The assessee, M/s Shantilal Pvt. Ltd., Bombay, is a private limited company.
In the assessment proceedings for the assessment year 1971 72 it claimed a sum of Rs. 1,50,000 paid by it as damages to M/s Medical Service Centre as a business loss.
During the previous year relevant to the said assessment year the assessee had contracted to sell 200 Kilograms of Folic Acid USP at the rate of Rs. 440 per Kilogram to M/s. Medical Service Centre and the delivery was to be effected on or before November 1, 1969, within about three months of the date of entering into the contract.
The 472 case of the assessee is that as the price of the commodity rose very sharply to as high as Rs. 2,000 per Kilogram during the period when the delivery was to be effected, the assessee was unable to fulfil the contract, giving rise to a dispute in regard to the payment of compensation between the parties.
The dispute was referred to arbitration and by an award dated August 25,1970 the arbitrator directed the assessee to pay Rs. 1,50,000 as compensation to M/s. Medical Service Centre.
A consent decree in terms of the award was made by the High Court.
In the assessment proceedings, the Income Tax officer rejected the claim of the assessee that the payment of compensation was a business loss.
He found that the transaction was a speculative transactions as defined by Sub section
(5) of section 43.
Income Tax Act, 1961.
The Appellate Assistant Commissioner allowed the assessee 's appeal on the view that the payment made by it represented a settlement of damages on breach of the contract, which was distinct from a settlement of the contract.
Accordingly, he found that the loss must be regarded as a business loss and not as a speculation loss.
The Income Tax officer 's appeal was dismissed by the Income Tax Appellate Tribunal by its order dated February 18, 1976.
The Commissioner of Income Tax applied in reference for a decision on the question of law set out earlier, and in view of an apparent conflict between different High Courts on the point the Tribunal has made this reference.
There is no doubt that the arbitration award granting compensation to M/s. Medical Service Centre proceeds on the footing that there was a breach of contract.
The Tribunal took the view that the award of damages for breach of a contract did not bring the transaction within the definition of "speculative transaction" set forth in sub section
(5) of section 43, Income Tax Act, 1961.
In this, the Tribunal found support in the view expressed by the Calcutta High Court in Commissioner of Income Tax, West Bengal vs Pioneer Trading Company Private Ltd.,(1) Daulatram Rawatmull vs Commissioner of Income Tax (Central), Calcutta(2) and by the Mysore High Court in Bhandari Rajmal Kushalroj vs Commissioner of Income tax, Mysore,(9) which they preferred to the view expressed by the Madras High Court in R. Chinnaswami Chettiar vs Commissioner of Income 473 Tax, Madras.,(1) P.L. KN.
Meenakshi Achi vs Commissioner of Income Tax, Madras(a) and A. Muthukumara Pillai vs Commis sioner of Income Tax, Madras.(3) on cereful consideration of the matter we are of opinion that the Tribunal is right.
Sub section
(5) of section 43 defines "speculative transaction" to mean: "a transaction in which a contract for the purchase or sale of any commodity, including stocks and shares, is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrips . " Is a contract for purchase or sale of any commodity settled when no actual delivery or transfer of the commodity is effected, and instead compensation is awarded under and arbitration award as damages for breach of the contract ? A contract can be said to be settled if instead of effecting the delivery or transfer of the commodity envisaged by the contract the promisee, in terms of section 63 of the Contract Act, accepts instead of it any satisfaction which he thinks fit.
It is quite another matter where instead of such acceptance the parties raise a dispute an d no agreement can be reached for a discharge of the contract.
There is a breach of the contract and by virtue of section 73 of the Contract Act the party suffering by such breach becomes entitled to receive from the party who broke the contract compensation for any loss or damage caused to him thereby.
There is no reason why the sense conveyed by the law relating to contracts should not be imported into the definition of "speculative transaction".
The award of damages for breach of a contract is not the same thing as a party to the contract accepting satisfaction of the contract otherwise than in accordance with the original terms thereof.
It may be that in a general sense the layman would understand that the contract must be regarded as settled when damages are paid by way of compensation for its breach.
What is really settled by the award of such damages and their acceptance by the aggrieved party is the dispute between the parties.
The law, however, speaks of a settlement of the contract, and a contract is settled when it is either performed or the promisee dispenses with or remits, wholly or in part, the performance of the promise made to him or accepts instead of it any satisfaction which he thinks fit.
We are concerned with the sense of the law, and it is 474 that sense which must prevail in sub section
(5) of section 43.
Accordingly, we hold that a transaction cannot be described as a "speculative transaction" within the meaning of sub section
(5) of section 43, Income Tax Act, 1961 where there is a breach of the contract and on a dispute between the parties damages are awarded as compensation by an arbitration award.
We are unable to endorse the view to the contrary taken by the Madras High Court in R. Chinnaswami Chettiar(supra) and approve of the view taken by the Calcutta High Court in Pioneer Trading Company Private Ltd. (supra) and by the Mysore High Court in Bhandari Rajmal Kushalra; (supra).
The decisions of the Madras High Court in P. L. K. N. Meenakshi Achi (supra) and A. Muthukumara Pillai (supra) are not apposite and are not concerned with the point before us.
Our attention was invited by learned counsel for the Revenue to the decision of this Court in Devenport o. P. Ltd. vs Commissioner of Income Tax, West Bengal II(1) but this point did not arise there either.
Accordingly, we answer the question referred in the affirmative, in favour of the assessee and against the Revenue.
There is no order as to costs.
H.S.K. Question answered in affirmative.
| The respondent assessee claimed that a sum of Rs. 1,50,000 paid by them as compensation for being unable to fulfil a contract was a business loss.
The Income tax officer rejected the claim on the ground that the transaction was a speculative transaction as defined by sub section (5) of section 43 of the Income tax Act, 1961.
The Appellate Assistant Commissioner held that the loss was a business loss and not a speculative loss on the view that the payment made represented a settlement of damages on breach of the contract, which was distinct from a settlement of the contract.
The Income Tax Appellate Tribunal confirmed the order of the Appellate Assistant Commissioner.
On the request of the Commissioner of Income tax the Appellate Tribunal has referred the question whether the loss suffered by the assessee was not a loss in a speculative transaction within the meaning of section 43(5) of the Income tax Act, 1961.
Answering the question in the affirmative, ^ HELD: A transaction cannot be described as a "speculative trans action" within the meaning of sub section
(5) of section 43 where there is a breach of the contract and on a dispute between the parties damages are awarded as compensation by an arbitration award.
[474 A B] Sub section
(5) of section 43 speaks of the settlement of a contract.
A contract can be said to be settled if instead of effecting the delivery or transfer of the commodity envisaged by the contract the promisee, in terms of section 63 of the Contract Act, accepts instead of it any satisfaction which he thinks fit.
It is quite another matter where instead of such acceptance the parties raise a dispute and no agreement can be reached for a discharge of the contract.
There is a breach of the contract and by virtue of section 73 of the Contract Act the party suffering by such breach becomes entitled to receive from the party who broke the contract compensation for any loss or damage caused to him thereby.
There is no reason why the sense conveyed by the law relating to contracts should not be imported into the definition of "speculative transaction" What 471 is really settled by the award of such damages and their acceptance by the aggrieved party is the dispute between the parties.
[473 A, C G] Commissioner of Income Tax, West Bengal vs Pioneer Trading Company Private Ltd., ; Bhandari Rajmal Kushiraj vs Commissioner of Income Tax, Mysore, approved.
R. Chinnaswami Chettiar vs Commissioner of Income Tax, Madras, overruled.
P.L. KN.
Meenakshi Achi vs Commissioner of Income Tax, Madras, ; A. Muthukumara Pillai vs Commissioner of Income Tax, Madras, and Devenport & Co. P. Ltd. vs Commissioner of Income Tax, West Bengal 11, not relevant to the point raised.
| 4631.txt |
l Appeal No. 1036 of 1976.
551 From the Judgment and Order dated 11.6.1975 of the Kerala High Court in Appeal Suit No. 764 of 1972.
T.T. Kunhikannan for the Appellant.
section Padmanabhan and E.M.S. Anam for the Respondent.
The Judgment of the Court was delivered by K. RAMASWAMY, J.
This appeal by special leave is against the judgment and decree of the Kerala High Court dated June 11, 1975 made in A.S. No. 764 of 1972.
The notification under section 3 of the Kerala Land Acquisition Act, 1961 (Act 21 of 1962) was published in the Gazette on February 28, 1967 acquiring six acres of land in the city Of Calicut to construct staff quarters of P & T of Govt.
of India.
The Land Acquisition Officer by award dated February 29, 1969 awarded compensation @ Rs.230 per cent and also the value of the trees by capitalisation method in a sum of Rs.2,69,421.55 p. towards the land improvement together with 15 per cent solatium and 4 per cent interest.
On reference, the Civil Court enhanced the market value by judgment and award dated February 9, 1972 at Rs.500 per cent i.e., in total Rs.3,00,000 towards land value and confirmed the award of the Land Acquisition Officer of 2,69,421.55 p. towards land improvement making in all 5,69,421.55 p. with solatium at 15 per cent and interest at 4 per.
cent from the date of dispossession.
In the appeal by the State against the en hanced compensation, it was contended that the Civil Court committed grave error in fixing market value separately to the land and the trees on capitalisation basis to make up the compensation.
That contention was found favour with the High Court and it set aside the award of the Civil Court of the value of the land of Rs.3,00,000 and confirmed the award of Rs.2,69,421.55.
Calling in question the reversing decree of the High Court, this appeal has been filed.
Two contentions have been raised by Shri Padmanabhan, the learned senior counsel for the appellant.
Firstly he argued that there is an intensive cultivation in the ac quired land not only of the fruit bearing trees therein but also using the vacant space for other short term crops to establish which the appellant sought remand to the Civil Court to adduce additional evidence under Order 41 of Rule 27 etc.
The High Court had wrongly rejected the request for additional evidence.
we find no force in the contention.
It was not the case that the appellant was prevented to adduce evidence in this behalf.
Remand 552 under order 41 Rule 27, C.P.C cannot be made to adduce fresh evidence, when though available but was not adduced.
Even otherwise it was further argued that the land and the trees together constitute the value of the acquired lands and so are separately valued which would reflect the true and correct market value.
The Civil Court has correctly adopted the method and the High Court is unjustified in interfering with.the award of the Civil Court; It is also further contended that the land possessed of potential value as building sites and, therefore, the reliance by the Civil Court on exhibit A. 1 dated February 19, 1964 which worked out at Rs.400 per cent and exhibit A. 2 dated February 17, 1967 under which 14 were purchased worked out at Rs.556 percent and award of market value @ Rs.500 per cent by the Civil Court was not illegal.
exhibit B. 1 under which Rs.230 per cent accepted as claimed by the State cannot be relied upon as the document dated June 3, 1966 does not relate to the lands in the neighbourhood.
Admittedly they are situated six furlongs away from the limits of Calicut city and one mile from the acquired lands.
On the other hand, the lands under exhibit A. 1 and A. 2 are situated one furlong from the acquired lands.
Therefore, they provide the comparable sales for fixation of market value.
The second contention is that the appellant is entitled to 30 per cent solatium under section 23(2) of the Land Acquisition Act 1 of 1894 as amended under the Land Acquisition Amendment Act 68 of 1984.
The learned counsel appearing for the State has resisted the conten tions.
He argued that exhibit A. 1 and A. 2 relate to small extent of 5 cents and 14 cents together with the buildings situated therein.
Therefore, when a large extent of six acres was acquired they offer no comparable price.
Small plots always fetch higher price and that, therefore, they cannot form same basis to fix the market value at Rs.500 per cent.
He also further contended that the lands and the trees cannot be valued separately.
The court should adopt only either the value of the, land or income of the trees with suitable multiplier but not both.
The High Court is, there fore, well justified in rejecting the sale deeds and the total valuation and confirmed the capitalisation method of valuation.
He also contended that the Land Acquisition Act, 1894 and 1984 Amendment Act have no application since acqui sition proceedings were admittedly taken under the Kerala Land Acquisition Act.
The crucial question, therefore, is what is the proper method of valuation of the land in question.
The total extent of the land is six acres consisting of 1130 coconut trees; 65 arecanut trees and 45 pepper wines.
The Civil Court fixed the market value of the lands at 553 Rs.3,00,000.
Admittedly, the appellant did not file any cross objections in the High Court seeking any higher com pensation.
Accordingly the market value of the lands fixed at Rs.3,00,000 became final.
The fixation of the market value on capitalisation method also became final.
It is settled law that the methods of valuation to be adopted in ascertaining the market value of the land as on the date of the notification are: (i) opinion of experts (ii) the price paid within a reasonable time in bona fide transaction Of the purchase or sate of the lands acquired or the lands adjacent to the lands acquired and possessing similar advan tages and (iii) a number of years purchase of the actual or immediately prospective profits of the lands acquired.
These methods, however, do not preclude the court from taking any other special circumstances obtained in an appropriate case into consideration.
As the object being always to arrive as near as possible in an estimate of the market value in arriving at a reasonable correct market value, it may be necessary to take even two or all those matters into account inasmuch as the exact valuation is not always possible as tow lands may be the same either in respect of the situation or the extent or the potentiality nor is it possible in all cases to have reliable material from which that valuation can be accurately determined.
In State of Kerala vs
P.P. Hassan Koya; , the question arose whether the separate valuation of the land and building would be proper method to be adopted to determine the market value of the acquired property. ' This Court held that "the land and the building constitute one unit" and the value of "the entire unit must be determined with all its advantages" and poten tialities.
When the property is sold with building it is often difficult to have sale of single land with building approximately in time to the date of the notification.
Therefore, the, method which is to be adopted in determining the value of the land and building is the method of capital isation of return actually received or which might reasona bly be received from the land or the building separate valuation of the land and building was not approved and the annual rent received with the proper capitalisation was adopted by the courts below was approved by this Court.
In Special Land Acquisition Officer v.P. Veerabhadrappa, etc.
; , this court held that the method of valuation by capitalisation should not be resorted to when other methods are available.
However, where definite materi al is not forthcoming either in the shape of sales of simi lar lands in the neighbourhood at or about the, date of notification under section 4(1) or otherwise,.
the court has no other alternative but to fall back on the method of valua tion by capitalisation.
In valuing land or an interest in land for purposes of land acquisition proceedings, the rule as to number of years purchase is not a theoretical or legal rule but depends 554 upon economic factors such as the prevailing rate of inter est in money investments.
The return which an investor will expect from an investment will depend upon the characteris tic of income as compared to that of idle security.
The main features are: (1) security of the income; (2) fluctuation; (3) chances of increase; (4) cost of collection; etc.
The traditional view of capitalised value being linked with gilt edged securities, no longer be.
rigorous when invest ment in fixed deposits with nationalised banks, National Savings Certificates, Unit ' Trusts and other forms of Govt.
securities and even in the share market command a much greater return are available.
The capital in agricultural lands normally when the rate of return on investment was 8.25per cent in the years.
1971 72, the proper multiplier to be applied for the purpose of capitialisation would not, in any event, exceeding 10 per cent.
In that case the State had agreed to apply 12 1/2 per cent capitalised value of the lands, this court upheld capitalisation of the value of land at 12 1/2 per cent In Admn.
General of West Bengal vs Collector, Varanasi, ; this ' Court held that usually land and building there9n constitute one unit.
Land is one kind of property; land and building ' together constitute an alto gether different kind of property.
They must be valued as one unit.
But where, however, the property comprises exten sive land and the structure standing thereon, do not show that full utilization of potential of the land realised, it might not be impermissible to value the property estimating separately the market value of the land with reference to the date of the preliminary notification and to add to it the value of the structures as at that time.
In this method, building value is estimated on the basis of the prime cost or replacement cost less depriciation.
The rate of depricia tion, generally, arrived at by dividing the cost of con struction '(less the salvage valued at the end of the period of utility) by the number of years of utility of the build ing.
The factors that prolong the life and the utility of the building, such as good maintenance, necessarily influ ence and bring down the rate of depreciation.
In that case larger extent of 23.66 acres together with building of 25,000 sq.
feets comprises of 35 rooms,halls and other appurtenances, and 43 1 fruit bearing and 13 timber trees and 12 bamboo clumps situated in the city of Varanasi were acquired.
With regard to the value of the trees, this Court held that where the land is valued with reference to the potentiality for building purposes the trees on the land cannot be valued independently on the basis of its horticul tural value or with reference to the value of the yield but this principle does not come in the way of awarding the timber value after deducting costs for cutting and removing them from the lands as salvage value.
555 It is thus settled law that in evaluating the market value of the acquired property, namely, land and the build ing or the lands with fruit bearing trees standing thereon, value of both would not constitute one unit; but separate units; it would be open to the Land Acquisition Officer or the court either to assess the lands with all its advantages as potential value and fix the market value thereof or where there is reliable and acceptable ' evidence available, on record of the annual income of the fruit bearing trees the annual net income multiplied by appropriate capitalisation of 15 years would be the proper and fair method to determine the market value but not both.
In the former case the trees are to be separately valued as timber and to deduct salvage expenses to cut and remove the trees from the land.
In this case the award of compensation was based on both the value of the land and trees.
Accordingly the determination of the compensation of the land as well as the trees is illegal.
The High Court laid the law correctly.
It is seen that exhibit B. 1 relied on by the State was rejected by both the courts and, therefore, it cannot offer any reasonable basis to fix the market value of the land.
It is 'equally seen that exhibit A. 1 and A. 2 relate to small extent of land together with buildings standing thereon.
Therefore, they too do not also form any reasonable basis Or guide to determine market value of large extent of six acres of the acquired land.
The High Court rightly did not place reliance therein.
But from the evidence it is clear, as found by the Civil Court, that the lands possessed of poten tial value as building sites as the lands are situated in the city itself.
There was all round development around the lands.
The lands are situated half a furlong from the Bom bay Kanyakumari National Highway.
It also abutts the road to Naduvattom, a busy bus route within the Corporation, Cali cut.
It is situated nearby the industrial area.
The Western India Steel Mill, the Premier Steel Mills, Arts and Science College, Cinema Theatre, Police Station and other offices are situated in close proximity to the lands and that, therefore, the lands are possessed of potential value but unfortunately the appellant did not place any material of the prevailing prices as house sites.
However, the value of the land as fixed at Rs.3,00,000 became final.
The market value of the income from the trees with 15 years multiplier was ' worked out at Rs.2,69,42 1.55 p. by the Civil Court and the High Court accepted to be the correct valuation and it was also not questioned.
But it is lesser than the value of the land.
Being higher in value the appellant is entitled to the value of the land as determined by the Civil Cout at Rs.3,00,000 (three lakhs) in total.
The value of the trees as fire wood shall be determined towards compensation.
We have noted the number of coconut trees etc.
The learned counsel has left to this Court 556 to fix any reasonable compensation and On the totality of the facts and circumstances we are of the opinion that total sum of Rs. 10,000 would be reasonable compensation towards the value of the total trees as fire wood or as for use of other purposes after deducting salvage expenses.
Accordingly we hold that the appellant is entitled to total cOmpensation of Rs.3,10,000.
Admittedly, the appellant is entitled to solatium at 15 percent and 4 per cent interest under the Kerala Land Acqui sition Act.
Section 30 sub section (1) of the Land Acquisi tion Amendment Act 68 of 1984 reads thus: "Transitional Provisions (1) the provisions of sub section (1A) of section 23 of the Principal Act, as inserted by Clause (a) of section 15 of this Act, shall apply, and shall be deemed to have applied, also to, and in relation to, (a) every proceeding for the acquisition of any land under the principal Act pending on the 30th day of April, 1982 (the date of introduction of the Land Acquisition (Amend ment) Bill, 1982, in the House of People), in which no award has been made by the Collector before that date; (b) every proceeding for the acquisition of any land under the principal Act commenced after that date, whether or not an award has been made by the Collector before the com mencement of this Act".
(2) "The provisions of sub section, (2) of section 23 and section 28 of the principal Act, as amended by CI.
(b) of section 15 and section 18 of this Act respectively, shall apply, and shall be deemed to have applied, also to, and in relation to, any award made by the Collector or Court or to any order passed by the High Court or Supreme Court in appeal against any such award ' under the provisions of the, principal Act later the 30th day of April, 1982.
(the date of introduction of the Land Acquisition (Amend ment) Bill, 1932, in the House of the People) and before the commencement of this Act".
A reading of the provisions would reveal the legisla tive intendment that the transitional provisions could apply to every proceeding for acquisition of any land under the principal Act, namely, Act 1 of 1894 (Central Act), pending on the 30th day of April, 1982, 557 namely, the date of introduction of the Land Acquisi tion (Amendment) Bill, 2982 in the House of the People; in which no award has been made by the Collector before.
that date or the award made by the.
Civil Court at the date of the Amendment Act, namely, September 24, ,1984.
Thus it is clear that 'the Amendment Act 68 of 1984 including sub section (2) section 23 per se is inapplicable to the acquisition of the land under the Kerala Land Acquisition Act, 1961.
In Kanthitnathy Plantation Pvt. Ltd. vs State.
of Kerala & Ors., this Court held that,by operation of the Land Acquisition (Amendment) Act 68 of 1984 read with Art 254 of the Constitution, the Kerala Land Acquisition Act, 1961 by necessary implication stood repealed, in its application to the State of Kerala and that the Land Acqui sition Act 1 of 1984 as amended by Central Act 68 of 1984 stands applicable.
Therefore, the proceedings ' under the Kerala Act being pending proceedings would be continued from the stage at which they stood at.
Shri Padmanabhan then.contends that the ratio in Union of India & Ors.
vs Filip Tiago De Game of Veden Vasco De Gama, [1990] 1 SCC 277 would attract the facts in this case and the appellant is entitled to 30 per cent solatium under the amended Act.
We are afraid we cannot accede to this contention.
The admit ted facts in this case are that the award was made by the Collector on February 29, 1969.
On reference the Civil Court made the award on February 9, 1972.
In Filip Tiago 's case the award was made on March 5, 1969 and the Civil Court on reference under section 18 made its award on May 28, 1985.
In the light of those facts, this Court by processual interpretation of transitional provision of section 30(2) avoided injustice by eschewing literal construction and advanced justice by mending the law.
The ratio is clearly distin guishable.
In Union of India & Anr.
vs Raghubir Singh (dead) by Lrs.
; , a Constitution Bench of this Court, to resolve the conflict of decisions as to the 'applicability of the Amendment Act to pending appeals in the High Court and in this Court, held authoritatively that the award made by the Collector referred to in section 30(2) is an award made under section 11 of the Parent Act and the award made by the Principal Civil Court of original juris diction under section 23 of the Parent Act, on reference made to it by the Collector under section 18 of the Parent Act.
There can, therefore, be no doubt that the benefit of enhanced solatium intended by section 30(2) is in respect of an award made by the Collector between April 30, 1982 and September 24, 1984.
Likewise the benefit of the enhanced solatium is extended by section 30(2) to the case of an award made by the Civil Court between April 30, 1982 and September 24, 1984 even though it be upon reference from the award made before April 30, 1982.
Thus it was held that the pend ency of the appeals against the 558 award made preceding the aforestated two dates in the High Court or this Court would not attract the application of section 30(2) and that, therefore, enhanced solatium under section 30(2) read with section 23(2) is inapplicable.
Thereby, the appellant is not entitled to enhanced solatium at 30 per cent.
As regards interest is concerned it is fairly conceded that the claimant is entitled only to 4 per cent as awarded by the courts below.
Accordingly we allow the appeal, set aside the judgment of the High Court and hold that the appellant is entitled to Rs.3,10,000 as enhanced compensation with 15 per cent sola tium and interest at 4 per cent on enhanced market value from the date of dispossession.
The appeal is accordingly allowed with costs of this Court.
V.P.R. Appeal al lowed.
| The notification under section 3 of the Kerala Land Acquisition Act, 1961 (Act 21 of 1962) was published in the Gazette on February 28, 1967 acquiring six acres of land to construct staff quarters of P & T of Govt.
of India.
The Land Acquisition Officer awarded compensation @ Rs.2.30 per cent and also the value of the trees by capital isation method in a sum of Rs.2,69,421.55 p. towards the land improvement together with 15 per cent solatium and 4 per cent interest.
On reference, the Civil Court enhanced the market value at Rs.500 per cent, i.e., in total Rs.3,00,000 towards land value and confirmed the award of the Land Acquisition Offi cer of 2,69,421.55 p. towards land improvement.
making in all 5,69,421.55 p. with solatium at 15 per cent and interest at 4 per cent from the date of dispossession.
The appeal by the State was allowed by the High Court.
Calling in question the reversing decree of the High Court, this appeal has been filed by the claimant contending that there was an intensive cultivation in the acquired land not only of the fruit hearing trees therein but also using the vacant space for other short term crops to establish, which the appellant sought remand to the Civil Court to adduce additional evidence under Order 41 of Rule 27 etc., which request the High Court had wrongly rejected; that the appellant was entitled to 30 per cent solatium under section 23(2) of the Land Acquisition as amended under the Land Acquisition Amendment Act 68 of 1984; and that the land and the trees together constitute the value of the acquired lands and so were separately valued which would reflect the correct market value, which method the Civil Court had correctly adopted.
The State contended that the lands and.
the trees cannot be valued separately; and that the Laud Acquisitiou Act, 1894 and 1984 Amendment Act have no application since acqui sition proceedings were admittedly taken under.
the Kerala Land ACquisition Act.
On the question, what is the proper method of valuation of the land, this Court, allowing the claimant 's appeal, HELD.1.
The methods of valuation to be adopted in ascertaining the market value of the land as on the date of the notification are: (i) opinion of experts, (ii) the price paid within a reasonable time in bona fide transaction of the purchase or sale of the lands acquired or the lands adjacent to the lands acquired and possessing similar advan tages, and (iii) a number of years purchase of the actual or immediately prospective profits of the lands acquired.
These methods, however, do not 'preclude the court from taking any other special circumstances obtained in an appropriate case into consideration.
As the object being always to arrive as near as possible in an estimate of the market value in arriving at a reasonable correct market value, it may be necessary to take even two or all those matters into account inasmuch as the exact valuation is not always possible as no two lands may be.the same either in respect of the situation or the extent or the potentiality nor is it possible in all cases to have reliable material from which that valuation can be accurately determined.
[553B D] 2.
In evaluating the market value of the acquired property, namely, 'land and the building or the lands with fruit bearing trees standing thereon, value of both would not constitute one unit; but separate.units; it would be open to the Land Acquisition Officer or the court either to assess the lands with all its advantages as potential value and fix the market value thereof or where there is reliable and acceptable evidence available on record of the annual income of the fruit bearing trees the annual net income multiplied by appropriate capitalisation of 15 years would be the proper and fair method to determine the market value but not both.
[555A C] State of Kerala V.P.P. Hassan Koya; , ; Spe cial 550 Land Acquisition Officer vs
P. Veerabhadarappa, etc.
; , and Admn.
General of West Bengal vs Collec tor, Varanasi; , , referred to.
3. SectiOn 30 sub section (1) of the Land Acquisition Amendment Act 68 of 1984 would reveal the legislative in tendment that the transitional provisions could apply to every proceeding for acquisition of any land under the principal Act, namely, 'Act 1 of 1894 (Central Act), pending on the 30th day of April, 1982, namely, the date of intro duction of the Land Acquisition (Amendment) Bill, 1982 in the House of the People; in which no award has been made by the Collector before that date or the award made by the Civil Court at the date of the Amendment Act.
It is clear that the Amendment Act 68 of 1984 including sub section (2) of section 23 per se is inapplicable to the acquisition of the land under the Kerala Land Acquisition Act, 1961.
The pendency of the appeals against the award made preceeding the dates in the High Court or this Court would not attract the application of section 30(2) and that, therefore, en hanced solatium under section 30(2) read with section 23(2) is inapplicable.
[556H 557B, 557H 558B] Kanthimathy Plantation Pvt. Ltd. vs State of Kerala & Ors.
, , referred to.
Union of India & Ors.
vs Filip Tiago De Gama, [1990] 1 SCC 277, distinguished.
Union of India & Anr.
vs Raghubir Singh (dead) by Lrs.; , , followed.
On the totality of the facts and circumstances, total sum of Rs. 10,000 would be reasonable compensation towards the value of the total trees as fire wood or as for use of other purposes after deducting salvage expenses.
The appel lant iS not entitled to enhanced solatium at 30 percent: but is entitled to Rs.3,10,000 as enhanced compensation with 15per cent solatium and interest at 4 per cent on enhanced market value from the date of dispossession.
[556A B, 558B C] 5.
Remand under order 41 Rule27, C.P.C. cannot be made to adduce fresh evidence, when though available but was not adduced; [551H 552A]
| 6787.txt |
Appeal No. 366 of 1976 (From the Judgment and Order dated 2.12.1974 of the Karnataka High Court in Civil Writ Appeal No. 171/73).
K.N. Bhatta and M. Rangaswamy for the Appellant Mrs. Shyamla Pappu and Girish Chandra for Respondent No. 3 B.R.G.K. Achar for Respondents Nos. 1 and 2.
666 The Judgment of the Court was delivered by BEG J.
This appeal by special leave raises the question whether the State Government could, by a general direction given under Section 43(1) of the (hereinafter referred to as 'the Act ') fix the charges to be imposed upon operators of stage carriages for carrying mails as conditions of their permits.
Section 48 of the Act lays down the power of the Region al Transport Authority to grant stage carriage permits with conditions annexed thereto.
The first stage of exercise of this power is preceded by ' the quasi judicial enquiry, under Section 47 of the Act, into the matters affecting the interests of public in general.
Section 48, sub. section (1), subjecting the power to grant stage carriage permits to provisions of section 47 of the.
Act, includes what may be ' correctly characterised as the "quasi judicial" power either to grant or refuse to grant a permit after consideration of matters stated in Section 47 of the Act.
After that, we come to the power to attach conditions laid down in Sec tion 48(3), and we find: "49(3) The Regional Transport Authority, if it decides to grant a stage carriage permit, may grant the permit for a service of stage carriages of a specified description or for one or more particular stage carriages, and may, subject to any rules that may be made under this Act, attach to the permit any one or more of the following conditions, namely: . . " Out of a number of kinds of conditions which may be imposed, the xvth, given below, is relevant: "(xv) that mails shall be carried on any of the vehi cles authorised by the permit subject to such conditions (including conditions as to the time in which mails are to be carried and the charges which may be levied) as may be specified".
Now, it is contended on behalf of the appellants, that the power to attach conditions under.
Section 48(3) is also quasi judicial with which the State Government neither has nor ought to have any concern.
The conditions of permits are prescribed by statute.
It is for the authority, exer cising the power quasi judicially to grant or not to grant permits, to decide what conditions to attach or not to attach to each permit.
It is.
not, it is submitted, for the State Government to dictate any conditions to be attached.
Hence, the challenge to the Government notification dated 30th May, 1968, which directed the State Transport Authori ty, to impose the charge of certain uniform rates of freight upon operators carrying mails or postal goods in stage carriages owned by operators other than State Transport Undertakings throughout the State.
The State Transport Authority had, in its turn, issued a direction to the Re gional Transport Authorities all over the State under Section 44 (1 ) of the Act to impose, 667 duty of carrying the postal goods upon rates fixed by the Government as a condition annexed under Section 48(3) (xv) to permits.
The relevant part of Section 43 (1) of the Act enacts: "43 (1) A State Government having regard to (a) the advantage 's offered to the public, trade and industry by the above development of motor transport, and (b) the desirability of co ordinating road and rail transport, and (c) the desirability of preventing the deterio ration of the road system, and (d) the desirability of preventing uneconomic competition among motor vehicles, may, from time to time, by notification in the Official Gazette, issue directions to the State Transport Authority (i) regarding the fixing of fares and freights for stage carriages, contract carriages and public carriers;" Learned Counsel for the appellant contends that the power of the Government to issue directions relating to "freights" does not include imposition of charges for carry ing postal goods as conditions permits which the Regional Transport Authority grants in exercise of its quasi judicial powers.
The attack on the validity of the Government direc tion is thus two fold: firstly, that it falls outside the scope of Section 43(1) of the Act as charges for carrying mail are not "freight" on goods carried; and, secondly, that no directions could be given to a quasi judicial au thority as to how it should perform its functions.
So far as the first argument is concerned, we do not find much substance in it.
The term "charge" is a broad one.
As used here, it is not a technical term and has not been defined by the Act.
It has, therefore, its ordinary dic tionary meaning.
It means any amount which may be demanded as a price for the rendering of some service or as price of some goods.
The argument of the learned Counsel for the appellant that the Act uses the term "freight" to.
indicate the charge made on carriage of goods, whereas the term "fare" is used for the charge made for carrying passengers, itself rests on the assumption that the term charge is a wide one.
It includes both freights and fares.
It is true that the term "fare" is used in relation to charges made for carriage of passengers and the term freight is used for charges made for the carriage of goods.
Nevertheless, both are charges.
It may be that stage carriages are meant for the carriage of passengers.
But, as is a matter of common knowledge, they also carry the luggage of passengers.
In other words, they also carry some goods incidentally.
The mail bags in which the postal goods are sent are only a type of goods which are not so bulky as to require trucks 11 l234SCI/76 668 Or special vans.
It is possible to carry them in stage carriages together with the luggage of the passengers.
In any case, this is a condition which is probably imposed only in those areas where mail vans of the State are not found to be necessary or economical to run.
In the villages in the interior of some rural areas, there may not be so much mail to carry as to justify sending a mail van.
Therefore, power is given to the Regional Transport Authori ty to attach the condition that postal goods should be carried in stage carriages at rates fixed by the Govern ment.
The real grievance of the operators is not that they have to carry postal goods as a condition of their permits but that the rates fixed are too low.
The proper remedy for such a grievance is, as the High Court rightly pointed out, to apply to the Government for revision of rates fixed.
Coming to the second submission, we may observe that, although, there is ample authority for the proposition that the grant of stage carriage permits is a quasi judicial function, with which the State Government cannot interfere by giving directions which may impede the due performance of such functions, yet, when Section 48(3) speaks of the power to attach conditions after the decision to grant the permit, it really deals with what lies past the quasi judi cial stage of decision to grant the permit.
At that stage, the decision to grant the permit is already there and only conditions have to be attached to the permit, such as the necessity to carry postal goods on certain routes at rates fixed by the Government.
On the face of it, these rates cannot be properly determined by the Regional Transport Authority.
They have to be uniform throughout the State.
A decision on what they should be must rest on considerations of policy and on facts which are not quite relevant to the grant of stage carriage permits.
In any case, it is the State Government which has the data and the legal power, under Section 43(1).of the Act, to fix freights for carriage of postal goods in various types of carriages, mentioned there, including stage carriages.
We 'think that such charges are merely a species of freight on postal goods about which the State Government can issue appropriate directions to the State Transport Authority.
The Regional Transport Authority has only to.
annex the condition auto matically in areas where such a condition may be required to be annexed to the permits granted.
A reference to Section 59, sub.
section (3)(c) would show that acceptance of the fixed rates of fares and freights, after their notification under Section 43, becomes a condi tion which has to be automatically attached to a permit.
The Regional Transport Authority has no option on this matter.
This is what this Court held in section Srikantiah & Ors.
vs The Regional Transport Authority, Anantapur & Ors.(1) In other words, the Regional Transport Authority has to act mainly mechanically after considering matters on which it has to form an opinion and take a decision quasi judicially.
We think that there is no scope for argument that there is any interference here with the quasi judicial functions of the Regional Transport Authority.
The (1) [1971] Supp.
S.C.R. 816.
669 annexation of a condition like this is a part of the purely executive Activities of the Regional Transport Authority.
By Civil Miscellaneous Petition No. 4023 of 1976, learned Counsel for the appellant sought to add two further grounds of appeal.
These were: that, the special provisions of Section 49(3)(xv) over ride the general provisions of Section 43(I)(d) (i) on the principle of interpretation 'generalia specialibus non derogant ' : and, that, in view of the special provision of Section 48(3)(xv), the impugned notification of the State Government was ultra vires.
The second ground is what follows if the first is good.
But as we have already explained above, the first ground itself is not sound.
There is no question of any special provision over riding the general.
The provisions are complementary.
Section 48(3)(xv) is really meant to carry out the direction which can legally be given under section 43(1)(d)(i) of the Act.
Therefore, although we allow the miscellaneous applica tion and have permitted the grounds to be argued, we reject them as untenable.
For the reasons given above, we agree with the views contained in the judgment of the Karnataka High Court against which this appeal has been filed.
We hold that the impugned direction and notification by the Government was not invalid and that the Regional Transport Authority had not acted illegally in attaching the required condition to the permit.
Consequently, we dismiss this appeal with M.R. Appeal dismissed.
| The State Government issued a notification u/s 43(1) , directing the State Transport Authority to impose the charge of certain uniform rates of freight upon the operators of stage carriages other than State Transport undertakings, carrying mails or postal goods.
The S.T.A. then directed the Regional Transport Authority, u/s 44(1) of the Act, to impose the duty of carrying the postal goods upon rates fixed by the Government as a condition annexed u/s 48(3)(XV) to permits.
The appellant contended that the power of the Government u/s 43(1) to issue directions relating to "freights", does not include imposition of charges for carrying postal goods as conditions of permits granted by the Regional Transport Authority.
in exercise of its quasi judicial powers.
Dis missing the appeal the Court, HELD: The State Government has the data and the legal power under Section 43(1) of the Act to fix freights for carriage of postal goods in various types of carriages mentioned there, including stage carriages.
Such charges are merely a species of freight on postal goods about which the State Government can issue appropriate directions.
[668 E] (2) Section 48(3) deals with what lies past the quasi judicial stage of decision to grant the permit.
At that stage, the decision to grant the permit is already there and only conditions have to be attached to the permit.
The Regional Transport Authority has, at this stage to act mainly mechanically after considering matters on which it has, acting quasi judicially, formed an opinion and taken a decision.
There is no interference with the quasi judicial functions as the annexation of a condition like.
this is a part of the purely executive duties of the Regional.
Trans port Authority.
[668 D E, 669 A] section Srikantiah & Ors.
vs The Regional Transport Author ity, Anantapur & Ors followed.
(3) There is no question of any special provision over riding the general.
The provisions are complementary.
Section 48(3)(XV) is really meant to carry out the direc tions which can legally be given under section 43( 1 )(d)(i) of the Act.
[669 B C]
| 3589.txt |
Appeals .
101 to 104 of 1957.
Appeals from the judgment and order dated February 4, 1954, of the Mysore High Court in Regular, Second Appeals Nos. 5 and 6 of 1953 and Writ Petitions Nos. 67 and 68 of 1953 respectively.
H. N. Sanyal, Additional Solicitor General of India, R.Ganapathy Iyer and D. Gupta for the appellant.
A. V. Visv)anatha Sastri, M. section K. Sastri and ' T. R. V. Sastri for A. G. Ratnaparkhi, for the respondents.
February 20.
The Judgment of the Court was delivered by WANCHOO, J.
These are four appeals on certificates granted by the Mysore High Court.
They will be disposed of together as the. points raised in them are common.
The facts of these cases are complicated and may be mentioned in some detail.
On July 7, 1949, the then State 'of Mysore passed The Mysore Administration of Evacuee Property (Emergency) Act, No. XLVII of 1949 (hereinafter called the.
first Mysore Act).
It provided for the appointment of a Custodian of Evacuee Property for the State of Mysore and other officers subordinate to him for the purpose of administering evacuee property in that 858 State.
Section 2(c) defined an " evacuee " and section 2(d) evacuee property ".
Section 5 laid down that all evacuee property situate in Mysore would vest in the custodian.
Section 6 provided for a notification by the Custodian in the Mysore Gazette of evacuee property vested in him.
Section 8 provided that any person claiming any right to or interest in any property notified under section 6 as evacuee property or in respect of which a demand requiring a surrender of possession had been made by the Custodian might arefer a claim to the Custodian on the ground that he property was not evacuee property or his interest in the property had not been affected by the provisions of that Act.
It was further provided that the Custodian was, to hold a summary inquiry in the prescribed manner into such claims and after taking such evidence as might be produced, pass an order stating the reasons there for) either rejecting the claim :or allowing it wholly or in part.
Finally, section 30 provided for an appeal to the High Court where the original order under section 8 had been passed by the Custodian, an Additional Custodian or an Authorised Deputy Custodian.
This Act remained in force till it was replaced by the Mysore Administration of Evacuee Property (Second) (Emergency) Act, No. LXXIV of 1949 (hereinafter called the second Mysore Act), which came into force on November 29, 1949.
On September 21, 1949, the Custodian issued a notification by which he declared the properties.
of the two respondents as evacuee properties which had vested in him, as the, respondents had become evacuees.
Thereupon two claims were filed under section 8 of the first Mysore Act separately by the two respondents.
These claims were investigated by the Deputy Custodian who dismissed the same on April 17, 1950, declaring that the, properties were evacuee properties.
, It may be mentioned that in the meantime, the second Mysore Act had come into force by which the first Mysore Act was repealed.
But section 53(2) of the second Mysore Act provided, that anything done or any action taken.
in the exercise of any power conferred by the first Mysore Act shall be deemed to have been done 859 or taken in the exercise of the powers conferred by the second Mysore Act.
It was also provided that any penalty incurred or proceeding commenced under the first Mysore Act shall be deemed to be a penalty incurred or proceeding commenced under the second Mysore Act as if the latter Act were in force on the day on which such thing was done, action taken, penalty incurred or proceeding commenced.
There was how.
ever one difference in the two Mysore Acts.
The first Mysore Act had provided by section 5 for the vesting of all evacuee property situate in Mysore ipso facto in the Custodian; section 6 then provided for notification by the Custodian and section 8 for preferring claims.
The second Mysore Act however made a departure from this and section 5 thereof provided that " a where the Custodian is of opinion that any property is evacuee property within the meaning of this Act he may, after causing notice thereof to be given in such manner as may be prescribed to the persons interested, and after holding such inquiry into the matter as the circumstances of the case permit, pass an order declaring any such property to be evacuee property.
" Section 6 then provided for vesting of any property declared to be evacuee property in the Custodian.
Thus while under the first Mysore Act the evacuee property vested in the Custodian and the person who claimed that it was not evacuee property had to make an application under section 8 and to get it declared that it was not evacuee property, under the second Mysore Act there was no vesting in the Custodian and the Custodian had to give a notice in the manner prescribed (if he thought any property to be evacuee property) and after hearing the persons interested to declare the property to be evacuee property; and it was only thereafter that the property vested in him as evacuee property.
Further, the second Mysore Act also defined the " Custodian General " as the Custodian General of Evacuee Property in India appointed by the Government of India under section 5 of the Administration of Evacuee Property Ordinance (Central Ordinance No, XXVII of 1049), which had come 860 into force on October 18, 1949.
Further there was a change in the forum of appeals and instead of the High Court the appeal lay to the Custodian General from an order passed under section 5 of the second Mysore Act where the original order had been passed by the 'Custodian, Additional Custodian or Authorised Deputy Custodian and in some cases to the District Judge designated in this behalf by the Government under sections 22 and 23 of the second Mysore Act.
In addition, provision was made by section 25 of the second Mysore Act for revision by the Custodian General of orders passed by the District Judge or the Custodian on appeal.
It may be mentioned that the , No. XXXI of 1950 (hereinafter called the Act), came into force on the day the Deputy Custodian passed the order dated April 17, 1950.
It may also be mentioned that in the meantime the Constitution of India had come into force on January 26, 1950, and the former State of Mysore had become the new Part B State of Mysore under the Constitution.
The Act was to apply to the whole of India except the States of Assam, West Bengal, Tripura, Manipur and Jammu and Kashmir.
Thus the Act applied to the Part B State of Mysore on April 17, 1950, and though there was no specific provision then in the Act repealing the second Mysore Act it is not seriously disputed that the Act by necessary implication repealed the second Mysore Act, as the Act substantially enacted all that was contained in the second Mysore Act.
However that may be, appeals were filed against the order of April 17, 1950, before the Custodian.
These appeals were allowed on August 22, 1950.
The Custodian held that there was not sufficient evidence to prove the respondents as evacuees and consequently the properties in question could not be treated as evacuee properties.
On October 3,1950, the Custodian General gave notices to the respondents under section 27 of the Act in respect of the order of the: Custodian dated August 22, 1950, and asked them to show cause why '; the said order of the Custodian be not revised, On December 7, 1950, the Administration of Evacuee 861 Property (Amendment) Act, No. LXVI of 1950, was passed by which inter alia section 58 of the Act was amended and it was provided that if immediately before the.
commencement of the Act there was in force in any State to which the Act extended any law which corresponded to the Act and which was not repealed by, sub section
(1) it shall stand repealed.
This was made retrospective from the date from which the Act came into force (namely, April 17, 1950) and so the repeal of evacuee property laws which were in force in those States to which the Act applied which was implicit in it was made explicit from December 7, 1950, so that frum April 17, 1950, only the Act held the field.
On February 11, 1952, the Custodian General set aside the order of the Custodian dated August 22, 1950, and ordered that further proceedings in these cases should be taken before the Custodian as an original matter and be was directed to dispose of the cases afresh in the light of the evidence already recorded and such other evidence as might be produced before him by the two respondents.
When the matter thus came back to the Custodian he ordered the Deputy Custodian on April 7, 1952, to record the evidence and then submit the record to him for final disposal.
Eventually, the matter came before the Custodian for final disposal on December 2, 1952.
He held that the two respondents were evacuees and their properties were evacuee properties.
This was followed by two appeals to the High Court on January 2, 1953.
As, however, the respondents felt some doubt whether any appeal lay to the High Court two writ petitions were also filed on September 7, 1953, against the order of the Custodian.
The two appeals as well as the two writ petitions were disposed of by the High Court by a common judgment on February 4, 1954.
The High Court held that the appeals before it were competent.
It further seems to have 'held that the CustodianGeneral had no power under section 27 of the Act to revise the order passed by the Custodian on August 22,1950.
Finally, as the High Court held that the appeals were competent it went into the matter as an appellate court and came to the conclusion that the order of the 862 Custodian dated December 2, 1952, was erroneous.
It, therefore, allowed the appeals as well as the writ petitions and set aside the order of the Custodian dated December 2, 1952, and restored the earlier order of the Custodian dated August 22, 1950.
Thereupon "followed applications by the Custodian of Evacuee Property, Mysore, for certificates to file appeals to this Court on which the High Court granted the certificates, and that is how the four appeals have come up before us.
The main contention of the learned Additional Solicitor General on behalf of the appellant is two.
He urges firstly that the High Court was in error when it held that the Custodian General had no power to set aside the order of August 22, 1950, under section 27 of the Act.
In the second place, his contention is that the High Court was in error in holding that an appeal lay to it from the order of the Custodian dated December 2, 1952.
Therefore, the High Court could not deal with the matter before it as if it were hearing an appeal; it could only consider the writ petitions before it and in doing so it would not be justified in issuing a writ of certiorari against the order of December 2, 1952, because that order was not passed without jurisdiction and there was no error of law apparent on the face of the record to call for interference with it.
Mr. Sastri for the respondents In reply submits that as the proceedings in these oases began under a. 8 of the first Mysore Act and as there was nothing corresponding to that section either in the second Mysore Act or in the Act, which replaced successively the first Mysore Act, the High Court was entitled to hear an appeal from the order of Decem ber 2, 1952, as that order must be held to have be On passed in a proceeding under the first Mysore Act, even if it be that the Custodian General had the jurisdiction to set aside the order of August 22, 1960 under section 27 of the Act.
Further, Mr. Sastri contends that the Custodian General had no jurisdiction to set aside the order of August 22, 1960, under section 27 of the Act.
863 The first point therefore which falls for consideration is whether the Custodian General had jurisdiction to set aside the order of August 22,1950, under section 27; for if he had no such jurisdiction the High Court may be entitled after holding that the Custodian General 's order of February 11, 1952, was without jurisdiction, to set aside all subsequent proceedings, leaving:the order of August 22, 1950, operative and in full force (assuming for this purpose that the High.
Court had jurisdiction in writ proceedings to set aside the order of the Custodian General whose headquarters were in New Delhi).
Now the first Mysore Act had no provision relating to the Custodian General.
It was the second Mysore Act which for the first time brought in the CustodianGeneral and gave him powers of revision under section 25 with respect to orders passed by the Custodian or the District Judge in.
appeal.
Then came the Act on April 17, 1950, by which the Custodian General was given the power to call for the record of any procee in which any District Judge or Custodian had passed an order for the purpose of satisfying himself as to the legality or propriety of any such order and to pass such order in relation thereto as he thought fit.
This provision is wider than the provision in the second Mysore Act and is not confined to orders passed by a District Judge or a Custodian in appeal and would apply even to original orders passed by the Custodian, which term, according to the definition in section 2(c) includes any Additional, Deputy or Assistant Custodian of evacuee property.
We have already pointed out that the Act provides substantially for all ,matters contained in the second Mysore Act and therefore must be held to have repealed the second Mysore Act by implication.
but in any case the question whether the second Mysore Act was repealed by the Act when it came into force on April 17, 1950, I" been set at rest by the later Central Act, LXVI of 1950.
That Act was passed on December 7, 1950, and 2 thereof began thus: "For section 58 of the, , the following section shall be 864 substituted.
and shall be deemed always to have been substituted.
" This clearly shows that Central Act LXVI was amending section 58 retrospectively from the date on which it came into force (namely, April 17, 1950).
The new section 58 which was thus substituted in the Act from April 17, 1950, contained sub section
(2) which is as follows: " If, immediately before the commencement of this Act, there is in force in any State to which this Act extends any law which corresponds to this Act and which is not repealed by sub section (1), that corresponding law shall stand repealed.
" It is clear therefore that the second Mysore Act was expressly repealed as from April 17, 1950, by the Act in view of this substituted section 58 put into it retrospectively by Act LXVI, for the second Mysore Act was undoubtedly a law corresponding to the Act.
The High Court seems to have overlooked the fact that Act LXVI gave retrospective operation to the new section 58(2) which was inserted in the Act.
It seems to think that the second Mysore Act was repealed on December 7, 1950, when Act LXVI came into force.
The High Court was further in error in holding that the amended sub section (3) of section 58 which was put into the Act also came into force from December 7, 1950, while as matter of fact it came into force from April 17, 1950, when the Act itself first came into force.
The position when the Custodian General gave notice in October, 1950, under section 27 of the Act therefore was that the first Mysore Act had already been re. 'pealed by the second Mysore Act and the second Mysore Act had been repealed by the Act as from April 17, 1950, and therefore in October, 1960, only the Act held the field.
The question then arises whether it was open to the Custodian General to revise the order dated August 22, 1950, under section 27 of the Act in February, 1952.
Now section 27 is very wide in terms and gives power to the Custodian General at any.
time either on his own motion or on application made to him in this behalf.
, to call for the record of any proceeding in which any District Judge or Custodian 865 has passed an order for the purpose of satisfying himself as to the legality or propriety of any order and to pass such order in relation thereto as he thinks fit.
Prima facie, therefore, these wide words give power to the Custodian General to revise any order passed by the Custodian.
It is urged on behalf of then respondents that the Custodian General could; not revise the order dated August 22, 1950.
We are not impressed by this argument.
Now the Act was passed in 1950 to set up a central organisation for the custody, management and control, etc.
, of property declared by law to be evacuee property with the Custodian General at the head.
It is also clear that all similar laws existing in various States on the date the Act came into force (namely, April 17, 1950) were repealed by it.
The intention of the Legislature obviously was to provide for the custody and management etc.
of evacuee property in the manner provided in the Act with the Custodian General as the head of the organisation.
Further, action taken with respect to evacuee property under the first Mysore Act was deemed under section 53 (2) of the second Mysore Act to have been taken thereunder and finally any action taken in the exercise of the power conferred by the second Mysore Act was deemed to have been taken in the exercise of the powers conferred by the Act.
Therefore, any action taken with respect to evacuee property and any order passed by any Custodian in any proceeding with respect to such property would be subject to the revisory jurisdiction of the CustodianGeneral under section 27 in view of the wide language thereof and the fact that proceedings started under the first Mysore Act.
would not, in our opinion, make any difference to the power of the Custodian General under section 27.
Obviously the order of August 22, 1950 was passed when the Act was in force in a proceeding relating to evacuee property by the Custodian and the Custodian General would be competentunder section 27 to call for the record of that proceeding and satisfy himself as to the legality or propriety of any such order and thereafter pass, such order in relation thereto so he thought fit, We are, therefore, of opinion that ' 866 considering the purpose for which the Act was passed and the successive saving clauaes in the second Mysore Act and in the Act,,the Custodian General had the power under section 27 to call for the record of the proceed.
ing in which the order of August ' 22, 1950, was passed &ad consider its legality or propriety and Pass such order in relation thereto as he thought fit.
Even if the notice of October, 1950, may be open to question as it was issued before Act LXVI of 1950 was passed, there can be no doubt that the order of February,, 1952, under a. 27 was passed after hearing the parties and would be valid and within the jurisdiction of the Custodian General when it was passed.
Therefore, the order of the Custodian General dated February II,, 1952, being within his jurisdiction would not be liable to be set aside on a writ of certiorari as if the Custodian General had acted without jurisdiction.
The subsequent proceedings, therefore, which took place after the order of the Custodian General would also be with jurisdiction and would not be liable to be set aside on a writ of certiorari on the ground that they were without jurisdiction.
The High Court, thereforewas in error in holding that the order of the Custodian, General dated February 11, 1952,was without juries diction and therefore all subsequent proceedings taken in pursuance thereof were also without jurisdiction, with the result that the order of August 22, 1950 stood fully operative.
This brings us to the next question whether any appeal lay to the High Court against the order of December 2, 1952.
There is no,doubt that the proceedings in the present case commenced under the first, Mysore Act with a notification under is.
6 and claim applications under section 8.
If the original proceeding had finished when the first Mysore Act was in force and the order of December 2, 1952, had been passed during its operation there would undoubtedly have been as appeal to the High Court under section 30 thereof.
But the, first Mysore Act, was repealed by the second Mysore Act in.
November, 1949, and the second Mysore Act was in its turn repealed by the Act #,a from April 1950.
The, questions therefore, that arises for consideration 867 is 'Whether after the repeal of the first Mysore Act an appeal would still lie to the High Court from the order of December 2, 1952.
The main contention of Mr. Sastri in this behalf is that if the second Mysore Act or the Act contained provisions which were similar to the provisions contained in section 8 of the first Mysore Act, it may have been possible to say that the remedy provided by the first Mysore Act under section 30 had been superseded by the remedy provided in the Act, that remedy being an appeal to the Custodian General under section 24 of the Act.
The argument further proceeds that neither the second Mysore Act nor the Act provides anything similar to what was provided by section 8 of the first Mysore Act.
Therefore, even though the first Mysore Act was repealed by the second Mysore Act the proceedings in the present case must be deemed to be still under the first Mysore Act which must be deemed to be existing for this purpose and, therefore, the right of appeal being a vested one and &rising when the proceedings commenced, there would still be a right of appeal under section 30 of the first Mysore Act in spite of its being repealed.
When the matter came before the Custodian in 19,52 it was contended before him that the proceedings should be taken to be under the first Mysore Act.
He accepted this contention, though he added that it was immaterial for the purposes of the present cases as the definition of " evacuee " in section 2(c) of the first Mysore Act was practically the same as in section 2(d) of the Act.
It is urged that in view of the manner in which the Custodian, dealt with the case when he passed the order.
dated December 2, 1952, the proceedings before him must be taken to be under the first Mysore Act and if so an appeal would lie to the High Court under ,section 30.,of the first Mysore Act.
This view has been accepted by the High Court also and that is why it hold; that the appeals before it were competent; and it is,, the correctness of this view which has been challenged before us.
Now there is no doubt that the right of appeal is a substantive right and arises when A proceeding is commenced and cannot be taken away by subsequent 868 legislation, except by express provision or necessary intendment.
There is no express provision in the present case taking away the right of appeal conferred by the first Mysore Act.
We have therefore to see whether it can be said that the right of appeal conferred by the first Mysore Act has been taken away by necessary intendment by the subsequent legislation ; and if so whether it has been completely taken away or has been replaced by another right of appeal, though not to the High Court.
Under the first Mysore Act, as we have already pointed out, evacuee property ipso facto vested in the Custodian under section 5.
There.
after the Custodian was expected to notify such property under section 6.
On such notification or where the Custodian demanded surrender of possession a person claiming any right to the property was entitled to make an application preferring a claim before the Custodian.
That application was dealt by the Custodian in a summary manner and he had 'the power either to reject the application or allow it in whole or in part.
An order passed by the Deputy or the Assistant Custodian under section 8 was appealable to the Custodian and an order passed by the Custodian or Additional Custodian or an authorized Deputy Custodian was appealable to the High Court.
The contention on behalf of the respondents is that when the first Mysore Act was replaced by the second Mysore Act, there was a vital change in the procedure and therefore cases in which proceedings had commenced under section 8 could only be dealt with under the first Mysore Act and for that purpose the first Mysore Act would be deemed to be alive under a. 6 (e) of the Mysore General Clauses Act, No. III of 1899, which corresponds to section 6 (e) of the General Clauses Act, No. X of 1897.
Now there is no doubt that the proceedings in these cases commenced under the first Mysore Act though they terminated when that Act was no longer in force.
What we have to see is whether there is anything in the repealing legislation which by necessary intendment took away the right of appeal provided by the first Mysore Act and substituted in its place another right of appeal provided by the repealing Act, 869 The argument of Mr. Sastri is that there is nothing in the second Mysore Act which repealed the first Mysore Act corresponding to section 8 of the first Mysore Act and therefore in spite of the repeal of the first Mysore Act proceedings commenced under a. 8 of that Act would continue to be governed thereby, including the right of appeal.
In this connection he urges that the scheme of the second Mysore Act with respect to evacuee property is vitally different from the scheme which is to be found in the first Mysore Act.
In the second Mysore Act there is no provision corresponding to section 5 of the first Mysore Act by which any property becomes ipso far to evacuee property and vests in the Custodian.
Under the second Mysore Act the Custodian has first to form a tentative opinion whether the property is evacuee property and after he has formed such opinion he gives notice thereof to the persons interested; after such notice is given he holds inquiry into the matter and thereafter passes an order declaring the property to be evacuee property.
Thus under the first Mysore Act the property became evacuee property ipso facto and the person claiming any interest in it had to proceed under section 8 and make a claim which had to be investigated and thereafter the Custodian finally declared whether the property, which he had notified under section 6 was evacuee property or not.
Under the second Mysore Act there being no vesting ipso facto, the proceeding commences; with a notice by the Custodian to the person interested followed by an inquiry after which the Custodian decides to declare the property evacuee if he finds it to be so under the law.
Further under the second Mysore Act when an order was passed declaring property to be evacuee property under a. 5 it was open to the person aggrieved by such order to file an appeal to the Custodian where the original order had been passed by the Deputy Custodian or Assistant Custodian and to the Custodian General where the original order had been passed by the Custodian, Additional Custodian or Authorised Deputy Custodian.
There was also in certain cases appeal to the District Judge; but we are not concerned with that in the 870 present appeals.
The position under the Act was also the same as under the second Mysore Act and the right of appeal was also similar.
It is thus true that there has been a change in the procedure by which evacuee property is finally declared to be evacuee property.
Under the first Mysore Act the property became evacuee property and the person had to go and file a claim and establish that it was not.
That claim was investigated and after investigation the Custodian had to come to a final conclusion whether the property was evacuee or not. 'If he came to the conclusion that it was evacuee property, the vesting under section 5 was confirmed.
If on the other hand he came to the conclusion that the pro perty was not evacuee property the legal effect was that there was no vesting under section 5 of the first Mysore Act.
Under the second Mysore Act the property did not ipso facto vest in the Custodian as evacuee property but he formed a tentative opinion as to whether it was evacuee property and then gave notices to the persons interested.
They appeared before him and the matter was investigated.
He then had to come to a final conclusion whether the property was evacuee property or not.
If he came to the conclusion that it was evacuee property he declared it to be such; if on the other hand he came to the conclusion that it was not evacuee property the proceedings came to an end.
It will be seen therefore on a comparison of the two procedures that though there is difference between the two, the difference is not of a vital or substantial nature.
In the one case the ' law started with the presumption that the property was evacuee property and the person interested had to go and make a claim and establish that it was not evacuee property and the matter had to be investigated and the Custodian finally had to come to the conclusion one way or the other.
In the other case the law did not start with the presumption but only a tentative opinion was to be formed by, the Custodian who gave notice to the person interested and the matter was then investigated and thereafter the Custodian had to decide finally one way or the other 871 But in both cases the question whether the property was evacuee property or not was investigated and it was only after investigation that it could be finally said whether the property was evacuee property or, not.
Therefore, though there may be an apparent difference between what is provided by a. 8 in the, first Mysore Act and by section 5 in the second Mysore Act as also by section 7 in the Act, the difference is, not material and it is only after investigation, whether under section 8 of the first Mysore Act, or under section 5 of the second Mysore Act or under section 7 of the Act that the Custodian comes to the final conclusion whether the property is evacuee property or not.
Under the circumstances it would not in our opinion be unreasonable to say that the investigation provided under a. 8 of the first Mysore Act and the subsequent remedies following on an order under section 8 are in substance the same as the investigation provided under section 5 of the second Mysore.
Act ores.
7 of the Act and the subsequent remedies following on an order thereon.
We cannot, therefore, agree with the High Court that there is nothing in the second Mysore.
Act to correspond to section 8 of the first Mysore Act and therefore these proceedings which began under the first Mysore Act must continue to be governed by that Act in spite of its repeal by the second Mysore Act.
As we have pointed out above the proceedings under section 8 of the first Mysore Act are in substance equal to proceedings under section 5 of the second Mysore Act and therefore proceedings commenced under the first Mysore Act must in view of a. 53(2) of the second Mysore Act, be deemed to be proceedings under section 5 of the latter Act.
Once that conclusion is reached and it seems to us that it is inevitable it follows that an order made in a proceeding commenced under section 8 of the first Mysore Act must be deemed to be an order made under section 5(1) of the second Mysore Act or under section 7(1) of; the Act.
In this connection it is relevant to point out that; it could not have been the intention of the legislature to keep the first Mysore Act alive for certain purposes for all, time the whole object of passing the subsequent Acts is plainly against such an assumption.
872 The next question that arises is whether the second Mysore Act and the Act took away the right of appeal which lay to the High Court under the first Mysore Act and substituted for it another right of appeal by necessary intendment.
As we have already Pointed out, there is no express provision either in the second Mysore Act or in the Act in this behalf.
But once it is held that proceedings which commenced under section 8 of the first Mysore Act must, when the second Mysore Act came into force, be deemed under section 53(2) thereof to be proceeding under section 5(1) or when the Act came into be deemed under section 58(3) thereof to be proceeding under section 7(1) and must be continued under those provisions, it follows that the legislature necessarily intended that all subsequent action following an order under section 5(1) or section 7(1) must be taken under the second Mysore Act or under the Act as the case may be.
It could not have been intended by the legislature when it was expressly providing for appeal from an order under section 5(1) of the second Mysore Act or under section 7(1) of the Act that a proceeding commenced under the first Mysore Act (which was equivalent to a proceeding under section 5(1) or section 7(1) should continue to be governed in the matter of appeal by the first Mysore Act.
This is therefore in our view a case where by necessary intendment (though not by express provision) the legislature intended that the provision as to appeals provided by subsequent legislation should supersede the provision as to appeals under the first Mysore Act.
We may point out that this is not a case where the right of appeal disappears altogether,, all that happens is that where the order is passed by the Custodian the appeal lies to the Custodian General instead of to the High Court.
The legislature has provided another forum where the appeal will lie and in the circumstances it must be held that by necessary intendment the legislature intended that forum alone to be, the forum where the appeal will lie and not the forum under the first Mysore Act.
Reference in this connection may be made to Garikapatti Veeraya vs 873 N. Subbiah Choudhury (1), where this Court held that the vested right of appeal was a substantive right and was governed by the law prevailing at the time of th commencement of the suit and comprised all successive rights of appeal from court to court which really constituted one proceeding but added that such right could be taken away expressly or by necessary intendment.
In the present cases we are of opinion that once proceedings under section 8(1) of the first Mysore Act are held to be similar to proceedings under section 5(1) of the second Mysore Act or section 7(1) of the Act, it must necessarily follow that the legislature intended this all subsequent proceedings in the nature of appeal after the first Mysore Act came to an end, must being the forum provided by the subsequent legislation We are therefore of opinion that the High Court was in error in holding that appeals to it lay from the order of December 2, 1952.
The result of the view we have taken is that the High Court was not justified in looking into the order of December 2, 1952, as an appellate court,, though I would be justified in scrutinizing that order as if it was brought before it under article 226 of the Constitutional for issue of a writ of certiorari.
The limit of th jurisdiction of the High Court in issuing writs of certiorari was considered by this Court in Hari Vis Kamath vs Syed Ahmed Ishaque and others (2) and the following four propositions were laid down: (1) Certiorari will be issued for correcting errors of jurisdiction ; (2)Certiorari will also be, issued when the Court or Tribunal acts illegally in the exercise of its undoubted jurisdiction, as when it decides without giving an opportunity to the parties to be heard, or violates the principles of natural justice; (3), The court issuing a writ of critorari acts in exercise of a supervisory land not appellate jurisdiction.
One consequence of this is that, the court will not review findings of fact reached by.
the inferior court or tribunal, even if they be erroneous; (4)An error in the decision or determination itself may also be amenable to a writ of certiorari if (1) ; (1) ; , 874 it is a manifest error apparent on the face of the proceedings, e.g., when it is based on clear ignorance or disregard of the provisions of law.
In other words, it is a patent error which can be corrected by certiorari but not a mere wrong decision.
In the present case, the Custodian had jurisdiction to decide the matter once it is held that the, Castodian General had jurisdiction to set aside the order of August 22, 1950.
The main question for decision in these cases was whether the respondents were evacuees within the meaning of a. 2(c) of the first Mysore Act.
The questions that fall for decision under section 2(o) are questions of fact and as pointed out in Hari Vishnu Kamath 's case (2) it is not open on a writ praying for certiorari to review findings of fact reached by an inferior court or tribunal even though they may be erroneous.
Further, unless there is a patent error of law there can be no interference by a writ of certiorari.
While dealing with the writ petitions the main argument that appealed to the High Court was that the Custodian General, had no Jurisdiction in revision to reopen the earlier proceedings and in consequence all subsequent proceedings were null and void The High Court was further aware of the fact that, the ordinary remedy of the respondents in these cases against the order of December 2, 1952, was to appeal to the Custodian General tinder section 24 of the Act; but as it was of the view that the order of ;the Custodian General under a. 27 was without jurisdiction it held that it should interfere and set aside the order of December 2, 1952, which was also without jurisdiction and restore that, of August 22,1950.
In the view we have taken, the order of the Custodian General was with jurisdiction and therefore there was in our opinion no reason for the High Court interfere in the exercise of its jurisdiction under article 226 of the Constitution with the order of December 2, 1952, as this is a case where only a writ of certiorari could issue and that is not justified in view of the decision in Hari Vishnu Kamath 's case(1) (1) ; 875 We therefore allow the appeals, set aside the order of the High Court and restore that of the Custodian dated December 2, 1952.
This of course will not take away the right if any of the respondents to approach the Custodian General, for we have not considered the merits of the order, of December 2, 1952.
In the circumstances of this case we pass no order as to costs.
Appeals allowed.
| On July 7, 1949, the then State of Mysore passed the Mysore Administration of Evacuee Property (Emergency) Act, 1949, providing, inter alia, for the appointment of a Custodian of Evacuee Property for the State of Mysore for the purpose of administering evacuee property in the State.
By section 6 all evacuee property vested in the Custodian under section 5 had to be notified by him in the Mysore Gazette, while section 8 provided that any person claiming any right to any property notified under section 6 might prefer a claim to the Custodian on the ground that the property was not evacuee property.
Section 30 provided for an appeal to the High Court where the original order under section 8 had been passed by the Custodian, an Additional Custodian or an Authorised Deputy Custodian.
This Act was replaced by the Mysore Administration of Evacuee Property (Second) (Emergency) Act, 1949, which came into force on November 29, 1949.
Section 53(2) of that Act provided that anything done or any action taken in the exercise of any power conferred by the earlier Act shall be deemed to have been done or taken in the exercise of the powers conferred by the later Act.
Under the second Act, instead of the High Court an appeal from the order of the Custodian lay to the Custodian General, appointed by the Government of India under the provisions of the Administration of Evacuee property Ordinance, 1949, which had come into force on October 18, 1949 ; and in addition, section 25 Of that Act provided for revision by the Custodian General of orders passed by the Custodian.
The , which was passed by Parliament and which came into force on April 17, 1950, provided substantially for all matters contained in the second 856 Mysore Act.
Section 27 gave the Custodian General powers of revision against the orders of the Custodian, and section 58 as amended and given retrospective operation, provided that " if, immediately before the commencement of this Act, there was in force in any State to which this Act extended any law which corresponded to this Act and which was not repealed. . that corresponding law shall stand repealed.
" On September 21, 1949, the Custodian issued a notification declaring the properties of the respondents as evacuee properties, and claims filed by them under section 8 of the earlier Mysore Act were investigated by the Deputy Custodian who dismissed the same on April 17, 1950.
Appeals were filed against the said order before the Custodian and were allowed on August 22, 1950.
on the ground that there was not sufficient evidence to prove the respondents as evacuees and consequently the properties in question could not be treated as evacuee properties.
On October 3, 1950, the Custodian General gave notice to the respondents under section 27 of the , in respect of the order of the Custodian dated August 22, 1950, and asked them to show cause why the said order be not revised.
On February II, 1952, the Custodian General set aside the order and directed the Custodian to dispose of the cases afresh.
On December 2, 1952, the Custodian passed an order by which he held that the respondents were evacuees and that their properties were evacuee properties.
Against this order the respondents filed two appeals to the High Court, and also two writ petitions under article 226 of the Constitution as they had doubts whether any appeal lay to the High Court.
The High Court took the view that the Custodian General bad no power under section 27 of the Act to revise the order of the Custodian and that as the proceedings in these cases began under section 8 of the first Mysore Act and as there was nothing corresponding to that section either in the second Mysore Act or in the Act of 1950, the High Court was entitled to hear the appeal from the order of December 2, 1952, as that order must be held to have been passed in proceedings under the first Mysore Act.
The High Court then went into the matter as an appellate court and came to the conclusion that the order of the Custodian dated December 2, 1952, 'Was erroneous.
Held, that the High Court erred in holding that the order of the Custodian General dated February II, 1952, was without jurisdiction.
Considering the purpose for which the Administra tion of Evacuee Property Act, 195o, was passed and the successive saving clauses in the second Mysore Act and in the Act, the Custodian General bad the power under S ' 27 to call for the record of the proceeding in which the order of August 22, 1950, was passed and consider its legality or propriety.
Held, further, that the High Court was also in error in holding that appeals to it lay from the order of December 2, 1952.
857 An order made in a proceeding commenced under section 8 of the.
first Mysore Act must be deemed to be an order made under section 5(1) of the second Mysore Act or under section 7(1) of the Act, in view of section 53(2) of the second Mysore Act and section 58(3) of the Act.
Consequently, by necessary intendment, the legislature must have intended that the provision as to appeals provided by subsequent legislation should supersede the provision as to appeals under the first Mysore Act.
Garikapatti Vecraya vs N. Subbiah Choudhury ; , referred to.
Since the main question for decision in these cases was whe ther the respondents were evacuees, and as such a question was one of fact, the High Court was not justified in looking into the order of December 2, 1952, as an appellate court in dealing with applications for a writ of certiorari under article 226 of the, Constitution.
Hari Vishnu Kamath vs Syed Ahmad Ishaque and Others, ; , applied.
| 1146.txt |
minal Appeal No. 101 of 1969.
Appeal by special leave from the judgment and order dated April 16, 1969 of the Rajasthan High Court in section B. Criminal Appeal No. 558 of 1966.
A. section R. Chari and section B. Wad, for the appellant.
K. B. Mehta, for the respondent.
The Judgment of the Court was delivered by Jaganmohan Reddy, J.
This is an appeal by special leave against the judgment of the Rajasthan High Court.
The accused was initially charged on three counts, firstly, under section 5(2) read with section 5(1)(c) of the Prevention of Corruption Act 1947 (hereinafter referred 'to as 'the Act '), secondly, under section 409, I.P.C., and thirdly, under section 477A, I.P.C. Thereafter on 15 1 1964 another Special Judge charged him on two counts, namely, under section 5 (2) read with section 5 ( 1) (c) and section 5 (2) read with section 5 (1) (w) of the Act.
After the trial, the appellant was, however, convicted under section 409, I.P.C. and section 5(2) read with section 5(1)(c) and (d) of the Act and sentenced to rigorous imprisonment of 18 months and a fine of Rs. 250/ under section 409, I.P.C. and 18 months ' rigorous imprisonment, and a fine of Rs. 250/ under section 5(2) read with sections 5(1)(c) and 5(1)(d) of the Act.
The sentences on both these counts were, directed to run concurrently.
The High Court, however, thought that the Special Judge had not recorded any conviction under section 5(1)(d) of the Act and in that view confirmed the conviction and sentence of the appellant of 18 months" rigorous imprisonment on each of the counts, namely, under 499 section 409, I.P.C. and section 5(2) read with section 5(1)(c) of the Act, but reduced the fine for each of the offences from Rs. 250/ to Rs. 150/ .
The appellant was employed as a Traffic Assistant in the Indain Airlines Corporation 's office at Jaipur and his duty was to make reservations of the passengers intending to go by air and issue tickets.
As it happens, when the quota of seats allotted to Jaipur is full, intending travellers who request for accommodation would be required to pay trunk telephone charges for enabling the Airlines Corporation to obtain release of seats from quotas allotted to other centers.
The practice of the Airlines was to collect the approximate charges and issue a receipt therefore and if a seat was available, the reservation would be confirmed and accommodation given to the passengers if seats could be released from other centers for Jaipur.
The appellant who was incharge of these arrangements between 16 2 62 and 30 8 62, collected Rs. 184.90 towards trunk telephone charges but actually deposited with the Airlines Corporation a sum of Rs. 44.91 and misappropriated the balance of Rs. 139.99.
The modus operendi followed by him, it is alleged, was that he would demand a higher amount for Trunk Call charges than were likely to be incurred and he would issue a correct receipt for those amounts on behalf of the Airlines Corporation but after making the trunk call, he would alter the counter foil with the actual amount of trunk call charges.
On the same day he would make a daily return showing the actual amounts and deposit them with the Cashier.
A typical sample of the receipts given by him on behalf of the Airlines Corporation is Exhibit 40 which is as follows INDIAN AIRLINES CORPORATION NEW DELHI.
No. 354577 Station Jaipur.
Date : 30 8 62.
Received with thanks from M/s. M/Travels, Jaipur sum of Rupees Twenty three and forty nP, being the amount T/Call charges to Udaipur and AMD for re lease of seat.
for INDIAN AIRLINES CORPORATION.
Sd/ Cashier".
Rs. 23.40 On 31 8 62, one M.D. Singh of_the Mercury Travel Agency, Jaipur complained to B.S. Gupta, Incharge of the Office of the Indian Airlines Corporation at Jaipur that the appellant had 500 collected Rs. 23.40 for proposed trunk call charges from the Agency but made no call and no seat was allotted to the passenger of the Mercury Travel Agency even though one was available and that seat was given by B. section Gupta to someone else.
B. section Gupta questioned the appellant who then made; a confession of his having collected the amount but not having made a call.
After making this confession he immediately resigned his job.
A preliminary inquiry was conducted by the Area Manager who thereafter lodged the First Information Report.
The accused denied having collected the amounts or of having issued the receipts and further stated that whatever amounts were; collected by him were paid in the office of the Airlines everyday.
Both the Courts found on the evidence that the appellant used to make trunk calls whenever he was on duty from the Indian Airlines Corporation office at Jaipur for the release of seats and that he would call for and receive trunk call charges from intending passengers.
It was further held proved that the appellant gave receipts Exhibited in the case which were in his own hand writing and signed by him; and that it was he who realised the total sum of Rs. 185/ which was entrusted to him and over which he, had a dominion in his capacity as a public servant.
We have already pointed out that the High Court did not confirm the conviction of the appellant under section 5(2) read with section 5(1)(d) on the assumption that the said Special Judge had not convicted the accused for that offence, and since there is no appeal by the State against this part of the judgment, the contention on behalf of the State that he was convicted under section 5(1)(d) has no merits and cannot be sustained.
On behalf of the appellant it was urged before the High Court that as the appellant had to fare a trial extending over more than 3 years incurring enormous expenses for coming to and from Chandigarh where he was practicing law and was also in Jail for some time, the benefit of the Probation of Offenders Act should be given to him] This contention was rejected because the provisions of that Art were inapplicable in view of his conviction under section 409, I.P.C.
As the offence of criminal breach of trust under section 409, I.P.C. is punishable with imprisonment for life, the High Court, in our view, was right because the provisions of section 4 are only applicable to a case of a person found guilty of having committed an offence not punishable with death or imprisonment for life.
Apart from this reasoning, section 18 of the Probation of Offenders Act makes, the provisions of that Act inapplicable to are offence under sub section (2) of section 5 of the Prevention of Corruption Act.
On behalf of the appellant it is submitted by the learned Advocate that the prosecution case as disclosed by the evidence was that the appellant had collected excess charges from the passengers 501 representing them to be the actual charges for trunk calls and not that any excess over the actual charges would be returned to them.
In view of this evidence, the appellant could not be convicted either under section 5(2) read with section 5(1)(c) of the Act or under section 409, I.P.C. because the important ingredient which is entrustment of the amounts is absent.
In order that any amount can be said to be entrusted it should be lawfully made over, but in this case the appellant obtained the amount by cheating and by the commission of an offence.
If there was no entrustment of the moneys to the appellant, he could not be convicted either under section 409 or under section 5(2) read with 5(1)(c) of the Act and is accordingly entitled to an acquittal on both these charges.
In support of this contention reliance has been placed on Surendra Pal Singh vs The State(1), where a Bench of the Allahabad High Court held that the amounts collected from cultivators by the Canal Amin in excess of the amount actually due from them and misappropriated by him, did not amount to an entrustment as he could not be a trustee of that money on behalf of the cultivators, from whom he realised it because when they banded over the money to the accused, they purported to surrender all their rights in that money, nor could it be said that this money had become the property of the Government at any stage for him to be considered a trustee on its behalf.
This decision was, however, disapproved in The State vs Dahyalal Dalpatram(2), by a Bench of the Bombay High Court, a view with which the High Court agreed.
In that case the accused who was employed as a Talati in the Revenue Department, was invested with the authority to collect land revenue and fines.
He was ordered to recover from the land holders who had defaulted in paying the moneys but having collected them, be did not pay them into the Government Treasury as required by the rules made under the Land Revenue Code.
The accused was convicted under section 409, I.P.C.
On the question that when the accused collected the amount as tax alleged to be due by the land holder though the liability whereof could not be enforced according to law.
could it be said that he was then entrusted with the money, the High Court after noticing that the Allahabad High Court appears to have taken the view that a public servant collecting the money claiming that it was, due to the State but which in fact was not due to the State, could not be regarded as entrusted with the money collected by him, held that that was not a necessary ingredient of section 405.
The learned Advocate sought to distinguish this case on the ground that in the Bombay case there was a definite direction to collect a specific amount and when that amount was collected there was entrustment of that money which was lawfully collected, as such the accused was rightly convicted.
It was further contended that if looked at from the point of view of the passengers from whom (1) A.I.R. 1957 All. 122.
(2) A.I.R. 1960 Bom.
502 trunk call charges were collected, they had not entrusted money to the accused because they had parted with the proprietary rights thereon and if viewed from the point of view of the Airlines Corporation, the money collected did not be come the property of the Corporation and consequently there was no entrustment of it.
There can be no doubt 'that before a public servant can be convicted of an offence under section 5(1)(c) or under section 409, I.P.C. the property which is said to, have been misappropriated must be entrusted to him.
Section 405 merely provides, whoever being in any manner entrusted with property or with any dominion over the property, as the first ingredient of the criminal breach of trust.
The words 'in any manner ' in the context are significant.
The section does not provide that the entrustment of property should be by someone or the amount recieved must be the property of the person on whose behalf it is received.
As long as the accused is given possession of property for a specific purpose or to, deal with it in a particular manner, the ownership being in some person other than the accused, he can be said to be entrusted with that property to be applied in accordance with the terms of entrustment and for the benefit of the owner.
The expression 'entrusted ' in section 409 is used in a wide sense and includes all cases in which property is voluntarily handed over for a specific purpose and is dishonestly disposed of contrary to the terms on which possession has been handed over.
It may be that a person to whom the property is handed over may be an agent of the person to whom it is entrusted or to whom it may belong in which case if the agent who comes into possession of it on behalf of his principal, fraudulently misappropriates the property, he is nonetheless guilty of criminal breach of trust because as an agent he is entrusted with it.
A person authorized to collect moneys on behalf of another is entrusted with the money when the amounts are paid to him, and though the person paying may no longer have any proprietary interest nonetheless the person on whose behalf it was collected becomes the owner as soon as the amount is handed over to the person so authorized to collect of different High Courts in this country for nearly a century, a few of which alone need be examined.
In the matter of Ram Sounder Poddar & Ors.(1), a Deputy Magistrate convicted the accused under section 406, I.P.C., an offence over which he had jurisdiction, instead of under section 409, i.p.c.
which was cognizance only by the Court of Session.
on revision the High Court held that the proceedings were contrary to law and the Deputy Magistrate was directed to commit the accused for trial by the Court of Session.
It appears that the accused who were charged were Treasury employees.
One of the accused (1) 1878 (2) al.
L.R. 515.
503 was allowed to, write the Treasury Cash Book which was the duty of the Treasurer.
Taking advantage of it, he misappropriated Rs. 16/ by scoring off the entry in the account book.
In this misappropriation he was assisted by the other accused who was employed to do stamp work.
While holding the trial to be without jurisdiction, it was observed that section 409 does not as supposed by the Deputy Magistrate, require the property in respect of which criminal breach of trust is committed, to be the property of Government, but only requires that it should be entrusted to a public servant in his, capacity as such public servant.
In re : Ramappa(1), the accused who was the Superintendent of some Coffee Curing Works was convicted of criminal breach of trust by misappropriating a large sum of money made up of amounts which he had received from the Manager on the false pretense that they were required for paying coolies who garbled coffee.
One of the arguments urged against the conviction was that the receipt of the money by false representation amounted to an offence of cheating and that the subsequent appropriation of it by the accused to his own use was not a criminal breach of trust as the criminal intent was present at the time of the receipt of the moneys from the Manager.
Benson and Sundara Aiyar, J., while rejecting that argument, observed: "When the accused received the money he did so as a servant of the Company for the express purpose of using it for his master 's benefit in a particular way.
He was, therefore, entrusted with the money and his appropriating it to himself clearly amounts to criminal breach of trust".
In Venkata Raghunatha Sastri(2), Spencer, J., held that where a person who had pledged promissory notes with another as seenrity for a loan dishonestly induced the latter to hand over the same to him by pretending that he required the same for collecting money from his creditors with the aid of which he would pay cash to the complainant, his act constituted an offence of cheating punishable under section 420, I.P.C. and that when he dishonestly disposed of the notes in violation of his contract with the pledgee to use the money collected in paying off his debt, there was both entrustment and dishonest misappropriation and that the conviction for the offence of criminal breach of trust under section 406, I.P.C. was legal.
Both these cases were referred to in The Crown Prosecutor vs J. McIver and K. section Narasimhachari(3).
The facts in this case also were somewhat similar to those in Venkataraghunatha Sastri 's case (4 ) Madhavan Nair, J (as he then was) examined the meaning of the word 'entrusted ' in section 406 and rejected a similar contention as was urged in this case on behalf of the appellant that when the accused by deceiving the complainant fraudulently and (1) (3) (2) (4) 504 dishonestly induced him to part with the property in question, the offence of cheating was complete and that there is no room for further holding that the accused have committed criminal breach of trust also by their subsequent misappropriation of the property.
In the case before us, the practice which was being followed by the Jaipur office of the Indian Airlines Corporation is spoken to by M. U. Menon, P.W. 6, who was a Personal Assistant to the General Manager of the National Engineering Industries Ltd., Jaipur.
He says that on 16 2 1962 his General Manager had directed him to issue instructions to the accounts branch for arranging for flight tickets by air for Delhi.
He first rang up the Indian Airlines Corporation about the air passage for eight persons and received, a reply from that office that 8 tickets were not available at Jaipur and they would try from Udaipur and Ahmedabad by trunk calls.
After some time the Indian Airlines Corporation people rang up telling him that tickets can be arranged and he should end the money amounting to Rs. 410.50 which included trunk call charges of Rs. 26.50.
He thereupon sent a slip, Exhibit P 6 to the accounts department for further necessary action.
There was no cross examination on behalf of the accused.
Similarly Ganesh Singh, P.W. 3 who is working for the National Engineering Indus ' his people contacted Indian Airlines tries Ltd., Jaipur said that when Corporation on telephone and enquired about the fare etc.
they would ask for trunk call charges along with the amount for tickets.
This would be paid and in fact he pointed out to the accused and said that he might be one of the persons whom he met at the office and after he paid the amounts for the tickets and trunk call charges, he would obtain a receipt and give it to the company.
This evidence read with other evidence which has been accepted by both the Courts would show that whatever may have been the criminal in tention of the accused, the amounts for trunk call charges were demanded on behalf of the Indian Airlines Corporation and were paid to the corporation.
The receipts in respect of the sums were given on behalf of the Corporation and it would be the Corporation that would be liable directly to the person who had paid this amount, if no trunk calls were made, or any excess over the actual amount of the trunk call charges was charged by it.
The amount was not paid by passengers to the accused as such but to the Indian Airline.
,, Corporation and as soon as the receipt for the amount actually received from the passengers was given by the accused on behalf of the Corporation, he was entrusted with that amount.
His subsequent conduct in falsifying the counter foils and fraudulently misappropriating the amounts would make him guilty of criminal breach of trust punishable under section 409, I.P.C. as also under section 5(2) read with section 5(1)(c) of the Act.
There is, therefore, no merit in this appeal and it is accordingly dismissed.
Appeal dismissed.
| The appellant who was an employee of the Indian Airlines Corporation was convicted under section 409, Penal Code, and section 5(2) read with section 5 (1) (c) of the Prevention of Corruption Act, 1947.
The appellant 's duty was to make reservations for the passengers.
The practice was that whenever the quota was full intending travellers were re quired to pay trunk telephone charges for enabling the Corporation to obtain release of seats from quotas allotted to other centers.
The appellant who was incharge of this arrangement, it was alleged, collected Rs. 184.90 towards trunk telephones charges but actually deposited with the corporation only a sum of Rs. 44.90 and misappropriated the balance.
The modus operandi, it was alleged, was that he would demand a higher, amount for Trunk Call charges than was likely to be incurred and he would issue a correct receipt for this amount on behalf of the corporation but after making the trunk call, he would alter the counterfoil with the actual amount of trunk call charges.
In the appeal to this Court it was urged that since the prosecution case as disclosed by the evidence was that the appellant had collected excess charges representing them to be actual charges for trunk calls and not that any excess over the actual charges would be returned to the appellant he could not be convicted either under section 5(2) read with 5(1)(c) of the Prevention of Corruption Act or under section 409 penal code, because, the important ingredient, viz., entrustment of the amount was absent.
Dismissing the appeal, HELD : (i) The expression, 'entrusted in section 409 is used in a wide sense and includes all cases in which property is voluntarily handed over for a specific purpose and is dishonestly disposed of contrary to the terms on which possession has been handed over.
As long as the accused is given possession of property for a specific purpose or to deal with it in a particular manner, the ownership being in some person other than the accused, he can be said to be entrusted with that property to be applied in accordance with the terms of entrustment and for the benefit of the owner.
It may be that a person to whom the property is handed over may 'cc an agent of the person to whom it is entrusted or to whom it may belong in which case, if the agent who comes into possession of it on behalf of his principal, fraudulently misappropriates the property, he is nonetheless guilty of criminal breach of trust, because, as an agent he is entrusted with it.
A person authorized to collect moneys on behalf of another is entrusted with the money when the amounts are paid to him, and though the person paying may no longer have any proprietary interest, nonetheless, the person on whose behalf it was collected become the owner as soon as the amount is handed over to the person so authorized to collect on his behalf.
[502 D] 498 The State vs Dahyalal Dalpatram, A.I.R. 1960 Bom.
53; In re: Ram Soonder Poddar & Ors.
1878 (2) Cal.
L.R. 515; In re : Ramappa, ; in re : Venkata Raghunatha Sastri, (1923)45 M.L.J. 133 and the, Crown Prosecutor vs J. Mclyer and K. section Narasimhachari, , referred to.
(ii)In the present case the amounts for trunk call charges were demanded on behalf of the Corporation and were paid to the Corporation.
The receipts in respect of the sums, were given on behalf of the Corporation and it would be the Corporation that would be liable directly to ,the person who had paid this amount, if no trunk calls were made, or any excess over the actual amount of the trunk call charges was charged by it.
The amount was not paid by passengers to the accused as such but to the corporation and as soon as the receipt for the amount actually received from the passengers was given by the accused on behalf of the corporation, he was entrusted with that amount.
His subsequent con.duct in falsifying the counterfoils and fraudulently misappropriating the amount would make him guilty of criminal breach of trust under section 409 I.P.C., as also under section 5(2) read with section 5(1)(c) of the Act.
[604 E H]
| 3059.txt |
Appeal No. 1 of 1976.
Appeal by Special Leave from the Judgment and Order dated 23 5 1975 of the Allahabad High Court in First Appeal No. 392/ 64.
Shana Bhushan, V.P. Goel and Subodh Markendeya, for the Appellant.
L.N. Sinha, Solicitor General of India and O.P. Rana, for the Respondent No. 1.
Bal Kishan Gaur and Amlan Ghosh, for Respondent No. 2.
Yogeshwar Prasad and Rani Arora, for Respondent No. 3.
The Judgment of the Court was delivered by KRISHNA IYER, J.
Two principal submissions, whose implications ' perhaps are of profound moment and have public impact, have been, at wide ranging length, urged in this appeal by certificate, by Shri Shanti Bhushan, for the appellant/defendant and, with effective brevity, controvert ed by the Solicitor General, for respondent/1st plaintiff.
The two focal points of the controversy are: (a) Is the appeal to the High Court by the State 1st plaintiff at all competent, entitlement as a 'party aggrieved ' being absent, having regard to the provisions of the U.P. Zamindari Aboli tion and Land Reforms Act, 1950 (U.P. Act 1 of 1951) (for short, the Act) ?; and (b) Is it sound to conceptualise 'area appurtenant to buildings ' in section 9 of the Act so nar rowly as has been ' done by the High Court ? There were two plaintiffs the State of Uttar Pradesh and the Gaon Sabha of Bedpura claiming common but alternative reliefs.
The suit was for injunction or ejectment, on title, of the sole defendant who was the quondam zamindar of the 'estate ' which is the 'subject matter of the suit.
The trial Court dis missed the suit whereupon the 2nd plaintiff dropped out of the litigation, as it were, and the State alone pursued the matter by way of appeal against the decree.
The High Court partially allowed the appeal and the aggrieved defendant is the appellant before us.
An expose of the facts may now be given to the extent necessary for explaining the setting of the contention between the parties.
The State of Uttar Pradesh extin guished all zamindari estates by the Act and implemented a scheme of settlement of lands with intermediaries, tenants and others by first vesting all estates in the State and empowering it to vest, divest and re vest flora time to time according to flexible needs and ad hoc requirements, the same estate 's in Gaon Sabhas or other local authorities.
Settlement of trees, buildings and other specified items in the intermediaries was also part of the agrarian reform.
A skeletal picture of the legislation may now be projected.
But, before that, a short sketch of the actual dispute may illumine the further discussion.
The suit lands were part of an estate owned and.pos sessed by the defendant zamindarini.
The statutory conse quence of the abolition of all zamindaris by force of section 4 is spelt out in section 6, to wit, the 1075 cesser of the ownership of the zamindar and vesting of title and possession in the State.
By a notification under section 117(1) of the Act the area of lands was vested by the State in the 2nd plaintiff Gaon Sabha.
The legislative nullifica tion notwithstanding, the defendant who had been conducting a lucrative bi weekly cattle fair, the best in the district, persisted in this profitable adventure strengthened by section 9 of the Act which settles in the intermediary all buildings and area appurtenant thereto.
This resulted in possessory disputes between the Gaon Sabha and the defendant proceed ings under section 145 upholding the latter 's possession and the present suit for declaration of title and consequential injunction or ejectment.
The estate, which is the site of the rural cattle mar ket, has a large number of trees on it, a temple in one plot, a (veterinary) clinic in another and quite a number of cattle stands and other auxiliary structures which are facilities for the bovine display and transaction of business.
Taking advantage of the provisions of the Act, the defendant successfully claimed before the High Court that the trees and the two plots with the shrine and the oushadhalaya should be deemed to have been settled with her.
Her ambitious demand, based on some provisions which we will presently X ray more carefully, was that the entire estate with all the buildings thereon was enjoyed as a unum quid and th.e vacant lands were as much necessary for the mean ingful running of the cattle fair as the structures them selves.
To dissect and detach the buildings from the vacant spaces was to destroy the functional wholeness of the serv ice rendered.
In short, the large intervening areas sur rounding the chabutras and other edifices were essential adjuncts or appurtenant lands which, together in their original entirety, should be settled under section 9 of the Act with the erstwhile intermediary viz., the defendant.
The High Court declined to go the whole hog with the defendant but granted the plea to the limited degree of giving all the structures and a space of 5 yards running round each 'build ing '.
In the view of the Court hats, bazars, and melas could not be held by a private owner under the scheme of the Act and reliance on the conduct of the cattle market as an indicator of 'appurtenant ' area was, therefore, impermissi ble.
The suit was decreed pro tanto.
The Gaon Sabha, when defeated in the trial Court, discreetly stepped out of the risks of an appeal but the Government, first plaintiff, claiming to be gravely ag grieved, challenged the dismissal of the suit and was faced with the plea that the land having vested in the Gaon Sabha, on the issue of the notification under section 117 (1 ) of the Act, .the
State had no surviving interest in the property and, therefore, forfeited the position of a person ag grieved, who alone could competently appeal against a de cree.
This contention, negatived by the High Court. has been reiterated before us with resourceful embellishments and that, logically, is the first question of law falling for our decision and is the piece de resistance, if we may say so, in this appeal.
If the 1st plaintiff 's entire interests, by subsequent plenary vesting in the 2nd plain tiff, have perished, the former cannot, as of right, appeal under section 96 C.P.C. Survival after death is unknown to 1076 real property law and suits, without at least apprehended injury, are beyond the ken of the procedural law.
To put it in a nutshell, has the State current interest in the estate, sufficient to sustain an appeal ? The anatomy of the Act, so far as this dispute is con cerned, needs to be ' set out and alongside thereof, the exercises in statutory construction necessary to resolve the two legal disputes.
The Act had for its primary object, as testified by its Preamble, the extinction of intermediary rights viz., zamindaris and the like.
The goal of the legislation must make its presence felt while the judicial choice of meanings of words of ambiguous import or plurality of significations is made.
Section 4 is the foundational provision, the very title deed of the State; and it runs, to read: "section 4.
Vesting of estates in the State. (1 ) As soon as may be after the commence ment of this Act, the State Government may, by notification, declare that, as from a date to be specified, all estate situate in the Uttar Pradesh shall vest in the State and as from the beginning of the date so specified (herin after called the date of vesting), all such estates shall stand transferred to and vest except as hereinafter provided, in the State free from all encumbrances.
(2) It shall be lawful for the State Government, if it so considers necessary, to issue, from time to time, the notification referred to in sub section (1) in respect only of such area or areas as may be specified and all the provisions of sub section (1), shall be applicable to.
and in the case of every such notification." Section 6 sets out the legal consequences of such vesting more specifically.
We may extract the provision: "6.
Consequences of the vesting of an estate in the State.
When the notification under section 4 has been published in the Gazette then, notwith standing anything contained in any contract or document or in any other law for the time being in force and save as otherwise provided in this Act, the consequences as hereinafter set forth shall, from the begining of the date of vesting, ensue in the area to which the notification relates, namely (a) all rights, title and interest of all the intermediaries (i) in every estate in such area including land (cultivable or barren), grove land, forests whether within or outside village boundaries, trees (other than trees in village abadi, holding or grove), fisheries, tanks, ponds, water channels, fernes, pathways, abadi sites, hats, bazars and meals other than hats, bazars and melas held upon land to which clauses (a) to (c) of sub section (1) of Section 18 apply, and 1077 (ii) in all sub soil in such estates including rights, if any in mines and miner als, whether being worked or not; shall 'cease and be vested in the State of Uttar Pradesh free from all encumbrances; * * * * Reading the two sister sections together, certain clear conclusions emerge.
Emphatically, three things happened on the coming into force of the Act.
By virtue of section 4 the right, title and interest of all intermediaries in every estate, including hats, bazars and melas, stood terminated.
Secondly, this whole bundle of interests came to be vested in the State, free from all encumbrances, the quality of the vesting being absolute. 'Thirdly, one and only one species of property in hats, bazars and melas was expressly excluded from the total vesting of estates in the State, viz., such as had been held on lands to which section 18(1)(a) to (c) ap plied.
Section 9, at this stage, needs to be read since it is geared to the nationalisation of zamindaris by providing for settlement, under the State, of some kind 's of landed interests in existing owners or occupiers.
Section 9 states: "Private wells, trees in abadi and buildings to be settled with the existing owners or occupiers thereof All wells, trees in abadi, and all build ings situate within the limits of an estate, belonging to or held by an intermediary or tenant or other person, whether residing in the village or not, shall continue to belong to.
or be held by such intermediary, tenant or persons, as the case may be,, and the site, of the wells or the buildings which are appurte nant thereto: shall be.
deemed to.
be settled with him by the State Government on such terms and conditions as may be prescribed" A close up of this section is called for since the basic plank of the defendant 's case is the claim to the whole set of plots as building and appurtenant area of land statutori ly settled with her.
If she is such a settlee, the substan tive merit of the plaintiff 's title fails.
We will examine this aspect after a survey of the sections relevant to the locus standi of the State is done.
So we shift to Chapter VII which relates to Gaon Sabhas vesting by the State of resumed estates in them and the limitations and other conditions to which it is subject.
Attributed legal personality by s.3, the Gaon Sabhas are bodies corporate which, under the various provisions of Chapter VII, have been invested with legal viability right to own and hold property, to transfer and otherwise deal with movables and immovables and manage their landed assets through the executive agency of Land Management Com mittees.
This comprehensive 'proprietary personality of the Sabha is indisputable but unhelpful for our purpose.
1078 The controversy before us comes into focus when we read section 117 (1), (2) and (6), all the limbs being taken as belong ing to a legally living corporate body.
Section 117, cls.
(1) and (2), provide: "117.
Vesting of certain lands etc., in Gaon Shabhas and other local authorities. (1 ) At any time after the publication of the notification referred to in Section 4, the State Government may, by general or special order to be published in the manner pre scribed, declare that as from a date to be specified in this behalf, all or any of the following things, namely * * * * * (v) hats, bazars and melas except hats, bazars, and melas held on land to which, the provisions of clauses (a) to (c) of sub sec tion (1) of section 18 apply or on sites and areas referred to in section 9, and * * * * * which had vested in the State under this Act shall vest in the Gaon Sabhas or and other local authority established t.or the whole or part of the village in which the said things are situate, or partly in one such local authority (including a Gaon Sabha) and partly in another: Provided that it shall be lawful for the State Govern ment to make the declaration aforesaid subject to such exceptions and conditions as may be specified in the notifi cation.
(2) Notwithstanding anything contained in this Act or in any other law ' for the time being in force, the State Government may, by general or special order to be published in the manner prescribed in the Gazette, declare that as from a date to be specified in this behalf, all or any of the things specified in clauses (i) to (vi) of sub section (1) which alter their vesting in the State under this Act had been vested in a Gaon Sabha or any other local authority, either under this Act or under section 126 of the Uttar Pradesh Nagar Mahapalika Adhiniyam 1959 (U.P. Act II of 1959) shall vest in any other .local au thority (including a Gaon Sabha) established for the whole or part of the village in which the said things are situated.
" Section 117(6) injects a precarious does into the system of estates vested in Gaon Sabhas by sub s.(1) and goes on to state: "117(6).
The State Government may, at any time, by general or special order to be published in the manner prescribed, amend or cancel any declaration or notification made in respect of any of the things aforesaid. ' whether 1079 generally or in the case of any Gaon Sabha or other local authority, and resume such thing and whenever the State Government so resumes any such thing, the Gaon Sabha or other.
local authority, as the case may be, shall be enti tled to receive and be paid compensation on account only of the development, if any, effected by it in.
or over that thing: Provided that the State Government may, after such resumption, make a fresh declara tion under sub section (1) or sub section (2) vesting the thing resumed in the same or any other local authority (including a Gaon Sabha) and the provisions of sub sections (3), (4) and (5) as the case may be, shall mutatis mutandis, apply to such declaration.
* * * * * Before moving further, we may glance at a group of sections which have more than peripheral impact on the legal equation between Government and Sabha visa vis estates vested in the latter by the former.
Section 119 carves out a power for the State Government to take away hats, bazars and melas vested in a Gaon Sabha and transfer them to a zilla parishad or other authority.
Sections 122A and 122B create and regulate the Land Management Committee which is to administer the estates vested in the Sabha and section 126, quite importantly, gives the power to the State Government to issue orders and directions to the Management Committee.
Pausing here for an instant, let us look back on the status of the State which, through its Executive branch, vests a resumed estate in a Gaon Sabha, retaining power, at any time, and without conditions or even compensation (save for actual developmental work done), to divest the land so vested and make it over to another like local authority.
In such a situation where the State remains the legal master with absolute powers of disposition over the land vested pro tempore in a particular Gaon Sabha, can it be postulated that it has no legal interest in the preservation of that over which it has continuous power of operation, creation and deprivation? Government, despite vesting estates in Gaon Sabhas on the wholesome political princi ple of decentralisation and local self government, has and continues to have a constant hold on these estates, may be like a brooding omnipotence descending, when it chooses, to take away what it had given possession of to a Sabha.
This is plainly present legal interest in Government and a sort of precarium tenans in the Sabha, notwithstanding the illu sory expression 'vesting ' which may mislead one into the impression that an absolute and permanent ownership has been created.
An overview of these legal prescriptions, makes one sceptical about the statutory ideology of autonomous village self government since, so far as estates are concerned, these Sabhas have been handcuffed and thrown at the mercy or mood of the State Government.
The pragmatics of the Act has reduced Gaon Sabhas to obedient 1080 holders, for the nonce, of the limited bounty of estates vested in them a formal, fickle, homage to article 40 of the Constitution! Shri Shanti Bhushan did draw our attention to certain cousin statutes and other 'remotely related provisions but the soul of his submission does not suffer by their omission in the discussion.
We pass on to the spinal issues agitat ed before us.
Locus standi The estates first vest in the State.
The fulfilment of the purpose of the Act, the setting in which the corner stone for the statutory edifice is laid and the categorical language used, especially 'free from all encumbrances ', leave no doubt in our minds, nor was it disputed before us, that this initial vesting is absolute and inaugurates the scheme of abolition.
The consequence of vesting articulated by section 6 only underscore this conclusion.
What next ensues.
when the State Government, acting under s.117(1), notifies a further vesting in a Gaon Sabha is the cardinal question.
Does the State retain a residu ary legal interest, sufficient to make it a 'person ag grieved ', competent to challenge in appeal an adverse de cree? And can the State canvas for the position that a proprietary right persists in it albeit its act of vesting the same estate earlier in a local authority? Does the key word 'vest ' connote and denote divergent things in the same section and Act visa vis Government and the Gaon Sabha? Had drafting skills been better, this unlovely ambiguity could have been avoided.
But courts have no choice but to take the text as it is.
Zeroing in on the relevant provisions, we are inclined to concur with the High Court.
With certi tude one may assert that the State has that minimal interest to follow the proprietary fortunes of the estate so as to.
entitle it to.
take legal action to interdict its getting into alien hands.
The legislative project and the legal engineering visua lised by the Act are clear and the semantics of the words used in the provisions must bend, if they can, to subserve them.
To be literal or be blinkered by some rigid canon of construction may be to miss the life of the law itself.
Strength may be derived for this interpretative stand from the observation in a recent judgment of this Court(1) "A word can have many meanings.
To find out the exact connotation of a word in a statute, we must look to the context in which it is used.
The context would quite often provide the key to meaning of the word and the sense it ' should carry.
Its setting would give colour to it and provide a cue to the inten tion of the legislature in using it.
A word, as said by Holmes, is not a crystal, trans parent and unchanged; it is the skin of a living thought and may vary greatly in colour and content according to the circumstances and the time in which it is used." (1) Thiru Manickaru & Co. vs The State of Tamil Nadu.
[1977] 1 S.C.R. 950.
1081 In the instant case the Act contemplates taking over of all zamindari rights as part of land reform.
However, instead of centralising management of all estates at State level, to stimulate local self government, the Act gives an ena bling power not obligatory duty to make over these estates to Gaon Sabhas which, so long as they are in their hands, will look after them through management committees which will be under the statutory control of Government under s.126.
Apart from management, No. power is expressly vested in the Sabhas to dispose of the estates absolutely.
The fact that as a body corporate it can own and sell property does not mean that the estates vested in a Sabha can be finally sold away, in the teeth of the provisions striking a contrary note.
For, under s.117(6), if, for any reasons of better management or other, the State (Government is but the operational arm of the State and cannot, as contended, be delinked as a separate entity, in this context) the.
State thinks fit to amend or cancel the earlier vesting declara tion or notification, it can totally deprive the Sabha of, and resume from it, any estate.
This plenary power to emasculate or extinguish the Sabha 's right to the estate is tell tale.
True, this cut back on the amplitude of the vesting is not an incident of the estate created but is provided for by the Act itself.
Even so, we have to envi sion, in terms of realty law, what are the nature and inci dents of the interest vested in the Sabha full ownership divestible under no circumstances or partial estate with the paramount interest still surviving in praesenti in the State ? It is reasonable to harmonize the statutory provisions to reach a solution which will be least incongruous with legal rights we are cognisant of in current jurisprudence.
Novelty is not a favoured child of the law.
So it is right to fix the estate created by s.117 into familiar moulds if any.
Such an approach lends to the position that the vesting in the State was absolute but the vesting in the Sabha was limited to possession and management subject to divestiture by Government.
Is such a construction of 'vesting ' in two different senses in the same section, sound ? Yes.
It is, because 'vesting ' is a word of slippery import and has many meanings.
The context controls the text and the purpose and scheme Project the particular semantic shade or nuance of meaning.
That is why even definition clauses allow themselves to be modified by con textual compulsions.
So the sense of the situation suggests that in s.117(1) of the Act "vested in the State ' carries a plenary connotation, while 'shall vest in the Gaon Sabha ' imports a qualified disposition confined to the right to full possession and enjoyment so long as it lasts.
Lexico graphic support is forthcoming, for this meaning.
Black 's Law Die 1082 tionary gives as the sense of 'to vest as 'to give an imme diate fixed right of present or future enjoyment, to clothe with possession, to deliver full possession of land or of an estate, to give seisin '.
Webster 's III International Dic tionary gives the meaning as 'to give to a person a legally fixed immediate right of present or furture enjoyment '.
The High Court has sought some Engilsh judicial backing(1) for taking liberties with strict and pedantic construction.
A ruling of this Court(2) has been aptly pressed into service.
There is thus authority for the position that the ex pression 'vest ' is of fluid or flexible content and can if the context so dictates, bear the limited sense of being in possession and enjoyment.
Indeed, to postulate vesting of absolute title in the Gaon Sabha by virtue of the declara tion under s.117(1) of the Act is to stultify s.117(6).
Not that the legislature cannot create a right to divest what has been completely vested but that an explanation of the term 'vesting ' which will rationalise and integrate the initial vesting and the subsequent resumption is prefera ble, more plausible and better fulfils the purpose of the Act.
We hold that the State has title to sustain he action in ejectment.
Aside from this stand, it is easy to take the view that the 1st plaintiff is a person I aggrieved and has the competence to carry an appeal against the dismissal of the suit.
Of course, he who has a proprietary right, which has been or is threatened to be violated, is surely an 'ag grieved person '.
A legal injury creates a remedial right in the injured person.
But the right to a remedy apart, a larger circle of persons can move the court for the protec tion of defence or enforcement of a civil right or to ward off or claim compensation for a civil wrong, even if they are not proprietarily or personally linked with the cause of action.
The nexus between the lis and the plaintiff need not necessarily be personal although it has to be more than a wayfarer 's allergy to an unpalatable episode. 'A person aggrieved ' is an expression which has expanded with the larger urgencies and felt necessities of our times.
Processual jurisprudence is not too jejune to respond to societal changes and challenges: "Law necessarily has to carry within it the impress of the past traditions, the capacity to respond to the needs of the present and enough resilience to cope with the demands of the future.
A code of law, especially in the social fields, is not a document for fastid ious dialectics; properly drafted and rightly implemented it can be the means of the order ing of the life of a people.
"(3) (1) Richardson vs Robertson (1862) 6 L R 75; & .Hiride vs Chorlton (1866) 2 CP 104, 116.
(2) Fruit & Vegetable Merchant 's Union vs The Delhi Improvement Dust, ; (3) Address by Khanna 1.
at the Birth Centenary of Sir Tej Bahadur Sapru d/16 10 76 at Allahabad.
1083 The classical concept of a 'person aggrieved ' is delin eated in Re : Sidebotham ex p. Sidebotham (1880 14 Ch.D. 258).
But the amplitude of 'legal grievance ' has broadened with social compulsions.
The State undertakes today activ ities whose beneficiaries may be the general community even though the legal right to the undertaking may not vest in the community.
The State starts welfare projects whose effective implementation may call for collective action from the protected group.
or any member of them.
New movements like consumerism, new people 's organs like harijan or mahila samajams or labour unions, new protective institutions like legal aid societies operate on the socio legal plane, not to beat 'their golden wings in the void ' but to intervene on behalf of the weaker classes.
Such burgeoning of collec tive social action has, in turn, generated gradual processu al adaptations.
Test suits, class actions and representa tive litigation are the beginning and the horizon is ex pending, with persons and organisations not personally injured but vicariously concerned being entitled to.
invoke the jurisdiction of the court for redressal of actual or imminent wrongs.
In this wider perspective, who is a 'person aggrieved '? Dhabolkar gives the updated answer: "The test is whether the words 'person ag grieved ' include a person who has a genuine grievance because an order has been made which prejudicially affects his inter ests '." (p. 315) "American jurisprudence has recognised, far instance, the expanding importance of consumer protection in the economic system and permit ted consumer organisations to.
initiate or intervene in actions, although by the narrow rule of 'locus standi ', such a course could not have been justified (see p. 807 New York University Law Review, Vol. 46, 1971).
In fact, citizen organisations have recently been compaigning for using legal actions for pro tection of community interest, broadening the scope of 'standing ' in legal proceedings (see p. 403 Boston University Law Review, Vol.51. 1971).
In the well known case of Attorney General of the Gambia vs Peirra Sarr N. 'Jie 1961 A.C. 617), Lord Denning observed about the Attor ney General 's standing thus: " .
The words 'person aggrieved ' are of wide import and should not be subjected to a restrictive interpretation.
They do not in clude, of course, a mere busy body who is interfering in things which do not concern him; but they do include a person who has a genuine grievance because an order has been made which prejudicially affects his interests." (p. 324 325) Where a wrong against community interest is done, 'no locus standi ' will not always be a plea to non suit an interested public body chasing the wrong doff in court.
In the case before us, Govern 1084 ment, in the spacious sense of 'person aggrieved ' is comfortably placed.
Its, right of resumption from the Gaon Sabha, meant to be exercised in public interest, will be seriously jeopardised if the estate slips into the hands of a trespasser.
The estate belonged to the State, is vested in the Gaon Sabha for community benefit, is controlled by the State through directions to the Land Management Commit tee and is liable to be divested without ado any time.
The wholesome object of the legislature of cautiously decen tralised vesting of estates in local self governing units will be frustrated, if the State, the watchdog of the whole project, is to be a helpless.
spectator of its purposeful bounty being wasted or lost.
It must act, out of fidelity to the goal of the statute and the continuing duty to sal vage public property for public use.
Long argument is otiose to make out a legal grievance in such a situation of peril and, after all, the star of processual actions pro bono publico has to be on the.
ascendant in a society where supineness must be substituted by activism if the dynamic rule of law is to fulfil itself. 'Locus standi ' has a larger ambit in current legal semantics than the accepted, individualistic jurisprudence of old.
The legal dogmas of the quiet past are no longer adequate to.
assail the social injustices of the stormy present.
Therefore, the State, in the present case, is entitled to appeal under section 96 of the Code of Civil Procedure.
The second, and from a practical point of view equally potent ground of defence, is that 'appurtenant ' space envelops the whole area around the buildings and the suit for recovery of possession deserves to be dismised in toto.
Let us examine this submission.
Section 9 of the Act obligates the State to settle (indeed, it is deemed to be settled) with the intermediary certain items in the estate.
That provision has been set out earlier.
The short enquiry is whether the entire land is 'appurtenant ' to the buildings.
The contention of the defendant flows along these lines.
The structures accepted by the High Court as 'buildings ' within the scope of section 9 were part of a cattle fair complex.
Even the mandir and the oushadalya fitted in to the hat total and the integrity of the whole could not be broken up without violating the long years of common enjoyment.
It would also be, a double injury: (a) to the defendant; and (b) to the community.
The hat or mela could not be held by the defendant if the land were snatched away and the Government could do.
nothing on a land without the buildings belonging to the defendant.
Maybe there is some sociological substance in the: presenta tion but the broader purpose of the ' section cannot be sacrificed to the marginal cases .like the. present.
The larger objective is to settle with the former intermediary only.
such land as is strictly appurtenant to buildings, all the rest going to the State for implementation of the agrarian reform policy.
The key to the solution of the dispute lies in ascer taining whether land on which the cattle fair was being held was appurtenant to the buildings or not on the strength of its use for the hat.
The Solicitor General made a two pronged attack on the defendant 's proposition.
1085 Firstly, he argued that hats, bazars and melas were a dis tinct interest in the scheme of Indian agrestic life and agrarian law.
This right had been virtually nationalised by the Act and only the State or the Gaon Sabha.
save where section 18(a) to (c) otherwise provided, could hold a 'fair.
A ruling by this Court on an analogous subject lends support to this contention (See State of Bihar vs Dulhin Shanti Devi: AIR 1967 SC 427 relating to Bihar Land Reforms Act).
The heated debate at the bar on this and allied aspects need not detain us further also because of our concurrence with the second contention of the Solicitor General that the large open spaces cannot be regarded as appurtenant to the terraces, stands and structures.
What is integral is not necesarily appurtenant.
A position of subordination, something incidental or ancillary or dependant is implied in appurtenance.
Can we say that the large spaces are subsidi ary or ancillary to or inevitably implied in the enjoyment of the buildings qua buildings? that much of space required for the use of the structures as such has been excluded by the High Court itself.
Beyond that may or may not be necessary for the hat or mela but not for the enjoyment of the chabutras as such.
A hundred acres may spread out in front of a club house for various games like golf.
But all these abundant acres are unnecessary for nor incidental to the enjoyment of the house in any reasonable manner.
It is confusion to miss the distinction, fine but real.
"Appurtenance ', in relation to a dwelling, or to a school, college . includes all land occupied therewith and used for the purpose thereof (Words and Phrases Legally Defined Butterworths, 2nd edn).
"The word 'appurtenances ' has a distinct and definite meaning .
Prima facie it imports nothing more than what is strictly appertaining to the subject matter of the devise or grant, and which would, in truth, pass without being specially mentioned:Ordinarily, what is necessary for the enjoyment and has been used for the purpose of the building, such as easements, alone will be appurtenant.
Therefore, what is necessary for the enjoy ment of the building is alone covered by the expression 'appurtenance '.
If some other purpose was being fulfilled by the building and the lands, it is not possible to contend that those lands are covered by the expression 'appurte nances '.
Indeed 'it is settled by the earliest authority, repeated without contradiction to the latest, that land cannot be appurtenant to land.
The word 'appurtenances ' includes all the incorporeal hereditaments attached to the land granted or demised, such as rights of way, of common . but it does not include lands in addition to that granted '.
(Words and Phrase, supra).
In short, the touchstone of 'appurtenance ' is dependence of the building on what appertains to it for its use as a building.
Obviously, the hat, bazar or mela is not an appurtenance to the building.
The law thus leads to the clear conclusion that even if the buildings were used and enjoyed in the past with the whole stretch of vacant space for a hat or mela, the land is not appurtenant to the prin cipal subject granted by section 9, viz., buildings.
This conclustion is inevitable, although the contrary argument may be ingenious.
What the High Court has grant ed, viz., 5 yards of 1086 surrounding space, is sound in law although based on guess work in fact.
The appeal fails and is dismissed but, in the circumstances, without costs.
P.B.R. Appeal dismissed.
13.385CI/76 GIPF.
INDEX ACCOMPLICE: Whether a pointer an accomplice [See Representation of the People Act.] . 525 ACCUSED PLEADED GUILTY If lesser sentence could be awarded.
Murlidhar Meghraj Loya etc.
vs State of Maharashtra etc.
. 1 ADMISSIONS: admissibility in evidence [See Evidence Act] . 967 ADMINISTRATION OF EVACUEE PROPERTY ACT, 1950 S.40(4) (a) and rule 22 Scope of, section 10(2) (n) out of the funds in his possession meaning of.
Custodian of Evacuee Property vs Smt.
Rabia Bai . 255 ALTERNATE REMEDY Whether a bar to writ jurisdiction under article 226 of the Constitution under Art 226 of the constitution.
. 64 [See Constitution of India, 1950] . 64 ANDHRA PRADESH (ANDHRA AREA) Electricity Supply Undertaking(Acquisition) Act (Andhra 15of 1954), Ss. 5(3)(vi), 6(2)(a) (iii) and 10(2)(b)(iii) Amounts due to undertaking from consumers prior to vesting in State If can be recovered by State from the licence.
Vijayawada Municipal Council vs Andhra Pradesh State Elec tricity Board and Anr.
. 846 ANDHRA PRADESH GENERAL SALES TAX ACT, 1957 Excise and countervailing duty paid by the buyers directly into the Treasury Neither the invoice nor books of the assessee (manufacturer) show the excise duty Excise duty.
If fails under "any sums charge by the dealer" occurring in the definition of "turnover".
M/s Mc Dowell & Company Ltd. etc.
vs Commercial Tax Office VII Circle Hyderabad etc.
APPEAL AGAINST ACQUITT OF AN OFFENCE OF CONSUMING LIQUOR Mem because the High Court took view that a fur ther charge "possession of liquor" she have been framed setting aside the acquittal without find whether the order of acquittal erroneous and ordering re t is bad Bombay Prohibition A 1949 (Bern.
XXV Sec.
66(1) r/w Sec.
378 Criminal Procedure Code (Act 11 of 1974) 1973.
Patel Jethabhai Chatur vs State of Gujarat , Contract between lay parties not be thwarted by narrow pedal and legalistic interpretatic Intendment of parties regarding validity of arbitraror 's appointment, whether material.
Union of India vs M/s D.M. R. &Co .
ATTESTING WITNESS [See Succession Act] BENAMI TRAINSACTION Pr of Benami nature.
Union of India vs Moksh Buil and Financiers and Ors.
BIHAR AND ORISSA EXC ACT, 1951 as amended Amending Acts of 1970 and 1 Ss. 22 and 29 Power of State 2 to auction exclusive privilege to vend liquor Nature of payment received.
Lakhan Lal etc.
vs The State of Orissa and Ors.
BIHAR ELECTRICITY DUTY ACT, 1948 (As amended) S.3(2) (e) Scope of.
Damodar Valley Corporation vs State of Bihar and Ors.
. 118 HAR LAND REFORMS ACT, 1950 Ss. 4(a) and 10 Lessee of nines If a tenure holder or intermediary under the Act.
Sone Valley Portland Cement Co. Ltd. vs The General Mining Synidicate (P) Ltd. 359 BOMBAY INDUSTRIAL RELATIONS ACT, 1946 section 98(1)(a) schedule III item 6(ii) Scope of Workmen laid off Lock out de clared later alleging unruly behaviour Lockout if illegal.
priya Laxmi Mills Ltd. vs Mazdoor Maharan Mandal, Baroda . 709 BOMBAY PROHIBITION ACT, 949 (Bom.
XXV) Sec.
66(1)(b).
[See Appeal against acquittal] . 872 BOMBAY PROVINCIAL MUNICIPAL CORPORATIONS ACT, As applied in Gujarat (Bom.
59 of 1949), S.284N Applicability of .5A, Land Acquirition Act.
Farid Ahmed Abdul Samad and Anr.
vs The Municipal Corpora tion of the City of Ahmedabad and Anr.
. 71 BOMBAY RENT, HOTEL AND LODGING HOUSE RATES ACT, 1947 Sub.
Section 13(1)(B) Suit for eviction on the grond of bonafide and personal need of a landlord Whether right to sue survives to his heirs Requirement of firm in which landlord is a partner whether his requirement Whether decree passed in favour of landlord can be disturbed on his death.
Shantilal Thakordas and Ors.
vs Chimanlal Maganlal Telwala . 341 5(4A) Indian Easements Act 1882 Sec.
52 62(c) Revocation of licence by efflux of time Presiden cy Small Causes Courts Act 1882 Sec. ' 47 Effect of filing of application for eviction Meaning of licence under a Subsisting agreement Interpretation of statutes Practice.
D.H. Manjar & Ors.
vs Waman Laxman Kudav .
.403 BOMBAY VILLAGE PANCHAYAT ACT (BOM.
6 OF 1933) S.89 'House ' if includes 'building '.
Tata Engineering & Locomotive Company Ltd. vs Gram Panchay at pimpri Waghere.
. 306 BURDEN OF establishing urgency under the .
Land Acquisition Act [See Land Acquisition Act] . 763 CENTRAL CIVIL SERVICE (CLASSIFICATION, CONTROL AND APPEAL) Rules, 1965 Scope of Rules applicable only when disciplinary proceedings are taken.
Union of India and Anr.
K.S. Subramanian . 87 1.
2(b) 9 Andhra Pradesh General Sales Tax Act 1957, Central Government selling foodgrains and fertilisers, whether a dealer Profit motive, if relevant Whether State carried on business.
Joint Director of Food, Visakapatham vs The State of Andhra Pradesh.
. 59 3 2.
section 15(b) Scope of Assessee bought declared goods and paid States Sales Tax Sale by way of inter state sale If entitled to refund of State Sales Tax.
Thiru Manickam and Co. vs The State of TamilNadu .
.950 3.
(74 of 1956) section 8(3)(6) and Central Sales Tax (Regulation and Turnover) Rules, 1957, r. 13Goods used in the manufac ture or processing of goods for sale Scope of Fertilizers used for growing tea plants, if could be included in goods used in the manufacture of tea for sale.
Travancore Tea Estates Co. Ltd. vs State of Karnataka & Ors. 755 4.
(74 of 1956) S.9(1), proviso Scope of.
M/s Karam Chand Thapar and Bros. (Coal Sales) Ltd. vs State of Uttar Pradesh and Ant.
. 25 CHARGE Fresh charge on appreciation of evidence can be ordered to be framed by the High Court in exercise of its appellate jurisdiction Criminal Procedure Code (Act.
II of 1974), 1973 Secs.
386(a), 464(I) and 462(2)(a).
Patel Jethabhai Chatur vs State of Gujarat . 872 CITY OF BANGALORE MUNICIPAL CORPORATION SERVICES (GENERAL) CADRE AND RECRUITMENT REGULATIONS 1971, Reg.
3 'Absorption of Senior Health Inspectors by Corporation contrary to provi sions in Reg.
3 Effect of.
C. Muniyappa Naidu etc.
vs State of Karnataka & Ors.
CITY OF MYSORE IMPROVEMENT ACT, 1903, Ss. 16, 18 and 33(1) Relevant date for determining market value for purposes of compensation, what is.
Special Land Acquisition Officer City Improvement Trust Board, Mysore vs
P. Govindan.
. 549 CIVIL SERVICE 1.
Powers of relaxation Whether rules can be made retro spectively Andhra Pradesh State and Subordinate Serv ices Rules 1962 Rule 47 Andhra Pradesh Civil ' Services (Co operation Branch) Government of Andhra Pradesh and Ors.
vs Sri D. Janardhana Rao and Anr. 702 2.
Seniority Irregular recruitment Regularisation Appointments through Public Service Commission Recruitment through centralised recruitment scheme.
P.C. Patel and Ors.
vs Smt.
T.H. Pathak and Ors.
. 677 CODE OF CIVIL PROCEDURE Res Judicata, whether invocable in subsequent stage of same proceedings.
Y.B. Patel and Ors.
vs Y. L. patil . 320 2.
Ss. 79 and 80, suit for compensation against railway administration whether impleading Union of India as a party necessary.
State of Kerala vs The General Manager, Southern Railway Madras.
. 419 3.
S.80 Whether applicable to suits filed under s.9(1) of the (M.P.) Public Trusts Act, 1951.
State of Maharashtra & Anr.
vs Shri Chartder Kant . 993 4.
S.115 Jurisdiction of High Court to interfere with the Trial Court 's discretionary order, when exercisable.
4 M/s Mechelec Engineers & Manu facturers vs M/s Basic Equipment Corporation. 1060 5.
(Act 5 of 1908) Order VI r/w Order, XIV, rule 1(5) Courts should not allow parties to go to trial in the absence of proper pleadings.
Union of India vs Sita Ram Jaiswal . 979 6.
(Act v of 1908) Order V], Rule 17.
[See Pleadings] . 728 7.
Act V of 1908 Section 11 Principle of res judicata Applicability when gratuity was awarded in a previous proceedings under the Payment of Wages Act i.n the teeth of the clear provision of Rule 8.01 Scope of Rule 8.01.
Andhra Pradesh State Road Transport Corporation Hyderabad vs Venkateswara Rao etc.
. . 248 CODE OF CRIMINAL PROCEDURE 1908 1.
Whether Magistrate has jurisdiction to recall dismissal order made u/s 203 Application for recalling dismissal order, whether amounts to fresh complaint.
Bindeshwari Prasad Singh vs Kali Singh . 125 2.
S.99 A Scope of Whether 'Statement of grounds ' a mandatory provision.
State of Uttar Pradesh vs Lalai Singh Yadav . 616 3.
(Act 2 of 1974)Ss.
235 and 465 Scope of.
Santa Singh vs The State of Punjab . 229 4.
(Act II of 1974), 1973 section 378.
[See Appeal against ac quittal] . 872 5.
(Act 2 of 1974) S.494 Prosecution applying for with drawal of prosecution Principles to be considered by Court in granting consent.
State of Orissa vs Chandrika Mohapalra & Ors. 335 COMPULSORY RETIREMENT Compulsory retirement made in public interest under the Government of lndia Decision No. 23 dated 30th November 1962 below Fundamental Rule 56 (later substituted as a new rule FR 56(i) Mere reference to a non subsisting rule does not invalidate the order when retirement is in public interest and bona fide.
Mayconghoan Rahamohan ,Singh vs The Chief Commissioner(Administration) Manipur and Ors.
. 1022 2.
[see Constitution of India] . 128 CONDONATION OF DELAY in applying for renewal of stage permits under the Motor Vehicles Act.
[See Motor Vehicles Act] . 503 CONDUCT OF ELECTION RULES 1961, rr.
42 and 56(6) .
Tendered ballot paper, what is and use of.
Dr. Wilfred D 'Souza vs Francis Menino Jesus Ferrao . 942 CONSTITUTION OF INDIA 1. article 14 Combines Seniority Scheme introduced by the Reserve Bank of India to equalise opportunities of confirma tion and pro motion of Clerks Some Clerks affected ad versely by unforseen circumstances if violative of equal opportunity clause Right of State to integrate Cadres and lay down principles of seniority.
Reserve Bank of India & Ors.
N. C. Paliwal & Ors.
. 377 5 2.
articles 14, 16 Civil Service Seniority Direct Re cruits and promotees Quota Whether roster implicit Bene fit of service Words and Phrases "As far as practicable." N.K. Chauhan and Ors.
vs State of Gujarat and Ors.
. 1037 3. article 15(4) Reservation of seats for socially and educa tionally backward classes in educational institutions Annual family income test if valid.
Kumari K.S. Jayasree and Anr.
vs The State of Kerala and Anr.
. 194 4. article 19(6)(ii) and 269(g): [See ] . 59 5. article 3IA(1) Second Proviso article
31(b) Meaning of right conferred 9th Schedule Whether different ceiling can be imposed for different persons Whether second proviso to article 31(A)(1) imposed a feter on the legislative competence Gujarat Agricultural Land Ceiling Act 1961 (Gujarat Act 27 of 1961) Section 2 (21), 6.
Hasmukhlal Dahayabhai and Ors.
vs State of Gujarat & Ors.
. 103 6.
article 131 Disputes between State and Union Jurisdic tion of High Court Charge of Excise Duty Condition of Whether an article manufactured or produced before the levy is imposed is excisable.
Union of India vs State of Mysore . 842 7.
article 136 Practice and Procedure Whether a Court of Criminal Appeal Whether can interfere with concurrent findings of fact Interference when grave and substantial injustice.
Dalbir Kaur and Ors.
vs State of Punjab .
.280 8.
article 226 High Court if could interefere with the Appellate orders of Income Tax Appellate Tribunal under article 226.
Income Tax Officer, Lucknow vs M/s S.B. Singbar Singh and Sons and Anr.
.214 9.
article 226 When alternative remedies available, whether writ petition maintainable.
G. Sarana vs University of Lucknow and Ors.
. 64 10. article 226, whether concurrent findings of facts by the Revenue Authorities, can be reopened in writ petition.
Y.B. Patel and Ors.
vs Y. L. Patil . 32 11.
article 235 Disciplinary action over subordinate judiciary Governor If bound by the recommendation of the High Court Consultation with State Public Service Commis sion If warranted by article 235.
Baldev Raj Guliani and Ors.
vs The Punjab & Haryana High Court and Ors.
. 425 12.
article 288(2) Scope of.
Damodar Valley Corporation vs State of Bihar and Ors.
. 118 13.
articles 309, 310 and 311 Scope of article 310 Visa Vis articles 309 and 311.
Union of India and Anr.
vs K. section Subramanian . 87 14.
article 311 Termination of services of temporary servant Protection of Article when applicable.
State of U. P. vs Ram Chandra Trivedi . 462 15.
article 311(2), violation of Penalty of compulsory retirement Hyderabad Civil Service (Classification, Control and Appeal Rules,) reasonable opportunity of defence at the stages of enquiry and punishment 6 Consideration of extraneous matters in recommendation of penalty by High Court Chief Justice, whether valid.
State of Andhra Pradesh vs S.N. Nizamuddin Ali Khan . 128 CONTEMPT OF COURT ACT (ACT NO.
70 OF 1971) Ss.
2(b) 10 and 12(1) read with Article 215, Constitution of India Remitting the punishment awarded after accepting the apolo gy, tendered by the contemnor and ordering him to pay the cost of paper books, whether valid Whether endorsing to the Registrar a copy of the wireless message, addressed to the State Counsel for information only amounts to contempt.
Arun Kshetrapal vs Registrar, High Court, Jabalpur & Anr. 98 2.
1971, S.19(1)(b) Finding of committal of contempt is basis of acceptance of apology Judge exposing himself to public controversy cannot shelter behind his office.
Ram Pratap Sharma and Ors.
vs Daya Nand and Ors.
CONTRACT OF SALE OF GOODS Whether interstate or intra state Sale.
[See sale] . 631 CORRUPT PRACTICE: [See Election] .
.490 COSTS: tax matters when there is conflict among High Courts.
[See Practice] . 9 , Ss. 28, 131(1)(3) and (5): [See Limitation] .
.983 DEALER: Whether Central Government selling foodgrains and ferti lizers a dealer.
[See ] .
DELEGATION OF POWERS TO OFFICERS for execution of contracts under s.122(1) of Jammu & Kashmir Constitution Contracts containing arbitration clause validity executed on behalf of the Government cannot be questioned on the plea of violation of section 122(1.).
Timber Kashmir (P) Ltd. etc.
vs Conservator of Forests, Jammu and Ors.
. 937 DEVELOPMENT REBATE Whether dividend when withdrawn.
[See Income Tax Act] . 638 DIRECTORATE GENERAL OF TECHNICAL DEVELOPMENT (CLASS II POSTS) RECRUITMENT (AMENDMENT) RULES, 1974, Rule 2, inter pretation of whether officer on special duty in the same grade as Development Officers.
section Ramaswamy vs Union of India and Ors. 221 DISCIPLINARY ACTION : Over subordinate judiciary by High Court.
[See Constitution of India] .
DISMISSAL ORDER, recall of [See Code of Criminal Procedure] . 125 DOCTRINE OF WAIVER Bar of waiver, whether applicable to later grievance against 'bias. ' G. Sarana vs University of Lucknow and Ors.
ELECTION Representation of the People Act, 1951 Sec.
123(2) Sec.
100(1)(b) Corrupt practice Undue influ ence Conduct of Election Rules 1961 Rules 39(2) Ballot paper containing mark on the reverse of the symbol 7 Can be rejected as invalid Charge of Corrupt practice If of quasi criminal nature Degree of proof Interference with appreciation of evidence by High Court Whether elec tion result can be lightly interfered with.
M. Narayana Rao vs
G. Venkata Reddy & Ors. 490 ELECTRICITY ACT 1910 Section 22B Electricity Supply Act.
1948 Sections 18, 49 and 79(j) Whether section 49 invalid for excessive delegation Whether Electricity Board can reduce the quota of consumption if the State Government has done so Board having determined the quota, whether can further reduce it Whether Board can fix the quota with out framing regulations Practice and Procedure Whether appellant can be allowed to raise a new question of facts for the first time.
Adoni Cotton Mills etc.
vs The Andhra Pradesh State Electricity Board and Ors.
.133 EMPLOYEES ' STATE INSURANCE ACT, 1948 Sec.
61 If debars grant of sick leave If the Act deals with all aspects of sickness.
The Alembic Glass Industries Ltd. Baroda and Ors.
vs The Workmen and Ors. 80 ESCAPED ASSESSMENT [See Income Tax ] . 207 ESTATE DUTY ACT (34 of 1953) 1.
Ss. 2(15), 9 and 27 Scope of.
Controller of Estate Duty, Gujarat vs Shri Kantilal Trikam lal .
S.5 Land covered with wild.
and natural forest growths of agricultural land.
Controller of Estate Duty, Kerala v V. Venugopala Verma Rajah . 346 3.
S.10 Gift of property the deemed to be part of the State of deceased doner.
Controller of Estate Duty, Keral vs M/s R.V. Vishwanathan and Ors.
. 64 EVIDENCE ACT (1 of 1872) 1.
Ss. 17 and 33 Evidence of admission Admissibility.
Union of India vs Moksh Builder and Financiers and Ors.
. 96 2. S.43 and Code of Civil Procedure (Act 5 of 1908) 0.41 r. 2 Admission of Judgments in land acquisition preceedings an additional evidence.
The Land Acquisition Officer, City Improvement Trust Board vs H. Narayaniah etc.
3. S.68 Discharge of onusproban by propounder when execut ic of will surrounded by suspicious circumstances.
Seth Beni Chand (since dead) no by 1. rs.
vs Smt.
Kamla Kunwar and Ors.
. 57 4.
116 Whether tenant cadeny the landlord 's title.
Sri Ram Pasricha vs Jagannat and Ors.
FINAL LIST, when may be set asid by Court.
Union of India vs Dr. R.D. Nanjia and Ors.
FINDINGS OF FACT [See Constitution of India] . 32 FIRST INFORMATION REPORT delay in lodging.
[See Penal Code] . 280 FUNDAMENTAL RULE 56(j): [See Compulsory retirement] . 1025 GENERAL CLAUSES ACT 189 ' Section 3(42) Meaning of per son Whether legislatur 8 bound to follow definition in General Clauses Act.
Hasmukhalal Dayabhai and Ors.
vs State of Gujarat and Ors. etc.
. 103 OLD CONTROL RULES, 1963, whether includes smuggled gold within their ambit.
Triveni Prasad Ramkaran Verma State of Maharashtra . 519 GRATUITY, entitlement to whether a former employee of he Nizam 's State Railway can claim gratuity aS of right in addition to provident Fund Government of Hyderabad Railway establishment Code, 1949, Rule . 01, 8.02, 8.05, 8.12, 8.13, .15, 8.16, 8.17 and 8.19 read with para 17 Chapter VII interpretation of.
Andhra Pradesh State .Road
Transport Corporation, Hyderabad vs Venkateswara .Rao.
GUJARAT MUNICIPALITIES 1963, section 38 (10)(b)(i) "act as Councillor" ScoPe of President of the Municipality applying or lease of land If debarred taking land on lease General power of supervision conferred on the President If resident should be deemed to have acted within the meaning of 38(1)(b)(i) when lease was ranted to him by the Chief officer.
Rustamji Nasorvanji Danger vs shri Joram Kunverji Ganatra and Ors.
. 884 HINDU LAW If a co widow can relinquish ght of survivorship Whether after relinquishment, a widow an dispose of property by will.
Rindumati Bai vs Nrarbada ' Prasad .
.988 RELIGIOUS ENDOWMENT Hindu temple forming part of a Jain Institution When may be treated as a Hindu religious endow ment.
Commissioner of Hindu Religious & Charitable Endowments Mysore vs Sri Ratnavaram Heggde (deceased) by 1.
.889 IDENTIFICATION PARADE: [See Penal Code] . 280 INCOME TAX ACT 1922 1.
S.2.(4) When can single and isolated sale be a busi ness transaction within the meaning of Onus probandi on the Taxation Department Initial purchase with intention of advantageous sale Earning profit on delivery of goods not necessary.
Dalmia Cement Ltd., vs The Commissioner of Income Tax, New Delhi.
. 5 54 2.
(11 of 1922) Ss. 2 (6A)(e) 'and 10(2) (vi b) Development rebate treated as accumulated profits Withdrawal of amount by shareholder from Company 's account if withdrawal can be treated as dividend since amount withdrawn is within accumulated profits.
P.K. Badiani vs The Commissioner of Income Tax, Bombay .
.638 3.
S.9 Irrevocable rent If could be deducted from income from property of only one year Exemption If could be given only once.
Commissioner of Income Tax, Lucknow vs Shri Madho Parsad Jatia.
. 202 2(1) to Sec.
23A(1) Meaning of investment Companies, whether restricted to shares stocks and other securities or used in contradistinction with manufacturing processing and trading operations Indian Companies 87(f) Companies Act 1956 Sec.
372(11).
Nawn Estates (P) Ltd. vs C.I.T., West Bengal . 798 5.
23A and 35(1) Whether income tax officer has power under section 35(1) to rectify an order passed under section 23A. Commissioner of Income Tax, Kanpur.
vs M/s. J.K. Commercial Corporation Ltd. etc. 512 for partition and disruption of the Hindu Undivided family disallowed by I.T.O. Appeal under the Act filed against the orders of.
I.T.O. also dis missed No reference under the Act challenging the Tribu nal 's order dismissing the appeal was taken, but subse quentiy got a preliminary decree for partition passed by the civil court during the pendency of the apPeal Whether t he Income Tax Authorities are bound by the subsequent parti tion decree of the civil court.
Narendra kumar J. Madi vs Commissioner of Income Tax, Guja rat 11, Ahmedabad . 112 7.
Ss. 34 and 42, Income Tax Act (43 of 1961) section 147 and Income Tax Rules, 1922, r. 33 corresponding to r. 10 of 1962 Rules One 0 f t he met hods mentioned in corresponding to r. 10 of 1962 Rules One of the methods mentioned in r. 33 applied for assessment Higher tax liability if another method in rule adopted If a case of income escaping as sessment.
Commissioner of Income Tax, West Bengal 1, Calcutta vs Simon Carves Ltd. 207 8.
section 5(2) Non resident company receiving income outside India Income if accrued in India.
84SCI/77 The Performing Right Socio)Ltd.
& Anr.
vs The Commr.
Income Tax and Ors.
. 1 INDUSTRIAL DISPUTES A( 1907 Sec.
2(00) Meaning of trenchment Can termination service by efflux of time cover by the expression retrenchment Hindustan Steel Ltd. vs The p siding Officer, Labour.
Court Orissa and Ors.
. 6 legal practioners can appear before the Tribunal Whether Secs.
36(1) an 36(2) is controlled by section '36(4) Pradip Port Trust, Pradip Their Workmen . 5 INTER STATE SENIORITY [See State 's Reorganisation Act] .
INTERPRETATION 1.
Amendment of a section could be used to interpret earlier provision in the Act.
Sone Valley Portland Cem Co. Ltd. vs The General Mini Syndicate (P) Ltd. 3 2. "Refund meaning of Subsequent amendment of Section If could. be used to interpr earlier ambiguous provision.
Thiru Manickam & Co. vs Sic of Tamil Nadu . 9 3. "should" contained in a clause "should" possesses a post graduate degree and requist experience whether mandato ry or directory "Post gradual Meaning of.
Juthika Bhattacharya The State of Madhya prad and Ors.
. 4 4.
Contract of.
[See ] INTERPRETATION OF DOCUMENTS Principles application 10 to interpretation of document Notifications Nos.
F. 9/5/59 R & S published in gazette dt.
17 1 60 u/s 507 of the Delhi Municipal Corporation Act, 1957 (66 of 1957) and Notifica tion GSR 486 u/s 1(2) of Delhi Rent Control Act, 1958 (59 of 1958) gazetted on 21 4 62 Whether the whole of Mauza Chowkri Mubarakbad and whole of Onkar Nagar and Lekhpura were meant to be notified.
Jangbirv.
Mahavir Prasad Gupta . 670 INTERPRETATION OF STATUTES [See Bombay Rents/ Hotel and Lodging House Rates Control Act, 1947] .
Estate Duty Act and other taxing statutes Principles.
Controller of Estate Duty, Gujarat vs Shri Kantilal Trikam lal Expressions not being terms of art whether to be construed in technical sense or ordinary popular sense as used by businessmen Legislative history as guide to construction Genesis and development of law as key to interpretation Whether English decisions useful guides or construction of analogous provisions, fundamental concepts and general principles.
Nawn Estates (P) Ltd.
C.I.T., West Bengal . 798 Provision in Act substituted by another Amending provision avoid Effect.
State of Maharashtra vs The Central Provinces Manganese Ore Co. Ltd. 1002 Rules as an aid Use of Statement of objects and reasons.
Tata Engineering & Locomotive Company Ltd. vs Gram Panchayat Pimpri Waghere.
. 306 6.
Statute when retrospective.
K. Eapen Chacko vs The Provident Investment Co. P. Ltd. 1026 7.
When a statute could be read retrospectively.
State of Kerala vs philomina etc.
& Ors.
. 273 JAMMU & KASHMIR CONSTITUTION, section 122 [See Delegation of Powers] . 937 Admission of judgments in Land Acquisition proceedings.
[See Land Acquisition] . 178 JURISDICTION 1. of High Courts to interfere with the trial Court 's discretionary order.
[See C.P.C.] . 1061 2. of High Court under article 226 to interfere with orders of the Income Tax Appellate Tribunal.
[See Constitution of India ] . 214 KARNATAKA LAND REFORMS ACT, 1961, Ss. 107 and 133 'Whether applicable to land unauthorisedly held after expiry of lease.
Corporation of the City of Bangalore vs
B.T. Kampanna .
KARNATAKA RECRUITMENT OF GAZETTED PROBATIONERS (Class I and 11 Posts appointment by competitive examination) Rules, 1966 R. 9 read with Part IV of Schedule II Scope of Awarding block marks in interview If violative of the Rule.
State of Karnataka and Anr.
vs M. Farida & Ors.
. 323 KERALA LAND REFORMS ACT 1.
1963 section 84 Scope of interpretation When a statute could be read retrospectively.
11 State of Kerala and Ors.
vs Philomina etc.
and Ors.
. 273 2.
1964 Secs.
81, 83, 84, 85, 85A and 86 Voluntary trans fers made after notified date whether valid.
State of Kerala and Ors.
vs K.A. Gangadharan . 960 3.
(Kerala 1 of 1964) as amended in 1969 and 1971, Secs.
3(1), 50A, 52, 73, 108, 125 and 132(3) Scope of.
K. Eapen Chacko vs The Provident Investment Co. P. Ltd. 1026 LAND ACQUISITION ACT 1.
City of Bangalore Improvement Act, 1945, Ss. 16, 18 and 27 Notification under Ss. 16 and 18 on different dates Date for determining market .value for awarding compensation for acquisition of land.
The Land Acquisition Officer, City Improvement Trust, Board vs 11.
Narayaniah etc. 178 Ss.
5A, 6 and 17(4) Burden of establishing urgency On whom lies.
Narayan Govind Gayate etc.
vs State of Maharashtra . 763 3.
(1 of 1894) s.6A If mandatory Effect of non compliance in case of beneficial schemes.
Farid Ahmed Abdul Samad and Anr.
vs The Municipal Corpn.
of the City of Ahmedabad and Anr.
LEGAL ENTITY [See Railways Act, 1890] .
.419 LIMITATION 1.
for rectification under the U.P. Sales Tax Act, 1948, section 22.
[See U.P. Sales Tax Act, 1948] .
Period of limitation in respect of suo moto revision by Central Government to annul or modify any order of erroneous refund of duty when begins Customs Act, , 131(1)(3)(5) scope of.
Geep Flashlight Industries Ltd. vs Union of India & Ors.
.983 LIMITATION ACT 1.
1963 Ss. 5 and 29(23) If applicable.
Mohd. Ashfaq vs State Transport Appellate Tribunal M.P. and Ors. 563 2.
whether applicable to revision petitions filed under section 10, U.P. Sales Tax Act.
Time spent in obtaining second copy of.
impugned order, whether to be excluded in computing limitation period for filing revi sion petitions.
Commissioner of Sales Tax, U.P. vs Madan Lal and Sons Ba reilly.
MADHYA pRADESH MUNICIPAL CORPORATION ACT 1956Sec.
138(b) Madhya Pradesh Accommodation Control Act Sec.
7 Must rental value under the Municipal Act follow the standard rent under Accommodation Control Act When premises let out When used by owner.
Municipal Corporation, Indore, and Ors.
vs Smt.
Ratna Prabha ana Ors.
. 1017 MADHYA PRADESH PUBLIC TRUSTS ACT 1951s.
9(1): [See Code of Civil Procedure] . 993 MADRAS GENERAL SALES TAX ACT 1959, Schedule 11, items 7(a and (b) If ultra vires.
M/s. Guruviah Naidu and Sons etc vs State of T.N. and Anr.
State Government reserved certain areas for exploitation of minerals in public sector If had the power to do so.
State Governments If could reject application of private persons.
Amritlal Nathubhai Shah and Ors.
vs Union Government of India and Anr . 372 2.
S.30A Scope of.
State of Bihar and Anr.
vs Khas Karampura Collieries Ltd. etc. 157 , Entry 22 Explanation of Schedule, construction of word includes Whether ,potteries Industry includes manufacture of Mangalore pattern roofing tiles.
The South Gujarat .Roofing
Tiles Manufacturers Associations and Ant.
vs The State of Gujarat and Anr . 878 MONOPOLY OF BUS ROUTES Whether permitting the existing private operators to operate till the date of expiry of their permits creates a monopoly.
Sarjoo Prasad Singh vs The State of Bihar and Ors. 661 MOTOR VEHICLES ACTS 1939 1.
section 43(1) State Government can direct imposition of fiscal rates on stage carriage operators for carrying mails as condition of permit Ss. 48(3) and 59(3)(c) such direc tions do not interfere with quasi judicial functions of Regional Transport Authority.
Special provisions of section 48(3) (XV) do not override general provisions of section 43(1)(d)(1).
Sree Gajana Motor Transport Co. Ltd. vs The State of Karna taka and Ors.
. 665 Motor Vehicles Rules, 1951 Rule 108(c) Whether considerations in Sec.47 for grant of stage permits to be mentioned in the order.
Ikram Khan vs State Transport Appellate Tribunal and Ors.
. 459 3. S.58(2) proviso Delay in.applying for renewal of exist ing permit If could be condoned Chapter IVA If a self contained code Renewal application under section 68F(ID) Whether section 57 applicable.
Mohd. Ashfaq vs State Transport Appellate Tribunal U.S. and Ors. 563 of 'Whether there should be a finding on each and every separate objection raised.
Sarjoo prasad Singh vs The State of Bihar and Ors. 661 MURDER: Distinction between S.299 and 300 I.P.C. [See Penal Code] . 601 NECESSARY PARTY: [See Civil Procedure Code] . 419 NEW CASE Courts ' Whether can make a [See Partnership Act] . 583 NEW DELHI HOUSE RENT CONTROL ORDER 1939 C1.
Standard rent of house fixed in 1944 Rateable value enhanced on the basis of rent received in 1966 Whether rating should be correlated to actual income.
New Delhi Municipal Committee vs
M.N. Soi and Anr.
NEW PLEA [See Adoni Cotton Mills vs Andhra Pradesh State Elec tricity Board] . 133 NOLLES PROSEQUE: Principle to be followed by court (See Criminal Procedure Code Act 2 of 1974) .
.335 13 OTHER RIGHTS in Explanation 2 to section 2(15) meaning of.
Controller of Estate Duty, Gujarat vs Shri Kantilal Trikam lal . 9 PARTNERSHIP ACT Whether mandatory Whether suit can be filed by unregistered firm Dissolution of firm Suit by a 'partner of erstwhile unregistered firm, If other partners of erstwhile firm necessary parties Materi al alterations in a document Effect of Suit for Specific and ascertained amount Whether court can make out new case and grant partial relief on another basis.
Loonkaran Setia etc.
vs Ivan E. Johan and Ors.
. 853 PENAL CODE S.34 Specific evidence for infliction of fatal wound not required Community of intent with participatory presence fixes constructive liability.
Harshadsingh @ Baba Pahalvansingh Thakura vs The State of Gujarat . 626 2.
Ss. 299 and 300 Culpable homicide not amounting to murder and murder Distinction Tests to be applied in each case S.300 Thirdly I.P.C. Scope of.
State of Andhra Pradesh vs Rayavarapu Punnayya and Anr.
.601 3.
Section 302 Non examination of eye witnesses Interest ed witnesses Meaning of Necessity of examining independent witnesses Motive Delay in lodging F/R and despatch to Magistrate Identification parade, necessity of.
Dalbir Kaur and Ors.
vs State of Punjab . 280 PLEADINGS 1.
Amendments to Amendment to the pleadings to introduce an entirely different case, under the guise of permisible inconsistent pleas which is likely to cause prejudice to the other side cannot be allowed Civil Procedure Code (Act V of 1908) Order VI Rule 17.
M/s Modi Spinning and Weaving Mills Co. Ltd. and Anr.
vs M/s Ladha Ram and Col .
.728 2.
Under section 70 of the Contract (Act 9) of 1872 Ingre dients necessary to be pleaded.
Union of India vs Sita Ram Jaiswal.
. 979 POSSESSION "Possession" to attract criminal liability must be "conscious possession".
Patel Jethabhai Chatur vs State of Gujarat . 872 POWERS OF OFFICER to rectify an order passed u/s 23A [See Income Tax Act] . 512 POWER TO AUCTION exclusive privilege to vend liquor [See Bihar and Orissa Excise Act.
.811 PRACTICE 1.
Costs in tax matters when there is conflict among High Courts Controller of Estate Duty, Gujrart vs Shri Kantilal Trikamalal . 2.
Duty of High Court when there is conflict between deci sions the Supreme Court Upsetting concurrent findings of fact second appeal Propriety.
State of U.P .
vs Ram Chandrs Trivedi . 46: 3.
Duty of High Court where there, is conflict between the view expressed by Divisional bench and larger benches of the Supreme Court.
Union of India and Anr.
K.S. Subramanian.
Non suiting for want of proper pleadings at the appellate stage by the Supreme Court when parties went to trial and issues were raised and the litigation went through the course of trial and appeal is not desirable.
Union of India vs Sita .Ram Jaiswal . 979 5.
Supreme Court will not entertain a complaint on facts and interfere with a finding of facts by the appellate Court under Article 136 of the Constitution of India.
Patel Jethabhai Chatur vs State of Gujarat . 872 PRACTICE AND PROCEDURE 1.
Further plea taken in the affidavit rejoinder to the writ petition shall not be allowed to be agitate Sarjoo Prasad Singh vs The State of Bihar and Ors. 861 2.
High Court 's duty to give reasons even in cases of sum mary dismissal.
Shankar Gopinath Apte vs Gangabai Hariharrao Patwardhan . 411 3.
Interference with findings on reliability of evidence only in exceptional circumstances.
Harshadsingh@ Baba pahalvansingh Thakur vs The State . 626 5.
Re appraisal of evidence by Supreme Court in spite of concurrent findings of fact, proper when miscarriage of justice has occurred.
Mohammad Aslam vs State of Uttar Pradesh . 689 Whether High Court can direct a Minister to be impleaded as a party and file his personal affidavit.
State of Punjab ana Anr.
vs Y.P. Duggal and Ors.
. 96 PREVENTION OF CORRUPTION ACT, and 5(1)(d) Sec.
5(2) Misappropriating Govt.
funds.
Retaining Govt.
Funds by a Govt.
Servant Evidence Act, Sec.
154 When can witness be declared hostile Can evidence of a hostile witness be accepted Evidence Act Sec. 105 Onus of proving exceptions in IPC on accused Degree of proof Criminal Trial Effect of non examination of materi al witness Conviction on evidence of a solitary witness Whether adverse inference can be drawn against accused for not leading evidence Onus of prosecution Pre sumption of innocence.
Rabindra Kumar Dey vs State of Orissa .
.439 PREVENTION OF FOOD ADULTERATION ACT 1910.
1. section 16 Proviso Scope of.
Murlidhar Meghraj etc.
vs State of Maharashtra etc.
. 1 2. sec.
16(1) (a) (2) (1) 2(1) (c) 2(1) (j) 2(1) Preven tion of Food Adulteration of Rules.
Rules 23, 28 and 29 Can conviction be based on sole testimony of Food Inspector Can an article fail under clause (j) and (i) of Sec.
2(i) Are they mutually exclusive or overlapping When rules are silent about colouring material can use of dye be punished Do provisions of Probation of Offenders Act apply to offences under the Prevention of Food Adulteration Act.
Prem Ballab and Anr vs The State (Delhi Admn.) . 592 PRIVITY OF CONTRACT When a company has severa branches and there is a contract between the buyer and one of the branches, the contract of sale is between the company and the buyer.
English Electric Company of India 1Ltd.
vs The Deputy Commercial Tax Officer and Ors.
. 631 15 PROBATION OF OFFENDERS ACT, 1958 Applicability to cases under POFA [See Prevention of Food Adulteration Act, 1950] . 59 PROCEDURE When a court of appeal can interfere in the lower court 's Judgment.
Padma Uppal etc.
vs State of Punjab and Ors.
. 329 PROMOTIONS Right to promotion Whether promotion of class III employees to Class is governed by "Advance Correction Slip No. 7)" introducing w.e.
f. March, 11, 1973, new rules 324 to 328 and substituting a new rule 301 in Chapter III of the Indian Railway Establishment Manual Scope and applica bility of Rules 301 and 328 (2) (4) and (5) S.K. Chandan vs Union of India and Ors.
. 785 PROPERTY right to dispose of by will by a widow [See Hindu Law] .
PROVIDENT FUND Illegal payment of gratuity in the past will not affect legal claims to Provident Fund.
Andhra Pradesh State Road Transport Corporation, Hyd.
P. Venkateswara Rao etc. 248 PUNJAB GENERAL SALES TAX ACT (Punjab Act 46 of 1948), section 11(2) Notice under Whether should be issued within a par ticular period.
The Indian Aluminium Ltd. & Anr.
vs The Excise and Taxa tion Officer and Anr.
.716 PUNJAB CIVIL SERVICE RULES, Vol.
1 Rules 2.49 and 3.10 to 3.16 Junior Vernacular Cadre teachers officiating in senior vernacular cadre enti tled to benefit of their substantive post .
State of Punjab and Ors.
v, Labh Ram and Ors.
. 832 RAILWAYS ACT, 1890 section 3(6), Railway Administration, whether a separate legal entity.
State of Kerala vs The General Manager.
S.R. Madras .
.419 RAILWAYS ESTABLISHMENT CODE Para 157 Whether the para graph empowers the Railway Board to make rules for the gazetted Railway servants Construction of para 157.
S.K. Chandan vs Union of India and Ors.
785 RAILWAY ESTABLISHMENT MANUAL Whether Rule 328 (2) providing for the invalidity of promotions made in the Diesel Locomotive Works from August 1, 1961 to March 11, 1973 casts an obligation on the Railway Board to recall all promotions and to form a fresh panel Meaning of "Promotion made in the Diesel Locomotive Works in Rule 328 (2) and promotion to the higher grades in Rules 328(4)".
S.K. Chartdan vs Union of India and Ors.
.785 RATEABLE VALUE (See New Delhi House Rent Control Order) . 731 REAPPRAISAL of Evidence by Supreme Court.
(See Practice and Procedure) . 689 REASONABLE OPPORTUNITY See Constitution of India . 128 2. to be heard.
(See State 's Reorganisation Act) .
.827 REHABILITATION ACT, 1954 section 14(1) (b) "Such cash balances Meaning of.
16 Custodian of Evacuee Property, vs Smt.
Rabia Bai .
.255 .
Election petition Not accompanied by impugned pamphlet If liable to be rejected Printer If could be called an accom plice Failure to send pamphlet to District Magistrate as required by section 127 A(2) If makes the printer an accom plice.
Thakur Virendra Singh v .
Vimal Kumar . 525 See.
15, 21, 22, 23"Preparation and revision of electoral roll Amendment, transposition or deletion of entries in electoral roll Provision of Sec.
23, if mandatory Repre sentation of the People Act, 1951 Every person on elec toral roll whether entitled to vote even if name not brought in accordance with law Sec.
100(1) See.
123(1) (A) Bribery Proof of Quasi criminal in nature inter ference with appreciation of evidence by High Court, Bihar and Orissa Act, Ramji Prasad Singh vs Ram Bilas Jha and four Ors.
.741 .
section 9A Contract signed as President, Gram Panchayat Rejection of nomination paper If valid Improper rejection If courts could give relief under section 100(1) (c).
Jugal Kishore Patnaik vs Ratnakar Mohanty .
Incurring expenses in excess of what is per missible Interference by this Court with appreciation of evidence by High Court.
Nangthomban Ibomeha Singh vs Leisanghem Chandramoni Singh and Ors, . 573 RES JUDICATA.
(See Civil Procedure Code). 320 RETRENCHMENT Meaning of (See industrial Disputes Act) . 586 RETROSPECTIVITY.
service rules.
(See Civil Service) .
REVISION suo moto limitation for (See Limitation) . 983 RIGHT OF MANAGEMENT Hindu Law Joint Hindu Undivided family Whether a junior member of the family can act as Karta with the consent of all the other members, if the senior member gives up his right.
Narendra Kurnar J. Modi vs Commissioner of Income Tax Gujarat 11.
Ahmedabad . 112 RIGHT TO PLEAD by legal Practitioners before the Labour Tribunal.
(See IndustriaI Disputes Act). 537 RIGHT TO SUE by the heirs (See Bombay Rents Hotel and Lodging House Rates Control Act, 1947) . 341 RIGHT TO SUE for eviction by a co owner.
(See West Bengal Premises Tenancy Act, 1956) .
SALE Contract for sale of goods, whether inter State sale or intraState sale Ingredients Central Sales Tax Act Section 3(a).
English Electric Company of India Ltd. vs The Deputy Commercial Tax Officer and Ors.
. 631 SALES REORGANISATION ACT (37 of 1956) section 115 Oppertunity to hear after final inter state seniority list is prepared 17 after giving opportunity to aggrieved officers to make representation against provisional list If should be given.
Union of India vs Dr. R.D. Nanjiah and Ors. 827 SALES TAX Central Provinces Bear Sales Tax Act, 1947 section 2(g) Expln.
II Goods within States at the time of contract of sale, mixed up outside state and the mixture sold 'sale ' if taxable.
State of Maharashtra etc.
vs Central Provinces Manganese Ore. Co. Ltd. 1002 2.
Supply of crude oil by Oil and Natural Gas Commission from Assam to refinery of Indian Oil Corporation in Bihar Supply under directions of Government at price fixed, by Government If inter state sale liable to Central Sales Tax.
Oil and Natural Gas Commission vs State of Bihar and Ors. 364 SECOND APPEAL 1 Disturbance of concurrent finding of fact without consid ering the objects of the notification or discussing any principle of construction of documents which could indicate that a point of law had really arisen for a decision is patently exceeding the jurisdiction of the High Court Civil Procedure Code (Act V) 1908, section 100.
Jangbir vs Mahavir Prasad Gupta . 670 2.
Propriety of upsetting concurrent findings in (See Practice) . 462 SENIORITY 1.
Direct recruits of Promotees.
(See Constitution of India) . 1037 2.
When recruitment irregular.
(See Civil Service) . 677 SENIORITY SCHEME Right of State to lay down principles of seniority (See Constitution of India) . 377 SENTENCE Judicial Jurisdiction to soften the sentence in economic crimes and food offences.
(See ) . 1 SICKNESS BENEFIT (See ) . 80 SOLE WITNESS conviction based on (See Prevention of Corruption Act) .
SPECIAL RULES 1962 Rule 4.
Government of A.P. and Ors.
vs Shri D. Janardhana Rao Anr.
. 702 SUCCESSION ACT, 1925 Sec.
6" legal will Genuineness of Suspicious circumstances Burden of proof Degree of proof.
Jaswant Kaur vs Amrit Kaur and Ors.
. 925 2. 1975, section 63 (c), Attesting witness defined.
Seth Beni Chand (Since dead now by 1. rs.
vs Smt.
Kamh Kunwar and Ors.
. 578 SUMMARY DISMISSAL Court 's duty to give reasons.
(See Practice and Procedure) .
.411 SUSPENDED OFFICER REINSTATED AND LATER COMPULSORILY RETIRED Effect of If order of suspension merge with order of reinstatement.
Baldev Raj Guliani and Ors.
vs The Punjab & Haryana High Court and Ors, . 42 18 SUSPENSION ORDERS Whether merges with order of Retirement (See Suspended Officer) .
.425 TERMINATION of services of temporary servants.
(See Constitution of India) . 462 TRANSFER OF PROPERTY ACT (4 of 1882) section 53A, Indian Easements Act (5 of/882) section 60(b) and Indian Contract Act (9 of 1872) section 221 Scope of.
Shankar Gopinath Apte vs Gangs bai Hariharrao Patwardhan . 411 U.P. INTERMEDIATE EDUCATION ACT, 1921 Whether the basic section of a college is within the scope of.
Commissioner, Lucknow Division and Ors.
vs Kumari Prem Lata Misra. 957 U.P. SALES TAX ACT, 1948 section 3 A, Notification issued under Rule for constructing words Whether carbon paper is taxable as 'Paper ' Whether ribbon is accessory or part of typewriter.
State of Uttar Pradesh vs M/s Kores (India) Ltd. 837 section 22 Order of rectification passed within 3 years of orginal order, but served beyond 3 years /f barred by limitation.
M/s Karam Chand Thapar and Bros. (Coal Sales ) Ltd. vs State of U.P. and Anr.
. 25 U.P. ZAMINDARI ABOLITION AND LAND REFORMS ACT, 1950, Section 117 Scope of State vests lands in Gaon Sabha Suit for eject ment .Goan
Sabha did not appeal State If had locus standi.
Maharaj Singh vs State of Uttar 5.
Pradesh and Ors. 1072 UNION AND STATE DISPUTES (See Constitution of India) . 842 VOLUNTARY TRANSFERS (See Kerala Land Reforms Act) .
.960 WEALTH TAX ACT (27 of 1957) S.2(e)(i) Agricultural Lands, What are Tests for determining.
Commissioner of Wealth Tax, A.P. vs Officer in charge (Court of Wards ) Paigah.
. 146 WEST BENGAL PREMISES TENANCY ACT (f) Whether one of the co owners can file suit for eviction without impleading other co owners Whether a co owner, an owner for the purpose of an eviction suit Stage for raising objection about frame of suit.
Sri Ram Pasricha vs Jagannath and Ors. 395 WILL genuineness of legal will degree of proof.
(See Succession Act, 1925) . 925 WORDS AND PHRASES 1.
"As far as Practicable" (See Constitution of India) . 1037 2.
"House, if it concludes buildings".
(See Bombay Village Panchayat Act) . 306 3.
"Other rights" in Explanation 2 to section 2(15) of the Estates Duty Act, meaning of.
(See "Other rights") . 9 4. "Out of the funds in his possession" and "such cash balances".
Meaning of Custodian of Evacuee Property vs Smt.
Rabia Bai .
.255 5.
See "Person" meaning of General Clauses Act) . 103 19 6.
"Post graduate" Meaning of (See Interpretation) .
.477 7.
"restoration" in Section 70 of the Contract Act, meaning of.
union of India vs Sita Barn Jaiswal . 979 8.
"Substituted" meaning of.
State of Maharashtra etc.
vs The General Provinces Manganese Ore. Co. Ltd. 1002 9.
Vest Persons aggrieved Appurtenance meaning of.
Maharaj Singh vs State of Uttar Pradesh and Ors. 1072 WRIT JURISDICTION High Court cannot interfere with a finding .of fact based upon relevant circumstances and when it is not shown to be perverse The Constitution of India, Article 226.
Khazan Singh Ors.
vs Hukan Singh and Ors.
. 636 WRIT JURISDICTION OF THE HIGH COURT Scope for interference with findings of depart.
mental authorities.
Mis Khushiram Behari Lal and Co. vs The Assessing Authority Sangrur Anr.
. 752 M 184 SCI/77 2500 9 8 77 GIPF.
| By virtue of section 4 of the U.P. Zamindari Abolition & Land Reforms Act, 1950, the right, title and interest of all the intermediaries in every estate including hats, bazars and melas stood terminated and vested absolutely in the State.
Section 9 provides ' that all wells, trees in abadi and all buildings situate within the limits of an Estate, belonging to an intermediary, shall continue to belong to or be held by such intermediary and the site of the buildings which is appurtenant thereto, shall be deemed to be settled with him by the State Government.
Section 117(1) empowers the State Government to vest lands in Gaon Sabhas or other local authorities.
Under section 117(6) the State Government has power to resume from a Gaon Sabha the lands vested in it.
By a notification under section 117(1 ) the State Government vested the land in the village in the Gaon Sabha.
On the estate in dispute, the defendant who was the quondam zamindar, had been conducting a cattle fair.
The estate had on it, among others, a few structures.
The plaintiffs ' (the State and the Gaon Sabha) suit for eject ment of the defendant from the estate was dismissed by the trial court.
The Gaon Sabha, however, did not appeal; but the State went in appeal to the High Court as 'a person aggrieved '.
The High Court negatived the defendants conten tions that as a result of the notification under section 117(1) the land having vested in the Gaon Sabha, the State Government had no locus standi and that it was not a person aggrieved, but allowed the defendant to keep all the struc tures and a space of 5 yards running round each building.
Dismissing the appeal, HELD: (1) The State has title to sustain the action in ejectment.
The Government, despite vesting the estates in Gaon Sabhas has, and continues to have, a constant hold on these estates, when it chooses, to take away what it had given possession of to a Gaon Sabha.
This is plainly 'present legal interest ' in the Government and a sort of precarium tenans in the Sabha.
[1082 D; 1079 F G] (a) The Act contemplates taking over of all zamindari rights as part of land reform.
Instead of centralising management of all estates at State level, the Act gives an enabling power to make over these states to Gaon Sabhas.
Apart from management, no power is expressly vested in the Sabhas to dispose of the estates absolutely.
If the State thinks fit to amend or cancel the earlier vesting declara tion or notification it can totally deprive the Sabha of, and resume from it, any estate.
The vesting in the State was absolute but the vesting in the Sabha was limited to possession and management subject to divestiture by Government.
Such a construction of vesting in two different senses in the same section is sound because the word 'vest ' has many meanings.
The sense of the situation suggests that in section 117(1) 'vested in the State ' carries a plenary conno tation, while 'shall vest in the Gaon Sabha ' imports a qualified disposition confined to the right to full posses sion and enjoyment so long as it lasts.
To postulate vesting of absolute title in the Gaon Sabha by virtue of the declaration under section 117(1) is to stultify section 117(6).
[1081 A C; F G] 1073 (b) The State is 'a person aggrieved '.
He, who has a proprietary right, which has been or is threatened by violation, is an 'aggrieved person '.
The right to a remedy apart, a larger circle of persons can move the court for the protection of defence or enforcement of a civil right or to ward off or claim compensation for a civil wrong, even if they are not proprietarily or personally linked with the cause of action.
The nexus between the lis and the plain tiff need not necessarily be personal.
A person aggrieved is an expression which has expanded with the larger urgen cies and felt necessities of our time.
[1082 E F] (c) The amplitude of 'legal grievance ' has broadened with social compulsions.
The State undertakes today activi ties whose beneficiaries may be the general community even though the legal right to the, undertaking may not vest in the community.
The State starts welfare projects whose effective implementation may call for collective action from the protected group or any member of them.
Test suits, class actions and representative litigation are the begin ning and the horizon is expanding with persons and organi sations not personally injured but vicariously concerned being entitled to invoke the jurisdiction of the court for redressal of actual or imminent wrongs.
[1083 A C] Dhabolkar ; followed. 'Locus standi ' has a larger ambit in current legal semantics than the accepted, individualistic jurisprudence of old.
Therefore, the State, in the present case, is entitled to appeal under section 96 of the= Code.
of Civil Procedure.
[1084 D] (2) Where a wrong against community interest is done, 'no locus standi ' will not always be a plea to non suit an interested public body chasing the wrongdoer in court.
In the instant case the Government is the 'aggrieved person '.
Its right of resumption from the Gaon Sabha, meant to be exercised in public interest will be seriously jeopardised if the estate slips into the hands of a trespasser.
The estate belonged to the State, is vested in the Gaon Sabha for community benefit, is controlled by the State through directions to the Land Management Committee and is liable to be divested.
The wholesome object of the legislature of cautiously decentralised vesting of estates in local self governing units will be frustrated, if the State is to be a helpless spectator of its purposeful bounty being wasted or lost.
[1083 H; 1084 A B] (3)(a) The touchstone of 'appurtenance ' is dependence of the building on what appertains to it for its use as a building.
Obviously the hat, bazar, or mela is not an appurtenance to the building.
Even if the buildings were used and enjoyed in the past with the whole.
st.retch of.vacant space for a hat or mela, the land is not appurte nant to the principal subject granted by section 9, namely, buildings.
[1085 G] (b) The larger objective of section 9 is to settle with the former intermediary only such land as is strictly appurte nant to buildings, all the rest going to the State.
for implementation of the agrarian reform policy.
[1084 G] (c) The large open spaces cannot ,be regarded as appurtenant to the terraces, stands and structures.
What a integral is not necessarily appurtenant.
A position of subordination, something incidental or ancillary or depend ent is implied in appurtenance.
That much of space required for the use of the structures as such has been excluded by the High Court itself.
Beyond that may or may not be necessary for the hat or mela but not for the enjoyment of the chabutras as such.
[1085 B C] (d) 'Appurtenance ' in relation to a dwelling, includes all land occupied therewith and used for the purposes there of.
The word 'appurtenances ' has a distinct and definite meaning.
Prima facie it imports nothing more than what is strictly appertaining to the subject matter of the devise or grant.
What is necessary for the enjoyment and has been used for the purpose of the building, such as easement, alone will be appurtenant.
The. word 'appurtenance ' in cludes all the incorporeal hereditaments attached to the land granted or demised such as rights of way, but does not include lands in addition to that granted.
[1086 D E] (e) What the High Court has granted viz., 5 yards of surrounding space is sound in law.
[1086 H] 1074
| 3628.txt |
minal Appeal No. 164 of 1962.
Appeal from the judgment and order dated May 2, 1962, of the Allahabad High Court in Criminal Revision No. 1579 of 1961.
O. P. Rana and C. P. Lal, for the appellant.
Harnam Singh Chadda and Harbans Singh, for the respondent.
February 6, 1964.
The Judgment of the Court was delivered by AYYANGAR J.
This appeal which comes before us on a certificate of fitness granted by the High Court of Allahabad under article 134(1)(c) of the Constitution, is against a judgment of that Court acquitting the respondent Kartar Singh of an offence under section 7 read with section 16 (1)(a) (i) of the which may be conveniently referred to as the Act.
681 The facts giving rise to the prosecution are briefly these: The respondent runs a shop at Haldwani and among the products sold by him is ghee.
On March 19, 1960 a quantity of the ghee was purchased by the Food Inspector of the area and he put samples of the purchase into three phials which were sealed in the respondent 's presence.
It may be mentioned that even in the seizure memo the Food Inspector noted the ghee purchased by him as "pahadi ghee".
One of the samples was forwarded to the Public Analyst to the Government of Uttar Pradesh for analysis forascertaining whether the said ghee was adulterated.
The analysis disclosed that in several respects the samplewas sub standard and that in particular it had a ReichertValue of 22 5 as against the prescribed minimum of 28 for ghee in Uttar Pradesh.
After setting out the details of the ana lysis, the Public Analyst expressed the opinion that the sample "contained a small proportion of vegetable fat or oil foreign to pure ghee".
On receipt of this report, the Medical Officer of Health, Haidwani sanctioned the pro secution of the respondent and a complaint was thereafter laid before the Magistrate 1st Class by the Food Inspector.
The respondent pleaded not guilty and entered on his defence.
Subsequently, the second sample was got analysed by the Director, Central Food Laboratory, who reported that his analysis disclosed a Reichert Value of 21 7 as against 22 5 of the Public Analyst.
The opinion expressed by him as regards the sample of ghee which he analysed was the same as that of the Public Analyst, viz., that the sample was adulterated.
The defence of the respondent who admitted that he had sold the ghee, samples of which were the subject of analysis, but denied it was adulterated, was two fold: (1) He had obtained the ghee which he sold from Jodhpur, (2) The sample must be held not to be adulterated on the basis of the decision of the Allahabad High Court in State vs Malik Ram(1).
The plea by the respondent regarding the ghee sold having come from Jodhpur was made because if this were established under the rules framed under the Act, to which (1) A.I.R. 1962 AU.
682 we shall later refer, the minimum Reichert value prescribed for ghee in the Jodhpur area was 21 and that minimum re quirement was satisfied by the sample analysed.
The res pondent led evidence to prove his purchase from Jodhpur but the learned Magistrate did not accept this case.
The other defence was a point of law relying on the decision of a Division Bench of the Allahabad High Court reported as State vs Malik Ram(1).
The learned Judges who decided that case drew a distinction between ghee obtained from Cattle in the hill districts of Uttar Pradesh and those from cattle in the plains.
This decision was relied on by the respondent because the ghee sold by him was noted as 'pahadi ghee ' by the Food Inspector.
The learned Judges held that notwithstanding the terms of the rules to which we shall later refer, ghee obtained from hilly areas of Uttar Pradesh like Kumaun hills, could not be held to be adulterated if its Reichert value was equal to that prescribed for Himachal Pradesh which was mostly a hilly area.
They therefore held that though the rules under the Food Adulteration Act prescribed a minimum Reichert value of 28 for ghee for the entire State of Uttar Pradesh, still if ghee from hill areas of the Uttar Pradesh State reached a minimum of 26 Reichert value, such ghee would not be "adulterated ghee".
We shall consider the correctness of this decision after completing the narrative of the proceedings.
The learned Magistrate held that this decision did not affect the present case because the Reichert value of the respondent 's ghee was less than 26.The Magistrate therefore convicted the respondent andsentenced him to rigorous imprisonment for a period of sixmonths and a fine of Rs. 500 and in default to furtherimprisonment for three months.
The respondent preferred an appeal to the Sessions Judge Kumaon, and raised the same pleas and defences as he put forward before the learned Magistrate.
The Sessions Judge concurred in the finding of the Magistrate regarding the story of the respondent having bought the ghee from Jodhpur, and he also agreed with the Magistrate about the effect of the decision of the Division Bench of the High Court which was also relied on before him.
The (1) A.I.R. 1962 All.
683 Sessions Judge, however, while upholding the conviction reduced the sentence of imprisonment from six months to one month and the fine to Rs. 200.
The respondent thereupon filed a Criminal Revision petition to the High Court under sections 435 and 439 of the Criminal Procedure Code.
The learned Judge of the High Court agreed with the Courts below on the finding of fact as regards the Jodhpur origin of the ghee observing "as the file stands I am satisfied that this ghee was of local origin".
There was, of course, no point raised before him as regards the correctness of the analysis. 'Me learned Judge, however, held that the basis on which the Reichert value had been prescribed for the several areas in the country was not based on any rational classification and he therefore held that it was sufficient if any vendor of ghee in the country satisfied the minimum standards prescribed for any area under these rules.
As there were areas in the country in regard to which a minimum Reichert value of 21 had been prescribed, he held that the respondent was not guilty of adulteration and so directed his acquittal.
It is from this decision that the present appeal has been filed by the State.
Before considering the point about the standards prescribed under the Food Adulteration Act being violative of article 14, an Article which though not specifically mentioned, is apparently the ground upon which the learned Judge has held that the prescription of the Reichert value of 28 for Uttar Pradesh was unenforceable, it would be necessary to set out the statutory provisions on which the decision of the present appeal turns.
The preamble to the Act describes it as one "to make provision for the prevention of adulteration of food".
Section 2 defines the word 'adulterated ' as follows : "An article of food shall be deemed to be adulterated (i) if the quality or purity of the article falls below the prescribed standard or its constituents are present in quantities which are in excess of the prescribed limits of variability;" 684 to read only the portion that is material.
Section 3 enables the Central Government to constitute a committee for food standards and it runs "3.(1) The Central Government shall, as soon as may be after the commencement of this Act, constitute a Committee called the Central Committee for Food Standards to advise the Central Government and the State Governments on matters arising out of the administration of this Art and to carry out the other functions assigned to it under this Act.
(2) The Committee shall consist of the following members, namely: (a) the Director General, Health Services, ex officio, who shall be the Chairman; (b) the Director of the Central Food Laboratory, ex officio; (c) two experts nominated by the Central Government; (d) one representative each of the Central Ministries of Food and Agriculture, Commerce and Industry, Railways and Defence nominated by the Central Government; (e) one representative each nominated by the Government of each State; (f) two representatives nominated by the Central Government to represent the Union territories; (g) two representatives of Industry and Com merce nominated by the Central Government; (h) one representative of the medical profession nominated by the Indian Council of Medical Reserch".
685 Section 7 which prohibits the manufacture and sale of adulterated food reads: "No person shall himself or by any person on his behalf manufacture for sale, or store, sell or distribute (i) any adulterated food;. " Section 8 makes provision for State Governments appointing Public Analysts and section 9 for the appointment of Food Ins pectors.
The next material provision is that contained in section 13 which deals with the reports of the analysis of food for the purpose of ascertaining whether there are adulterat ed or sub standard etc.
Its first sub section directs the Public Analyst to make a report and under sub section
(3) the Certificate issued by the Director of the Central Food Laboratory under sub section
(2) is to supersede the report given by a Public Analyst under sub section
Section 16 provides for the penalties for offences under the ' Act.
Section 23 confers on the Central Government power to make rules but these rules have to be framed after consultation with the Committee established under section 3 and among the rules which might be made are Section 23(1)(b) defining the standards of quality for, and fixing the limits of variability permissible in respect of, any article of food;. . . "23.
(2) All rules made by the Central Government under this Act shall as soon as possible after they are made be laid before both Houses of Parliament.
" Under the power conferred by section 23, the Prevention of Food Adulteration Rules, 1955, were promulgated.
Rule 5 which occurs in Part III of the rules headed "Definitions and Standards of quality" specifies that "the standards of quality of the various articles of food specified in Appendix B to these rules are as defined in that appendix.
" Ghee is one of the articles of food whose standards are prescribed in Appendix B, milk and milk products being listed under head A 1 1.
Ghee is dealt with in item 14 of A 11 and the standard prescribed for it runs: Ghee means the pure clarified fat derived solely from milk or from curds or from cream to 686 which, no colouring matter or preservative has been added.
It shall conform to the following specifications in Punjab, Uttar Pradesh, Bhopal Vindhya Pradesh, Bihar, West Bengal (except Bishnupur) and PEPSU (except Mahendragarh): (a). . . (b) Reichert Value Not less than 28.
(c). . . . (d). . . .
In Madras, Andhra, Travancore Cochin, Hyderabad, Mysore, Orissa, Assam, Tripura, Manipur, Madhya Bharat, Bombay, Himachal Pradesh, Mahendragarh District of PEPSU, Madhya Pradesh (except cotton tract areas) and Rajasthan (except Jodhpur) the specifications will be the same as above except that Reichert value shall be not less than 26.0.
In Saurashtra, Kutch, cotton tract areas of Madhya Pradesh, Jodhpur Division of Rajasthan and Bishnupur Sub division of West Bengal the Reichert value shall not be less than 21 and the Butyro refractometer reading at 40 degree C shall be between 41 5 to 45.0.
The limits for free fatty acids and moisture shall be the same as for ghee in Punjab, PEPSU etc.
given above.
Explanation.
By cotton tract is meant the areas in Madhya Pradesh where cotton seed is extensively fed to the cattle.
The learned counsel for the State has urged before us that the learned Judge was not justified in striking down or re drafting the rules framed by the Central Government in the manner in which he has done, purporting to invoke article 14 of the Constitution, and in virtually setting up what he considered was the reasonable standard of quality which should determine whether the ghee sold by the respondent was adulterated or not.
We entirely agree with this submission.
Now, it is common ground that if the rules were valid and the standards prescribed enforceable, the ghee 687 sold by the respondent was 'adulterated ' with the result that the respondent was guilty of an offence under section 7 read with section 16 of 'the Act.
The only question is whether there was any material placed before the Court for refusing to apply the rules for determining the standards of quality.
The standards themselves, it would be noticed, have been prescribed by the Central Government on the advice of a Committee which included in its composition persons considered experts in the field of food technology and food analysis.
In the circumstances, if the rule has to be struck down as imposing unreasonable or discriminatory standards, it could not be done merely on any apriori reasoning but only as a result of materials placed before the Court by way of scientific analysis.
It is obvious that this can be done only when the party invoking the protection of article 14 makes averments with details to sustain such a plea and leads evidence to establish his allegations.
That where a party seeks to impeach the validity of a rule made by a competent authority on the ground that the rules offend article 14 the burden is on him to plead and prove the infir mity is too well established to need elaboration.
If, therefore, the respondent desired to challenge the validity of the rule on the ground either of its unreasonableness or its discriminatory nature, he had to lay a foundation for it by setting out the facts necessary to sustain such a plea and adduce cogent and convincing evidence to make out his case, for there is a presumption that every factor which is relevant or material has been taken into account in formu lating the classification of the zones and the prescription of the minimum standards to each zone, and where we have a rule framed with the assistance of a committee containing experts such as the one constituted under section 3 of the Act, that presumption is strong, if not overwhelming.
We might in this connection add that the respondent cannot assert any fundamental right under article 19(1) to carry on business in adulterated foodstuffs.
Where the necessary facts have been pleaded and established, the Court would have materials before it on which it could base findings, as regards the reasonableness or otherwise or of the discriminatory nature of the rules.
In 688 the absence of a pleading and proof of unreasonableness or arbitrariness the Court cannot accept the statement of a party as to the unreasonableness or unconstitutionality of a rule and refuse to enforce the rule as it stands merely because in its view the standards are too high and for this reason the rule is unreasonable.
In the case before us there was neither pleading nor proof of any facts directed to that end.
The only basis on which the contention re garding unreasonableness or discrimination was raised was an apriori argument addressed to the Court, that the division into the zones was not rational, in that hilly and plain areas of the country were not differentiated for the prescription of the minimum Reichert values.
That a distinction should exist between hilly regions and plains, was again based on apriori reasoning resting on the different minimum Reichert values prescribed for Himachal Pradesh and Uttar Pradesh and on no other.
It was, however, not as if the entire State of Himachal Pradesh is of uniform elevation or even as if no part of that State is plain country but yet if the same minimum was prescribed for the entire area of Himachal Pradesh, that would clearly show that the elevation of a place is not the only factor to be taken into account.
At this stage it might be pointed out that the test for Reichert or Reichert Meissl value of ghee is one of the important tests for detecting adulteration with certain vegetable oils by determining the proportion of the volatile soluble acids in the ghee.
The presence of the adulterant disturbs the ratio existing in normal butter fat or ghee between soluble and insoluble acids and volatile and non volatile acids.
The Reichert value of pure ghee is not constant, but is dependent on several factors among them the breed of the cattle to be found in an area, whether the cattle are pasture fed or stall fed, and the nature of the additional feed given, the nature of the terrain, the rain fall and climatic conditions etc.
That the feed available for the cattle is a very material and determining factor is apparent even from the rules, for a distinction is drawn between different areas of Madhya Pradesh depending on cotton seed being available for feeding the cattle.
It is on the basis of the conjoint effects of these and other factors which 689 obtain in the different areas, some pointing to a higher Reichert value and others neutralising it and after extensive survey conducted from samples collected and analysed during various seasons, that the country has been divided into zones under the rule in Appendix 'B ' and the minimum Reichert value ascertained and prescribed for each.
From the fact that certain areas included in some of the zones are hilly, it does not automatically follow that was the potent factor or the only factor which was taken into consideration for prescribing the standard for that region.
Without appreciating the several factors which bear upon the Reichert value of the ghee produced in a locality and the value attributed to each of these several relevant factors, it would not be possible to pronounce upon the reasonable ness or correctness of the classification of the areas and the prescription of different standards to each of them.
In State vs Malik Ram (1) a Division Bench of the High Court held that because certain areas of Uttar Pradesh were hilly, the Reichert value prescribed for the hilly areas like those in Himachal Pradesh should be adopted and be given effect to notwithstanding there was no ambiguity in the rules as regards the area where the prescribed standards should be applicable.
Except a principle which the Court deduced from the rules themselves there was no material before the Court that the minimum standard prescribed for Uttar Pradesh was defective in any respect.
The approach adopted by the learned Judges in Malik Ram 's case appears to us to be a reversal of the well recognised principle that it is for those who challenge the constitutionality of a statute or a statutory rule to allege and prove the grounds of invalidity and the adoption of the contrary rule that when a party makes such a challenge it is for those who seek to support it to sustain it by positive evidence of its reasonableness and legality.
The Court evolved from a reading of the rules a principle that the standards vary with the elevation of the place, without having before it any materials for such a conclusion save what it considered was the rationale underlying the division into zones.
As already explained, even in Himachal Pradesh the elevation of every place is not the same and there are areas which (1) A.I.R. 1962 All.
134 159 S.C. 44 690 are higher than others and so the test adopted does not even satisfy logic.
We do not consider that the Court was justified in practically legislating and laying down what the rules should be rather than give effect to the law by adherence to the rules as framed.
In the case now under appeal the learned Judge took the matter a step further and he adopted the lowest Reichert value prescribed for any area in the country as that which he would adopt for every other area in the country disre garding the rules.
We find no justification for this either and, in fact, if the learned Judges in Malik Ram 's case(1) were in error in applying the Himachal standard to hilly areas of Uttar Pradesh, the judgment now under appeal discloses even more error.
We might add that if one could legitimately discard the standard prescribed in the rules, as the learned Judge has done, we do not see any principle in holding, as he seems to indicate, that where the Reichert value is below 21 the ghee should be treated as adulterated.
We, therefore, hold that the learned Judge was not justified in allowing the revision of the respondent and acquitting him.
The result is that the appeal is allowed, the acquittal of the respondent is set aside and his conviction restored.
It was stated to us on behalf of the respondent that of the imprisonment for one month to which the sentence passed on him by the Magistrate was modified by the Sessions Judge, he had already undergone a sentence of 18 days.
He has been on bail practically since the admission of his Revision Petition in the High Court.
In the circumstances, we consider that the sentence of imprisonment passed on him might be reduced to the period already undergone.
The sentence of fine imposed will, however, stand.
Appeal allowed.
1) A.I.R. 1962 All.
| The respondent was tried for the commission of an offence under section 7 read with section 16(1)(a)(i) of the for selling adulterated ghee.
The analysis of the ghee had disclosed that it had a Reichert Value of only 22 5 whereas the minimum Reichert value fixed for Uttar Pradesh, where the respondent sold the ghee, was 28.
The defence of the respondent was that he had obtained the ghee which he sold from Jodhpur where the Reichert value fixed was only 22 and that the sample must be held not to be adulterated on the basis of the decision of the Allahabad High Court in State vs Malik Ram, A.1,R. 1962 All.
This decision laid down that a distinction should be made between ghee obtained from cattle in the hill districts and ghee obtained from cattle in the plains and that ghee obtained from the hill districts of U.P. cannot be held to be adulterated if its Reichert value was equal to that prescribed for Himachal Pradesh which is a hilly area.
It was the contention of the respondent that his ghee was admittedly pahadi ghee and therefore this decision would apply.
The First Class Magistrate rejected these contentions and convicted him and sentenced him to six months ' R.I. and a fine of Rs. 500.
On appeal the Sessions Judge concurred in the findings of the trial court but reduced the sentence.
The respondent thereupon filed a Criminal Revision Petition before the High Court.
The High Court agreed with the courts below that the ghee was not Jodhpur ghee but it was produced locally.
But it held that the Reichert values as fixed were not based on any reasonable classification and therefore it was sufficient if a vendor satisfied the minimum standard prescribed for any area in the country and since the minimum prescribed for certain areas is 21 and since the ghee in question had 22 2 the respondent was not guilty of the offence charged.
The State thereupon appealed to this Court by way of a certificate under article 134(1)(e) of the Constitution.
It was urged by the appellant that the High Court was wrong in striking down or re drafting the rules framed by the Central Government in the manner in which the High Court has done purporting to invoke 680 article 14 of the Constitution and virtually setting up what the High Court considered was the reasonable standard.
Held: (i) Where the Government have prescribed certain standards after taking into considerations various factors the court cannot strike down these standards as unreasonable or discriminatory merely on some priori reasoning.
It can do so only by basing its decision on materials placed before it by way of scientific analysis.
The party invoking article 14 must make averments with details to sustain such a plea and lead evidence to establish his allegations.
In the absence of such plea and evidence the court cannot accept the statement of a party as to the unconstitutionality of a rule and refuse to enforce that rule as it stands merely because in its view the standards are too high and for this reason the rule is unreasonable.
(ii) Applying these principles it is found that the case State vs Malik Ram (A.I.R. 1962 All. 156) was wrongly decided by the Allahabad High Court.
In the case under appeal the High Court took the matter a step further and adopted the lowest Reichert value prescribed for any area in the country as what should be adopted for every other area in the country disregarding the rules.
Hence the High Court was wrong in allowing the revisions.
| 1721.txt |
ecial Leave Petition (C) No. 8566 of 1988.
From the Judgment and Order dated 9.10.1987 of the Andhra Pradesh High Court in W.P. No. 306 of 1983.
R. Mohan for the Petitioner.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This petition is for leave to appeal under Article 136 of the Constitution from the judgment and order of the High Court of Andhra Pradesh dated 9th October, 1987.
The question that was urged before the High Court and the question which is sought to be raised in this petition is whether the respondent Pradesh Rayons Ltd. which is manufacturing Rayon Grade Pulp, a base material for manufacturing of synthetics or manmade fabrics is an industry as mentioned in Schedule I of the Water (Prevention and Control of Pollution) cess Act, 1977 for the purposes of levy of Water Cess under the Act.
The water (Prevention and Control Of Pollution) Act, 1974 was passed by the Parliament to "provide for the prevention and control of water pollution and the maintaining or restoring of wholesomeness of water, for the establishment, with a view to carrying out the purposes aforesaid, of Boards for the prevention and control of water pollution, for conferring on and assigning to such Boards powers and functions relating thereto and for matters connected therewith".
For the aforesaid purposes, the Act contemplated creation of State Boards at State level and the Central Board at the national level.
Thereafter, the being Act 36 of 1977 was passed (hereinafter called 'the Act ').
The preamble to the said Act states that the said Act was "to provide for the levy and collection of a cess on water consumed by persons carrying on certain industries and by local authorities, with a view to augment the resources of the Central Board and the State PG NO 383 Boards for the prevention and control of water pollution constituted under the ".
Therefore, the said Act was passed only for the purpose of providing for levy and collection of cess on water consumed by persons carrying on certain industries with a view to augment the resources of the Central Board and the State Boards.
Section 2(c) stipulates A `specified industry ' means any industry specified in Schedule T. Section 3 provides as follows: "3.
Levy and collection of cess. (1) There shall be levied and collected a cess for the purposes of the and utilisation thereunder.
(2) The cess under sub section ( I) shall be payable by (a) every person carrying on any specified industry; and (b) every local authority, and shall be calculated on the basis of the water consumed by such person or local authority, as the case may be, for any of the purposes specified in column (1) of Schedule II, at such rate, not exceeding the rate specified in the corresponding entry in column (2) thereof, as the Central Government may, by notification in the Official Gazette, from time to time, specify.
" Therefore, this section provides for levy and collection of cess from the specified industries.
Specified industry is one which is mentioned in Schedule I which is as follows: "1.
Ferrous metallurgical industry.
Non ferrous metallurgical industry.
Mining industry.
Ore processing industry.
Petroleum industry.
Petro chemical industry.
Chemical industry.
Ceramic industry.
PG NO 384 9.
Cement industry.
Textile industry 11.
Paper industry.
Fertilizer industry.
Coal (including coke) industry.
Power (thermal and diesel) generating industry.
Processing of animal or vegetable products industry.
" Therefore, the short question, is, whether the industry run by the respondent herein for manufacturing Rayon Grade Pulp, a base material for manufacture of synthetics or man made fabrics is one of the industries mentioned in Schedule I hereinbefore.
In this case, the respondent company was registered as company in 1975.
The supply of energy to the company commenced on August 22, 1981 and the production began from September 1, 1981.
The company manufactures rayon grade pulp of 26250 tonnes per annum.
The Company was served with a notice on 12th August, 1981 to furnish the quantum of water consumed for assessment under the Act.
Based on the returns filed by the respondent as required under section S of the Act, assessment of water cess was made by an order dated 31st December 1981.
Aggrieved by the said order the respondent filed an appeal before the Appellate Committee constituted under the Act.
The Appellate committee by its order dated 30th November, 1982 conformed the orders of the assessment passed by the petitioner.
Before the Appellate Committee various contentions were urged and only one of such contention survives now and is agitated before us, namely, that the Rayon Industry is nOt included in Schedule I of the said Act.
The Appellate Committee by its order said as follows: "We are unable to agree with the arguments advanced by the learned counsel.
The appellant industry is manufacturing Rayon Grade Pulp which comes under the category of textile industry as it involves the production of Rayon Grade Pulp.
a base material for manufacture of synthetic of man made fibres. ' ' PG NO 385 From the aforesaid, it appears that the Appellate Committee was of the view that the respondent herein was manufacturing Rayon Grade Pulp which comes under the category of Textile mentioned in Schedule I of the Act.
Textile industry is item No. 10 in the aforesaid Schedule.
Aggrieved by the decision of the Appellate Committee, the respondent herein filed writ petition challenging the constitutional validity of the Act as well as the levy of cess on water on the ground that it was not one of the industries mentioned in the Schedule.
The High Court by its order dated 9th October, 1987 rejected the contention relating to the constitutional validity but upheld the contention that the respondent 's industry was not an industry which is mentioned in Schedule I and as such was not liable to pay cess.
It is the propriety or the correctness of that decision which is sought to be canvassed before us by this petition.
It must, therefore, be made clear that we are not concerned with the correctness or otherwise of the decision of the High Court about the constitutional validity of the Act in question.
That is not at issue before us since the petitioner, Andhra Pradesh State Board for Prevention and Control of Water Pollution has not challenged that finding.
The only question is whether the respondent is an industry as mentioned in the aforesaid schedule.
The High Court in the impugned judgment has held that Rayon Grade Pulp is not covered by any of the items specified in the said Schedule.
We are of the opinion that the High Court was right.
Before us it was sought to be canvassed that Rayon Grade Pulp is covered either by Item No. 7 which is chemical industry or 13y item No. 10 which is textile industry or item No. I1 which is paper industry.
We are unable to accept the contention.
It has to be borne in mind that this Act with which we are concerned is an Act imposing liability for cess.
The Act is fiscal in nature.
The Act must, therefore, be strictly construed in order to find out whether a liability is fastened on a particular industry.
The subject is not to be taxed without clear words for that purpose; and also that every Act of Parliament must be read according to its natural construction of words.
See the observations in Re Micklethwait, ; , 456.
Also see the observations in Tenant vs Smith, ; and Lord Halsbury 's observations at page 154.
See also the observations of Lord Simonds in St. Aubyn vs AG, ; at 485.
Justice Rowlatt of England said a long time ago, that in a taxing ACt one has to look merely at what is clearly said.
There is no room for any intendment.
There is no equity about a tax.
There is no presumption at to tax.
Nothing is to be read in, nothing is to be implied.
One has to look fairly at the language used.
See the observations in Cape Brandy Syndicate vs IRC, [1921]J 1 KB PG NO 386 64 at 71.
This Court has also reiterated the same view in Gursahai Saigal vs C.I.T. Punjab, ; ; S.L. T. Madras vs V. MR.
P. Firm, Muar, [1965] I SCR 815.
and Controller of Estate Duty Gujarat vs Kantilal Trikamlal, ; The question as to what is covered must be found out from the language according to its natural meaning fairly and squarely read.
See the observations in IRC vs Duke of Westminster, [1936] AC I at 24, and of this Court in A V Fernandez vs The State of Kerala, ; Justice Krishna Iyer of this Court in Martand Dairy & Farm vs Union of India, has observed that taxing consideration may stem from administrative experience and other factors of life and not artistic visualisation or neat logic and so the literal, though pedestrian, interpretation must prevail.
In this case where the question is whether a particular industry is an industry as covered in Schedule I of the Act, it has to be judged normally by what that industry produces mainly.
Every industry carries out multifarious activities to reach its goal through various multifarious methods.
Whether a particular industry falls within the realm of taxation, must be judged by the predominant purpose and process and not by any ancillary or incidental process carried on by a particular industry in running its business.
Chemical process would be involved to a certain extent, more or less in all industries, but an industry would be known as a chemical industry if it carries out predominantly chemical activities and is involved in chemical endeavours.
We fail to see that Rayon Grade Pulp could be considered even remotely connected as such with chemical industry or textile industry or paper industry.
In all preparations, there is certain chemical process but that does not make all industries chemical industries.
The expression "chemical" means, according to Collins English Dictionary.
any substance used in or resulting from a reaction involving changes to atoms or molecules or used in chemistry.
The Concise Oxford Dictionary, 8th Edition page 170 defines "chemical ' ' as made by or relating to, chemistry.
Broadly and literally, in our opinion, it can be said that the Rayon Grade Pulp is neither chemical industry nor textile industry nor paper industry.
We find it difficult on a broad and literal construction to bring the industry of the respondent into any of these categories.
In other words, to find out the intention of the legislation, if possible it should be PG NO 387 found out from the language used in case of doubt.
The purpose of legislation should be sought for to clarify the ambiguity only, if any.
The fairest and most rational method, says Blackstone, to interpret the will of the legislator is by exploring his intentions at the time when the law was made, by signs the most natural and probable.
And these signs are either the words, the context, the subject matter, the effects and consequence, or the spirit and reason of the law.
See Commentaries on the Laws of England by Blackstone (facsimile of 1st edition of 1765, University of Chicago Press, 1979 Vol. 1 p. 59.).
The words are generally to be understood `in their usual and most known signification ', although terms of art `must be taken according to the acceptation of the learning in each art, trade and science.
If words happen still to be dubious, we may establish their meaning from the context, which includes the preamble to the statute and laws made by the same legislator on the same subject.
Words are always to be understood as having regard to the subject matter of the legislation.
See Cross Statutory Interpretation, 2nd Edition page 21.
This Court in Lt Col. Prithi Pal Singh Bedi etc.
vs Union of India & Ors., [1983] I S.C.R. 393 at page 404 of the report reiterated that the dominant purpose in construing a statute is to ascertain the intention of the Parliament.
One of the well recognised canons of construction is that the legislature speaks its mind by use of correct expression and unless there is any ambiguity in the language of the provision the Court should adopt literal construction if it does not lead to an absurdity.
Therefore, the first question to be posed is whether there is any ambiguity in the language used.
If there is none, it would mean the language used, speaks the mind of Parliament and there is no need to look somewhere else to discover the intention or meaning.
If the literal construction leads to an absurdity, external aids to construction can be resorted to.
To ascertain the literal meaning it is equally necessary first to ascertain the juxtaposition in which the rule is placed, the purpose for which it is enacted and the object which it is required to subserve and the authority by which the rule is framed.
Bearing the aforesaid principle in mind, we find that there is no absurdity in the literal meaning.
The purpose of the Act is to realise money from those whose activities lead to pollution and who must bear the expenses of the maintenance and running of the State Board.
It is a fiscal provision and must, therefore, not only be literally construed but also be strictly construed.
Having regard to the literal expression used and bearing in mind the purpose for the legislation, we arrive at a result that certain PG NO 388 industries have to pay the expenses of the maintenance and functioning of the State Boards.
Considering the principle broadly and from commonsense point of view, we find nothing to warrant the conclusion that Rayon Grade Pulp is included in either of the industries as canvassed on behalf of the petitioner here and as held by the High Court in the judgment under appeal.
In this case, we must also note that neither the water Pollution Board nor any authorities under the Act nor the High Court proceeded on any evidence how these expressions are used in the particular industry or understood in the trade generally.
In other words, no principle of understanding in "common parlance" is involved in the instance case.
In that view of the matter, we are of the opinion that the contention sought for by the petitioner is of no substance.
Our attention, however, was drawn to the decision of a learned single Judge of the High Court of Kerala in M/s. Gwalior Rayon Silk Mfg.
(Wvg.) Co. Ltd., Mavoor vs The Appellate Committee for Water Cess, Trivandrum and others, A.I.R. 1983 Kerala 110.
There, the learned single Judge of the Kerala High Court held that industry manufacturing rayon grade pulp is chemical industry.
The High Court has observed that the product of the Pulp Division of a rayon silk manufacturing company is rayon grade pulp, extracted from bamboo or wood.
The High Court noted that the pulp produced in the Pulp Division of the company is the raw material for the Staple Fibre Division.
The High Court further observed that the pulp in question is a chemical used as chemical raw material, in the form known as chemical cellulose, for preparation of fibres.
The High Court noted that for the scientist cellulose is a carbohydrate an organic compound, a saccharide and for the layman also it is a chemical like salt and sugar.
Manufacture of pulp from wood or bamboo involves consumption of large quantities of water which get polluted in the process; and "chemical industry ' ' in the context in which it is used in Schedule I of the Act, can therefore, include an industry manufacturing rayon grade pulp.
We are unable, with respect, to accept the circuitous process of reasoning of the Kerala High Court.
As mentioned hereinbefore, looked at from this circuitous method every industry would be chemical industry.
It could not have been the intention to include all industries because every industry has to go to certain chemical process more or less and, therefore, it could not be so construed.
Such expression should, therefore, be construed reasonably, strictly and from a commonsense point of view.
The High PG NO 389 Court of Kerala has set out in the said judgment the company 's case in that case which also produced Rayon Grade Pulp and the manufacturing process consisted only of isolating cellulose present in bamboo and wood by removal of "lignin" and other contents, and that the resultant product is not chemical cellulose.
It explained the process as under: "The actual process of manufacture of Rayon grade pulp is by feeding the raw materials on the conveyors leading to the chippers, where they are chipped into small pieces in uniform sizes.
The raw materials are washed by a continuous stream of water before they are fed into chippers for removal of their adhering mud and dirt.
The chips are then conveyed into Digesters, where they are subjected to acid pre hydrolysis, using dilute sulphuric acid solution.
The spent liquor is then drained out, and the chips washed to remove the acid.
The chips are again cooked using a solution containing cooking chemicals at high temperature of above 160C. After the chips are thus cooked the pressure is released, and the material is collected in a blow tank, from where the chipped pulp is sent to "Knotter Screen" for removal of uncooked particles.
The pulp is washed in a series of washers in a counter current manner.
The washed pulp is bleached in a multi staged Bleaching Plant, and converted into sheets in a continuous machine.
The pulp sheets so obtained are sent to other factories for their conversion into Staple Fibre.
" The said High Court also relied on a passage from the "Book of Popular Science" Grolier, 1969, Vol. 7, p. 55 which reads as follows: "Just what is a chemical, after all? Presumably it is a pure chemical substance (an element or compound) and not a mixture.
Thus sulphuric acid is a chemical .
But common salt and sugar, with which all of us are familiar, are also pure chemical substances .
The truly chemical industries, which manufacture chemicals, are seldom well known to the public.
This is because we, as consumers, do not ordinarily make use of chemicals in their pure form.
Instead they are converted into products that reach the consumer only after a number of operations . " (Emphasis supplied) PG NO 390 As mentioned hereinbefore, the expression should be understood not in technical sense but from broad commonsense point of view to find out what it truly means by those who deal with them.
Bearing the aforesaid perspective in mind, we are unable to agree with the view of the Kerala High Court expressed in the aforesaid judgment.
In that conspectus of the Kerala High Court everything would be included in the process of chemical.
In the aforesaid view of the matter we are of the opinion that the High Court of Andhra Pradesh in the impugned judgment was right and the High Court of Kerala in the judgment referred to hereinbefore was not right.
In the aforesaid view of the matter this petition fails and is accordingly dismissed.
| The respondent, Andhra Pradesh Rayons Ltd., manufacturing Rayon Grade Pulp, a base material for the manufacture of synthetics or man made fabrics, was assessed by the petitioner under the provisions of which provided for levy and collection of Water cess from the specified industries enumerated in Schedule I of the Act.
On appeal, the Appellate late Committee confirmed the order of assessment on the ground that the respondent was manufacturing Rayon Grade Pulp which came under the category of Textile industry.
The respondent filed a writ in the High Court challenging the levy Inter alia on the ground that it was not one of the industries mentioned in the Schedule.
The High Court upheld this contention.
Before this Court, it was sought to be canvessed by the petitioner that Rayon Grade Pulp was covered either by Item No. 7 of the Schedule, which was chemical industry, or item No. 10 which was textile industry, or item No.11 which was paper industry.
Dismissing the petition, it was, PG NO 380 PG NO 381 HELD: (I) The Act being fiscal in nature must be strictly construed.
The question as to what is covered must be found out from the language according to its natural meaning, fairly and squarely read.
[385F; 386B] (2) In a taxing Act one has to look merely at what is clearly said.
There is no room for any intendment.
There is no equity about a tax, there is no presumption as to tax.
Nothing is to be read in, nothing is to be implied.
[385H] (3) Whether a particular industry is an industry covered in Schedule I has to be judged normally by what that industry produces mainly, its predominant purpose and process, and not by any ancillary or incidental process carried on by it.
[386D] (4) Chemical process would be involved to a certain extent, more or less in all industries, but an industry would be known as a chemical industry if it carries out predominantly chemical activities and is involved in chemical endeavours.
[386E] (5) Taxing consideration may stem from administrative experience and other factors of life and not artistic visualisation or neat logic and so the literal, though pedestrian, interpretation must prevail.
[386C] (6) One of the well recognised canons of construction is that the legislature speaks its mind by use of correct expression and unless there is any ambiguity in the language of the provision the Court should accept literal construction if it does not lead to an absurdity.
[387E] (7) There is no absurdity in the literal meaning.
Broadly and literally it can be said that the Rayon Grade Pulp is neither chemical industry nor textile industry nor paper industry.
[387G;386H] In Re Micklethwait., [1885] II EX 452. 456; Tenant vs Smith; , ; St. Aubyan vs AG., [1951] 2 All E.R. 473; Cape Brandy Syndicate vs IRC.
, at 71; Gursahai Saigal vs C.I.T. Punjab, ; ; C.I.T. Madras vs MR.
P. Firm, Muar, ; ; Controller of Estate Duty, Gujarat vs Kantilal Trikamlal, ; ; IRC vs Duke of Westminster, at 24; AV Fernandez vs The State of Kerala, ; ; Martand Dairy & Farm vs Union of India, [1975] Supp.
SCR 265; Lt Col. Prithi Pal Singh Bedi vs Union of India, , referred to.
PG NO 382 M/s. Gwalior Rayon Silk Mfg.
(Wvg.) Co. Ltd. Mavoor vs The Appellate Committee for Water Cess, Trivandrum, A.I.R. 1983 Kerala 110.
overruled.
| 5865.txt |
il Appeal.
No. 1745 of 1968.
(Appeal by Special Leave from the Judgment and Order dated 13 10 1967 of the Punjab and Haryana High Court in Civil Writ No. 1113 of 1966).
O.P. Sharma, for the appellants.
section K, Mehta, K.R. Nagaraja and P.N. Puri, for the Respond ents, The Judgment of the Court was delivered by BEG, J.
The State of Punjab has come up by special leave against the judgment of a Division Bench of the High Court o[ Punjab & Haryana allowing the Writ petition of the respondents who, it is admitted by the State, are teachers of the Junior Vernacular grade working, on the dates on which they filed the Writ petition, as "promotees" in the senior vernacular grade temporarily but had not been con firmed there.
It appears that the only difference between the junior vernacular cadre and the senior vernacular cadre is that those who teach lower classes were placed in the "junior" cadre and those who teach higher classes were in the "senior vernacular cadre".
But, for some reason, working in senior vernacular cadre was considered a promotion.
After consideration of the whole position, the two grades were integrated by the Government from 1st October.
1957, with retrospective effect, under the Punjab Educational Service 833 (Provincialised Cadre) Class III Service Rules, 1961.
This meant that the Government recognised that both the cadres should be really considered as one and that there were no acceptable grounds for a differentiation.
Nevertheless, it appears that the names of the petitioners were dropped from the junior vernacular cadre as they had been working for more than the probationary period in the senior vernacular cadre.
It is urged that it must be deemed that they were confirmed in the senior vernacular cadre automatically.
However, they had to be "probationers" in the senior cadre for such a result to enure.
We fail to see how they become "probationers" there.
Curiously, the prospects of those who were not considered "promoted" to the senior vernacular cadre and were junior to the petitioners respondents in that cadre, improved as they were offered opportunities of being taken in a "selection grade".
But, no such opportunities were offered to the petitioners on the ground that they had been removed from the junior vernacular cadre.
The names of the petitioners respondents had been automatically dropped from the cadre in which they held their liens having been appointed there initially permanently.
The High Court of Punjab & Haryana held that the peti tioners respondents are entitled to the benefit of their substantive posts, which were still in the junior vernacular cadre, as they were never confirmed in the senior vernacular cadre whatever may be the sentimental satisfaction of being considered as persons "promoted" to and working in the "senior vernacular cadre".
Subsequent events showed that those who are junior to the petitioners, and, for that reason, did not get the opportunity of serving in the "senior" cadre, had better opportunities offered to them without any reasonable ground of discrimination between the two cadres except that the petitioners were seniors and could consider themselves "promoted" because they had been performing the duties of teachers of the "senior" cadre.
The petitioners, after discovering that those who were junior to them and had, therefore, not been given the oppor tunity of serving in the senior vernacular cadre, had a better opportunity of moving into the selection grade, which had not been offered to them, applied for this very opportunity as they still continued in their substantive posts which were in the junior vernacular cadre.
They took up the correct position that they had merely been officiat ing in the senior vernacular cadre but their right places were in the junior vernacular cadre.
The mere fact that they worked in the senior cadre for longer periods than proba tioners would could not give them the status of either more probationers or persons Confirmed in the senior vernacular cadre.
They could not, for that reason alone, be deprived of the benefits of their substantive appointments in the junior vernacular cadre.
Hence, their Writ Petitions were allowed and they were afforded all the benefits which would have accrued to them as members of the junior vernacu lar cadre to which they did not really cease to belong.
Moreover, as already pointed out, the Government had itself considered the position and had integrated the two cadres into one with retrospective effect from 1st October, 1957.
834 The position of the petitioners appears to us to be fully covered by the following rules contained in the Punjab Civil Services Rules Volume I: "3.10.
Unless in any case it be other wise distinctly provided the whole time of a Government servant is at the disposal of the Government which pays.
him and he may be employed in any manner required by proper authority, without claim or additional remu neration, whether the services required of him are such as would ordinarily be remunerated from Union or State revenues, or from the revenues of a local fund.
Substantive Appointment and Lien.
(a) Two or more Government serv ants cannot be appointed substantively to the same permanent post at the same time.
(b) A Government servant cannot be appointed substantively except as a temporary measure, to two or more permanent posts at the same time.
(c) A Government servant cannot be appointed substantively to a post on which another Government servant holds a lien.
Unless in any case it be otherwise provided in these rules, a Government servant on substantive appointment to any permanent post acquires a lien on that post and ceases to hold any lien previously acquired on any other post.
Unless his lien is suspended under rule 3.14 or transferred under rule 3.16, a Government servant holding substantively a permanent post retains a lien on that post (a) while performing the duties of that post; (b) while on foreign service, or holding a temporary post, or officiating in another post; (c) during joining time on transfer to another post, unless he is transferred sub stantively to a post on lower _pay, in which case his lien is transferred to the new post from the date on which he is relieved of his duties in the old post; (d) except as provided in Note below while on leave; and (e) while under suspension.
(a) A competent authority shall suspend the lien of a Government servant on a permanent post which he 835 holds substantively, if he is appointed in a substantive capacity: (1) to a tenure post, or (2) to a permanent post outside the cadre on which he is borne.
or (3) provisionally, to a post on which another Government servant would hold a lien, had his lien not been suspended under rule.
(b) A competent authority may, at its option, suspend the lien of a Government servant on a permanent post which he holds substantively if he is deputed out of India or transferred to foreign service, or in circumstances not covered by clause (a) of this rule, is trans ferred, whether in a substantive or officiat ing capacity, to a post in another cadre, and if in any of these cases there is reason to believe that he will remain absent from the post on which he holds a lien, for a period of not less than three years.
(c) Notwithstanding anything contained in clause (a) or (b) of this rule, a Government servant 's lien on a tenure post may, in no circumstances, be suspended.
If he is appointed substantively to another permanent post, his lien on the tenure post must be terminated.
(d) If a Government servant 's lien on a post is suspended under clause (a) or (b) of this rule, the post may be filled substantive ly, and the Government servant appointed to hold it substantively shall acquire a lien on it: Provided that the arrangements shall be reversed as soon as the suspended lien re vives.
(e) A Government servant 's lien which has been suspended under clause (a) of this rule shall revive as soon as he ceases to hold a lien on a post of the nature specified in sub clause (1), (2) or (3) of that clause.
(f) A Government servant 's lien which has been suspended under clause (b) of this rule shall revive as soon as he ceases to be on deputation out of India or on foreign service or to hold a post in another cadre: Provided that a suspended lien shall not revive because the Government servant takes leave if there is reason to believe that he will, on return from leave, continue to be on deputation out of India or on foreign service or to hold a post in another cadre and the total period of absence on duty will not fall short of three years or that he will hold substantively a post of the nature specified 'in sub clause (1 ), (2) or (3) of clause (a).
(a) Except as provided in clause (c) of this rule and in note under rule 3.13, a Government servant 's 836 lien on a post may, in no circumstances, be terminated, even with his consent, if the result will be to leave him without a lien or a suspended lien upon a permanent post.
(b) In a case covered by sub clause (2) of clause (a) rule 3.14 the suspended lien may not, except on the written request of the Government servant concerned, be terminated while the Government servant remains in Government service.
(c) Notwithstanding the provisions of rule 3.14(a).
the lien of a Government serv ant holding substantively a permanent post shah be terminated on his appointment substan tively to the post of Chief Engineer of the Public Works Department.
Subject to the provisions of rule 3.17, a competent authority may transfer to another permanent post in the same cadre the lien of a Government servant who is not performing the duties of a post to which the lien relates, even if that lien has been suspended.
" According to the rules set out above, the lien of the petitioners in the junior vernacu lar cadre was retained by them and it could not be suspended by the mere fact that they were performing the duties of teachers working in ' the senior vernacular cadre.
Nothing beyond this was disclosed by the facts of these cases.
The definition of a probationer, given in rule 2.49 is as follows: "2.49.
Probationer means a Government servant employed on probation in or against a substantive vacancy in the cadre of a depart ment.
This term does not, however, cover a Government servant who holds substantively a permanent post in a cadre and is merely appointed on probation ' to another post".
Learned Counsel for the State was unable to substantiate the submission that the petitioners respondents were merely probationers the senior vernacular cadre and not really persons whose substantive posts were in the junior vernacu lar cadre, appointed to perform the duties of persons put in another cadre.
Their duties in the senior cadre involved teaching somewhat higher classes.
This additional experience could not reasonably be looked up as a disquali fication for the selection grade.
The High Court had, therefore, given the petitioner respondents the benefits of the cadre on which their names should have been retained.
Moreover, this is not a question which can arise again as the two different cadres have been merged with retrospective effect from 1st October, 1957.
It meant that they were enti tled to be considered for the selection grade, and, if they satisfy the requirements for selection to get the benefits of it.
Consequently, we dismiss this appeal with costs.
M.R. Appeal dis missed.
| The respondents, teachers of the Junior vernacular cadre, Punjab, were promoted to the senior vernacular cadre temporarily.
After the expiry of their probationary period, they were not confirmed, but continued to work in the senior cadre and their names were dropped from the junior vernacu lar cadre.
Mean while, other teachers, junior to the re spondents in the junior cadre were offered better opportuni ties of being taken in a "selection grade".
The respondents filed a writ petition in the High Court contending that they were entitled to the opportunity of moving into the selection grade, as they were neither probationers nor confirmed members but were only officiating in the senior cadre while retaining their substantive places and liens in the junior cadre.
The High Court allowed the writ.
Dismissing the appeal the Court.
HELD: The state was unable to substantiate the submis sion that the petitioners respondents became probationers in the senior vernacular cadre.
According to the rules, their lien in the junior vernacular cadre was retained by them, and, it could not be suspended by the mere fact that they were performing the duties of teachers working in the senior vernacular cadre.
[836 D E]
| 3605.txt |
Appeal No. 380 of 1965.
Appeal from the judgment and decree dated May 23, 1963 of the Allahabad High Court, Lucknow Bench in First Civil Appeal No. 70 of 1950.
429 C. B. Agarwala, Ishtiaq Ahmad Abbasi, section Rehman and, C. P. Lal, for the appellants.
section P. Sinha, Mohammad Hussain and section section Shukla, for the respondents Nos. 1 and 3.
The Judgment of the Court was delivered by Shah, J.
By our judgment dated April 19, 1968, we passed the following order in this appeal : "It will be declared that the deed of trust executed by Raja Bishwanath on August 29, 1932, did not operate to settle any property being part of the taluqdari estate and governed by the Oudh Estates Act 1 of 1869, for the purposes specified therein.
" The Senior Raj Kumar applied for review of judgment on the ground that the deed of trust dated August 29, 1932, settled properties non taluqdari as well as taluqdari and the Court at the earlier hearing did not make any order as to the revolution of the non taluqdari property.
Apparently at the earlier hearing no argument on the matter now sought to be raised was advanced, though the hearing lasted for several days.
We have, however, granted review of judgment and heard the parties on the question whether a different rule of revolution prevails in respect of properties which are non taluqdari.
We have held that on the death of Raja Surpal Singh the taluqdari estate of Tiloi vested in Rani Jagannath Kuar, and she continued to hold the property as life owner under section 22(7) of the Oudh Estates Act, even after she adopted Raja Bishwanath Singh on February 21, 1901, and so long as she was alive Raja Bishwanath Singh had no interest in the estate which he could settle or convey.
The deed of settlement was executed by Raja Bishwanath Singh during the lifetime of Rani Jagannath Kuar and did not operate to convey the taluqdari estate.
Counsel for the Senior Raj Kumar contends that even if Raja Bishwanath had no interest in the taluqdari estate, under the ordinary Hindu law, on adoption the non taluqdari property left by Raja Surpal Singh vested in Raja Bishwanath Singh and he was competent under the deed of settlement to dispose of the property in the manner directed by that deed.
Counsel says that the revolution of non taluqdari property is governed by the rules of Hindu law, and that on adoption of a son by Rani Jagannath Kuar her interest in the property was divested and the adopted son became the owner of the property.
430 Counsel for the Junior Raj Kumar resists this claim.
Section 8 of the Oudh Estates Act 1 of 1869 provides for the preparation of lists of taluqdars and grantees, and the second list prepared under that section is a list of taluqdars whose estates, according to the custom of the family on and before the 13th day of February, 1856, ordinarily devolved upon a single heir.
The taluqdari estate of Tiloi was entered in the second list.
By section 10 of the Act .it is provided : "No persons shall be considered taluqdars or grantees within the meaning of the Act, other than the persons named in such original or supplementary lists as aforesaid.
The Courts shall take judicial notice of the said lists and shall regard them as conclusive evidence that the persons named therein are such taluqdars or grantees. ' Section 22 of the Act prescribes a special mode of succession to intestate taluqdars and grantees.
By cl.
(6) of section 22 in default of any brother, or a male lineal descendant, the estate devolves upon the widow of the deceased taluqdar or grantee, heir or legatee, for her life time only, and by cl.
(7) on the death of the widow, the estate devolves upon such son as the widow shall, with the consent in writing of her deceased husband, have adopted, and his male lineal descendants.
The Tiloi Estate which was a taluqdari estate, therefore, devolved upon Rani Jagannath Kuar and she held that estate during her life time.
The rule of Hindu law that on the adoption of a son by a widow to her deceased husband, the estate vests in the adopted son, is by the express provisions of cls.
(6) & (7) of section 22 of the Oudh Estates Act inapplicable to taluqdari estates.
That was so held in our earlier judgment dated April 19, 1968, and on that account the claim of the Senior Raj Kumar to take the taluqdari estate under the deed of settlement 'was negatived.
It was decided by the Judicial Committee of the Privy Council that it will be presumed that the non taluqdari estate of a taluqdar governed by the Oudh Estates Act, 1869, is governed by the same rules which govern succession to the taluqdari estate.
In Rani Huzur Ara Begam and Anr.
vs Deputy Commissioner, Gonda(.), the Judicial Committee held that the entry of a taluqdar in List 2 prepared under section 8 of the Oudh Estates Act, 1869, which raises an irrebuttable presumption of single heir succession to the taluqdari property also raises a presumption, rebuttable by evidence proving a different rule of revolution, that the family custom of ,single heir succession applicable to the taluqa governs the suc (1) L.R. 65 I.A. 397.
431 cession to the non taluqdari property, movable as well as immovable, of the taluqdar.
In that case the taluqdar of Utraula Estate obtained decrees for recovery of money against a debtor.
The taluqdar died on March 4, 1934, leaving him surviving a widow, a daughter and two sons.
The widow on behalf of herself and as the guardian of her daughter filed applications for execution of the decrees obtained by the taluqdar.
The execution was resisted on the ground that the widow and the daughter had no right to enforce the decrees because the right to the decrees had devolved upon the eldest son who was under the Oudh Estates Act the, sole heir under the law and family custom of single heir succession.
The Board upheld the contention raised ,by the judgment debtor.
They observed : "Now, the taluqdar of the Utraula Estate is named in list 2 of the taluqdars prepared under section 8 of the Oudh Estates Act, 1 of 1869, whose estate, according to the custom of the family on or before February 13, 1856, ordinarily devolved upon a single heir.
Section 10 of the statute provides that the Court shall take judicial notice of the said list and regard as conclusive the fact that the person named therein is such taluqdar.
In other words, there was a pre existing custom attaching to the estate on which its inclusion in list 2 was based.
There is, therefore, an irrebuttable presumption in favour of the existence of the custom of the family by which the estate devolves on a single heir, but the provision as to the conclusiveness of the custom is confined to the estate coming within the ambit of the statute.
It does not apply to any property which is not comprised in the estate or taluqa.
What is the rule which governs succession to non taluqdari property ? If immovable property forming part of the taluqa is governed by the custom of single heir succession, there is no prime facie reason why immovable property which is not comprised in the taluqa should follow a different rule.
Indeed, it has been decided by this Board that there is a presumption that the rule as to succession to a taluqa governs also the succession to non taluqdari immovable property: Murtaza Husain Khan vs Mahomed Yasin.
Ali Khan [(1916) L.R. 43 I.A. 269].
It must, therefore, be taken as a settled rule that, whereas the entry of a taluqdar in list 2 is conclusive evidence that this taluqa is governed by the rule of revolution on a single heir, it raises also a presumption that the family custom applying to a taluqa governs also the succession to non taluqdari immovable property." 432 Counsel for the Senior Raj Kumar contended that the rule enunciated by the Judicial Committee in Rani Huzur Ara Begam 's case(1) applies only to Muslims and has no application to Hindus.
Counsel submitted that in Murtaza Husain Khan vs Mahomed Yasin Ali Khan(2) Mr. Ameer Ali delivering the judgment of the Board explained that the reason of the rule is that the presumed custom applies to the acquired property of a Muslim taluqdar since under the Mahomed an law, ancestral and self acquired properties are subject to the same rule of descent, and that in the case of self acquired property of a Hindu taluqdar, the presumed custom only affects the succession upon proof that the property was incorporated with the taluqa, either by intention of the owner or by family custom.
It is true that in Rani Huzur Ara Begam 's case(2) the dispute related to the succession to the estate held by a Muslim taluqdar, but the Board in that case relied upon the observations at p. 148 in Thakur Ishri Singh vs Baldeo Singh(3) a case of Hindu succession to a taluqdari held by a Hindu taluqdar.
Counsel also invited our attention to section 23 of the Oudh Taluqdars Act, but we see no inconsistency between the presumption that non taluqdari property also devolves upon a single heir and the terms of section 23 of the Act.
Counsel for the Senior Raj Kumar contends that the decision of the Judicial Committee gives no reasons in support of the view taken by the Board and should be reconsidered by this Court.
We are unable to agree with that contention.
The rule has apparently been settled for the last many years that where property devolves upon a single heir of a taluqdar entered in the second list, there is a presumption that the non taluqdari estate also devolves upon him and we see no reason to depart from that rule.
To do so would result in upsetting settled titles.
Prior to the enactment of the Oudh Estates Act, 1869, there was no distinction between taluqdari and non taluqdari estates and the presump tion merely gives effect to family custom.
There is, therefore, a presumption, unless rebutted, that non taluqdari property of a taluqdar entered in List 2 devolves by the custom of the family upon a single heir.
On the death of Raja Surpal Singh his entire estate devolved, upon his wife Rani Jagannath Kuar and by virtue of the custom, she must be presumed to have remained life owner of the non taluqdari estate also.
The customary rule may undoubtedly be rebutted by evidence to the contrary, but at no stage of the hearing of this protracted trial was the contention raised that if the Senior Raj Kumar had under the deed of (1) L.R. 65 I.A. 397.
(2) L.R. 43 I.A. 269.
(3) L.R. 11 I.A. 135.
433 settlement interest in the non taluqdari estate even if his claim to the taluqdari estate under that deed failed to take effect.
It was then urged that in any event the widow of a taluqdar is not an "heir" within the definition of the, Act.
It is true that in the interpretation clause in the Act an "heir" means a person who has inherited or inherits otherwise than as a widow or a mother, an estate or portion of an estate whether before or after the commencement of the Act.
But we fail to appreciate the bearing of this definition upon the question in issue.
By virtue of section 22(6) of the Act the taluqdari.
estate devolved upon Rani Jagannath Kuar on the death of her husband and the estate enured during her life time.
She also inherited the non taluqdari estate.
Techni cally she may not be called an "heir" under the Act, but that is irrelevant in determining whether in the devolution of the taluqdari and non taluqdari estates different rules prevail.
Counsel then contended that though the argument was not raised at an earlier stage, the Senior Raj Kumar should be permitted to amend his pleading to contend that there was a custom in the family under which non taluqdari estate did not devolve upon a single heir.
This case is more than 22 years old and we do not think that we would be justified at this date in allowing the parties to raise a new contention and give it a fresh lease of life.
On the record there is evidence relating to devolution of the estate since the time of Raja Jagpal Singh to whom the Tiloi Estate was granted by the Government, and it has never been suggested that the non taluqdari estate devolves otherwise than upon a single heir.
Counsel also contended that even if leave to amend the written statement be not granted to the Senior Raj Kumar the Court may review the evidence and hold on the evidence already on the record that such a custom did prevail in the family.
Our attention has, however, not been invited to any reliable evidence on this part of the case.
We, therefore, declare that even in the non taluqdari estate left by Raja Surpal Singh which devolved upon his widow Rani Jagannath Kuar for her life time, Raja Bishwanath Singh had on August 29, 1932, no interest which he could transfer, alienate or settle.
Counsel for the Senior Raj Kumar finally submitted that the Trial Court did not decide issues Nos.
14 & 15 relating to the rights of Rani Aditya Binai Kumari defendant No. 4 and Rani Fanindra Rajya Lakshmi Devi defendant No. 5 and these issues should be decided.
No argument was advanced before 434 the High Court in respect of issues Nos.
14 & 15.
The reason is obvious : in the Trial Court the defendants agreed that no findings should be recorded on those issues.
We cannot at this stage enter upon the trial of issues which, it was agreed, had to be tried in another suit.
The Senior Raj Kumar will pay the costs of this hearing.
| Section 8 of the Oudh Estates Act 1 of 1869 provided for the preparation of lists of taluqdars and grantees, and another list of taluqdars whose estates, according to the custom of the family on and before 13th February, 1856, ordinarily devolved upon a single heir.
The taluqdari estate of Tiloi was entered in the second list.
Upon the death of the taluqdar and in the absence of any brother or a male lineal descendant, the estate devolved, in accordance with the provisions of section 22(6) upon the widow of the deceased taluqdar for her life.
Thereafter she adopted a son.
The adopted son by a deed of trust executed in August, 1932, settled certain properties.
By judgment dated April 19, 1968, this Court declared that the deed of trust of August, 1932 did not operate to settle any property being part of the taluqdari estate and governed by the Oudh Estates Act of 1869.
In the present petition for review of the judgment it was contended that even if the settlor had no interest in the taluqdari estate under the ordinary Hindu law, on adoption, the non taluqdari property vested in him and he was competent under the deed of settlement to dispose of the property in the manner directed by that deed.
It was also contended that the widow of a taluqdar was not an "heir" within the definition of the expression in the Act.
HELD : That even in the non taluqdari estate left by the taluqdar which devolved upon the widow, her adopted son, the settlor, had so, long as the widow was alive no interest which he could transfer, alienate or settle.
[433G] it is well settled that where property devolves upon, a single heir of a taluqdar entered in the second list under section 8 of the Act, there is a rebuttable presumption that the non taluqdari estate also devolves upon him.
In the present case there was no reason to depart from that rule.
Prior to the enactment of the Oudh Estates Act 1869 there was no dis tinction between taluqdari and non taluqdari estate and the presumption merely gave effect to family custom.
[432E F] Rani Huzur Ara Begam and Anr.
vs Deputy Commissioner Gonda, L.R. 65 I.A. 397 followed.
Murtaza Husain Khan vs Mahomed Yasin Ali Khan L.R. 43 I.A. 269;Thakur Ishri Singh vs Baldeo Singh, L.R. 11 I.A. 135: referred to.
| 2628.txt |
Criminal Appeal No. 214 of 1979.
From the Judgment and Order dated 22.11.1978 of the Punjab and Haryana High Court in Criminal Appeal No. 701 of 1975.
A.N. Mulla, O.P. Sharma and R.C. Gubrele for the Appellants.
Ms. Amita Gupta and R.S. Suri for the Respondents.
The Judgment of the Court was delivered by FATHIMA BEEVI, J.
Balbir Singh and Inderjit Singh, the appellants, are brothers.
Onkar Singh, brother of Brijinder Singh, the father of the appellants, died of multiple in juries on 8.7.1974.
The appellants along with Mehar Singh, were tried on the charge of murder under Section 302, I.P.C. read with Section 34, I.P.C. The Sessions Judge acquitted the accused of the charge.
The High Court, in appeal pre ferred by the State, convicted these appellants and sen tenced them to undergo imprisonment for life under Section 302, I.P.C. The appeal being one under Section 2 of the , the appellants ' learned counsel persuaded us to go through the entire evidence maintaining that the High Court has erred in interfering with the order of acquittal.
Ac cording to the learned counsel, the view taken by the trial court is reasonable and there was no justification for upsetting the judgment even if a different view could have been taken by the appellate court on reappraisal of the evidence.
It was contended that the High Court has not effectively dislodged the various reasons given by the trial Court for discarding the evidence and that the conclusion drawn by the High Court on the evidence on record is clearly wrong.
In order to appreciate these arguments, it is necessary to set out briefly the facts of the case and summarize the relevant evidence.
The deceased, Onkar Singh, at the time of his death was employed in government service and was resid ing in Chandigarh.
His brother, Darbara Singh, and his son Iswardial Singh, as well as these appellants were residing in the village.
Onkar Singh came to the village on 6th July, 1974.
On 8th July, 242 1974, at about 10.30 A.M., Darbara Singh, along with his wife, Surjit Kant, and son Ishwardial Singh had gone to the mango grove across the choe to collect mangoes for being given to Onkar Singh.
While they were returning home along the pathway, Onkar Singh was seen coming in the opposite direction.
These two appellants along with their companion emerged on the scene and attacked Onkar Singh Balbir Singh had a datar and Inderjit Singh had a sua and Mehar Singh had a lathi.
After inflicting injuries with the weapons the appellants escaped.
The deceased, Onkar Singh, was removed to the house of Darbara Singh for being rushed to the hospi tal but within a short time, he breathed his last.
The first information was lodged at the police station around 7.00 P.M., and the crime was registered and investi gated and finally chargesheeted.
The post mortem examination on the dead body revealed that Onkar Singh had sustained besides lacerated injuries three stab wounds and that he died on account of the shock and hemorrhage as a result of the injuries.
The motive alleged was that there had been some grouse on account of the transfer of agricultural land that belonged to the family, among the children of the three brothers.
The land stood in the name of the deceased 's son under cultivation of Darbara Singh at the material time.
The land was originally gifted to the appellants in 1964 but was reconveyed to the deceased.
The learned Sessions Judge found that the motive had been proved.
The two eye witnesses to the occurrence were Darbara Singh and his son Ishwardial Singh.
They narrated the incident.
Their evidence was discarded by the trial court for the reasons that there was a thick growth of reeds on either side of the pathway which was running zigzag and it was not, therefore, possible for the witnesses even if they were present in the vicinity to observe the assault and identify the assailants.
Another reason was that the medical evidence was in distinct conflict with the oral testimony and the nature of injuries were such that the same could not be attributed to the use of the weapons mentioned by the witnesses.
Yet another reason was that there had been no trace of blood either on the pathway or on the clothes worn by the deceased.
The time of death of the deceased as dis closed by the medical evidence did not agree with the ver sion of the witnesses.
There had been inordinate delay in lodging the F.I.R.
The first information report did not inspire confidence.
The witnesses had no consistent case regarding the role played by Mehar Singh and the evidence was interested and unconvincing.
The learned Judge, there fore, rejected the 243 same and recorded the order of acquittal.
The High Court had cautioned itself on the limited scope of interference while analysing and appreciating the evi dence and arriving at its own conclusion.
The High Court has given very cogent reasons to establish that the whole ap proach by the trial court was wrong and reasons for reject ing the evidence did not stand scrutiny.
Having heard the counsel on both sides, we agree with the High Court that the prosecution evidence in the case is wholly reliable and it leads to irresistible conclusion that these appellants had intentionally caused the death of Onkar Singh.
The occurrence took place in broad day light at a place close to the residence of the witnesses.
The appel lants are the near relations of the deceased and the wit nesses and it has happened in the background of the family rued.
The first information has been recorded within a few hours which in the circumstances of the case cannot be considered as unreasonably delayed.
The version given in the F.I.R, is substantially the same as the one spoken to by the witnesses before the court.
There had not been any accept able suggestion why Darbara Singh should foist a case against the appellants.
It is most unlikely that these witnesses would allow the real culprits to escape and their near relations to be implicated on the happening of such a tragedy in the family.
Both the father and the son have given consistent account of the role played by each of the appellants.
There would not have been any difficulty for the witnesses to identify the appellants from a distance and across the reeds even if they could get only a glimpse of them in the course of their action.
The evidence is also clear that there had not been thick growth of reeds to cause complete obliteration of the scene.
It could not, therefore, be assumed that the place of occurrence was out of bounds and that the witnesses have weaved a story of their own.
As rightly pointed out by the High Court, the medical evidence is not inconsistent.
The witnesses are clear that the appel lants used the datar on the wrong side and that accounts for the lacerated injuries.
Incised wounds may be produced by using the sua on that part of the body.
We do not find any material to infer that the death could not have happened at the time spoken to by the witnesses.
Since there had been internal hemorrhage and the injured person was immediately lifted from the place of occurrence the absence of blood at the scene is not strange.
The fact that the acquittal of Mehar Singh had not been interfered with by the High Court cannot advance the case of the appellants.
The High Court 244 has given him the benefit of doubt on the materials that emerged in the evidence.
That is no reason to discard the evidence of the witnesses so far as these appellants are concerned when such evidence does not suffer from any seri ous infirmity.
We find that the High Court had given weighty reasons in accepting the evidence and finding that the view taken by the trial court was clearly wrong.
We reject the contentions of the appellants.
There is no reason to interfere with the judgment of the High Court.
The appeal is accordingly V.P.R. Appeal dis missed.
| The appellants along with another were tried of the charge of murder under Section 302, I.P.C., read with Sec tion 34, I.P.C. The prosecution case was that the appellants as well as the deceased 's brother and his son were residing in a vil lage.
The deceased came to the village on 6.7.1974.
On 8.7.1974 at about 10.30 a.m., the deceased 's brother along with his wife and his son had gone to the mango grove across the choe to collect mangoes to give to the deceased.
While they were returning home along the pathway, the deceased was seen coming in the opposite direction.
The two appellants along with another accused, emerged on the scene and at tacked the deceased.
Appellant No.1 had a datar and Appel lant No. 2 had a sua and their companion had a lathi.
After inflicting injuries with the weapons the appellants escaped.
The deceased was removed to the house of one Darbara Singh for being rushed to the hospital, but within a short time, he breathed his last.
The first information was lodged at the police station, around 7.00 P.M., and the crime was registered and investi gated and finally chargesheeted.
The post mortem examination of the dead body revealed that the deceased had sustained lacerated injuries and three stab wounds and that he died on account of the shock and hemorrhage as a result of the injuries.
The motive alleged was that there had been some grouse on account of the transfer of agricultural land that be longed to the family, among the 240 children of the three brothers.
The Sessions Judge acquitted the accused of the charge.
The High Court, in appeal preferred by the State convicted the appellants and sentenced them to undergo imprisonment for life, against which, this appeal under Section 2 of the Supreme Court (Enlargement of Criminal Appellate Jurisdic tion) Act, 1970 was filed.
The appellants contended that the view taken by the trial court was reasonable and there was no justification for upsetting the judgment even if a different view could have been taken by the appellate court on reappraisal of the evidence; that the High Court did not dislodge the various reasons given by the trial court for discarding the evidence and that the conclusion drawn by the High Court on the evidence on record was wrong.
Dismissing the appeal, this Court, HELD: 1.
The prosecution evidence in the case is wholly reliable and it leads to irresistible conclusion that the appellants had intentionally caused the death of the de ceased.
The occurrence took place in broad day light at a place close to the residence of the witnesses.
The appel lants are the near relations of the deceased and the wit nesses and it has happened in the background of the family rued.
The first information has been recorded within a few hours which in the circumstances of the case cannot be considered as unreasonably delayed.
The version given in the F.I.R. is substantially the same as the one spoken to by the witnesses before the Court.
[243 C D] 2.
The eye witnesses have given consistent account of the role played by each of the appellants.
There would not have been any difficulty for the witnesses to identify the appellants from a distance and across the reeds even if they could get only a glimpse of them in the course of their action, and the medical evidence is not Inconsistent.
[243 E F] 3.
The fact that the acquittal of the companion of the appellants had not been interfered with by the High Court cannot advance the case of the appellants.
The High Court has given him the benefit of doubt on the materials that emerged in the evidence.
That is no reason to discard the evidence of the witnesses so far as the appellants are concerned when such 241 evidence does not suffer from any serious infirmity; [243 H; 244 A]
| 6844.txt |
Criminal Appeal No. 559 of 1983.
From the Judgment and Order dated 7.1.1982 of the Punjab and Haryana High Court in Crl.
Appeal No. 537 (SB) of 1980.
Harbans Lal, I.S. Goel and K. Chaudhri for the Appellant.
Govind Mukhoty (Amicus Curiae) for the Respondent.
The Judgment of the Court was delivered by BALAKRISHNA ERADI, J.
Uttam alias Cheaku, the respond ent herein along with three others was tried by the learned Additional Sessions Judge, Gurgaon for alleged commission of offences under Sections 395,397 and 4 12 of the Indian Penal Code.
By judgment dated July 21.
1980, the learned Addition al Sessions Judge held that the charge against Uttam under Section 395 I.P.C. was proved beyond all reasonable doubt and he was accordingly convicted and sentenced to undergo rigorous imprisonment for four years.
The other three ac cused were acquitted on the ground that their participation in the crime was not sufficiently proved and hence they were entitled to the benefit of doubt.
The respondent carried the matter in appeal to the High Court of Punjab and Haryana.
The High Court by its impugned judgment dated January 7, 1982 allowed the said appeal, extending the benefit of doubt to the respondent, and set aside his conviction and sen tence.
The State of Haryana has come up to this Court with this appeal against the said order of acquittal after ob taining Special leave from this Court.
Briefly stated, the prosecution case i.s that on October 24, 1978, Om Parkash (P.W. 5) accompanied by his wife Jai Rani (P.W. 6) and their daughter Neelam left Delhi in the early hours of the morning for Jaipur by car.
Om Parkash and his wife Jai Rani were in the front seat of the vehicle while their daughter was occupying the rear seat.
When their car had reached about 10 12 Kms.
beyond Gurgaon on the Delhi Jaipur Road, another car bearing registration No. DEA 2914 came 1067 from behind and attempted to overtake their vehicle.
Even though Om Parkash had made way for the other car to pass, that car deliberately swerved to the left side and struck against the front wheel of his car, whereupon Om Parkash stopped his car on the left side of the road in the kacha portion.
In the meantime, the other car also stopped at a distance of about ten paces ahead and five persons came out of that vehicle.
It is stated that two or three out of them were armed with revolvers and others with daggers.
Om Par kash got out of the vehicle and asked the assailants as to why they had caused the accident.
In the meantime, Jai Rani also came out of the car.
One of the assailants then gave a couple of knife blows in the chest of Om Parkash, whereupon he tried to raise an alarm.
Hearing the said cry ' for help, some trucks which were passing along that road tried to stop but one of the assailants who was armed with a pistol, fired shots in the air and scared away those truck drivers.
There after one of the assailants removed the ear rings, necklace and wrist watch from the person of Jai Rani and in that process one of her ear lobes was cut as under.
The wrist watch and purse of Om Parkash were also removed by one of the culprits.
Apart from that, three attache cases which were on the luggage carrier of the car were also forcibly removed and taken away by the miscreants.
Before the cul prits left the spot in their car with all the booty, a shot was fired by one of them which hit Om Parkash on his fore head.
After inflicting the said injury, the miscreants made good their escape.
Om Parkash somehow managed to drive back his car to Gurgaon and there he contacted his partner Joginder Singh (P.W. 7) to whom he narrated the whole incident.
Om Parkash was immediately taken to Civil Hospital, Gurgaon where he was medically examined and various injuries were found on his person.
Jai Rani also medically examined and the injury on her right ear lobe was declared to be grievous.
The other injuries were found to be simple for which she was given first aid.
The first information report was thereafter lodged with the police by Om Parkash and Sub Inspector Tilak Raj (P.W. 21) carried out the investigation.
He recovered empty cartridge cases (Exhibits P. 15 and P. 16), one wad (Exhibit P. 17) and one Ball Point Pen (Exhibit P. 18) from the place of occurrence.
During the investigation it was found that the car used by the culprits had been stolen on October 23, 1973 from the house of its owner, one S.K. Mahajan.
Subsequently, on October 27, 1978, the car was found lying abandoned in the Ghaziabad factory area and it was taken into police custody.
The accused were arrested after a fairly long delay since it so happened that subsequent to the occurrence in question the accused 1068 persons had been allegedly involved in the commission of other crimes in the State of Uttar Pradesh and they were lodged in the Meerut jail.
After the accused were brought from Meerut, two test identification parades were held, one separately for Uttam at his request and the other for the remaining suspects.
In the first parade, Uttam was correctly identified by both Om Parkash and Jai Rani.
In the second identification parade, Om Parkash failed to identify any of the other accused whereas Jai Rani identified Trilok Singh, who was accused No. 2.
On the basis of the information furnished by the accused the Investigating Officer and the police party led by him recovered some of the articles which formed the contents of the suit cases removed from the car of the victims.
They consisted of new suit length cloths, sarees, trousers, blouses, petti coats etc.
The Prosecution examined in all 22 witnesses in its endeavour to establish the guilt of the accused in relation to the the charges framed against them.
The learned Addi tional Sessions Judge after an elaborate and analytical discussion of the whole evidence recorded the conclusion that the participation of the respondent Uttam in the com mission of the crime was established beyond all doubt inas much as he had been identified by both Om Parkash (P.W. 5) and Jai Rani (P.W. 6), and the testimony given by these two witnesses narrating the details of the incident of robbery and assault was not in any manner shaken in cross examina tion and deserved to be accepted as wholly truthful.
The remaining three accused were given the benefit of doubt mainly on the ground that excepting the second accused who had been identified only by Jai Rani at the identification parade, the others were not identified either by Jai Rani or by Om Parkash and hence there was no satisfactory proof of their participation in the crime.
In the light of the afore said conclusion reached by him, the learned Additional Sessions Judge convicted the respondent Uttam under Section 395 I.P.C. and sentenced him to undergo rigorous imprison ment of four years.
The High Court by a judgment which we are constrained to characterise as most perfunctory has set aside the judgment of the learned Additional Sessions Judge in so far as he was convicted the respondent herein and acquitted him.
We regret to have to remark that the High Court has dealt with the case in a very superficial and casual manner and has not even taken to,trouble to discuss the evidence adduced in the case before it proceeded to interfere with the well consid ered judgment of the trial court.
Both Om Parkash (P.W. 5) and Jai Rani (P.W. 6) had clearly identified the respondent at the test identification parade as well as in the Court and they had 1069 clearly and unequivocally deposed that he was one of the assailants who took part in the robbery and assault.
Their testimony has been discussed at length by the learned Addi tional Sessions Judge and he has given sound and convincing reasons for accepting and acting upon the same.
The whole discussion of the case by the High Court is contained in one short paragraph of its judgment namely, paragraph 6.
It is not disclosed anywhere therein as to why the High Court considered that the testimony of these two witnesses who were the victims of the crime could not be accepted and why it could not form the foundation for the conviction of the respondent.
A case of highway robbery, such as this, should have been dealt with much more seriousness and care than has been bestowed on it by the High Court.
The approach of the High Court to the case and the conclusion recorded by it cannot but be characterised as manifestly illegal and per verse.
In the absence of any discussion of the evidence by the High Court, we have ourselves gone through the entire evi dence adduced in the case with the assistance of the Counsel appearing in both sides.
We are in complete agreement with the conclusion recorded by the learned Additional Sessions Judge that from the evidence of Om Parkash (P.W. 5) and Jai Rani (P.W. 6), the participation of the accused in the commission of the offence has been proved beyond all reason able doubt.
The respondent was, therefore, rightly convicted by the learned Additional Sessions Judge and the only mis take committed by the learned Additional Sessions Judge was in not in awarding a more severe sentence commensurate with the gravity of the offence.
In the result, we allow the appeal, set aside the judg ment Of the High Court and restore that of the learned Additional Sessions Judge convicting the respondent under Section 395 I.P.C. and sentencing him to undergo rigorous imprisonment of four years.
The Bail Bond of the respondent will stand cancelled.
He shall be taken into custody forth with to serve out the remaining portion of the sentence.
N.P.V. Appeal allowed.
| The respondent.
along with three others, was tried for offences under sections 395,397 and 412 of the Indian Penal Code.
The prosecution alleged that the respondent had delib erately dashed his car against the car of P.W. 5 on the Delhi Jaipur Road, while the latter was traveling to Jaipur alongwith his wife, PW 6 and daughter.
Five persons, two or three of them armed with revolvers and others with daggers came out of the respondent 's car.
One of them gave a couple of knife blows in the chest of PW 5, and another.
who was armed with a pistol, fired shots in the air and scared away drivers of some trucks who were passing along that road and tried to come to the aid,of PW 5 who was crying out for help.
One of the assailants removed the ear rings, necklace and wrist watch from the person of PW 6.
and in that proc ess, one of her ear lobes was cut as under.
The wrist watch and purse of PW 5 and three attache cases on the luggage carrier of his car were also forcibly removed and taken away.
Before the culprits left the spot in their car with all the booty.
a shot was fired by one of them which hit PW 5 on the forehead.
PW 5 somehow managed to drive back his car to Gurgaon and narrated the whole incident to his part ner and thereafter he and his wife were medically examined and treated at Gurgaon Civil Hospital, for the various injuries that were found on them.
Thereafter an F.I.R. was lodged with the Gurgaon Police.
The accused were arrested after a fairly long delay and two test identification pa rades were held.
one separately for the respondent accused at his request and other for the remaining suspects.
The respondent was identified by the victims.
On the basis of the information furnished by the accused some of the arti cles of the victims were recovered.
1065 The trial court held that the charge against the re spondent under section 395 I.P.C. was proved beyond all reasonable doubt and convicted and sentenced him to undergo rigorous imprisonment for four years.
The other three ac cused were acquitted on the ground that their participation in the crime was not sufficiently proved and hence they were entitled to the benefit of doubt.
The High Court, however, allowed the appeal of the respondent by extending the benefit of doubt to him and set aside his conviction and sentence.
Allowing the State 's appeal by Special leave.
HELD: 1.
A case of highway robbery, such as this, should have been dealt with much more seriousness and care than has been bestowed on it by the High Court.
Its approach to the case and the conclusion recorded by it cannot but be cha racterised as manifestly illegal and perverse.
The trial court has rightly concluded that from the evidence of the victims the participation of the respondent in the commis sion of the offence had been proved beyond all doubt.
[1069B C] 2.1 The High Court, by a most perfunctory judgment, set aside the judgment of the trial court, insofar as the trial court had convicted the respondent herein, and acquitted him.
It has dealt with the case in a very superficial and casual manner and has not even taken care to discuss the evidence adduced in the case, before it proceeded to inter fere with the well considered judgment of the trial court.
[1068G H] 2.2.
The trial court after an elaborate and analytical discussion of the whole evidence recorded the conclusion that the participation of the respondent in the commission of the crime was established beyond all doubt inasmuch as he had been identified by the both the victims, and their testimony narrating the details of the incident of robbery and assault was not shaken in cross examination and deserved to be accepted as wholly truthful, [1068D E] 2.3 Both the victims, PW 5 and 6, had clearly identified the respondent at the test identification parade as well as in the court and they had clearly and unequivocally disposed that he was one of the assailants who took part in the robbery and assault.
The trial court has given sound and convincing reasons for accepting and acting upon their testimony.
The High Court has, however.
not discussed in its judgment as to why it considered that the testimony of the victims of the crime could not_be accepted and why it could not form the foundation for the conviction of the respond ent.
[1068H; 1069A B] 1066 3.
The judgment of the High Court is set aside and that of the trial court convicting the respondent under section 395 of the Indian Penal Code and sentencing him to undergo rigorous imprisonment of four years is restored.
Necessity for awarding severe punishment in such cases of proven highway robbery stressed.
[1069F]
| 5335.txt |
Civil Appeal No. 4448 of 1985.
From the Judgment and order dated 26.
1982 of the Andhra Pradesh High Court in Tax Revision Case No. 23 of 1978.
WITH Civil Appeal No. 694 of 1986.
From the Judgment and order dated 31.7.1985 of the Andhra Pradesh High Court in Tax Revision Case No. 205 of 1985.
T.V.S.N. Chari for the Appellant.
739 R. Ramachandran for the Respondents.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
The question of law which arises in these two appeals by special leave being a common, they are disposed of by this common judgment.
The said question relates to the time within which an assessment can be made under the provisions of the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter referred to as 'the Act ') where the return is not filed by the dealer within the time prescribed in that behalf.
The assessee in Civil Appeal No. 4448 of 1985 is M/s. Nav Swadeshi oil Mills, Jadcharla, Mahboobnagar district.
For assessment year 1968 69 the assessee filed its return relating to the quarter ending 31.3.
,969 on 7.8.1969 before the Commercial Tax Officer of Mahboobnagar under the even though the last date for submission of return prescribed by law was 24.5.
The return filed by the assessee showing a taxable turnover of Rs. 18,25,410.72 was accepted and it was called upon to pay sales tax of Rs.45,424.48 under the Act.
The assessment order was passed on 3.8.1973 beyond four years from 31.3.1969 which was the last day of the assessment year 1968 69.
Aggrieved by the assessment order which had been passed beyond the period of four years from the last day of the assessment year the assessee filed an appeal before the Assistant Commissioner (CT) Appeals, Warangal in Appeal No. 5 75 76 and that appeal was dismissed on 14.9.1976.
Against the order of the Assistant Commissioner (CT) Appeals.
Warangal the assessee filed an appeal before the Sales Tax Appellate Tribunal, Andhra Pradesh at Hyderabad in Tribunal Appeal No. 183 of 1977.
That appeal also was dismissed.
The assessee thereafter filed a revision petition in Tax Revision Case No. 23 of 1978 before the High Court of Andhra Pradesh.
The High Court by its order dated October 26, 1982 set aside the order of the Tribunal and also the assessment on the ground that the assessment which had been passed after four years from the last day of the assessment year was not a valid assessment.
Aggrieved by the decision of the High Court the State of Andhra Pradesh has filed this appeal by special leave.
The assessee in Civil Appeal No. 694 of 1986 is M section Nav Swadeshi oil Mills and Refinery at Jadcharla.
In respect of the assessment year 1968 69 the assessee filed an annual return under the provisions of the on 19.8.
1969 after the expiry 740 Of the prescribed period.
The order of assessment was passed on 2.8.1973 beyond four years from the last day of the assessment year 1968 69.
Aggrieved by the assessment order which had been passed by the assessing authority the assessee filed an appeal before the Assistant Commissioner (CT) Appeals, Warangal on the ground that the asssessment order passed beyond four years from the last day of the assessment year was barred by time.
That appeal was dismissed.
Against the order passed in that appeal the assessee filed an appeal before the Sales Tax Appellate Tribunal, Andhra Pradesh in Tribunal Appeal No. 206 of 1977.
The Tribunal allowed the appeal and set aside the assessment holding that the assessment had been passed beyond time.
Aggrieved by the decision of the Tribunal the State of Andhra Pradesh filed a Revision Petition in Tax Revision Case No. 205 of 1985 on the file of the High Court of Andhra Pradesh.
That Revision Petition was dismissed in limine by the High Court.
Aggrieved by the decision of the High Court the State of Andhra Pradesh has filed this appeal by special leave.
The only question which arises for consideration in these appeals is whether the orders of assessment in the above two cases which had admittedly been passed beyond four years from the last day of the assessment year but within the period of six years from that date had been validly passed.
By virtue of section 9 of the the procedure prescribed for making an assessment under the Act is applicable to the assessments to be made under the .
Section 13 of the Act prescribes that every dealer who is liable to get himself registered under section 12 or section 12 A as the case may be under the Act shall submit such return or returns relating to his turnover in such manner within such period and to such authority as may be prescribed.
The material part of section 14 which is relevant for purposes of these cases reads thus: "14.
Assessment of tax: ( I) If the assessing authority is satisfied that any return submitted under section 13 is correct and complete, he shall assess the amount of tax payable by the dealer on the basis thereof, but if the return appears to him to be incorrect or incomplete he shall, after giving the dealer a reasonable opportunity of proving the correctness and completeness of the return submitted by him and making such inquiry as he deems necessary, assess to the best of his judgment, the amount of tax due from the dealer.
An assessment under this section shall be made only within a period of four years from the expiry of the 741 year to which the assessment relates.
. . . . (3) Where any dealer liable to tax under this Act (i) fails to submit return before the date prescribed in that behalf, or (ii) produces the accounts, registered and other documents after inspection, or (iii) submits a return subsequent to the date of inspection, the assessing authority may, at any time within a period of six years from the expiry of the year to which assessment relates, after issuing a notice to the dealer and after such enquiry as he considers necessary, assess to the best of his judgment, the amount of tax due from the dealer on his turnover for that year, and may direct the dealer to pay in addition to the tax so assessed penalty as specified in subsection (8).
" It is necessary to analyse sub section (1) and sub section (3) of section 14 of the Act for purposes of determining the issue involved in these cases.
Sub section ( ]) of section 14 of the Act provides that if the assessing authority is satisfied that any return submitted under section 13 is correct and complete, he shall assess the amount of tax payable by the dealer on the basis thereof but if the return appears to the assessing authority to be incorrect or incomplete he shall after giving the dealer reasonable opportunity of proving the correctness and completeness of the return submitted and making such inquiry as he deems necessary, assess to the best of his judgment, the amount of tax due from the dealer.
In both these cases the return contemplated is one which has been filed in accordance with section 13 of the Act within the time prescribed for that purpose.
Such an assessment under sub section ( 1) of section 14 of the Act can be made within a period of four years from the expiry of the period to which the assessment relates.
Sub section (3) of section 14 of the Act authorises the assessing authority to make an assessment to the best of his judgment in three cases: (i) where a dealer under the Act fails to submit return before the date prescribed in that behalf, (ii) where a dealer produces the accounts.
registers and other documents after inspection and (iii) where a dealer submits a return subsequent to the date of inspection.
In these three cases the 742 assessing authority is empowered to make an assessment to the best of '4 his judgment at any time within a period of six years from the expiry of the year to which the assessment relates after issuing a notice to the dealer and after such inquiry which he considers necessary to make the assessment.
The crucial question which arises for consideration in these cases is whether in a case where the assessee submits a true and complete return after the prescribed date the assessment should be completed within a period of four years prescribed by sub section ( 1) of section 14 of the Act or within a period of six years permitted under sub section (3) of section 14 of the Act.
Sub section (1) of section 14 of the Act relates to an assessment which may be made on the basis of a return submitted under section 13 of the Act.
Section 13 of the Act as stated above provides that every dealer shall submit such return or returns relating to his turnover in such manner within such period and to such authority as may be prescribed.
The return on the basis of which an assessment is to be made under section 14(1) of the Act is, therefore, a return filed within the prescribed period and in such a case the assessment has to be completed within a period of four years from the expiry of the year to which the assessment relates.
The return referred to in sub section ( 1) of section 14 of the Act cannot be a return filed beyond the prescribed date is emphasised by clause (i) of sub section (3) of section 14 of the Act which refers to a case where a dealer liable to pay tax fails to submit return before the date prescribed in that behalf.
All cases where the return is submitted beyond the prescribed date fall under sub section (3) of section 14 of the Act.
The scheme of the Act regarding the period within which assessments can be made is very simple.
Assessments in cases falling under sub section (1) of section 14 of the Act have to be completed within four years from the expiry of the year to which the assessment relates and assessments in cases falling under sub section (3) of section 14 of the Act may be completed within six years from the expiry of the year to which the assessment relates.
The two types of cases which fall under sub section (l) and sub section (3) of section 14 of the Act respectively are mutually exclusive.
When once it is established in case that a return has not been filed within the prescribed period such case falls outside section 14 ( l) of the Act and therefore the period of four years prescribed therein becomes automatically inapplicable.
It clearly falls under clause (i) of sub section (3) of section 14 of the Act and assessment can be made in such a case within the expiry of the period of six years.
While a dealer who files a return within the prescribed 743 period acquires immunity against assessment on the expiry of four years from the last day of the assessment year, a dealer who fails to file a return within the prescribed period has to wait for six years to be over to acquire such immunity.
Thus the Act confers a distinct advantage on a dealer who is prompt in filing his return.
We are not impressed by the argument that since the returns in the cases before us had been accepted even though they had been filed beyond the prescribed date the assessments made thereon cannot be considered as best judgment assessment and therefore sub section (3) of section 14 of the Act under which it is permissible to make best judgment assessments would be inapplicable.
The period within which assessments can be made under the Act does not depend upon the answer to the question whether the assessment in question is a best judgment assessment or it is an assessment made treating the return as correct and complete but it depends upon the other conditions mentioned in sub section ( 1) and in sub section (3) of section 14 of the Act.
We may here point out that even in a case falling under subsection (1) of section 14 of the Act it is possible for the assessing authority to make a best judgment assessment as can be seen from the latter part of the said sub section which reads: "but if the return appears to him to be incorrect or incomplete he shall after giving the dealer a reasonable opportunity of proving the correctness and completeness of the return submitted by him and making such inquiry as he deems necessary, assess to the best of his judgment, the amount of tax due from the dealer." Yet such best judgment assessment has to be completed within a period of four years from the expiry of the year to which the assessment relates.
Hence it cannot be held that merely because the assessments in question are not best judgment assessments sub section (3) of section 14 of the Act is inapplicable for best judgment assessments can be made both under sub section (1) and subsection (3) of section 14 of the Act.
That the assessment is a best judgment assessment is not, therefore, decisive of the question involved in these appeals.
The decision of the Andhra Pradesh High Court in the State of Andhra Pradesh vs Pyarelal Malhotra 13 S.T.C. 946 and the decision of this Court in the State of Madras vs S.G. Jayaraj Nadar & Sons 28 S.T.C. 700 which dealt with the question as to when a best judgment assessment could be made are not relevant for purposes of deciding the question which has arisen before us.
As we have already pointed out the question whether the assessment made is the best judgment assessment or not has no bearing at all on the period within which an assess 744 ment can be made under the Act.
Neither in the judgment of the High Court against which Civil Appeal No. 4448 of 1985 is filed nor in the judgment of the Tribunal out of which Civil Appeal No. 694 of 1986 arises adequate attention is given to the words 'before the date prescribed in that behalf in clause (i) of sub section (3) of section 14 of the Act.
The High Court and the Tribunal laid emphasis only on the words "fails to submit return" in the said sub clause and it is on this account they arrived at a wrong conclusion.
On a true construction of sub section (I) and sub section (3) of section 14 of the Act we are of opinion that where a return is not filed by a dealer before the date prescribed in that behalf under the Act, the assessing authority has got jurisdiction to complete the assessment within a period of six years from the expiry of the year to which the assessment relates.
Admittedly, in these cases the returns were not filed within the prescribed date and the assessments have been made within six years from the expiry of the year to which the assessments relate.
The orders of the High Court against which these appeals have been filed are therefore liable to be set aside.
In Civil Appeal No. 4448 or 1985 the judgment of the High Court is set aside and the judgment of the Tribunal is restored.
In Civil Appeal No. 694 of 1986 the order of the High Court and the judgment of the tribunal are set aside and judgment of the Assistant Commissioner (CT) Appeals, Warangal is restored.
The respondent shall pay the costs of the Appellant in both the appeals.
P.S.S. Appeals allowed.
| % Sub section (2) of section 9 of the makes the assessment procedure prescribed under the general sales tax law of the appropriate State applicable to the assessment to be made under the Central Act.
Section 13 of the Andhra Pradesh General Sales Tax Act, 1957 requires the dealer to submit returns in such manner, within such period and to such authority as may be prescribed.
Sub section (1) of section 14 permits the assessing authority to assess the amount of tax due on the returns submitted under section 13 only within a period of four years from the expiry of the year to which the assessment relates.
Sub section (3) permits the assessing authority to make best judgment assessment where a dealer (i) fails to submit return before the date prescribed; (ii) produces the accounts registers and other documents after inspection and (iii) submits a return subsequent to the date of inspection, within a period of six years from the expiry of the year to which the assessment relates.
In the main appeal before this Court the assessee respondent filed its return relating to the quarter ending 31st March, 1969 on 7th August, 1969 under the .
The last date prescribed by law was 24th May, 1969.
The Commercial Tax officer passed the assessment order on 3rd August, 1973, beyond four years from 31st March, 1969, the last day of the assessment year 1968 69.
The assessee 's appeals against that order were dismissed by the Assistant Commissioner and the Sales Tax Appellate Tribunal.
The High Court in revision, however, held that the assessment made after four years from the last day of the assessment year was not a valid assessment.
737 In the connected appeal the respondent who was the assessee filed the annual return in respect of the assessment year 1968 69 under the A provisions of the Central Act on 19th August, 1969 after the expiry of the prescribed date.
The order of assessment was passed on 2nd August, 1973 beyond four years from the last day of the assessment year 196869.
An appeal against that order was dismissed by the Assistant Commissioner.
The Sales Tax Appellate Tribunal, however, allowed the appeal holding that the assessment had been passed beyond four years from the last day of the assessment year.
The revision petition preferred by the State was dismissed in limine by the High Court.
In the appeals by special leave filed by the State, it was contended for the respondent that since the returns in the cases had been accepted, even though they had filed been beyond the prescribed date, the assessments made thereon could not be considered as best judgment assessments and, therefore, sub section (3) of section 14 of the Act under which it is permissible to make best judgment assessments would be inapplicable.
Allowing the appeals.
D ^ HELD: 1.1 on a true construction of sub section
(1) and sub section (3) of section 14 of the Andhra Pradesh General Sales Tax Act, 1957 it is apparent that where a return is not filed by a dealer before the date prescribed in that behalf under the Act the assessing authority has jurisdiction to complete the assessment within a period of six years from the expiry of the year to which the assessment relates.
[744C] 1.2 The two types of cases which fall under sub section
(1) and sub section
(3) of section 14 of the Act respectively are mutually exclusive.
The return on the basis of which an assessment is to be made under section 14(1) is a return filed within the prescribed period and in such a case the assessment has to be completed within a period of four years from the expiry of the period to which the assessment relates.
The Act confers a distinct advantage on such a dealer who is prompt in filing his return inasmuch as he acquires immunity against assessment on the expiry of the said period of four years.
All cases where the return is submitted beyond the prescribed date fall under sub section
(3) of section 14 of the Act.
Assessment in such cases may be completed within six years from the expiry of the year to which the assessment relates.
When once it is established in a case that a return has not been filed within the prescribed period such case falls outside section 14(1) of the Act and therefore the period of four years prescribed therein becomes automatically inapplicable.
It clearly falls under cl.
(i) of sub section
(3) of section 14 of the Act and assessment can be H 738 made in such a case within the expiry of the period of six years.
In the instant cases the returns were not filed within the prescribed dates.
The assessments have, therefore, been rightly made within six years from the expiry of the year to which the assessments relate.
[742G H; 743A B; 744C] 2.
Whether the assessment made is the best judgment or not has no bearing at all on the period within which an assessment can be made under the Act.
It depends upon the other conditions mentioned in sub section
(1) and (3) of section 14.
Best judgment assessment can be made even in a case falling under sub section
(1), as is evident from the latter part of that sub section which reads: "but if the return appears to him to be incorrect or incomplete he shall after giving the dealer a reasonable opportunity of proving the correctness and completeness of the return submitted by him and making such inquiry as he deems necessary, to assess to the best of his judgment, the amount of tax due from the dealer." Yet such best judgment assessment has to be completed within a period of four years from the expiry of the year to which the assessment relates.
Therefore, in the instant case merely because the assessments are not best judgment assessments, it cannot be said that sub section
(3) of section 14 is inapplicable.
Neither the High Court nor the Tribunal gave adequate attention to the words 'before the date prescribed in that behalf ' in cl.
(i) of sub section
(3) of section 14.
They laid emphasis only on the words 'fails to submit return ' in the said sub clause to arrive at a wrong conclusion.
[743C, H; 744A B] State of Andhra Pradesh vs Pyarelal Malhotra, (13 S.T.C. 946), and State of Madras vs S.G. Jayaraj Nadar & Sons, 28 S.T.C. 700, distinguished.
| 5518.txt |
Appeals Nos. 86 to 97 of 1962.
Appeals from the judgment and order dated July 25, 1955, of the Assam High Court in Civil Rule Nos.
94 97, 105, 106, 114 and 175 to 179 of 1953.
M. C. Setalvad, Sohan Shroff, P. K. Kapila and Sukumar Ghosh, for the appellants.
Naunit Lal, for the respondents.
February 4, 1964.
The Judgment of the Court was delivered by SHAH J.
These appeals have been filed with certificates granted by the High Court of Assam under article 132 of the Constitution against orders passed in certain petitions filed by the appellants praying for writs of certiorari or other appropriate writs quashing orders relating to assessment of sales tax, and prohibiting the Superintendent of Taxes, Dhubri and other officers from taking action in enforcement of the said orders.
The appeals raise common questions and may be disposed of by a common judgment.
The appellants are merchants carrying on business as dealers in jute, and have their principal place of business at Calcutta.
The appellants have a branch office at Dhubri in the State of Assam and are registered dealers under the Assam Sales Tax Act, 1947 (17 of 1947).
The appellants purchased jute at Dhubri and other places in the State of Assam and despatched bales 'of jute to diverse factories ,outside the Province of Assam.
The appellants submitted returns of turnover for purposes of sales tax before the Superintendent of Taxes, Dhubri, under the Assam Sales Tax Act in respect of transactions of sale during the period 657 between March 1948 to March 1950.
The Superintendent of Taxes called upon the appellants under section 17(2) of the Act to produce their books of account and other evidence in support of their returns and granted them time to enable them to comply with the requisition, but the appellants failed to do so.
The Superintendent of Taxes then made "best judgment assessments" exercising his powers under section 17(4) of the Act and issued demand notices for the tax determined.
Against the orders passed by the Superintendent of Taxes appeals were preferred to the Assistant Com missioner of Taxes.
Before the appellate authority the appellants produced some but not all their books of account and documents in support of their returns.
Before the appellant authority it was contended, inter alia, that the definition of "sale" in section 2(12) of the Act was beyond the legislative competence of the Provincial Legislature, that tax was sought to be levied on sales effected outside the State, and that imposition of sales tax on the transactions of the appellant amounted to levying an "export tax" which was not open to the Provincial Legislature.
It was however not contended before the Assistant Commissioner of Taxes that the jute bales, sale price of which was included in the turnover were not at the time of the contracts in the form of jute bales actually within the State of Assam and there fore the Explanation to section 2(12) did not make that sale price liable to be included in the turnover of the appellants.
The Assistant Commissioner of Taxes, Assam, dismissed the appeals.
In the revision applications preferred to the Commissioner of Taxes, Assam, against the order of the Assistant Com missioner of Taxes it was contended for the first time that the price of jute included in the turnover under the orders passed by the Superintendent of Taxes was not liable to be taxed because within the meaning of the Explanation to section 2(12) the goods were not at the time of the contracts actually in the Province of Assam.
The Commissioner rejected the contention after examining what he called the "time table of cultivation".
He observed that the usual time for marketing jute of the new crop was between July and June of the following year, jute being planted in or 134 159 S.C. 42.
658 about February and being ready for marketing some time about the month of June.
The Commissioner further observed that the contracts were made on diverse dates between March and September and deliveries under the contracts were made after the month of July when the new crop was brought into the market.
The contracts between the months of March and July were therefore in respect of the last year 's crop and the goods sold must actually have been in the Province of Assam at the date of the contracts.
The Commissioner made certain modifications in the assessment order, but with those modifications we are not concerned in these appeals.
Against the order passed by the Commissioner, petitions under article 226 of the Constitution were filed by the appellants for writs of certiorari and prohibition.
Amongst the grounds urged before the High Court were the following two grounds, which alone survive for determination in these appeals: (1) that the Explanation to section 2(12) of the Act was ultra vires the Assam Legislature under the provisions of the Government of India Act, 1935, and therefore tax could not be levied on sales irrespective of the place where the contracts were made merely relying upon the circumstance that at the time of the contracts of sale the goods contracted to be sold were actually in the Province of Assam; and (2) that the finding recorded by the Commissioner that the goods were actually in the Province of Assam at the time when the contracts were made was "speculative".
The High Court held that the Explanation to section 2(12) was.
in respect of the period prior to the Constitution, not ultra vires the authority of the Provincial Legislature, and that no attempt was made to establish before the appellate authority that the books of account supported the contention that the goods were not actually in existence in the State of Assam at the time of the contracts of sale.
Holding that the reasons which the Commissioner had given in support of his finding were not "altogether unjustified" and that the taxing 659 authorities being "fully conscious" that one of the essential ingredients of tax liability was that the goods must be actually in existence in the State of Assam at the time of the contracts of sale, the High Court declined to consider whether the conclusions of the taxing authorities on questions of fact were correct.
But the High Court held that the plea about the vires of section 2(12) and the Explanation thereto raised a substantial question as to the interpretation of the Constitution, and accordingly granted certificates of fitness under article 132 of the Constitution.
At the hearing of these appeals counsel for the appellants sought leave to challenge the correctness of the decision that the goods were when the contracts were made actually within the Province of Assam.
We have heard counsel for the appellants at great length upon this application for leave to appeal on grounds other than constitutional on which the certificates were granted by the High Court.
After carefully considering the arguments, we are of the view that no case has been made out for acceding to that request.
A person appealing to this Court under article 132 of the Constitution may not challenge the correctness or propriety of the decision appealed against on grounds other than those on which the certificate is granted, unless this Court grants him leave to raise other questions.
Such leave is generally granted where the trial before the High Court has resulted in grave miscarriage of justice or where the appeal raises such substantial questions that on an application made to this Court under article 136 of the Constitution leave would be granted to the applicant to appeal against the decision on those questions.
The Assam Sales Tax Act, 1947, was enacted in 1947.
By section 2(3) the expression "dealer" is defined as meaning any person who carries on the business of selling or supplying goods in the Province, and by the Explanation the manager or agent of a dealer who resides outside the Province and carries on the business of selling or supplying goods in the Province is in respect of such business to be deemed a dealer for the purpose of the Act.
Clause (12) of section 2 defines 'sale '.
Section 3 is the charging section and section 4 prescribes the rates of tax.
The sales tax authority may, 660 if he is not satisfied that the return furnished by the dealer is correct and complete, serve on the dealer a notice requiring him either to attend in person and to produce or cause to be produced any evidence on which he may rely in support of his return [sub section
(2) of section 17], and may make an assessment to the best of his judgment if the dealer fails to make a return or fails to comply with the terms of the notice issued under sub section
(2) of section 17.
Section 30 confers a right of appeal to an aggrieved dealer to the authority prescribed by the rules, and by section 31 revisional jurisdiction may be exercised by the Commissioner of Sales Tax against the order of the sales tax authorities.
By section 32, within sixty days from the date of service of any order in appeal or revision, the dealer may, by application in writing, require the Board of Revenue or the Commissioner, as the case may be, to refer to the High Court any question of law arising out of such order, and if the Board or the Commissioner decline to state the case, the dealer may apply to the High Court calling upon the Board or the Commissioner to state the case, and the High Court may if it be not satisfied with the correctness of the decision of the Com missioner, require the authority concerned to state the case and refer it and on receipt of any such requisition, such authority shall state and refer the case.
The High Court upon hearing any such case decides the question of law raised on the reference and delivers its judgment thereon containing the grounds on which such decision is founded [sub section
The Act therefore provides a hierarchy of taxing tribunals competent to decide question as to the liability of the tax payer under the Assam Sales Tax Act, with a right to have questions of law arising out of the order decided by the High Court of the Province.
Primarily it is the Superintendent of Taxes who assesses the liability to pay tax.
An appeal against the order of the Superintendent lies to the Assistant Commissioner of Taxes and against the order of the Assistant Commissioner a revision application lies to the Commissioner Against the order of the Commissioner a reference may be demanded on questions of law to the High Court and if reference is refused the High Court may be moved to call for a reference.
The scheme evolved by the Legislature for determination 661 of tax liability is that all questions of fact are to be decided by the taxing authorities and on questions of law arising out of the decision of the taxing authorities the opinion of High Court may be obtained.
The High Court has however no power to decide questions of fact, which are exclusively within the competence of the taxing authorities.
The High Court is again not an appellate authority over the decision of the Commissioner; it has merely to give its opinion on questions of law arising out of the order of the Commissioner.
Whether the decision of the Commissioner is not supported by any evidence, or is based upon a view of facts which could never be reasonably entertained, is a question of law which arises out of the order.
Against the order of the Commissioner an order for reference could have been claimed if the appellants satisfied the Commissioner or the High Court that a question of law arose out of the order.
But the procedure provided by the Act to invoke the jurisdiction of the High Court was bypassed.
The appellants moved the High Court challenging the competence of the Provincial Legislature to extend the concept of sale, and invoked the extraordinary jurisdiction of the High Court under article 226 and sought to reopen the decision of the taxing authorities on questions of fact.
The jurisdiction of the High Court under article 226 of the Constitution is couched in wide terms and the exercise thereof is not subject to any restrictions except the territorial restric tions which are expressly provided in the Article.
But the exercise of the jurisdiction is discretionary; it is not exercised merely because it is lawful to do so.
The very amplitude of the jurisdiction demands that it will ordinarily be exercised subject to certain self imposed limitations.
Resort to that jurisdiction is not intended as an alternative remedy for relief which may be obtained in a suit or other mode prescribed by statute.
Ordinarily the Court will not entertain a petition for a writ under article 226, where the petitioner has an alternative remedy which, without being unduly onerous, provides an equally efficacious remedy.
Again the High Court does not generally enter upon a determination of questions which demand an elaborate examination of evidence to establish the right to enforce which the writ is 662 claimed.
The High Court does not therefore act as a court of appeal against the decision of a court or tribunal, to correct errors of fact, and does not by assuming jurisdiction under article 226 trench upon an alternative remedy provided by statute for obtaining relief.
Where it is open to the aggrieved petitioner to move another tribunal, or even itself in another jurisdiction for obtaining redress in the manner provided by a statute, the High Court normally will not permit, by entertaining a petition under article 226 of the Constitution, the machinery created under the statute to be by passed, and will leave the party applying to it to seek resort to the machinery so set up.
In the present case the appellants had the right to move the Commissioner to refer a case to the High Court under section 32 of the Act, and to move the High Court if the Commissioner refused to refer the case.
But they did not do so and moved the High Court in its jurisdiction under article 226 of the Constitution, and invited the High Court to reopen the decision of the taxing authorities on questions of fact, which jurisdiction by the statute constituting them is exclusively vested in the taxing authorities.
This they did, without even raising the questions before the Superin tendent of Taxes and the Assistant Commissioner.
The appellants who are dealers registered under the Assam Sales Tax Act submitted their returns to the Superintendent of Taxes, but failed when called upon to produce their books of account and other evidence in support of their returns.
Even before the Assistant Commissioner, they produced some but not all their books of account and evidence demanded by the Superintendent.
By the Explanation to section 2(12) of the Act the expression 'sale ', notwithstanding anything contained in the Indian , includes sale of any goods which are actually in the Province at the time when the contract of sale in respect thereof is made, irrespective of the place where the said contract is made and such sales are deemed for the purposes of the Act to have taken place in the Province.
Under the Indian , a sale takes place when property in the goods passes.
But, for the purposes of the Assam Sales Tax Act situation of the goods 663 is seized by the Legislature for the purpose of fictionally regarding the sale as having taken place within the Province of Assam if at the time of the contract of sale the goods are within the Province.
Liability to sales tax in respect of the goods where the transfer in the property of the goods has taken place outside the Province of Assam undoubtedly arose if the conditions prescribed by the Explanation, exist : viz. the goods are actually in the Province when the contract of sale is made, and not otherwise.
But the question whether the goods at the date of the contract of sale were actually in the Province is a question of fact which had to be determined by the sales tax authorities.
Before the Superintendent of Taxes liability to pay tax was challenged but it does not, appear to have been contended that at the time of the contract of sale, :the goods were not actually within the Province, and no such contention appears to have been even raised before the Assistant Commissioner of Taxes.
Before the Commissioner in the revision application filed by the appellants it was urged that part of the goods the price of which was sought to be included in the turnover were not within the Province at the time of the contract of sale and therefore the price of those goods could not be taken into account in computing the taxable turnover.
The Commissioner held having regard to the "time table of cultivation of jute" and the time when the jute is brought into the market for sale, that the goods sold were within the Province on the dates of the contracts and therefore the price thereof was liable to be included in the taxable turnover.
The High Court, as we have already observed, took the view that the finding of the Commissioner was not "altogether unjustified", nor could it be said that the Commissioner and the other taxing authorities "were not quite conscious of" the requirements which attracted the application of the Explanation to section 2(12) and declined to enter upon a reappraisal of the evidence which in the view of the High Court the taxing authorities alone were competent to enter upon.
In these appeals Mr. Setalvad on behalf of the appellants contends that there is clear evidence on the record to show that even applying the test laid down by the Commissioner 664 some of the contracts of sale were made before the goods were marketable and therefore the view taken by the taxing authorities that the goods were at the date of the contract in existence within the Province of Assam was "without any foundation".
Counsel also submitted that some of the contracts related to jute grown in Pakistan and with respect to those contracts also the assumption made by the Com missioner that the goods were within the State of Assam at the date of the contract of sale could not be warranted.
Counsel then said that the description of the goods in the contracts of sale indicated that they related to bales whereas the contracts for purchase by the appellants were in respect of loose jute and as the goods purchased were not identical or ascertainable with reference to the contracts of sale made by the appellants, liability to pay tax was not attracted under section 2(12) of the Act.
We are unable to entertain these pleas because they were never raised before the Superintendent of Taxes and the Assistant Commissioner and no evidence was produced by the appellants to support those pleas.
Before the Commissioner it was broadly urged that the goods in respect of the con tracts could not have been in existence within the Province at the date of the respective contracts of sale but that argument was for reasons already mentioned rejected by the Commissioner and the High Court declined to allow the question whether the findings of the Commissioner were "speculative" to be agitated.
The appellants now seek to plead that the taxing authorities were in error in holding that the goods conformed to the conditions as to the sites of the goods at the dates of the contracts of sale, prescribed by section 2(12) so as to make the price liable to be included in the taxable turnover.
The Legislature has entrusted power to ascertain facts on which the price received on sales becomes taxable, to the authorities appointed in that behalf with right of recourse to the High Court on questions of law arising out of the order of the Commissioner of Taxes.
It is therefore contemplated by the Legislature that all material evidence on which a tax payer relies to justify his claim that his transactions are not taxable, should be placed before the taxing authorities so that they may have an opportunity to adjudicate upon the claim.
If after a proper trial, the claim is negatived, 665 because the facts on which it is founded are not proved, the proceeding must end.
If, however, the adjudication of the Commissioner is vitiated because there is no evidence to support it or it is based on conjectures, suspicions or irrelevant materials, or the proceedings of the taxing authorities are otherwise vitiated so that there has been no fair trial, the High Court may undoubtedly advise the Com missioner on questions properly referred to it in the manner provided by the Act.
But the High Court cannot be asked to assume the role of an appellate authority over the decision of the Commissioner on questions of fact or even of law.
Assuming that there is some substance in the contention that the adjudication by the Commissioner proceeded on grounds which the appellants characterised as "speculative", it was open to them to resort to the machinery provided by the Act, and having failed to do so, they could not ask the High Court to act as an appellate authority in clear violation of the statutory provisions and to bypass the machinery provided by the Act.
We accordingly decline to entertain the application to raise questions other than those raised by the certificate granted by the High Court, because the questions sought to be raised are questions of fact which were not canvassed at the appropriate stage before the taxing authorities and the machinery provided under the Act for determination of questions relating to liability to tax is attempted to be bypassed.
The constitutional question on which certificate was granted does not need consideration in any detail.
By the Explanation to section 2(12) of the Act notwithstanding anything to the contrary contained in the provisions of the Indian , a sale is deemed to be complete when the goods which are actually within the State of Assam at the time when the contract of sale is made, irrespective of the place where the contract is made.
Under the , in the absence of a contract to the contrary a sale is complete when property in the goods passes, but by the Assam Sales Tax Act the Legislature has attempted to locate the sites of sale for the purpose of levy 666 of sales tax by fixing upon the actual situation of the goods within the Province at the date of the contract, for the purposes of levying tax on sales.
The Legislature has thereby not overstepped the limits of its authority : The Tata Iron & Steel Company Ltd. vs The State of Bihar(1).
No argument has therefore been advanced before us to support the plea of unconstitutionality.
All the appeals fail and are dismissed with costs.
One hearing fee.
Appeals dismissed.
| The appellants who are merchants carrying on business as dealers in jute in Calcutta, submitted returns of turnover for purposes of sales tax due under the Assam Sales Tax Act, 1947, but as they did not comply with the requisition of the Superintendent of Taxes to produce their books, the latter made a "best judgment assessment" under section 17(4) of the Act.
Their appeals to the Assistant Commissioner of Taxes and revision petitions to the Commissioner of Taxes, Assam were dismissed.
The appellants then moved the High Court of Assam by petitions under article 226 and contended that Explanation to section 2(12) of the Act was ultra vires the Assam Legislature and that the tax could not be levied on sales irrespective of the place where the contracts were made.
They also contended that the finding of the Commissioner that the goods were actually in the State of Assam at the time when the contract was made was based on mere speculation.
The writ petitions were dismissed by the High Court and the appellants appealed to the Supreme Court with certificate under article 132(1) of the Constitution.
Before the Supreme Court the appellants applied for leave under article 132(3) of the Constitution to challenge the correctness of the decision of the High Court that the goods were actually within the State of Assam when the contracts were made.
Held:(i) Leave under article 132(3) be refused and the appeal must be restricted to the question of law as to the interpretation of the Constitution, certified by the High Court.
If these questions were desired to be raised the appellants ought to have moved the Commissioner to refer the case to the High Court under section 32 of the Act.
They could have moved the High Court if the Commissioner refused to refer the case to the High Court.
The Act provided machinery for obtaining relief and the same had to be resorted to and could not be allowed to be by passed.
Ordinarily, the High Court does not entertain a petition for a writ under article 226, where the petitioner has an alternative remedy, which without being unduly onerous, provides an equally efficacious remedy.
The High Court does not generally enter upon questions which demand an elaborate examination of evidence to establish the rights to enforce which the writ is claimed.
The High Court does not in exercise of its jurisdiction under article 226 act as a court of appeal against the decision of a court or Tribunal correct errors of fact.
656 The scheme of the Assam Sales Tax Act is that all questions of fact are to be decided by the taxing authorities.
The opinion of the High Court can be obtained on questions of law arising out of the decisions of the taxing authorities.
The High Court has under the Act no power to decide questions of fact which are exclusively within the competence of the taxing authorities.
(ii)Explanation to section 2(12) of the Act is not ultra vires the Legislature.
| 1724.txt |
ivil Appeal No. 1065 of 1987.
From the Judgment and Order dated 21.10.1986 of the Kerala High Court in S.A. No. 491 of 1980.
G. Vishwanatha Iyer, section Balakrishnan and M.K.D. Namboo dri for the Appellants.
T.S. Krishnamoorthy Iyer, A.K. Srivastava and S.C. Birla for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This appeal by leave is from the judgment and order of the High Court of Kerala, dated 21st October, 1986.
It arises in the following circumstances: The building in question which is a shop building No. T.C. 887, M.G. Road, Pazhavangadi, Trivandrum, is part of a pucca three storeyed building belonging to one M.P. Philip and as per his settlement the disputed shop building and two other rooms devolved on one of his sons M.M. Philip.
While this disputed shop building was in the possession of a tenant under the owner, the owner mortgaged the disputed building and the remaining portions to the first defendant with a direction to receive the rent from the tenant.
The mortgagor directed the tenant also to attorn to this mortga gee.
The first defendant subsequently in the course of his management of the mortgaged property, gave the building on lease to the appellants for a higher rent when the former tenant vacated the same.
Subsequently, the owner executed a subsequent mortgage with a direction to redeem the mortgage in favour of the first defendant and before the subsequent mortgagee took steps to redeem the mortgage, the owner assigned his equity of redemption to the respondent.
The respondent and the subsequent mortgagee together as plain tiffs 1 and 2 filed a suit to redeem the mortgage of the first defendant impleading the appel 977 lants as well as respondents and claimed recovery of the khas possession of the building.
The appellants contended that they are tenants of the building inducted into posses sion by the mortgagee as a mode of enjoyment that the mort gage deed authorised the mortgagee to enjoy the building by letting it out and they were not liable to be evicted through a decree of court in a redemption suit without an order under the Kerala Building (Lease & Rent Control) Act, 1965 (hereinafter referred to as 'the Act ').
The trial court decreed the suit and directed recovery of possession of the shop building on the ground that the mortgagee could not induct a tenant and give him any right to continue in pos session even after the redemption of the mortgage.
On appeal by the appellants, the first appellate court held that the disputed building was a shop building which was never in the enjoyment of the owner and the mode of enjoyment of the owner of the property was by letting it out and when the mortgagee enjoyed the property in that manner, by letting it out, the person put in possession as a tenant was entitled to continue in possession even after redemption, until evicted under the Rent Control Act.
The first appellate court further found that the mortgage deed impliedly autho rised the mortgagee to let out the building.
In that view the decree for khas possession of the shop building in possession of the appellants was denied to the respondent.
The respondent filed a second appeal before the High Court, raising the following three contentions: (1) Whether under section 76(a) of the Trans fer of Property Act, 1882, a tenancy created by the mortgagee in possession of an urban immovable property would be binding on the mortgagor after redemption of the mortgage, assuming that the tenancy was such as a pru dent owner of property would have granted in the usual course of management.
(2) Whether a tenancy created in exercise of a general power to grant a lease expressly or impliedly conferred on the mort gagee would survive the redemption of the mortgage in view of Sec.
111(c) of the Trans fer of Property Act, 1882; and (3) Whether a tenant inducted on the property by a mortgagee with possession, would after redemption of the mortgage be protected under the provisions of section 11(1) of the Act.
The High Court was of the view that as the appellants had not pleaded that they were inducted into possession by the mortgagee as 978 prudent act of management, it was not open to the appellants to contend that they could continue in possession even after redemption.
Further, the High Court was of the view that it was not open to the mortgagee to induct a person into pos session which conferred any right on the tenant to continue in possession even after redemption.
The High Court categorically came to the conclusion that protection under section 76(a) of the was never claimed in the written statement.
On the other hand, it was contended by the appellants that this was a pure question of law unconnected with the question of fact and, therefore, no pleadings were necessary and even without pleading such contention could be raised and considered by the Court at the time of argument.
Whether a particular lease is bona fide or prudent act of management, is primari ly a question of fact, though whether on account of the bona fide or prudent act of the mortgagor his lessee was entitled to continue even after the mortgage was determined, is a question of law.
The High Court was of the view that the decision on the question of law is dependent on the question of fact whether the lease was bona fide or a prudent act of a person of ordinary prudence, who would manage it as if it were his own.
On that question of fact, there should be definite pleading so that the plaintiff must have an oppor tunity of meeting the claim and adduce evidence in rebuttal.
The High Court therefore could not sustain the right of the tenant under section 76(a) of the , as a matter of prudent management.
There was no issue in this respect and the judgment of the trial court did not show, according to the High Court, that such a contention was raised.
The only contention that was raised was that the lease was with the knowledge or consent of the mortgagor.
The High Court further came to the conclusion that there was no evidence in support of that contention.
The finding of the District Judge that the mortgagee had implied authority of the mortgagor to let out, was not only lacking in plead ings or issue, but it was also not warranted by the provi sion of the mortgage deed or the evidence.
The High Court relied on several decisions and came to the conclusion that the provision of Sec.
76(a) of the , which was an exception to the general rule embodied in Sec.
111(c) applies in appro priate cases ordinarily only to the management of agricul tural lands and had seldom been extended to urban property so as to tie up in the hands of lessee or to confer on him rights under special statutes.
The High Court further came to the conclusion that the general 979 proposition of law is that no man can convey a better fight than he himself has.
Therefore, a mortgagee in possession cannot create tenancy with a right to continue in possession beyond the period of redemption.
Normally, lease by the mortgagee is determined when the mortgage is redeemed since there is no privity between the mortgagor and the lessee.
The question of prudent management under Sec.
76(a) of the by granting of lease or otherwise normally arises only in rural agricultural lands and not in urban immovable property.
The High Court further came to the conclusion that a mere authorisation to the mortgagee to lease the property itself does not amount to any intention to allow expressly the creation of a tenancy beyond the term of the mortgage.
Only where the words of the mortgage deed clearly and expressly allowed creation of tenancy beyond the term of the mortgage that the lease would be binding on the mortgagor.
In that view of the matter, the High Court held that the learned District Judge was wrong in holding that the defendants Nos. 2 & 3 were not liable to be evicted in this suit and that they could be evicted only through an order of a competent Rent Controller.
In the premises, the second appeal was allowed and a decree for eviction was passed.
Aggrieved thereby, the appellants have come up before this Court.
The question is was the High Court right.
The first contention of Sri Vishwanatha Iyer, learned counsel for the appellants, was that in view of the terms of the mortgage in the instant case, the appellants were enti tled to be in possession after redemption of mortgage as against the mortgagor.
He drew our attention to the mortgage deed dated 4th July, 1960.
The mortgagor in that mortgage deed stated that he was the absolute owner of the property and therefore he was mortgaging the property.
Thereafter, the deed proceeded to state as follows: "This property is hereby secured to you on otti for a term of 2 years for Rs.7,000 which I have received as recited hereunder.
There fore, you may possess and enjoy the property by collecting the rent from the tenants and after the expiry of two years I shall pay you the sum of Rs.7,000 and get a release of the otti ands the expenses for the release should be shared by us.
" The mortgagee was to enjoy the property by collecting the rent from the tenants.
This mortgage was renewed for the second time on 980 17th August, 1977.
The second mortgage deed recited that the shop in Item I which was in possession of Carona Shoe Compa ny, was given for enjoyment.
Therefore, the fact that the tenant was there, is accepted.
It was contended that as no amount was being paid as interest, the mortgagee was entitled to the benefit, that is to say, the rent from the premises in question.
It was contended that the High Court was wrong in holding that it was not an act of prudent management.
Sri Iyer referred to the document dated 3rd June, 1977 which recited as follows: "But the portion where the Ringal shop was situate alone was given possession to you and the remaining portion forming upstairs to the shop previously Ringal Shop, now Carona Shoe Mart, and the shed portion behind it was let out to Chellamma Pillai by the mortgagor and she is occupying it while so the mortgagor has executed a subsequent mortgage and an agree ment for sale to Chellamma Pillai and she is entitled to redeem you and recover posses sion of the building." These contentions, in our opinion, are concluded by the decision of this Court in PomaI, Kanji Gvoindji & Ors.
vs Vrajlal Karsandas Purohit & Ors., [1988] 4 Jmt.
Today SC 307, wherein it was held that except in cases where the leases specifically and categorically make exceptions in favour of the tenants that they would continue to be in possession even after the expiry or termination of the mortgage, and those leases are acts of prudent management, the tenants inducted by the mortgage would be entitled to the protection under the Rent Act after the redemption of mortgage .and in no other cases.
Sri Iyer, in our opinion, is wrong in contending that in the instant case the mortgage deed specifically empowered the mortgagor to induct tenant who would continue to be in possession even after the redemption or end of the mortgage.
It is true that the mortgage deed recited that the tenants were there.
It is also true that the mortgage deed also enjoined that the method of realisation of the rent as the method of having the usufruct of the mortgage by the mortga gee.
But it must be understood that so long as the mortgage subsisted, there was relationship of tenant and landlord.
It could not be so after the mortgage was redeemed.
There is nothing in the mortgage deed in the instant case which warranted the conclusion that the mortgagee could 981 induct tenants who Would continue beyond the term of the existence of the mortgage or who would be given rights even after the expiry of the mortgage.
Sri Iyer then submitted that this Court in the aforesaid decision had referred to another decision of this Court, namely, Jadavji Purshottam vs Dhami Navnitbhai Amaratlal & Ors., where it was held that if the lease granted to the tenant by the mortgagee had the approval or concurrence of the mortgagor, the same would entitle the tenant to claim tenancy rights even as against the mortgagor after he had redeemed the mortgage, then in such a case, such tenants would continue to be in possession.
Sri Iyer drew our attention to the observations of this Court in the aforesaid decision at para 13 of page 236 of the report.
With reference to the term of the mortgage in the instant case and the communications between the parties, Sri Iyer tried to contend that the lease granted in favour of the appellants by the mortgagee had the approval or concurrence of the mortgagor.
We are, however, unable to accept or find in the correspondence any such approval or concurrence.
We have referred to the mort gage deed and the sale deed as mentioned hereinbefore.
Sri Iyer drew our attention to a letter dated 7th October, 1977 addressed to the Rent Controller with a copy to the General Manager, Carona Shoe Co. Ltd. Therein, the respondent had negotiated or made an offer and expressed preference for the appellant company.
The letter contained the following state ments: "Under the circumstances, I have now finally decided to settle all the issues and start the construction of the rear portion as early as possible as I have two more offers (other than yours) for renting out the entire ground floor (about 1,500 sq.
ft.) which includes the space now occupied by you and a portion of the first floor.
I am writing this letter to you because my first preference is for your company.
The main reason is that you are conducting the business in the same shop for some years.
Second thing is that I have already agreed to you at the discussion even though there was no written consent.
In the light of the above, I give below my terms and conditions for renting out the shop with additional space annexed, if you are interested to continue the business in my building.
Of course, the expenses (portion) for the same will have to be borne by you.
But I will provide you with a very good show room considering your requirements.
Necessary bathroom, lavatory, office cabin etc.
will also be provided in consulta 982 tion with your representative.
I had a discus sion with Mr L.W. Baaker, A.R.I.B.A. (The British Architect who is doing so many artis tic modern buildings and show room etc.
throughout India including the Chitralekha Film Studio) and the article Director and Interi or Decorator of our Studio regarding the subject.
" Thereafter, certain terms and conditions of the proposed lease were suggested.
Ultimately, however, no such lease was executed.
This communication strictly, in our opinion, negates the submission that there was any concurrence or approval of the mortgagor of the continuance of the appel lant 's as tenants after the expiry or redemption of the mortgage.
It was then submitted by Sri Iyer that in view of the provisions of the Act, it was not possible for the respond ents to execute the decree.
After an exhaustive discussion of the relevant authorities, it has been held by this Court in Pomal Kanji Govindji 's case (supra) that in respect of the urban immovable properties, the tenants do not get any protection after the redemption of mortgage.
Sri Iyer, however drew our attention to Sec. 11 of the Act, to contend that notwithstanding anything contained in any other law or contract, a tenant shall not be evicted, whether in execu tion of a decree or otherwise, except in accordance with the provisions of the Act.
He drew our attention to the defini tion of 'tenant ' under sec.
2(6) of the Act which defines a tenant as a person by whom or on whose account rent is payable for a building and includes the heir or heirs of a deceased tenant and a person continuing in possession after the termination of the tenancy m his favour.
Similarly, landlord is defined under section 2(3) of the Act as follows: "(3) "landlord" includes the person who is receiving or is entitled to receive the rent of a building, whether on his own account or on behalf of another or on behalf of himself and other or as an agent, trustee, executor, administrator, receiver or guardian or who would so receive the rent or be entitled to receive the rent, if the building were let to a tenant.
" But in view of the said definitions, we are of the opinion that between the appellants and the respondent, there was never any landlord or tenant relationship.
The appellants were never the tenants of the respondent.
Sri Iyer drew our attention to the observations of this 983 Court in Raj Brij Krishna & Anr.
S.K. Shaw & Bros., , where it was held that the non obstante clause would be applicable.
Our attention was drawn to the observa tions of Fazal Ali, J. at page 150 of the report.
There, the Court observed that Section 11 of the Bihar Buildings (Lease, Rent & Eviction) Control Act, 1947 was a self con tained section, and it was wholly unnecessary to go outside the Act for determining whether a tenant was liable to be evicted or not, and under what conditions he could be evict ed.
But in the instant case, the appellants were not the tenants.
The respondent, the original mortgagor, would never after the redemption of the mortgage have treated the appel lants to be tenants.
There was no relationship ever between the appellants and the respondent.
The mortgagor had a separate and distinct interest which was wiped out on the redemption of the mortgage or expiry of the period of mort gage.
The mortgagor on redemption of mortgage gets back his own right, he is not the successor in interest of the mort gagee.
Interest, if any, created by the mortgagee on the mortgagor 's right, must disappear on ceasing of interest of the mortgagee.
In that view of the matter, in our opinion, thus the said observations would not be of any relevance to the present case.
Similarly, reliance was placed on the observations of this Court by Sri Iyer in M/s Raval & Co. vs
K.G. Ramachandran & Ors., ; The observa tions that the definitions of 'landlord ' and 'tenant ' might apply even if the contractual tenancy has come to an end.
But that is not the situation here in the instant case.
In the said case, Bhagwati, J. as the Chief Justice then was, in his judgment at page 439 of the report observed that sub section (1) of section 4 of the Act in question i.e., Tamil Nadu Buildings (Lease & Rent Control) Act, 1960 con templated that an application for fixation of fair rent of a building might be made by the tenant or the landlord.
The definition of 'tenant ', it was observed, included contractu al tenant as well as tenant remaining in possession of the building after determination of the contractual tenancy, i.e. statutory tenant, and both contractual tenant and statutory tenant could, therefore, apply.
It was, therefore, submitted in this case that on the analogy of the contractu al tenant, the appellants were entitled to the protection of the Act.
We are unable to agree.
It is not a question of a contractual tenancy coming to an end.
The limited estate created in favour of the mortgagee having disappeared, all rights emanating from that limited estate disappear and the superior fight of the mortgagor comes not in place of the mortgagee but as a result of an independent title, and as such the mortgagor cannot be bound by any act created or any relationship contracted between the mortgagee and the ten ant, unless it is permitted by the mortgage deed Reliance was also placed on certain observations of 984 this Court in V. Dhanpal Chettiar vs Yesodai Ammal, 14.
Therein, it was held that under the State Rent Acts, the concept of contractual tenancy has lost much of its significance and force.
Therefore, giving of the notice was a mere surplusage and unlike the law under the , it does not entitle the landlord to evict the tenant.
In our opinion, the observations of the said decision cannot have any assistance or significance for the purpose of the issues involved in the present controver sy.
Our attention was also drawn to the observations of this Court in Pomal Kanji Govindji 's case (supra) at para 42 of page 326 and it was contended that in this case impliedly the mortgage deed specifically and categorically made an exception in favour of the tenants that they would continue in possession even after the termination or redemption of the mortgage and that these leases were acts of prudent management.
In this connection, reference may be made to Section 60 of the .
It is this which gives the mortgagor right to redeem after the date fixed for payment.
The mortgagor 's right of redemption and the mortga gee 's right of foreclosure or sale are co extensive.
Simi larly, Section 76(a) of the which determines the liabilities of the mortgagee and imposes the obligation to manage the property as a person of ordinary prudence.
In the instant case, it has been held by the High Court that the induction of the appellants as tenant was not an act of prudent management.
Our attention was also drawn by Sri Iyer to the observa tion of this Court in Gian Devi Anand vs Jeevan Kumar & Ors., ; in support of his submission that in the emerging jurisprudence of tenancy legislation the dis tinction between statutory tenant and contractual tenant has disappeared.
The said view, in our opinion, would be of no avail as the respondent is not the successor in interest and does not come in place of the mortgagee but by virtue of its independent title.
Reliance was also placed on the observations of this Court in G. Ponniah Thevar vs Nalleyam Perumal Pillai & Ors., ; That decision, in our opinion, has no application.
The person inducting the tenant appellant was a co widow who had a life interest in the lands.
It was observed that the terms of the statutory protection applied clearly to all tenancies governed by the Madras Cultivating Tenants Protection Act irrespective of the nature of fights of the person who leased the land so long as the lessor was entitled to create a tenancy.
In our opinion, the said observations would not be applic 985 able.
The said decision deals with the right of the co widow in the land.
Reference may be made to the facts of that case at page 504, para 10.
In our opinion, in view of the said facts, the decision would not apply to the facts of the instant case.
On the other hand, in view of the facts and ratio of the principle of the decisions in Jadavji Purshot tam, (supra) and PomaIii Govindji, (supra) we are of the opinion that the contentions of Sri Iyer cannot be sus tained.
The non obstante clause in Section 11(a) of the Act is applicable only to a decree for eviction obtained by a landlord against a tenant.
The appellants were never the tenants of the respondent.
In the aforesaid view of the matter, we are unable to accept the submissions urged in this case and, therefore, the appeal must fail.
But in view of the fact that the appellants have been carrying on the business for some time in the premises in question in order to enable them to adjust their business, we direct that the order for eviction of the appellants should not be executed upon 31st October, 1989 if the appellants give an undertaking within a period of four weeks from this date to give vacant possession in a peaceful manner on 3 1st October, 1989; and also containing the usual terms of undertaking.
In default of such undertak ing being given within the time aforesaid, the decree will be forthwith executed.
The appeal is accordingly dismissed with costs.
Y.L. Appeal dis missed.
| The appellants are tenants.
The premises in dispute is a shop building bearing No. T.C. 887, M.G. Road, Pazhavangadi, Trivandrum, part of a Pucca three storeyed building owned by one M.P. Phillip.
As per the settlement the shop in dispute devolved on one of his sons, while the shop was in the possession of the tenant.
During the tenancy owner mortgaged the premises in dispute and the remaining portions to the first defendant with a direction to receive the rent from the tenant.
The tenant was asked to attorn to the mortgagee.
The first defendant in course of management of the property gave the building on lease to the appellants for a higher rent; the earlier tenant having vacated the same.
The owner thereafter executed the second mortgage with a direction to redeem the mortgage in favour of the first defendant and before the subsequent mortgagee took steps to redeem the mortgage, the owner assigned his equity of redemption to the respondent.
The Respondent and the subsequent mortgagee together as plaintiffs 1 & 2 filed a suit to redeem the mortgage of the first defendant impleading the appellants as parties and claimed recovery of the Khas possession of the building.
The appellants contended (i) that they are tenants of the build ing inducted into possession by the mortgagee as a mode of enjoyment; (ii) that the mortgage deed authorised the mort gagee to enjoy the building by letting it out and that they were not liable to be evicted through a decree of Court in redemption Suit without an order under the Kerala Building (Lease and Rent Control) Act 1965.
The trial Court decreed the suit and directed recovery of possession of the Shop building.
It took the view that the mortgagee could not induct a tenant and give him any right to continue in possession even after the redemption of the mortgage.
975 On appeal, the first appellate Court held that the disputed building was a shop building which was never in the enjoyment of the owner; mode of enjoyment of the owner being by letting it out and when the mortgagee enjoyed the proper ty in that manner by letting it out, the person put in possession as a tenant was entitled to continue in posses sion even after redemption, until evicted under the Rent Control Act.
It also found that the mortgage deed impliedly authorised the mortgagee to let out the building.
In that view of the matter, the trial Court 's order was set aside.
The Respondent thereupon filed a second appeal before the High Court The High Court took the view that it was not open to the mortgagee to induct a person into possession which conferred any right on the tenant to continue in possession even after redemption.
Accordingly it allowed the appeal and a decree for eviction was passed.
Hence this appeal by the appellants tenant.
Dismissing the appeal, but directing that the decree for eviction should not be executed till the 31st October, 1989 if the appellants give usual undertaking to deliver vacant possession on 31st October, 1989, this Court, HELD: That the mortgagor on redemption of mortgage gets back his own right; he is not the successor in interest of the mortgagee.
Interest, if any, created by the mortgagee on the mortgagor 's right, must disappear on ceasing of the interest of the mortgagee.
[983C D] The limited estate created in favour of the mortgagee having disappeared, all rights emanating from that limited estate disappear and the superior right of the mortgagor comes not in place of the mortgagee but as a result of an independent title, and as such the mortgagor cannot be bound by any act created or any relationship contracted between the mortgagee and the tenant, unless it is permitted by the mortgage deed [983G H] The mortgagor 's right of redemption and the mortga gee 's right of foreclosure or sale are co extensive.
[984D] Jadavji purshottam vs Dhani Navnitbhai Amaratlal & Ors., and Pornal Kanji Govindji & Ors.
vs Vrajlal Karsandas Purohit & Ors., [1988] 4 Judgment Today SC 307, followed.
976 Raj Brij Raj Krishna & Anr.
S.K. Shaw & Bros., ; M/s. Raval & Co. vs
K.G. Ram Chandran & Ors., ; ; V. Dhanpal Chettiar vs Yesodai Ammal, ; ; Gian Devi Anand vs Jeevan Kumar & Ors., ; and G. Ponnial Thevar vs Nalleyam Perumal Pillai & Ors., ; not applicable.
| 5991.txt |
Appeals Nos. 934935 of 1963.
Appeals from the judgment and orders dated August 12, 1960, and April 30, 1960, of the Madhya Pradesh High Court in Civil Suit No. 1 of 1958 and Misc.Petition No. 101 of 1958 respectively.
C.K. Daphtary, Attorney General, R. Ganapathy Iyer and R. H. Dhebar, for the appellants (in both the appeals).
M.C. Setalvad, K. A. Chitale, M. K. Nambyar.
Rameshwar Nath and section N. Andley, for the respondents (in both the appeals).
April 28, 1964.
The judgment of the Court was delivered by WANCHOO, J.
These two appeals on certificates granted by the Madhya Pradesh High Court raise common questions of law and will be dealt with together.
The respondent the Gwalior Rayon Silk Manufacturing (Weaving) Company Limited (hereinafter referred to as the company) is registered under the Indian Companies Act.
It is necessary to set out how the company came to be established in order to understand the case put forward by the company.
In October 1946 Messrs. Birla Brothers Limited, Gwalior, wrote to the Government of Gwalior that they intended to establish at some suitable place in Gwalior a kind of industrial centre in which they intended to set up certain industries provided certain facilities were granted to them by the Government of Gwalior.
The facilities for which they made the request were (i) free adequate land at a suitable site; (ii) free processing water if obtainable from a river and at a specially concessional rate if obtainable from a dam; and (iii) exemption from any form of taxation on income for a period of fifteen years from the date of the starting of the factories.
On this letter being received, the matter was processed in the Secretariat of the former State of Gwalior.
The Secretariat noting shows that the decision to establish industries in Gwalior was largely to be influenced by the decision of the Gwalior Government as to the facilities asked for.
The Secretariat also noted that no positive scheme regarding the proposed industrial centre had been submitted but that only tentative proposals were made to ascertain if the State was willing to grant the concessions asked for.
It was pointed out that the main question that required consideration was with respect to exemption from any form of taxation on income for a period of fifteen years.
It was also pointed out that no income tax was leviable 895 in that State at that time and that exemption from incometax for period of fifteen years would lead to the establishment of the industries which thereafter would yield income in the shape of taxes to the State.
It was therefore proposed by the Secretariat that the concessions asked for might be granted.
Later, however, the period of exemption from taxation on income was reduced from fifteen to twelve years and it was recommended that this might be granted in order to attract the establishment of industries in the State.
The matter was eventually put up before the Ruler on January 18, 1947, and he passed the following order: "The Guzarish of the Minister for Industries, Commerce and Communications dated 15 11 1946 is sanctioned.
Exemption from any form of taxation on the income for a period of 12 years from the date of starting of the factories is granted.
The other two concessions he has asked for should be given and attempt should be made to establish and start these factories as early as possible.
" The substance 'of this order was communicated to Messrs. Birla Brothers Limited and eventually an agreement was entered into on April 7, 1947 between the Government of Gwalior and Messrs. Birla Brothers Limited, which stated that in accordance with the orders of the Ruler dated January 18, 1947, it was hereby agreed to grant and accord the facilities, privileges, concessions and benefits hereinafter mentioned to the said company.
These facilities, privileges, concessions and benefits in the agreement were three, namely (1)provision for sufficient and adequate land or lands absolutely free of any cost, revenue or cess whatsoever, for the construction and erection of factory etc.for starting the industries mentioned in the agreement; (2)making of arrangements for the supply of adequate and sufficient quantities of suitable water, whatever available, for the above mentioned industries on most concessional and suitable terms; (3) granting of exemption to the above mentioned industries and/or any concern or concerns promoted or started or to be hereinafter promoted or started for the establishment and starting of all or any of the above mentioned industries from the payment of all taxes and/or duties, in any form or nature whatsoever, on their incomes, prolits, gains or busi ness, levied or to be hereinafter levied in the Gwalior State, or any part thereof, for a period of twelve years reckoned from the date on which the factory or factories of the abovementioned industries has or have started, working or starts or start working.
896 In consequence of this agreement, the company was a started and actual production began sometime in June 1949 so far as the weaving section for manufacturing cloth from artificial silk yarn was concerned.
It may be added that the staple fibre section of the company started actual working on or about February 18, 1954.
That is how the company came to be established and started working in what was the former Gwalior State in pursuance of the agreement of April 7, 1949.
Before however the company actually started working even the weaving section for manufacturing cloth from artificial silk yarn, certain constitutional changes took place in India to which it is now necessary to refer.
On August 15, 1947, India became a Dominion and the process of mergers which eventually resulted in the emergence of the Republic ,of India and its Constitution on January 26, 1950, began.
In that process, the Rulers of Gwalior, Indore and certain other States in what was known as Central India, entered into a covenant for the formation of the United State of Gwalior, Indore and Malwa (also known as Madhya Bharat) in April 1948.
Article VI of that covenant provided that the Ruler ,of each covenanting State shall, as soon as may be practicable, and in any event not later than the first day of July 1948, make over the administration of his State to the Raj Pramukh, and thereupon (1) all rights, authority and jurisdiction belonging to the Ruler, which appertain or are incidental to the Government of the covenanting State shall vest in the United State; (2) all duties and obligations of the Ruler pertaining or incidental to the Government of the covenanting State shall devolve on the United State and shall be discharged by it; (3) all the assets and liabilities of the covenanting State shall be the assets and liabilities 'of the United State; and (4) the military forces, if any, of the covenanting State shall be the military forces of the United State.
Clause (2) of this Article also provided that where in pursuance of any agreement of merger, the administration of any other State was made over to the Raj Pramukh, the provisions of cl.(1) would apply to such State as they applied in relation to a covenanting State.
On July 19, 1948, the State of Madhya Bharat acceded to the Dominion of India.
On November 24, 1949, the Raj Pramukh of Madhya Bharat issued a proclamation accepting the provisions of the Constitution of India to be framed for the State of Madhya Bharat also.
On January 26, 1950, the Constitution of India came into force and the United State ,of Gwalior, Indore, Malwa became the Part B State of Madhya Bharat.
Meanwhile on December 13, 1948, the United State of Gwalior, Indore, Malwa (Madhya Bharat) Regulation of 897 Government Act, No. I of 1948 was passed.
Section 4 of that Act provided that "when the administration of any covenanting State has been taken over by the Raj Pramukh or when any State has merged in the United State as aforesaid, all laws, Ordinances, Acts, Rules, Regulations etc., having the force of Law in the said State shall continue to remain in force until repealed or amended under the provisions of the next succeeding section, and shall be construed as if references in them to the Ruler or Government of the State were references to the Raj Pramukh or the Government of the United State respectively".
The company contended that by virtue of this Act read with article VI of the covenant, the liabilities of the covenanting States devolved on the United State of Gwalior, Indore, Malwa (Madhva Bharat).
Further it was contended that under cl.(b) of article 295(l), when the Constitution came into force all rights, liabilities and obligations of the Government of any Indian State corresponding to a State specified in Part B of the First Schedule, became the rights, liabilities and obligations of the Government of India, if the purposes for which such rights were acquired or liabilities or obligations were incurred before such commencement would thereafter be purposes of the Government of India relating to any of the matters enumerated in the Union List.
This was subject to any agreement entered into in that behalf by the Government of India with the Government of the State concerned.
It was therefore contended on behalf of the company that the obligation incurred by the Ruler of Gwalior by virtue of the agreement of April 7, 1947 became the obligation of the Government of India under cl(b) of article 295(1) on January 26, 1950.
On April 1, 1950, the Indian Income tax Act was extended to the Part B State of Madhya Bharat.
From the same date the Finance Act (No. XXV of 1950) also became applicable to the Part B State of Madhya Bharat by which incometax became chargeable as provided therein on any income accruing or arising in Madhya Bharat, which by then had become part of India.
Further section 13 to the Finance Act, 1950 provided that "if immediately before the 1st day of April, 1950, there is in force in any Part B State other than Jammu and Kashmir or in Manipur, Tripura or Vindhya Pradesh or in the merged territory of Cooch Behar any law relating to income tax or super tax or tax on profits of business, that law shall cease to have effect except for the purposes of the levy, assessment and collection of income tax and super tax in respect of any period not included in the previous year for the purposes of assessment under the Indian Income tax Act, 1922, for the year ending on the 31st day of March, 1951 or for any subsequent year, or, as the case may be, the levy, assessment and collection of the tax on profits of business L/P(D)ISCI 29 898 for any chargeable accounting period ending on or before the 31st day of March, 1949".
The effect of this provision was to repeal all laws relating to income tax in its broadest sense prevailing in those parts 'of India to which the Indian Income tax Act was extended from April 1, 1950.
In the meantime, however, agreements were entered into by the Government of India with Part B States in accordance with the recommendation of the Indian States Finances En quiry Committee, 1948 49 (hereinafter referred to as the Enquiry Committee '.
The agreement with the State of Madhya Bharat provided that the recommendations of the said Com mittee contained in Part 1 of its report read with Chapters 1, 11, III of Part 11 of its report insofar as they apply to the State of Madhya Bharat together with the recommendations contained in Chapter IX of Part 11 of its report were accepted by the parties subject to certain modifications and this agreement was in force for a period of ten years.
Further in order to overcome difficulties which might arise on the application of the Indian Income tax Act, 1922 to Part B States and other areas which became merged with India, section 60 A was introduced in the Income tax Act in the following terms: "Power to make exemption etc., in relation to merged territories or to any Part B State or to Chandernagore If the Central Government considers it necessary or expedient, so to do for avoiding any hardship or anomaly, or removing any difficulty that may arise as a result of the extension of this Act to the merged territories. or to any Part, B State. . the Central Government may, by general or special order, make an exemption, reduction in rate or other modification in respect of income tax in favour of any class of income, or in regard to the whole or any part of the income of any person or class of persons.
" In pursuance of this power, the Central Government issued the Part B States (Taxation Concessions) Order, 1950 (here inafter referred to as the Concessions Order), which fixed reduced rates of income tax and super tax for Part B States.
Clause 16 of that Order is material for our purpose and was in these terms: "Concession to industrial undertakings (1) Where any industrial undertaking situated in any State claims that it has been granted any exemption from or concession in respect of income tax or super tax by the Ruler of an Indian State and was enjoying such exemption or concession immediately before the appointed day it shall submit 899 an application to the Commissioner of Income tax giving the following particulars: 1.Name of the industrial undertaking.
Status (ie.whether public or private company", firm, individual or Hindu undivided family).
Nature of the business.
Date of commencement of the business.
Nature of the concession granted.
Period for which concessions granted.
Unexpired period of the concessions after the appointed day.
(2) Every such application shall be accompanied by the orders in original of the Indian State granting the concession together with a certified copy of the order.
(3) The Commissioner shall after obtaining such other information as he may require, forward the application to the Central Government which, having regard to all the circumstances of the case, may grant such relief, if any, as it thinks appropriate.
" In December 1950, the company applied under cl. 16 of the Concessions Orders for concessions regarding income tax and super tax.
In November 1951, the company was informed that the Government of India had decided to exempt it from income tax and super tax for the assessment years 1950 51 to 1954 55 in respect of the weaving section.
The company wanted exemption for the full period of twelve years as pro vided in the agreement of 1947, but was asked to apply later and eventually the Central Government granted exemption to the weaving section for another five years from 1955 56 to 1959 60.
The company 's request for exemption of the staple fibre section which began working in April 1954 was rejected by the Government of India.
In the meantime assessment proceedings had been initiated by the Income tax Officer, A Ward, Gwalior against the company and assessment orders were passed in March 1955, March 1956 and March 1957 with reference to the weaving section for the assessment years 1950 51, 1951 52 and 1952 53.
The company appealed to the Assistant Appellate Commisssioner against these orders.
As the contention of the company was that it was entitled to exemption in accordance with the agreement of April 7, 1947 consequent on the order of the Ruler of Gwalior dated January 18, 1947, it filed a suit on November 23, 1956 against the Union of India for a declaration that under the order dated January 18, 1947 and the agreement L/P(D)ISCI 30 900 following thereon, the company was entitled to exemption from income tax and super tax and for other reliefs in the alternative.
This suit was transferred in 1958 to the High Court on the application of the company under article 228 of the Constitution.
While this suit was pending the company filed a petition under article 226 of the Constitution on September 11, 1957 in which also it claimed that by virtue of the order of the Ruler of Gwalior dated January 18, 1947 and the agreement following thereon, it was entitled to exemption from incometax and super tax for a period of 12 years from June 1949 with respect to the weaving section and for a period of 12 years from February 1954 with respect to the staple fibre section of the company and for other consequential reliefs in the alternative.
The High Court of Madhya Pradesh accepted the petition of the company and a direction was issued restraining the Union of India and its officers from making any assessment under the Income tax Act and levying or collecting income tax or super tax in contravention of the exemption given by the agreement dated April 7. 1947.
Further the proceedings taken by the income tax authorities in contravention of the said exemption were quashed.
In view of this decision on the writ petition, the High Court decreed the suit in the same terms.
The High Court however gave certificates to the Union of India and its officers to appeal to this Court; and that is how there are two appeals before us.
one against the decree passed in the suit and the other against order in the writ petition, though as we have said already, the points involved in the two appeals are exactly the same.
Three main contentions were raised on behalf of the company in the High Court.
In the first place it was urged that the order dated January 18, 1947 was a special law.
It was continued by the State of Madhya Bharat by Act No. 1 of 1948 and it continued after the Constitution came into force by virtue of article 372.
It was not repealed either by the extension of the Income tax Act to the State of Madhya Bharat from April 1, 1950 or by section 13 of the Finance Act, 1950, which applied to the State of Madhya Bharat from the same date.
In this connection reliance was placed on the agreement between the President of India and the State of Madhya Bharat dated February 25, 1950 to show that there could be no intention to repeal this special law merely by the extension of the Income tax Act to the State of Madhya Bharat or by section 13 of the Finance Act.
In the alternative it was submitted that if the order of January 18, 1947 did not have the force of law the agreement of April 7, 1947 between the Ruler of Gwalior and the com pany created an obligation which was binding on the former State of Gwalior.
That obligation continued to be binding 901 on the State of Madhya Bharat as it was before the Constitu tion came into force by virtue of Act No. 1 of 1948 read with article VI of the covenant.
Further that obligation of the State of Madhya Bharat devolved on the Government of India by cl.(b) of article 295 (1) of the Constitution.
The obligation thus being a constitutional obligation was not and could not be affected by the extension of the Income tax Act to the Part B State of Madhya Bharat read with the Finance Act, 1950, and could only be got rid of by an amendment of the Constitution, as cl.(b) of article 295 (1) made it into a constitutional obligation which could not be affected even by law.
Thirdly reliance was placed on the agreement between the President of India and the State of Madhya Bharat dated February 25, 1950 under article 278 of the Constitution and it was contended that this agreement was binding under article 278 (1) (a) of the Constitution and the result of the agreement was that the concessions granted in the agreement in favour of industrial corporations would continue and could not be affected even by the enactment of a law in the shape of the extension of the Income tax Act to the Part B State of Madhya Bharat read with the Finance Act, 1950.
The High Court held that the order dated January 18, 1947 was a law and that it continued in force by virtue of Act I of 1948 of the State of Madhya Bharat and article 372 of the ,Constitution and that it was not repealed by the extension of the Income tax Act to the State of Madhya Bharat read with section 13 of the Finance Act, 1950.
It further held that in view of cl.(b) of article 295 (1) of the Constitution there was a clear positive instruction in the Constitution that the obligations devolving thereby would be fulfilled and therefore the Government of India was bound to fulfil them irrespective of the extension of the Income tax Act read with the Finance Act to the State of Madhya Bharat from April 1, 1950.
The High Court summed up its conclusion as follows: 1.that the order dated January 18, 1947 of the Ruler of Gwalior State exempting the company from taxation had the effect of law and the agreement executed on April 7, 1947 cast an obligation on the Gwalior Government to exempt the ,company from taxation; 2.that by virtue of sections 3 and 4 of Madhya Bharat Act No. 1 of 1948, the company 's right to get the exemption received legislative recognition and the State of Madhya Bharat was bound to discharge the obligation undertaken by the Ruler of the Gwalior State which devolved on it; 3.that it was this obligation of the Madhya Bharat Government to fulfil the obligation undertaken by the Ruler of Gwalior State of granting exemption to the company that 902 devolved on the Government of India under article 295 (1) (b) and became a constitutional obligation of that Government; and 4.that on a true construction of the relevant provisions of the Income tax Act, section 13 of the Finance Act of 1950, and cl. 16 of the Taxation Concessions Order 1950, they did not repeal the specific exemption granted to the company by spe cial statutory provisions and that therefore the company 's claim for exemption from taxation was well founded.
The argument based on article 278 does not seem to have been considered by the High Court; but it has been urged before us by learned counsel for the company in support of the con clusions of the High Court.
The questions that were raised in the High Court have all been raised before us and we now proceed to deal with them seriatim.
The first question that falls for consideration is whether the order of January 18, 1947, is a law.
In this connection it is contended on behalf of the company that the order must be looked at independently of the agreement of April 7, 1947 which followed it and looked at in that way it must be held to be a law.
On the other hand, learned Attorney General urges that the order was passed by the Ruler in connecting with a process which started with the letter of Birla Brothers Limited dated October 17, 1946 and ended with the agreement of April 7, 1947.
Birla Brothers Limited had asked for certain concessions in order to enable them to start certain industries in Gwalior and that matter was processed in the Secretariat of the former State of Gwalior.
Naturally as concessions could not be granted without the sanction of the Ruler, the matter was put up before the Ruler whether he would agree to rant concessions and the order of January 18, 1947 is nothing more than the Ruler 's acceptance of the prayer for grant of concessions which eventually culminated in the agreement of April 7, 1947.
The learned Attorney General therefore contends that the order must be read in the context in which it was passed and if so read, it cannot be law.
Before we consider the rival contentions in this behalf ' we would like to clear the ground with respect to orders of absolute Rulers.
The High Court has relied in this connec tion on two decisions of this Court, viz. Ameer un Nissa Begum vs Mehboob Begum(1), and the Director of Endowments Government of Hyderabad vs Akram Ali(2).
In these cases it was observed that the Firmans were expressions of the sover eign will of the Nizam and they were binding in the same way as any other law; and therefore so long as a particular Firman (1)A.I.R (2) A.I.R. 1956 S.C. 60.903 held the field, that alone would govern or regulate the rights of the parties concerned and that the word of the Nizam was law.
It was on these general observations that the High Court relied to hold that the order of January 18, 1947 was law.
Since then, however, this Court bad occasion to consider these observations in three cases, namely: (I) Maharaja Shree Umaid Mills Ltd. vs Union of India(1), (2) the State of Gujarat vs Vara Fiddali Badruddin Mithibar(2) and (3) Rajkumar Narsingh Pratap Singh Deo vs The State of Orissa(3).
It has been pointed out in these cases that the observations in the earlier cases were not intended to lay down a general proposition that in the case of an absolute monarch no distinction can be made between his legislative and his executive acts.
In Maharaja Shree Umaid Mills Limited(1), the agreement between the Ruler and the Mills pursuant to the order of the Ruler was held to be a mere contract and not a law within the meaning of article 372.
The same view has been expressed by four learned Judges in the case of Vara Fiddali Badruddin Mithibar(2).
Finally in Rajkumar Narsingh Pratap Singh Deo 's case(3) it was held that this Court had not laid down a general proposition about the irrelevance or inapplicability of the well recognised distinction between legislative and executive acts in regard to the orders issued by absolute monarchs and that the true legal position was that whenever a dispute arose as to whether an order passed by an absolute monarch represented a legislative act all relevant factors must be considered before the question was answered.
These relevant factors were, the nature of the order, the scope and effect of its provisions, its general setting and context, the method adopted by the Ruler in promulgating legislative as distinguished from executive orders, these and other allied matters would have to be examined before the character of the order is judicially determined.
We need only add that this must be so when the contention is that a particular order of the Ruler has been continued as a law by article 372 of the Constitution.
We cannot impute to the Constitution makers an intention to continue each and every order of an absolute Ruler as a law whatsoever be its nature.
When article 372 of the Constitution speaks of continuance of laws in 1950 the jurisprudential distinction between legislative, judicial and executive acts must have been present in the mind of the Constitution makers and that distinction must always be kept in mind by courts in deciding whether a particular order of an absolute Ruler is law for the purpose of its continuance under article 372.
It may be that the order might not be liable to challenge by any one in the State, while the Ruler was there and in that sense the word of a Ruler might be law in his State.
But when we are (1) [1963] Supp. 2 S.C.R. 515.(2) A.I.R. 1964 S.C. 1043.(3) ; 904 considering whether a particular order of a Ruler continues under article 372 as law we cannot forget the jurisprudential distinction between legislative, judicial and executive acts and only those orders of the Ruler which are jurisprudentially legislative acts will continue as laws under article 372 of the Constitution.
Therefore simply because the order dated January 18, 1947 was passed by an absolute Ruler it does riot necessarily follow that it is law for the purpose of article 372 and we have to see after looking into all the various considerations referred to above whether the order can be jurisprudentially said to be a law in order that it may continue as law under article 372 of the Constitution.
Let us therefore see the circumstances in which the order came to be passed.
We have already referred to the fact that on October 17, 1946, Birla Brothers Limited wrote to the Government of Gwalior saying that they intended to establish in some suitable place in Gwalior a kind of industrial centre in which certain new industries would be located provided certain facilities requested by them were granted by the Government.
The facilities requested were three namely, (i) provision for adequate land free at a suitable place (ii) Supply of water free or at a concessional rate, and (iii) exemption from any form of taxation on income for a period of fifteen years from the date of the starting of the factory.
It also appears that the industries would have been started in Gwalior only if the concessions were granted.
This request in the letter of October 17, 1946 was processed in the Secretariat of the former Gwalior State.
The entire file has apparently not been placed before the court but from whatever material is available on the record it appears that there was first a note by the office.
Thereafter the Secretary of the department concerned gave his opinion in which it was pointed out that Birla Brothers Limited would only establish industries in Gwalior State if they got the concessions.
Then there is the vinanti by the Minister concerned.
The Minister made it clear that no positive scheme had been submitted but only tentative proposals were made to ascertain if the State would be willing to grant the concessions asked for.
The Minister also pointed out that there was no income tax in the State at that time and so if concession from such taxation was granted it would lead to establishment of industries which after fifteen years might be made liable to such taxes yielding additional income to the State.
Therefore the Minister recommended that the concessions as to income tax as well as the other two concessions might be granted.
This report was made on November 15, 1946.
On November 17, 1946, the Ruler made the following note thereon: "Submit personally on my return".
It cannot be the case of the company that even this order of the Ruler requiring papers to be submitted on his return was a law, though 905 it was certainly an order requiring the Minister to submit papers again when the Ruler returned from somewhere.
Then on January 17, 1947, there was a Guzarish.
In this Guzarish it was said that the concessions which had been asked for a period of fifteen years would be accepted if granted for twelve years.
It was also made clear that unless such concessions were granted Birla Brothers Limited would not be induced to open factories within the State.
Then followed the order of the Ruler dated January 18, 1947, headed Darbar Order, which we have already set out.
This order is apparently on the relevant file and it is not in dispute that it was never published, though it was usual by that time in the State of Gwalior to publish laws in some form or other: see, Madhaorao Phalke vs The State of Madhya Bharat(1).
Apart however from the fact that this order was never published in any form the circumstances in which it came to be made also clearly show that the Ruler while passing the order was merely telling his officers that they could go ahead to comply with the request of Birla Brothers Limited for the three concessions that they wanted.
The form of the order also shows that it could not be law.
The order consists of three sentences.
The first sentence says that "the Guzarihs of the Minister. dated 15 11 1946 is sanctioned".
Obviously such a sanction for certain concessions cannot be law.
Then comes the sentence: "exemption from any form of taxation on the income for a period of 12 years from the date of starting of the factories is granted".
It is this sentence which according to the company is law.
It may however be mentioned that there was no law as to income tax in Gwalior State at the time and all that this sentence could mean in the cir cumstances was that the Ruler was telling his officers that they might assure Birla Brothers Limited that he would not subject them to income tax for 12 years, even if a law as to incometax came to be passed later on.
In the circumstances we do not think that this sentence which was a promise to exempt Birla Brothers Limited from income tax, if and when a law of income tax was passed in future, can jurisprudentially be called a law.
Looking at the matter jurisprudentially, the sentence means that if and when the Ruler came to pass a law as to income tax he would include therein a provision exempting Birla Brothers Limited for the period mentioned in the order.
We are therefore of opinion that this sentence even by itself cannot amount to law.
Then follows the third sentence, which is divided into two parts.
The first part says that "the other two concessions he has asked for should be given".
This cannot obviously be law and it is not even contended on behalf of the company that the concessions as to giving of land free and giving of water free or at concessional rate were law.
Then follows the second part of the sentence ; , at 966 67. 906 which says that "attempt should be made to establish and start these factories as early as possible".
This cannot possibly be called law and even the company does not contend that this part of the sentence is a law promulgated by the Ruler of Gwalior.
Reading the order as a whole therefore it is obvious that the officers of the Ruler put up the request of Birla Brothers Limited for certain concessions for his order in order that they might be able to go forward and in particular make provision for land and water for the company to be started by Birla Brothers Limited.
Therefore as we read this order of January 18, 1947, it appears that by this order the Ruler of Gwalior was saying that he was agreeable to the request of Birla Brothers Limited asking for concessions in order to enable them to start certain industries in Gwalior and that he would grant them concessions if they started industries in Gwalior.
This order was apparently communicated to Birla Brothers Limited and it was followed on April 7, 1947 by a formal agreement between the State and Birla Brothers Limited.
Whatever doubt might there have been as to the nature of the order, that is in our opinion completely set at rest by the fact that it was followed 2 1/2 months later by an agreement which specifically recited that in accordance with the orders of the Darbar dated January 18, 1947, the agreement was being entered into in order to grant and accord certain facilities etc. to the company.
Looking at the matter therefore in the entire context beginning with the letter of Birla Brothers Limited of October 17, 1946 and ending with the agreement of April 7, 1947, all that in our opinion the order of January 18, 1947 says is that the Ruler was agreeable to grant the concessions and that his officers could proceed to take further steps necessary for the purpose.
We are not prepared to accept the argument on behalf of the company that the order of January 18, 1947 must be read independently of the agreement of April 7, 1947 simply because the order did Dot say that an agreement should be taken from Birla Brothers Limited.
The absence in the order of any reference to any agreement in our opinion makes no difference in the context in which the order came to be passed and we have no difficulty in holding that the order of January 18, 1947 was not a law by which the Ruler of Gwalior granted exemption from income tax to the company to be established.
It only amounted to a signification of the Ruler 's acceptance of the request for concessions made by Birla Brothers Limited and an order to his officers to proceed further in the matter after this signification of the Ruler 's acceptance of the request.
That the matter was processed further is clear from the fact that on April 7, 1947 an agreement was entered into between the Government of Gwalior and Birla Brothers Limited incorporating the terms acceptance of which had been signified by the Ruler of Gwalior on January 18, 1947.
The fact that the 907 order is called a Darbar Order is again of no significance for it was the Ruler who was signifying his acceptance of the request and the matter was cast in the form of a Darbar Order because his officers would have to carry out what he had decided.
There is therefore no doubt that the order of January 18, 1947 cannot be read independently of the agreement of April 7, 1947 and must be read in the context of the entire set of circumstances beginning from the letter of Birla Brothers Limited dated October 17, 1946 and ending with the agreement of April 7, 1947 and so read the order must be held to be a mere signification of the acceptance of the request and cannot be held to be a law even with respect to that part of it which dealt with exemption from income tax.
Further the form and content of the order are against its being a law.
Finally the fact that it was never published and remained only on the file concerned has also a bearing on the question and shows that it was not a law but a mere signification of the Ruler 's acceptance of the request made by Birla Brothers Limited.
It is plain that the order must in the context be treated as one step in the negotiations between the parties which ultimately led to the agreement; and so it would be idle to dissociate it from the said negotiations and treat it as a law.
Besides the fact that the parties entered into a formal contract in writing embodying these concessions by the Ruler as consideration for the obligation on the part of Birla Brothers Limited to start the named industries in Gwalior State, is really decisive to negative the argument urged by the company.
The agreement having force as a contract undoubtedly that was the intention both of the Government of the Ruler and Birla Brothers Limited is wholly irreconcilable with a law operating side by side simultaneously and de hors the contract.
As we have come to the conclusion that the order of January 18, 1947 is not a law, we think it unnecessary to consider whether if it was a law it could be said to have been re pealed by the extension of the Income tax Act read with section 13 of the Finance Act, 1950 to the State of Madhya Bharat.
Nor is it necessary to consider what the effect of the agreement between the President of India and the State of Madhya Bharat dated February 25, 1950 would be on the question of repeal and whether that agreement supports the view that in the circumstances there could be no repeal.
This brings us to the alternative argument based on article 295 (1) (b) of the Constitution read with the agreement of April 7, 1947.
The argument on behalf of the company is that in view of article 295 (1)(b) the obligation cast on the Ruler of Gwalior by the agreement of April 7, 1947 became the obligation of the Government of India through the Government of Madhya Bharat, and this was a constitutional obligation which could not be affected by the extension of the 908 Income tax Act to the Part B State of Madhya Bharat, from April 1, 1950.
it is contended that the obligation being cast by the Constitution its binding force could only be taken away by the amendment of the Constitution and that no law, even if it was good law, could take away the exemption granted by the agreement.
On the other hand, learned Attorney General contends that article 295 (1) merely provides in the context of the coming into existence of the sovereign State of 'the Republic of India for the devolution of the property and assets, and the rights, liabilities and obligations of the Governments of the former Indian States corresponding to State specified in Part B of the First Schedule to the Constitution.
He, therefore, contends that article 295 (1) (b), when it provides that the liabilities and obligations of any Indian State corresponding to a State specified in Part B of the First Schedule to the Constitution shall in the circumstances mentioned therein be the liabilities and obligations of the Government of India, it only means that for the purposes of the rights and liabilities arising for example out of an agreement between the previous Indian State and any other person, the Govern ment of India will in the circumstances mentioned in article 295 (1) (b) be substituted for the Indian State concerned.
He further contends that article 295 (1) (b) does not in any manner make the liabilities and obligations arising particularly out of contract any the more binding on the Government of India than would have been the case as against the State which originally entered into the contract and that it is not correct to say that article 295 (1) (b) cast any constitutional obligation on the Government of India to honour the liabilities and obligations.
It is urged that Government of India would have the same defences against a contract as the previous Indian State which originally entered into it would have had, and that article 295 (1) (b) is not a fetter on the power of Parliament to legislate in respect of matters with which such contract is concerned and that such legislation would prevail against contract if Parliament was competent to enact it and it did not in any way transgress the constitutional limitations.
We are of opinion that the submission of the learned Attorney General is correct.
article 295 appears in Part XII of the Constitution dealing with finance, property, contracts and suits.
This Part is divided into three chapters.
The first chapter deals with finance and provides for a consolidated fund (article 266), a contingency fund if necessary (article 267), and for the distribution of public revenues between the Union and the States (articles 268 to 272) and grants by the Union to the States (articles 273 and 275).
Article 277 provides for savings with respect to certain taxes, duties, cesses and fees which were being lawfuly levied by any Government before the constitution came into force and article 278 provides for an 909 agreement between the Union and the States for a period not exceeding ten years, with respect to certain matters.
The other Articles upto article 284 in this chapter provide for the Finance Commission and make other miscellaneous provision in financial matters relating to public revenues.
These provi sions dealing with finances have nothing to do with legislative competence of Parliament or of State legislatures.
Articles 285 to 289 certainly affect legislative competence but that is because they make provision in express terms in that behalf.
Articles 290 and 291 deal with certain financial adjustments and privy purses of Rulers.
Chapter 11 relates to borrowing and has nothing to do with legislative competence.
Then comes Chapter 111, which deals with property, contracts, rights, liabilities, obligations and suits.
Article 294 provides for the devolution of property and assets, and rights, liabilities and obligations as between the Union and the previous Provinces which became Part A States when the Constitution came into force.
Similarly article 295 provides for devolution of property and assets, and rights, liabilities and obligations between the Union and what were Part B States when the Constitution came into force.
These provisions as to devolution of property and assets, and rights, liabilities and obligations were necessary when the Republic of India came into existence.
But there is nothing either in article 294 or article 295 which in any way fetters the legislative competence either of the Union or of the State legislatures.
These provisions had to be made in view of List I and List 11 which defined the ambit of the power of the Union and the States respectively '.
but the effect of these provisions so far as rights, liabilities and obligations are concerned, was only to substitute the Union or the States, as the case may be, in place of the old British Indian Provinces or the old Indian States which became respectively Part A and Part B States under the Constitution.
These provisions relating to devolution of rights, liabilities and obligations were therefore made only to substitute in place of the old British Indian Provinces and the old Indian States either the Union or Part A or Part B States in accordance with the scheme of division contained in List I and List 11 of the Seventh Schedule to the Constitution.
They did not confer any greater sanctity on contracts, for example, entered into by an old Indian State with other persons, and did not cast any fresh obligation on the Union or the new Part A or Part B State over and above what was already cast on the previous States by contracts when they were made.
The defences which would have been open to the old Indian States or the old British Indian Provinces would still be open I to the Union or Part A or Part B States against such contracts and the fact that articles 294 and 295 provided for devolution made no change in their essential nature as contracts merely.
We have not therefore been able to understand what exactly 910 is meant by saying that contracts existing from before were converted into constitutional obligations which could only be changed by an amendment of the Constitution and could not be affected even by law validly passed after the Constitution came into force.
Stress has particularly been laid on the words "shall be the rights, liabilities and obligations of the Government of India" in article 295 (1) (b) and it is suggested that that means that there was clear positive instruction that the obligations so devolving shall be fulfilled, We do not read any such meaning in these words and as we see them they only provide that liabilities and obligations on the Government of India shall be the same as in the case of the previous Indian State which originally entered into contract and therefore the Government of India will have the same defences to such a contract as the previous Indian State would have bad; further if the contract could be affected by legislation previously it could equally be affected by legislation after the provision in article 295(l)(b).
If contracts entered into by the Union could be overborne or nullified by law competently enacted, the obligations devolving on the Union under article 295 (1) (b) do not enjoy any higher sanctity or immunity from the effect of legislation.
Similar words occur in article 294 (b), and what we have said about article 295 (1) (b) may be illustrated with respect to article 294 (b).
Suppose a contract had been entered into by the Dominion of India which was not in accordance with section 175 of the Government of India Act, 1935, corresponding to article 299 of the Constitution.
Surely it cannot be contended that simply because article 294 (b) says that liabilities and obligations of the Dominion of India shall be the liabilities and obligations of the Government of India, under the Constitution, it would not be open to the Government of India to raise the defence that the contract was not binding on it as it was not entered into in accordance with section 175 of the Government of India Act, 1935, because these words in article 294 (b) amounted to a clear positive instruction that obligations devolving shall be fulfilled.
We have no doubt therefore that neither article 294 nor article 295 cast any such obligation to the effect that the obligation shall be fulfilled, even though it might not have been binding on the previous Indian State which entered into it and even though the previous State might have the right to affect the contract by legislation provided the law passed was valid.
The position in our opinion is the same even after the devolution provided in articles 294 and 295, and all that these Articles have done is to substitute in place of the previous States or the British Indian Provinces, the Government of India or Part A or Part B States, as the case may be.
The devolution of the rights and liabilities prescribed by article 295 does not involve and is not intended to involve any change in the character of the said rights and liabilities; and 911 so pleas which could have been raised in respect of the said rights and liabilities prior to the devolution remain entirely unaffected.
There is therefore no question of any constitutional obligation being cast by the provisions contained in ,article 295 (1) (b) on the Government of India to fulfil the contracts irrespective of whether they were binding on the original State which entered into them and whether they can be affected by law validly passed after the Constitution came into force.
We may in this connection refer to the decision in Maharaja Shree Umaid Mills Ltd.(1) where it was held that there was nothing in article 295 to show that it fettered for all time to come, the power of the Union legislature to make modifications or changes in the rights, liabilities and obligations which bad vested in the Government of India.
The legislative competence of the Union legislature or even of the State legislature could only be circumscribed by express prohibition contained in the Constitution itself and unless and until there was any provision in the Constitution expressly prohibiting legislation on the subject either absolutely or conditionally, there was no fetter or limitation on the plenary powers which the legislature enjoyed to legislate on the topics enumerated in the relevant lists.
There is nothing in article 295 which expressly prohibits Parliament from enacting a law as to income tax in territories which became Part B States and which were formerly Indian States, and such a prohibition cannot be read into article 295 by virtue of some contract that might have been made by the then Ruler of an Indian State with any person.
Further in State of Rajasthan vs Shyam Lal(2), this Court pointed out that even though liability or obligation may be cast on the Government of India or Part A or Part B State by articles 294 and 295 of the Constitution, such liability or obligation was always subject to any law made by the new State repealing the old laws and the liabilities arising thereunder or even otherwise, provided the law so made was within the competence of the new State and did not transgress the constitutional limitations.
The fact that the obligation of the Ruler of Gwalior under the agreement of April 7, 1947, devolved on the Government of India eventually by virtue of article295 (1) (b) therefore would not take away the power of parliament to pass a valid law within its competence which does not transgress the constitutional limitations, and which might affect the obligation arising out of the agreement of April 7, 1947, and even completely superseding it.
We have therefore to see what happened after the Consti tution came into force and whether any law was passed by Parliament which in any way affected the agreement of 1947.
Reliance in this connection has been placed on behalf of the company on the agreement of February 25, 1950 between the President of India and the State of Madhya Bharat to which we have already referred.
That agreement accepted the recommendations of the Enquiry Committee.
Our attention is drawn to Part 11, Chapter 11 of the recommendations, where the following recommendation was made in para.11 (4) (ii): "Any special financial privileges and immunities affecting federal revenues conferred by the State upon other individuals and corporations should ordinarily be continued on the same terms by the Centre, subject to a maximum period of ten (or fifteen) years, and subject also to limiting in other ways any such concessions as may be extravagant or against the public interest.
" This recommendation is undoubtedly part of the agreement made between the President of India and the State of Madhya Bharat on February 25, 1950.
It is therefore urged that in view of this recommendation in the agreement it was not open to the Government of India to take away the exemption ranted by the agreement of April 7, 1947.
The agreement between the President of India and the State of Madhya Bharat was entered under articles 278, 291, 295 and 306 of the Constitution.
It may be accepted that the provision to which we have referred above was entered into by virtue of article 295 (1) which provided for devolution of property and assets.
and rights, liabilities and obligations subject to any agreement entered into in that behalf by the Government of India with the Government of that State, and to that extent the Government of India was bound to honour the agreement of February 25, 1950.
But we have to see what exactly this agreement provides with respect to any special financial privileges and immunities conferred on corporations by the old Indian States.
The provision is that privileges and immunities should ordinarily be continued on the same terms by the Centre subject to a maximum period of ten (or fifteen) years.
We may emphasise the word "ordinarily" in this provision which shows that the Centre was not bound to continue the privileges and immunities exactly in the same form though '.ordinarily" it was expected to do so.
Even so, the use of the word "ordinarily" shows that it was open to the Centre to examine the privileges and immunities and decide for itself whether they should be continued and if so in what form and to what extent.
Further the provision as to the continuance of the privileges and immunities was subject also to the power of 913 the Government of India to limiting in other ways any such ,concession as might appear to it to be extravagant or against the public interest.
There was thus a double limitation on the continuance of the privileges and immunities of corporations.
Firstly, these privileges and immunities were ordinarily to be continued and that in itself imports that in some cases they might not be continued.
In the second place the Government of India was given power to limit these privileges and immunities if it was of the opinion that the privileges and immunities were extravagant or against the public interest.
This again is a very wide power which the Government of India had even under the agreement of February 25, 1950.
Therefore, the argument that the Government of India was bound to continue the privileges and immunities without any modification because of the agreement of February 25, 1960 cannot prevail.
Let us therefore see if any provision was made by the Government of India in this behalf, to carry out this recom mendation of the Enquiry Committee.
It may be mentioned that the recommendation was made on July 22, 1949 though it was brought into the agreement on February 25, 1950.
Section 60 A was introduced in the Income tax Act by section 19 of the Taxation laws (Extension to Merged States and Amendment) Act, (No. LXVII of 1949).
Originally it only applied to merged territories, but when the Income tax Act was extended to part B States on April 1, 1950 by the Finance Act, 1950, section 60 A was amended from the same date and applied to part B States also.
Thus it seems to us clear that the provision with respect to immunities and privileges of corporations to which we have already referred was given effect to by the application of section 60 A which we have already set out above to Part B States.
That section provides that if the Central Government consiciers it necessary or expedient so to do for avoiding any hardship or anomaly or removing any difficulty that may arise as a result of the extension of the Income tax Act to Part B States, the Central Government may, by general or special order, make an exemption, reduction in rate or other modification in respect of income tax in favour of any class of income or in regard to the whole or any part of the income of any person or class of persons.
Section 60 A therefore clearly provides for the continuance of exemptions where the Central Government thought it necessary so to do.
This provision is clearly in accord with the recommendation of , the Enquiry Committee to which we have already referred above.
This was followed by the Concessions Order, cl. 16 of which specifically referred to concessions to industrial undertakings and provided that the Central Government having regard to all the circumstances of the case might grant such relief if any as it thought appropriate.
It may be mentioned further that the same Order 914 provided for lower rates of income tax for some time with respect to all incomes accruing in a Part B State.
The position therefore which emerges on April 1, 1950 is that the income tax Act was extended to Part B States as from that date by the Finance Act, 1950, and thus income tax became payable on all income accruing in Part B States subject to the terms of the Finance Act, 1950.
Further by the Concessions Order relief was given generally to all income tax payers in Part B States by reducing the rates of income tax and there was a special provision in cl. 16 of the Concessions Order with respect to industrial undertakings situated in Part B States which had been ranted any exemption from or any concession in respect of income tax or super tax by the Ruler of an Indian State and was enjoying such exemption or concession immediately before April 1, 1950.
It is not in dispute that it was within the competence of Parliament to extend the Income tax Act to Part B States and to subject incomes accruing in Part B States to income tax and super tax by the Finance Act of 1950.
A specific provision was also made in the Income tax Act by section 60 A to provide for exemption, reduction in rates or other modifications in respect of income tax accruing in Part B States, in order to avoid any hardship or anomaly or removing any difficulty which might arise as a result of the extension of the Income tax Act to Part B States.
Lastly by the Concessions Order issued under section 60 A of the Income tax Act rates were reduced generally for sometimes and special provision was made with respect to concssions to industrial undertakings in cl. 16.
These provisions were all within the competence of parliament and it is not the case of the company that they transgress any constitutional limitation.
Therefore as soon as these provisions came into force from April 1. 1950, the result must be that the exemption claimed by the company under the agreement of April 7, 1947 must fall in the face of these legislative provisions and the company would only be entitled to (i) reduction in rates provided by the Concessions Order and (ii) such exemption or concessions as the Central Government might grant under cl. 16 of the Concessions Order.
These provisions of law therefore clearly affect the exemption granted by the agreement of April 7. 1947 and after these provisions came into force from April 1, 1950 the company could only get such concessions as were allowable generally under the Concessions Order or specifically under cl. 16 thereof to Industrial undertakings covered by that clause.
These provisions clearly affect and supersede the agreement and it is not the case of the company that these provisions are not valid.
The agreement must therefore be held to have been superseded and the company could only get such benefits as it was entitled to under the Concessions Order.
The argument therefore that the obligation arising out of the agreement of 1947 could 915 not be affected by the extension of the Income tax Act to Part B State of Madhya Bharat read with Finance Act of 1950 must fail.
We have already pointed out what the scope of article 295 (1) (b) is and we are of opinion that it was not necessary to amend the Constitution in order to affect the agreement of April 7, 1947.
The argument that the Union of India was still bound by the agreement of April 7, 1947 in spite of the legislative provisions made from April 1, 1950 to which we have already referred must therefore fail.
The company is therefore not entitled to rely on the agreement of April 7, 1947 for the purpose of exemption and that it can only take advantage of the Concessions Order with respect to income accruing to it in Madhya Bharat.
It may be mentioned that the company applied under cl. 16 of the Concessions Order and was given certain exemptions with respect to the weaving section and that is all that the company is entitled to.
As to the staple fibre section, the company did apply for exemption under cl. 16, but in all the circumstances the Government of India did not think it fit to grant exemption in that behalf.
As that order was in accordance with law the company cannot rest on the agreement of April 7, 1947 which must be deemed to have been superseded by legislative provisions made from April 1, 1950 with respect to income tax and super tax in the Part B State of Madhya Bharat.
In this connection our attention is drawn to The South India Corporation Ltd. vs The Secretary, Board of Revenue(1) on behalf of the company.
We find nothing in that case which in any way militates against the view that we have taken and it is therefore unnecessary to consider that case in detail.
We are therefore of opinion that the High Court was not correct in holding that the Government of India was bound to fulfil the obligation undertaken by the Ruler of Gwalior and was bound to grant exemption to the company under the agreement of April 7, 1947, irrespective of the legislative provisions made with respect to income tax and super tax from April 1, 1950.
This brings us to the last contention based on article 278, of the Constitution.
In this connection the company relies on the agreement of February 25, 1950 to which we have already referred and on the recommendation of the Enquiry Committee.
which was made part of the agreement and to which also we have already referred.
The argument is that that recommendation must be treated to be an agreement under article 278 and would therefore be binding for ten years under that Article and thus the company would be entitled to exemption for at least ten years by virtue of the agreement.
We are of opinion that there is no force in this argument.
In the first place, the agreement of February 25, 1950 was not merely under article 278; it was a composite agreement under articles 278, 291, 295 (1) ; 916 and 306.
We have already pointed out while dealing with the argument based on article 295 (1) (b) that this provision of the agreement relating to corporations as to exemptions and concessions to be granted to them may be treated as an agreement under article 295 (1), for it dealt with matters of obligation devolving on the Government of India and such devolution was subject to any agreement entered into in that behalf by the Government of India with the Government of the State concerned.
But we are unable to see how the provision relating to exemptions or concessions to corporations can be said to be an agreement under article 278.
The relevant part of article 278 (1), on which reliance is placed on behalf of the company isas follows: "(1)Notwithstanding anything in this Constitution, the Government of India, may, subject to the provisions of clause (2), enter into an agreement with the Government of a State specified in Part B of the First Schedule with respect to (a) the levy and collection of any tax or duty leviable by the Government of India in such State and for the distribution of the proceeds thereof otherwise than in accordance with the provisions of this Chapter; (b). . . . . . . . "
Clause (2) of article 278 to which cl.(1) is subject merely prescribes the period for which the agreement will remain in force, the maximum being ten years in all.
Article 278 appears in Ch.I of Part XII with which we have already dealt with briefly.
As we read article 278 (1) (a) we find nothing in it which has any relevance with respect to any agreement between Ruler of an Indian State and a corporation.
Article 278(l)(a) provides for an agreement between the Government of India and the Government of a Part B State for the levy or collection of any tax or duty leviable by the Government of India in such State and for the distribution of the proceeds thereof otherwise than in accordance with the provisions of Chapter 1 Part XII; and this provision is "notwithstanding anything on the Constitution.
" The earlier provisions in this Chapter provide for the levy and collection of certain taxes and duties leviable by the Government of India and for their distribuion between the Government of India and the States.
Article 268 (1) deals with such stamp duties and such duties of excise on medicinal and toilet preparations as are mentioned on the Union List and provides that they shall be levied by he Government of India but shall be collected by the States within which such duties are leviable and the proceeds of such duties are to be assigned to that State.
Similarly article 69 deals with certain other duties and says that they shall be levied and collected by the Government of India but shall 917 be assigned to the States as provided therein.
Article 270 speaks of taxes on income other than agricultural income and lays down that they shall be levied and collected by the Government of India and distributed between the Union and the States in the manner provided thereunder.
Article 272 speaks of Union duties of Excise other than such duties of excise on medicinal and toilet preparations as are mentioned in the Union List and lays down that they shall be levied and collected by the Government of India, but, if Parliament by law so provides, there shall be paid out of the Consolidated Fund of India to the States to which the law imposing the duty extends sums equivalent to the whole or any part of the net proceeds.
It will be clear therefore that the earlier part of the Chapter has provided for levy and collection of certain taxes and duties leviable by the Government of India and the distribution of the proceeds between the Government of India and the States.
All that article 278 (1) does is to permit by agreement variation in the manner of levy and collection as compared to the provision in the earlier part of the Chapter and also variation in the manner of distribution of the proceeds as compared to the provision in the earlier part.
Article 278 (1) (a) only deals with levy and collection of certain public revenues and their distribution between the Government of India and the States.
It gives power to the Government of India to enter into agreement with any Government of a State specified in Part B of the First Schedule by which variation may be made in the manner of levy and collection of any tax or duty leviable by the Gov ernment of India and the distribution of the proceeds, even though that might not be in accordance with the earlier provisions in the Chapter.
Article 278 (1) (a) thus has nothing to do with any obligation arising out of agreements between Rulers of former Indian States and other persons with respect to exemption from any tax or duty.
Nor do we see anything in article 278 (1) which in any way affects the legislative competence of Parliament or of State Legislatures to pass any law within their respective powers.
All that it provides is that the earlier provisions in the Chapter relating to levy, collection and distribution of any tax or duty may be varied for a certain period on an agreement between the Government of India and the Government of a Part B State.
This was clearly necessary in view of the fact that many sources of revenue of States which came to form part B States had to be taken over by the Government of India in view of the division of powers of taxation in List I and List 11 of the Seventh Schedule to the Constitu tion and that might have created a gap in the revenues of Part B States.
Therefore the Government of India was given the power for a period of ten years at the outside to come to an agreement with any Part B State in the matter of levy or collection of any tax or duty leviable by it and its distribution.
918 Article 278(l)(a) would also affect article 266 which provides that all revenues received by the Government of India shall form one consolidated fund except the proceeds of certain taxes and duties which were assigned in whole or in part to the States by the other provisions of this Chapter.
What article 278 (1) does is that it permits the Government of India to enter into agreements not only with respect to levy and collection of duties and taxes specifically dealt with in this Chapter but also with respect to other taxes and duties leviable by the Government of India which would ordinarily go to the Consolidated Fund of India and to provide how such taxes and duties which are made part of the agreement may be levied and collected and in what manner they should be distributed between the Government of India and the Part B State concerned.
But for this provision it may not have been open to the Government of India to give help to Part B States which required it beyond what is provided in the earlier provisions of this Chapter.
All that article 278 (1) does is to provide for further help to Part B States in case it was necessary by entering into agreements with them as to the manner of levy and collection of any tax and duty leviable by the Government of India and for the distribution of its proceeds in spite of the provision in Art 266 requiring all such proceeds to be credited in the Consolidated Fund of India.
When article 278 (1) (a) speaks of levy and collection it does not deal with legislative competence but only with the actual levy of tax and its collection , and this in our opinion is clear from the later provision which relates to the distribution of the proceeds resulting from such levy and collection.
It is true that sometimes the word "levy" also includes imposition of tax and not merely its assessment and collection; but in the context in which the words "levy and collection" have been used in article 278(l), it seems to us that they only cover the assessment and collection not the imposition of a tax.
We may in this connection refer to the words of article 277 which speaks of any taxes, duties, cesses or fees which were being lawfully levied by the Government of any State or by any municipality or other local authority or body.
Those words came up for consideration by this Court in The Town Municipal Committee vs Ramchandra Vasudeo Chimote (1) and it was held that in the context the words "being lawfully levied" in article 277 meant that the tax was actually levied and not merely that a law imposing a tax had been made.
Similarly in the context of article 278 (1) (a) the levy and collection of any tax, followed as it is by the distribution of its proceeds, mean the actual assessment and collection of the tax and the way in which that should be done and have no reference to legislative competence as to the imposition of the tax.
We are of opinion that article 278 (1) (a) deals only with public revenues and how they should be assessed and collected (1) ; 919 and distributed between the Union of India and Part B States in case there is an agreement in that behalf between the Union of India and Part B States.
It further provides that in case of such agreement the earlier provisions of the Chapter relating to the levy, collection and distribution of taxes and duties would not apply and the agreement would prevail for a maximum period of ten years.
As to the non obstante clause with which article 278 (1) (a) opens, that was apparently necessary in view of certain provisions of the Constitution as to the extent of the executive power of the Union and the States.
Thus it becomes possible to the Government of India if it so decides to enter into an agreement with a Part B State with respect to a tax leviable by the Government of India that the tax shall be assessed and collected by the State through its own officers and the State may retain the entire proceeds so assessed and collected even though the executive power of the Union under article 73 extends to matters with respect to which Parliament has power to make laws and ordinarily if a law as to taxation is passed by Parliament within its power its assessment and collection would be by officers under the Government of India.
Article 278 (1) (a) however permits that such assessment and collection may also by agreement be left to the States in spite of the provisions in other part of the Constitution.
The nonobstante clause however with which article 278 (1) opens does not in our opinion affect the legislative competence of Parliament even with respect to duties and taxes which are dealt with by an agreement under article 278(l)(a).
We are therefore of opinion that in the first place the agreement of February 25, 1950 on which the company relies with respect to concessions to corporations must be deemed to have been entered under article 295 (1) (b), and not under article 278 (1) (a).
In the second place, article 278 (1) (a) merely contemplates an agreement between the Centre and Part B States with respect to levy collection or distribution of public revenues which are leviable by the Government of India and has nothing to do with any contract between a former Indian State and another person with respect to such revenues which may have become the obligation of the Government of India under article 295 (1) (b).
The company therefore cannot rely on the agreement of February 25, 1950 in this connection and contend that the agreement of April 7, 1947 was binding for at least ten years thereunder.
We are therefore of opinion that the view taken by the High Court is incorrect.
The appeals are therefore allowed and the order of the High Court in the writ petition and the decree of the High Court in the suit are set aside, and the writ petition and the suit are dismissed.
In the circumstances we order parties to bear their own costs throughout.
Appeal allowed.
| In October 1946, B wrote to the Government of the erstwhile State of Gwalior stating that certain industries would be established in Gwalior if the Government gave certain facilities including exemption from taxation.
The matter was eventually put up before the Ruler who on January 18, 1949, made an order sanctioning the proposals made by the minister which.
included exemption from taxation as desired by B.
On April ' 7, 1947, an agreement was entered into between the Government and B in accordance with the order of the Ruler dated January 18, 1947, under which certain facilities and concessions were granted to B for the establishment of industries in Gwalior, which included exemption from any form of taxation on the income for a period of 12 years from the date of starting of the factories.
In pursuance of the agreement the appellant company was started and actual production began sometime in June 1949 so far as the weaving section of manufacturing, cloth from artificial silk yarn was concerned, while the staple fibre section of the company started actual working on or about February 18, 1954.
In April 1948 the Ruler of Gwalior entered into a covenant with the rulers of certain other States for the, formation of a United State called Madhya Bharat, under which the Rulers made over the administration to the Raj Pramukh.
Article VI of the Covenant provided, inter alia, that the duties.
and obligations of the Ruler pertaining or incidental to the Government of the covenanting states shall devolve on the United State and shall be discharged by it.
On December 13, 1948, the Madhya Bharat Act, No. 1 of 1948, was passed which, provided, inter alia, that all laws of the covenanting states.
shall continue to remain in force until repealed or amended.
On January 26, 1950, the Constitution of India came into force and the State of Madhya Bharat became a Part B State under the Constitution.
On April 1, 1950, the Indian Income tax Act,. 1922, was extended to the Part B State of Madhya Bharat, and, from the same date Finance Act, 1950, also became applicable, to that State.
The effect of section 13 of the Act of 1950 was to repeal all laws relating to income tax prevailing in those parts of India to which the Indian Income tax Act was extended.
On February 25, 1950, an agreement was entered into between the President of India and the State of Madhya Bharat, which was to be in force for a period of ten years under which certain recommendations of Indian States Finances Enquiry Committee were accepted.
The Government of India also issued the Part 893 B States (Taxation Concessions) Order, 1950, by cl. 16 of which, certain concessions were given to industrial undertakings which had been granted exemption from income tax by the Ruler of an Indian State.
In December 1950, the company applied under cl. 16 of the Concessions Order for an exemption from payment of income tax for the full period of twelve years as provided in the agreement dated April 7, 1947, but the Government of India decided to exempt the company from incometax and super tax for the assessment years 1950 51 to 1954 55 in respect of the weaving section and rejected the claim for exemption of the staple fibre section which began working in April 1954.
On November 23, 1956, the company filed a suit against the Union of India for a declaration that under the agreement dated April 7, 1947, it was entitled to exemption from income tax and super tax for a period of 12 years from June 1949 with respect to the weaving section and for a period of 12 years from February 1954 with respect to the staple fibre section of the company.
The company also filed a petition under article 226 of the Constitution before the High Court of Madhya Pradesh for the same reliefs.
Held:(i) The order of January 18, 1947, was not a law by which the Ruler of Gwalior granted exemption from income tax to the company to be established.
It only amounted to a signification of the Ruler 's acceptance of the request for concessions made by B and an order to his officers to proceed further in the matter after the signification of the Ruler 's acceptance of the request.
(ii)In finding out whether a particular order of a Ruler continued under article 372 of the Constitution of India as law, the jurisprudential distinction between legislative, judicial and executive acts had to be considered; and only those orders of the Ruler which were jurisprudentially legislative acts would continue as laws under article 372.
(iii)The fact that the obligation of the Ruler of Gwalior under the agreement of April 7, 1947, devolved on the Government of India eventually by virtue of article 295(l)(b), did not take away the power of Parliament to pass a valid law within its competence which did not transgress the constitutional limitations, and which might affect the obligation arising out of the agreement of April 7, 1947, and even completely supersede it.
(iv)After the extension of the Indian Income tax Act to Part B State of Madhya Bharat and the passing of the Finance Act, 1950, the exemption claimed by the company under the agreement of April 7, 1947, must fall and the company would only be entitled to (i) reduction in rates provided by the Concessions Order and (ii) such exemption or concessions as the Central Government might grant under cl. 16 of the Concessions Order.
(v)Art.
278(l)(a) merely contemplated an agreement between the Centre and Part B States with respect to levy, collec tion and distribution of public revenues which were leviable by the Government of India and had nothing to do with any contract between a former Indian State and another person with respect to such revenues which might have become the obligation of the Government of India under article 295(1)(b) 894 (vi)The Agreement of February 25, 1950, with respect to concessions to corporations must be deemed to have been en tered under article 295(l)(b) and not under article 278(l)(a) and, hence, the company could not rely on that agreement and con tend that the agreement of April 7, 1947, was binding for at least ten years thereunder.
| 1824.txt |
Civil Appeal No. 1331 of 1966.
Appeal by special leave from the order dated January 20, 1966 of the Bombay High Court in Special Civil Application No. 54 of 1966.
D. V. Patel and L N. Shroff for the appellant.
G. P. Pai, Bhajan Ram Rakhiani and R. K. Khanna, for respondent No. 1.
The Judgment of the Court was delivered by Mitter, J.
The question involved in this appeal by special leave from an order of the Bombay High Court rejecting summarily a petition under Art.227 of the Constitution for the issue of a writ of certiorari or other appropriate writ for examining the legality of the award made by the Industrial Tribunal, Maharashtra on July 27, 1965 and published in the Maharashtra Gazette on August 19, 1905 and for quashing the same appears to be one of first impression so far as this Court is concerned.
The appellant before e this Court is an institution which came into existence as far back as 1834.
It originated in the desire of certain Hindu and Parsee gentlemen of the City of Bombay to put a stop to the practice of killing of stray dogs by the stray dogs by the sepoys of the East India Company.
the deed of October 18, 1834 shows that certain Hindus , Parsees and Mahajuns had resolved to start a Panjrapole with suitable.buildings by raising subscription and also by promising to pay certain fees on stated mercantile commodities to the Panjrapole to be established for the keeping of stray cattle and other animals and for protecting their lives.
This was followed by a deed of declaration of trust executed on 2nd November, 1850.
This shows that the institution mentioned in the earlier document had 204 been established and the management of its funds had been placed in the hands of certain Banians.
under the superintendence of Sir Jamshedjee Jeejeebhoy and that out of the surplus funds collected Rs. 75,057/ had been invested in the purchase of Government Promissory notes.
The trustees were to stand possessed of the said notes and interest and dividends thereof upon trust for the use and benefit of the said institution.
On 2nd November, 1850 a deed of assignment and declaration of trust in favour of panjrapole was executed by Sir Jamshedjee Jeejeebhoy to Khimchand Motichand.
This document shows that a part of the surplus funds had been invested in the purchase of several pieces or parce Is ,of lands, houses etc.
and the new trustees were to stand possessed of the same upon trust for the use and benefit ,of the said institution.
Another trust deed was executed ,on 5th September, 1851 by Khimchand Motichand, Sir Jamshedjee Jeejeebhoy and others.
This document shows that the institution was then possessed of considerable wealth comprising of Government promissory notes, houses, lands and other immovable estate in the Islands of Bombay, besides cash balances.
The funds of the institution appear to have been augmented further under a deed of 10th June, 1871.
According to this document certain charitably disposed persons, Hindus and Parsees, had raised a fund for releasing animals in Surat meant for slaughter on the occasion of Bakrild and Id E Kurbani.
The trustees of the said fund being desirous of transferring the sums in their hands with all accumulations of interest, income etc.
and also the trust thereof to the trustees of the Bombay Panjrapole had requested the trustees of the said Panjrapole to become the trustees of Surat Bakri Id fund to which the latter had a in Surat meant for slaughter on the occasion of Bakrild and Id E Kurbani.
The trustees of the said fund being desirous of transferring the sums in their hands with all accumulations of interest, income etc.
and also the trust thereof to the trustees of the Bombay Panjrapole had requested the trustees of the said Panjrapole to become the trustees of Surat Bakri Id fund to which the latter had agreed.
This document shows further that the trustees of the Bombay Panjrapole had agreed to use the said funds towards the purchasing, releasing and redeeming from slaughter some of the cows, sheep and other animals intended or likely to be sacrificed at Surat on the Bakrid or Id Kurbani occasions and for conveyance of the animals so purchased to be kept there according to the custom and rules of that institution.
In 1915 the Government 205 declared the institution as an infirmary under the Preven tion of Cruelty to Animals Act (IX of 1890).
it would appear that the Bombay Panjrapole expanded its activities considerably over the years and had besides its original seat at Bombay, branches at three other places viz., at Raita, Bhiwandi and Chembur Cattle, birds and other animals were kept and maintained at all these places.
A very large number of persons was pursuing manifold acti vities at the said places.
Latterly the workers of the institution were not satisfied with their wage scales and other service conditions.
On the basis of the report submitted by the Conciliation Officer under sub s.(4) of s.12 of the Industrial Disputes Act the Government of Maharashtra referred the dispute for adjudication to the Tribunal constituted under a Government notification.
An order of reference was made on 25th June, 1963 and the heads of disputes were, the wages, privilege, sick and casual leave, bonus, gratuity and reinstatement of certain workmen.
In the written statement filed by Panjrapole it was stated inter alia (a) The main aims and objects of the institution were purely charitable.
Whatever income the institution had was not all to be distributed either to the donors or the trustees.
It was wholly and solely for the maintenance and treatment of animals of the Bombay Panjrapole.
To aehieve the above objects the means to be adopted were (i) maintenance of a shelter house for aged and unserviceable animals; (ii) the feeding and treatment of all animals entrusted to the institution either by the owners anxious to pension their old animals or rescued by philanthropic persons from the hands of butchers and the protection of animals remanded by magistrates; (iii) the breeding of bulls under ideal and sanitary conditions; (iv) the maintenance of a dairy farm with special attention to proper feeding, accommodation and water supply, the proceeds to go to the benefit of other animals of the Panjrapole; and 20 6 (v) bringing up of calves of the young cows under healthy conditions.
(b) The Managing Committee of trustees of the institution was advised that in fulfilment of their primary and only object of maintaining sick and infirm cattle and dogs etc.
it was necessary that they should have healthy food and nutrition.
Since milk from outside would not fulfil that condition it was decided to upgrade the infirm cattle and rear them into good animals so as to get good and pure milk for the inmates of the Panjrapole.
Thus the milk that was produced and remained surplus after feeding the old cows, motherless calves and dogs and other such animals was sold to members of public instead of being thrown off.
The income derived therefrom was again utilised only after maintenance of the Panjrapole animals.
The sale proceeds of the milk was never utilised nor meant for the benefit or the profit of the donors of of trustees nor was it produced and sold for the purpose or satisfying human needs or desires or with any object of rendering material service to the community.
The cows which yielded milk were kept by the Panjrapole till the end of their lives.
The milk derived from them could only be considered as natural and incidental product in the maintenance of cows.
It was submitted on the basis of the above that essentially object with which the institution received animals was not for doing service to their owners or others but to the animals themselves.
The Tribunal examined meticulously the activities of the institution over a number of years.
The workers served various interrogatories on the trustees to elicit from the various facts relating to the income by way of rent from building etc.
the income from milk and milk products, the income from sale of other commodities, the number and categories of animals in the Panjrapole, the number of animals, if any, purchased, the number of dry and wet cows owned by the Panjrapole and the number of stud bulls either purchased by or bred at the Panjrapole for the last ten years.
The society answered all the particulars.
The chart below prepared by the respondent shows the total cattle strength of the Panjirapole in all its four branches comprising of productive animals (whether milch cows milch buffaloes, 207 stud bulls and working bullocks), the number of unpro ductive animals, including cows, buffaloes, buffalo calves, heifers and calves and bullocks.
The chart was compiled from the documents disclosed by the appellant and contains the figures for the years 1958 to 1962 Total strength in the following years.
1958 1959 1960 1961 1962 Total strength Bombay 149 117 150 201 214 Raita 833 595 508 604 538 Bhiwandi 501 653 503 408 426 Chambur 191 233 272 275 281 Total 1,674 1,598 1,533 1,4881,459 Sick, old and infirm Bombay.
Raita 32 19 10 16 31 Bhiwandi 424 364 132 150 171 Chambur.
Total 466 25 % 383 20% 142 10% 166 10% 202 15% Young animals Bombay Raita 181 44 120 50 36 Bhiwandi 6 47 5 99 59 Chambur 56 87 79 93 100 Total 243 178 204 242 185 Other cattle not sick Bombay 149 117 150 201 214 Raita 620 532 488 538 471 Bhiwandi 71 242 366 159 196 Chambur 135 146 193 182 181 Total.
975 1,037 1,197 1,080 1,602 The following chart was pared by the respondents showing the values of the milk supplied to the animals as 208 also the amounts fetched by sale of the surplus milk for the same years.
Chart.
Year Own consump Sale Total Percentage tion.
Rs. Rs. Rs. of sale approxima tely 1 2 3 4 5 1958 2,681 1,49,854 1,314 3,995 1,53,849 2.
6% 1959 5,256 6,716 5,475 17,447 1,69,465 1,86,912 9. 5% 1960 1,755 6,570 2,686 11,011 2,13,117 24,1185% 1961 2,046 3,286 3,504 8,836 2,23,095 2,31,9314 4% 1962 1,954 4,555 3,650 10,159 2,30,043 2,40,2024% The facts found by the Tribunal may be summarised as follows (1) At the end of the year 1962 there were altogether, 445 cows, 48 bulls, bullocks and oxen, other cattle (cows and bullocks) 508, calves 495, dogs 160, goats and sheep 32, horses 12, hares 18, cocks, hens and ducks ' 18 and parrots 8 : the total number was 1754.
(2) The total income for the year was Rs. 6,64,043 including the amount of Rs. 1,73,583 received by way of donation.
The income proper was thus Rs. 4,90,459.
, 20 9 (3) Some lands of the institution were under its personal cultivation.
The sale proceeds of the yield thereof was Rs. 6,492.
The rent fetched by the immovable property was Rs. 2,20.549.
The milk vielded by the cows was regularly collected and sold, the sale proceeds for the year being Rs. 4,30,034.
A large number of workmen was employed to attend to the cows and to feed them, to.
milk the cows and to carry and sell the milk to the public.
(4) The number of cows yielding milk at the end of the year was 242.
At that time there were 75 pregnant cows.
There were 57 other cows, 101 grown up calves (female) and 91 other small calves (female) all described as "reserved".
In the opinion of the Tribunal all these calves would in course of time grow into cows.
(5) The institution maintained some stud bulls.
Besides there were bullocks which were used for plying the carts or for cultivation of the lands of the institution.
(6) There were 36 heads of cattle described as arrivals from Bombay.
There were another 87 cows described as "danger"; the rest of the cattle (cows and bullocks) were 57 lame and blind, 177 weak, 51 infirm, quite infirm 80 and sick 108, the total of this category being 473; including the "danger" cows the total was 560.
These animals depended entirely on the charity of the institution.
The Tribunal found the activities of the institution in connection with its movable property and collection and sale of milk to be an industry while the maintenance of danger cows, blind, lame, infirm and sick, the dogs and other animals did not constitute an industry.
As already noted, the application under article 227 by the Panjrapole to the Bombay High Court was dismissed summarily and therefore we do not have the benefit of a judgment of the High Court.
As the records stand we must proceed one the facts found by the Tribunal and such light as is thrown thereon by arguments of counsel.
Before looking into the relevant authorities on the subject, we may note the points canvassed in support of or against the appeal by learned counsel on either side.
Referring to the trust deeds it was argued on behalf of the appellant that the essential purpose of the institution was 210 to keep and foster animals which were either rejected by their owners as old and infirm or of no use to them as suckling calves, dry cows etc.
It is not necessary to take into account the other animals which were maintained by the institution.
Leaving out of account the number of dogs kept, the number of other animals was insignificant.
It was argued that although the sale of milk produced a fair amount of income, certain portion of it was necessary for the maintenance of the sick and infirm animals and the sale of the balance of the milk ought to be regarded as incidental to the keeping of cows thrown on the hands of the institution and ought not to lead to an inference that the institution was pursuing an industry.
With regard to the immovable properties, it was said that they had been purchased out of surplus funds in the hands of the insti tution over 50 years back and on a conspirator of the acti vities of the institution it should be held that it was merely doing charity to animals and it was not producing food or giving service to humans to constitute its activity as an industry within the meaning of s.2(1) of the Industrial Disputes Act.
Learned counsel for the respondent drew our attention to certain facts which according to, him went to show that so far as the activity of keeping cattle, specially cows and she buffaloes was concerned, there could be little doubt that it was pursued as an industry.
He handed over two charts containing analysis of the cattle population as culled from the documents placed before the Tribunal by the institution itself.
The total strength of cattle in all the four branches of the institution in the year 1958 was 1674, 1598 in the year 1959, 1533 in the year 1960 and 1488 in 1961 and 1459 in 1962.
The sick, old and infirm cattle for the year 1958 was 456 or roughly 25 per cent of the total strength.
Young animals numbered 243 and other cattle which were not at all sick was 975 in number.
The percentage of sick, old and infirm cattle in the year 1959 was roughly 20 % in.
the year 1960 and 1961, 10 per cent and in the year 1962 15%.
The rest of the cattle according to counsel were neither old nor infirm but were either producing milk or being put to use immediately or capable of yielding milk or work in the future.
Another chart handed over by him went to show that the total value of milk produced in the year 1958 was Rs. 1,53,849 and 211 leaving out of account of Rs. 3,995 being the value of milk supplied to the sick cattle, the institution derived an in come of Rs. 1,49,854/ from the sale of milk.
The corres ponding figures for 1959 were total sales Rs. 1,86,912, value of milk consumed Rs. 17,447, income from milk, Rs. 1,69,465.
The figures for 1960 were Rs. 2,24, 118, Rs. 11,011 and Rs. 2,13,117/ ; those for 1961 were Rs. 2,31,931, Rs. 8,836 and Rs. 2,23,095/ .
The figures for the last year 1962 were Rs. 2,40,202, Rs. 10,159 and Rs. 2,30,043.
Thus according to the above figures, the percentage of milk given to the animals out of the total production was 2 6 in 1958, 9 5 in 1959, 5 in 1960 and 4 in the years 1961 and 1962.
Learned counsel drew our attention to the figures of expenses of tending the sick and infirm cattle either by employment of hospital workers or medical expenses and compared the same with the total expenses of the institution and the number of men employed.
The value of medical relief to animals either by way of salary to workers, dearness allowance paid to them, medical expenses and feeding of milk to the animals for the Bombay Panjrapole in the year 1961 was Rs. 11,762, 'for Raita Rs. 5,551, for Chembur Rs. 5,028 and for Bhiwandi Rs. 28,805.
The expenses of feeding and maintenance of sick animals for the said branches were Rs. 1,825, 13,596, 7,554 and 81,464.
But it is pertinent to note that medical expenses accounted for very small sums, namely, Rs. 1,267 for Bombay, Rs. 559 for Raita, Rs ' 1,696 for Chembur and Rs. 552 for Bhiwandi.
The figures of medical expenses for the year 1962 were equally negligible.
The number of people employed for giving medical relief at the Bombay Panjrapole in the year 1961 was only 7, namely, a doctor, a dresser, 4 coolies and other workers and a sundry worker.
Their total salary came to Rs. 6,000 besides dearness allowance of Rs. 2,448.
Similarly at Raita there were a doctor, two coolies, two dressers and sundry workers and expenditure was only Rs. 552 out of the total expenditure on all these items Rs. 4,992.
It was argued oil the basis of these figures that if the object of the Panjrapole was only to maintain and treat the old, diseased or infirm or rejected cattle on its hands acquired from different sources, the number of men employed would be very small and the milk required for the sick and infirm cattle could be had from only a few milch 212 cows and she buffaloes.
It was urged that the fact that a large number of milch cattle were to be found every year among the cattle population yielding milk regularly of the value of over Rs. 2,00,000 for the last 3 or 4 years went to show that the institution was pursuing an activity mole or less like that of, a dairy farm.
It was maintaining a number of stud bulls and had actually purchased one, the obvious object behind it being improving the cattle wealth of the institution by the production of good and healthy cattle, the females of which would come to yield milk in future.
It was said that the value of milk sold could not be as high as disclosed by the figures unless the institution was getting a number of milch cattle every year to replace those which were going dry for the time being.
This could only be possible if the institution was in a position to keep up its number of milch cattle from the young ones either given to the Panjrapole or those which were bred at the Panjrapole.
The only difference between the Panjrapole and a well organised dairy farm was that the Panjrapole was not buying milch cattle of good quality nor destroying or getting rid of any which were found to become useless.
As the objects of the institution did not permit it to get rid of any cattle it undoubtedly had to maintain whatever cattle came to it but nevertheless the activities displayed by the facts were enough to show that it was being run on the lines of a business or an undertaking, though not of the normal type of a well organised dairy business.
In our view the arguments of learned counsel for the respondent have considerable force.
The main heads of the income of the institution were income from immovable properties, donation from charitably disposed members of the public and the sale of milk.
No doubt the immovable property had been acquired many years back from the surplus funds in the hands of the trustees.
These were old houses and buildings but the Panjrapole was maintaining them in tenantable condition by incurring considerable expenses every year over the repairs.
The more significant factor was the steadily growing income from the sale of milk derived from milch cows and buffaloes, the number of which though not steady was always considerable.
Regard must also be had to the written statement of the institution itself before the Tribunal showing 213 that the Managing Committee of the trustees had decided some time back to upgrade the infirm cattle and rear them into good animals so as to get good and pure milk for the inmates of Panjrapole.
In fact however the upgrading was to such an extent that the milk yielded always was far in excess of the needs of the inmates of the Panjrapole.
Although the sale proceeds of the milk was never utilised nor was ever meant for the benefit or profits of the donors or trustees, the very production of it in such large bulk wholly unrelated to the needs of the sick cattle showed that the institution was pursuing an activity with the central idea of obtaining a steady income therefrom.
In our view, the facts justifiably lead to the conclusion that the institution deliberately diversified its objects from only tending to the sick, infirm or unwanted cattle by adopting the policy of keeping cattle not merely for their own sake but for the sake of improving the cattle population committed to its care with an eye to serve human beings by making large quantities of good milk available to them and thereby getting an income which would augment its resources.
It pursued its policy just as any dairy owner, would by having a few good quality bulls to impregnate the cows and thereby ensuring a steady production of milk and also improve the quality of the progeny.
We have then to consider whether on the above facts an inference ought properly to be drawn that the activities of the Panjrapole constituted an industry.
It is not necessary to go through the plethora of cases decided by this Court to find out whether the Tribunal had come to a proper conclusion.
Although there is no decision of this Court arising out of the affairs of a Panira Dole, there are several dealing with the question as to whether hospitals constituted industries.
The contention of learned counsel for the appellant W. as that the main and chief object of the appellant institution being the keeping and fostering of ' animals incidental activities ought to be disregarded and the institution ought to be considered as a hospital.
If the activities relating to the production of milk could be said to be incidental to the maintaining of sick, infirm and diseased or rejected cattle, the argument would, in our opinion, rest on solid foundation.
2 1 4 At the time when the application under article 227 of the Constantine was presented before the Bombay High Court, the decision of this Court in State of Bombay vs The Hospital Mazdoor Sabha (1) held the field and it can be assumed that it was on the strength of this decision that the Bombay High Court did not feel called upon to examine the merits of the case by issuing a rule.
In the 'Hospital Mazdoor Sabha 's case (supra) the dispute arose out of the retrenchment of respondents 2 and 3 before this Court who ' had been engaged as ward servants in the J.J. Group of Hospitals, Bombay under State control and management without payment of compensation as required by section 25 F(b) of the Industrial Disputes Act.
The decision of this Court shows that there was a group consisting of five hospitals under the administrative control of the Surgeon General of the appellant and its day to day affairs were conducted and controlled by a Superintendent who was a full time employee of the appellant.
The residential staff including the Resident Medical Officers, Horsemen, Nurses etc. were all full time employees of the appellant and their salaries were drawn on the establishment pay bills of the appellant and paid entirely by the appellant.
According to this Court : "This group serves as a clinical training ground for students of the Grant Medical College which is a Government Medical College run and managed by the appellant for imparting knowledge of medical, sciences leading to the Degrees of Bachelor of Medicine and Bachelor of Surgery of the Bombay University as well as various Post Graduate qualifications of the said University and the College of Physicians and Surgeons, Bombay; the group is thus run and.
managaed by the appellant to provide medical relief and to promote the health of the people of Bombay.
" On the question as to whether the activities of this group of hospitals would be covered by the definition of 'in dustry ' in s.2(j) of the Industrial Disputes Act, the Court ,observed (see at p. 878) "In considering the question as to whether the group of Hospitals run by the appellant undoubtedly (1) ; 21 5 for the purpose of giving medical relief to the citizens and for helping to impart medical education are an undertaking or not, it would be pertinent to enquire whether the activity of a like nature would be an undertaking if it is carried on by a private citizen or a group of private citizens.
There is no doubt that if a hospital is run by private citizens for profit it would be an undertaking very much like the trade or business in their conventional sense. .
Trust the character of the activity involved in running a hospital brings the institution of the hospital within s.2(j).
Does it make any difference that the hospital is run by the Government in the interpretation of the word "undertaking" in s.2(j)? In our opinion, the answer to this question must be in the negative.
It is the character of the activity which decides the, question as to whether the activity in question attracts the provision of s.2(j); who conducts the activity and whether it is conducted for profit or not do not make a material difference.
" As to the attributes which made the activity an under taking it was stated (see at p. 879) : "It is difficult to state these possible attributes denitely or exhaustively; 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 or 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 the 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,, 5 Ml 1245 Sup.
Cl/71 216 to which s.2(j) applies.
Judged by this test, there would be no difficulty in holding that the State is carrying on an undertaking when it runs the group of Hospitals in question.
" The recent decision of this Court in Safdar Jung Hospital, New Delhi vs K. section Sethi and Management of M/s T.B. Hospital, New Delhi vs The Workmen (1) is a pointer in the contrary direction.
There was also another appeal relating to the Kurji Holy Family Hospital.
The Court proceeded to consider the general proposition whether a hospital could be considered to fall within the concept of industry in the Industrial Disputes Act and whether all hospitals of whatever description could be covered by the concept or only some hospitals under special conditions.
According to this Court in Safdar Jung Hospital case , '(see p.1412 paragraph 1.3) "an industry is to be found when the employers are carrying on any business, trade , under taking, manufacture or calling of employers.
If they are not, there is no industry as such.
" The Court referred to the decision of this Court in Gymkhana Club Union vs Management (2) and the conclusion therein that : "Primarily, therefore, industrial disputes occur when the operation undertaken rests upon co,operation between employers and employees with a view to production and distribution of material goods, in other words, wealth, but they may arise also in cases where the co operation is to reduce material services.
The normal cases are those in which the production or distribution is of material goods or wealth and they will fall within the expressions, trade, business or manufacture.
" With regard to trade and business it was said : "Business too is a word of wide import.
In one sense it includes all occupations and professions.
But in the collocation of the terms and their defi (1) A. I.R. 1970 S.C. 1407.
(2) [1968] 1 S.C.R. 742.
217 nitions these terms have a definite economic content of a particular type and all the authorities of this Court have been uniformly accepted as excluding professions and are only concerned with the production, distribution and consumption of wealth and the production and availability of material services.
" With regard to the Hospital Mazdoor Sabha case (1) was remarked (see p. 1414) "The case proceeds on the assumption that there need not be an economic activity since employment of capital and profit motive were considered unessential.
It is an erroneous assumption that an economic activity must be related to capital and profit making alone.
An economic activity can exist Without the presence of both.
Having rejected the true test applied in other cases before, the test applied was 'can such activity be carried on private individuals or group of individuals? ' Holding that a hospital could be run as a business proposition and for profit, it was held that a hospital run by Government without profit must bear the same character.
With respect, we do not consider this to be the right test.
This test was employed to distinguish between the administrative functions of Government and local authorities and their functions analogous to business but it cannot be used in this context.
When it was emphasised in the same case that the activity must be analogous to business and trade and that it must be productive ,of goods or their distribution or for producing ,material services to the community at large or a part of it, there was no room for the other proposition that privately run hospitals may in certain circumstances be regarded as industries.
" This Court held that the Hospital Mazdoor Sabha case(1) "took an extreme view of the matter which was not justi fied".
With regard to the activities of the individual hospitals it was said the Safdar Jung hospital had not embarked on an economic activity which could be said to be analogous to trade or business.
There was no (1) [1960] 2 section C. R. 866, 218 evidence that it was more than a place where persons could get treated.
This was a part of the functions of Government and ,the hospital was run as a Department of Government and could not therefore be said to be an industry.
Again, with regard to Tuberculosis hospital it was found not to be an independent institution but a part of the Tuberculosis Association of India.
The hospital was wholly charitable and was a research institute.
The dominant purpose of the hospital was research and training, but as research and training could not be given without beds in a hospital, the hospital was run.
According to this Court, treatment is thus a part of research and training.
In these circumstances the Tuberculosis hospital could not be described as an industry.
With regard to the Kurji Holy Family Hospital again it was found to be entirely charitable.
It carried on the work of training, research and treatment; its income was mostly from donations and distribution of surplus as profit is prohibited.
It could not therefore be an industry as laid down in the Act.
Reference may also be made to the case of Lalit Hari Ayurvedic College Pharmacy vs Its Workers ' Union (1).
In this the appellate Tribunal found that the pharmacy run by the appellant sold medicines in the market and realised about Rs. one lakh per annum whereas in the hospital run by it about 30% of the medicines manufactured by it were consumed and about 70% were sold in the market.
This judgment was delivered on the same date by the same Bench which decided the Hospital Mazdoor Sabha case (supra).
On the facts found this Court held that there could be no doubt "that the activity of the appellant in running the pharmacy and the hospital was an undertaking under s.2(j) and was an industry".
The only case of Panjrapole which appears to have come before the High Courts was that of the Madras Panjrapole vs Labour Court(2)which was the subject matter of an industrial dispute referred to in the year 1958 by the State Government for adjudication by the Labour Court, Madras.
This was decided after the Hospital Mazdoor, Sabha case.
The facts referred to by the High Court were that the Madras Panjrapole was a charitable society (1) A.I.R. 1960] S.C. 1261.
(2) 219 registered under the Societies Registration Act occupying an area of about Ac.
12 00 of land within the city of Madras on which the munificence of several donors had enabled the construction of shelters for animals as well as sanctuary for birds.
The objects of the society, as stated in the memorandum of association, are protection, care and treatment of old, infirm and injured cows, calves, bullocks etc.
and affording freedom to such animals from being slaughtered unnecessarily and to guarantee old age relief to the old, infirm and unserviceable animals till they die of natural causes.
To achieve these objects, the means envisaged to be adopted were : (a) maintenance of shelter house for aged and unserviceable animals ' (b) the feeding and treatment of all animals entrusted to the care of the society either by the owners anxious to pension their old animals or rescued by philanthropic persons from the hands of butchers and the protection of animals remanded by magistrates; (c) the breeding of bulls under ideal and sanitary conditions (d) the maintenance of a dairy farm with special attention being paid to proper feeding, accommodation and water supply, the proceeds of which will go to the benefit of the other animals of the Panjrapole; and (e) the bringing up of the calves of the young cows under healthy conditions.
The Court observed (see p. 689): " It is a matter of common knowledge that a number of dry cows in the City of Madras are sold away to butchers by the poor milkmen who could not support them.
Butchers themselves offer tempting prices for such cows, a temptation which the poverty of the milkmen could not but lead him to succumb.
Dry cows were admitted into the Panjrapole to prevent them from going into the slaughter house.
Maintenance of the dry cows called for stud bulls Stud bulls were presented to the society by the Government.
In the course of time, the dry cows brought forth their progeny and began to yield milk.
220 The Panjrapole was, therefore, in a position to sell milk yielded by the cows which were received by it with a view to protect them from the slaughter house details of the sale amounts in respect of the milk produced shows that the institution had been receiving substantial sums every year by sale of milk." So for as the activities of the Madras Panjrapole and Bombay Panjrapole are concerned they are Practically identical except that in the present case the maintenance, of a dairy farm is not explicitly referred to anywhere but the facts as culled from the evidence makes the same only too obvious.
There was however a certain difference in the case of the Madras Panjra pole inasmuch as the Madras High Court found that (see p. 691) "During certain years, it even went a step further.
The Panjrapole purchased cows, maintained a dairy farm and supplemented their own production of milk with out side milk and sold them.
These activities would certainly partake the character of a business, though the profit of such business might have gone to the humanitarian activities undertaken by the society.
But the activities have long ago ceased.
What the society is now having is the milk yielded by its own cows.
Those cows are admittedly kept by the Panirapole till their lives.
They are not sold.
They are the property of the Panjrapole.
The milk yielded by those cows could only be considered as an incidental product in the maintenance of the cows.
The sale of cowdung cakes and menure and of the calves after the mother cows become dry are also incidental.
It cannot be held that a trade or business is conducted by the institution.
" According to the learned single Judige who heard the peti tion the activities of the Panjrapole had nothing to do with human needs.
They were solely devoted to the needs of helpless animals; though incidentally such activities have a business tinge about them it cannot be said to be for human need or material welfare.
The objects were mainly religious and humanitarian.
Following the test laid down in the Hospital Mazdoor Sabha case the learned Judge was of opinion that there was no industrial dispute which could be referred by the State Government to the 221 Labour court for adjudication.
The case went in appeal to a Letters Patent Bench : Workmen Employed in Madras Panjrapole vs Madras Panjrapole (1).
The Bench took a somewhat different view from that of the learned single Judge.
It demurred to the observations of the trial Judge that "there is no element of trade or business involved in the various activities of the society".
According to the Bench : "These observations, however, do not extend to subsequent developments, the result of the growth of the institution, and its attempt to achieve self sufficiency.
There were (1) purchase and sale of milk, a fairly wide upon scale, (2) the maintenance of a dairy farm during a period of the history of the institution, and (3) similarly, the maintenance of stud bulls, to enable dry cows to conceive and bear calves." The Bench felt compelled to allow the appeal to the extent of modifying the writ of certiorari and laying down that the actual decision would have to be arrived at after the record of adequate evidence by the Labour court in the light of the principles formulated, the available evidence being both inadequate and contradictory.
For the guidance of the Labour court the Bench observed Even if the institution at the inception, and as basically defined, be purely humanitarian,.
non industrial and not amenable to any of the tests.
upon which the definition has been applied,, it cannot be gainsaid that, if the.
institution had largely altered its complexion through the years, so as to have become a focus of economic production, the definition again night be applicable.
" The Bench also examined the question whether the activity of the Panjrapole was in essence religious, or spiritual, as according to it a temple or a church could not be considered to be an industry.
(1) [1962]2 L.L.J. 472.
222 The net result of the above seems to be that although the Bench was inclined to hold that the Madras Panjrapole at its inception was not an industry the complexion of its activities might have been altered by later developments so, as to render the institution as then organised an industry within the meaning of, the Act.
Further according to the Bench individual units of the Organization (like the dis trict dairy farm) might constitute an industry though the society itself may not be one.
The matter came up again before the Madras High Court (see , The Tribunal held in favour of the workmen and the learned Judge dismissed the application for the issue of a writ by the Panjrapole.
The learned Judge referred to the reports of the institution in several years past from 1937 to 1957.
He found that the object of the society had been amended in 1937 to enable it to receive young cows and charge fees from the owners.
The idea of starting a dairy farm was for supporting the infirm cows, bullocks and horses and in pursuance of that idea stud bulls were acquired for improving the cattle breeding.
, The income from the sale of milk rose phenomenally reaching the figure of Rs. 60,000 in the year 1957.
The learned Judge found himself unable to hold that maintaining cows and stud bulls and selling milk were only Subsidiary in nature to the humane the society, namely, to provide Shelter for the de CrePit and useless and infirm animals.
The learned Judge held that "if the Madras Panjrapole had confined itself to the objectives at its inception, namely, to give protection to the old, infirm and decrepit animals, it could well be con tended that it was only for the purpose of satisfying purely spiritual needs, as it is common knowledge that Hindus 'consider cow protection.
as one of their religious duties.
If the Madras Panjrapole had not extended its activities, following 'the, authorities cited above, would have had no hesitation in holding that it is not an industr) A reading of the annual reports show that a large number of high milk yielding cows and buffaloes were pur ,chased, by the society and due to the successful working of the dairy farm the Panjrapole was able to supply milk to various institutions .
The reports show that considerable profits were made by the Panjrapole, the sale of milk fetching a sum of Rs. 60,000 in the year 1957".
In the 223 result the petition was dismissed and the labour court was directed to determine the other issues.
We have referred at some length to the Madras Panjle case to show the analogy of the activities of the radoras Panjrapole to the.
Bombay Panjrapole.
Save for the fact that the Madras Panjrapole definitely and expressly changed its objective by starting a dairy farm and purchasing mulch cows and stud bulls there is very little difference between the facts of the case before us from those in the Madras Panjrapole case.
In the present case only one stud bull w s purchased but the activities pursued by the Bombay Panjrapole make it clear that they were pursuing the same kind of activity, namely, that of using ,stud bulls for the purpose of breeding healthy cattle including cows so as to be able to make a very sizable income from the sale of milk.
For the last few years, from 1958 to 1962 the number of milch cows was always Considerable which could only be accounted for by the fact that from time to time the place of cows which had become dry was being taken up by cows fecundate by the bulls maintained for the purpose of keeping up a steady supply of milk.
We have already referred to the fact that ' the value of milk supplied to the sick and infirm cattle was infinitesimal compared to that sold in the market.
The expenses incurred in connection with the treatment of sick and infirm animals was also negligible compared to the total expenses of the institution.
The number of men employed for such treatment was very small at all times.
The mere fact therefore that the Panjra pole never purchased milch cows and never purchased stud bulls except once makes no difference to the question as to whether their activity of maintaining cows and bulls could only be considered as an investment.
It was certainly carried on as a business although it was not pursued in the same way as astute businessmen only out to make profit would, namely, get rid of the animals which were no longer fit for any Use.
The value of the milk supplied for the last 3 or 4 years was well in excess of Rs. 2 lakhs per annum and this could only be possible if the cows and buffaloes had been kept and maintained not merely to keep them alive but with the idea of getting as much production out of them as possible.
224 In this view of the matter, it is hardly necessary to consider the other cases which were cited at the Bar, namely, Gymkhana Club Union case (1), Cricket Club vs Labour Union (2) and Harinagar Cane Farm vs State of Bihar (1).
It was remarked in the Gymkhana Club case that the activity of the club is conducted with the aid of employees, who follow callings or avocations and that the activities of the club was not a calling or business of its members, of Managing Committee and there was no undertaking analogous to trade or business.
In the Cricket Club 's case (2) the Court examined the different activities of the club and came to the conclusion that they did not lead to the inference that the club was carrying on an industry.
On the facts of this case we hold that the activities of the Panjrapole as disclosed in this case constituted an industry within the meaning of section 2(j) of the Industrial Disputes Act and the appeal must therefore be dismissed with costs.
S.C. Appeal dismissed. (1) [1968] 1 S.C.R. 742.
(2) ; (3) ; 225.
| The appellant Panjrapole was started in 1834 as a charitable institution for the care and protection of animals.
it expanded its activities considerably over the years.
The institution gradually diversified its objects from only tending to the sick, infirm and unwanted cattle by adopting a policy of keeping cattle not merely for their own sake but for the sake of improving the cattle population in order to get large quantities of milk for sale and there by get an income which would augment its sources.
The institution was using stud bulls for the purpose of breeding healthy cattle including cows so as to be able to make a sizable income from the sale of milk.
The value of the milk sold was considerable compared to the value of milk supplied to the sick and infirm cattle of the institution.
The expenses for treating the sick animals was also very little compared to the total expenses of the Institution.
A large number of workers were employed at the institution.
They raised an industrial dispute in relation to their wages and other service benefits.
The dispute was referred for adjudication to the Industrial Tribunal.
It was contended by the Appellant that the Institution was a charitable institution and therefore was not an 'industry ' within the meaning of section 2(j) of the Industrial Disputes Act.
The Tribunal found that the activities of the institution in connection with its movable property and collection and sale of milk to be an "industry" while the maintenance of lame, infirm and sick cows, dogs and other animals was held not to constitute an "industry".
A petition under article 227 was moved in the High Court for quashing the award of the Industrial Tribunal but the same was summarily rejected.
Dismissing the appeal, HELD:On the facts and circumstances of the case, the Bombay Panjrapole is an "Industry" within the meaning of Sec.
2(j) of the Industrial Disputes Act.
The activities of the Panjrapole, though charitable at the.
beginning, was not exclusively so in later years, and the later activities show that it was carried on as a business concern.
Even the value of the milk supplied for the last 3 or 4 years itself was well in excess ,of Rs. 2 lakhs per annum and this could only be possible if the cows ,and buffaloes had been kept and maintained not merely to keep them ,alive but with the idea of getting as much production out of them as possible and the Panjrapole was run like a dairy firm.
[223H] State of Bombay vs The Hospital Mazdoor Sabha, ; , Safdar Jung Hospital, New Delhi vs K. section Sethi & Management of M/s T. B. Hospital, New Delhi vs The Workmen, A.I.R. 1970 'S.C. 1407.
Gynmkhana Club Union vs Management, [1968].
1 S.C.R. 742, Lalit Hari Ayurvedic College Pharmacy vs
Its Workers Union, A.I. R. , Madras Panjrapole vs Labour Court, , Worknien Employed in Madras Panjapole vs Madras Panjropole , Cricket Club vs Labour Union, ' [1969] 1 S.C.R. 60, Harinagar Cone Firma vs State of Bihar, [1964] 2 S.C.R. 458, referred to.
| 3016.txt |
Appeal No. 342 of 1972.
Appeal by special leave from the judgment and order dated the 16th September, 1972 of the High Court of Bombay in Civil Revision No. 263 of 1967.
F. section Nariman, Additional Solicitor General of India, P. C. Bhartari, B. R. Zaiwala and B. section Bhesania, for the appellant.
Anil B. Divan, K. section Cooper, Vasant C. Kotwal, section C. Agarwal and P. D. Sharma, for the respondents.
The Judgment of the Court was delivered by KRISHNA IYER, J.
A small cause involving a petty claim of Rs. 1147.42 has sailed slowly into the Supreme Court by special leave.
Both sides The Bombay Port Trust, appellant, and the New Great Insurance Co. (a nationalised institution), the contesting respondent agree before us that while there is only a short point of law in the case, a large section of the business community, as well as the Port Trust, are affected by the ambiguity of the legal situation and an early pronouncement by this Court on the law of limitation applicable to consignee 's actions for short delivery by the Port Trust is necessary.
Is the period so brief as six months in terms of section 87 of the Bombay Port Trust Act, 1879 (hereinafter called the Act), and if so, does time begin to run within around a week of the landing of the goods (suggested by section 6lA) of the Act ? Or, alternatively, does the longer spell allowed by the avail the plaintiff and the terminus a quo start only when the owner has been finally refused delivery ? Although the Court in this case is enquiring whether the little delay alleged legally disentitles the plaintiff to claim the value of the lost goods, it is a bathetic sidelight that the judicial process has limped along for 15 years to decide in this small, single point commercial cause, whether a little over seven months to come to court was too late.
Pope Paul in opening the judicial year of the Second Roman Rota pontificated that delay in dispensing justice is 'in itself an act of injustice '.
Systemic slow motion in this area must claim the nation 's 399 immediate attention towards basic reformation of the traditional structure and procedure if the Indian Judicature is to sustain the litigative credibility of the community.
Indeed, even about British Justice Lord Devlin 's observations serve as warning for our court system : "If our business.
methods were as antiquated, as our legal methods, we would be a bankrupt country.
" The problem that falls for resolution by this Court turns on the subtle semantics alternatively spun by counsel on both sides out of the words "any thing done, or purporting to have been 'done, in pursuance of this Act, .
after six months from.
the accrual of the cause of such suit.
True to Anglo Indian forensic tradition, a profusion of precedential erudition has been placed for our consideration in the able submissions of the learned advocates on both sides.
Intricacy and refinement have marked the arguments and meticulous judicial attention is necessitated to discover from the tangled skein of case law the pertinent principle that accords with the intendment of the statute, the language used, the commonsense and justice of the situation.
A relevant diary of facts and dates will help focus attention on the primary legal question.
The first plaintiff became entitled to claim a consignment of 53 bundles of mild steel plates despatched by a Japanese exporter to be delivered at the port of Bombay.
The goods were discharged in the docks into the custody of the.
Bombay Port Trust (the defendant, and now the appellant) on September 12, 1959.
The goods had been insured and the second plaintiff is the insurer.
Within a week, that is, on September 19,1959, delivery of the goods was applied for and was given but of only 52 bundles.
A week thereafter, the first plaintiff demanded the missing bundle, but was tenta lisingly put off from time to time by the defendant by letters of September 29, October 10, and December 4, 1959 assuring that a search was in progress to trace the goods.
It is important at this stage to notice that the plaintiff 's letter of September 26, 1959 sought "information regarding the whereabouts of the above bundle so as to enable us to clear the same at an early date".
The broad implication is that at that time the first plaintiff had.
no idea where the missing bundle was in the vessel or the port.
It is not unreasonable to infer that he did not then know, for sure, whether the undelivered item had been landed from the ship at all.
None of the three, letters by the defendant stated firmly that it had been discharged into the port, and it is quite on the cards that part of the total consignment had not been discharged into the port, in these any thing may happen days of expect the unexpected.
Significantly ' the first plaintiff inquired of the Indian Maritime Enterprises, the agents of the Japanese vessel, whether the entire consignment of 53 bundles bad been duly landed.
The reply received by the first plaintiff is meaningful in that the Indian Maritime Enterprises in there letter dated November 7, 1959, told the first plaintiff that all the 53 bundles had been duly unloaded.
It inevitably follows that the earliest date when we can attribute to the plaintiff clear knowledge of the port authorities having come into possession of the missing bundle was November 7, 1959.
of course, 400 the inquiry Section of the Alexandra Dock of the defendant indifferently informed the first plaintiff even on December 4, 1959 that the missing bundle was still under search and a definite reply regarding the out turn of that item could be given only later when loading sheets were fully checked.
However, the first plaintiff by letter dated December 5, 1959 wrote to the port authorities that he had been informed by the agents of the vessel (The Indian Maritime Enterprises) that the entire 53 bundles had been landed and desired "to please let us know immediately whether the bundle has been landed; if landed let the, information regarding the whereabouts and, if not, kindly confirm the short landings".
Apparently, this was to make assurance doubly sure which could be gained only when the defendant 's officials also confirmed it.
Counsel for the plaintiffs, with sweet reasonableness, urges that the interested ipse dixit of the agents of the vessel may not by itself be sufficient to impute clear knowledge of the discharge from the ship into the port of goods of which the Port Trust dis claimed knowledge of whereabouts.
Long later, on January 22, 1960, the Port Trust informed the first plaintiff "that the bundle under reference had been out turned as landed but missing".
Within a week thereafter, the first plaintiff asked for a non delivery certificate so that he could claim from the insurers the value of the article lost.
Such a certificate was issued on March 1, 1960 and on May 12, 1960 a statutory notice under section 87 of the Act was issued, followed on June 18, 1960 by the suit for the missing bundle or its value by way of damages.
The deadly defence put forward by the defendant and reiterated before us with great plausibility, was that the suit being governed by section 87 of the Act and the cause of action having been born on and limitation commenced to run from around September 19, 1959, the claim was stale, being well beyond six months and the statutory notice of a month super added.
The second plaintiff, insurer, having paid the value of the lost articles to the first plaintiff got itself subrogated to the latter 's right, and they together laid the suit before the Court of Small Causes.
That Court held on the merits that the defendant had been negligent in bestowing the basic care which as statutory bailee it was bound to take, and on the preliminary plea of bar of limitation repelled it, taking the view that non delivery of a consignment could not attract the shorter period prescribed in section 87 of the Act.
The decrees passed was, however, set aside by the Full Court in appeal which held the claim to fall within the ambit of the lesser limitation laid down by the Act, and so beyond time.
The teetering course of the case brought success to the plaintiffs in the High Court when a single Judge upset the finding on limitation and directed disposal of the appeal on the merits.
The last lap of the litigation has spurred them to this Court where learned counsel have addressed arguments principally on two facets of the plea of limitation.
The primary question is whether the present suit is one 'for any thing done, or purporting to have been done, in pursuance of this Act '.
The action is for non delivery of one out of 53 bundles.
plaintiffs ' counsel argues that an omission to do cannot be 'an act done 401 or purporting to have been done '.
Again, the failure to do what the Act mandates the Port Trust to do, viz., to deliver consignments to owners, cannot be 'in pursuance of this Act '.
How can the statute direct non delivery and how can the Port officials reasonably conceive that not delivering the goods committed to their charge is in pursuance of statutory duty? The perverse verdict would then be reached that violation of a law is fulfilment thereof.
Embellished by numerous rulings, Shri Cooper strove to convince us of the substance of the further link in the chain of his case that the cause of action for recovery of the value of the lost article could not spring to life before the knowledge of the landing and loss was brought home to the plaintiff.
How can a party, other than one with uncanny powers of extra sensory perception, sue for recovery from a bailee of compensation for loss of goods at a time when he is ignorant of the key fact that they have come into the latter 's, hands and have been lost? In short, for a cause of action for non delivery by the bailee to materialise, scienter that there has been delivery to the bailee and that it has since become non deliverable while in his custody, is a sine qua non.
Otherwise, suits for loss of goods would be some sort of a blind man 's buff game.
The Additional Solicitor General, armed with many decisions, Indian and English, parried the thrust by urging the rival position that an act includes an omission in circumstances like the present, that an official may contravene the duty laid under an Act and may yet purport to act under it, so much so delivery of 52 out of 53 bundles, impliedly omitting to deliver one item, is in pursuance of the statutory scheme of accepting the cargo discharged from the vessel, warehousing them and making them available for delivery to consignees.
In his submission, to dissect the integral course of statutory performance and to pick out a minor component of 'commission ' as constituting the infringement of the owner 's right which has given rise to the cause of action, is to misread the purpose and to re write the effect of section 87 and similar provisions in many statutes calculated to protect public officer and institutions on a special basis He further contends that even if, theoretically speaking, knowledge of the landing of the goods may be an ingredient of the cause of action, correspondence between the bailee and the owner regarding search for the landed goods is no ground to postpone the accrual of the right to sue, and When in a large consignment the bulk of it is delivered on a certain date the few undelivered items should also be reasonably presumed as having been landed and ready to be handed over, thus bringing into being, on such short delivery, the 'cause ' to sue.
Likewise, when the rules specify a week of the landing (vide section 61A) within which the owner is expected to take charge of the goods and the Port Trust is absolved from liability thereafter that is indication of the reasonable limit of time for delivery.
Limitation begins to run when the goods should reasonably have been delivered, ignoring operations for tracing the missing goods.
The absurd result would otherwise be that the right to sue would flicker fitfully as the search for the last bundle is protracting and the Port Trust can indefinitely put off a claimant 's suit by persisting in vain searches for the pilfered article and sending soothing 402 letters that efforts trace are 'in progress. ' And more sinister is the possibility of owners of considerable consignments, by oblique methods, getting letters of promise of search despatched by Port officials and thus postpone the time for taking delivery, thereby saving immensely on warehousing charges which are heavy in big cities.
Corruption spreads where such legal construction protects.
The proponents of both views have cited rulings in support but the sound approach of studying for oneself the sense of section 87 prompts us to set it out together with other cognate sections, get the hang of the statutory scheme and read the plain meaning of the notice and limitation provisions.
"section 87.
No suit or other proceeding shall be commenced against any person for any thing done, or purporting to have been done, in pursuance of this Act, without giving to such person one month 's previous notice in writing of the intended suit or other proceeding, and of the cause thereof, nor after six months from the accrual of the cause of such suit or other proceeding. " "section 61A(1).
The Board shall, immediately upon the landing of any goods, take charge thereof, except as may be otherwise provided in the bye laws, and store such as are liable in their opinion to suffer from exposure in any shed or warehouse belonging to the Board.
(2) If any owner, without any default on the part of the Board, fails to remove any goods other than those stored in the warehouses appointed by the Board for the storage of duty paid goods or in warehouses appointed under section 15, or licenced under section 16 of the , from the premises of the Board within seven clear days from the date on which such goods shall have been landed, such goods shall remain on the premises of the Board at the sole risk and expense of the owner and the Board shall thereupon be discharged from all liability theretofore incurred by them in respect of such goods. ' "61B. The responsibility of the Board for the loss, destruction or deterioration of goods of which it has taken charge shall, subject to the other provisions of this Act and subject also in the case of goods received for carriage by railways to the provisions of the Indian Railways Act, 1890 be that of a bailee under section 151, 152 and 161 of the , omitting the words "in the absence of any special last mentioned Act.
" Let us interpret and apply.
Non delivery of an article is an omission, not an act and, in any case.
not one in pursuance of the Act, because the statute does ,not direct the Port Trust not to deliver the goods received from the 403 ships that Call at the port.
This view has found favour with the High Court.
With due difference to the learned judge, we think this approach to be too literal, narrow and impractical." 'For, inaction has a positive side as where a driver refuses to move his vehicle from the middle of tile road or even an operator declines to stop an engine or a surgeon omits to take out a swab ' of cotton after the operation.
Omission has an activist, facet "like commission, more so when there is a duty not to omit.
Again, where a course of conduct is enjoined by a law, the whole process pursuant to that obligation is an act done or purporting to be done under that Act although the components of that comprehensive act may consist of commissions and omissions.
A policeman acts or purports to act not only when he uses his lathi but also when he omits to open the lock up to set the arrested free or omits to produce him before a Magistrate.
The ostensible basis of 'the whole conduct colours both doings and defaults and the use of the words ' purporting to have been done".
in their natural sweep, cover the commission omission Complex.
A, cognate point arises as to whether you can attribute the neglect to comply with a law as something done in pursuance of that law.
Here again the fallacy is obvious.
If under colour of office.
clothed with the rules of authority, a person indulges in conduct not falling under the law he is not acting in accordance with the sanction of the statute or in bona fide execution of authority but ostensibly under the cloak of statute.
It is the apparel that oft proclaims the man and whether anything is done under, in pursuance of or under colour of a law.
merely means that the act is done in apparent, though not real, cover of the statute.
Broadly understood, can the official when challenged fall back, in justification, on his official trappings? A revenue officer distraining goods wrongfully or a municipal officer receiving license fee from a non licensee is violating the law but purports to act under, it.
On the other hand, a police officer who collects water cess or a municipal officer who takes another into custody, is not by any stretch of language acting in pursuance of or under the relevant Act that gives him power.
And certainly not an act of taking bribe or committing rape.
Such is the sense of the words we are called upon to construe.
The true meaning of such and similar words used in like statutes has been set out In, Halsbury correctly and concisely : "An act may be done in Pursuance of or in the execution of the powers granted by a statue, although that act is prohibited by the statute.
A person acting under statutory powers may erroneously exceed the powers given, or inadequately discharge the duties imposed, by a statute, vet if he acts bona fide in order to execute such powers Pr to discharge such duties.
he is considered as acting in pursuance of the statute.
Where a statute imposes a duty, the omissions to do something that ought to be done in order completely to Perform the duty, on the continuing to leave any such duty unpe rformed, amounts to an act done or 404 intended to be done, within the meaning of a statute which provides a special period of limitation for such an act." (3rd edn., vol.
24, pp.189 190).
A selective reference to the rulings cited at the bar may now be made.
although in this blurred area conflicting pronouncements have made for confusion, a systematised presentation will yield the clear inference we have reached without reference to the citations.
In one of the earliest cases under the Highway Act, the defendant.
surveyor of the perish of T., was charged with failure to remove the gravel from the highway which obstructed and caused nuisance to the public and overturned the plaintiff 's carriage.
It was proved that the defended was guilty of want to care in leaving the gravel there, and the questions arose whether under section 109 of the Highway Act he was entitled to notice.
Lord Denman, C.J., disposed of the matter tersely : "It is clear that the defendant is charged with a tort committed in the course of his official duty,; he is charged, as surveyor.
with the positive act of leaving the gravel on 'the road, where it had been improperly placed, for, an unreasonable time On that simple ground, I think it clear that he was entitled to notice.
" Patterson J. considered the same point a little more at length taking the, view ". that the charge is not one of mere omissions, but of actually continuing the nuisance.
That is a charge of doing something wrong, of keeping the gravel in an improper place.
an act continued until the concurrence of the mischief.
Is it then an act done in pursuance of the statute ? It is not denied that the heap of gravel was put there in pursuance of the statute , it could not be spread at the same moment; the question then would arise, whether the length of time during which it was kept in a heap was reasonable or not.
The continuing, therefore, was a thing done in pursuance of the statute. ' Wightman J. struck a similar note.
The learned Judge observed "The defendant is liable only by virtue of his office.
lie is charged with ' permitting an obstruction to remain, of which permission he is guilty in his character of an officer described in the Act of Parliament.
He is, therefore, under sev 109, entitled to a notice, in order to enable him to tender amends." This decision rendered around 130 years ago has a modern freshness and it is remarkable that the language of the statute construed by the Judges there has a likeness to the one we are concerned with here, namely, "anything done in pursuance of or under the authority" of statute.
405 Still earlier rulings may be referred to; for instance Palmer V. Tile Grana Junction Railway Company(1) where the same point was ruled.
but where Baron Parke said : "If the action was brought against the railway company for the omission of some duty imposed upon them by the Act.
this notice would be required.
" In another old decision, Poulsum vs Thirst(2) the construction of the expression, acts "done or intended to be done under the powers of the Metropolitan Board of Works, and fell for decision.
Byles, J. relied on Newton vs Ellia(3) where also a similar set of words had to be interpreted and "omitted to be done" was absent.
In the case decided by Byles, J., the defendant stopped up the sewer, and neglected to drain it, thereby causing injury. 'The learned Judge belt] that the defendant 's conduct must be looked at as a whole, and that he was entitled to notice of action.
The other two Judges took the same view.
Newton vs Ellis(4) decided in 1855 under section 139 of the Public Health Act, 1848, for injury caused by digging a hole on the road without placing a light or signal there, turned on the need for notice before summons.
Earlier cases like Davis vs Curling(5) were referred to and the conclusion reached that though the gravamen of the charge against the defendant was the omission to place a light in the spot of danger it attracted the formula "anything done or intended to be done under the provisions of this Act" comparable to the phraseology of the Act which came under the judicial lens in.
Davis vs Curling 'things done in pursuance of or under the authority ' of the Act.
Coleridge, J. observed with felicitous precisions "This is not a case of not doing; t e defendant does something, omitting to secure protection for the public.
He is not sued for not putting up a light, but for the complex act.
" Erle J. likewise said ".Here the cause of action is the making the hole, compounded with the not putting up a light.
When these are blended, the result is no more than if two positive acts were committed, such as digging the hole and throwing out the dirt; the two would make up one act.
" Are we not concerned with a blended brew of act and omission, a complex act, a compound act of delivery cum non delivery, pursuant to the statute without which the vinculum juris between the Board and the plaintiff did not exist? Jolliffee vs The Wallasey Local Board(6) is a leading case, rightly pressed for acceptance of its ratio by the, learned Solicitor General.
Kesting, J., after finding for the plaintiff on negligence, focussed atten (1) ; (3) ; ; (5) 8 Q. D. 286.
(2) (1867) 2 L. R. 449.
(4) ; (6) (1873) L. R. 62.
406 tion on the nature of the Act and the need for notice.
He observed "As a matter of fact, therefore I come to the conclusion that the defendants were guilty of the negligence complained of, and that negligence was the cause of the accident; and, as matter of law, I hold that negligence to give the plaintiffs a cause of action against the local board.
But, assuming that to be so, then comes the further question, whether the defendants are not absolved from liability in this action, by reason of the absence of a notice of action.
For myself, I must express my regret that this case should be decided upon such a point; but my opinion is that the defendants were entitled to notice.
This question depends upon the construction of the several Acts of Parliament which have been placed before us." "Now the local board was originally constituted under the Public Health Act, 1848; and it is not denied that, for anything done or intended to be done under that Act, they would be entitled to a notice of action under section 139." "That.
however, does not dispose of the matter; a further question arises, viz., whether the acts complained of here are acts which could be done by the local board under the provisions of the Act of Parliament, so as to entitle them to a notice of action." "It has been suggested that protection is not intended to be given by clauses of this description in cases of nonfeasance.
so, is clear, from the cases of Davis vs Curling, Newton vs Ellis, Wilson vs Mayor, & C., of Halifax, and Salmes vs Judge, all of which seem to me to establish that a case of what appears to be nonfeasance may be within the protection of the Act.
" Brett, J, expressed himself equally unminicingly: "Now. two objections were urged by Mr. Aspinnal.
In the first place, he says the thing complained of here is a mere nonfeasance, and therefore not "an act done.
" If I rightly understand the judgments in former cases, the rule is this,where a man is sued in tort for the breach of some positive duty imposed upon him by an Act of Parliament, or for the omission to perform some such duty, either may be an act done or intended to be done under the authority of the Act, and if so done or intended to; be done, the defendant is entitled to a notice of action." "In Wilson vs Mayor, & c. of Halifax(1), Kelly, C.B., states the proposition in those terms: It has been urged on the part of the plaintiff that the charge against the defendants is not of any act done or intended to be done, but of an omission to erect or cause to be erected a fence between the foot path and the goit, and that the omission to do an act is not (1) Law Rep. 407 an act done or intended to be (lone, ' Some authorities have been cited on both sides: but we think that, whatever may be the construction which might be put upon the words of the statute if the question arose in this case for the first time, it is now settled by authority that an omission to do something that ought to be done in order to the complete performance of a duty imposed upon a public body under an Act of.
Parliament, or the continuing to leave any such duty unperformed, amounts to an act done or intended to be done, within the meaning of these clauses requiring notice of action for the protection of public bodies acting in the discharge of public duties under Acts of Parliament." "It would seem from these authorities that, where the plaintiff is suing in tort, nonfeasance is to be considered as " an act done," within.
such clauses as these." Mr. Cooper tried to distinguish Jolliffee 's case but having given our close attention to the matter we decline to jettison this weighty judgment.
Jolliffee 's case was followed by the Privy Council in Queen vs Williams(1).
The Judicial Committee took the view that "an omission to do something which ought to be done in order to the complete performance of a duty imposed upon a public body under an Act of Parliament, or the continuing to leave any such duty unperformed, amounts to "an act done or intended to be ' done" within the meaning of a clause requiring a notice of action." A case which went up to the Privy Council from India under the Calcutta Port Act, 1890, was decided on similar lines by the Judicial Committee in Commissioner for the Port of Calcutta vs Corporation of Calcutta(2).
Lord Alness observed "Reliance was placed by the respondents on the case of the Bradford Corporation vs Myers [(1916) I. A.C. 242].
Now, inasmuch as that case related to the construction of the Public Authorities Protection Act (1893), which contains language not to be found in the Indian statute, and which omits language to be found in the latter, manifestly the decision falls to be handled with c are.
In particular, the English Act does not contain the word is "purporting or professing" to act in pursuance of the statute.
Their Lordships regard these words as of pivotal importance.
Their presence in the statute appears to postulate that work which is not done in pursuance of the statute may nevertheless be accorded its protection if the work professes or purports to ' be done in pursuance of the statute.
The English Act was properly treated by the, House in the Bradford case as one from which the words "profession or purporting" were omitted, and the observations of the House must, of course, be construed secundum subjectam materiem." (2) [1937] 64IA 363; 371.
(1) (1884) 9 L. R. 41 8. 408 In a different context though, the Privy Council had to deal with a similar provision, namely, section 197 of the Criminal Procedure Code, in the well known case of Gill vs The King(1).
Lord Simonds, speaking for the Board, explained the position of law thus : "A public servant can only be said to act or to purport to act in the discharge of his official duty, if his act is such as to lie within the scope of his official duty.
Thus, a judge neither acts nor purports to act as a judge in receiving a bribe, though the judgment which he delivers may be such an act: nor does a Government medical officer act or purport to act as a public servant in picking the pocket of a patient whom he is examining, though the examination itself may be such an act.
The test may well be whether the public servant, if challenged, can reasonably claim that, what he does, he does in virtue of his office.
" It may be mentioned even here that the Judicial Committee had distinguished Bradford Corporation vs Myers(2) on which considerable reliance was placed by Shri Cooper and also in several decisions which took the opposite point of view.
We need make no comments on that decision except to state that for exceedingly excellent reasons the Judicial Committee has put that ruling out of the way.
Shri Cooper brought to our notice the circumstance that Public Authorities Protection Act, 1893, brought in 'neglect and default ', which became necessary only because "any act done in pursuance. of any Act of Parliament." would not otherwise comprehend omissions and defaults.
We are not impressed with this submission and decline to speculate why a change of language was made if the law packed "omission" into "act".
Gill vs The King (supra), just referred to, affirms the careful analysis of the authorities by Varadachariar, J., in Hori Ram Singh vs The Crown(3) and also the ratio in Huntley 's (4) case.
In Hori Ram 's case, which related to the construction of section 197 of the Criminal Procedure Code and section 270(1) of the Government of India Act, Varadachariar, J., brought out the true meaning of the words "act done or purporting to be done in the execution of his duty".
The learned Judge observed : "Apart from the principle that, for the purposes of the criminal law, acts and illegal omissions stand very much on the same footing, the conduct of the appellant in maintaining the accounts, which it was his duty to keep, has to be dealt with as a whole and the particular omission cannot of itself be treated as an offence except as a step in the appellant 's conduct in relation to the maintenance of the register which it was his duty correctly to maintain." Stress was laid rightly by the learned Judge on the relevance of public interest in protecting a public servant and in restrictions being placed on an aggrieved citizen seeking redress in a court of law, to point out (1) [1948] 75 I. A. 41; 59 60.
(3) (2) (4) 409 that acts which have no reference to official duty should not come within the protective umbrella of these statutory provisions.
The learned Judge insisted that "an act is not less one done or purporting to be done in execution of a duty because the officer concerned does it negligently." The true test, if we may say so with great respect, is whether the conduct of the public servant or public body, viewed as a whole, including as it may 'omissions ' also, be attributed to the exercise of office.
Sri Cooper reinforced his contrary argument by reliance on the case of Revati Mohan Das vs Jatindra Mohan Ghosh(1) which dealt with section 80 of the Civil Procedure Code.
That decision, however, is distinguishable and relates to an optional act or omission of a public officer where it could not be designated that the failure to pay the debt by a manager was an 'illegal omission ' constituting an 'act ' under section 3 of the General Clauses Act.
A decision of the Calcutta High Court (Commissioner for the Court of Calcutta vs Abdul Rahim Osman & Co.(2), turning on the construction of a similar provision (section 142 of the Calcutta Port Act) covers the various decisions, Indian and English, and after pointed reference to Amrik Singh 's case reaches the conclusion : "There must be a reasonable connection between the act and the discharge of official duty; the act must bear such relation to the duty that the accused could lay a reasonable, but not a pretended or fanciful claim, that he did it in the course of the performance of his duty.
" The Bench proceeded to set out the following propositions which meet with our approval: (a) I order to apply the bar under sec.
142 of the Calcutta Port Act, it is first to be determined whether the act which is complained of in the suit in question can be said to come within the scope of the official duty of the person or persons who are sought to be made liable.
This question can be answered in the affirmative where there is a reasonable connection between the act and the discharge of the official duty.
(b) Once the scope of the official duty is determined, sec.
142 will protect the defendants not only from a claim based on breach of the duty but also from a claim based upon an omission to perform such duty.
(c) The protection of sec.
142 cannot be held to be confined to acts done in the exercise of a statutory power but also extends to acts done within the scope, of an official duty.
" The case dealt with was also one of short delivery and consequent loss of a part of the goods, and the suit was dismissed for being beyond the short period of limitation prescribed under the special Act.
Again, in District Board of Manbhum vs Shyamapada Sarkar(3) the Bihar Local Self Government Act containing a provision analogous to (1) [1934] 61 I. A. 171.
(2) 68 Cal.
Weekly Notes 814.
(3) A. I. R. 1955 Pat.
410 what we are, concerned with here was construed by a bench of that Court reading the words "anything done under this Act" to include "anything Omitted to be done under the Act", and further that anything done tinder this Act ' necessarily and logically embraces anything wrongfully done or wrongfully omitted to be done.
In Gorakh Fulji Mahala vs State(1), Chandrachud, J., as he then was, made an elaborate study of a comparable provision in the Bombay Police Act (section 161) and followed the Federal Court decisions already referred to by us, as well as this Court 's decision in Shreekantiah Ramayya kunipalli vs State of Bombay(2).
The learned Judge summed up the law thus "The decisions cited above have uniformly taken the view that in an act cannot be said to be done under colour of office or under colour of duty or in the Purported execution of official duties unless there is a reasonable connection between the act and the office.
A view has also been taken in these decisions that one of the tests for determining whether an act has been done in the purported discharge of official duties is whether the public servant can defend his act by reference, to the nature of the duties of his office if he is challenged while doing the act.
" A few more decisions, apart from what has already been referred to by us, specifically dealing with similar causes of action under similar statutes, viz., the Calcutta Port Act and the Madras Port Trust Act, have discussed the problem before us.
In Madras Port vs Home Insurance Co. (3), a Division Bench of the Madras High Court adopted the wider view and held "The services which the Board has to perform and could perform statutorily under the statutory powers and duties cannot be dissociated from its omissions and failures in relation to the goods.
Any action Which is called for will properly be covered by the Words 'anything done or purporting to be done in pursuance of this Act.
Under the Madras General Clauses Act, 1891 words which refer to.
the acts done extend also to illegal omissions.
" Natesan, J., relied on Calcutta Port Commissioner vs Corporation of Calcutta(4), where the Judicial Committee had stressed the ampler sense of 'purporting or professing to act in pursuance of the statute ' and observed "Their Lordships regard these words as of pivotal importance.
Their presence in the statute appears to postulate that work which it hot done in pursuance, of the statute may nevertheless be accorded its protection, if the work professes or purports to be done in pursuance of the statute." (1) I. L. R. (3) A. I. R. ; 57 58.
(2) ; (4) A. I. R. 411 The whole issue is clinched in our view by the final pronouncement of this Court in Public Prosecutor Madras ;vs R. Raju(1).
the, interpretation of s.40(2) of the Central Excis ' and Salt Act, 1944 and the antithesis argued between 'act ' and 'omission ' provoked a panoramic survey of the Indian statute book.
Reference was made to Pritam Singh 's (2) case where absence from duty at the time of the roll call was held to be something done under the provisions of the Police Act.
Maulad Ahmadabad 'S(3), case Was relied an as fortifying this view, for there too a Head Constable who made false entries in a General Diary of the Police Station *as held entitled to.invoke the 3 months limitation under section 42 of the Police Act since the act complained of was the non discharge of duty in keeping a regular diary.
Even filing false returns by a sales tax assessee was held in Sitaram vs State of Madhya Pradesh(4) as an act done under the Berar Sales Tax Act whereunder a prosecution for such an.
act had to be brought in three months.
The ratio decidendi is set out by Ray, J. (as he then was) thus : "25.
These decisions in the light of the definition of the word 'act ' in the General Clauses Act establish that non compliance with the provisions of the statute by omitting to do *hat the act enjoins will be anything done or ordered to be, done under the Act.
The complaint against the respondents was that they wanted to evade payment of duty.
Evasion was by using and affixing cut and torn banderols.
Books of accounts were not correctly maintained There was shortage of banderol in stock.
Unbanderolled matche 's were found.
These are all infraction of the provisions in respect of things done or ordered to be done under the Act.
In Amalgamated Electricity Co. vs Municipal Committee, Ajmer [(1969) 1 S.C.R. 430] the meaning of 'omission ' of a statutory duty was explained by this Court.
Hegde, J., speaking for the Court said "The omission in question must have a positive content in it.
In other words, the non discharge of that duty must amount to An illegality".
The positive aspect of omission in the present case in evasion of payment of duty.
The provisions of the Act require proper affixing of banderols.
Cut or turn banderols were used.
Unban dderolled match boxes were found.
These proisions about use of banderols are for collection and payment of excise duty.
The respondents did not pay the lawful dues which are acts to be done or ordered to be done under the Act.
" We readily concede that it is oversimplfication to state that no court has taken the contrary view, both on the question of act not including an omission and action contrary to the behest of the statute not being done pursuant to or under the statute.
An exhaustive consideration of these twin propositions is found in Zila Parishad vs Shanti Devi(5).
(1) A. I. R. (2) ; (3) [1963] Supp, 2 section C. A. 38.
(4) [1962] Supp. 3 section C. R. 21.
(5) ; 412 Seemingly substantial support for Shri Cooper 's contention is derived from observations in State of Gujarat vs Kansara Manilal Bhikhala(1), where, rejecting a plea of protection under section 117 of the , by an occupier of a factory who had violated the duties cast on him, Hidayatullah, J. (as he then was) observed "But the critical words are "any thing done or intended to he done" under the Act.
The protection conferred can only be claimed by a person who can plead that he was required to do or omit to do something under the Act or that he intended to comply with any of its provisions, It cannot confer immunity in respect of actions which are not done under the Act but are done contrary to it.
Even assuming that an act includes an omission as stated in the General Clauses Act, the omission also must be one which is enjoined by the Act.
It is not sufficient to say that the act was honest.
That would bring it only within the words "good faith".
It is necessary further to establish that what is complained of is something which the Act requires should be done or should be omitted to be done.
There must be a compliance or an intended compliance with a provision of the Act, before the protection can be claimed.
The section cannot cover a case of a breach or an intended breach of the Act however honest the conduct otherwise.
In this connection it is necessary to point out, as was done in the Nagpur case above referred to, that the occupier and manager are exempted from liability in certain cases mentioned in section 101.
Where an occupier or a manager is charged with an offence he is entitled to make a complaint in his own turn against any person When acctual the actual offender and on proof of the commission of the offence by such person the occupier or the manager is absolved from liability.
This shows that compliance with the peremptory provisions of the Act is essential and unless the occupier or the manager brings the real offender to book he must bear the responsibility.
Such a provision largely excludes the operation of section 117 in respect of per sons guilty of a breach of the provisions of the Act.
It is not necessary that mens rea must always be established as has been said in some of the cases above referred to.
The responsibility exists without a guilty mind.
An adequate safeguard, however, exists in section 1 0 1 analysed above and the occupier and manager can save themselves if they prove that they are not the real offenders but who, in fact is".
It is obvious that this ruling can hardly help, once we understand the setting and the scheme, of the statute and the purpose 'of protection of workers ensured by casting an absolute obligation on occupiers to observe certain conditions.
The context is the thing and not verbal similitude.
In a recent ruling of this Court in Khandu Sonu Dhobi vs State of Maharashtra(2), Khanna, J., while repelling a plea of immunity from (1) (2) ; 413 prosecution put forward by the accused on the score of limitation and the case being "in respect of anything done or intended to be done under this Act" (The Bombay Land Improvement Scheme Act, 1942) said: "This contention, in our opinion, is devoid of force.
Subsection (2) refers to suit or prosecution against a public servant or person duly authorised under the Act in respect of anything done or intended to be done under the Bombay Land Improvement Schemes Act.
It cannot be said that the acts of the accused appellants in preparing false documents and in committing criminal breach of trust in respect of the amount of Rs. 309.07 as also their act of criminal misconduct were done under the Bombay Land Improvement Schemes Act.
Sub section (2) of section 23 deals with anything done or intended to be done under.
the above mentioned Act by a public servant or a person duly authorised under the Act.
It has no application where something is done not under the Act even though it has been done by a public servant who has been entrusted with duties of carrying out improvement schemes under the above mentioned Act.
The impugned acts of the appellants in the present case were not in discharge of their duties under the above mentioned Act but in obvious breach and flagrant disregard of their duties.
Not only they did no rectification work for the Bundh which was a part of the improvement scheme, they also misappropriated the amount which had been entrusted to them for the purpose of rectification.
" How slippery and specious law and logic can be unless the Court is vigilant is evident from this kind of defence Here is a case not of performing or omitting to perform an official act in the course of which an offence is committed.
On the contrary, an independent excursion into crime using the opportunity of office without any nexus with discharge of official function is what we have, in that case.
The Court significantly highlights the fact that 'not only they did no rectification work for the Bundh they also misappropriated the amount entrusted to them for the purpose of rectification. ' We hope no policeman can shelter himself after a rape of an arrested *Oman or shooting of his own wife on the pretext of acting under the Police Act.
Immunity cannot be confused with toxicity disastrous in law as in medicine.
Nor can functions of office be equated with opportunities of office, without being guilty of obtuseness.
This chapter of our discussion yields the conclusion that an act includes an omission (regardless of the General Clauses Act, which does not apply to antecedent statutes) not under all circumstances but in legislations like the Act we are construing.
Again, what is done under purported exercise of statutory functions, even if in excess of or contrary to its provisions, is done pursuant to or under the Act so long as there is a legitimate link between the offending act and the official role.
Judged thus the defence by the Board fills the bill.
The Scheme of the statute is simple.
When cargo ships call at the port, the Board constituted under the Act shall take charge of the goods landed from the vessel and store them properly (section 61 (A)( 1) ).
The 14 L954SupCI/74 414 Board cannot keep goods indefinitely, hard pressed as any modern port is for space and facing as it does intractable problems of protection of goods.
When the goods have landed the owner has to be on the alert and get ready to remove them within 7 days, after which the statutory bailee, the Board, is discharged from liability subject, of course, to any default on the part of the Board in the matter of making the goods deliverable (section 61A(2)).
The span of statutory custody of the Board is short but during that time its obligations are those of a bailee under sections 151, 152 and 161 of the , omitting the words "in the absence of any special contract" in section 152 of the Contract Act (section 61B).
If the person entitled to the goods defaults in removing them within one month of the Board coming into custody, special powers of disposal by public auction are given by section 64A.
The Act charges, the Port authorities with a wealth of functions and duties and necessarily legal proceedings follow upon the defects, defaults and other consequences of abuse of power.
Even so, a public body undertaking work of the sort which a Port carries out will be exposed to an explosive amount of litigation and the Board as well as its officers will be burdened by suits, and prosecutions on top of the pressure of handling goods worth crores daily.
Public bodies and officers will suffer irremediably in such vulnerable circumstances unless actions are brought when evidence is fresh and before delinquency fades; and so it makes sense to provide, as in many other cases of public institutions and servants, a reasonably short period of time within which the legal proceedings should be started.
This is nothing unusual in the jurisprudence of India or England and is constitutionally sound.
Section 87 is illumined by the protective purpose which will be ill served if the shield of a short limitation operates in cases of misfeasance and malfeasance but not nonfeasance.
The object, stripped of legalese and viewed through the glasses of simple sense, is that remedial process against official action showing up as wrong doing or non doing which inflicts injury on a citizen should not be delayed too long to obliterate the probative material for honest defence.
The dichotomy between act and omission, however, logical or legal, has no relevance in this context.
So the intendment of the statute certainly takes in its broad embrace all official action, positive and negative, which is the operative cause of the grievance.
Although the Act, in the present case, uses only the expression 'act ' and omits 'neg lect or default or omission, the meaning does not suffer and if other statutes have used all these words it is more the draftsman 's anxiety to avoid taking risks in court, not an addition to the semantic scope of the word 'act '.
Of course, this is the compulsion of the statutory context and it may well be that other enactments, dealing with different subject matter, may exclude from an 'act ' an 'omission '.
This possibility is reduced a great deal by the definition of 'act ' in the various General Clauses Acts, as including 'illegal omissions '.
The leading ,case of Jolliffee vs The Wallesey Local Board(1) decided nearly a century ago has stood the test of time and still cunent coin, and (1) (1873) 9 L. R. 62.
415 Stroud (Stroud 's Judicial Dictionary; 3rd edn.
Vol. 1; page 877) has extracted its ratio thus : "An omission to do something which ought to be done in order to complete performance of a duty imposed upon a public body under an Act of Parliament, or the continuing to leave any such duty unperformed, amounts to "an act done or intended to be done" within the meaning of a clause requiring a notice of action (Joliffe vs Wallesey, L.R. 9 C.P. 62).
" We regret the prolixity of the judgment because we appreciate brevity but it is the judicial price or tribute to the learning and length of the arguments presenting a panoramic view of Anglo Indian judicial thought for which we are obliged to both counsel.
Indeed, the plethora of rulings cited has been skipped here and there by a process of calculated ricochet, without omitting the more salient cases.
And we are re assured, at the end of this pilgrimage through precedents, that the soundness of the view we have taken is attested by pronouncements of vigorous judges twice three score and ten years ago, in words which 'age cannot wither nor custom stale '.
Law is a practical instrument, a working tool in a workaday world and where, as here, the effected fraction of the community is the common official.
the commercial man and ordinary folk, the wiser rule of construction follows commonsense, not casuistry, context, not strictness and not subtle nuance but plain sense.
The logical conclusion of the legal study is that the short delivery of one bundle or rather the act of under delivery in purported discharge of the bailee 's obligation under section 61B of the Act is covered by section 87 and the truncated limitation prescribed thereunder will apply.
Of course, the statutory notice under section 83 is a condition precedent to, although not a constituent of, the cause of action And there is some authority for the position that the period of one month may also be tacked on under section 15(2) of the .
In the view we take on the ultimate issue this question is immaterial.
Even so, the decisive date on which the decree turns and time runs has to be settled.
if the applies, the suit, by any reckoning, is not barred but since it does not apply the critical issue is as to when time begins to run.
Brushing aside technicalities and guided by the analogy of article 120 of the , we think it night to ]told that the cause of action for short delivery comes into being only when the consignee comes to know that the bailment has come into existence.
You cannot claim delivery from a statutory bailee till you know of the bailment, which under the Act arises only on the vessel discharging the goods into the port certainly not before.
In this species of actions, the right to sue postulates knowledge of the right.
Till then it is embryonic, unborn.
A vital point, then, is as to when the first plaintiff came to know of the goods in question having landed.
The defendant says that when the bulk of the consignment is delivered 'on a Particular date, it must be presumed, unless a contrary inference on special circumstances is made out, that the undelivered Dart was deliverable on that date so 416 much so that limitation began to run from then on.
Any further representation by the bailee that he was trying to trace the missing bundle would not affect the cause of action and therefore the commencement of limitation.
How can a claim be barred without being born ? 'When, then, did the right to sue arise ? It depends on what right was infringed or duty breached.
Which leads us to the enquiry as to what is the statutory responsibility cast on the Board and what is the violation alleged to create the 'cause ' of action.
The bundle of facts constitutive of the right to sue certainly includes the breach of bailee 's duties.
Section 61B of the Act saddles the Board with the, obligations of a bailee under sections 151, 152 and 161 of the Contract Act in regard to loss, destruction or deterioration of goods of which it takes charge.
The degree of care is fixed by section 151 the absolvatory circumstances are indicated by section 152 and the responsibility for loss is fastened by section 162 if, by the fault of the bailee, the goods are not delivered or tendered at the proper time to the bailor.
The proper time for delivery is as soon as the time for which the goods were bailed has expired or the purpose of the bailment has been accomplished Sec. 160, although not in terms woven into the Port Trust Act, is impliedly incorporated, because section 161 inevitably brings it into play.
Even so, when does the time for which the goods are bailed expire ? The answer is, according to the Solicitor General, when the week after landing of the goods expires if section 61A(2) betokens anything on this point.
He urges that when the bulk of a consignment is delivered by the bailee the time for delivery of the short delivered part must be reasonably held to have come.
Finally, he submits that the time consumed by search for the landedgoods cannot be added for fixing the terminus a quo of limitation.
Assuming for arguments sake all these in favour of the appellant, one critical issue claims precedence over them.
When does the statutory bailment take place and can the time for delivery to the owner of the goods arise before he knows or at least has good grounds to know that the bailment has in law come into being ? The owner must ordinarily take delivery in a week 's time after landing since thereafter the Board will cease to be liable for loss, etc., save, of course, when the latter defaults in giving delivery as for instance the goods are irremovably located or, physical obstruction to removal is offered by striking workers or natural calamities.
Here the 7 days ended on September 19, 1959 when actually 52 out of the 53 bundles were delivered.
And if the due date for delivery of the missing bundle had arisen then the suit is admittedly time barred.
However, the learned Solicitor General rightly agrees that 7 days of unloading is no rigid, wooden event to ignite limitation and it depends on other factors which condition the reasonable time when delivery ought to be made.
If a tidal bore has inhibited approach to the port it is a futile law which insists on delivery date having arrived and therefore limitation having been set in motion.
The key question is, according to counsel, when ought the goods have been put in a deliverable state by the Board ?.
If, having regard to reasonable circum 417 stances, the Port Trust did not tender delivery, the right of action for non delivery, subject to statutory notice, arose and the calendar would begin to count the six months in section 87.
We are inclined to assent to this stand for legal and pragmatic reasons.
In Madras Port Trust case where action for loss of goods was laid, two extreme contentions competed for acceptance.
The Board argued that the goods once landed, time ran inflexibly and an absolute span of one month having expired before statutory notice was given the suit was barred.
This was over ruled by the Court (M/s. Swastik Agency vs Madras Port Trust) (1).
But the opposite plea, equally extravagant, commended itself to the Court, erroneously in our view.
The plea was that till the plaintiff knew of the loss, destruction or deterioration time stood still even if many months might have rolled on after the vessel had discharged the goods.
It is true that section 87 speaks of '6 months from the accrual of the cause of such suit '.
What is cause of the suit? Loss, destruction or deterioration ? If so, as Ramamurti, J., has held : "It stands to common sense that the owner cannot be expected to file a suit before he is given access to the goods and also an effective opportunity to examine the goods and he becomes aware of the loss or damage which had occurred to the goods.
To hold that the period of one month specified in s.40(2) would, commence to run even before the owner of the goods became aware, of the loss or damage would result in absurd and startling results.
" The legal confusion issues from the clubbing together of the triple categories of damage.
Cause of suit being destruction or deterioration while the goods are in the custody of the bailee it is correct to read as this Court did in a different situation under the Land Acquisition Act in Harish Chandra vs Deputy Land Acquisition Officer(2), knowledge of the damage by the affected party as an essential requirement of fair play and natural justice.
The error stems from visualising loss as the 'cause ' of suit.
The bailee is bound to return, deliver or tender.
If he defaults in this duty the ,cause ' of action arises.
While destruction or deterioration may need inspection by the owner, it may be proper to import scienter as integral to the 'cause ' or grievance.
But loss flows from sheer non delivery, with nothing super added.
_Loss is the direct result.
viewed through the owner 's eyes, of non return, non delivery or non tender by the bailee the act/omission which completes the 'cause, (vide ;.
161 Contract Act).
What is complained of is the nondelivery, the resultant damage being the loss of goods.
We must keel) ' the breach of duty which is the cause distinct from the loss which is the conse quence.
The judicial interpretation cannot take liberties with the language of the law beyond the strict needs of natural justice.
So we hold that awareness of the factum of loss of goods is not a sine qua non of the 'cause '.
(1) A. I. R. (2) A.I.R. 1961 S.C. 1500.
418 In a stroke of skilful advocacy it was urged that when the bailee fails to return the goods it is like a suit for wrongful detention and the cause of action is a continuing one.
This is an action in detention and its impact on limitation must be recognised, was the contention, stren gthened by Dhian Singh Sabha Singh vs Union of India(1) and certain passages from Clerk & Lindsell on Torts (11th Edition, pages 441 and 442; paras 720 & 721).
The flaw in the argument is that we are concerned with a statutory bailment, statutory action for loss due to non delivery and not a contractual breach and suit in damages or for value of the goods bailed.
Another fascinating,line of thought was suggested to extricate the plaintiff from the coils of brief limitation.
When the defendant holds goods as bailee, the plaintiff may found his cause of action on a breach of the defendant 's duty as bailee of the goods by refusal to deliver them upon request.
Gopal Chandra Bose vs Surendra Nath Dutt(2), Laddo Begam vs Jamal ud din(3) and Kupruswami Mudaliar vs Pannalal Sawcar(4) were cited in support.
Other rulings striking a similar note were also relied on.
But we need not express any opinion on the soundness of that position for here we are dealing with a statutory liability where the plenary liabilities of a bailee cannot be imported.
Counsel for the respondents also urged that the analogy of article 120 of the entitles him to reckon time from when he came to know of the facts making up the right to sue.
In Annamalai Chettiar vs Muthukarappan Chattiar(5), the Judicial Committee had observed: "In their Lordships ' View the case falls under article 120, under which the time begins to run when the right to sue accrues.
In a recent decision of their Lordship 's Board, delivered by Sir Binod Mitter, it is stated, in reference to article 120 : There can be no 'right to sue ' until there is an accrual of the right asserted in the suit and its infringement or at least a clear and unequivocal threat to infringe that right by the defendant against whom the suit is instituted" : Bala vs Koklan(6).
Counsel for the appellants admitted that he was unable to specify any date at which the claim to an account here in suit was denied by the appellants.
Accord ingly this contention fails.
" The reference to Sir Binod Mitter 's observations relates.
to the ruling in Bala vs Koklan.
The proposition is impeccable but is inapplicable if it is urged that the knowledge of the loss marks the relevant date.
On the other hand, if the right to sue or the accrual of the cause of action is based on the infringement by non delivery the knowledge must be the knowledge of the factum of bailment which takes place on the unloading from the vessel and the taking charge by (1) ; (2) (3) All 45.
(4) (5) 58 I.A. 18.
(6) (1930) L.R. 57 I.A. 325.
419 the Board.
That is to say, it is preposterous to postulate the running of limitation from a date anterior to when the plaintiff has come to know that his missing goods have been landed on the port.
Mohammad Yunus vs Syed Unnisa(1) is authority for the rule that there can be no right to sue (under article 120) until there is an accrual of the right asserted which as we have shown, involves awareness of the bailment.
It meets with reason and justice to state that the cause in section 87 cannot arise until the consignee gains knowledge that his goods have come into the hands of the Board.
The Railways Act has spanned cases where courts have laid down legal tests for determining the commencement of limitation.
Views ran on rival lines till in Bootamal 's case(2) this Court settled the conflict and gave the correct lead which has been heavily relied on by the Solicitor General.
Sri Cooper contested the application of the principle in Bootamal on the score that article 31, Limitation Act, 1908, which fell for construction there, used the words 'when the goods ought to be delivered" and covers both delayed delivery and nondelivery, which were absent in s.87, and argued that even otherwise it did not run counter to the contention of the respondent.
Anyway, the Court held there as follows: "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 reasonable 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 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 arriage of goods from the place of despatch to the place of destination.
Any time taken over and above that would be a else 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." (1) ; (2) ; , 76, 79.
420 "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 destinations.
" The ratio is twofold, viz. (1) not when the final refusal to deliver but when the reasonable time for delivery has elapsed does limitation start; (2) correspondence stating that efforts are being made to trace the goods cannot postpone the triggering of limitation.
Of course, 'reasonable ' time is a relative factor and representation by the Railway inducing the plaintiff not to sue may amount to estoppel or waiver in special circumstances.
We are inclined to confine, Bootamal to the specific words of article 39.
The discussion discloses the influence of the words in columns 1 and 3 on the conclusion, rendering it risky to expand its operation.
Section 87 speaks only of the accrual of the cause.
The cause is the grievance which is generated by nondelivery.
But can it be said that it is unreasonable not to be aggrieved by non delivery if the Board credibly holds out that delivery will shortly be made and vigorous search for the goods is being made amidst the enormous miscellany of consignments lying pell mell within the Port? Do you put yourself in peril of losing your right by behaving reasonably and believing the Board to be a responsible body ? We think not.
We are not impressed by the argument based on Bootamal and the train of decisions following it, under the Railways Act.
The rulings of this Court in Union of India vs Amar Singh,(1), Governor General in Council vs Musaddi Lal(2) and Jetumull Bhojrai vs The Darjeeling Himalayan Railway Co.(3) relate to the Limitation Act and the Railways Act; ' and, while public carriers and Port authorities may in many respect bear similar responsibility, the limitation law applicable is different.
May be, some uniformity is desirable in this area of law.
But we have to go by the language of section 87 and not be deflected by analogy drawn from the Railways Act or Limitation Act with noticeable variations.
Never the less, one of the legal lines harshly but neatly drawn in Bootamal lends some certainty to the 'from when ' of limitation, by eliminating an impertinence letters informing that search for the goods is under way.
The snag is in linking this proffer of search to the vital ingredient in the 'accrual of the cause '.
If, as Bootamal has correctly highlighted, the tracing process is after the 'cause ' is complete it is irrelevant to procrastinate limitation.
This is the wider contribution of that decision to this blurred branch of the law.
So much so, sheafs of letters from the Port officials that the landed goods are being tracted out or searched for are impotent to alter the date from when the crucial six months ' race with time be gins.
Once limitation starts, nothing not the most tragic events can interrupt it; for 'the moving hand writes, and having writ (1) ; (2) ; (3) [1963] 2 S.C.E. 832.
421 moves on; not all thy tears nor piety can lure it back to cancel half a line '.
This implacable start is after 'the accrual of the cause ', which is when non delivery or non tender takes place.
That event is fixed with reference to reasonable lapse of time after the unloading of the goods.
Thus, if the search is to find out whether the goods have landed at all, it is integral and anterior, to the 'cause '; but if it be to trace what has definitely been discharged into the port it is de linked from the, 'cause 'a la Bootamal.
Such an approach reduces the variables and stops the evils of fluctuation of limitation.
It is easy to fix when the vessel has discharged the goods into the port by, looking into the tally sheet or other relevant documents prescribed in the bye laws.
This part of the tracing cannot take long although it is regrettable and negligent for the Bombay Port officials to have taken undue time to give the plaintiffs even this information.
On the contrary, search for the missing but landed goods in the warehouses and sheds and open spaces can be a wild goose chase honestly or as long as the consignee or port officials with dishonestly.
Reasonable diligence will readily give the consignee information of landing, of his goods.
In the major port cities warehousing facilities are expensive and difficult to procure so that a consignee of considerable goods may manage to get free warehousing space within the port for as long as he wants by inducing, for illicit consideration, the port officials to issue letters that the goods are being traced out.
This is a vice which adds to the sinister uncertainty of the terminus a quo if we accept the plea that every letter from the port authorities that the missing goods are being traced out has the effect of postponing limitation.
We wish to make it clear however that the event which is relevant being the discharge of the goods from the ship into the port, the bailment begins when the Board takes charge of the goods and a necessary component of the "cause" in section 87 of the Act is the knowledge of the owner that the goods have landed.
One small but significant argument of the Solicitor General remains to be noticed.
In the search for what 'is the reasonable time for delivery by the bailee a pragmatic or working rules is suggested by him which we think merits consideration.
When a large consignment is entrusted with the Board and the bulk of it is delivered on a particular date it ordinarily follows that the reasonble time for the delivery of the missing part of the consignment also fell on that date.
There may be exceptional circumstances whereby some items in the consignment might not have been unloaded from the ship by mistake or might be stored by error in a wrong shed mixed up with other goods so that they are not deliverable readily, or a substantial part of the goods has been taken delivery of and by the time the balance is sought to be removed a bandh or strike or other physical obstruction prevents taking delivery.
Apart from these recondite possibilities which require to be specially proved by him who claims that limitation has not started, it is safe to conclude that the date for delivery of the 422 non delivered part of the consignment is the same as that when a good part of it was actually delivered.
The ruling in Trustees of the Port of Mad? as vs Union of India, cited by Shri Cooper in this context, is good in parts.
The learned judges were dealing with the short delivery by the Madras Port Trust.
While pointing out that attempts made by the Port Trust to locate the goods would be no answer to the claim for delivery made by the consignee, the Court held that the date when limitation starts in such cases is when a certificate that the missing packages are not available (Shedmaster 's certificate 'C ') is issued.
While it is correct to say that alleged attempts by the Port officials to locate the goods which have definitely landed has no bearing on the "cause", it is equally incorrect to hold that till the certificate that the non delivered package is not forthcoming limitation does not begin.
The true test, as we have earlier pointed out, is to find out when delivery should have been made in the normal course, subject to the fact of discharge from the ship to the port of the relevant goods and the knowledge about that fact by the consignee.
In Union of India vs Jutharam(1) a single Judge of that High Court took the view that when part of the goods sent in one consignment was not delivered it is right to hold that it should have reasonably been delivered on the same day the delivery of the other part took place.
The date of delivery of part of the consignment must be deemed to be the starting point of limitation.
This approach has our broad approval.
In Union of India vs Vithalsa Kisansa & Co.(2) a single Judge of Bombay High Court, while emphasizing that what is reasonable time for delivery may depend upon the circumstances of each case, the point was made if the correspondence between the bailee and the consignee disclosed anything which may amount to an acknowledgment of the liability of the carrier that would give a fresh starting point of limitation.
even as.
if the correspondence discloses material which may throw light on the question of determining the reasonable time for delivery, the Court may take into account that correspondence but not subsequent letters relating only to the tracing of the goods.
This statement of law although made in the context of a public carrier 's liability applies also to the Port Trust.
In short, there is force in the plea that normally the date for delivery of the missing packages should be deemed to be the same as the date when another part of the consignment was actually delivered.
We thus come to the end of the case and may formulate our conclusions, as clearly as the complex of facts permits.
(1) Section 87 of the Acts insists on notice of one month.
This period may legitimately be tacked on to the six month period mentioned in the section (vide Sec.
15(2) ).
(2) The starting point of limitation is the accrual of the cause of action.
Two components of the "cause" are important.
The date (1) A.I.R. 1968 Pat.
(2) A.I.R. 1971 Bom.
423 when the plaintiff came to know or ought to know with reasonable diligence that the goods had been landed from the vessel into the port.
Two clear, though not conclusive indications of when the consignee ought to know are (1) when the bulk of the goods are delivered, there being short delivery leading to a suit (ii) 7 days after knowledge of the landing of the goods suggested in Sec.
Whichever is the later date ordinarily sets off the running of Limitation.
(3) Letters or assurances that the missing packages are being searched for cannot enlarge limitation, once the goods have landed and the owner has come to know of it.
To rely on such an unstable date as the termination of the search by the bailee is apt to make the law uncertain, the limitation liable to manipulation and abuses of other types to seep into the system.
(4) Section 87 is attracted not merely when an act is committed: but also when an omission occurs in the course of the performance of the official duty.
The act omission complex, if it has a nexus to the official functions of the Board and its officers, attracts limitation under section 87.
Judged by these working rules, the present case has to be decided against the plaintiffs.
For one thing, the short delivery of one bundle of steel plates is an integral part of the delivery of the consignment by the port authorities to the consignee in the discharge of their official functions as statutory bailee.
Section 87 of the Act, therefore, applies.
The delivery of the bulk of the consignment took place on September 19, 1959 and more than seven months had passed after that before the institution of the suit.
Of course, a later date, namely, November 7, 1959 (Ext. 'A ') clearly brings to the ken of the plaintiff the fact that the missing bundle has been duly landed in the port.
It is true that the enquiry section of the Bombay Port Trust Docks did not even, as late as December 4, 1959, give a definite reply about the "outturn" for this item.
On December 5, 1959, the first plaintiff brought to the notice of the Board "that the above mentioned bundle has been landed and they (agents of the vessel) hold receipt from you (the Board)".
The plaintiffs made an enquiry "Whether the bundle has been landed, if landed, let the information regarding the whereabouts and, if not, confirm the short landings." Further reminders by the plaintiffs proved fruitless till ;It last on January 22.
1960,, the port officer concerned wrote : "I beg to inform you that the bundle under reference has been outturned as "Landed but missing." It was contended that the plaintiffs, for certain, came to know of the landing of the missing bundle only on January 22, 1960.
We are unable to accept this plea because the first plaintiff had already got the information, as early as November 7, '1959, about the due landing of the missing item from the Indian Maritime Enterprises.
Nothing has been suggested before us as to why this knowledge of the plaintiff should be discarded.
The subsequent correspondence between the port officers and the plaintiffs was more for getting requisite documents.
424 to follow up legal proceedings against the insurer by the consignee.
In this view, the starting point of limitation arose on November 7, 1959 and the suit was instituted on June 18, 1960, a little over 10 days beyond the period of limitation.
The plaintiffs thus missed the bus and we regret to decide on this technical point that the suit is liable to be dismissed but we must.
A faint plea that the Board is not a 'person ' falling with in section 87 was suggested by Sri Cooper but its fate, if urged, is what overtook a similar contention before a Bench of the Madras High Court in Trustees of the Port of Madras vs Home Insurance Co.(1) dismissal without a second thought.
It is surprising that a public body like the Port Trust should have shown remissne in handling the goods of consignees and in taking effective action for tracing the goods.
It is seen that while there is ,a special police station inside the port, called the Yellow Gate Police Station, with six or seven officers and 200 policemen for duty by day and with about 400 policemen for duty by night, the port authorities ,did not care to report to the police till December 16, 1959.
Three months is far too inordinate and inexcusable a delay for reporting about the pilferage of a vital and valuable item, namely, a bundle of ,steel plates imported from Japan by an automobile manufacturing company.
While we dismiss this suit, we feel that it is not enough that the State instal police stations inside the ports; it must ensure diligent action by the officials, and if there is delinquency or default in discharging their duties promptly and smartly, disciplinary action should be taken against those concerned.
In this country our major harbours are acquiring a different reputation for harbouring smugglers :and pilferers and an impression has gained currency that port officials ,connive at these operations for consideration.
Every case is an event and an index, projects a conflict of rights between two entities but has a social facet, being the symptom of a social legion.
We consider that the Government and the public must be alerted about the unsatisfactory functioning of the ports so 'that delinquent officials may be proceeded against for dubious default in the discharge of their duties.
It is not enough that diligence is shown in pleading limitation when honest citizens aggrieved by loss ' of their goods entrusted to public bodies come to court.
The responsibility of these institutions to do their utmost to prevent pilferage is implied in the legislative policy of prescribing a short period of ' limitation.
Another important circumstance we wish to emphasize is that ambiguity in language leading to possibilities of different constructions should not be left to the painfully long and expensive process of being ,settled decades later by the highest court in the land.
The alternative and quicker process in a democracy of rectification by legislative amendment should be resorted to so that private citizens are not subjected to inordinate expense and delay because the legalese in a legislation reads abstruse or ambiguous.
The very length of this judgment, and of this litigation, is eloquent testimony to the need (1) A.I.R. 1970 Mad.
425 for prompt corrective legislation on such small matters as have cropped up in the present case.
Moreover, some uniformity in regard to.
statutory bailee 's responsibilities, whether they be public carriers like the Railways, or strategic institutions like Ports, will give the community a sense of certainty and clarity about their rights and the duties.
of public bodies in charge of their goods.
Counsel had drawn attention to the difficulties of the community where conflicting judicial currents aided by tricky words have made law chancy, and the need for this Court to clear the ground and give.
the lead.
We are aware, with justice Jackson of the U.S. Supreme Court, that 'the judicial decree, however, broadly worded, actually binds in most instances, only the parties to the case.
As to others,.
it is merely a weather vane showing which way the judicial wind is blowing '.
The direction of the wind.
in this branch of law, is as we have projected.
We are of the view, in reiteration of earlier expression on the same lines, that public bodies should resist the temptation to take technical pleas or defeat honest claims by legally permissible but marginally unjust contentions, including narrow limitation.
In this and similar cases, where a public carrier dissuades private parties from suing by its promises of search for lost articles and finally pleads helplessness,, it is doubtful morality to non suit solely on grounds of limitation, a plaintiff who is taken in by seemingly responsible representation only to find himself fooled by his credibility.
Public institutions convict themselves of untrustworthiness out of their own mouth by resorting to such defences.
What should be the proper direction for.
costs ? Both the parties arc public sector bodies.
But the principle which must guide us has to be of general application.
Here is a small claim which is usually associated with the little man and when, as in this test action, the litigation escalates to the final court wafted by a legal nicety, his financial back is broken in a bona fide endeavour to secure a declara tion of the law that binds all courts in the country for the obvious benefit of the whole community.
The fact that the case has gained special leave under article 136 is prima facie proof of the general public importance of the legal issue.
The course of this litigation proves that the fine but decisive point of law enmeshed in a conflict of precedents found each court reversing the one next below it, almost hopefully appetising the losing party to appeal to the higher forum.
The real beneficiary is the business community which now knows finally the norm of limitation they must obey.
Is it fair in these circumstances that one party, albeit the vanquished one, should bear the burden of costs throughout for providing the occasion not provocation for laying down the correct law in a controversial situation.
Faced with, a similar moral legal issue, Lord Reid observed : "I think we must consider separately costs in this House and costs in the Court of Appeal.
Cases can only come before this House with leave, and leave is generally given because some general question of law is involved.
In this 426 case it enabled the whole vexed matter of non est factum to be re examined.
This seems to me a typical case where the costs of the successful respondent should come out of public funds.
"The Evershed Committee on Supreme Court Practice and Procedure had suggested in England that the Attorney General should be empowered to issue a certificate for the use of public funds in appeals to the House of Lords where issues of outstanding public importance are involved.
Maybe, a scheme for a suitor 's fund to indemnify for costs as recommended by a Sub Committee of Justice is the answer, but these are matters for the consideration of the Legislature and the Executive.
We mention them to show that the law in this branch cannot be rigid.
We have to make a compromise between pragmatism and equity and modify the loser pays all doctrine by exercise of a flexible discretion.
The respondent in this case need not be a martyr for the cause of the, certainty of law under section 87 of the Act, particularly when the appellant wins on a point of limitation.
(The trial court had even held the appellant guilty of negligence).
In these circumstances we direct that the parties do, bear their costs throughout.
Subject to this, we allow the appeal.
S.C. Appeal allowed.
(1) Gallie vs Lee.
(2) ,1048.
| The first plaintiff became entitled to claim a consignment of 53 bundles of mild steel plates despatched by a Japanese exporter to be delivered at the port of Bombay.
The goods were discharged in the docks on 12th September 1959, into the custody of the Bombay Port Trust, the appellant.
The goods were insured and the second plaintiff was the insurer.
On September 19, 1959, delivery of the goods was applied for and was given but only 52 bundles.
A week thereafter, the first plaintiff demanded the missing bundle but was put off from time to time by the appellant assuring that a search was in progress to trace the goods.
From the Indian Maritime Enterprises, the agents of the Japanese vessel, the plaintiff came to know on November 7, 1959 that all the 53 bundles had been duly unloaded.
The plaintiff enquired from the appellant again on December 5, 1959 whether the bundle had been landed; but the port authorities still informed that the missing bundle was still under search.
Thereafter, on January 22, 1960, the appellant informed the first plaintiff that the bundle under reference had been out turned as landed but missing.
Within a week thereafter, the first plaintiff asked for a non delivery certificate and the certificate was issued on March 1, 1960 and on May 12, 1960 a statutory notice under section 87 of the Bombay Port Trust Act, 1879, was issued and a suit was filed for the missing bundle or its value by way of damages.
The defence put forward by the appellant was, that since the suit was governed by section 87 of the Act and the cause of action having arisen on September 19, 1959, the claim is barred by limitation because 6 months had already passed from the time the first cause of action arose.
The second plaintiff, insurer, having paid the value of the lost articles to the first plaintiff got itself subrogated to the later 's right, and they together filed the suit before the Court of Small Causes.
That Court held against the appellant but the full Court in appeal reversed the judgment of the trial court and held in favour of the appellant holding that the claim was barred by limitation.
The High Court, however, held in favour of the plaintiff and hence the appeal to this Court.
Section 87 of the Bombay Port Trust Act, 1879, provides that no suit or other proceeding shall be commenced against any person for anything done or purporting to have been done, in pursuance of this Act without one month 's previous notice, and not after 6 months from the accrual of the cause of such suit or other proceeding.
The question was whether the suit was for anything done or purporting to have been done in pursuance of this Act, when the action is for non delivery of one out of 53 bundles.
Allowing the appeal, HELD : (1) Where a statute imposes a duty, the omission to do something that ought to be done in order completely to perform the duty, or the continuing to have any such duty unperformed, amounts to an act done or intended to be done within the meaning of a statute which provides a special period of limitation for such an act.
[403 H 404 A] Halsburys Laws of England, 3rd Ed.
Vol. , referred to.
Therefore in the present case, the truncated limitation prescribed under the Act will apply.
[415 E] 13 L 954 SupCI/74 398 (2)Sec.
87 of the Act insists on notice of one months This period may legitimately be tacked on to the six months period mentioned in the section (vide sec.
15(2) .
[422 G H] (3) The starting point of limitation is the accrual of the cause of action.
Two components of the "Cause" are Important.
The date when the plaintiff came to know or ought to know with reasonable diligence that the goods had been landed from the vessel into the port.
Two clear indications of when the consignee ought to know are : (1) when the bulk of the goods are delivered, there being short delivery leading to a suit, and (2) 7 days after knowledge of ,he landing of the goods suggested in Sec.
Whichever is the later date ordinarily sets off the running of limitation.
[422 H 423 B] (4) Utters of assurance cannot enlarge the limitation once the goods have landedand the owner has come to know of it.
[423 B C] (5) Sec. 87 is attracted not merely when an act is committed but also when a omission occurs in the course of the performance of the official duty.
[1423C D] In the present case, applying the above principles, the case has to be decided against the plaintiffs and the appeal is allowed.
[423D]
| 3199.txt |
: Civil Appeal No. 38 of 1960.
Appeal by special leave from the judgment and order dated October 6, 1958, of the Punjab High Court in Letters Patent Appeal No. 52 of 1954, arising out of the judgment and order dated June 15, 1954, of the said High Court in First Appeal from Order No. 149 of 1953.
Y. Kumar, for the appellant.
Bakshi Man Singh and Sardar Singh, for the respondents.
April 20.
The Judgment of the Court was delivered by WANCHOO, J.
This is an appeal by special leave against the judgment of the Punjab High Court.
The brief facts necessary for present purposes are these.
The appellant had executed two usufructuary mortgages with respect to two properties situate in Ferozepore city in favour of the respondents in 1946.
She also took both properties on lease on the same date.
An application was filed by the respondents under section 13 of the Displaced Persons (Debts Adjustment) Act, No. LXX of 1951 (hereinafter called the Act), for recovery of the principal sum due as well as the rent which was said to be in arrears.
The application was resisted by the appellant on various grounds, one of which was that no such application lay as the liability was not a debt under the Act.
The tribunal negatived the contention of the appellant and passed a preliminary decree for sale.
Six months ' time was allowed to the appellant to pay the decretal amount, failing which the respondents were at liberty to get a final decree prepared and bring the properties to sale.
The appellant went in appeal to the High Court but the appeal was dismissed.
Then there was a Letters Patent Appeal, which was also dismissed.
The appel lant then applied for and was granted special leave by this Court, and that is how the matter has come up before us.
The only point for our consideration is whether the liability created under a mortgage is a debt within 572 the meaning of section 2(6) of the Act.
The relevant part of that provision runs as follows: " 'Debt ' means any pecuniary liability, whether payable presently or in future, or under a decree or order of civil or revenue court or otherwise, or whether ascertained or to be ascertained, which (a) in the case of a displaced person who has left or been displaced from his place of residence in any area now forming part of West Pakistan, was incurred before he came to reside in any area, now forming part of India; (b)in the case of a displaced person who, before and after the 15th day of August, 1947, has been residing in any area now forming part of India, was incurred before the said date on the security of any immovable property situate in the territories now forming part of West Pakistan : Provided that where any such liability was incurred on the security of immovable properties situate both in India and in West Pakistan, the liability shall be so apportioned between the said properties that the liability in relation to each of the said properties bears the same proportion to the total amount of the debts as the value of each of the properties as at the date of the transaction bears to the total value of the properties furnished as security, and the liability, for the purposes of this clause, shall be the liability which is relatable to the property in West Pakistan; (c)is due to a displaced person from any other person (whether a displaced person or not) ordinarily residing in the territories to which this Act extends; x x x x The contention on behalf of the appellant is that the liability under a mortgage is not a pecuniary liability and therefore section 2(6) will not apply to a mortgage debt.
It is further urged that the scheme of the Act shows that mortgages in relation to properties situate in what is now India are not covered by the Act at all.
573 Debt is defined in section 2(6) as meaning any pecuniary liability and has been restricted by the three subclauses in the sub section with reference to the person who might be owing the debt or to whom the debt might be owed.
Sub cls.
(a) and (b) refer to the debts owed by a displaced person as defined in the Act while sub cl.
(c) refers to a debt due to a displaced person.
Sub cl.
(c) has therefore to be taken independently of sub cls.
(a) and (b), for it refers to a creditor who is a displaced person while the other two sub clauses refer to a debtor who is a displaced person.
Under subcl.
(c) a displaced person who is a creditor can recover the debt due to him from any other person, whether a displaced person or not, who is residing in the territories to which the Act extends.
The main contention of the appellant in this connection is that a mortgage debt is not a pecuniary liability and therefore does not fall within the definition of debt at all.
We are of opinion that there is no force in this contention.
The words " pecuniary liability " will cover any liability which is of a monetary nature.
Now the definition of a mortgage in section 58 of the Transfer of Property Act, No. 4 of 1882, shows that though it is the transfer of an interest in specific immovable property, the purpose of the transfer is to secure the payment of money advanced or to be advanced by way of loan or to secure an existing or future debt or the performance of an engagement which may give rise to a pecuniary liability.
The money advanced by way of loan, for example, which is secured by a mortgage, obviously creates a pecuniary liability.
It is true that a mortgage in addition to creating the pecuniary liability also transfers interest in the specific immovable property to secure that liability ; none the less the loan or debt to secure which the mortgage is created will remain a pecuniary liability of the person creating the mortgage.
Therefore a mortgage debt would create a pecuniary liability upon the mortgagor and would be covered by the definition of the word "debt" in section 2(6).
We may in this connection refer to the Displaced Persons (Institution of Suits) Act, No. XLVII of 1948, which has been practically repealed by the 75 574 Act.
In that law, suits relating to immovable property were specially excepted under section 4, but there is no such provision in the Act.
Again section 6 of the Displaced Persons (Legal Proceedings) Act, No. XXV of 1949, which has also been repealed by the Act mentions decrees or orders for payment of money while in section 15 of the Act which deals with the same matter those words are omitted and the words " proceedings in respect of any debt " are used instead.
There can be no doubt in consequence that the Act is a comprehensive law dealing with all kinds of pecuniary liability.
We are therefore of opinion that section 2(6) clearly includes a mortgage debt and under sub el.
(c) thereof a displaced person to whom such a debt is due from any other person, whether a displaced person or not, ordinarily residing in the territories to which the Act extends can take the benefit of this Act.
Let us now see whether there is anything in the scheme of the Act which in any way militates against the plain words of section 2(6).
Learned counsel for the appellant in the first place refers to sub el.
(b) of section 2 (6) in this connection and points out that that subclause specifically deals with mortgage debts secured on any immovable property situate in the territories forming part of West Pakistan.
It is urged that there was a specific provision with respect to mortgage debts in relation to immovable properties in West Pakistan and that if it were intended that mortgage of immovable properties situate in what is now India would also be dealt with under the Act there would have been a similar specific provision in the Act.
Further it is pointed out that the proviso to subel.
(b) to section 2(6) provides for apportioning the mortgage debt in cases where the property on which the debt is secured is both in West Pakistan and in India and restricts the application of sub cl.
(b) only to that part of the debt which was secured on the property in West Pakistan and thus excludes from the operation of sub el.
(b) that part of the debt which is secured on property in India.
That is undoubtedly so.
The reason however for this special provision is to be found in the later provision contained in section 16 by which a charge was created on compensation to be given to a 575 displaced person with respect to the mortgage debt secured on immovable property in Pakistan or in the alternative a charge was created on property given in exchange for the property in Pakistan on which the debt was charged.
The special provision there ,.
fore in sub cl.
(b) of section 2(6) would not in these circumstances cut down the plain meaning of the words used in sub cl.
(c) or restrict the wide words " pecuniary liability " to liability other than that secured by a mortgage.
Incidentally we may mention that subcl.
(b) itself shows that pecuniary liability includes a mortgage debt, for it shows that any liability which was incurred on the security of any immovable property situate in West Pakistan would be a debt within the meaning of section 2 (6) and therefore a pecuniary liability.
It is next urged that when the legislature excepted the property in India which was encumbered from being dealt with under sub el.
(b) so far as displaced debtors were concerned, there is no reason why it should allow the displaced creditors to proceed under the Act with respect to mortgage debts.
This argument, however, overlooks the provision in sub cl.
(a) under which a displaced debtor can take the benefit of the Act, once it is held that the words " pecuniary liability " also include mortgage debt.
As we have said before sub cl.
(b) was dealing with a special situation which was worked out in section 16 of the Act and the general right of a displaced debtor to take advantage of the Act is to be found in sub cl.
(a) and that subclause will cover a mortgage debt as it is a pecuniary liability.
Reliance was then placed on section 16 (5), which gives a right to the creditor to elect to be treated as an unsecured creditor in relation to the debt, in which case the provisions of the Act would apply accordingly.
It was urged that this sub section requires that a creditor must make an election before he can take the benefit of this Act.
We are of opinion that this argument has no force, for sub section
(5) of section 16 only deals with a situation which arises where the mortgage, charge or lien was on immovable property situate in West Pakistan.
It does not deal at all with cases 576 where the mortgage, charge or lien is on immovable property situate outside West Pakistan.
Reference was then made to section 17 of the Act.
It deals with debts secured on movable properties.
That section is again concerned with displaced debtors and provides how equities will be worked out between a displaced debtor and his creditor with respect to debts secured on movable property.
We see nothing in this section which can cut down the amplitude of the words used in section 2 (6)(c).
Reference was then made to section 21 which provides for scaling down debts.
That is however a general provision dealing with debts of all kinds and there is nothing in that section which shows that the word " debt " as defined in section 2(6) refers only to claims for money and does not include a mortgage debt.
Thus we see nothing in any provision of the Act or in its scheme which would cut down the meaning we have given to the words " pecuniary liability " as used in section 2 (6) read with sub cl.
(c) thereof.
It was also urged that if mortgage debts on property situate in India were covered by the Act, there is no machinery (like section 16) for enforcement of the creditors ' rights in respect thereof.
This is not correct.
Section 10 provides for the claim of a displaced creditor against a displaced debtor and section 13 provides for the claim of a displaced creditor against any other person who is not a displaced debtor.
Section 11 then provides how an application under section 10 A ill be dealt with and under sub section
(2) thereof a decree can be passed under certain circumstances against the displaced debtor.
Similarly under section 14 (2) a tribunal can pass such decree in relation to an application under section 13 as it thinks fit.
These decrees are executable under section 28 of the Act.
Therefore even when the debt is a mortgage debt there is provision in the Act for enforcement of that debt, though of course this provision is different from the provision contained in section 16, which was dealing with the special situation of properties under ,mortgage situate in West Pakistan.
We may also refer to section 3 of the Act which lays down that the provisions of the Act and of the Rules 577 and Orders made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force.
The effect of this overriding provision is to make a suit like the present maintainable in spite of the provisions applying to such suits in other laws.
The last contention on behalf of the appellant is that if section 2 (6) (c) empowers a displaced creditor to make an application under section 13 even with respect to a mortgage debt, there will be hardship to prior mortgagees or subsequent mortgagees inasmuch as these persons cannot be dealt with under the Act.
Section 13 empowers a displaced person claiming a debt from any other person who is not a displaced person to apply within one year of the coming into force of the Act in any local area to the tribunal having jurisdiction in the matter.
The provision is obviously enacted to give relief for a short period only.
Section 25 of the Act provides for the regulation of all proceedings under the Act by the provisions contained in the Code of Civil Procedure save as expressly provided in the Act or in any rules made thereunder.
But assuming that in spite of this provision, 0.
XXXIV, r. 1 of the Code of Civil Procedure will not apply to proceedings under the Act and all those having an interest in the mortgage security cannot be joined as parties as required by 0.
XXXIV, r. 1, the interest of prior or puisne mortgagees cannot in any case be affected by the decree passed under the Act.
The Explanation to 0.
XXXIV, r. 1, shows that a prior mortgagee need not be made a party to a suit for sale by a puisne mortgagee.
So far therefore as a prior mortgagee is con cerned, his rights will not be affected by the decree passed under section 13 of the Act, just as his rights are not affected by the decree passed under 0.
XXXIV.
So far as mortgagees subsequent to the displaced creditor who applies under section 13 are concerned, their interests will also not be jeopardized by the decree which may be passed under section 13.
Even under 0.
XXXIV, which requires puisne or subsequent mortgagees to be joined as parties in a suit for sale, a decree obtained in a suit to which the subsequent mortgagee was not joined as a party does not affect his rights and the 578 proceedings in such a suit are not binding on him so as to affect his rights under the second mortgage.
He can thus follow the property by suing his mortgagor, even though it may have been sold under the decree of an earlier mortgagee in a suit to which he was not a party.
Therefore, the interest of the prior mortgagee or the subsequent mortgagee, if any, would not be affected by a decree passed on an application under section 13 and there is no reason therefore to cut down the plain meaning of the words used in section 2 (6) (c) on the ground that the proceedings under the Act would prejudicially affect the rights of prior or puisne mortgagees.
There is therefore no force in this appeal and it is hereby dismissed with costs.
Appeal dismissed.
| The appellant executed two usufructuary mortgages in favour of the respondents in 1946 with respect to two properties situated in Ferozepur city and herself took the properties on lease on the same date.
The respondents filed an application under section 13 of the Displaced Persons (Debts Adjustment) Act, LXX of 1951, for recovery of the principal sum due and also the arrears of rent.
The appellant contested the application on the ground, inter alia, that the liability was not a debt under the Act as it was not a pecuniary liability and that mortgages in relation to properties situated now in India were not covered by it.
The Tribunal allowed the application and passed a preliminary decree for sale.
The appellant 's appeal to the, High Court and another under the Letters Patent were both dismissed.
On appeal by special leave: Held, that a mortgage debt would create a pecuniary liabi lity upon the mortgagor and would be covered by the definition of the word " debt " in section 2 (6) of the Act.
There is nothing in any provision of the Act which would cut down the plain meaning of the words "pecuniary liability" as used in section 2(6) read with sub cl.
(c) thereof or restrict those wide words to liability other than that secured by a mortgage.
Under sub cl.
(c) of section 2(6) a displaced person to whom a mortgage debt is due from any other person, whether a displaced person or not, ordinarily residing in the territories to which the Act extends can take the benefit of this Act.
571 The interest of the prior mortgagee or the subsequent mort gagee if any would not be affected by a decree passed on an application under section 13 of the Act.
| 897.txt |
Appeal No. 158 of 1967.
Appeal by special leave from the judgment and order dated August 5, 1966 of the Rajasthan High Court.
in section P. Civil Regular Second Appeal No. 222 of 1964.
section T. Desai, P. C. Bhartari, J. B. Dadachanji and Pukhraj Singh, for the appellant.
S.V. Gupte, K. K. Jain and H. K. Puri, for respondents Nos. 1 to 9.
That Judgment of the Court was delivered by P.Jaganmohan, Reddy, J. This Appeal by Special Leave of this Court is against the Judgment of a Single Judge of the Rajas 838 than High Court affirming the Judgment and decree of the, District Court with certain variations.
Respondents 1 to 9 filed a suit against the Appellants and Respondents 10 and 11 and two others for a declaration that they have been carrying on and are entitled to carry on Darshan, Prakshal and Poojan etc.
of the idol of Adeshwarji, the first Tirthankar in the Temple named after him at Paroli without interference according to the tenets observed by the Digambri Sect of the Jain religion. ' The said Temple of Shri Adeshwarji is said to have been in existence for 200 years while, the Respondents aver that the inscriptions on it bear Vikram Samvat 1510 (1454 AD).
The Plaintiffs further alleged that the Temple was constructed and the idol, was consecrated according to and by the followers of the tenets of the Digamber sect; that the Plaintiffs and the other followers of the Digamber Sect have been performing Darshan, Prakshal and Poojan of the said idol according to their tenets every since the Temple was founded; that on the 23rd of December 1949 the Defendants attempted to convert the said idol into the idol of Swetambri Sect by putting Chakshus (artificial eyes ) thereon, but were prevented from doing so by a strong opposition of the followers of the Digamber Sect; that thereafter some temporary arrangements were made between the followers of the two Sects who agreed to maintain the status quo until a decision of the Civil Court on the rival claims of the parties was given; that in disregard of the temporary settlement and without getting the rights in the Temple adjudicated upon by the Civil Court, the Defendants made arrangements to put Dhwajadand and Kalash on the said Temple according to their tenets,, and that they also further learnt that the Defendants were intending to enclose the said idol by putting up doors and locks with the.
object of interfering with and obstructing the free exercise by the Digamberies of their unfettered rights to perform Poojan, Prakshal and worship of the said ideal according to their tenets.
On these allegations it was prayed that the Defendants be restrained by a permanent injunction from (i) erecting the Dhwajadand, and putting up Kalash; (ii) enclosing the idols by putting up doors and locks; or in any manner altering the nature and shape and appearance of the idols installed in the said Temple; or directly or indirectly doing any act or thing which may have the effect of wounding the religious susceptibilities and sentiments of the followers of the Digamberi Jain Sect; and (iii) from interfering with the free and unfettered rights of the Plaintiffs of performing Darshan.
Prakshal and Poojan and other rites according to the tenets of Digamber Jain Sect.
839 The Defendants did not deny that they,intended to put the Netras ' but said that they did so because the Netras which the idol had even before the said date having been damaged and fallen out, new Netras were put up.
They further claimed that since its existence the Temple of Adeshwarji has been in the possession of the Defendants who have been in exclusive management of the Temple and its property; that the Plaintiffs never used to do Poojan or Prakshal in the Temple nor had they any Tight thereto, and that when in 1949 there was a dispute between the parties a temporary arrangement was made but the Defendants did not admit any right of Plaintiffs to Poojan.
It, was further averred that the said idol and the Temple is in all respects Jain Swetambri Sect, that it has been so used and described in all the historic records from time to time and that the Civil Court had no jurisdiction to decide the religious rights of the parties nor is it a dispute of a civil nature.
On these pleadings issues were framed on 3 12 55 but subse quently after the evidence in the case was recorded and having regard thereto fresh issues were framed in substitution of the former ones on 4 6 57 but thereafter no evidence was led by either party.
The controversy between the parties as is evident from these issues was, as to which Sect of the Jains the main idol of Adeshwarji belongs, which Sect has constructed the upper portion of the idol referred to and the nearby portion of the temple; under what tenets have the followers of the Sects, Digamber and Swetamber, performed Darshan, Prakshal and Poojan of the idol of the temple referred to and can any Sect change those previous tenets , whether the Notras (artificial eyes) of the idol, Bhujband and Dhwajadand over the temple existed before and if not, can they be placed and inserted now; and whether the Temple is in possession and under the management of the Defendants alone from the time it came into existence.
The Civil Judge of Bhilwara decreed the suit of the Plain tiffs, against which the Defendants appealed.
The District Judge, however, allowed the appeal and dismissed the suit on the ground that in his opinion no question of any right to property or office was involved in the suit ' and consequently the plaintiffs suit was dismissed with costs.
On an appeal from this Judgment the High Court allowed the Appeal holding that inasmuch as the allegations in the plaint relate to an assertion of a right of worship and an interference with that right, a dispute of civil nature arises which is, clearly cognizable by a Civil Court.
In this view the case was, remanded to the District Judge for determining the appeal on merits.
Leave to Appeal was also refused.
840 After remand the District Judge confirmed the Judgment and decree of the Trial Court with certain variations.
Against this Judgment the Appellants filed an appeal to the High Court and the Respondents filed cross objections.
The High Court affirmed the Judgment of the District Judge except for that part of the decree directing the Appellants to keep open the doors of the Temple between 8.30 and 9.30 each morning to enable the Respondents to worship without interference, which, however, was modified to enable Respondents to worship at the Temple between 6 a.m. to 9 a.m. every morning, during which time the Temple was not to be locked.
It further directed that if the Swetambaries wanted also to worship during this period without disturbing the Digamberies they had the liberty to do so.
The learned Advocate for the Appellants Shri section T. Desai urged several contention before us namely; (i) the High Court was in error in not deciding the ownership of the Temple or of the idol; (ii) that it should have held that a presumption of ownership would arise having regard to the concurrent findings that the Swetamberies were in management and possession of the Temple; (iii) that the reliefs claimed make it clear that the dispute is not of a civil nature for in any view of the matter the Courts were in error that placing of the Dhwajadand and Kalash on the Temple changes the nature of the temple; (iv) that the High Court should not have accepted the cross appeal fixing 3 hours time for the worship of the Digamberies Sect; (v) that the Judgment of the Trial Court is wholly vitiated because the Trial Judge not having accepted the evidence based his findings on his own inspection.
Before as deal with these contentions, it is necessary to detail the findings of the Courts below The Trial Court while decreeing the Plaintiff 's suit held that though it was not proved as to who built the Temple of Adeshwarji initially, both Digamberies and Swetamberies worshipped in the said Temple; that the management and the possession of the Temple was with the Defendants Swetamberies for a long time, that the Swetamberies were not entitled to put artificial eyes or to put Dhwajadand or Kalash on the Temple; and that the Defendants were trying to interfere with the rights of the Plaintiffs ' and were making alterations to transform the character of the Temple.
In this view the Trial Judge gave a declaration in favour of the Plaintiffs against Defendants in their personal capacity as well as representatives of the Jain Swetamberies Sect that the Plaintiffs or the followers of the Digamberi Sect have been performing Prakshal, Poojan and Darshan and are also entitled to do so in future.
He also issued a permanent injunction against the Defendants in their personal capacity as well as representatives 841 of the Jain Swetamberi Sect restraining them from changing the shape and appearance of the idol by putting Netras (artificial eyes), Armlets, and Mukat, from erecting Dhwajadand and putting Kalash on the Temple and putting locks on the shutters of the Temple.
The Appellants were further directed not to restrain the followers of the Jain Digamber Sect from performing Darshan, Poojan and Prakshal according to their tenets.
After the remand Appellants urged before the District Judge the following contentions : (1)That the Temple belongs to Swetamber Sect and the Plaintiffs are entitled to have Darshan only of the idol, otherwise they have got no right to worship it according to their tenets; (2) That the idol being Swetamberi, the Defendants are entitledto put artificial eyes in the idol, Dhwajadand and Kalash on them Temple; (3) That the Defendants having been managing the Temple for the last so many years, their management cannot be interfered with it for the betterment of the idol, it is kept under lock, it cannot be said to wound the sentiments and religious feelings of the Plaintiffs.
The District Judge held on the first contention that though the Temple is admittedly an old one there is not an iota of evidence as to who constructed the Temple originally; that the Appellants have been in management and possession of the Temple, which fact was not really challenged by the Respondents, though this by itself does not imply that the Temple is a Swetamberi Temple.
It was also contended that the Respondents had no right to worship the idol but can only have Darshan.
This contention was also rejected on a review of the evidence led by both parties, and also, by relying on Exh. 1 which embodied a compromise between the two Sects under which the right of the Respondents to worship the idol was specifically admitted.
On the second point urged before him the District Judge held that the Appellants case that there were eyes already in the idol, but as they got damaged they wanted to replace them is not substantiated by the evidence led on behalf of the Appellants themselves.
It also held that an attempt was made by, the Swetamberies in 1949 to install the eyes in the idol and that as most of the Appellant 's witnesses admitted that though Dhwajadand was offered on certain occasions which were retained by the Oswals (Swetamberies) there was no Dhwajadand and Kalash on the temple itself.
On the third point it was held that the Appellants, who were in management and possession of the Temple for the last so many 842 years, have a right to lock the main Temple, to prevent it from being defiled, which does.
not in any way interfere with the right of worship of the Respondents or any other person on their behalf.
This being so ' the Trial Courts decree excepting for restraining the Appellants to lock the Temple was affirmed subject to the further,direction as already noticed keeping the Temple open for worship of the Respondents and the Digambaries Sect between 8.30 and 9.30 a.m.
When the appeal and cross objections were pending before the High Court the Appellants filed an application under Order 41, Rule 27 of the Civil Procedure Code for recording the evidence of Shri Satya Prakash Srivastava, Director of Archaeology and Museum, Rajasthan to establish the denominational identity of.
the idol in the Temple.
It was stated in that, application that since he District Judge had remarked that the parties had not produced sufficient evidence and it was not possible to come to any conclusions regarding the nature of the idol as to whether it is Swetamberi or Digamberi, the petitioner had moved the Direc tor of Archeology who after a thorough examination came to the conclusion that the idol was Swetamberi.
In view of this Report it was prayed that the said Director be called in evidence and be examined.
In the alternative it was prayed that the case be remanded to the Trial Court for allowing the parties to lead additional evidence so that effective adjudication can be made.
The High Court however, did not feel the need for any additional evidence as the case could be disposed of on the material on record.
In this view it dismissed the application.
Even before us the learned Advocate for the Appellant tried to persuade us to look into that Report and urged that the evidence of the Director was necessary and ought to have been allowed to be adduced.
In view of the concurrent findings of all the Courts on certain material aspects of the case to which we shall presently refer, it is possible to determine the controversy between the parties, as such we agree with the High Court that no additional evidence is required at this stage, though the parties could have led better evidence in the initial stages itself.
It was further contended on behalf of the Appellants that the Respondents suit was not maintainable because it did not involve a dispute of a Civil nature.
Respondents ' learned Advocate though he first indicated that he would raise a preliminary objection to this contention being urged because when the High Court set aside the Judgment of the District Judge and remanded the case to be decided on merits holding that the suit was maintainable as it raised a dispute of a civil nature, the Appellants ought to have appealed to the Supreme Court.
The learned Advocate for the Appellants however contends that the remand order of the 843 High Court did not finally dispose of the rights of the parties as such it is open to him to urge in this appeal that the suit was not maintainable on the ground that it does not raise any dispute of a civil nature.
Though the preliminary objection was not subsequently pressed even on the merits, the learned Advocate for the Appellant is unable to satisfy us that the suit is not of a civil nature.
From the pleadings and the controversy between the parties it is clear that the issue is not one which is confined merely to rites and rituals but one which effects the rights of worship namely whether the Swetamberies by placing Chakshus, Dhwajadand and Kalash according to their tenets or by locking the temple could preclude the Digamberies from worshipping in accordance with their tenets.
It is admitted that the Digamberies will not worship the idol which is not Nirakar ' or which has Chakshus.
If the Digamberies have a right to worship at the temple the attempt of the Swetamberies 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.
These findings clearly establish that the Appellants interfered with the rights of Digamberies to worship with respect to which a civil suit is maintainable under Section 9 of the Civil Procedure Code.
This position is well established.
If authority was needed we may refer only to two cases.
The Privy Council in Sir Seth Hukam Chand & Ors.
vs Maharaj Bahadur Singh & Ors.(1), had to deal with the practices observed by Digamberies and Swetamberies on the Parasnath Hill which is considered to be sacred by.
both the Sects but in respect of which the Digamberies objected to the continuous employment of human beings on the Hill and against building thereon of Dwellings necessarily involving according to their tenets of a sacrilegious pollution and desecration of the sacred hill, while the Swetamberies had no such belief.
Sir John Wallace delivering the opinion of the Board observed :"These are matters for the Jain themselves and the Civil Courts are only concerned with them in so far as they are relevant to questions of civil right such as an alleged interference with the Plaintiffs rights to worship on the hill, and in that case the issue must be not whether the acts complained of are in accordance with orthodoxy or with previous practice, but whether they do in fact interfere with the plaintiff 's rights of worship".
Again this Court in Nar Hari Sastri and Others vs Shri Badrinath Temple Committee (2 ) was concerned with the rights of the Deoprayagi Pandas to enter the Badrinath Temple alongwith their Yajmans or clients, which it was claimed the Pawal or the Trustee denied and threaten to obstruct the said Deoprayagi (1) (2) ; 844 Pandas from entering the precincts of the Temple along with their Yajmans or from assisting the pilgrims in the matter of Darshans etc.
inside the Temple.
The Defendant however, asserted that it was neither necessary nor desirable that the plaintiffs should be allowed to accompany their Yajmans or clients into the Temple, as he had himself made adequate arrangements for the Darshan and worship of the pilgrims and that as the sole Trustee and manager of the Temple he had the right to regulate entry into the Temple so the over crowding might be avoided and order maintained inside it.
Mukerjea J, (as he then was) speaking for the Court dealt with this contention in the following passage "The true position therefore is that the Plaintiffs ' right of entering the temple along with their Yajmans is not a precarious or permissive right depending for its existence upon the arbitrary discretion of the Temple authorities; it is a legal right in the true sense of the expression but it can be exercised subject to the restrictions which the Temple Committee may impose in good faith for maintenance of order and decorum within the Temple and for ensuring proper performance of customary worship.
In our opinion, the Plaintiffs are entitled to a declaration in this form.
" It is clear therefore that a right to worship is a civil right, interference with which raises a dispute of a civil nature though as noticed earlier dispute which are in respect of rituals or ceremonies alone cannot be adjudicated by Civil Courts if they are not essentially connected with Civil rights of an individual or a sect on behalf of whom a suit is filed.
In our view the contention of the learned Advocate for the Appellant to the maintainability of the suit is not well founded.
One other objection which the learned Advocate for the Appellants urged at the outset is that the findings of the Trial Judge are vitiated because he did not rely on the evidence on record but decided to which Sect the idol in dispute belongs, only on what he found on his inspection of the idol and the Temple which cannot be evidence in the case, without his being subjected to cross examination.
It is further contended that even if what has been stated in the Judgment is what the Trial Judge had observed in his inspection there is nothing to show that he had drawn up inspection notes and made them part of the record as required under the law.
The contention that the Trial Judge had given his findings mainly on the observations made during his inspection in the first place is based on insufficient appreciation of what was really observed when dealing with the question as to 845 which Sect the idol in dispute belongs.
It was observed in the Judgment that most of the witnesses produced were non Jains and therefore, their evidence does not carry much weight to establish to which Sect the idol belongs.
After stating that the remaining witnesses of the parties have given statements in favour of their party the Trial Judge said that these statements also cannot be much relied upon.
The decision of his case is based mostly on the site inspection and the evidence on record.
Even while giving the findings the Trial Judge remarked that the evidence led by the Plaintiff appears to be correct.
These observations themselves show that the evidence on record was an element in the formulation of the Trial Courts Judgment buttered by the observations of the learned Judge during the site inspection.
There is therefore, no validity in the contention that the finding of the Trial Judge was based entirely on the result of his inspection.
It is also evident from a narrative given in the Judgment of what was noticed during the inspection that the Judge had inspected the site on two occasions once on 24 3 1956 and again a year and two months thereafter on 23 5 1957.
The details given by him could not have been given if he had not made some inspection notes.
It would also appear that at the time of the inspection Council for the Plaintiffs and Defendants were present because when giving a description of the idol of Neminathji in the Swetemberi Jain Temple when it was noticed that some portion of the idol under the waist and naval is raised and is like a line, the Council for the Plaintiffs pointed out to him that mark denoted the wearing of a loin cloth while the Counsel for the Defendants said it was the mark of an Artist.
Again in respect of the observation that on the back side and at the lower portion of the navel some portion is raised, the Counsel for the Plaintiffs had pointed out to the loin cloth, while the Counsel for the Defendants said that it has been engraved by an Artist without any sense.
We are satisfied that the description given by the learned Judge of the idols in the Adeshvarji Temple and the Temple of the Swetambaries 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.
The Appellants had at no time made a grievance either to the District Judge or to the High Court or even before this Court except during the stage of arguments that there were no inspection notes nor that the inspection was made by the Judge behind the back of the parties.
if these objections had been raised earlier the Respondents would have had an opportunity of showing that there were inspection notes.
The Judgment in our view is not based solely on the result of personal inspection made by the Trial Judge, which inspection was for the purposes of understanding the evidence in the case and has been so used by the Trial Judge.
We must, 846 therefore, reject the contention of the learned Advocate for the Appellants that the finding in respect of the idol is vitiated.
In this view it is not necessary to deal with any of the decisions referred to before us.
It was contended by Shri Desai that unless the ownership of the Temple is established or that the idol belongs to the Digamberies no injunction can be given nor the Plaintiffs permitted to worship.
It is argued that in the plaint the Respondents wavered that the idol is a Digamberi idol and if they have failed to prove it then their right to worship fails.
At any rate the argument proceeds that the High Court was in error in not deciding the ownership of the Temple or of the idol.
We have earlier indicated the plaint averments in which there is no mention of the ownership of the Temple or of the idol but that paragraphs 2 and 3 of the plaint merely gave a description of the Temple and the idol when it is averred that the idol was constructed and consecrated according to and by the followers of the Digamberi Sect and that the Plaintiffs and the other followers of the Digamberi sect have been performing Darshan, Prakshal and Poojan of the said deity in the said Temple for a considerable number of years past and really ever since the Temple was founded.
There is therefore, force in the contention of Shri Gupte, learned Advocate for the Respondents that having regard to the concurrent findings of the Courts below that the idol was Nirakar ' (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 held as had already been noticed that though it is not possible to say when the Temple was constructed and the idol consecrated it was an ancient Temple and that both the Digamberies and the Swetamberies worship the idol.
It is 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 indeed has been so held by all the Courts.
Even the Defendants ' witnesses substantiate these findings.
We would refer to only two of these witnesses.
Shri Suwa Lal D.W. 4 even though he says that the Temple belonged to the Oswals in which he and his father has been performing Sewa for the last 30 or 35 years on behalf of the Oswals (Swetamberies) admitted that since he attained the age of discretion and upto the time of giving evidence he had never seen Adinathji wearing clothes, never saw the idol with eyes and had never seen Dhwajadand or Kalash on the Temple and does not know whether the idol belongs to Oswals or Saravagis (Digamberies).
D.W. 3 Shri Pokhar a barber of Oswals also supports this witness.
That the Digamberies had a right to worship is also borne out by exhibit 1 dated 847 23 12 49 which was a compromise entered into between Swetam beries and Digamberies at the time when the Swetamberies attempted to put Chakshus in the idol.
No doubt this was an interim arrangement till the decision of a Civil Court adjudicating the respective rights, but there was never any question of either Sect not having the right to worship the idol.
The dispute had arisen only as to whether Swetamberies can fix Chakshus in the idol.
1 states as follows: "We Panchas give this award that a dispute had arisen between the Swetamberies and Digamberies as Swetamberies recently fixed eyes on the idol.
This new thing should not continue.
These eyes should be removed.
Digamberies have a right to perform Poojan so they can mark saffron Tiki ' and have Darshan and come back.
Digambries will not performs Prakshal, Poojan.
Swetamberies will continue incurring expenses as usual.
The idol shall remain backed (Nirakar)".
The representatives of both Sects have signed this award, as a temporary measure agreeable to both the Sects, who indicated that they would press their rights in a Civil Court.
Once the right of worship of the Digamberies is established there is little doubt that they are entitled to the injunction sought for by them against the Defendants Appellants from preventing them from worshiping or from interfering with that right by placing Chakshus in the idol, Dhwajadand, Kalash on the Temple.
In view of these findings the further question that when once it has been found that the Swetamberies have the right of management and possession of the Temple there is a presumption of ownership under Sec.
110 of the Evidence Act does not arise nor is it relevant.
It is no doubt contended by the Respondents Advocate that when consecration of an idol takes place the ownerships of the Temple is in the idol and therefore, the question, of presumption under Sec. 110 does not arise.
It is again contended by Shri Desai that the moment it is held that it is not possible to, come to a conclusion as to which Sect the idol belongs, as has been held by the Court below, the Respondents cannot be allowed to object to the Appellants worshipping the idol according to their tenets.
This contention, however, in our view ignores the rights of the Digamberies to worship in accordance with their tenets.
If the contention of the learned Advocate for the Appellants is accepted it will be tantamount to holding that Digamberies have no right to worship as there would denomination change in the idol if the Swetamberies are held to have the right to worship it according to their tenets by placing Chakshus in the idol or by erecting their Dhwajadand or Kalash over the Temple.
848 Lastly it is urged that the High Court ought not to have entertained the cross objection by extending the time for worship from 1 hour to 3 hours.
In our view the directions of the High Court are not unreasonable nor do they in any way affect the right of the Respondents to worship because the directions clearly enable the Swetamberies who wish to worship the deity within that period without disturbing the Digamberies to be at liberty to do so and likewise it will be open to Digamberies to go and worship in the temple during the period it is kept open.
In view of the acute controversy between these 2 sects and their reluctance to arrive at an amicable settlement the directions given by the High Court are manifestly reasonable just and proper.
In this view the appeal fails and is dismissed with costs.
R.K.P.S. Appeal dismissed.
| 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]
| 2895.txt |
Appeal No. 59 of 1953.
Appeal from the Judgment and Order dated the 5th April, 1950, of the High Court of Rajasthan at Jaipur in Case No. 24 of Samvat 2005 (Review modifying the Decree dated the 3rd March, 1949, of the High Court of the former Jaipur State in Civil Second Appeal No. 187 of Samvat 2004 against the Decree 52 dated the 15th April, 1948, of the Court of the District Judge, Jaipur City, in Civil Appeal No. 40 of Samvat 2004 arising out of the Decree dated the 23rd August, 1947, of the Civil Judge, Jaipur City, in Suit No. 66 of Samvat 2002).
Dr. Bakshi Tek Chand, (Rajinder Narain, with him) for the appellant.
D.M. Bhandari, (K. N. Aggarwala and R. N. Sachthey, with him) for the respondent.
April 9.
The Judgment of the Court was delivered by MEHR CHAND MAHAJAN C. J.
This is an appeal from the judgment and decree of the High Court of Judicature of Rajasthan, dated the 5th April, 1950, modifying the decree of the High Court of the former Jaipur State, dated the 3rd March, 1949, on an application for review in a second appeal concerning a suit for possession of property.
The property in dispute originally belonged to one Ramchandra who died sonless in the year 1903.
He was survived by his mother, Sheokori, his widow, Mst.
Badni, and his two daughters,.
Bhuri and Laxmi.
It is alleged that he made an oral will under which he bequeathed the property in dispute to his daughter, Laxmi.
On the 6th September, 1906, Mst.
Sheokori and Mst.
Badni, purporting to act in accordance with the directions of the oral will, executed and registered a deed of gift of the property in dispute in favour of Mst.
Laxmi.
The gift deed contains the following recitals: " These houses are made a gift to you according to the will of your father, Ramchandra. .
In this way, these houses belonging to us were purchased by your father, Ramchandra, and he in his last days having made a gift of these houses to you, made a will to us that he had made a gift of that house to his daughter, Laxmi, and directed us to get the gift deed registered in her name.
He further said that if we or our relations., kinsmen, creditors do raise any dispute with her he would I damangir hoonga catch hold of him by his 53 garments.
According to his aforesaid will, we have got this gift deed executed in your favour, while in best of our senses and in discharge of our sacred duty enjoined by Dharma.
No other person except you has got any claim over the house.
You deal with your house in any way you like.
If anybody takes back the land gifted by himself or his ancestors, he will live in hell as along as the sun and moon shines.
" The scribe, it seems, did not in appropriate language express the directions of the two widows and his ideas of the legal situation were somewhat confused but there can be no manner of doubt that the two executants were not conferring themselves any title which they had in the property on Laxmi but were merely giving effect to the oral will as executors and were putting the legatee in possession of the bequeathed property in this manner.
That the widows had no title themselves is evident from the fact that Mst.
Sheokori also joined in executing the gift deed.
Admittedly Ramchandra 's estate could not devolve on her.
Bhuri, the second daughter, died in the year 1907, while Mst.
Badni, the widow., died in the year 1927.
Laxmi remained in possession of the property till her death in the year 1928.
After her death Balabux, her husband, on the 5th of July, 1930, claiming as heir to her mortgaged the house in dispute to the defendant appellant Nathoo Lal and later on the 5th of October, 1933, he sold it to him and put him into possession of it and since then he is in possession.
On the 4th October, 1945, that is one day before the expiry of the period of 12 years from the date of the defendant 's entry into possession of the house, the plaintiff, son of Mst.
Bhuri, sister of Mst.
Laxmi, claiming as an heir to her estate, filed this suit in forma pauperis for possession of the house.
He alleged that he was in possession of the house till the 24th of August, 1933, through his tenant, that after it was vacated by the tenant he locked it and went away to his native village Harmara ; and that on the 27th of September, 1944, he came to know that the house had been taken possession of by the appellant during his absence.
It 54 was contended by him that Balabux had no right either to mortgage or sell the house and that Laxmi was not the absolute owner of the property but had only a limited estate in it, and on her death he was entitled to possession of it.
On the 28th of August, 1947, the suit was dismissed by the Civil Judge, who held that Mst.
Laxmi became the absolute owner of the property, and the plaintiff therefore had no title to claim possession of it after her death, Balabux being her stridhan heir.
The learned Judge however held that the suit was within limitation.
On appeal, this decision was affirmed by the District Judge.
He expressed the opinion that the widow in executing the deed of gift was only acting as an execution of the oral will made by Ramchandra at his deathbed and that Laxmi got under this will an absolute estate in the suit property.
The plea of limitation raised by the defendant was negatived on the finding that the plaintiff was in possession of it within twelve years of the suit.
Plaintiff preferred a second appeal to the High Court of Jaipur and this time with success.
The High Court held that after the death of Laxmi the plaintiff continued in possession of the house till he was dispossessed by the defendant on the 5th of October, 1933, and that he was in possession even during her lifetime.
On the main question in the case the High Court held that though the house was bequeathed to Laxmi by Ram chandra under an oral will, there was no proof that it conferred upon her an absolute interest in the property and that in the absence of any evidence indicating that the donor intended to convey an absolute interest to her, the gift being in favour of a female could only confer upon her a limited life estate and on her death revert to the donor 's heirs and the plaintiff being such an heir was entitled to succeed.
In the result the appeal was allowed and the plaintiff 's suit was decreed with costs throughout.
The defendant applied for a review of this judgment.
Meanwhile the Jaipur High Court had become defunct and the review was heard by the Rajasthan High Court 55 as successor to the Jaipur High Court under the High Courts Ordinance and was partially allowed on the 5th of April, 1950, and the decree was accordingly amended and it was provided therein that the plaintiff shall not be entitled to possession of the house except on payment of Rs. 4,000 to the defendant as costs of improvements and repairs.
It is against this judgment and decree passed after the coming into force of the Constitution of India that the present appeal has been preferred to this Court by leave of the Rajasthan High Court under article 133(1)(c) of the Constitution.
The learned counsel for the respondent raised a preliminary objection as to the maintainability of the appeal.
He contended that according to the Code of Civil Procedure of the Jaipur State the decision of the Jaipur High Court had become final as no appeal lay from it and hence this appeal was incompetent.
It was argued that the proceedings in the suit decided in 1945 had concluded by the decision of the High Court given in 1949, and the review judgment which modified the decree in regard to improvements, could not entitle the appellant to reopen the decision of the High Court of Jaipur given in 1949.
In our opinion, this objection is not well founded.
The only operative decree in the suit which finally and conclusively determines the rights of the parties is the decree passed on the 5th of April, 1950, by the Rajasthan High Court and that having been passed after the coming into force of the Constitution of India, the provisions of article 133 are attracted to it and it is appealable to this Court provided the requirements of that article are fulfilled.
The Code of Civil Procedure of the Jaipur State could not determine the jurisdiction of this Court and has no relevancy to the maintainability of the appeal.
The requirements of article 133 having been fulfilled, this appeal is clearly competent.
The learned counsel then contended that the High Court was in error in granting the certificate in this case.
We are unable to agree.
An inquiry was made into the valuation of the property and it was reported that its value was Rs. 20,000 or that the decision affected 56 property of the value of above Rs. 20,000.
A substantial question of law was involved in the case, that is, whether a testamentary disposition by a Hindu in favour of a female ' heir conferred on her only a limited estate in the absence of evidence that he intended to confer on her an absolute interest in the property.
In these circumstances the High Court was fully justified in granting the certificate.
We ourselves would have been prepared to admit this appeal under our extraordinary powers conferred by article 136(1) of the Constitution, if such a certificate had not been given in the case.
For the reasons given above we see no force in either of these two preliminary objections which we overrule.
Dr. Bakshi Tek Chand for the appellant contended that the Courts below were in error in holding that the plaintiff 's suit was within limitation.
He urged that in order to bring the suit within limitation the plaintiff in paragraph 5 of the plaint alleged that after the death of Laxmi he kept tenants in the house, realised the rent and enjoyed it and/that the last tenant vacated on the 24th August, 1933, and thereafter he went to his native place after locking the house, but that this allegation had not been made good by him, and as there was no evidence that he looked the house, it should be held that plaintiff 's possession discontinued with effect from the 24th August, 1933, and hence his suit brought more than twelve years from that date was not within time.
It has been found by the Courts below that the plaintiff was in possession of this house even during the lifetime of Laxmi and continued in possession thereafter.
Even if the tenant vacated the house on the 24th August, 1933, and the plaintiff did not lock it, his possession would be presumed to continue till he was dispossessed by some one.
The law presumes in favour of continuity of possession.
The three Courts below have unanimously held that on the evidence it was established that after the death of Laxmi plaintiff continued in possession of the house and the suit was within limitation.
There are no valid grounds for reviewing this finding in the fourth Court and the contention is therefore negatived.
57 Dr. Bakshi Tek Chand next contended that Laxmi acquired an absolute title in the suit property under the will of her father and that the High Court was in error in@holding that unless there were express words indicating that the donor who had absolute interest in the gifted property intended to convey an absolute interest to her, the gift in favour of an heir who would ordinarily inherit a limited interest could not be construed as conferring an absolute interest.
The learned counsel for the respondent on the other hand raised two contentions.
He urged in the first instance that it seems that the intention of Ramchandra was to make a gift of the suit property in favour of Laxmi but he was unable to perfect the gift by executing a registered deed, being on his deathbed and in that situation the property devolved on his widow by inheritance and it only came to Laxmi under the widow 's gift and under it she could not get a larger interest than what the widow herself possessed, namely, a limited life estate, which terminated on her death.
In the alternative, it was said that there was no evidence as to the terms of the oral will and that 'being so, the gift being in favour of a female heir, the presumption in the absence of evidence to the contrary was that the donee got only a limited life interest in the bequeathed property.
In our judgment, there is force in the contention of Dr. Tek Chand and none of the contentions raised by the respondent 's 'counsel have any validity.
That Ramchandra bequeathed the suit property and did not gift it to his daughter Laxmi is a fact which cannot be questioned at this stage.
It was admitted by the plaintiff himself in the witness box.
This is what he said : " Ramchandra had made a will in favour of Mst.
Laxmi and in that connection my maternal grandmother and maternal great grandmother got the gift deed registered.
This very gift deed was got executed by my maternal grandmother and maternal great grandmother and had got it registered.
Through this gift deed Mot.
Laxmi held possession over it till she was alive.
She had kept deponent as her son and so 8 58 she got the rent notes executed in my name." ' What is admitted by a party to be true must be presumed to be true unless the contrary is shown.
There is no evidence to the contrary in the case.
The gift deed fully supports the testimony of the plaintiff on this point.
It definitely states that according to the will, the gift deed was executed in favour of Laxmi and it further recites that Laxmi was entitled to deal with the house in any manner she liked.
Those who were directed to execute the oral will made by Ramchandra must be presumed to have carried out his directions in accordance with his wishes.
It seems clear that the intention of the testator was to benefit his daughter, Laxmi, and to confer upon her the same title as he himself possessed.
She was the sole object of his bounty and on the attendant circumstances of this case it is plain that he intended to confer on her whatever title he himself had.
Laxmi therefore became the absolute owner of the property under the terms of the oral will of her father and the plaintiff is no heir to the property which under the law devolved on Laxmi 's husband who had full right to alienate it.
We are further of the opinion that the High Court was in error in thinking that it is a settled principle of law that unless there are express terms in the deed of gift to indicate that the donor who had absolute interest intended to convey absolute ownership, a gift in favour of an heir who inherits only a limited interest cannot be construed as conferring an absolute interest.
It is true that this was the principle once deduced from the Privy Council decision in Mahomed Shumool V. Shewukram(1) wherein it was held that a bequest to a daughter in law passed a limited estate.
The proposition laid down in Mahomed Shumsool 's case was construed by the High Courts in India to mean that a gift of immovable property to a woman could not be deemed to confer upon her an absolute estate of inheritance which she could alienate at her pleasure unless the deed or will gave her in express terms a heritable estate or power of alienation.
Later decisions of the Judicial Committee made it clear that if words were used (1) 2 I.A. 7. 59 conferring absolute ownership upon the wife, the wife enjoyed the rights of ownership without their being con ferred by express and additional terms.
Shumsool 's case(1) has been examined in recent years in some High Courts and it has been observed that according to the law as understood at present there is no presumption one way or the other and there is no difference between the case of a male and the case of a female, and the fact that the donee is a woman does not make the gift any the less absolute where the words would be sufficient to convey an absolute estate to a male (see Nagammal vs Subbalakshmi Ammal(2).
The matter has now been set at rest by the decision of this Court in Ram Gopal vs Nand Lal(3).
In this case it was observed as follows: " It may be taken to be quite settled that there is no warrant for the proposition of law that when a grant of an immovable property is made to a Hindu female, she does not get an absolute or alienable interest in such property, unless such power is expressly conferred upon her.
The reasoning adopted by Mitter J. of the Calcutta High Court in Mst.
Kollani Kuar vs Luchmi Kuar(4), which was approved of and accepted by the Judicial Committee in a number of decisions, seems to me to be unassailable.
It was held by the Privy Council as early as in the case of Tagore V. Tagire (5) that if an estate were given to a man without express words of inheritance, it would, in the absence of a conflicting context, carry, by Hindu Law, an estate of inheritance.
This is the general principle of law which is recognized and embodied in section 8 of the Transfer of Property Act and unless it is shown that under Hindu Law a gift to a female means a limited gift or carries with it the restrictions or disabilities similar to those that exist in a "widow 's estate, ' there is no justification for departing from this principle.
There is certainly no such provision in Hindu Law and no text could be supplied in support of the same.
" The position, therefore, is that to convey an absolute estate to a Hindu female, no express power (1) 21 A. 7.
(4) (2) (1947) I M.L.J. 64.
(5) , P.C. (3) ; 60 of alienation need be given; it is enough if words are used of such amplitude as would convey full rights of ownership." The learned Judges of the High Court were therefore clearly wrong in law in holding that the will having been made by the father in favour of his daughter, it should be presumed that he intended to give her a limited life estate.
For the reasons given above we allow the appeal, set aside the decree of the High Court decreeing the plaintiff 's suit and restore the decree of the trial Court dismissing the plaintiff 's suit.
In the circumstances of this case we will make no order as to costs.
Appeal allowed.
| It may be taken as well settled that there is no warrant for the proposition of law that when a grant of immoveable property is made to a Hindu female she does not get an absolute or alienable interest in such property unless such power is expressly conferred upon her.
The law is that there is no presumption one way or the other and there is no difference between the case of a male and the case of a female and the fact that the donee is a woman does not make the gift any the less absolute where the words would be sufficient to convey an absolute estate to a male.
Mohamed Shumsool vs Shewakram (2 I.A. 7), Nagammal vs Subbalakshmi 1(1947) I.M.L.J. 641 and Ram Gopal vs Nand Lal (A.I.R. referred to.
| 237.txt |
ivil Appeal No. 3693 of 1989.
734 From the Judgment and Order dated 23.2.
1989 of Delhi High Court in R.S.A. No. 31 of 1989.
K.S. Bindra, R.K. Maheshwari and G.S. Gujananip for the Appellant.
Prem Sunder Jha for the Respondent.
The Judgment of the Court was delivered by SHARMA, J.
This appeal by special leave arises out of a suit filed by the respondent company against the appellant, Municipal Corporation of Delhi, for a mandatory injunction to restore the supply of electricity discontinued during the pendency of the suit.
Initially the suit was filed for a prohibitory injunction from disconnecting the electric connection.
The plaint was amended following stoppage of the supply of energy.
According to the plaintiff 's case, the suit had to be filed as the Delhi Electricity Supply Undertaking was threatening disconnection without disclosing any reason.
Subsequently, some officers of the Undertaking made an inspection of the meters and alleged theft of electricity after tampering with the seals affixed on the meters.
A First Information Report was lodged with the police.
Admittedly no notice was served by the Delhi Elec tricity Supply Undertaking on the plaintiff before severing the electric connection.
The learned trial court, however, dismissed the suit and the plaintiff appealed.
The First Additional District Judge, Delhi, who heard the appeal decreed the suit on the sole ground of nonservice of notice as required under condition No. 36 in regard to supply of electricity by the appellant.
The Delhi High Court dismissed the appellant 's second appeal at the admission stage by a reasoned judgment.
The learned counsel for the appellant has contended that in view of the conduct of the plaintiff in stealing electricity, the Court should in its discretion refuse to issue a direction for restoration of the electric supply.
We are afraid, it is not possible to agree with the appellant for more reasons than one.
The plaintiff is seriously deny ing the allegation of theft and it is not possible to assume the accusation as correct without a full fledged trial on this issue.
The case of Jagarnath Singh vs
B.S. Ramaswamy; , ; relied upon on behalf of 735 the appellant is clearly distinguishable inasmuch as the consumer in that case was convicted under the Indian Penal Code, and the conviction was being maintained in appeal.
Besides, the service of notice is a prerequisite for discon nection, and the appellant can not be allowed to go back upon its words and refuse the consumer the benefit of notice as contemplated by the agreement.
The learned counsel for the appellant urged that the Delhi Electric Supply Undertak ing will seriously suffer if this view is upheld.
We do not understand as to what is the difficulty in the way of the appellant to serve a notice on the consumer before discon tinuing the supply.
It has to be appreciated that the licen see Undertaking is performing a public duty and is governed by a special statute and the law also contemplates service of a notice before disconnection of supply of electricity.
The courts below have made it clear that they have not examined the case on merits.
The question whether, the allegations of theft are true or not has to be examined and decided in an appropriate proceeding, and the appellant will not, therefore, be prejudiced by the present judgment in its claim.
In the result, the appeal is dismissed but, without costs.
P.S.S. Appeal dismissed.
| The Delhi Electricity Supply Undertaking disconnected the supply of electricity to the respondent company during the pendency of the suit for a prohibitory injunction with out serving notice on the consumer.
The trial court dis missed the amended suit for mandatory injunction to restore the supply.
The First Appellate Court decreed the suit on the sole ground of non service of notice as required under condition No. 36 in regard to supply of electricity by the appellant.
It did not go into the allegation of theft of electricity by the plaintiff.
The High Court dismissed the appeal.
Dismissing the appeal by special leave, this Court, HELD: 1.
The licensee undertaking is performing a public duty and is governed by a special statute.
The law also contemplates service of a notice before disconnection of supply of electricity.
The appellant cannot also be allowed to go back upon its words and refuse the consumer the bene fit of notice as contemplated by the agreement.
The suit was, therefore, rightly decreed by the First Appellate Court.
[735B C, A B] 2.
The plaintiff is seriously denying the allegation of theft.
It is not possible to assume the accusation as cor rect without a full fledged trial on this issue.
The courts below have not examined the case on merits.
The question whether the allegations are true or not has to be examined and decided in an appropriate proceeding.
The appellant will not, therefore, be prejudiced in its claim by dismissal of the appeal.
[734G H, 735C] Jagarnath Singh vs
B.S. Ramaswamy; , , distinguished.
| 6358.txt |
176 of 1959.
Petition under Article 32 of the Constitution of India for enforcement of Fundamental Rights.
Basudeva Prasad, M. K. Ramamurthi, K. N. Keshwa and R. Mahalingier, for the petitioner.
Lal Narain Sinha, B. K. P. Sinha, L. section Sinha and section P. Varma, for the respondents.
M. C. Setalvad, Attorney General for India, C. K. Daphtary, Solicitor General of India, H. J. Umrigar and T. M. Sen, for the Attorney General of India.
August 1.
The Judgment of the Court was delivered by SINHA C. J.
By this petition under article 32 of the Constitution the petitioner raises almost the same 13 98 controversy as had been done in Writ Petition No. 122 of 1958, which was heard and determined by this Court by its judgment dated December 12, 1958, and by Writ Petition No. 106 of 1959, which was heard by this Court on November 10, 11 and 12, 1959, but which did not reach the stage of judgment by this Court, inasmuch as the petitioner 's Advocate requested the Court to permit him to withdraw the petition and the Court allowed the prayer and permitted the petitioner to withdraw the petition.
In each of these petitions the petitioner, who is a journalist by profession and is functioning as the Editor of " the Searchlight ", an English daily newspaper published from Patna in the State of Bihar, impugned the validity of the proceedings before the Committee of Privileges and prayed for restraining the opposite party, namely, the Chief Minister of Bihar as Chairman of the Committee of Privileges, Bihar Legislative Assembly, Committee of Privileges and the Secretary of the Bihar Legislative Assembly, from proceeding against the petitioner for the publication in its issue dated May 31, 1957, of the Searchlight an account of the debate in the Legislative Assembly, Bihar, on May 30, 1957.
The facts of the case have been stated in great detail in the majority judgment of this Court delivered by section R. Das, C. J., in M. section M. Sharma vs Sri Krishna Sinha (1).
In the opening paragraph of this Court 's judgment aforesaid, the parties before the Court have been enumerated and the anomaly pointed out.
This Court held in effect that under article 194(3) of the Constitution a House of a Legislature of a State has the same powers, privileges and immunities as the House of Commons of the Parliament of the United Kingdom had at the commencement of the Constitution.
The House of Commons at the relevant date had the power or privilege of prohibiting the publication of even a true and faithful report of proceedings of the House and had a fortiori the power or privilege of prohibiting the publication of an inaccurate or garbled version of such debate or proceedings.
The powers or privileges of a House of State Legislature are the same as (1) [1959] SUPP.1 S.C.R. 806.
99 those of the House of Commons in those matters until Parliament or a State Legislature, as the case may be, may by law define those powers or privileges.
Until that event has happened the powers, privileges and immunities of a House of legislature of, a State or of its members and committees are the same as those of the House of Commons at the date of commencement of our Constitution.
This Court also expressed the view that Legislatures in this country like the House of Commons will no doubt appreciate the benefit of publicity and will not exercise those powers, privileges and immunities, except in gross cases.
The minority judgment delivered by Subba Rao, J., on the other hand, expressed the view that at the relevant date the House of Commons, even as the Legislatures in this country, had no privilege to prevent the publication of a correct and faithful report of the proceedings of those legislatures, except those of secret sessions, and bad only a limited privilege to prevent mala fide publication of garbled, unfaithful or expunged reports of the proceedings.
He also held that the petitioner had the fundamental right to publish the report of the proceedings of the Legislature.
In the result, this Court, in view of the judgment of the majority, dismissed the petition, but made no order as to costs.
This Court further held that the Assembly of Bihar was entitled to take proceedings for breach of its privileges and it was for the House itself to determine whether there had in fact been any breach of any of its privileges.
After Writ Petition No. 122 of 1958 had thus ended, the petitioner again moved this Court under article 32 of the Constitution.
That case was registered as Writ Petition No. 106 of 1959.
On January 5, 1959, the petitioner received a notice that the case of breach of privilege against him would be considered by the Committee of Privileges of the Assembly on February 3, 1959.
That hearing was postponed from date to date, until in August, 1959, the petitioner filed his petition under article 32 of the Constitution.
He contended in that petition that, as a citizen of India, the petitioner had the fundamental right under article 19(1)(a) of the 100 Constitution to freedom of speech and expression which included the freedom of publication and circulation and that the Legislature of the State of Bihar could not claim any privilege contrary to the right thus claimed.
In effect, it was contended that the privilege conferred on the Legislature of a State by article 194(3) of the Constitution was subject to the fundamental right of a citizen contained in article 19(1)(a).
It was also contended that the first respondent, the Chief Minister of Bihar, who, it was alleged, had control over the majority of the members of the Bihar Legislative Assembly and of the Committee of Privi leges, was proceeding mala fide in getting the proceedings instituted against the petitioner for alleged breach of the privilege of the House.
Though not in terms, but in effect, the points raised in this petition were a reiteration of those already determined by this Court in its judgment aforesaid of December 12, 1958.
The prayer made in the petition was that the proceedings of the Committee of Privileges at its meeting held on August 10, 1958, might be quashed and the respondents restrained by a writ in the nature of a writ of prohibition from proceeding against the petitioner in respect of publication aforesaid of the proceedings of the Bihar Legislative Assembly of May 30, 1957.
After the petitioner had made his writ application to this Court as aforesaid, the Bihar Legislative Assembly reconstituted the Committee of Privileges of the Assembly, and on that very date a member of the Legislative Assembly sought to move a motion in that Assembly for revival and re reference of the matter of the alleged breach of privilege by the petitioner.
Some members of the Bihar Legislative Assembly objected to the motion being moved and the Speaker of the Assembly deferred giving his ruling on that objection.
At the instance of some of the members of the Assembly, the Speaker of the Assembly referred two questions to the Advocate General of Bihar for his opinion on the floor of the House on October 20, 1959, namely, (1) whether it was open to the Assembly to debate on an issue which might be sub judice in view of the writ petition aforesaid filed by the 101 petitioner in the Supreme Court under article 32; and (2) whether the matter which was dead by reason of prorogation of the House several times could be, legally revived and restored.
On October 20, 1959, the Advocate General of Bihar attended the House and gave his opinion, which it is not relevant to ' state here.
The Writ Petition, 106 of 1959, was heard in part and allowed to be withdrawn, as indicated above, on November 12, 1959.
On November 24, 1959, the petitioner received a fresh notice from the Secretary of the Legislative Assembly, opposite party No. 3, calling upon the petitioner to show cause on or before December 1, 1959, why appropriate action should not be recommended against him for a breach of the privilege of the Speaker and the Assembly.
The petitioner again instituted proceedings under article 32 of the Constitution complaining that the motion adopted by the Committee of Privileges of the Bihar Legislative Assembly at its meeting held on November 23, 1959, amounted to an abridgement of his fundamental right of speech and expression guaranteed under article 19(1) (a) of the Constitution and was an " illegal and mala fide threat to the petitioner 's personal liberty in violation of article 21 of the Constitution of India and that the Committee of Privileges, respondent No. 2 had no jurisdiction or authority to proceed against the petitioner as threatened by the notice aforesaid ".
The grounds of attack raise substantially the same questions that were agitated on the previous occasions in this Court.
It was contended before us that the petitioner, as a citizen of India, had the fundamental right of freedom of speech and expression which included the freedom of obtaining the earliest and most correct intelligence of the events of the time including the proceedings of a Legislature and publishing the same and that no Legislature of a State could claim a privilege so as to curtail that right.
It was, therefore, contended that the majority decision of this Court in Pt.
M. section M. Sharma vs Shri Sri Krishna Sinha (1) was wrong.
In this connection it was also contended that (1) [1959] SUPP. 1 S.C.R. 806. 102 the rule of construction adopted by this Court in its pre vious decision had been wrongly applied.
It was further contended that even if the House of a State Legislature had the same powers, privileges and immunities as those of the House of Commons, those will be only such as were being actually exercised at the date of the commencement of the Constitution and the right to prevent publication of its proceedings was not one of those powers, privileges or immunities.
An appeal was also made to article 21 of the Constitution and it was contended that no citizen could be deprived of his personal liberty, except in accordance with the procedure established by law.
Hence, it was further contended that the malafide act of respondents 1 and 2 calling upon the petitioner to show cause was a threat to his fundamental right, and, finally, it was contended that after several prorogations, the previous proceedings for breach of privilege were dead and the House of the Assembly had, therefore, no power or jurisdiction to issue the fresh notice in accordance with the motion of November 23, 1959, reviving the proceedings.
It will thus appear that in the present proceedings also the very same questions which were discussed and decided in Writ Petition No. 122 of 1958 are sought to be raised once again.
In effect, it is sought to be argued that the previous decision of this Court has proceeded on a wrong appreciation of the legal position.
In short, it is insisted that the petitioner has the fundamental right of publishing the proceedings of the Bihar Legislature and that the Legislature has no power to restrict or control the publication of its proceedings.
The Government Advocate of Bihar, on behalf of the opposite party, has contended, in the first instance, that the present writ petition against the parties, namely, the Chairman and the Members of the Committee of Privileges, respondents 1 and 2, is barred by the principle of res judicata and, therefore, not maintainable.
His contention also is that the writ cannot issue either against an individual member or against the House of the Legislature as a whole in 103 respect of what has been done by it in exercise of its privilege of prohibiting or, at any rate, controlling the publication of its proceedings.
On behalf of the petitioner it was contended by Mr. Basudeva Prasad that respondent No. 2, the, Committee of Privileges, has been reconstituted as aforesaid after the first decision of this Court which is sought to be availed of as res judicata and that therefore the rule of res judicata is inapplicable.
In this connection it may be pointed out that in Writ Petition No. 122 of 1958, Sri Krishna Sinha, Chief Minister of Bihar, was impleaded as opposite party No. 1 in his capacity as the Chairman of the Committee of Privileges of the Bihar Legislative Assembly and opposite party No. 2 was cited as Committee of Privileges, Bihar Legislative Assembly, without any names being given.
In the present writ petition, opposite party No. 1 is the same.
Opposite party No. 2 is impleaded as the (New) Committee of Privi leges of Bihar Legislative Assembly and then a number of names are given including that of Dr. Sri Krishna Sinha, the Chief Minister, as Chairman.
Would it make any difference that though opposite party No. 2 is the Committee of Privileges, its personnel is different from that of the Committee of Privileges constituted as it was in 1958 ? In our opinion, it does not make any difference.
So long as the Assembly remains the same it is open to the Assembly to reconstitute its Committees according to the exigencies of the business of the Assembly.
The Committee of Privileges is one of the agencies through which the Assembly has to transact its business.
It is really the Assembly as a whole which is proceeding against the petitioner in purported exercise of its powers, privileges and immunities as held by this Court in its judgment in Writ Petition No. 122 of 1958.
This Court has laid it down in the case of Raj Lakshmi Dasi vs Banamali Sen (1) that the principle underlying res judicata is applicable in respect of a question which has been raised and decided after full contest, even though the first Tribunal which decided (1) ; 104 the matter may have no jurisdiction to try the subsequent suit and even though the subject matter of the dispute was not exactly the same in the two proceedings.
In that case the rule of res judicata was ,applied to litigation in land acquisition proceedings.
In that case the general principles of law bearing on the rule of res judicata, and not the provisions of section 1 1 of the Code of Civil Procedure, were applied to the case.
The rule of res judicata is meant to give finality to a decision arrived at after due contest and after hearing the parties interested in the controversy.
There cannot be the least doubt that, though eo nomine opposite party No. 2 were not the same, but there is no escape from the conclusion that the Committee of Privileges is the same Committee irrespective of its personnel at a given time so long as it was a Committee constituted by the same Legislative Assembly.
The question decided by this Court on the previous occasion was substantially a question affecting the whole Legislature of the State of Bihar and was of general importance and did not depend upon the particular constitution of the Committee of Privileges.
It cannot, therefore, be said that the question decided by this Court on the previous occasion had not been fully debated and had not been decided after due deliberation.
That there was difference of opinion and one of the Judges constituting the Court held another view only shows that there was room for difference of opinion.
It was a judgment of this Court which binds the petitioner as also the Legislative Assembly of Bihar.
For the application of the general principles of res judicata, it is not necessary to go into the question whether the previous decision was right or wrong.
In our opinion, therefore, the questions determined by the previous decision of this Court cannot be reopened in the present case and must govern the rights and obligations of the parties which, as indicated above, are substantially the same.
It is manifest, therefore, that the petitioner has no fundamental right which is being threatened to be infringed by the proceedings taken by the opposite party.
It now remains to consider the other subsidiary 105 questions raised on behalf of the petitioner.
It was contended that the procedure adopted inside the House of the Legislature was not regular and not strictly in accordance with law.
There are two answers to this contention, firstly, that according to the previous decision of this Court, the petitioner has not the fundamental right claimed by him.
He is, therefore, out of Court.
Secondly, the validity of the proceedings inside the Legislature of a State cannot be called in question on the allegation that the procedure laid down by the law had not been strictly followed.
Article 212 of the Constitution is a complete answer to this part of the contention raised on behalf of the petitioner.
No Court can go into those questions which are within the special jurisdiction of the Legislature itself, which has the power to conduct its own business.
Possibly, a third answer to this part of the contention raised on behalf of the petitioner is that it is yet premature to consider the question of procedure as the Committee is yet to conclude its proceedings.
It must also be observed that once it has been held that the Legislature has the jurisdiction to control the publication of its pro ceedings and to go into the question whether there has been any breach of its privileges, the Legislature is vested with complete jurisdiction to carry on its proceedings in accordance with its rules of business.
Even though it may not have strictly complied with the requirements of the procedural law laid down for conducting its business, that cannot be a ground for interference by this Court under article 32 of the Constitution.
Courts have always recognised the basic difference between complete want of jurisdiction and improper or irregular exercise of jurisdiction.
Mere non compliance with rules of procedure cannot be a ground for issuing a writ under article 32 of the Constitution vide Janardan Reddy vs The State of Hyderabad (1).
It was also sought to be argued that the subjectmatter of the proceedings in contempt, whatever it was, took place more than three years ago, and that, therefore, it has become much too stale for proceeding (3) ; 14 106 against the petitioner in contempt.
In our opinion, this is also a matter within the jurisdiction of the legislature which must decide whether or not it was recent enough to be taken serious notice of, or whether any punishment in the event of the petitioner being found guilty is called for.
These are matters with which this Court is in no way concerned.
Mr. Lal Narain Sinha, the Government Advocate of Bihar, who appeared on behalf of the respondents, informed the Court that the Legislature was interested more in the vindication of its constitutional rights than in inflicting any punishment on the petitioner.
Hence, no more need be said on this aspect of the matter.
It remains to consider one other point sought to be made on behalf of the petitioner that the Assembly had no power to proceed against the petitioner for breach of privilege in May, 1957 when we know as a fact that the Assembly was prorogued several times between May 31, 1957 and November 23, 1959.
In our opinion, there is no substance in this contention, for the simple reason that the prorogation of the Assembly does not mean its dissolution.
The House remains the same; only its sessions are interrupted by prorogation of the House according to the exigencies of public demands on the time and attention of the members of the Assembly and the volume of business of the Assembly itself.
In this connection reliance was placed on the following passage in May 's Parliamentary Practice, 16th Edition, p. 279 " The effect of a prorogation is at once to suspend all business until Parliament shall be summoned again.
Not only are the sittings of Parliament at an end, but all proceedings pending at the time are quashed, except impeachments by the Commons and appeals before the House of Lords.
Every bill must therefore be renewed after a prorogation, as if it were introduced for the first time.
" The observations quoted above do not support the extreme contention raised on behalf of the petitioner that the proceedings in contempt are dead for all time.
The effect of the prorogation only is to interrupt the proceedings which are revived on a fresh motion to 107 carry on or renew the proceedings.
In this case, it is not necessary to pronounce upon the question whether dissolution of the House necessarily has the effect, of 2 completely wiping out the contempt or the proceedings relating thereto.
In our opinion, for the reasons given above, no grounds have been made out for the exercise by this Court of its powers under article 32 of the Constitution.
The petition is accordingly dismissed.
There will be no order as to costs.
Petition dismissed.
| 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.
| 924.txt |
ivil Appeal No. 2847 of 1986 290 From the Judgment and Order dated 1.8.1986 of the Delhi High Court in F.A.O. No. 146 of 1986.
Soli J. Sorabjee, E.C. Agarwala and Lalit for the Appel lants.
T.S.K. Iyer, B.P. Maheshwari, V.N. Ganpule, S.K. Agniho tri and J. Singh for the Respondent.
The Judgment of the Court was delivered by OZA, J.
This appeal arises as a result of leave granted by this Court against the summary dismissal of the first appeal by the appellant before the High Court of Delhi.
The first appeal was filed against an order passed by Sub Judge 1st Class, Delhi rejecting the review petition filed by the petitioner.
The facts necessary for disposal of this case are that in a suit filed against the present appellant in the Court of Sub Judge 1st Class, Delhi when the matter was fixed for evidence of the defendant as the plaintiff 's evidence was over and defendant present appellant 's evidence was to begin when the case was taken up on 24th January, 1985.
The order sheet of the Court shows that no DW is present and at the request of the counsel of the defendant the case was adjourned to 7th May, 1985.
It is stated that on this date for some reason, the. case was transferred to another board and in the transferee court, the order sheet showed presence of the counsel for parties and it further shows that as the case was received on transfer it was ordered to be put up on 21st August, 1985.
Learned counsel for the appellant disputed the mention in these proceedings about the presence of the counsel of the defendantappellant.
But in any event as it is not impor tant for the decision of this appeal it is not necessary to go into that question.
On 21st, August, 1985 it appears that there was a holi day and therefore the case was put up before the learned Judge on 22nd August, 1985 and it was postponed to 30th October, 1985 for the evidence of the defendant.
On 30th October, 1985 the order sheet showed that the counsel for plaintiff was present but no one was present for the defend ant.
The Court therefore directed the case to be taken up at 1 P.M.
At 1 P.M. again the situation remained the same as it is clear from the order sheet.
It also shows that none of the witnesses for defendant was also present and therefore the Court passed the order: "the case was called but none has appeared on behalf of the defendant and no DWs present.
The evidence of defendant closed.
291 Now to come up for arguments.
" The next date fixed was 1st November, 1985.
On this date also nobody appeared for the defendant and counsel for the plaintiff who was present sought adjournment and the case was adjourned to 8th Novem ber, 1985.
On 8th November, 1985 arguments of the plaintiffs counsel were heard and as none was present for the defendant the case was fixed for judgment on 11th November, 1985.
On this date also counsel for the plaintiff was present.
Nobody was present for the defendant and order sheet shows that as judgment was not ready it was postponed to 21st November, 1985.
On 21st November, the judgment was dictated and pro nounced and the order sheet also shows that the learned Judge ordered decree to be prepared.
It appears that after this the defendant claimed that they came to know about the decree on 18th January, 1986 as on that day the plaintiff came to take possession and therefore filed an application under Order 9 Rule 13 for setting aside the exparte decree which was dismissed by the trial court holding that the case was disposed of not in accordance with Order 17 Rule 2 but in accordance with Order 17 Rule 3 and therefore the appli cation under Order 9 Rule 13 was not maintainable.
The appellant defendant thereafter filed an application for review but that application also was dismissed by the trial court.
Thereafter the first appeal Was filed before the High Court of Delhi which was dismissed summarily by the impugned order.
Learned counsel for parties submitted at length the controversy that existed before the amendment of Code of Civil Procedure in 1976 about the interpretation of Order 17 Rule 2 and Order 17 Rule 3.
Apparently there were two views.
one was that Order 17 Rule 3 could be used for deciding the matter on merits if the party is present but has failed to do what was expected of that party to do and this rule could not be used against a party who was present whereas the other view was that even if a party is absent but has failed to do what was expected of him then it was the discretion of the Court either to proceed under Order 17 Rule 2 or under Order 17 Rule 3.
In some decisions, the High Courts have gone to the extent of saying that even if the trail court disposes of the matter as if it was disposing it on merits under Order 17 Rule 3 still if the party against whom the decision was pronounced was absent it could not be treated to be a dis posal in accordance with Order 17 Rule 3 and provisions of Order 9 will be available to such a party either for resto ration or for setting aside an exparte decree.
Learned counsel placed before us a 292 number of decisions of various High Courts on this aspect of the matter.
But in our opinion in view of the amendment to these two rules which have been made by 1976 amendment of the Code of Civil Procedure it is not disputed that to the facts of this case, Code of Civil Procedure as amended will be applicable and therefore it is not necessary for us to go into that question.
Order 17 Rule 2 and Rule 3 as they now stand reads: "Order 17, Rule 2: Procedure if parties fail to appear on day fixed: Where, on any day to which the beating of the suit is adjourned, the parties or any of them fail to appear, the Court may proceed to dispose of the suit in one of the modes directed in that behalf of Order IX or make such other order as it thinks fit.
(Explanation Where the evidence or a substantial portion of the evidence of any party has already been recorded and such party fails to appear on any day to which the hearing of the suit is adjourned, the Court may, in its discretion proceed with the case as if such party were present.
Order 17 Rule 3: Court may proceed notwith standing either party fails to produce evi dence, etc.
Where any party to a suit to whom time has been granted fails to produce his evidence, or to cause the attendance of his witnesses, or to perform any other act neces sary to the further progress of the suit, for which time has been allowed, the Court may, notwithstanding, such default, (a) if the parties are present, proceed to decide the suit forthwith, or (b) if the parties are, or any of them is absent, proceed under Rule 2.
" It is clear that in cases where a party is absent only course is as mentioned in Order 17(3)(b) to proceed under Rule 2.
It is therefore clear that in absence of the defend ant, the Court had no option but to 293 proceed under Rule 2, Similarly the language of Rule 2 as now stands also clearly lays down that if any one of the parties fail to appear, the Court has to proceed to dispose of the suit in one of the modes directed under Order 9.
The explanation to Rule 2 gives a discretion to the Court to proceed under Rule 3 even if a party is absent but that discretion is limited only in cases where a party which is absent has led some evidence or has examined substantial part of their evidence.
It is therefore clear that if on a date fixed, one of the parties remain absent and for that party no evidence has been examined upto that date the Court has no option but to proceed to dispose of the matter in accordance with Order 17 Rule 2 in any one of the modes prescribed under Order 9 of the Code of Civil Procedure.
It is therefore clear that after this amendment in Order 17 Rules 2 and 3 of the Code of Civil Procedure there remains no doubt and therefore there is no possibility of any con troversy.
In this view of the matter it is clear that when in the present case on 30th October 1985 when the case was called nobody was present for the defendant.
It is also clear that till that date the plaintiffs evidence has been recorded but no evidence for defendant was recorded.
The defendant was only to begin on this date or an earlier date when the case was adjourned.
It is therefore clear that upto the date i.e. 30th October, 1985 when the trial court closed the case of defendant there was no evidence on record on behalf of the defendant.
In this view of the matter there fore the explanation to Order 17 Rule 2 was not applicable at all.
Apparently when the defendant was absent Order 17 Rule 2 only permitted the Court to proceed to dispose of the matter in any one of the modes provided under Order 9.
It is also clear that Order 17 Rule 3 as it stands was not applicable to the facts of this case as admittedly on the date when the evidence of defendant was closed nobody appeared for the defendant.
In this view of the matter it could not ' be disputed that the Court when proceeded to dispose of the suit on merits had committed an error.
Unfor tunately even on the review application, the learned trial Court went on in the controversy about Order 17 Rules 2 and 3 which existed before the amendment and rejected the review application and on appeal, the High Court also unfortunately dismissed the appeal in limine by one word.
The learned counsel for the respondent attempted to contend that in this view of law as it now stands an appli cation under Order 9 Rule 13 will be maintainable.
However it was suggested that there was also an objection of limita tion about the acceptance of that applica 294 tion.
It is apparent that the learned trial Court has not considered the application on merits but has only rejected it as not maintainable and that order has been maintained.
This objection of the learned counsel for the respondent is not necessary for us to go into at this stage as in view of the law discussed above, the order rejecting the application as not maintainable, has to be set aside and it will be open to the learned trial Court to consider the application under Order 9 Rule 13 and dispose it of in accordance with that law and while so doing, it may even examine the objections that may be raised by the respondent.
The appeal is therefore allowed with costs.
The order passed by Hon 'ble the High Court and also the trial court rejecting the application of the appellant under Order 9 Rule 13 is set aside and it is directed that the learned trial court will proceed to hear and dispose of the applica tion under Order 9 Rule 13 filed by the appellant in accord ance with law.
A.P.J. Appeal al lowed.
| In a suit in which the appellant was defendant, after the plaintiff 's evidence was over, the defendant was to begin his evidence on 24th January, 1985.
As no witness was present, at the request of defendant 's counsel the case was adjourned to 7th May, 1985.
On that day, the case was trans ferred to another Court and the transferee Court ordered the case to be put up on 21st August, 1985.
It being a holiday, the case was put up on 22nd August, 1985 when it was ad journed to 30th October, 1985.
On that day, no one was present for the defendant.
The case was again taken up at 1 p.m. but the situation remained the same.
Since none of the witnesses for defendant was also present, evidence was closed and case fixed for arguments for 1st November 1985.
On this date also nobody appeared for the defendant and the case was adjourned to 8th November, 1985.
On that day, arguments of the plaintiff 's counsel were heard and as none was present for defendant, the case was fixed for judgment on 11th November, 1985.
On this date also nobody was present for defendant and since judgment was not ready it was post poned to 21st November, 1985.
On this date the judgment was dictated, pronounced and decree was ordered to be prepared.
The defendant filed an application under Order 9 Rule 13 of the Code of Civil Procedure, 1908 for setting aside ex parte decree urging that he came to know about decree on 18th January, 1986 when the plaintiff came to take posses sion.
The trial Court dismissed the application holding that it was not maintainable because the case was disposed of not in accordance with Order 17 Rule 2, but in accordance with Order 17 Rule 3.
An application for review was also dis missed by the Trial Court.
The first appeal too was summari ly dismissed by the High Court.
Allowing the appeal, 289 Held: 1.
The order passed by the High Court and also the trial Court rejecting the application of the appellant under Order 9 Rule 13 of the Civil Procedure Code 1908 are set aside and the trial Court is directed to dispose of the application in accordance with law.
[294C] 2.
In cases where a party is absent, only course is as mentioned in Order 17(3)(b) to proceed under Rule 2.
The language of amended Rule 2 also lays down that if any one of the parties fails to appear, the Court has to proceed to dispose of the suit in one of the modes directed under Order 9.
The Explanation to Rule 2 gives a discretion to the Court to proceed under Rule 3 even if a party is absent but that discretion is limited only in case where a party which is absent has led some evidence or has examined substantial part of their evidence.
Therefore, if on a date fixed, one of the parties remains absent and for that party no evidence has been examined upto that date the court has no option but to proceed to dispose of the matter in accordance with Order 17 Rule 2 in any one of the modes prescribed under Order 9 of the Code of Civil Procedure.
After this amendment in Order 17 Rules 2 and 3 in 1976 there remains no doubt, and therefore, there is no possibility of any controversy.
[292H 293C] 3.
In the present case, on 30th October 1985 when the case was called nobody was present for the defendant, and till that date the plaintiff 's evidence had been recorded but no evidence for defendant was recorded.
The defendant was only to begin on this date or an earlier date when the case was adjourned.
It is, therefore, clear that upto 30th October 1985 when the trial Court closed the case of defend ant there was no evidence on record on his behalf.
There fore, the Explanation to Order 17 Rule 2 was not applicable at all.
Apparently when the defendant was absent Order 17 Rule 2 only permitted the Court to proceed to dispose of the matter in any one of the modes provided under Order 9.
[293D E] 4.
Order 17 Rule 3 as it stands was not applicable to the facts of this case as admittedly on the date when the evidence of the defendant was closed nobody appeared for the defendant and, therefore, the Court when it proceeded to dispose of the suit on merits had committed an error.
Even on the review application, the trial Court went on in the controversy about Order 17 Rules 2 and 3 which existed before the amendment and rejected the review application and on appeal, the High Court also unfortunately dismissed the appeal in limine by one word.
[293F G]
| 5170.txt |
Appeal No. 173 of 1956.
Appeal from the judgment and order dated November 15, 1954, of the former Madhya Pradesh High Court at Gwalior in C. F. A. No. 9 of 1951.
Ganpat Rai, for the appellant.
N. section Bindra and D. D. Sharma for the respondent.
621 1962.
April 30.
The Judgment of the Court was delivered by KAPUR, J.
This is an appeal against the judgment and order of the High Court of Madhya Bharat at Gwalior on a certificate of that Court under article 133 (1) (c) and like Civil Appeal No. 24 of 1961, raised the question of the applicability of the Indian Code of Civil Procedure and the question whether the decree sought to be executed was a dec ree of a foreign Court or not.
It is a reverse case in the sense that the decree sought to be executed was passed by a Court in West Bedford province of what was British India.
In the appeal the appellant is the judgment debtor and the decree holder is the respondent.
On December 3, 1949, a decree was passed in favour of the respondent by the Subordinate Judge, Bankura, in the West Bengal and a certificate of transfer was applied for on July 27, 1950, granted on August 8, 1950, and was transferred for execution On August 28, 1950.
On September 25, 1950, the decree holder took out execution in the Court of the Additional District Judge, Morena, in what was Gwalior State and subsequently became a part of the United State named Madhya Bharat and after the Constitution the Part B State of Madhya Bharat.
On the judgment debtor 's objection the application for execution was dismissed on December 29, 1950, but the appeal against that order was allowed by the High Court on November 15, 1954.
It is unnecessary to set out the various sections of the Indian Code of Civil Procedure or to trace the various steps by which as.
43 and 44 were amended in that Code ; that we have done in C. A. No. 24 of 1960 decided today.
It was contended before us by the judgment debtor that 622 the Court had no power to transfer the decree under section 38 to the Court in Morena.
On the date when the decree was transferred the Courts in Madhya Bharat were governed by the Indian Code of Civil Procedure as adapted by the Madhya Bharat Adaptation Order of 1948 but the power of transfer by the Court at Bankura was governed by sections 38 and 39 of the Indian Code of Civil Procedure.
Under the Code, the Court to which the decree could be transferred was one established in what was British India because the Code extended to the territories of what was British India and it was not till, the coming into force of Act 11 of 1951 on April 1, 1951, that the Indian Code was applied to the "Territories of India" which comprised Parts A, B and C State.
It was contended by Mr. N. section Bindra counsel for the respondent that under sections 38 and 39 of the Indian Code of Civil Procedure a decree could be sent for execution to any Court, the expression "Court" being understood as a place where justice was administered and for this reliance was placed on Manawala Goundan vs Kumarappa Reddy (1) where the word "Court" in section 622 of the old Civil Procedure was defined as a place where justice is judicially administered ; but that was in a case where it had to be determined whether a District Registrar was Court for the purpose of Civil Procedure Code.
The definition as given in that case is not of any help in determining the question now before us because what we have to see is whether the Court at Morena even though it administered justice judicially was covered by the word "Court" in section 38 or not.
As we have said above "Court" in the section means a court to which the Indian Code of Civil Procedure applies and not any Court.
Similarly at the relevant time in es. 40 and 42 of the Indian Code of Civil Procedure "Court" nece I. L. R. 30 mad.
623 ssarily meant a Court to which Indian Civil Procedure Code applied i. e., a Court in what was British India.
The Court at Morena not being such a Court the decree could not be transferred to it under the Indian Code of Civil Procedure and sections 38 and 39 were inapplicable to justify such a transfer.
The decree, it was then argued, was executable under section 43 of the Indian Civil Procedure Code as amended by the Adaptation of Laws Order of June 5, 1950, which had retrospective effect as from January 26, 1950.
After the amendment that section reads : "S 43 Any decree passed (a) by a Civil Court in Part B State, or (b). . . . (c). . . . may, if it cannot be executed within the jurisdiction of the Court by which it was passed, be executed in manner herein provided within the jurisdiction of any Court in the States".
The argument was that in the present case the expression "in a Part B State, 'should be read as if the expression was "in a Part A State".
This again is not permissible for us.
Section 43 has to be interpreted as it is and a Court cannot read it as if its language was different from what it actually is.
It is not permissible for this court to amend the law as suggested.
Besides the Indian Civil Procedure Code was not extended to Madhya Bharat till April 1, 1951, by Act 11 of 1951.
The decrees of foreign courts were, under the Gwalior Code of which Morena was a part, executable neither under section 233 which required a suit to be brought on the basis of foreign decrees nor under the Madhya 624 Bharat Code of Civil Procedure.
The decree therefore could not be executed in Morena under s.43 of the Indian Code of Civil Procedure.
It was next argued that the appellant firm was not a foreigner because it did not fall under the foreigners Act (Act 31 of 1946) and reference was made to section 2 (a.) (iii) which was amended by Act 38 of 1947 on December 15, 1947 ; but this Act is not relevant for the purpose of finding out whether the decree was a foreign decree or not because the execution of decrees is governed by the provisions of the Code of Civil Procedure and not by the Foreigners Act.
Under the former a decree can be executed by a Court which passed the decree or to which it was transferred for execution and the decree which could be transferred has to be a decree passed under the Code and the Court to which it could be transferred has to be a Court which was governed by the Indian Code of Civil Procedure.
But in the present case it was not transferred to a Court which at the time of the transfer was governed by the Indian Code of Civil ,Procedure and therefore the transfer was ineffective for the purpose of execution and as we have said above, section 43 of the Indian Code was inapplicable before Act 11 of 1951 to the State of Madhya Bharat.
It is not necessary to go into the other questions raised if the above two questions are decided against the respondent.
We therefore allow this appeal, set aside the judgment and order of the High Court and restore that of the executing court.
The appellant will have its costs in the court.
Appeal allowed.
| A decree passed in favour of the respondent by a Subordinate judge of West Bengal was transferred for execution on August 28, 1950 to the Court of the Additional District judge of Morena in what was originally Gwalior State and subsequently became a part of the United States of Madhya Bharat and after the Constitution State of Madhya Bharat.
On the date when the decree was transferred, the 620 Courts in Madhya Bharat were governed by the Indian Code of Civil Procedure as adapted by the Madhya Bharat Adapt action Order of 1948 but the power of transfer by the Court of Bankura was governed by sections 38 and 39 of the Indian Code of Civil Procedure.
On the judgment debtor 's objection the application for execution was dismissed but the appeal against that order was allowed by the High Court.
The appellant contended that the Court had no power to transfer the decree under section 38 to the Court in Morena.
The question was with regard to the applicability of the Indian Code of Civil Procedure and whether the decree sought to be executed was a decree of a foreign Court or not.
Held, that the Court at Morena not being a court, to which Indian Civil Procedure Code applied, the decree could not be transferred to it under the Indian Code of Procedure and sections 38 and 39 were inapplicable to justify such a transfer.
The Indian Civil Procedure Code was not extended to Madhya Bharat till April 1, 1951, by the Act 2 of 1951.
The decrees of foreign courts were under the Gwalior Court of which Morena was a part, not executable under section 233 which required a suit to be brought on the basis of foreign decree under not the Madhya Bharat Court of Civil Procedure.
Held, further, that the Foreigners Act is not relevant for the purpose of finding out whether the decree was a foreign decree or not because the execution of decree is governed by the provisions of the Code of Civil Procedure and not by Foreigners Act.
A section of an enactment has to be interpreted as it is and a Court cannot read it as if its language was different from what it actually is.
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on No. 62 of 1956.
Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights.
N.H. Hingorani and A. N. Sinha, for the petitioner.
R. Ganapathy Iyer and T. M. Sen, for the respondent.
April 14.
The Judgment of the Court was delivered by KAPUR, J.
Prior to the integration of the Indian States with the Union of India on the promulgation of the Constitution of India there was in Kathiawad a State of the name of Vadia, succession to the Rulership of which was by primogeniture.
Its Ruler then was Darbar Saheb Shri Surag Vala Bavavala.
He had two sons Kumar Shri Krishan Kumar and the petitioner Kumar Shri Vira Vala Surag Vala.
Kumar Shri Krishan Kumar being the elder son was the heir apparent.
On July 5, 1943, the Ruler Darbar Saheb Shri Surag Vala executed two documents in favour of the petitioner granting him in perpetuity and in heredity a village called ' Mota Pithadia ' in the State for enjoyment as ' Kapal Giras ' as ' Bhayat '.
The word ' Bhayat ' means a cadet or the descendant of a younger branch of a Talukdar 's family where the State followstheruloofprimogeniture. 'Kapal Giras 'means a grant in appanage as a birthright to a share in the patrimony.
Sometime in or about August, 1947,the State of Vadia acceded to the Dominion of India on the terms contained in an instrument of accession then executed.
Thereafter, on January 23, 1948, various States in the Kathiawad area entered into a covenant forming the United State of Kathiawad, also called the United State of Saurashtra.
In terms of this covenant the 523 assets of each State excepting the private properties of the Ruler, became the assets of the United State.
The covenant also provided that the Ruler of each State shall be entitled to receive a certain sum as his privy purse from the revenues of the United State, to retain ownership of all private properties to be determined in the manner provided and to all personal privileges, dignities and titles.
The Government of India concurred in the covenant and guaranteed all its provisions.
The State of Vadia was a party to this covenant and its assets therefore became vested in the United State.
On September 13, 1948, the United State of Kathiawad executed a fresh instrument of accession to the Dominion of India cancelling the instrument of accession executed by the covenanting States in or about August, 1947.
On November 13, 1949, the United State of Kathiawad agreed to adopt the Constitution to be framed by the Constituent Assembly of India and further that the Constitution of India as from the date of its commencement would supersede and abrogate all other constitutional provisions inconsistent therewith in force in the United State.
On the promulgation of the Constitution of India on January 26, 1950, the United State merged in the Union of India and became Saurashtra, a Part B State mentioned in the Constitution.
The United State and therefore its component States since then lost all separate existence.
It is not in dispute that upon such merger all the assets of the United State became vested in the Union of India.
On January 27, 1950, Kumar Shri Krishan Kumar, the elder son of the Ruler Darbar Saheb Shri Surag Vala died and thereafter on May 16, 1950, the Ruler himself died.
On February 12, 1951, the President of India issued a notification recognising the petitioner as the Ruler of Vadia with effect from May 16,1950, and he became entitled to the rights of the Ruler which the Government of India had agreed to recognise.
These were the rights reserved to the Ruler under the covenant constituting the United State of kathiawad, namely, the right to a privy purse, to the private properties and to the personal privileges, dignities and titles.
524 On July 2, 1951, the Government of the State of Saurashtra issued a notification declaring that as the petitioner had succeeded his father as Ruler, the village Pithadia should, pending final orders be treated as Khalsa or Khas village of the State of Saurashtra.
The petitioner was then a minor and his mother submitted a representation to the Government protesting against the notification.
No reply was received to this protest.
On May 23, 1952, the Government of Saurashtra issued a further notification which stated: " Whereas the village Pithadia in Vadia Taluka of the Madhya Saurashtra District was granted, by Lekh No. 194 dated 5th July, 1943, as Kapal Giras by the late Ruler Darbar Saheb Suragwala of the former Vadia State to his second son Shri K. section Viravala in the latter 's capacity as a cadet, in appanage grant; and Whereas, the late Ruler and his eldest son Shri K. section Krishna Kumarsinghji predeceased this second son Shri K. S.Viravala, the latter has been recognised as the Ruler of the former State of Vadia with effect from 16th May, 1950, by the Government of Saurashtra and the President of India as per Notification No. PD/MS/20 dated 12th February, 1951, of the Government of Saurashtra Revenue Department (Political) published in the Gazette of Saurashtra and Whereas, pending the recognition the Government of Saurashtra had ordered, by Notification No. PD/148/20, dated 2nd July, 1951, of the Revenue Department (Political) that village should be treated as Khalsa village of the State of Saurashtra and whereas Shri K. section Viravala 's status as a Cadet has ceased and the object of the grant in appanage has terminated in consequence of his being recognised as the Ruler.
Now, therefore, the grant is deemed to have lapsed and reverted to the former Vadia State now integrated with the State of Saurashtra at present known as the State of Saurashtra with effect from the date of Shri K. section Viravala having been recognised as the Ruler of the former Vadia State in succession to the late Ruler Darbar Shri Suragwala of Vadia State, viz., 16th of May, 1950 ".
525 The petitioner again lodged a protest against this latter notification but this time also received no reply.
On March 9, 1956, he filed the present petition under article 32 of the Constitution asking for the issue of a writ directing the respondent, the State of Bombay, in which State State of Saurashtra had earlier merged, to withdraw or cancel the notification and to restore the village Pithadia with all collections and realisations made by it to the petitioner and restraining the respondent from giving effect to the notification.
The petitioner 's contention is that the village had been granted to him absolutely and unconditionally for permanent enjoyment from generation to generation and the State could not resume it so long as any of the descendants of the petitioner was alive.
He contends that President 's recognition of him as Ruler of Vadia did not affect his rights to the village.
The respondent 's contention is that the grant was not absolute or unconditional but it was to remain in force so long as the petitioner continued to be a cadet of the family and that as on his being recognised as the Ruler he ceased to be a cadet, the grant lapsed and the village reverted to the State.
It is said that the Union of India being entitled to all the assets of the State of Vadia, the village has become its property since the date of the petitioner 's recognition as the Ruler.
The question therefore is whether the grant lapsed on the grantee becoming the Ruler.
That is a question depending on the terms of the grant.
Webb in his compilation called " Political Practice in Kathiawad " has defined a ' Bhayat ' as a cadet or the descendant of a younger branch of a Talukdar 's family where the estate follows the rule of primogeniture.
The grant was made by a document called a Lekh or a writing to which was attached a Hakpatrak which is a Statement of rights created by the Darbar to a Bhayat.
Both these documents were registered before the Agency.
The main portions of the.
Lekh were in these terms: " Passed by Shree Vadia Darbar Shree Suragvala Bavavala, to long lived Kumar Shree Viravala.
To wit: the Rule of primogeniture (i.e., the system 69 526 of Heir apparent and cadets) having been applied to this State, and you being our Kumar (SOD) younger than our eldest Kumar, long lived Yuvaraj Shree Krishna Kumar Saheb, you are, by this Lekh, given, as Bhayat, for permanent enjoyment as Kapal Giras, from generation to generation, the village " Mota Pithadia ", a village of exclusive jurisdiction of this State, which is of our possession, enjoyment and ownership, with its village, Tal (village site), and Sim with all their boundaries, fields, Vadis, Kharo, Kharabo, etc., i.e., with all the boundaries of ' the said village, as Giras.
You may enjoy the revenues thereof from the beginning of the Year Samvat 2000.
as Bhayat, a Hakpatrak (statement of rights) thereof, according to procedure has been given.
The same has been attached herewith.
You and your heirs and successors may enjoy the same.
Map and Field Book of this village have been made, true copies whereof have been got prepared and given to you ".
The lekh conferred various other dignities, privileges, amenities and rights on the petitioner.
Thus it is stated that the petitioner 's marriage will be celebrated at the State expense and the State will arrange for his education, that no duties or taxes will be levied on the petitioner on account of his residence in Vadia proper, that the petitioner 's complaint regarding Giras, i.e., the village granted, or any other civil matter would be heard without charging any court fee and he would be exempt from personal attendance in court in civil matters and that no process will be issued against him in criminal cases without the permission of the Ruler himself.
All these dignities, rights and privileges are appropriate to a cadet of the Ruler 's family, but have no meaning when applied to a Ruler.
In the Hak Patrak it is stated: " In future even if your descendants are joint or may have divided, any one Bhayat surviving from amongst your descendants shall enjoy the Sudharo Giras and it Shall not 527 revert to the State till any one Bhayat from amongst your descendants is living ".
It also states that the grantee will not sell or mortgage the Giras without the permission of the State.
The grant and the Hak Patrak read together lead to the inescapable conclusion that in its true natures the grant is a grant to a cadet of the family and the grant enures for his benefit as long as he remains a cadet.
The expression " given as Bhayat " is not merely descriptive of the grantee, but indicates the true nature of the grant.
Nor do we agree that the expression " given as Bhayat " merely indicates the purpose for which the grant is made but describes the nature of the tenure.
The grant states in express terms that it is given as Bhayat for permanent enjoyment as Kapal Giras, which means that the grant is to a cadet as an appanage and continues from generation to generation as long as any of the descendants of the grantee is alive.
But if the grantee ceases to be the younger branch and becomes heir apparent by reason of the rule of primogeniture or ceases to be a cadet or Bhayat for any reason whatsoever, then the grant must come to an end.
This is what the rights and liabilities mentioned in the grant itself and also in the Hak Patrak show; for example, with regard to the right of succession, the Hak Patrak states that even if one Bhayat from amongst the descendants survives he shall enjoy the Giras and there will be no reversion to the State.
This, in our opinion, shows that the grant enures as long as there is a Bhayat.
If there is no Bhayat the grant lapses.
If on a true construction the grant is of the nature indicated above, then no question of reading an implied term in the grant arises; nor is there any necessity of determining whether the petitioner has become a ruler in the sense in which his father was a ruler of the Vadia State.
Whatever be the reason for which the petitioner has ceased to be a Bhayat, either by reason of the death of his elder brother or by reason of his becoming a ruler in the limited sense of the Constitution, he has ceased to be a Bhayat and the grant being given as Bhayat for 528 permanent enjoyment as Kapal Giras, it has come to an end.
In that view of the matter the petitioner must be held to have failed to make out any infringement of his fundamental : 'right by reason of the notification dated May 23, 1952.
The infringement which the petitioner complains of is deprivation of his property by State action and he bases his right on the terms of the grant.
If the grant is not an absolute grant in the sense in which the petitioner contends, but is a grant which by its very nature contains a defeasance clause, then the petitioner cannot found his claim on any violation of his fundamental right.
The petition is therefore dismissed with costs.
Petition dismissed.
| In the, Indian State of Vadia succession was governed by primogeniture.
The Ruler in 1943 granted to his younger son, the petitioner, a village in the State in perpetuity and in heredity for enjoyment as 'Kapal Giras ' as ' Bhayat '.
In 1947 the State of Vadia acceded to the Dominion of India and by subsequent constitutional developments it became merged in the State of Saurashtra.
After the coming into force of the Constitution the elder son of the Ruler and then the Ruler died, and the petitioner was recognised as the Ruler.
Thereupon the State of Saurashtra issued a notification resuming the grant as it was deemed to have lapsed and reverted to the former Vadia State.
The petitioner contended that the grant was absolute and unconditional for 522 permanent enjoyment from generation to generation and the State could not resume it: Held, that the grant lapsed on the petitioner becoming the Ruler and the State could resume it.
The grant was to the petitioner as a " Bhayat ", which word meant a cadet or the descendant of a younger branch of a Talukdar 's family where the estate followed the rule of primogeniture; as such if enured for his benefit as long as he remained a cadet.
But when the grantee became the Ruler and ceased to be a " Bhayat ", the grant came to an end.
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Nos. 2333 or 2336 of 1983.
(Under Article 32 of the Constitution of India).
Advocates for the Petitioners.
L.M. Singhvi, A.M. Singhvi, Vimal Dave and Krishan Kumar.
T.S. Krishnamurthy Iyer, Naresh Kumar Sharma and Vineet Kumar.
Dr. Y.S. Chitale, (Not present) Mrs. Sadhana Ramchandran and Raju Ramchandran and Harjinder Singh (Not present) Advocates for the Respondents: A.V. Rangam and Mrs. Sarla Chandra for the State of Tamilnadu.
N.H. Gurusahani, Ashwani Kumar, N.N. Keshwani and M.N. Shroff and A.S. Nambiar Not Present.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
The several petitioners in these writ petitions are agents for the sale of tickets for the lotteries conducted by the Governments of various States other than Maharashtra.
They question the ban sought to be imposed by the Government of Maharashtra on the sale within the State of Maharashtra of tickets of lotteries conducted by the Government of other States.
They, generally, seek a writ in the nature of a Mandamus directing the State of Maharashtra to forbear from interfering with the sale or distribution of lottery tickets in respect of the lotteries organised ' by the Governments of States other than Maharashtra.
There is no express notification or order of the Government of Maharashtra imposing a ban on the sale of lottery tickets of other.
States in the State of Maharashtra.
The ban is sought to be spelt out from a Press release of the Director of Publicity, Sachivalaya, Bombay dated September 24, 1969 and a communication ' dated August 24, 1981 addressed by the Government of Maharashtra, 443 Finance Department, to some of the petitioners individually.
The Press release is as follows: SALE OF LOTTERY TICKETS OF OTHER STATES UNLAWFUL Warning to Public On September 16, the Minister for Finance in a Press conference, followed by a press note, made it clear to agents who are selling lottery tickets that the sale of lottery tickets of other States in this State is unlawful.
The Government of India, in giving permission for conducting State lotteries had made a condition that the lottery tickets should not be sold in another State, without the express consent of that State, No such permission has been given in Maharashtra for the sale of outside State lottery tickets.
Despite the warning given by the Minister, unauthorised sales of lottery tickets, of outside States continues, and the Government is therefore taking steps to stop these obviously unlawful practices by seizing all stocks of tickets of other States ' lotteries, The public are warned that no tickets other that the Maharashtra State Lottery tickets can be sold within the Maharashtra State".
The communications addressed to the petitioners are in the following terms: Sir, I am directed to refer to your letter No. DA/PL/81/622, dated 22.6.1981 on the above mentioned subject and to state that there is ban on the sale of other State Lottery tickets in State of Maharashtra.
It is, therefore, regretted that your request to permit you to sell your State Lottery tickets in this State cannot ' be accepted.
Yours faithfully, Sd/ State Lottery Officer, Finance Department The basic submission on behalf of the petitioners is that there 444 is no legal authority for the imposition of the ban.
It is argued that ' under the Constitution, 'Lotteries organised by the Government of India or the Government of a State ' is a subject which is within ' the exclusive legislative competence of Parliament and that it is not open to the Government of any State purporting to act in exercise of its executive power to impose such a ban as that sought to be imposed by the Government of Maharashtra.
On the other hand, it is sought to be argued on behalf of the Government of Maharashtra that the Union Government 's executive power is co extensive with the power of Parliament to make laws, that the President in exercise of his power under article 258(i) has entrusted to the Government of Maharashtra the executive power of the Union in respect of lotteries run by the State and therefore, it was competent for the Government of Maharashtra to impose the ban.
Entry 40 of List I of the VIIth Schedule to the Constitution is "Lotteries organised by the Government of India or the Government of a State".
Entry 34 of List IT of VIIth Schedule is, "Betting and gambling".
There is no dispute before us that the expression "Betting and gambling" includes and has always been understood to have included the conduct of lotteries.
Quite obviously, the subject 'Lotteries organised by the Government of India or the Government of a State ' has been taken out from the legislative field comprised by the expression "Betting and gambling" and is reserved to be dealt with by Parliament.
Since the subject 'Lotteries organised by the Government of India or the Government of a State ' has been made a subject within the exclusive legislative competence of Parliament, it must follow, in view of Act.
246(1) and (3), that no legislature of a State can make a law touching lotteries organised by the Government of India of the Government of a State.
This much is beyond controversy and the Maharashtra legislature has acknowledged the position, as indeed it must, in Sec.
32 of the Bombay Lotteries (Control and Tax) and Prize Competitions (Tax) Act, 1958.
It is an Act to control and tax lotteries and to tax prize competitions in the State of Maharashtra.
Section 32(b) expressly provides that nothing in the Act shall apply to "a lottery organised by the Central Government or a State Government".
This, as we said, is but a recognition of the prevailing situation under the Constitution.
The Constitutional position cannot be altered by an act of the State legislature.
It appears that the Government of Maharashtra and various other State Governments requested the Union Government to authorise them to conduct lotteries for the purpose of 'finding funds 445 for financing their development plants '.
Such authorisation was, of course, strictly, not necessary in the absence of a law made by Parliament pursuant to Entry 40 of List I of the VIIth Schedule to the Constitution.
Article 298 of the Constitution extends the executive power of the Union and each State to the carrying on of any trade or business and to the acquisition, holding and disposal of property and the making of contracts for any purpose, with the stipulation that if the trade, business or purpose is not one with respect to which Parliament may make laws, the said executive power of Parliament shall be subject in each State to legislation by the State and if the trade, business or purpose is not one with respect to which the State legislature may make laws, the said executive power of the State shall be subject to legislation by Parliament.
Thus, while the Government of a State is free to carry on any trade or business in respect of which it may not have the power to make laws the power to carry on such trade or business shall be subject to legislation by Parliament.
Therefore, the Government of a State has the right to conduct lotteries subject to legislation by Parliament.
Since there is at present no legislation by Parliament on the subject of lotteries organised by the Government of India or the Government of a State, the Government of every State has the unrestricted right to organise lotteries of its own.
We will consider the effect of the impact of article 73, article 258(1) and Entry 40 of List I read with article 246 on this right a little later.
To continue the expose of facts, in response to the request of the several State Governments, the Ministry of Home Affairs, Government of India, addressed a communication dated July 1,1968 to the Chief Secretaries to the Government of all States.
It was stated in the letter that though the Central Government was opposed to the idea of lotteries being conducted by Governments, they had decided to authorise the State Governments to conduct lotteries in view of the representations of some of the State Governments that it would help them 'to mobilise savings and to find funds far financing their development plans '.
However, it was added : "At the same time, it is also felt that suitable steps should be taken to safeguard the interests of such State Governments, who, as a matter of policy, do not desire to start State Lotteries or permit sale of tickets of lotteries organised in other States, within their jurisdiction.
In order to avoid objections from such States, it has been decided that the Central Governments permission for conducting State Lotteries is available on the condition that tickets to such a lottery will 446 not be sold in another State without the express consent of the State Government concerned.
I am to add that in order to achieve this object an amendment of Section 294 A IPC is being undertaken to make sale of tickets, without the consent of the State Government concerned, a penal offence".
We may mention here that the proposal to amend Section 294 A IPC to achieve the object of preventing the sale of lottery tickets of one State being sold in States which are opposed to the conduct of lotteries as a matter of policy has remained a static proposal and no such amendment has so far been attempted to be made.
The communication dated July 1, 1968 from the Government of India was followed by Presidential order under article 258(1) of the Constitution.
The Presidential order relating to the State of Maharashtra with which we are concerned.
is as follows: No. 29/29/63 P.IV Government of India Ministry of Home Affairs New Delhi, the 2nd April, 1969.
ORDER Whereas the Government of Maharashtra propose to organise a State lottery; And whereas the Central Government has no objection to it: Now, therefore, the President is pleased to permit the Government of Maharashtra to conduct a State lottery, subject to the condition that the tickets of the lottery shall not be sold in another State without the permission of the Government of that State.
The President is further pleased to entrust to the Government of Maharashtra under clause (1) of Article 258 of the Constitution the executive power of the Union in respect of lotteries organised by that Government.
Sd/ (D.D. JOSHI) Deputy Secretary to the Government of India 447 It was after this entrustment of executive power of the Union to the Government of Maharashtra 'in respect of lotteries organised by that Government ' that the Government of Maharashtra proceeded to issue the Press release and thereafter the individual communications, earlier referred to, making it known that the sale of lottery tickets of other States was banned in the State of Maharashtra.
The source of power for the ban is claimed to be the entrustment of power by the President under article 258(1) of the Constitution.
But the terms of the entrustment do not justify the claim.
The entrustment of power, as is seen, is only 'in respect of lotteries organised by that Government '.
The expression 'that Government ' in the context of the entrustment of power to the Government of Maharashtra can only mean the Government of Maharashtra and no other.
Nor can it ever be that such executive power as the Union Government may possess in respect of the trading, business or, for that matter, any other activity of the Government of one State may be entrusted to the Government of another State.
That would be destructive of the very scheme and structure of our Constitution.
The Government of Maharashtra cannot therefore purport to ban the sale of lottery tickets of Other States by virtue of the entrustment of power under Article 258(1) of the Constitution.
It is then said that the permission granted to each State to conduct its lotteries is expressly subject to the condition that the tickets of the lottery shall not be sold in another State without the permission of the Government of that State.
We have already pointed out that Article 298 of the Constitution extends the executive power of every State to the carrying on of any trade or business even if such trade or business is one with respect of which Parliament alone has the exclusive power to make laws, subject to the stipulation that such executive power of the State shall be subject to Parliamentary legislation.
It is true that in view of Entry 40 of List I of the VIIth Schedule to the Constitution Parliament has exclusive power to make laws with respect to "Lotteries organised by the Government of India or the Government of a State", that Article 73 of the Constitution extends the executive power of the union to the matters with respect to which Parliament bas power to make laws and, therefore; the executive power of the Union must extends to the subject "Lotteries organised by the Government of India or the Government of a State".
But the executive power of the union, by the very opening words of Article 73, is "subject to the provisions of this Constitution".
It follows that the executive power of the Union with respect to lotteries 448 organised by the Government of a State has necessarily to be exercised subject to the provisions of the Constitution, including Article 298, which expressly extends the executive power of the State to the carrying on of any trade or.
business subject only to legislation by Parliament if the trade or business is not one with respect to which the State legislature may make laws.
It is to be noted that Article 298 does not open with the words 'subject to the provisions of the Constitution ', as does Article 73.
Reading and considering Articles 73 and 298 together, as they should indeed be read and considered, it is clear that the executive power of a State in the matter of carrying on an; trade or business with respect to which the State legislature may not make laws is subject to legislation by Parliament but is not subject to the executive power of the union, That is why we mentioned earlier that the Government of a State is not required to obtain the permission of the Union Government in order to organise its lotteries, in the absence of Parliamentary legislation.
Even assuming that such permission is necessary, we do not see how a condition imposed by such permission that lottery tickets of one State may not be sold in another State may be enforced by the other State.
The other State has no power to make laws in regard to the lotteries by the first State.
Its executive power, by virtue of Article 298, extends to lotteries organised by itself but not to lotteries organised by the other State.
If a State acts in breach of the condition imposed by the President while entrusting power under Article 258, it is open to the President to revoke the permission or to take such further or other action as may be constitutionally permissible but it cannot possibly enable the Government of the other State to do a thing about it except to complain, perhaps, to the Union Government.
The Government of India is quite obviously alive to the position that there is no way of enforcing the stipulation that lottery tickets of one State shall not be sold in another except by Parliament making a law in that behalf.
The awareness is revealed by the last sentence in the letter dated July 1, 1968 which says, "I am to add that in order to achieve this object an amendment of Section 294 A IPC is being undertaken to make sale of tickets, without the consent of the State Government concerned, a penal offence".
The proposed amendment is yet to see the light of day.
A submission which appears to have found favour with the 449 High Court of Bombay in Kamal Agency vs State and the High Court of Madras in H.G. Jain vs State of Tamil Nadu was that in Entry 40 of List I and the respective local Acts, a lottery organised by a State must be construed to refer to a lottery lawfully organised by a State and that if a lottery is not lawfully organised by a State it would not fall within Entry 40 of List I but would fall under the head 'gambling ' under Entry 34 of List II and the State legislature would then be empowered to legislate in respect of the same.
Where the State Legislature could thus legislate, it was said, the State Government could take executive action in respect of lotteries organised by another State if they were unlawful.
The Gujarat and Andhra Pradesh High Courts have dissented from this view.
In Special Civil Application No. 1309 of 1970 Bhagwati, C.J. presiding over a Division Bench of the Gujarat High Court and in L.B. Paradise Lottery Centre vs State one of us sitting singly in the Andhra Pradesh High Court have explained that there is no justification for first reading the word 'lawfully ' into Entry 40 of List I and then proceeding to interpret the expression 'Lottery lawfully organised ' as meaning a lottery organised persuant to the entrustment of executive power of the Union under Article 258 of the Constitution.
It was observed "legislative power cannot be fed into Entry 34, by feeding the word 'lawful ' into Entry 40 or List I and thus artificially restricting the cope of Entry 40".
It was pointed out that if the Government of a State organised a lottery without the entrustment of executive power as contemplated by Article 258 or in disregard or defiance of any condition that may have been imposed while entrusting executive power under Article 258 it would never be a matter for the legislature of one State to take upon itself the power to declare unlawful the lottery run by the Government of another State; and even less so could the Government of a State declare unlawful a lottery run by the Government of another State and thereafter ban the sale of the tickets of the lotteries organised by that State.
In the Madras case it was also observed that the entrustment order carried with it all powers which the State Government might take to realise the maximum collection.
We cannot subscribe to this view.
That would really amount to the entrustment of vital legislative powers to the State Government which would be constitutionally, impermissible.
We do not think it necessary to refer in any further detail to the decisions of the Gujarat, Andhra Pradesh Bombay and Madras decisions 450 except to say that we generally agree with the reasoning in the Gujarat and Andhra Pradesh decisions and disagree with the reasoning in the Bombay and Madras decisions.
In the result we allow the Write petitions and direct the State of Maharashtra to forbear from giving effect to the ban on the sale or distribution of tickets of lotteries organised by other States.
There is no order regarding to costs.
N.V.K. Appeal allowed.
| By a press release, the Government of Maharashtra declared that the sale of lottery tickets of States other than the State of Maharashtra was unlawful and warned the public that no lottery ticket of other States should be sold within the State.
The petitioners who were agents for the sale of tickets for lotteries conducted by various State Governments other than the State of Maharashtra contended in their writ petitions, that the aforesaid ban that was sought to be imposed had no legal authority.
Under the Constitution lotteries organised by the Government of India or the Government of a State was a subject which was within the exclusive legislative competence of Parliament and that it was not open to the Government of any State purporting to Act in exercise of its executive power to impose such a ban.
On behalf of the State Government respondent it was contended that the Union Government 's executive power was co extensive with the power to make laws, that the President in exercise of his power under Article 258(1) had entrusted to the State Government the executive power of the Union through a Presidential order dated April 2, 1969 in respect of lotteries run by the State, and therefore it was competent for the State Government to impose the ban.
Allowing the writ petitions, ^ HELD: 1.
The Government of Maharashtra cannot purport to ban the 441 sale of lottery tickets of other State by virtue of the entrustment of power under Article 258(1) of the Constitution.
[447 D] 2.
Entry 40 of List I of the VIIIth Schedule to the Constitution is "Lotteries organised by the Government of India or the Government of a State".
Entry 34 of List II of VIIIth Schedule is, "Betting and gambling".
Since the subject 'Lotteries organised by the Government of India or the Government of a State ' has been taken out from the legislative field comprised by the expression "Betting and gambling" and reserved to be dealt with by Parliament, within its exclusive legislative competence it must follow, in view of Article 246(1) and (3) that no legislature of a State. can make a law touching lotteries organised by the Government of India or the Government of a State.
[444 D E] 3.
Article 73 extends the executive power of the Union to the matters with respect to which Parliament has power to make laws.
But the executive power of the Union, by the very opening words of article 73 is "subject to the provisions of the Constitution".
It therefore follows that the executive power of the Union with respect to lotteries organised by the Government of a State has necessarily to be exercised subject to the provisions of the Constitution, including article 298, which expressly extends the executive power of the State to the carrying on of any trade or business subject only to legislation by Parliament if the trade or business is not one with respect to which the State Legislature may make laws.
[447G H; 440A B] 4.
Reading and considering Articles 73 and 298 together, it is clear that the executive power of a State in the matter of carrying on any trade on business with respect to which the State legislature may not make laws is subject to legislation by Parliament but is not subject to the executive power of the Union.
The Government of a State is not required to obtain the permission of the Union Government in order to organise its lotteries, in the absence of Parliamentary legislation.
Even assuming that such permission is necessary, a condition imposed by such permission that lottery tickets of one State may not be sold in another State cannot be enforced by the other State.
The other State has no power to make any laws in regard to lotteries organised by the first State.
Its executive power, by virtue of Article 298, extends to lotteries organised by itself but not to lotteries organised by the other State.
[448C E] 5.
If a State acts in breach of the condition imposed by the President while entrusting power under Article 258 it is open to the President to revoke the permission or to take such further or other action as may be constitutionally permissible but it cannot possibly enable the Government of the other State to do anything about it except to complain perhaps to the Union Government.
[448 E F] In the instant case the source of power for the ban is claimed to be the entrustment of power by the President under Act 258(1) through the Residential order Dated April 2, 1969.
But the terms of the entrustment do not justify the claim The entrustment of power is only 'in respect of lotteries organised by that Government '.
The expression 'that Government ' in the context of the entrustment of power to the Government of Maharashtra can only mean the Government of Maharashtra and no other.
[447 B C] L.B. Paradise Lottery Centre vs State, AIR 1975 AP 50 Shri Indravadan Chaman Lal Thacker vs State of Gujarat, S.C.A. 1309/70 approved.
442 Komal Agency vs State, AIR 1971 Bombay 332 and H.G. Jain vs State of Tamilnadu, AIR 1973 Madras 402; over ruled.
| 4741.txt |
ivil Appeal No. 1408 of 1966.
Appeal by special leave from the AWard dated May 19, 1965 February 23, 1966 of the Addl.
Industrial Tribunal, Delhi in Industrial Dispute No. 109 of 1965.
H.R. Gokhale, G.L. Sanghi and K.P. Gupta for the appellant.
Urmila Kapur and Bhajan Ramrakhiani, for the respondents.
The Judgment of the Court was delivered by Shah, J.
By order February 24, 1965 the Chief Commissioner of Delhi referred for adjudication, industrial disputes between the appellant company and its workmen relating to dearness allowance and introduction of a scheme of gratuity for the benefit of the workmen.
The Industrial Tribunal, Delhi framed the following "gratuity scheme": (1) On death or retirement on One months wages for each superannuation or on becoming Year of service of part mentally or physically unfit there of in excess of six for further service.
subject to a maximum of 15 months 's wages,In case of death of Employee the gratuity shall be payable to his nominee or if there is no nominee to his legal heirs (2)On termination after five 15 days for each year of se years 'service for any cause rvice or part there of in whatsoever except by way of exces of six months subject retrenchment or resignation to a maximum of 15 months resignation.
subject wages (3)On resignation after 10 years of service.
15 days wages for each year of service or part thereof in excess of six months to a maximum of 15 months wages Provided that if termination is for any misconduct causing financial loss to the company, the amount of loss shall be deducted from the gratuity payable.
The word 'wages ' in this Scheme shall mean the total pay packet of the workman including dearness which he was last drawing.
" The Tribunal also directed that "all workmen who were appointed in 1960 or earlier should get dearness allowance at Rs. 3 for every ten point rise in the cost of Consumer Price Index base 1960 over and above their existing wages with effect from 624 1st January, 1965.
In case of workmen appointed after 1960, the consumer price index base 1960 on the date of his appointment shall be found out and he shall be given Rs. 3 as dearness for every ten point rise in cost of Consumer Price index base 1960 above it with effect from 1st January, 1965 or such later date on which the limit of 10 point rise in cost of Consumer Price Index base is crossed.
" The Tribunal also directed that dearness allowance will not be enhanced till the limit of ten points be "crossed", and that dearness allowance once granted will not be reduced till the Consumer Price Index falls by more than 10 points.
The Company has appealed to this Court with special leave.
In the view of the Tribunal, the financial position of the company "is very sound" and that it has "financial capacity and, stability to bear the additional burden of dearness allowance and of the gratuity scheme." In reaching that conclusion the Tribunal relied upon a news item published in the newspapers that 2000 Russian Tractors were being immediately imported by the Company even though the agency of the Company was being terminated.
In relying upon newspaper reports the Tribunal may have erred.
But the conclusion of the Tribunal is rounded upon a review of several other circumstances.
It is true that one of the primary lines of business of the company was of selling tractors as agents of Russian manufacturers.
That agency was in danger of being terminated because the State Trading Corporation had arranged to take over the agency.
But the balance sheets of the company show that the agency was only one of the many lines of business and the closure of the agency of the tractor manufacturers was not likely to affect the financial structure of the Company seriously.
The Tribunal has on appreciation of evidence come to the conclusion that the financial position of the company was sound and assuming that the Tribunal is governed by the strict rules prescribed by the Evidence Act, sitting in appeal with special leave we will not be justified in interfering with the finding of the Tribunal even if it be open to the criticism that a part of the evidence relied upon is not in law relevant.
The company had on its roll 244 workmen out of whom 118 entered employment after 1960.
The company has been paying to its workmen wages consisting of two components basic wages and 50 per cent of the basic wages as dearness allowance.
Payment of wages is made in this form to all workmen whether their employment commenced before the year 1960 or thereafter.
It is true that before 1960 the company used to make a consolidated payment without specifying any amount of basic salary or dearness allowance.
Since 1960 in every appointment letter it was expressly recited that the employee v,iII get a consolidated salary consisting of 2/3rd of the consolidated salary as basic wages and 625 the balance as dearness allowance.
The company has produced before the Tribunal 118 such letters of appointment in respect of all employees employed after the year 1960.
In respect of the employees appointed prior to the year 1960 in the salary register basic salary and dearness allowance was separately entered though at the time of appointment of employees there was no allocation as basic wages and dearness allowance.
There is no dispute that since the year 1960 there has been a rise in the cost of living.
The Consumer Price Index for Industrial Workers which was 100 in 1960, had risen to more than 130 in 1965.
The management of the company granted dearness allowance to employees in other concerns under its management even though those other concerns were not financially very sound.
No serious argument has been advanced before us that the rise in dearness allowance is not Justified.
The only ground of complaint is that by relating the dearness allowance to the total wage packet the workmen are given a: rise both in the dearness allowance and in the basic wage The Tribunal has awarded dearness allowance at the flat rate of Rs. 3 for every 10 point rise in the cost of Consumer Price Index.
The rise is not related to the quantum of basic wage or consolidated wage.
It is a flat uniform rate applicable to every workman.
The Tribunal was of the view that the allocation between the basic wage and the dearness allowance was "not fair", but for the purpose of the present reference, the question is academic because dearness allowance is not related to the quantum of salary that the workmen receive.
The argument that the rise will operate to give to the workmen besides the additional dearness allowance, a percentage increase in dearness allowance already paid as part of the consolidated wage cannot be accepted.
We do not therefore see any reason to interfere with the order passed by "the Tribunal with regard to the dearness allowance at the rate of Rs. 3 for every 10 point rise in the Consumer Price Index.
" Gratuity payable to a workman on termination of employment is to be computed on the total wage packet of the workman including dearness allowance which he has last drawn.
This order makes a departure from the normal rule which is adopted in industrial awards.
In M/s. British Paints (India) Ltd. vs Its Workmen(1) this Court while introducing a gratuity scheme for the first time in the concern directed that the amount of gratuity shall be related to the basic wage or salary and not to the consolidated wage including dearness allowance.
A similar order was made in May and Baker (India) Ltd. vs Their Workmen(2).
It is true (1) ; (2) [1961] II L.L 626 that in British India Corporation vs The Workmen(1), an award made by the Tribunal fixing the quantum of gratuity on gross salary i.e., basic wage plus dearness allowance was upheld by this Court.
The Court affirmed that the usual pattern in fixing the gratuity is to relate it to the basic wage, but refused to interfere with the order because the. practice in that concern was to fix gratuity on the consolidated wage.
similarly in Hindustan Antibiotics Ltd vs their work men(2), the Tribunal directed the employer to pay gratuity at the rate of one half of wages for each month including dearness allowance but excluding house rent and all other allowances for each completed year of service subject to a maximum of wages for ten months.
In rejecting the claim of the employers for relating gratuity to the basic wage, this Court observed: "If the industry is a flourishing one, we do no see any reason why the labour shall not have the benefit of both the schemes i.e. the employees provident fund and the gratuity scheme.
Gratuity is an additional form of relief for the workmen to fall back upon.
If the industry can bear the burden, there is no reason why he shall not be entitled to both the retirement benefits.
The Tribunal considered all the relevant circumstances: the stability of the concern, the profits made by it in the past, its future prospects and its capacity and came to the conclusion that, in the concern in question, the labour should be provided with a gratuity scheme in addition to that of a provident fund scheme.
There was no justification to disturb this conclusion.
" In The Remington Rand of India Ltd. vs The Workmen(8) this Court declined to interfere with the order of the Tribunal awarding gratuity related to the consolidated wage including dearness allowance "in view of the flourishing nature of the concern, the enormous profits it was making, the reserves it had built up as also in view of the fact that it was paying gratuity to.
executives on the basis of consolidated wages.
" In The Delhi Cloth & General Mills Co., Ltd. vs The Workmen & Ors.
(4) this Court had to consider whether gratuity payable to workmen in the textile industry in the Delhi region should be related to.
the consolidated wage.
After referring to the decisions which were brought to the notice of the Court, it was observed that: "It is not easy to extract any principle from these cases:as precedents they are conflicting .
The (1) (1965) Vol.
10 Factory Law Report, 244.
(2) [1967] I L.L.J. 114.
(3) [1968] 1 S.C.R.164.
(4) ; 627 Tribunal has failed to take into account the prevailing pattern in the textile industry all over the country .
It is a countrywide industry: and in that industry, except in one case to be presently noticed, gratuity has never been granted on the basis of consolidated wages.
" The Court after referring to the schemes framed in respect of the industries in Bombay and Ahmedabad and other industries concluded that "determination of gratuity is not based on any definite rules.
In each case it must depend upon the prosperity of the concern, needs of the workmen and the prevailing economic conditions examined in the light of the auxiliary benefits which the workmen may get on determination of employment.
" There is no clear evidence on the record, and no precedents have been brought to our notice, to justify a departure from the normal rule that the quantum of gratuity is related not to the consolidated wage packet but to the basic wage.
A departure may be made from the normal rule, if there be some strong evidence or precedent in the industry, or conduct of the employer or other exceptional circumstances to justify that course.
In the absence of such evidence, we are of the view that gratuity should be related to the basic wage and not to the consolidated wage packet.
In the present case it is found that the financial position of the Company is sound but there is no evidence that the company is "making abnormally high profits" 'nor is there any evidence that in its sister concerns or in other engineering concerns in the region there is a practice of awarding gratuity related to consolidated wages.
It was urged on behalf of the company that even though the workmen had, in the claim made by them, demanded a scheme of .
gratuity benefit at the rate of 15 days wages for each year of service in case of death or retirement on attaining the age of superannuation or on becoming mentally or physically unfit for further service,.
the Tribunal had awarded gratuity at the rate of one month 's wages for each year of service subject to a maximum of 15 months ' wages.
But the claim was made on the footing that the wages were to include dearness allowance.
When the claim is not accepted, we cannot hold the workmen bound by the multiples.
We make no modification in clause (1 ) of the scheme.
We modify the scheme in so far as it relates to the dearness allowance and direct that for the last sentence of the gratuity scheme the following shall be substituted: "The word 'wages ' in the scheme shall mean basic salary or emoluments excluding dearness 'allowance and 628 other allowances and benefits payable to the workman which he had last drawn.
" Subject to the above modification, the appeal fails and is dismissed.
There will be no order as to costs in the appeal.
Y.P. Scheme modified and appeal dismissed.
| The Industrial Tribunal on a reference of the disputes between the appellant company and its workmen framed a gratuity scheme.
The gratuity payable to a workman on termination of employment was to be computed on the total wage packet of the workman including dearness allowance which he had last drawn.
The tribunal also awarded dearness allowance at a flat uniform rate for every 10 point rise in the cost of Consumer Price Index.
The Tribunal found that the financial position of the company was sound and it had the capacity to bear the additional burden.
In appeal, this Court HELD: (i) The usual pattern in fixing gratuity is to relate it to the basic wage or salary and not to consolidated wage.
A departure may be made from the normal rule, if there by some strong evidence or precedent in the industry, or conduct of the employer or other exceptional circumstances to justify that course.
In .the absence of such evidence, gratuity should be related to the basic wage and not to the consolidated wage packet.
[627 D] In the present case it was found that the financial position of the company was sound but there was no evidence that the company was "making abnormally high profits", nor was there any evidence that in its sister concern or in other engineering concerns in the region there was a practice of awarding gratuity related to consolidated wages.
M/s. British Paints (India) Ltd. vs Its Workmen, ; , May & Baker (India.) Ltd. vs Their Workmen, [1961] II L.L.J. 94, British India Corporation vs The Workmen, (1965) Vol.
10 Factory Law Reports 244, Hindustan Antibiotics Ltd. vs Their Workmen, [1967] I. L.L.J 114, The Remington Rand of India Ltd. vs The Workmen, , and Delhi Cloth & General Mills Co. Ltd. vs The Workmen & Ors. ; , referred to.
(ii) The rise in dearness allowance was not related to the quantum of basic wage or consolidated wage; it was a flat uniform rate applicable to every workman.
Therefore, the.
rise would not operate to give the workman, besides the additional dearness allowance, a percentage increase in dearness allowance already paid as part of the consolidated wage.
[625 E F] (iii) The Tribunal, on appreciation of evidence found that the financial position of the company was sound.
Assuming that the Tribunal was governed by the strict rules prescribed by the Evidence Act, Sitting in appeal with Special Leave this Court would not be justified in interfering 623 with the finding of the Tribunal even if it be open to the criticism that a part of the evidence relied upon was not in law relevant.
[624 F]
| 2639.txt |
N: Criminal Appeal No. 317 of 1986 From the Judgment and order dated 27.2.1986 of the Patna High Court in C.W.J.C. No. 33 of 1986.
With W.P. (Criminal)No. 316 of 1986.
R.K. Garg and Miss Rani Jethmalani for the Appellant/ Petitioner. D. Goburdhan for the Respondents.
907 The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
Criminal Appeal No. 317 of 1986 arises out of the judgment and order of the High Court of Patna and the Writ Petition No. 316 is in respect of the same detenu.
Both these challenge the order of detention dated 2nd January, 1986 passed by the respondent no.1.
The District Magistrate Dhanbad in respect of the petitioner under section 3(2) of the , hereinafter called the 'Act ' on the ground that the petitioner 's activities were prejudicial to the maintenance of public order.
Several criminal cases had been filed against the petitioner between 3rd January, 1983 to 18th February, 1985.
On or about 2nd January, 1985 the order of detention was passed on an incident relating to the exchange of fire between two rival groups.
The order states the grounds as follows: 1.
On 24.12.1985, between 10 and 10.30.
A.M. the subject alongwith Ramashish Bangali, Gulam, Rambriksha armed with Rifle, gun etc.
came in Car No. BHG 9372 on Katras Coal Dump and started indiscriminate firing to kill Birendra Pratap Singh a rival of his calendestine business of coal to establish his criminal superiority in full view of the shopkeepers customers and passers by of the area.
Birendra Pratap Singh and his associates who were there also returned the firing in same manner.
As a result of this firing one innocent namely Brahamdeo Mishra was killed.
The exchange of indiscriminate firing in the main market area of Katras created great panic and alarm in the area.
The normal tempo of life was completely disturbed.
The people started running helter and skelter for their lives.
Shopkeepers put down their shutters.
Doors and windows were closed.
The vehicular traffic came to halt.
This refers to Katras P.S. Case No. 331/85 dated 24.12.85 u/s 149/307/32 IPC/27 Arms Act.
Besides the aforesaid ground the following cases are also referred hereunder as background to show the criminality of the subject.
KATRAS P.S. CASE No. 5/83 dated 3.1.83 u/s 147, 341/353/307 I.P.C.
In this case subject and his associates tried to set free 908 the trucks and driver from the police custody by force and when he failed in his attempt he threatened the police officer and CISF Personnel to do away with their lives, C.S.No. 5/83 has already been submitted in this case.
Katras P.S. Case No. 303/83 u/s 147/148/452/323 IPC.
In this case subject and his associates went to the tailoring shop of Saukat Ansari and asked him to keep his cloths ready by 9.10.83 and on his refusal, he assaulted him in presence of customers and others C.S.No.
196/83 has already been submitted in this case.
Jogta P.S. Case No. 22/84 dated 11.3.84 u/s 147/148, 307/326/353/333/324/325 I.P.C./27 Arms Act.
In this case subject and his associates opened fire on police party who went to apprehend Raghunath Singh absconder under NSA.
As a result of this indiscriminate firing by him and his associates one Police officer namely Shri R.K. Verma, received serious head injury and is still incapable to work.
Charge sheet No. 25/84 has already been submitted in this case.
Jogta P.S. Case No. 9/85 dated 18.2.85 u/s 369, 307/323/ 324/ 176/34 I.P.C./27 Arms Act.
In this case Sisir Rajan Das, who was coming in a religious procession on the eve of Shivratri and was dancing in the role of Shiva was compelled by his associates to dance before the marriage party of subject 's sister.
Sri Sisir Rajan Das, however, acceded to their request and started dancing.
When he was dancing some of the members opened fire on him as a result of which he fell down.
The subject and his associates however put his body in his car and fled away.
Neither Shri Das nor his body could be traced out till date.
909 Charge sheet No. 20/85 has already been submitted in this case.
(Emphasis supplied) 5.
Jogta P.S. Case No. 68/85 dated 1.12.85 u/s 341/34 IPC.
In this case subject threatened Sri Krishana Ballav Sahay, General Secretary, Colliery Shramik Sangh, Sijua, to do away with his life if he takes out any procession or oppose him.
It is the case of the detenu that the order of detention was made on one incident relating to exchange of fire between two rival groups.
A criminal case had been registered in relation to the said incident pursuant to which the petitioner was already in custody.
The order of detention though dated 2nd January, 1986 was served on or about 11th January, 1986.
It is the case of the appellant/petitioner that the detenu was not served with all the documents referred to and/or relied on.
The detenu was served with order of approval of the said order of detention by the Government of Bihar.
The petitioner/appellant made representation on 22nd January, 1986 and the petitioner/ appellant was informed that the said representation was rejected.
Thereafter the petitioner 's appellant 's matter was referred to the Advisory Board.
The petitioner/appellant states that he desired that he should be heard in person by the Advisory Board.
The petitioner/appellant submits that he was produced before the Advisory Board but he was not given any hearing.
By letter dated 22nd February, 1986 the petitioner/appellant was informed that the Advisory Board had confirmed the order of detention.
The petitioner/ appellant thereafter filed a writ petition in the High Court of Patna which was dismissed without any speaking order.
The grounds of challenge are all stated in the writ petition as well as special leave petition.
The petitioner/ appellant was in detention when the petitioner/appellant was served with the order of detention.
There were criminal cases against the petitioner.
There was a murder case in respect of Crime No. 331 of 1985.
In the said case investigation was in progress and the defence of the petitioner in the murder case was that he was falsely implicated and was not at all concerned with the murder.
When the order was passed, the petitioner had not surrendered but when the order was served, the petitioner had already surrendered in respect of the criminal charge against him.
At the relevant time the petitioner was undertrial in the said criminal case.
910 It is the contention of the petitioner/appellant that the order of preventive detention could only be justified against a person in detention if the detaining authority was satisfied that his release from detention was imminent and the order of detention was necessary for putting him back in jail.
The service of order of detention on the petitioner while he was in jail was futile and useless since such an order had no application under section 3(2) of the Act.
In the affidavit of the District Magistrate, the detaining authority, it has been stated that the activities of the petitioner 's brother and the petitioner have disturbed the normal tempo of life in Katras and Jogta Police Stations in Dhanbad area.
The series of offences against the detenu and the manner of their perpetuation, which have been noted before, indicate a calculated move to create panic and fear in the mind of the people.
It further appears from the affidavit f f the District Magistrate filed before the High Court of Patna that the petitioner was absconding from the very day of the issuance of the detention order.
There is a statement in the order as follows D "Subject is already in jail.
He is likely to be enlarged on bail.
Hence detention order served in jail.
" According to the District Magistrate when police pressure to apprehend him became heavy, the detenu opted to surrender before the Sub Divisional Judicial Magistrate on 10th January, 1986 in substantive case to frustrate the service of the detention order.
It has been further stated that the service of the detention order had been properly made.
Grounds were all indicated.
All the documents which formed the basis of detention were supplied to the detenu.
His representation, was duly considered and rejected.
The grounds stated that there was indiscriminate firing on 24th December, 1985 on Katras Coal Dump and the petitioner started indiscriminate firing to kill Birendra Pratap Singh a rival of his calendestine business of coal to establish the criminal superiority in full view of the shopkeepers, customers and passers by of the area.
The acts alleged created a terror and not only law and order problem but problem of public order.
In those circumstances it appears that the grounds for forming the satisfaction for the need for the detention were there, and there was rational nexus between the object of the order as contemplated by the Act and the materials on record.
The principles applicable in these types of preventive detention cases have been discussed in the decisions of Suraj Pal Sahu vs State of Maharasthra & Ors., W.P. (crl) No. 2 96/86 with SLP (crl) No. 1265/86 dt.
25.9.86 and Raj Kumar Singh vs The State of Bihar & Ors.
Crl A. 353/86 with W.P. (crl) 27/86 dt.
26.9.86.
Judged on the basis of 911 the said principles there is no ground for interference with the order of detention as passed.
It, however, appears that after the order of detention was passed and before the actual service of the order of detention, the petitioner was taken into custody.
From the affidavit of the District Magistrate it does not appear that either the prospect of immediate release of the detenu or other factors which can justify the detention of a person in detention were properly considered in the light of the principles noted in the aforesaid decision and especially in the decisions, in Rameshwar Shaw vs District Magistrate, Burdwan & Anr., ; and Ramesh Yadav vs District Magistrate Etah and others, though there was a statement to the effect that the petitioner was in jail and was likely to be enlarged on bail.
But on what consideration that opinion was expressed is not indicated especially in view of the fact that the detenu was detained in a murder charge in the background of the facts mentioned before.
His application for bail could have been opposed on cogent materials before the Court of Justice.
In this case there were grounds for the passing of the detention order but after that the detenu has surrendered for whatever reasons, therefore the order of detention though justified when it was passed but at the time of the service of the order there was no proper consideration of the fact that the detenu was in custody of that there was any real danger of his release.
Nor does it appear that before the service there was consideration of this aspect properly.
In the facts and circumstances of this case, therefore, the continued detention of the detenu under the Act is not justified.
It is well settled in our Constitutional framework that the power of directing preventive detention given to the appropriate authorities must be exercised in exceptional cases as contemplated by the various provisions of the different statutes dealing with preventive detention and should be used with great deal of circumspection.
There must be awareness of the facts necessitating preventive custody of a person for social defence.
If a man is in custody and there is no imminent possibility of his being released, the power of preventive detention should not be exercised.
In the instant case when the actual order of detention was served upon the detenu, the detenu was in jail.
There is no indication that this factor or the question that the said detenu might be released or that there was such a possibility of his release, was taken into consideration by the detaining authority properly and seriously before the service of the order.
A bald statement is merely an ipso dixit 912 of the officer.
If there were cogent materials for thinking that the detenu might be released then these should have been made apparent.
Eternal vigilance on the part of the authority charged with both law and order and public order is the price which the democracy in this country extracts from the public officials in order to protect the fundamental freedoms of our citizens.
In the affidavits on behalf of the detaining authority though there are indications that transfer of the detenu from one prison to another was considered but the need to serve the detention order while he was in custody was not properly considered by the detaining authority in the light of the relevant factors.
At least the records of the case do not indicate that.
If that is the position, then however disreputable the antecedents of a person might have been without consideration of all the aforesaid relevant factors, the detenu could not have been put into preventive custody.
Therefore, though the order of preventive detention when it was passed was not invalid and on relevant considerations, the service of the order was not on proper consideration.
It may be mentioned that in the petition it is nowhere stated that the detenu has since been released or that the prospect of his imminent release was properly and with seriousness considered by the detaining authority.
The order of detention, therefore, is set aside.
The writ petition and the appeal are allowed to the extent indicated above.
This, how ever, will not affect detenu 's detention under the criminal cases.
If, however, the detenu is released on bail in the aforesaid criminal cases, the matter of service of the detention order under the Act on the aforesaid materials may be reconsidered by the appropriate authority in accordance with the law.
There is no statement in the petition that the detenu is on bail.
There will, therefore, be no orders for release of the detenu.
M.L.A. Petition and Appeal allowed.
| The respondent passed an order of detention in respect of the appellant under section 3(2) of the , on the ground that the appellant 's activities were prejudicial to the maintenance of public order.
Several criminal cases were pending against the appellant when the aforesaid order was passed.
The appellant had already surrendered in respect of a criminal charge against him before the order was served.
He filed a writ petition in the High Court challenging the detention order, but it was dismissed without any speaking order.
Aggrieved by the order of the High Court, the appellant filed the present criminal appeal by special leave as also a writ petition challenging the aforesaid order of detention on the ground that the order of preventive detention could only be justified against a person in detention if the detaining authority was satisfied that his release from detention was imminent and the order of detention was necessary for putting him back in jail.
The service of order of detention on the appellant/ petitioner while he was in jail was futile and useless since such an order had no application under section 3(2) of the Act.
Allowing the writ petition and the appeal in part, ^ HELD: 1.
The continued detention of the detenu under the Act is not justified.
The order of detention therefore is set aside.
However, this will not affect detenu 's detention under the criminal cases.
If however, the detenu is released on bail in the criminal cases already pending against him, the matter of service of the detention order under the Act may be reconsidered by the appropriate authority in accordance with law.
[912 E F] 906 2.
In our constitutional framework, the power of directing preventive detention given to the appropriate authorities must be exercised in exceptional cases as contemplated by the various provisions of the different statutes dealing with preventive detention and should be used with great deal of circumspection.
There must be awareness of the facts necessitating preventive custody of a person for social defence.
If a man is in custody and there is no imminent possibility of his being released, the power of preventive detention should not be exercised.
[911 F G] In the instant case, when the actual order of detention was served upon the detenu the detenu was in jail.
There is no indication that this factor or the question that the said detenu might be released or that there was such a possibility of his release was taken into consideration by the detaining authority properly and seriously before the service of the order.
If there were cogent materials for thinking that the detenu might be released, then these should have been made apparent.
In the affidavits on behalf of the detaining authority though there are indications that transfer of detenu from one prison to another was considered but the need to serve the detention order while he was in custody was not properly considered by the detaining authority in the light of relevant factors.
If that is the position then however disreputable the antecedents of a person might have been, without consideration of all the aforesaid relevant factors, the detenu could not have been put into preventive custody.
Therefore, though the order of preventive detention when it was passed was not invalid, and on relevant considerations the service of the order was not on proper consideration.
The order of detention is, therefore set aside.
[911 G H; 912 A D] Rameshwar Shaw vs District Magistrate, Burdwan & Anr., ; and Ramesh Yadav vs District Magistrate Etc.
and others, , relied upon.
| 5142.txt |
Appeal No. 398 of 1956.
Appeal from the judgment and order dated March 19, 1956, of the Bombay High Court in Appeal No. 45 of 1955, arising out of the judgment and order dated March 23, 1956, of the said High Court in its Ordinary Original Civil.
Jurisdiction in Suit No. 468 of 1951.
M. C. Setalvad, Attorney General for India, N. P. Nathwani, J. B. Dadachanji, section N. Andley and Rameshwar Nath, for the appellants.
Purshottam Tricumdas, K. K. Desai and I. N. Shroff, for the respondents.
March 31.
The Judgment of the Court was delivered by 348 BHAGWATI J.
This appeal with a certificate of fitness is directed against the judgment and decree passed by the High Court,of Judicature at Bombay in appeal from its ordinary Original Civil Jurisdiction confirming, though on different grounds, the judgment and decree passed by a single Judge of that High Court in Suit No. 468 of 1951 instituted by the appellants (Original Plaintiffs) to recover from the respon dents (Original Defendants) a sum of Rs. 1,80,099 8 0 with interest and costs.
Since the year 1932 the first appellant has been a member of the East India Cotton Association Ltd., (hereinafter referred to as " the Association " ) as the sole 'proprietor of the firm of Messrs. Narrondass Manordass There in after referred to as "the member firm").
The first appellant along with other partners carried on business in partnership in Bombay inter alia as Cotton Merchants and Commission Agents in the name and style of Messrs. Narrondass Manordass, the 2nd appellant (hereinafter referred to as " the partnership firm ").
The respondents are a partnership firm and also a member of the Association.
Between September 23, 1947, and December 10, 1947, the member firm sold to the respondents 2,300 bales of Broach Vijay Fine 3/4" Navsari and/or Bardoli 7/8" Cotton for March/April 1948 Delivery.
Out of these 2,300 bales, 1,100 bales were disposed of by means of " Havalas " and in respect of the remaining 1,200 bales, there were cross contracts.
In the result when the time for " Delivery " arrived, sales in respect of 700 bales remained outstanding and the member firm was liable to give delivery of 700 bales to the respondents.
As however, the member firm failed to give delivery of the said 700 bales to the respondents, under the relevant by laws of the Association, the respondents " Invoiced Back " these 700 bales to the member firm on May 3, 1948, and as a result of this " Invoicing Back " a sum of Rs. 1,07,530 8 0 became due and payable by the member firm to the respondents and with regard to the transactions of all the 2,300 bales taken together an aggregate sum of Rs. 1,79,749 8 0 became due and payable by the 349 member firm to the respondents.
In respect of this sum of Rs. 1,79,749 8 0, the respondents sent to the member firm eight separate " Debit Notes " in respect of varying amounts and finally a consolidated debit note for Rs. 1,79,749 8 0.
It appears that the contract notes in respect of these transactions had been signed by one Ramanlal Nagindas who had been employed as a salesman in the Ready Cotton Department of the partnership firm.
The appellants contended that the said Ramanlal Nagindas had no authority to enter into the said transactions or to sign contract notes in respect thereof on behalf of the appellants and also that the said contracts were not in accordance with the by laws of the Association and they therefore denied their liability in respect of the said transactions.
The partnership firm, however, as the beneficiary under the said contracts decided to pay the amounts claimed by the respon dents without prejudice to the rights and contentions of both the parties.
On May 7, 1948, the said sum of Rs. 1,79,748 8 0 was paid by the partnership firm and was received by the respondents in terms of the letter addressed by the respondents on the said date: "The payment is made by you and accepted by us without prejudice to the rights and contentions of both the parties in respect thereof.
" A further sum of Rs. 350 being the amount of penalty for the alleged failure to tender the aforesaid 700 bales of the said contracts of Broach/Vijay March/April 1948 Delivery, was also paid by the partnership firm to the respondents on June 6, 1948, without prejudice to their aforesaid contentions.
The said Ramanlal Nagindas had entered into similar transactions with several other merchants and some of them claimed arbitration under by law 38 A of the Association.
Petitions were thereupon filed by the member firm in the High Court at Bombay being Petitions Nos.
A/51, A/52, A/55 and A/56 of 1949 under section 33 of the Indian Arbitration Act inter alia for a declaration that there existed no valid and enforceable arbitration agreement between the parties.
Mr. Justice Shah delivered judgment in the said petitions 350 on August 20, 1950, holding inter alia that the said contracts were void as being not in accordance with the by laws of the Association and allowed those petitions.
The respondents to the petitions thereupon filed petitions under article 136 of the Constitution for special leave to appeal to this Court against the said judgment of Mr. Justice Shah.
These petitions were, however, dismissed by this Court on or about April 6, 1951.
The appellants thereafter by their attorney 's letter dated May 2, 1951, called upon the respondents to return the said sum of I Is.
1,80,099 8 0 (being the aggregate of the said two sums of Rs. 1,79,749 8 0 and Rs. 350.) with interest thereon at the rate of 6 per cent.
per annum.
The respondents failed and neglected to pay to the appellants the said sum or any part thereof with the result that on May 7, 1951, the appellants filed the suit against the respondents for repayment to them of the said sum with interest and costs.
In the plaint as filed the appellants averred that the said contracts were void under the Bombay Cotton Contracts Act, 1932, as being not in accordance with the by laws of the Association inter alia in the following respects: (1) The contract notes produced by the respondents omitted to state the difference of Rs. . above or below the settlement rate of hedge contracts for the purpose of periodical settlements as required by by laws 139 and 141; and (2) no provision was made in any of the aforesaid contract notes with regard to the measurement of bales as required by the official form for delivery contracts prescribed in bylaw 80.
The respondents in their written statement contended that there was no by law which required any person to agree upon any difference above or below the settlement rate of hedge contracts for the purpose of periodical settlements and to state the same.
They further contended that the relative provisions contained in the official contract form had become obsolete as at all material times there were no hedge contracts bearing different numbers and in practice the said contracts were not put through periodical settlements.
351 They also contended that at all material times there was no by law which required any person to agree upon any specific measurements in respect of the bales agreed to be purchased inasmuch as the operation of by law 101 in regard thereto had been suspended by the Board since November 30, 1942.
After the suit reached hearing the appellants amended the plaint by averring that by reason of the said payments having been made by them and accepted by the respondents without prejudice to the rights and contentions of both the parties there was an implied agreement between them that in the event of the appellant 's establishing that they were not bound to pay the said sums to the respondents and that the respondents were not entitled to the payment thereof the respondents would repay or return the same to the appellants.
This plea was traversed by the respondents in the supplemental written statement which they filed.
The learned trial Judge followed the judgment of Mr. Justice Shah and held that the omission of the clause regarding measurement in the contract notes did not alter the character or legal effect of the contracts.
He similarly held that the omission of any reference in the contracts to the amount of difference above or below the settlement rate of hedge contracts in the last term of the contract notes rendered the contracts void.
He however was of the opinion that there was no implied agreement between the parties of the nature alleged by the appellants and that the payment made by appellants to the respondents was voluntary and therefore dismissed the appellants ' suit with costs.
The appellants preferred ail, appeal against this decision and the appellate Court dismissed the appeal and confirmed the decree passed by the learned trial Judge, though on different grounds.
The appellate Court agreed with the learned trial Judge that the omission of the term regarding measurement in the contract notes did not affect the character or legal affect of the contracts.
In regard to the omission to fill up the difference above or below the settlement rate 352 fixed for the hedge contracts in the last clause of the contract notes, however, the appellate Court was of the opinion that there was no obligation on the parties to agree to add or deduct the difference above or below the settlement rate as contended by the appellants.
If the parties did agree then the contract form provided that the agreement should be set out therein.
If, however, they did not agree then the first part of cl.
(2) of by law 141 would come into play and the settlement of the delivery contract would go through on the basis of the settlement rate of the hedge contract.
The omission to fill up the difference was thus of no consequence and did not invalidate the contracts.
The appellate Court also differed from the trial Judge on the question of the implied agreement and held that if the appellants succeeded in establishing that the respondents were not entitled to receive the payments the respondents were bound to repay the sums paid by the appellants to them.
In view, however, of the conclusion reached that the contracts were not void, the appellate Court dismissed the appeal.
The provisions of the Bombay Cotton Contracts Act, 1932 (Bom.
IV of 1932) and the by laws of the Association which fall to be considered by us may now be referred to: Section 8(1) (Bombay Cotton Contracts Act, 1932): " Save as hereinafter provided in this Act, any contract (whether either party thereto is a member of a recognized cotton association or not) which is entered into after the date on which this Act comes into operation and which is not in accordance with the by laws of any recognized cotton association shall be void.
" By law 80 of the Association: " Forward contracts between members how made: Delivery Contracts between members shall be made on the official form given in the Appendix.
Hedge contracts between members may be verbal or in writing and when in writing shall be in one or other of the forms given in the Appendix.
Whether verbal or written all contracts shall be subject to the by laws, 353 provided that in the case of Delivery Contracts By laws 149 to 163 inclusive shall not apply.
The specimen of the official contracts form in triplicate as used in 1947 48 (Vide Exhibit " D ") contained the following terms amongst others: No. Contract Note From Brokers To Messrs. . . . .
We have this day bought by your order and for your account subject to the By laws of the East India Cotton Association Ltd. From Messrs. (. ) bales of Cotton at Rs. per candy, delivered in Bombay in full pressed bales.
Measurement. tons/per 100 bales.
(For delivery contracts only).
for the purpose of periodical settlement of this contract we agree to a difference of Rs. above/below the settlement rate of hedge contract No. Remarks. Bombay. 194 No. Contract Note From Brokers To Messrs. . . . .
We have this day sold by your order and for your account subject to the By laws of the East India Cotton Association Ltd. To Messrs. (. ) bales of. Cotton. at Rs. per candy, delivered in Bombay in full pressed bales.
Measurement. tons/per 100 bales.
(For delivery contracts only).
For the purpose of periodical settlement of this contract we agree to a differ ence of Rs . above/below the settlement rate of hedge con tract No. Remarks . Bombay . 194 The contract notes which are rendered between the member firm and the respondents, however, contained no term as to measurement and so far as the last clause was concerned the blanks in regard to the difference of Rs. above or below the settlement rate of hedge contract No. were not filled in.
The relevant by laws in connection with these two terms contained in the official contract form were by law 101, and by laws 139 and 141: By law: 101.
Claims for excess measurement.
In respect of all Forward Contracts, measurement 45 354 shall approximate 13 1/2 tons per 50 bales provided that in respect of Forward Contracts, other than Hedge Contracts, the parties may agree upon any other measurement.
In all Forward Contracts, for any port the rate or rates of freight for any excess measurement over 13 1/2 tons per 50 bales shall be fixed by the Board from time to time and unless otherwise fixed the rate for such excess for all ports shall be Rs. 15 per ton in respect of each lot of 50 bales measuring more than 13 1/2 tons but not more than 14 1/2 tons and in respect of each lot of 50 bales measuring more than 14 1/2 tons Rs. 35 per ton for any excess over 13 1/2 tons.
No allowance for excess measurement shall be payable by the seller: (a) unless the buyer has given to the seller reasonable notice fixing an appointment for measurement, or (b) unless the buyer submits a claim to the seller within 6 weeks after the complete lot has been weighed over.
The Board shall have power from time to time and at any time to suspend the operation of this Bylaw as regards measurements.
By law: 139. "Settlement Days.
All Delivery Contracts other than those excepted under By laws 136 and Hedge Contracts shall be subject to periodical settlements through the Clearing House and in every case the parties to the contract must be members of the Association.
Settlements of differences due on open contracts and of other liabilities to be settled through the Clearing House shall be made once weekly on days which shall be fixed by the Board and notified in a calendar to be published annually.
The day on which Balance Sheets are required to be submitted to the Clearing House shall be known as Settlement Day.
" By law: 141.
Settlement rates. (1) For the purpose of these settlements, settlement prices for all positions of the Hedge Contract shall be fixed by the Board on or about the third working day immediately preceding Settlement 355 Day.
The prices so fixed shall be I P. M. prices on the day of fixation.
(2)In the case of Delivery Contracts, the settlement price of the Hedge Contract shall be the basis for the periodical settlement.
Such allowances as shall be agreed upon by the parties in their contract to cover any difference, between the cotton contracted for and the cotton which is the basis of the Hedge Contract shall be added to or deducted from the said settlement price.
In the case of contracts for descriptions which are not tenderable against the Hedge Contract the parties may either agree in their contract upon an allowance above or below the Hedge Contract for the purpose of their periodical settlement or may apply to the Board to fix settlement rates.
. . . . . . . . . . .
The only question for our determination in this appeal is whether the contracts between the parties were not in accordance with the by laws of the Association and therefore void.
There is no doubt that all the contracts were subject to the by laws of the Association.
The question still remains whether they were in accordance with the by laws because if they were not in accordance with those by laws they would be void.
The expression " not in accordance with " has been the subject of judicial interpretation in Radhakisson Gopikisson vs Balmukund Ramchandra (1).
Their Lordships of the Privy Council there held that the form prescribed was not a stereotyped one and that literal compliance with it was not essential.
The only thing required was that the contract notes must contain all the terms and conditions set out in the form in order to comply with it.
Their Lordships were of the opinion that substantial compliance with the form would be enough and if such sufficient compliance with the by laws was found in a particular case that would save the contracts from being declared void as not being in accordance with the by laws.
It was, however, urged on behalf of the appellants that by law 80 prescribes the form in which the contracts were to be entered into and all the terms and (1) (1932) L.R. 60 I.A. 63.
356 conditions incorporated in the official contract form had to be strictly complied with, that the omission of the term as to measurement as also the omission to fill in the blanks in regard to difference of Rs. above or below the settlement rate of hedge contract No. . . . were such departures from the form prescribed as would render the contracts void because it could not be then said that there was sufficient compliance with the statutory form.
Reliance was placed in support of this contention on Burchell vs Thompson (1), Ex parte Stanford, In re Barber (2), Thomas vs Kelly (3) and Parsons vs Brand & Cols vs Dickson (4).
The principle emerging from these decisions was enunciated to be that if the document executed by and between the parties departed from a characteristic part of the form prescribed or made a difference in the legal effect of the instrument, it would not be in accordance with the form and would therefore be void.
It would all depend upon the materiality of the particular term which is incorporated in the form.
If the non compliance with the requirements of the form were such as to make the document something else by reason of a characteristic part of the form not being followed or the document would lose some legal effect which it would have had if the proper words had been inserted therein, it cannot be said that there is sub stantial compliance with the statutory form.
Considering the term as to measurement in this light, it appears that the same had its basis in the requirements of the trade in regard to the pressing of the bales.
The bales which were the subject matter of these forward delivery contracts were either meant for transport within the country or export outside the country.
The bales were to be fully pressed so as to occupy the minimum space either in transport by rail or by steamer and initially they were bound with hoops.
The baling hoops were however difficult to obtain from Japan and therefore the bales came to be bound with ropes made of cotton, jute coir and hemp.
The bales thus bound otherwise than with hoops (1) (3) (4) , 357 occupied more space and difficulties were encountered by the merchants because of their being obliged to pay extra insurance and freight charges in respect of such bales.
Not only did the railways charge more for the transport of such bales, the shipping companies also did so and the insurance companies charged higher rates for insurance because the bales were not pressed in a manner which would minimise the risks of insurance.
All these factors brought about a situation creating difficulties between the purchasers and the sellers of cotton and these difficulties had to be resolved by the Association.
by law 101 had proceeded on the basis of cotton bales being bound with hoops, the approximate measurement in tons as agreed and understood in the trade being, 13 1/2 tons per 50 bales.
That was the standard measurement.
It was open however to the parties to agree upon any other measurement.
If any measurement other than the standard measurement was agreed to, an adjustment had to be made by reason of such difference in measurement and by law 101 provided that certain amount therein specified had got to be paid by the seller to the purchaser as and by way of allowance for such excess measurement.
Towards October, 1942, the situation in regard to the baling hoops deteriorated so much that it was thought desirable that bales bound with ropes should be permitted to be tendered under the by laws of the Association and that the operation of by law 101 as regards measurements should be suspended.
There were heavy fluctuations in the prices of the materials permitted to be used, and it was therefore thought advisable to fix certain allowances from time to time or before the beginning of the delivery periods taking into consideration the extra insurance and freight charges, if any, in respect of such bales.
A sub committee appointed by the Association made a report in this behalf on October 29, 1942, and on November 20 1942, the Board of Directors of the Association passed a resolution approving the recommendations of the subcommittee with this modification that the allowance to be prescribed in the price of bales bound with ropes 358 as against the price of bales bound with hoops as provided in by laws 96 and 119, be fixed before the commencement of the season and not be altered from time to time.
The Board of Directors issued a notice on November 30, 1942, suspending the operation of bylaw 101 as regards the measurement until further notice.
The position as it obtained at the time when the suit contracts were entered into was that by law 101 as regards measurement had been suspended and there was no necessity so far as the by laws went to make any mention in the contracts in regard to the same.
If the claim for excess measurement had not to be entertained, it was not at all necessary to mention the measurement in the contract forms and there would be substantial compliance with the contract form, even though no measurement was mentioned therein, the very basis for the mention of such measurement having disappeared.
It was, however, urged on behalf of the appellants that measurement was an essential part of the description of the goods sold and the suspension of by law 101 made it all the more necessary that the measurement should be specified in the contract form itself.
The standard measurement which had been mentioned in by law 101 had disappeared and it would therefore be necessary to mention in the contract form what was the measurement on the basis of which the price of the contract had been fixed by and between the parties.
If the bales actually tendered measured more in weight than what was actually agreed upon, the purchaser would be entitled to obtain from the seller an allowance for such excess measurement and that was the reason why it was necessary after the suspension of by law 101 to mention the agreed measurement between the parties.
This argument however ignores the fact that simultaneously with the suspension of the operation of the by law 101, by laws 96 and 119 which referred to forward and hedge contracts respectively were altered and provision was made therein to incorporate measures consequent upon the tender of bales bound with ropes 359 in place of bales bound with hoops.
The consequences of such tenders were worked out in the by laws as thus amended and allowances in the price of bales bound with ropes as against the price of bales bound with hoops were also provided for.
These allowances were in accordance with the resolution of the Board dated November 20, 1942, to be fixed before the commencement of the season and if such allowances were provided for there was nothing further to be done in regard to the difference in measurement, if any.
If the situation which obtained after November 20, 1942, provided for a tender of bales bound with ropes instead of bales bound with hoops in fulfilment of the contracts entered into between the parties, that was well known to all the members of the Association and it was open to them while fixing the prices themselves to take count of the extra charges for insurance and freight which would be payable by the purchaser in the event of bales bound with ropes being tendered instead of bales bound with hoops.
It, therefore, follows that the omission to mention the measurements in the contract notes did not render the contracts not in accordance with the by laws.
There was no such by law in operation at the time and even otherwise there was no need whatever to incorporate in the contract notes any term as to measurement.
It could not therefore be said that there was any departure from an essential or a characteristic part of the contract form or that the legal effect of the contracts was changed so as to invalidate the same.
When we come to the term in regard to the differences of Rs. . . above or below the settlement rate of hedge contract No. . . we find that that had reference to periodical settlements of contracts through the clearing house.
In accordance with bylaw 139 all delivery contracts other than those excepted under by law 136 and hedge contracts were subject to periodical settlements through the Clearing House which settlements had to be made once weekly on days fixed by the Board.
If the contracts had got to go through the clearing house in this manner it was necessary also that settlement rates should be fixed 360 and by law 141(1) provided that settlement prices for all positions of the hedge contract should be fixed by the Board.
The settlement prices thus fixed were to be taken as the basis for the periodical settlement of delivery contracts and it was further provided in bylaw 141(2) that such allowance as shall be agreed upon by the parties in their contracts to cover any difference between the cotton contracted for and the cotton which was the basis of the hedge contract shall be added to or deducted from the said settlement prices.
This was the basis of the provision contained in the relevant term of the contract form.
In the case of contracts for descriptions not renderable against the hedge contract it was open to the parties either to agree upon an allowance above or below the hedge contract or they would make an application to the Board to fix the settlement rates.
Whenever there was an agreement in this behalf the parties were to mention the difference thus agreed into the contract form and the periodical settlements of delivery contracts were to be effected on that basis.
The question arises as to whether the parties were bound to enter into any such agreement at the time they entered into the contracts.
It was contended on behalf of the appellants that such an agreement was necessary because it would otherwise involve the parties into payment of large sums of money on the settlement day next after the day of the contract.
The hedge contracts appertained to cotton of the lowest average and if the quality of cotton which was the subject matter of the contract between the parties was, as was usual, of a higher variety, it would involve the payment of large amounts by way of differences on the next settlement day, which certainly would not be within the contemplation of the contracting parties.
If that was so, the parties would agree to a difference between the rates of the cotton contracted for and the cotton which was the basis of the hedge contract and this difference above or below would serve to minimize the incidence of such payment on the next settlement day.
It was, therefore, submitted that it was incumbent on the parties when entering into a contract to 361 fill in this term as to differences.
If they agreed upon such differences the blank had to be filled in accordingly; but even though they did not agree upon any such differences, it was necessary for them to mention in the contract form that the difference above or below the rate of the hedge contract agreed upon by them was nil.
It was contended on the other hand on behalf of the respondent that there was no obligation on the parties entering into the contract to fill in that term.
If they agreed upon the difference all well and good but if they did not agree upon the difference, the first part of by law 141(2) stepped in and the consequences had to be worked out as if there was no agreement and the differences had to be paid on the settlement day next ensuing on the basis of the difference between the contract rates and rates of hedge contract, even though it may involve a payment of a substantial amount all at once.
According to this submission, in the case of contracts for descriptions tenderable againt the hedge contract two positions arose: viz., (1) parties to the contract may not agree to any difference in which case it would not be necessary to fill in that term in the contract note or (2) they may agree to the difference in which event the difference would be mentioned in the contract note.
In the case of contracts for descriptions which were not renderable against the hedge contract three positions would arise, viz., (1) the parties may not agree upon any difference in which event it would not be necessary to fill in the term as to difference in the contract notes; (2) the parties may agree upon such difference and that would have to be mentioned in the contract notes or (3) the parties could apply to the Board to fix the settlement rates.
It appears that the contention urged on behalf of the appellants would be more in consonance with business idea, , because no business man would think of immediately forking out a large sum of money on the next ensuing settlement day.
It would be tantamount to paying the price of the goods or a substantial part thereof long before the due date of delivery ever 46 362 arrived.
While recognizing the necessity of arriving at an agreement in this manner we are, however, not impressed with the argument that in the event of no such agreement as to the difference having been reached it would even so be necessary to mention in the contract note that the difference agreed upon was nil.
When the parties entered into the transactions all the terms and conditions of the contract would certainly be negotiated and agreed upon between them.
It would be open to them, in view of the by laws above referred to, to agree upon the difference above or below the settlement rate of hedge contracts for the purpose of facilitating the settlements through the clearing house.
But if no such difference above or below the settlement rate of hedge contracts were agreed upon between the parties, it would not necessarily follow that the word nil had got to be mentioned in the contract notes.
The very fact that no difference above or below the settlement rate of hedge contracts was agreed upon in the manner contemplated would be enough to spell out an agreement that no such difference was to be computed in arriving at the settlement rates in respect of these contracts.
If that was the true position it would be Superfluous to write the word " nil " as contended for by the appellants and the consequences, of such non mention would be the same as if the difference agreed upon was nil.
By law 141 (2) could then be worked out without any difficulty and the settlement rates in the case of delivery contracts would be fixed on the basis of the settlement price of the hedge contracts taking into account the facts that there was either no difference which was agreed upon or that the difference agreed upon was a specific one which was mentioned in the contract notes.
It was however pointed out on behalf of the respondents that the official contract form contained the expression " above/below the settlement rate of hedge contract No. .
Even though this may have been in consonance with the position as it obtained when the hedge contracts of five different varieties were in vogue, involving the specification of hedge contracts as Nos.
I to 5, that position substantially chanced 363 when hedge contracts of these 5 varieties were abolished and in their place and stead was substitute, a hedge contract called the 1.
The five varieties of hedge contracts were also for different deliveries which did not necessarily coincide one with the other and these contracts were not on the market all at one time, With the result that it would be necessary if the requirements of the contract form had to be complied with to fill in the blank not only by describing the hedge contract number, whether it was one or the other of the numbers I to 5 but also the particular hedge contract of a particular delivery.
Even if it may be assumed that the blank to be filled in in this behalf required a mention not only of the hedge contract No but also of a particular delivery thereof, all that went by the board when the I. C. C. was substituted in place of the hedge contract Nos.
I to 5.
The old contract form which had been prescribed by by law 80 was continued without any change being effected therein by virtue of such substitution and if at all the parties to a contract were to fulfill the requirements of the contract form, it would be necessary for them to strike out the words " hedge contract No and put in their place and stead the word " 1. C. C. " Even there the 1.
C. C. appertained to different deliveries which were not on the market all at one time.
The months of delivery were nowhere required to be filled in in the contract form, whether the contract form required the parties to have regard to the hedge contract No or the I. C. C., and to that extent, it can be said that the parties were expected to rely upon their commonsense and the practice of the trade as to what particular delivery was contemplated when the contracts were entered into between them.
All this goes to show that the parties to the contract were not tied down to a literal compliance with the terms contained in the official contract form but were required to act according to the position as it then obtained and if they substantially complied with the requirements of the contract form that was enough.
If the hedge contract No was not in vogue in the 364 market they need not conform to that provision in the official contract form but could make the necessary changes in accordance with the type of hedge contract which was then in vogue.
Similarly, they would have to record in the contract form the agreement reached between them in regard to the difference of Rs. above or below the settlement rate of the hedge contract No. if they came to a particular agreement in that behalf.
if, however, no such agreement was reached between the parties and here the effect of no agreement having been arrived at in regard to such difference would be the same as if the agreement between them was that the difference was to be nil no mention need be made of such difference in the contract form.
The result of either of the two latter positions would be that if the contracts were to pass through the Clearing House the settlement rates would be determined on the basis of the settlement price of the hedge contract fixed by the Board for those various settlements and the parties would have to pay to or receive from one another the differences calculated on the difference between the contract rates and those settlement rates.
The whole of this discussion, however, is academic by reason of the fact that in practice delivery contracts were not put through any periodical settlements and at all material times the operation of this term in the official contract form ' had become obsolete.
This position was not disputed on behalf of the appellants and their counsel stated before the Court that he did not wish to dispute the fact that delivery contracts were at no time submitted to periodical settle ments in the Association.
The effect of this procedure being adopted in the Association was tacitly to suspend the operation of these by laws as to periodical settlements in respect of delivery contracts and it would be superfluous, nay absurd, on the part of the business people entering into contracts subject to the by laws of the Association to incorporate in the contract form provisions which had become obsolete.
If the contracts were not to pass through the periodical settlements in the Clearing House no question would 365 ever arise of settlement rates requiring to be fixed, much less of the basis of such settlement rates being determined, or of the difference of Rs. above or below the settlement rate of hedge contracts being ever agreed upon between the parties.
If under those circumstances, the parties did not fill in those blanks which required to be filled in in the official contract form on the basis of by laws 139 and 141 being in operation, it could not be said that they had failed to substantially comply with the requirements of the official contract form.
The official contract form had to be filled in so far as it was practicable.
The operation of these by laws was in effect suspended and by the tacit understanding of the trade they were to be treated as if they did not exist.
It could not therefore be urged that the parties were put to the necessity of agreeing to such differences, if having regard to the circumstances that prevailed, it was impracticable to do so and if these blanks were not filled in as originally contemplated the contract notes could certainly not be impeached as being not in accordance with the by laws of the Association.
It was, however, urged on behalf of the appellants that if the parties to the contracts intended not to comply with the requirements of by laws 139 and 141 that would by itself vitiate the contracts because in that event the contracts would certainly be not in accordance with the by laws of the Association.
The parties in that event intended to perpetrate an illegality at the very inception of the contracts and the contracts were therefore void.
There is considerable force in this argument but we do not feel called upon to consider the same in view of the fact that that was not the ground on which the validity of the suit contract was challenged in the plaint.
We are therefore of the opinion that the omission to fill in those blanks in the contract notes did not spell any departure from an essential or a characteristic part of the contract form nor was the legal effect of the contracts in any manner changed thereby rendering the contracts void within the meaning of section 8 of the Bombay Cotton Contracts Act, 1932.
366 Both these grounds of attack against the validity of the contracts in question therefore fail and we are of the opinion that the contracts entered into between the appellant, , and the respondents were not void as alleged.
The appellants were therefore not entitled to recover from the respondents the said sum of Rs. 1,80,099 8 0 or any part thereof as alleged or at all and we are of the opinion that the appellate Court was right in rejecting the appellants ' claim.
We cannot part with this appeal without observing that the whole difficulty has been created by reason of the Association not having made the necessary alterations in the contract form in accordance, with the situation as it obtained.
from time to time.
When by law 101 was suspended in operation the Association ought to have deleted the term as to measurement from the contract form.
When the by laws 139 and 141 were virtually abrogated by reason of the delivery contracts not being subjected to periodical settlements in the Clearing House, the Association ought to have similarly deleted the last clause from the official contract form which required the difference of Rs above or below the settlement rates of hedge contract No to be filled in by the parties.
Equally untenable west he retention of the expression " Hedge Contract No when the five different varies of hedge contracts were abolished and one hedge contract named 1.
C. C. was substituted therefor.
We fully endorse the observations made by the appellate Court in the course of its judgment: " We have had occasion to point out in the past how badly the by laws of the East India Cotton Association are drafted and how clumsily the forms also settled, and the present form is an illustration of what we have had occasion to say in the past.
" The manner in which the official contract form which had been settled when the by laws of the Association came first to be promulgated has been retained in its pristine glory in spite of the various changes made in the operation of the by laws and the practice of the trade only enhances the difficulties of the parties and enables the parties who are so minded to raise all 367 sorts of disputes tenable or otherwise in order to avoid their liability in respect of the transactions effected by them in the Association.
It may be hoped that the Association will take effective steps to bring the official contract form in conformity with the bylaw,% in operation from time to time and the practice of the trade prevailing in the Association.
The result therefore is that this appeal fails and must stand dismissed with costs throughout.
Appeal dismissed.
| Sub section (1) of section 8 of the Bombay Cotton Contracts Act, 1932, provides: " Save as hereinafter provided in this Act, any contract . which is entered into after the date on which this Act comes into operation and which is not in accordance with the by laws of any recognized cotton association shall be void ".
In respect of the transactions in cotton entered into between the parties, the appellants had to pay the respondents a sum of money for failure to give delivery of the cotton bales under the 347 contracts, but the payment was made without prejudice to the rights and contentions of the parties.
Subsequently, the appellants sued the respondents for recovery of the amount on the footing that the contracts were void under section 8(1) of the Bombay Cotton Contracts Act, 1932, as being not in accordance with the by laws of the East India Cotton Association Ltd., of which both the parties were members, in as much as the contract notes did not company with the terms contained in the official contract form provided by the by laws of Association, by reason of the omission to fill in the blanks relating to measurements and difference above or below the settlement rate.
The respondents contended that the relevant provisions contained in the official contract form bad either become obsolete or were suspended at all material times.
The evidence showed that according to the practice of the trade the parties to the contract were not tied down to a literal compliance with the terms contained in the official contract form but were required to act according to the position as it then obtained and that it was sufficient if they substantially complied with the requirements of the contract form : Held, that in the circumstances of the case the official contract form had to be filled in so far as it was practicable and that the omission to fill in the blanks in the contract notes did not spell any departure from an essential or a characteristic part of the contract form; consequently, the legal effect of the contracts was not in any manner changed so as to render the contracts void as not being in accordance with the by laws of the Association, within the meaning of section 8 of the Bombay Cotton Contracts Act, 1932.
Radhakisson Gopikisson vs Balmukund Ramchandra, (1932) L. R. 60 I. A. 63, relied on.
| 593.txt |
Appeal No. 1122 of1966.
Appeal from the judgment and decree dated January 29, 1964 of the Calcutta High Court in Appeal from original order No. 28 of 1960.
B. P. Maheshwari and Sobhag Mal Jain, for the appellant.
Niren De, Attorney General, N. section Bindra and section P. Nayar, for the respondent.
The Judgment of the Court was delivered by Vaidialingam, J.
This appeal, by the plaintiffs appellants, on certificate granted by the Calcutta High Court, is directed against the judgment and decree of the Division Bench of that Court, dated January 29, 1964 in Appeal from Original Order No. 28 of 1960, affirming the judgment and decree, dated July 16, 1959 of the learned Single Judge in Suit No. 2745 of 1947.
The circumstances leading up to the institution of the said suit may be stated.
The appellants, who were dealing also in the purchase of new and second hand machinery, on coming to know from an adver tisement in a Daily that the defendant respondent was offering for sale aero scrap, addressed a letter, dated November 6, 1946 to the respondent intimating their desire to purchase the materials advertised for sale, and stating that one of their representatives 129 would be contacting them shortly.
Obviously the parties must have met and decided about the purchase, as is seen from the letter, dated November 18, 1946 addressed by the General Manager of the respondent, to the appellants.
That letter refers to a discussion that the parties had on that day and the respondents confirmed having sold to the appellants the entire lot of aero scrap lying at Panagarh, on the terms and conditions mentioned in the letter.
The material was stated to be in Dump No. 1 near the flight line at Panagarh and the approximate quantity was 4000 tons of aero scrap, more or less.
The letter refers to the appel lants having agreed to pay Rs. 10 lakhs as price of the materials in the said Dump No. 1, against which the receipt, by cheque, of a sum of Rs. 2,50,000 was acknowledged by the respondent.
There is a further reference to the fact that the appellants had agreed to pay the balance of Rs. 7,50,000 that day itself.
The letter also refers to the fact that the price mentioned does not include sales tax to be paid by the appellants and to certain other matters, which are not relevant for the purpose of the appeal.
The letter further says : "The company 's terms of business apply to this contract and a copy of this is enclosed herewith".
We shall refer to the relevant clauses in the company 's terms of business, referred to in this letter, a little later.
It is enough to note, at this stage that those terms of business have been made part of the terms and conditions governing the contract.
On the same day, the appellants sent a reply to the respondent, acknowledging the letter.
The appellants said that they noted that the respondent wants to sell the aero scrap as it is and that it wanted the appellants to pay the full value, viz., the balance of Rs. 7,50,000 at once.
The appellants confirmed the arrangement contained in the respondent 's letter; but regarding payment, the appellants said that they agree to pay the balance amount in two instalments viz., Rs. 2,50,000 on or before November 22, 1946 and the balance of Rs. 5,00,000 on or before December 14, 1946.
,They also further stated that they shall commence taking delivery after making full payment.
The, respondent by its letter dated November 20, 1946 acknowledged the receipt of the appellants ' letter dated November 18, 1946 together with the modifications contained therein.
But the respondent emphasised that the other terms and conditions will be as mentioned in its letter of November 18, 1946.
On November 22, 1946, the appellants sent a communication, purporting to be in continuation of their letter dated November 18, 1946.
In this letter they state that the transaction has been closed without inspecting the materials, merely on the assurance of the respondent that the quantity of aero scrap was about 4,100 tons.
The appellants further state that they have since obtained 130 information that the quantity stated to be available is not on the spot and therefore they cannot do the business.
Under the circumstances, they request the respondent to treat their letter, dated November 18, 1946 as cancelled and to return the sum of Rs. 2,50,000 already paid by them.
The respondent sent several letters to the appellants asking them to pay the balance amount and take delivery of the goods; but the appellants refused to pay any further amount to the respondent.
The respondent ultimately forfeited the entire sum of Rs. 2,50,000 which, according to it, was earnest money and then cancelled the contract.
Now that we have referred to the material correspondence that took place between the parties as well as the final action of the defendant of forfeiting the amount, it is now necessary to advert to certain clauses in the Company 's terms of business which, as mentioned earlier, have been made by the defendant 's letter dated November 18, 1946 as part of the terms and conditions of the contract.
We have also referred to the fact that the appellants in their reply dated November 18, 1946 have accepted the same.
The respondent 's terms of business contain various clauses, of which clauses 9 and 10 are relevant for our purpose.
They are "9.
Deposits The buyer s hall deposit with the Company 25% of the total value of the stores at the time of placing the order.
The deposit shall remain with the Company as earnest money and shall be adjusted in the final bills, no interest shall be payable to the buyer by the Company on such amounts held as earnest money.
Time and method of payment.
(a) The buyer shall, before actual delivery is taken or the stores despatched under conditions, pay the full value of the stores for which his offer has been accepted less the deposit as hereinbefore contained after which a Shipping Ticket will be issued by the Company in the name of the buyer.
The buyer shall sign his copy of the Shipping Ticket before the same is presented to the Depot concerned for taking delivery of the stores concerned.
(b) If the buyer shall make default in making payment for the stores in accordance with the provisions of this contract the.
Company may without prejudice to its rights under Clause 11 thereof or other remedies in law 131 forfeit unconditionally the earnest money paid by the buyer and cancel the contract by notice in writing to the buyer and resell the stores at such time and in such manner as the Company thinks best and recover from the buyer any loss incurred on such resale.
The Company shall, in addition be entitled to recover from the buyer any cost of storage, warehousing or removal of the stores, from one place to another and any expenses in connection with such a resale or attempted resale thereof.
Profit, if any, on resale as aforesaid, shall belong to the Company.
" From the above clauses, it will be seen that a buyer has to deposit with the company 25% of the total value and that deposit is to remain with the company as earnest money to be adjusted in the final bills.
The buyer is bound to pay the full value less the deposit, ' before taking delivery of the stores.
In case of default by the buyer, the company is entitled to forfeit unconditionally the earnest money paid by a buyer and cancel the contract.
The appellants instituted suit No. 2745 of 1947 in the Original Side of the Calcutta High Court against the respondents for recovery of the sum of Rs. 2,50,000 together With interest.
The plaintiffs pleaded that there had been no concluded agreement entered into between the parties and even when the matter was in the stage of proposal and counter proposal, the plaintiffs had withdrawn from the negotiations.
They alleged that even if there was a concluded contract, the same was vitiated by the false and an true representations made by the respondents regarding the quantity of scrap material available and the plaintiffs had been induced to enter into the agreement on such false representations.
Hence the plaintiffs were entitled to avoid the contract and they have avoided the same.
They pleaded that the respondents were never ready and willing to perform their part of the contract.
Even on the assumption that the plaintiffs had wrongfully repudiated the contract, such repudiation was accepted by the defendant by putting an end to the contract.
The respondents were not entitled to forfeit the sum of Rs. 2,50,000 as the latter cannot take advantage of their own wrongful conduct.
In any event, the sum of Rs. 2,50,000 represents money had and received by the defendants to and for the use of the plaintiffs.
The plaintiffs, in consequence, prayed for a decree directing the defendants to refund the sum of Rs. 2,50,000 together with interest at 6% from November 18, 1946.
The defendants contested the claim of the plaintiffs.
They pleaded that a concluded contract has been entered into between 132 the parties as per two letters dated November 18 and November 20, 1946.
The appellants had agreed to buy the lot of scraps lying in Dump No. 1 for Rs. 10,00,000 of which Rs. 2,50,000 was paid as deposit.
The defendants had agreed to the balance amount being paid in instalments as asked for by the plaintiffs in their letter of November 18, 1946.
The defendants further pleaded that there has been no misrepresentation made by them but the plaintiffs, without any justification, repudiated the contract by their letter dated November 22, 1946.
As the plaintiffs wrongfully repudiated the contract, the defendants, as they are entitled to in law, forfeited the sum of Rs. 2,50,000 paid by the plaintiff as earnest money, under the terms of business of the Company which had become part of the contract entered into between the parties.
The defendants further pleaded that they have always been ready and willing to perform their part of the contract and that they, in fact, even after the plaintiff repudiated the contract, called upon them to pay the balance amount and take delivery of the articles.
But the plaintiffs persisted in their wailful refusal to perform their part and therefore the defendants had no alternative but to forfeit the earnest money and conduct a resale of the goods.
The defendants further pleaded that the appellants had to pay them a sum of Rs. 42,499 for the loss and damage sustained 'by the defendants They further urged that the plaintiffs were not entitled to claim the refund of the sum of Rs. 2,50,000 or any part thereof which had been paid as earnest money and forfeited according to law, and the terms of contract, by the defendants.
Though the plaintiffs have raised various contentions in the plaint, it is seen from the judgments of the learned Single Judge and the Division Bench, on appeal, that the appellants conceded that they committed breach of contract and that the defendants have been at all material times ready and willing to perform their part of the contract.
The plea that the plaintiffs entered into the contract under a mistake of fact and that they were induced, to so enter into the contract due to the misrepresentation of the defendants regarding the quantity of scrap available, was also given up.
The appellants have also accepted the position that there has been a concluded contract between the parties and the said contract was concluded by the correspondence between the parties consisting of the letters dated November 18, 1946 and November 20, 1946.
The plaintiffs have further abandoned the plea that the defendants were not ready and willing to perform their part of the contract.
Therefore the two questions that ultimately survived for consideration by the Court were: (1) as to whether the sum of Rs. 2,50,000 was paid by the plaintiffs as and by way of part payment or as earnest deposit; and (2) as to whether the defendants were entitled to forfeit the said amount.
133 The learned Single Judge and, on appeal, the Division Bench, have held that the sum of Rs. 2,50,000 paid by the appellants was so paid as and by way of deposit or earnest money and that it is only when the plaintiffs pay the entire price of the goods and perform the conditions of the contract that the deposit of Rs. 2,50,000 will go towards the payment of the price.
It is the further view of the Courts that the amount representing earnest money is primarily a security for the performance of the contract and, in the absence of any provision to the contrary in the contract, the defendants are entitled to forfeit the deposit amount when the plaintiffs have committed a breach of contract.
In this view the defendant 's right to forfeit the sum of Rs. 2,50,000 was accepted and it has been held that the plaintiffs are not entitled to claim refund of the said amount.
The plaintiffs ' suit, in the result, was dismissed by the learned Single Judge and, on appeal, the decree of dismissal has been confirmed.
On behalf of the appellants Mr. Maheshwari, learned counsel, has raised two contentions : (1) That the amount of Rs. 2,50,000 paid by the plaintiffs and sought to be recovered in the suit is not by way of a deposit or as earnest money and that, on the other hand, it is part of the purchase price and therefore the defendants are not entitled to forfeit the said amount.
(2) In this case, it must be considered that the sum of Rs. 2,50,000 has been named in the contract as the amount to be paid in case of breach or in the alternative the contract contains a stipulation by way of penalty regarding forfeiture of the said amount and therefore the defendants will be entitled, if at all, to receive only reasonable compensation under section 74 of the Contract Act and the Courts erred in not considering this aspect.
Under this head, the counsel also urged that even a forfeiture of earnest money can only be, if the amount is considered reasonable and in this case the amount which represents 25 % of the total price cannot be considered to be reasonable and hence the appellants are entitled to relief in law.
The learned Attorney General, on behalf of the respondents, pointed out that the material correspondence between the parties, by which the contract was concluded, read along with the terms of business will clearly show that the sum of Rs. 2,50,000 paid by the appellants was as earnest.
It was further pointed out that the position in law is that the earnest money is part of the purchase price when the transaction goes through and is performed and that on the other hand it is forfeited when the transaction falls through by reason of the fault or failure of the vendee.
The learned Attorney General invited us to certain decisions laying down the salient features of 'earnest deposit ' and the right of the party to whom the amount has been paid to forfeit when the opposite party has committed a breach of contract.
Regarding the second contention of 134 the appellant, the learned Attorney General pointed out that the appellants never raised any contention that the amount of Rs. 2,50,000 deposited by the appellants is to be treated as a sum named in the contract as the amount to be paid in case of breach or that the contract must be considered to contain any stipulation by way of penalty.
He also pointed out that the question of reasonableness or otherwise of the earnest deposit forfeited in this case, was never raised by the appellant at any stage of the proceedings in the High Court.
Therefore section 74 of the Contract Act has "no application.
The first question that arises for consideration is whether the payment of Rs. 2,50,000 by the appellants was by way of deposit or earnest money.
Before we advert to the documents evidencing the contract in this case, it is necessary to find out what in law constitutes a deposit or payment by way of earnest money and what the rights and liabilities of the parties are, in respect of such deposit or earnest money.
Borrows, in Words & Phrases, Vol.
11, gives the characteristics of "earnest".
According to the author, "An earnest must be a tangible thing.
That thing must be given at the moment at which the contract is concluded, because it is something given to bind the contract, and, therefore, it must come into existence at the making or conclusion of the contract.
The thing given in that way must be given by the contracting party who gives it, as an earnest or token of good faith, and as a guarantee that he will fulfil his contract, and subject to the terms that if, owing to his default, the contract goes off, it will be forfeited.
If, on the other hand, the contract is fulfilled, an earnest may still serve a further purpose and operate by way of part payment.
" Benjamin, in his book on 'Sale, 8th Edition, after referring to clause 17 of the Statute of Frauds and section 4(1) of the Sale of Goods Act, 1893 providing for giving "something in earnest to bind the contract, or in part payment", says, at p. 219 : " give something in earnest ' or 'in part payment, ' are often treated as meaning the same thing, although the language clearly intimates that the earnest is something to bind the bargain, ' or, 'the contract, ' whereas it is manifest that there can be no part payment till after the bargain has been bound, or closed.
" The author further states that there are two distinct alternatives, viz., a buyer may give the seller money or a present as a token or evidence of the bargain quite apart from the price, i.e., earnest, or 135 he may give him part of the agreed price to be set off against the money to be finally paid, i.e., part payment and that if the buyer fails to carry out the contract and it is rescinded, cannot recover the earnest, but he may recover the part payment.
But this does not affect the seller 's right to recover damages for breach of contract unless it as by way of deposit or guarantee in which case it is forfeited.
It is further stated that an earnest does not lose its character because the same thing might also avail as a part payment.
Regarding "deposit", the author states at p. 946, that a deposit is not recoverable by the buyer, for a deposit is a guarantee that the buyer shall perform his contract and is forfeited on his failure to do so and if a contract distinguishes between the deposit and installments of price and the buyer is in default, the deposit is forfeited.
Halsbury, in "Laws of England", Vol.
34, III Edition, in paragraph 189 at p. 118, dealing with deposit, states : "Part of the price may be payable as a deposit.
A part payment is to be distinguished from a deposit or earnest.
A deposit is paid primarily as security that the buyer, will duly accept and pay for the goods, but, subject thereto, forms part of the price.
Accordingly, if the buyer is unable or unwilling to accept and pay for the goods, the seller may repudiate the contract and retain the deposit.
" Earl Jowitt, in his Dictionary of English Law, says "Giving an earnest or earnest money is a mode of signifying assent to a contract of sale or the like, by giving to the vendor a nominal sum (e.g., a shilling) as a token that the parties are in earnest or have made up their minds.
" In Howe vs Smith(1) Fry, L.J., discussed the history of "earnest", which is identical with a deposit.
In that case, the plaintiff agreed to purchase a property for the price mentioned in the agreement and paid pound 500 on the signing of the agreement Al as a deposit and in part payment of the purchase money." There where other stipulations in the agreement regarding title to the property and the payment of the balance of the purchase money.
The plaintiff, apprehending that the defendant vendor would resell the property, brought an action against him for specific performance of the agreement; but the suit was dismissed on the ground (1) L.R. [1884] Ch. D. 89.
136 that there had been inordinate delay on the plaintiffs part in insisting on the completion of the contract.
The plaintiff appealed.
Before the Court of Appeal a request was made on his behalf for leave to amend the plaint that if specific performance could not be decreed, he should get a return of the deposit of pound 500.
Leave was granted by the Appellate Court and the question hence arose as to whether the plaintiff was entitled to get a refund of the said amount.
In dealing with the deposit claimed back by the plaintiff, Cotton, L.J., at p. 95, observes "What is the deposit ? The deposit, as I understand it, and using the words of Lord Justice James (in L. R. 10 Ch.
512), is a guarantee that the contract shall be performed.
If the sale goes on, of course, not only in accordance with the words of the contract, but in accordance with the intention of the parties in making the contract, it goes in part, payment of the purchasemoney for which it is deposited; but if on the default of the purchaser the contract goes off, that is to say, if he repudiates the contract, then, according to Lord Justice James, he can have no right to recover the deposit.
" Bowen, L.J., at p. 98, states "We have therefore to consider what in ordinary parlance, and as used in an ordinary contract of sale, is the meaning which business persons would 'attach to the term 'deposit '.
Without going at length into the history, or accepting all that has been said or will be said by the other members of the Court on that point, it comes shortly to this, 'that a deposit, if nothing more is said about it, is, according to the ordinary interpre tation of business men, a security for the completion of the purchase.
But in what sense is it a security for the completion of the purchase ? It is quite certain that the purchaser cannot insist on abandoning his contract and yet recover the deposit, because that would be to enable him to take advantage of his own wrong" Fry, L.J., at p. 101, observes "Money paid as a deposit must, I conceive, be paid on some terms implied or expressed.
In this case no terms are expressed, and we must therefore inquire what terms are to be implied.
The terms most naturally to be implied appear to me in the case of money paid on the signing of a contract to be that in the event of the contract being performed it shall be brought into 137 account, but if the contract is not performed by the payer it shall remain the property of the payee.
It is not merely a part payment, but is then also an earnest to bind the bargain so entered into, and creates by the fear of its forfeiture a motive in the payer to perform the rest of the contract.
" Ultimately, the Court of Appeal rejected the claim of the plaintiff for refund of the deposit.
In Soper vs Arnold(1) the House of Lords had to consider the right of the plaintiff therein to claim a refund of the deposit made by him.
In that case the plaintiff had contracted to purchase a piece of land and entered into an agreement with the vendee.
The agreement provided that the purchaser viz., the plaintiff, should make a deposit and it further provided that if the vendee failed to comply with the conditions, the deposit should be forfeited.
The plaintiff, accordingly, paid the deposit but as he was not in a position to complete the contract by paying the balance purchase money, the contract could not be fulfilled.
When in another litigation it was subsequently found that the vendor 's title to the property was defective, the plaintiff brought an action to recover his deposit on the ground of mistake and failure of consideration.
The suit was dismissed and the Court of Appeal also confirmed the said decision.
The House of Lords also finally rejected the plaintiff 's claim.
In discussing the nature of the deposit made by the plaintiff under the agreement, Lord Macnaghten at p. 435 observes "The deposit serves two purpose if the purchase is carried out it goes against the purchase money, but its primary purpose is this, it is a guarantee that the purchaser means business; and if there is a case in which a deposit is rightly and properly forfeited it is, I think, when a man enters into a contract to buy real property without taking the trouble to consider whether he can pay for it or not." In Farr, Smith & Co. vs Messrs, Ltd. (2) dealing with the question as to whether the payment was by way of earnest given to bind the contract, or it was a part payment towards the price.
Wright J., observes at p. 408 : "Certain characteristics, however, seem to be clear, An earnest must be a tangible thing, in which definition it may be that a deposit is included, but in the old cases it was always some tangible thing.
That thing must be given at the moment at which the contract is concluded, (1) L.R. [1889]14 A.C. 429, (1) L.R. (1928] 1 K.B.D. 397.
CI/70 10 138 because it is something given to bind the contract, and, therefore, it must come into existence at the making or conclusion of the contract.
The thing given in that way must be given by the contracting party who gives it, as an earnest or token of good faith, and as a guarantee that he will fulfil his contract, and subject to the terms that if, owing to his default, the contract goes off, it will be forfeited.
If on the other hand, the contract is fulfilled, an earnest may still serve a further purpose and operate by way of part payment." The learned Judge, quoting the observations of Hamilton, J., in Sumner and Leivesley vs John Brown & Co.(1), observes at p. 409: " Earnest '.
meant something given for the purpose of binding a contract, something to be used to put pressure on the defaulter if he failed to carry out his part.
If the contract went through, the thing given in earnest was returned to the giver, or, if money, was de ducted from the price.
If the contract went off through the giver 's fault the thing given in earnest was forfeited.
" The Judicial Committee had to consider in Chiranjit Singh vs Har Swarup(2) the question as to whether a payment maade by way of earnest money by a buyer could be recovered when the buyer had committed breach of contract.
In that case the plaintiff had entered into a contract with the defendant for purchase of a property.
One of the terms of the contract of sale was "Willing on old terms namely earnest twenty thousand balance in two moieties.
first payable on executing conveyance, last within six months net cash we receive 4 lakhs 76,000.
" The plaintiff did not pay the earnest money eo nomine but sent two cheques amounting to Rs. 1,65,000 and obtained a receipt ?hat this amount was paid towards the sale price of the estate in question out of the total consideration of Rs. 4,76,000.
Later the plaintiff informed the defendant that he was not in a position to complete the purchase and gave opportunity to the latter to sell the property to any other party.
Therefore it was clear that the plaintiff purchaser was unable or unwilling to complete the contract of purchase.
The, plaintiff, notwithstanding his default, sued to recover the entire sum of Rs. 1,65,000 paid by him.
The High Court held that as the plaintiff had broken the contract, he must lose the earnest money of Rs. 20,000 but was entitled to a refund of the balance amount of Rs. 1,45,000 from and out of the amounts paid by him on that account.
The plaintiff, dissatis (1) 25 Times L. R, 745.
(2) A.I.R. 1926 P.C. 1.
139 fled with the decision of the High Court, carried the matter in appeal to the Judicial Committee for obtaining relief of repayment of earnest money also.
The Judicial Committee agreed with the High Court that from and out of the amounts paid by the plaintiff, a sum of Rs. 20,000 was earnest money and there was nothing in the contract to suggest that the seller had agreed to sacrifice the stipulated earnest.
Regarding the legal incidents of earnest money, the Judicial Committee stated "Earnest money is part of the purchase price when the transaction goes forward; it is forfeited when the transaction falls through, by reasons of the fault or failure of the vendee.
" Holding that the above principle applied squarely to the contract before them, they dismissed the paintiff 's appeal for refund of earnest.
From a review of the decisions cited above, the following principles emerge regarding "earnest": (1) It must be given at the moment at which the contract is concluded.
(2) It represents a guarantee that the contract will be fulfilled or, in other words, 'earnest ' is given to bind the contract.
(3) It is part of the purchase price when the transetion is carried out.
(4) It is forfeited when the transaction falls through by reason of the default or failure of the purchaser.
(5) Unless there is anything to the contrary in the terms of the contract, on default committed by the buyer, the seller is entitled to forfeit the earnest.
Having due regard to the principles enunciated above, we shall now consider, the relevant claims in the contract between the parties in the case, before us, to ascertain whether the amount of Rs. 2,50,000 paid by the appellant constitutes earnest money and if so whether the respondents were justified in law in forfeiting the same.
We have already referred to the letter, dated November 18, 1946 written by the respondents to the appellants confirming the sale of scrap lying in Dump No. 1.
That letter states that the total price for which the appellants agreed to purchase the scrap material is Rs. 10,00,000 against which a sum of Rs. 2,50,000 had been paid and the balance amount was to be paid that day itself.
In the reply sent by the appellant on the same day, they 140 confirmed the arrangement referred to by the respondents but, regarding the payment of the balance amount, they agreed to pay the same in two instalments.
The letter of November 18, 1946 to the appellants clearly refers to the fact that the Company 's Terms of Business applied to the contract and a copy of the said terms was also sent to the respondents.
The respondents, by confirming the arrangement, by their letter of November 18, 1946 were fully aware that the terms of business of the respondent company formed part of the contract.
entered into between the parties.
We have also referred, earlier, to clauses 9 and 10 of the Terms of Business of the respondents.
Clause 9 requires the buyer to deposit 25%of the total value of the goods at the time of placing the order.
That clause also further provides that the deposit shall remain with the company "as earnest money", to be adjusted in the final bills.
It further provides that no interest is payable to the buyer by the company "on such amounts held as earnest money".
There is no controversy in this case that the appellants deposited the sum of Rs. 2,50,000 under this clause nine, representing 25% of the purchase price of Rs. 10,00,000.
It is therefore clear that this amount deposited by the appellant is a deposit "as earnest money", Mr, Maheshwari drew our attention to the letter, dated Nov ember 18, 1946 sent by the respondents to the appellants wherein the respondents have stated that the appellants have agreed to pay Rs. 10,00,000 for all the materials in Dump No. 1 against which a cheque for Rs. 2,50,000 has been paid and that the appellants further agreed to 'pay the balance of Rs. 7,50,000 that day itself.
This statement, according to the learned counsel, will clearly show that the sum.
of Rs. 2,50,000 has been paid as part payment towards the total price, pure and simple, and there is no question of any payment by way of earnest money.
But this contention ignores the last recital in the said letter wherein it has been specifically stated that the terms of business of the respondent company applied to the contract.
This condition has also been accepted by the appellants; in their reply, dated November 18, 1946.
Therefore the position is this, that the terms of business of the respondent company have been incorporated as part of the letter and has been embodied in the terms of contract between the parties.
Clause 9, to which we have already referred, clearly shows that 25% of the total value is to be deposited and that amount is to remain with the respondents as earnest money.
It is again emphasized in clause 9 that the amount so deposited as earnest will not bear any interest, but will be only adjusted in the final bills.
Therefore the amount of Rs. 2,50,000 deposited by the appellants, representing 25% of the total of Rs. 10,00,000, is "earnest money" under clause 9 of the Terms of Business.
141 We have also earlier referred to clause 10 of the Terms of Business, which relates to the time and method of payment.
Under clause 10(b) a right is given to the respondents when the buyer makes default in making payment according to the contract, to forfeit unconditionally the earnest money paid by the buyer.
That clause further provides that this forfeiture of earnest money is without proudly to the other rights of the respondents in law.
We have referred to the fact that though the appellants raised pleas that they have not committed any breach of contract and that on the other hand the respondents were the parties in 'breach, these contentions were not pursued and had been abandoned before the High Court.
Further, as noted by the High Court, the appellants conceded that they had committed a breach of the contract.
If so, as rightly held by the High Court, under clause 10(b) the respondents were entitled to forfeit the earnest money of Rs. 2,50,000.
Before closing the discussion on this aspect, it is necessary to note that in the case before the Privy Council, in Chiranjit Singh 's Case, though the contract stipulated that a sum of Rs. 20,000 should be paid as earnest, the buyer did not pay any amount by way of earnest, as such, but he paid by two cheques the sum of Rs. 1,65,000 against the purchase price of Rs. 4,76,000.
The receipt of the sum of Rs. 1,65,000, granted by the seller was also stated to be only towards the sale price.
But, nevertheless, the High Court, as well as the Judicial Committee, treated a sum of Rs. 20,000 out of the sum of Rs. 1,65,000, as earnest money paid under the terms of the agreement, and a claim to recover that amount of earnest money was negatived.
In the case before us, the contract read with the Terms of Business of the company, clearly refers to the earnest money being paid and to the fact of Rs. 2,50,000 having been paid as earnest.
Therefore, there is no ambiguity regarding the nature of the above payment and the right of the respondents to forfeit the same, under the terms of the contract, when the appellants admittedly had committed breach of the contract, cannot be assailed.
The first contention for the appellants therefore fails.
The second contention of Mr. Maheshwari, noted earlier, is really based upon sections 73 and 74 of the Contract Act.
According to the learned counsel, under section 73, the respondents wilt be entitled only to compensation for any loss or damage caused to them by the breach of the contract, committed by the appellants.
Counsel very strongly relied upon section 74 of the Contract Act.
According to him, the sum of Rs. 2,50,000, referred to in the contract, must be treated as the amount to be paid in case of a breach.
In the alternative, counsel also urged that the provision in the contract regarding the forfeiture of the said amount, should be treated as a term containing a stipulation by way of a penalty.
Under any of 142 these circumstances, the remedy of the aggrieved party would be to get compensation which is adjudged reasonable by the Court.
Counsel also urged that "earnest money", unless it is considered to be a reasonable amount, could not be forfeited in law.
The learned Attorney General very strongly urged that the pleas covered by the second contention of the appellant had never been raised in the pleadings nor in the contentions urged before the High Court.
The question of the quantum of earnest deposit which was forfeited being unreasonable or the forfeiture being by way of penalty, were never raised by the appellants.
The Attorney General also pointed out that as noted by the High Court the appellants led no evidence at all and, after abandoning the various pleas taken in the plaint, the only question pressed before the High Court was that the deposit was not by way of earnest and hence the amount could not be forfeited.
Unless the appellants had pleaded and established that there was unreasonableness attached to the amount required to be deposited under the contract or that the clause regarding forfeiture amounted to a stipulation by way of a penalty, the respondents had no opportunity to satisfy the Court that no question of unreasonableness or the stipulation being by way of penalty arises.
He further urged that the question of unreasonableness or otherwise regarding earnest money does not at all arise when it is forfeited according to the terms of the contract.
In our opinion the learned Attorney General is well founded in his contention that the appellants raised no such contentions covered by the second point, noted above.
It is therefore unnecessary for us to go into the question as to whether the amount deposited by the appellants, in this case, by way of earnest and forfeited as such, can be considered to be reasonable or not.
We express no opinion on the question as to whether the element of unreasonableness can ever be considered regarding the forfeiture of an amount deposited by way of earnest and if so what are the necessary factors to be taken into account in considering the reasonableness or otherwise of the amount deposited by way of earnest.
If the appellants were contesting the claim on any such grounds, they should have laid the foundation for the same by raising appropriate pleas and also led proper evidence regarding the same, so that the respondents would have had an opportunity of meeting such a claim.
In this view, it is unnecessary for us to consider the decision of this Court in Maula Bux vs Union of India(1) relied on by the appellants and wherein there is an observation to the effect : "Forfeiture of earnest money under a contract for sale of property movable or immovable if the (1) ; amount is reasonable, does not fall within section 74 (of the Indian Contract Act).
That has been decided in several cases.
Kunwar Chiranjit Singh vs Har Swarup (AIR 1926 P.C. 1); Roshan Lal vs The Delhi Cloth and General Mills Co. Ltd. Delhi (ILR 33 All.
166); Muhammad Habibullah vs Muhammad Shafi (ILR 41 All. 324); Bishan Chand vs Radha Kishan Das (ILR 19 All. 489).
These cases are easily explained, for forfeiture of reasonable amount paid as earnest money does not amount to imposing a penalty.
But if forfeiture is of the nature of penalty, section 74 applies.
Where under the terms of the contract the party in breach has undertaken to pay a sum of money or to forfeit a sum of money which he has already paid to the party complaining of a breach of contract, the undertaking is of the nature of a penalty.
" The learned Attorney General has pointed out that the decisions referred to in the, above quotation do not lay down that the test of reasonableness applies to an earnest deposit and its forfeiture.
He has also pointed out that this Court, in the above decision, did not agree with the view of the High Court that the deposit, the recovery of which was sued for by the plaintiff therein, was earnest money.
The learned Attorney General also referred 'Us to various decisions, wherein, according to him, though the amounts deposited by way of earnest were fairly large in proportion to the total price fixed under the contract, nevertheless the forfeiture of those amounts were not interfered with by the Courts.
But, as we have already mentioned, we do not propose to go into those aspects in the case on hand.
As mentioned earlier, the appellants never raised any contention that the forfeiture of the amount amounted to a penalty or that the amount forfeited is so large that the forfeiture is bad in law.
Nor have they raised any contention that the amount of deposit is so unreasonable and therefore forfeiture of the entire amount is not justified.
The decision in Maula Bux 's Case(1) had no occasion to consider the question of reasonableness or otherwise of the earnest deposit being forfeited.
Because , from the said judgment it is clear that this Court did not agree with the view of the High Court that the deposits made, and which were under consideration, were paid as earnest money.
It is under those circumstances that this Court proceeded to consider the applicability of section 74 of the Contract Act.
Mr. Maheshwari has relied upon the decision of this Court in Fateh Chand vs Balkishan Das(1) wherein, according to him, this (1) ; (2) ; 144 Court has held, under similar circumstances, that the stipulation under the conrtact regarding forfeiture of the amount deposited is a stipulation by way of penalty attracting section 74 of the Contract Act.
On this assumption, counsel urged that there is a duty, statutorily imposed upon Courts by section 74 of the Contract Act not to enforce the penalty clause but only to award reasonable compensation.
This aspect, he urges, has been totally missed by tile High Court.
We are inclined to accept this contention of the learned counsel.
This Court had to consider, in the said decision, two questions : (i) Whether the plaintiff therein was entitled to forfeit a sum of Rs. 1,000 paid as earnest money on default committed by the buyer; and (ii) whether the plaintiff was further entitled to forfeit the entire sum of Rs. 24,000 paid by the buyer under the contract which recognised such right.
This Court held that the plaintiff was entitled to forfeit the sum of Rs. 1,000 paid as earnest money, when default was committed by the buyer.
But, regarding the second item of Rs. 24,000 this Court held that the same cannot be treated as earnest and therefore the rights of the parties would have to be adjudged under section 74 of the Contract Act.
In view of this conclusion the Court further had to consider the relief that the plaintiff had to get when breach of contract was committed by the buyer and, in dealing with this question, it observed at p. 526 "Section 74 of the Indian Contract Act deals with the measure of damages in two classes of cases (i) where the contract names a sum to be paid in case of breach and (ii) where the contract contains any other stipulation by way of penalty.
We are in the present case not concerned to decide whether a covenant of forfeiture of deposit for due performance of a conrtact falls within the first class.
The measure of damages in the case of breach of a stipulation by way of penalty is by section 74 reasonable compensation not exceeding the penalty stipulated for.
" Again, at p. 528 it observed "In our judgment the expression 'the contract contains any other stipulation 'by way of penalty ' comprehensively applies to every covenant involving a penalty whether it is for payment on breach of contract of money or delivery of property in future, or for forfeiture of right to money or other property already delivered.
Duty not to enforce the penalty clause but only to award reasonable compensation is statutorily imposed upon courts by section 74.
In all cases, therefore, where there is 145 a stipulation in the nature of penalty for forfeiture of an amount deposited pursuant to the terms of contract which expressly provides for forfeiture, the court has jurisdiction to award such sum only as it considers reasonable, but not exceeding the amount specified in the contract as liable to forfeiture." The Court further observed at p. 529 : "There is no ground for holding that the expression 'contract contains any other stipulation by way of penalty ' is limited to cases of stipulation in the nature of an agreement to pay money or deliver property on breach and does not comprehend covenants.
under which amounts paid or property delivered under the contract, which by the terms of the contract expressly or by clear implication are liable to be forfeited.
Section 74 declares the law as to liability upon breach of contract where compensation is by agreement of the parties predetermined, or where there is a stipulation by way of penalty.
But the application of the enactment is not restricted to cases where the aggrieved party claims relief as a plaintiff.
I The section does not confer a special benefit upon any party; it merely declares the law that notwithstanding any term in the contract predetermining damages or providing for for feiture of any property by way of penalty, the court will award to the party aggrieved only reasonable compensation not exceeding the amount named or penalty stipulated.
The jurisdiction of the Court is not deter mined by the accidental circumstance of the party in default being a plaintiff or a defendant in a suit.
Use of the expression 'to receive from the party who has broken the contract" does not predicate that the jurisdiction of the court to adjust amounts which have been paid by the party in default cannot be exercised in dealing with the claim of the party complaining of breach of contract.
" This Court applied section 74 of the Contract Act, and ultimately fixed a particular amount which the plaintiff would be entitled to as reasonable compensation in the circumstances.
Mr. Maheshwari placed considerable reliance on the above extracts in support of his contention and urged that the recitals regarding forfeiture of the amount of Rs. 2,50,000 shows that the contract contains a stipulation by way of penalty and therefore s.74 is attracted.
It is not possible to accept this contention.
As we have already pointed out, this Court, in the above decision, 146 recognised the principle that earnest money can be forfeited, but in dealing with the rest of the amount which was not, admittedly, earnest money, s.74 was applied.
In the case before us the entire amount, as evidenced by the contract and as held by us earlier, is earnest money and therefore the above decision does not apply.
Mr. Maheshwari finally urged that s.64 of the Contract Act may apply and he also relied on the decision of the Judicial Committee in Murlidhar Chatterjee vs International Film Co.(1).
On the basis of that ruling he urged that the respondents are bound to restore the benefit that they have obtained under the contract.
In our opinion there is no scope for applying s.64 of the Contract Act and it follows that the decision of the Judicial Committee, referred to above, and dealing with s.64 has no relevance.
We have already pointed out that the appellants raised a contention that they had been induced to enter into the agreement on a misrepresentation made by the respondents regarding the quantity of material available.
If the.
appellants had proceeded on that basis, then the contract would have been voidable at their instance under s.19 of the Contract Act.
But they have abandoned that plea and have admitted that the breach of contract was committed by them.
Hence section 64 cannot be invoked by the appellants.
In this view, the second contention also fails.
In the result ', the appeal fails and is dismissed with costs.
V.P.S. Appeal dismissed.
(1) L. R. 70 I.A, 35.
| The respondent agreed to sell and the appellant agreed to buy some aero scrap for Rs. 10,00,000.
The appellant paid Rs. 2,50,000 on the date of the contract and it was agreed between the parties that the balance should be paid in two instalments.
It was also agreed that the respondent 's terms of business were made part of the terms and conditions gov erning the contract.
According to cl. 9 of the respondent 's terms of business the buyer has to deposit with the respondent 25% of the total value and that deposit is to remain with the respondent as earnest money to be adjusted in the final bills and no interest shall be payable to buyer on the amount.
Under cl. 10 of the terms and conditions, if the buyer makes default in making payment according to the contract, the respondent has a right to cancel the, contract and forfeit unconditionally the earnest money without prejudice to any other Tights of the respondent in law.
The appellant committed breach of the contract by refusing to pay the rest of the money and to take delivery of the aero scrap.
The respondent thereupon cancelled the contract and forfeited the deposit of Rs. 2,50,000.
A suit by the appellant for recovery of the amount was dismissed.
In appeal to this Court, HELD : (1) For a deposit by a purchaser to be treated as earnest money the 'following conditions must be satisfied : (i) it must be given at the moment at which the contract is concluded; (ii) it represents a guarantee that the contract will be fulfilled or, in other words, 'earnest ' is given to bind the contract; (iii) it is part of the purchase price when the transaction is carried out; (iv) it is forfeited when the transaction falls through by reason of the default or failure of the purchaser; and (v) unless there is anything to the contrary in the terms of the contract, on default committed by the buyer, the seller is entitled to forfeit the earnest.
[139 D F] In the present case, the payment of Rs. 2,50,000 could not be treated merely as part payment towards the total price, because, the terms of business of the respondent applied to the contract, and under those terms, since the conditions regarding earnest money are satisfied, the amount deposited by the appellant was earnest money and the respondent was entitled to forfeit if.
[140; 141 F] Howe vs Smith , Soper vs Arnold, I.R. , Farr, Smith & Co. vs Messers, Ltd. L.R. [1928] 1 K.B.D. 397, Sumner and Leivesley vs John Brown & Co. and Chiranjit Singh vs Har Swarup, A.I.R. , applied.
128 Roland Burrows, Words and Phrases Vol.
11, Benjamin on Sale, Halsbury 's Laws of England (111 Edition) Vol. 34, p. 118, para.
189 and Jowitt 's Dictionary of English Law, referred to.
(2) In Fateh Chand vs Balkishan Das, ; , this Court recognised the principle that earnest money could be forfeited, and that section 74 of the Contract Act applied only to the amount paid by the buyer which was not earnest money.
In the present case, since the entire amount paid by the appellant was earnest money under the contract, this decision has no application.
[145 H; 146 A] (3) As the plea of misrepresentation was abandoned by the appellant and the breach off contract was admittedly committed by the appellant,s. 64 of the Contract Act could not be invoked by the appellant.
[146 D] Murlidhar Chatterjee vs International Film Co. L.R. 70 I.A. 35, not applicable.
[The question as to whether the element of unreasonableness can even be taken into account when considering the forfeiture of an amount deposited by way of earnest, and if so what factors should be taken into account left open.] [142 F G] Maula Bux vs Union of India, ; , explained.
| 2771.txt |
Special Leave Petition (Civil) No. 2023 of 1983.
From the Judgment and Order dated 26.8.82 of the High Court of Punjab & Haryana in L.P.A. No. 1172/82.
Hardev Singh and R.S. Sodhi for the Petitioners.
The Order of the Court was delivered by PATHAK, J. This case has been pending in this Court for some years.
On November 21, 1983 we directed issue of notice on the special leave petition.
Almost three years later, on August 11, 1986 when the case was taken up it was found that the respondents had not entered appearance yet and consequently notice was directed to issue afresh, indicating this time that the case would be decided on the merits of the controversy itself between the parties.
On the latter date when no one appeared for the respondents, the case was adjourned for two weeks again to enable the respondents to enter appearance.
Thereafter on September 22, 1986 an order was made for the last time directing issue of notice to the respondents returnable on October 20, 1986 and intimating that the special leave petition would definitely be taken up on that date for final disposal on the merits of the case.
It was made clear that the case would not be adjourned on any account.
We find that the respondents continue to be absent.
No reason has been shown for their absence, and in the circumstances we proceed to dispose of the case.
A bus belonging to the Punjab Roadways met with an accident on February 13, 1971, which resulted in the death of three persons.
One of those persons was Balbir Singh.
An application was filed by the petitioners, who are the widow and minor children of Balbir Singh, for compensation before the Motor Accident Claims Tribunal.
By an order dated October 23, 1975 the Tribunal held the claimants entitled to compensation in the sum of Rs.93,600 with interest at 6 per cent per annum.
Dissatisfied with the order, the claimants as well as the State 1097 Government appealed to the High Court of Punjab and Haryana.
The High Court dismissed the appeal filed by the claimants and partly allowed the appeal by the State.
The High Court, while holding that the accident was caused by the rash and negligent act of the driver of the bus, reduced the compensation to Rs.79,200 but confirmed the award of interest made by the Tribunal.
After carefully considering the matter we think that the High Court erred in reducing the quantum of compensation awarded by the Tribunal.
There was sufficient material, in our opinion, to justify the quantification determined by the Tribunal and we see no reason why the amount should have been reduced.
It was strenuously contended by learned counsel for the petitioners that the petitioners are entitled to an even greater amount of compensation, in view of the different sources of income arising to the deceased Balbir Singh.
We think, however, that having regard to the material on the record the amount of compensation assessed by the Tribunal should be maintained.
Accordingly we restore the order of the Tribunal awarding compensation in the sum of Rs.93,600.
In regard to the interest, however, we think the petitioners are entitled to a higher rate of interest than that awarded by the Tribunal and confirmed by the High Court.
We find that in Narchinva V. Kamat and Anr.
vs Alfredo Antonio Doe Martins & Ors., ; , this Court awarded interest at 12 per cent from the date of the accident up to the date of payment.
Subsequently in Smt.
Chameli Wati & Anr.
vs Delhi Municipal Corporation of Delhi and Others, , a larger Bench of this Court awarded compensation at 12 per cent per annum from the date of the application for compensation.
We are of opinion that the petitioners should be entitled to interest at 12 per cent per annum from the date of the application for compensation to the date of payment.
We order accordingly.
The special leave petition is disposed of in these terms.
| A State Roadways bus met with an accident resulting in the death of three persons.
On an application being filed on behalf of one of the persons, the Motor Accident Claims Tribunal awarded a compensation of Rs.93,600 to the widow and the minor children of the deceased, with interest at 6 per cent per annum.
The claimants as well as the State appealed to the High Court, which dismissed the claimants ' appeal, and partly allowed the appeal by the State.
While holding that the accident was caused by the rash and negligent act of the driver of the bus, the High Court reduced the compensation to Rs.79,200 but confirmed the award of interest made by the Tribunal.
In the special leave petition it was contended for the petitioners claimants that they were entitled to an even greater amount of compensation on account of the different sources of income arising to the deceased.
Disposing of the special leave pention, the Court, ^ HELD: The High Court erred in reducing the quantum of compensation awarded by the Tribunal.
There was sufficient material on the record to justify the quantification determined by the Tribunal and there was no reason why the amount should have been reduced.
The amount of compensation assessed by the Tribunal should, therefore, be maintained.
[1097B D] The petitioners are entitled to interest at 12 per cent per annum 1096 from the date of the application for compensation to the date of payment.
[1097] Narchinva V Kamat & Anr.
vs Alfredo Antonio Doe Martins & Ors., ; and Smt.
Chameli Wati & Anr.
vs Municipal Corporation of Delhi & Ors., , referred to.
| 5149.txt |
Appeal No. 203 of 1964.
Appeal from the judgment and decree dated January 29, 1963 of the Rajasthan High Court in Civil Regular First Appeal No. 29 of 1956.
Sarjoo Prasad and T. Satyanarayana, for appellant.
R. Ganapapathy Iyer and B.R.G.K. Achar, for the respondent.
The Judgment of the Court was delivered by Ramaswami, J.
This appeal is brought by certificate against the judgment and decree of the Rajasthan High Court dated January 29, 1963.
The appellant firm Bansidhar Premsukhdas brought a suit which is the subject matter of this appeal against the State of Rajasthan on March 31, 1953 for the recovery of Rs. 86,646/3/ in the Court of District Judge, Bharatpur.
The case of the appellant was that the former State of Bharatpur with a view to increase the trade and commerce in the said State decided to establish a Mandi at Bharatpur where at the material time a T.B. Hospital was located, It decided to sell plots for certain fixed amounts and, therefore, issued a notification on May 18, 1946 offering the plots by public advertisement for sale on certain terms and conditions.
The notifification exhibit
4 was published in Bharatpur Rajpatra and one of the concessions proposed to be granted was embodied in cl. 3 of the notification which stated: "If any commodity is imported from outside into the Mandi and is sold for consumption within the State, or if any commodity received in the Mandi from within the State and is exported in both cases, a reduction of 25% in the customs duty prevailing at the time of the import and export of such commodities will be allowed.
This concession shall not be available in case of vegetable Ghee.
" The notification contained other terms and conditions relating to auction sale such as the prices for different kinds of plots available and the maximum number of plots which a person could purchase.
A committee for supervising the auction was also formed and the notification laid down the procedure for the sale of plots and certain other conditions such as deposit of one fourth sale money at the 83 time of auction etc.
The appellant purchased plots Nos. 8 and 9 for Rs. 4,600 at a public auction and two sale deeds (sanad nilam) were issued to the appellant on October 10, 1946.
The Government of Bharatpur and after its merger, the Government of United State of Matsya and thereafter the present Rajasthan State carried out the promise contained in cl. 3 of the Bharatpur notification and allowed reduction of 25 per cent in the customs duty, but on January 16, 1951 the Rajasthan Government issued notification No. F.4(18) SR/49 which reads as follows: "Now therefore Government of Rajasthan is hereby pleased to direct that with an immediate effect all free Mandies and Zones including the area comprising the former Kishangarh State and the Bhim District of the former Rajasthan State shall be abolished and that in consequence all the Customs concession hitherto enjoyed by or applicable to these Mandies or Zones shall cease to have force and duties of customs shall be levied and collected in such Mandies or Zones in accordance with the revised tariff, amended from time to time.
" The appellant and other traders thereupon made representation to the Rajasthan Government on January 29, 1951 and pending the disposal of the representation the Customs authorities agreed to keep the amount of 25 per cent by way of 'Amanat '.
The State of Rajasthan ultimately decided on May 25, 1951 that the reduction in the customs duty could not be conceded.
On March 31, 1953 the appellant filed the present suit in the Court of the District Judge of Bharatpur for the recovery of the excess amount of customs duty paid to the Rajasthan Government.
The main defence of the State Government was that item No. 3 of the Bharatpur notification was a matter of concession and could not be claimed as of right and the Rajasthan State as successor State was not bound by the contracts of the former State and the applicability of the concessions had also become impracticable on the formation of Rajasthan.
The District Judge of Bharatpur, by his judgment dated March 31, 1956, held that item No. 3 of Bharatpur notification was a term of sale between the parties and the Rajasthan State was bound by it and the succeeding States have recognised the concessions granted to the appellant and therefore the suit of the appellant should be decreed.
The State of Rajasthan took the matter in appeal to the Rajasthan Nigh Court which allowed the appeal and dismissed the suit holding that item No. 3 of the Bharatpur notification was not a part of the contract of sale, and even if it was held to be a part of the contract, the successor State of Rajasthan did not recognise it and was not, therefore, bound by it.
84 The first question involved in this appeal is whether cl. 3 of the Bharatpur notification exhibit 4, was a term of the contract of sale between the appellant and the State of Bharatpur.
It Was argued on behalf of the appellant that exhibit 4 which is the notification dated May 18, 1946 regarding the sale of plots by the Bharatpur State was an offer of purchase of plots on terms and conditions made in that notification.
It was contended that the offer was made to the public as a whole and after it was accepted by the appellant a valid contract came into existence.
The opposite view point was presented on behalf of the respondent.
It was submitted that the concession granted in cl. 3 did not relate to, nor did it form a part of the contract of sale of the plots of the Mandi.
It was pointed out that the concession of 25 per cent reduction in customs duty will not merely enure to the benefit of the purchaser of the plots but also enure to the benefit of the person trading in the shop.
The benefits were generally offered for trade and business in the Mandi and cannot be considered as an offer of benefit only to the prospective purchasers of the plots.
The commodities for which the concession was granted might be in the hands of purchasers and builders of plots, their tenants and licensees or other dealers.
It was therefore not possible to hold that the State Government offered the tax concessions as a reciprocal promise in connection with the contracts of sale with the appellant and the latter had no justification for treating the benefits offered as consideration in return for the purchase of the plots and the construction of shop buildings.
It is also pointed out by learned Counsel on behalf of the respondent that there are certain conditions in the Bharatpur notification exhibit 4, which can.
not, in the nature of things, be treated as terms of the sale.
Reference was made, in this connection, to cls.
5, 6, 7, 10 and 11.
In our opinion, there is much force in the argument advanced on behalf of the respondent but it is not necessary to express any concluded opinion on this aspect of the case.
We shall assume in favour of the appellant that cl. 3 of the Bharatpur notification, exhibit 4, was a term of the contract of sale of plots 8 and 9 of the Mandi.
Even upon that assumption the suit of the appellant must fail, for we shall presently show that there was no recognition of the contractual right by the succeeding State of Rajasthan, and in the absence of such recognition the contract between the former State of Bharatpur and the appellant cannot be legally enforced.
We shall proceed, therefore, to consider the next question, namely, whether the term of the contract was binding upon the successor State of Rajasthan on the assumption that cl. 3 of the Bharatpur notification, exhibit 4, was an integral term of the contract between the appellant and the Government of Bharatpur State.
It is not correct to say as a matter of law that the successor State automatically inherits the rights and obligations of the merged State.
There is no question of suborgation the successor State is not 85 subrogated ipso jure to the contracts with the merged State.
The true legal position is that the contract of the predecessor State terminates with the change of sovereignty unless the contract is ratified by the succeeding sovereign State.
It is now well established in law that the contractual liability of a former State is binding on a succeeding sovereign State only if it recognises that contractual liability.
The season is that the taking over of sovereign powers by a State in respect of territory which was not till then a part of it is an. act of State" and the municipal courts recognised by the new sovereign have the power and jurisdiction to investigate and ascertain only such rights as the new sovereign has chosen to recognise or acknowledge; and such recognition may be express or may be implied from circumstances.
In other words, accession of one State to another is an "act of State. and the subjects of the former State may claim protection of only such rights as the new sovereign recognises as enforceable by the subjects of the former State in his municipal courts.
In The Secretary of State in Council of India vs Kamachee Boye Saheba(1) the jurisdiction of the courts in India to adjudicate upon the validity of the seizure by the East India Company of the territory of Rajah of Tanjore as an escheat, on the ground that the dignity of the Raj was extinct for want of a male heir, and that the property of the late Rajah lapsed to the British Government, fell to be determined.
The Judicial Committee held that as the seizure was made by the British Government, acting as a sovereign power, through its delegate, the East India, Company, it was an act of State and the Municipal Court had no jurisdiction to inquire into the propriety of the action.
At page 529 of the Report Lord Kingsdown observed: "The transactions of independent States between each other are governed by other laws than those which Municipal Courts administer: Such Courts have neither the means of deciding what is right, nor the power of enforcing any decision which they may make.
" In another case Vajesingji Joravarsingji vs Secretary of State for India in Council(1) the Judicial Committee observed as follows: ". 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 recognized ruler.
In all cases the result is the same.
Any inhabitant of the territory can make good in the municipal courts established by the new sovereign only such rights as that sovereign has, through his officers, recognised.
Such rights as he had under the rule of precedes (1) Moore 's I.A. 476.
(2) 51 I. A. 357.
86 sors avail him nothing.
Nay more even if in a treaty of cession it is stipulated that certain inhabitants should enjoy certain rights, that does not give a title to those inhabitants to enforce these stipulations in the municipal courts.
The right to enforce remains only with the high contracting parties.
" In Secretary of State vs Sardar Rustom Khan and Others(1) a question arose whether the rights of a grantee of certain proprietary rights in lands from the then Khan of Kalat, ceased to be enforceable since the agreement between the Khan and the Agent to the Governor General in Baluchistan under which the Khan had granted to the British Government a perpetual lease of a part of the Kalat territory, at a quit rent, and had ceded in perpetuity with full and exclusive revenue civil and criminal jurisdiction and all other forms of administration.
In delivering the opinion of the Judicial Committee, Lord Atkin observed as follows: "In this case the Government of India had the right to recognise or not recognise the existing titles to land.
In the case of the lands in suit they decided not to recognize them, and it follows that the plaintiffs have no recourse against the Government in the Municipal Courts.
" The principle that cession of territory by one State to another is an act of State and the subjects of the former State may enforce only those rights which the new sovereign recognises has been accepted by this Court in M/s. Dalmia Dadri Cement Co. Ltd. vs The Commissioner of Income tax(2).
The State of Saurashtra vs Jamadar Mohamat Abdulla and others(1).
Maharaja Shree Umaid Mills Ltd. vs Union of India (4), and State of Gujarat vs Vora Fiddali Badruddin Mithibarwala(5).
On behalf of the appellant it was contended that there was an implied recognition by the Rajasthan State of the contractual liability since the exemptions were continued upto January 13, 1951 and were revoked with effect from that date by the notification No. F.4(18)SR/49.
We are unable to accept this argument as correct.
Before the process of integration began, each Covenanting State was a separate geographical unit for customs purposes and had its own customs laws and barrier.
After the formation of the Matsya Union on March 18, 1948 there was a promulgation of the Matsya Customs Ordinance by the Raj Pramukh on September 21, 1948.
The United State of Rajasthan was constituted on May 15, 1949 when there was merger of Matsya Union in the United State of Rajasthan.
On August 9, 1949 the Raj Pramukh promulgated the Rajasthan (Regulation of Customs Duties) Ordinance (1) 68 I.A. 100.
(2) [1959] S.C.R. 729.
(3) (4) [1963] Supp. 2 S.C.R. 515.
(5) ; 87 No. 16 of 1949.
Section 3 of this Ordinance abolished duties on the transport of goods within the territory of Rajasthan.
Sectio n Section 3 reads as follows: "3.
No duty leviable on internal transport With effect from such date as may be notified by the Government in the Rajasthan Gazette, no duties of Customs shall be levied and collected in respect of any goods transported within Rajasthan, notwithstanding anything to the contrary in any law, or rule, instrument of usage having the force of law, in any part of Rajasthan; and any such law, rule instrument or usage shall be deemed to be repealed to that extent: Provided that the Government may, by notification in the Rajasthan Gazette (a) Impose a duty of customs on the transport of goods from or to any part of Rajasthan to or from such other part thereof at such rate or rates and with effect from such date as may be specified in the notification, or (b) direct that, in respect of the transport of goods of such description and from or to such part of Rajasthan as may be specified in the notification, a sum of money equal to the amount of the duty leviable on the export on such goods shall be deposited with the appropriate Customs Officer of the place from where the goods are intended to be transported.
" section 4 is the charging section with regard to import and export duties.
Section 4(1) states: "4.
Duties on export and import: (1) Until a revised tariff is introduced under sub section (2) Customs duties on the export or on the import of goods shall be levied and collected in accordance with the tariff for the time being in force in the place from or into which goods leviable with a duty of Customs have been exported or imported, as the case may be.
" sub section (2) of section 4 provides: "The Government may, by notification in the Rajasthan Gazette, issue a revised tariff specifying the goods or class of goods in respect of which, and the rate at which, duties of Customs shall be levied and collected with effect from such date as may be specified in the notification on the export or on the import of such goods or class of goods." eventually on August 15, 1949 a uniform revised tariff was made applicable to the whole of Rajasthan.
Section 6 provided that the existing law in force of the covenanting States shall regulate the GI 8 88 collection of such duties and other ancillary duties in relation thereto, unless altered, modified or repealed by a competent legislative authority of Rajasthan and thus saved existing law with regard to the procedure and ancillary matters.
It is manifest on examination of the provisions of this Ordinance that there was a repeal of all Customs laws of the Covenanting States in so far as they provided for the levy and collection of duties in the particular territorial limits of the Covenanting States and the Ordinance introduced a new law imposing duty on export and import into Rajasthan State as a whole.
Further, after the issue of a revised tariff the old tariffs under the various laws of the Covenanting States also stood repealed.
There is no express provision in the Ordinance saving the previous contractual rights with regard to customs duty.
In the absence of any such express provision it must be held that all existing contracts were repudiated and cancelled.
The enjoyment of the concession by the appellant after the formation of the Rajasthan State is clearly referable to the law under which customs concessions could be granted and recognised.
This is borne out by the notification dated January 16, 1951 which appeared in the Rajasthan Raj Patra, which itself refers to sections 10 and 33 of the Matsya Customs Ordinance No. 14 of 1948 by which customs concessions were revoked.
We are, therefore, of the opinion that the High Court has rightly taken the view, upon an analysis of the evidence adduced in the case, that there was no recognition of the contractual liability by the succeeding State of Rajasthan.
We shall however ,assume in faboure of the appellant that the State of Rajasthan recognised the contractual right of the appellant with regard to the exemption of tax.
Even upon that assumption the suit of the appellant must fail, for the contractual liability must be taken to have been superseded by the enactment of the Rajasthan Regulation 'of Customs Duties) Ordinance No. 16 of 1949 promulgated by the Raj Pramukh on August 9,1949.
Before we deal with this question it is desirable to indicate the constitutional developments which resulted in the inclusion of the former Bharatpur State into the Part B State of Rajasthan, which came into existence on January 26, 1950.
The former Bharatpur State remained a separate entity till March 18, 1948, though it had acceded to the Dominion of India after August 15, 1947 with respect to three subjects, namely, communications, defence and external affairs.
In 1948, however, the process of merger in Rajasthan began and the first merger that took place was of the former States of Alwar, Bharatpur, Dholpur and Karauli, which formed the Matsya Union as from March 18, 1948 by a Covenant entered on February 28, 1948.
After the formation of the Matsya Union the Raj Pramukh promulgated the Matsya Customs Ordinance 1948 on September 21, 1948.
Section 2 of that Ordinance repealed the levy of 89 customs duty in force in all the Covenanting States and applied the provisions of the new Ordinance to the whole of the United State of Matsya.
Section 10 of the Ordinance provided for the charge of customs duty on goods or class of goods to be notified in the State Gazette from time to time.
Section 33 of the Ordinance similarly granted power to the State Government to exempt any goods or class of goods imported or exported from the United State of Matsya from payment of customs duty leviable thereon.
Then came another union of certain other Rulers in Rajasthan in March 1948 by which these Rulers united under the Ruler of Udaipur to form what later came to be known as the Former State of Rajasthan.
In March 1949, the United State of Rajasthan was formed by Covenant entered into by fourteen Rulers of Rajasthan, including those who had formed the Former State of Rajasthan, and this State came into existence from April 7, 1949.
There was a merger of the Matsya Union in the State of Rajasthan on May 15, 1949 and thus the former Bharatpur State came to be included in the United State of Rajasthan through the Matsya Union.
As we have already stated, the Raj Pramukh promulgated the Rajasthan (Regulation of Customs Duties) Ordinance No. 16 of 1949 on August 9, 1949.
It is well established that Parliament or State Legislatures are competent to enact a law altering the terms and conditions of a previous contract or of a grant under which the liability of the Government of India or of the State Governments arises.
The legislative competence of Parliament or of the State Legislatures can only be circumscribed by express prohibition contained in the Constitution itself and unless and until there is any provision in the Constitution expressly prohibiting legislation on the subject either absolutely or conditionally, there is no fetter of imitation on the plenary powers which the Legislature is endowed with for legislating on the topics enumerated in the relevant Lists.
this view is borne out by the decision of the Judicial Committee in Thakur Jagannath Baksh Singh vs The United Provinces(1) in which a similar complaint was made by the taluqdars of Oudh against the United Provinces Tenancy Act (U.P. Act 17 of 1939).
It was held by the Judicial Committee that the Crown cannot deprive itself of its legislative authority by the mere fact that in the exercise of its prerogative it makes a grant of land within the territory over which such legislative authority exists, and no court can annul the enactment of a legislative body acting within the legitimate scope of its sovereign competence.
If therefore, it be found that the subject matter of a Crown grant is within the competence of a Provincial legislature nothing can prevent that legislature from legislating about it unless the Constitution Act itself expressly prohibits legislation on the subject either absolutely or conditionally.
accordingly, in the absence of any such express prohibition, the (1) [1946] F.C.R. III.] I 8(a) 90 United Provinces Tenancy Act, 1939, which in consolidating and amending the law relating to agricultural tenancies and other matters connected therewith in Agra and Oudh, dealt with matters within the exclusive legislative competence of the Provincial legislature under item 21 of List 11 of the 7th Sch.
to the Government of India Act, 1935, was intra vires the Provincial legislature notwithstanding that admittedly some of its provisions cut down the absolute rights claimed by the appellant taluqdar to be comprised in the grant of his estate as evidenced by the sanad granted by the Crown to his predecessor.
The same principle has been reiterated by this Court in Maharaj Umeg Singh and others vs The State of Bombay and others(1).
It was pointed out that in view of article 246 of the Constitution, no curtailment of legislative competence can be spelt out of the terms of clause 5 of the Letters of Guarantee given by the Dominion Government to the Rulers of "States" subsequent to the agreements of Merger, which guaranteed, inter alia, the continuance of Jagirs in the merged 'States '.
This principle also underlies the recent decision of this Court in Maharaja Shree Umaid Mills Ltd. vs Union of India(2) in which it was pointed out that there is nothing in article 295 of the Constitution which prohibits Parliament from enacting a law altering the terms.
and conditions of a contract or of a grant under which the liability of the Government of India arises.
It was further held that there was nothing in article 295 prohibiting Parliament from enacting a law as to excise duty or income tax in territories which became Part B States, and which were formerly Indian States, and such a prohibition cannot be read into article 295 by virtue of some contract that might have been made by the then Ruler of an Indian State with any person.
As we have already indicated, there is nothing in the provisions of the Rajasthan (Regulation of Customs Duties) Ordinance No. 16 of 1949 which preserves the alleged contractual rights of the appel lant, and in the absence of any express language in the Ordinance preserving such alleged contractual rights, it must be held that the general, law enacted in the Ordinance supersedes the previous contract of the appellant with the State of Bharatpur.
Lastly, it was argued on behalf of the appellant that the notification dated January 16, 1951 revoking the tax concessions was in violation of article 306 of the Constitution which provides as follows: "Notwithstanding anything in the foregoing provisions of this Part or in any other provisions of this Constitution, any State specified in Part B of the First Schedule which before the commencement of this Consti tution was levying any tax or duty on the import of goods into the State from other States or on the export of goods (1) [1963] Supp. 2 S.C.R. 515. 91 from the State to other States may, if an agreement in that behalf has been entered into between the Government of India and the Government of that State, continue to levy and collect such tax or duty subject to the terms of such agreement and for such period not exceeding ten years from the commencement of this Constitution as may be specified in the agreement.
The argument is based on the assumption that the appellant was enjoying concessions under section 40 of the Customs Circular No. 15 and continued to enjoy the concessions in the State of Matsya under section 34 of the Matsya Customs Ordinance No. 14 of 1948, and subsequently in the State of Rajasthan under section 6 of the Rajasthan (Regulation of Customs Duties) Ordinance No. 16 of 1949.
It is the admitted position that the agreement entered between the Government of India and the United State of Rajasthan on February 25, 1950 incorporated certain recommendations of the Federal Finance Enquiry Committee Report 1948 49.
The agreement having been executed and the condition under article 306 having been satisfied in this case, the continuance of the customs duty is in conformity with the provisions of this Article.
In any case, the claim of the appellant is not based on any provision of Bharatpur law but upon a contractual liability of Bharatpur State and to a case of this description the provisions of article 306 cannot be attracted.
For the reasons expressed, we hold that the judgment of the High Court is right and this appeal must be dismissed with costs.
Appeal dismissed.
| The former State of Bharatpur sold some plots for establishing a Mandi, and the appellant was one of the purchasers.
Under the terms of the sale, a person trading in the Mandi would get a reduction of 25 % in the customs duty payable, if the commodities were imported into or exported out of the State through the Mandi.
The Government of Bharatpur and after its merger the Government of the United State of Matsya, and thereafter, the present Rajasthan State (respondent herein) allowed the reduction to the appellant, who was also a trader.
In 1951, the respondent revoked the concession.
The appellant filed a suit for the recovery of the excess amount of customs duty paid on the basis that there was a valid contractual liability to grant the concession.
The suit was dismissed by the High Court on appeal.
In appeal to this Court, HELD:(i) The appellant 's suit must fail because there was no recognition of the contractual right to the succeeding State of Rajasthan.
The contractual liability of a former State is binding on a succeeding sovereign State only if it recognises that contractual liability.
The enjoyment of the concession by the appellant after the formation of the Rajasthan State did not show any implied recognition of the contractual liability by the respondent, because, the concession is referable to section 33 of the Matsya Customs Ordinance of 1948 under which the concession could be granted and recognised.
[85B 88C D] Case law referred to.
(ii) Even upon the assumption that there was an implied re cognition by the respondent of the contractual liability, the suit must fail, for the contractual liability must be taken to have been super.
seded by the enactment of the Rajasthan (Regulation of Customs Duties) Ordinance No. 16 of 1949.
[88 E F].
Parliament and State Legislatures are, subject to any prohibition in the Constitution, competent to enact laws altering the terms and conditions of a previous contract or of a grant under which the liability of the Government of India or of the State Governments arises.
There is nothing in the provisions of the Ordinance which preserves the alleged contractual rights of the appellant, and in the absence of any express language in the Ordinance preserving such rights.
it must be held that the general law enacted in the Ordinance supersedes the previous contract of the appellant with the State of Bharatpur.
[90 D F] Maharaj Umeg Singh vs The State of Bombay.
[1955] 2 S.C.R. 164 and Maharaja Shree Umaid Mills Ltd. vs Union of lndia, [1963] Supp. 2 S.C.R. 515, followed.
82 (iii)The levy of Customs duty is in conformity with article 306 of the Constitution.
[91 D]
| 2097.txt |
Appeals Nos.
2 1 21 and 2122 of 1969.
Appeals from the judgment and order dated July 18, 1969 of the Andhra Pradesh High Court in W. P. Nos. 464 and 602 of 1965.
D. Narasaraju, A. Subba Rao and K. R. Sharma, for the appel lant (in both the appeals) M. C. Setalvad P. Parameswara Rao, V. Rajagopal Reddy, S, L. Setia and K. C. Dua, for respondent No. 1 (in both the appeals).
V. A. seyid Muhammad and section P. Nayar, for respondent No. 2 (in both the appeals).
156 P. Ram Reddy and A. V. V. Nair, for respondents Nos. 3 and 4 (in C.A. No. 2121 of 1969) and respondent No. 3 (in C.A. No. 2122 of 1969).
The Judgment of HEGDE and GROVER, JJ. was delivered by HEGDE, J. SHAH, J. delivered a dissenting opinion : Shah, J. I agree that Appeal No. 2122 of 1969 must be dismissed.
I also agree that if the states to dispose of the application for grant of a mining lease within the time prescribed by the rules, the failure,results in refusal to grant the lease.
The High Court was in error in holding that in the absence of a provision enacting, that even if the application stands rejected for failure to pass an order within the time prescribed, the State Government has power to issue a licence.
The High Court was again in error in holding that because of the representations made by the State before Bhimasankaran, J., in Writ Petition No. 1237 to 1957 the State Government were estopped from contending that the application was by the first respondent must be deemed to have been refused.
But I am unable to agree that the Central Government was competent in exercise of its power of review, against the order of the State Government made in compliance with the order of Basi Reddy, J. in Writ Petition No. 888 of 1957, to set aside the order so as in effect to overrule the, judgment of the High Court.
The relevant facts may be recalled.
The Central Government made an order on September 25, 1957, in the review application filed by the first respondent holding that his application was premature and that it was for the State Government to dispose of the application within six months of August 31, 1957.
The first respondent then moved Petition No. 888 of 1957 for a mandamus directing the State Government to dispose of his application.
By order dated November 4, 1958, Basi Reddy, J., observed that r. 57(2) as amended by S.R.O. No. 2753 "is intended for the benefit of the applicant, and does not relieve the State from per forming the statutory functions imposed on it under rule 17(1) and 17(2) viz. of granting or refusing the licence".
The State Government then heard the application and granted the mining lease for which the first respondent had applied on September 15, 1953.
Against that order the appellant moved a review petition.
The Central Government by order dated February 15, 1965, allowed the review petition and set aside the grant in favour of the first respondent.
Granting that the High Court erroneously issued a writ of mandamus directing the State Government to perform its func tions it was, in my judgment, not open to the Central Government 157 in effect to exercise appellate authority over the judgment of the High Court.
If the order was erroneous it could be set aside by an appropriate proceeding before a Division Bench of the High Court or before this Court.
But the Central Government had no power to set aside the order on the view that the High Court had reached an erroneous conclusion.
To accede to the contention that the executive has the power, when exercising quasi judicial functions, to sit in appeal over the decision of the High Court is to destroy the scheme of division of powers under our Constitution.
I see no reason for making a distinction be tween the effect of an order made by the High Court and carried out by the State, and an order made by the High Court and confirmed in appeal by this Court and carried out by the State.
In my view article 141 of the Constitution has no bearing on that question.
If this Court decided a question of law or of fact or a mixed question of law and fact arising in an appeal against an order passed by the High Court in a writ petition against the action of the State Government granting or refusing to grant a licence, it would not, in my judgment, be open to the Central Government, hearing a review petition against the order of the State Government in compliance with the order of this Court, to set aside the order so as to upset the order of this Court.
That is so,; not because of article 14 1, but I because neither the Legislature nor the executive is invested with powers to supersede judgments of Courts.
The Legislature may if competent in that behalf change the law but cannot supersede a judgment of the Court.
The executive has no power to change the law, and no power to supersede the judgment of the Court.
It was, however, said that the appellant was not impleaded as a party to Writ Petition No. 888 of 1957, and he could not seek redress in a superior court against the order of Basi Reddy, J.
But it is settled by a long course of authorities that a person who has not been made a party to a proceeding may still appeal with leave of the appellate Court, provided he might have properly been made a party to the proceeding : see Re. "B " an Infant.(1).
In In re.
Securitie Insurance Company(2) Lindley, L.J., observed at p. 413 : "I understand the practice to ' be perfectly well settled that a person who is a party can appeal (of course within the proper time) without any leave, and that a person who without being a party is either bound by the order or is aggrieved by it, or is prejudicially affected by it, cannot appeal without leave.
It does not require.
much to obtain leave.
If a person alleging him (1) C.A. (2) 158 self to be aggrieved by an order can make out even a prima facie case why he should have leave he will get it; but without leave he is not entitled to appeal.
" The rule has been accepted by the High Courts in India : see The Province of Bombay vs Western India Automobile Associa tion;(1) Ponnalagu vs State of Madras;(2) and Pullayya vs Nagbhushanam.
(3) The appellant could undoubtedly have been made a party to a petition before the High Court.
lie could, therefore, challenge the correctness of the order made by Basi Reddy, J. No objection could be raised against the grant of leave to him to appeal ,on the ground that he was not a party to the Writ Petition No. 888 of 1957.
In my judgment, therefore, Appeal No. 2121 of 1967 must also fail.
Hegde, J.
These appeals by certificate arise from the common judgment of the High Court of Judicature at Andhra Pradesh in Writ Petitions Nos.
464 and 602 of 1965.
The appellant herein was the petitioner in Writ Petition No. 602 of 1965 and the 5th respondent in Writ Petition No. 464 of 1965.
In this case, it will be convenient to formulate the issues arising for ' decision after setting out the relevant facts.
Amrutham Kotaiah Naidu, the 1st respondent in these appeals applied for the grant of a mining lease in respect of 915 acres and 18 cents of lands in Appalanarasinmhapuram hamlet of Cheruvumadhavaram in Khammameth Teluqa of Warangal District of the then Hyderbad State, on September 15, 1953.
After production of agreement with the pattedars lease in respect of lands comprising 57 acres 25 Gunthas was granted to him as per the order of the Director of Mines and Geology dated January 9, 1954.
That order is silent as regards the other areas included in his application.
Thereafter the respondent was pressing the State Government to , rant him on lease the remaining areas included in his application.
Meanwhile on November 21, 1955, the appellant applied for the grant of a mining lease of a portion of the area for which the respondent had earlier submitted his application.
The State Government granted on mining lease to various persons some of the areas in respect of which the respondent had asked for a mining lease.
Obviously aggrieved by those grants the respondent moved (1) I.L.R. (2) I.L.R. (3) I.LR.
F.B. 159 the Central Government under rule 57 of the Mineral Concession Rules, 1949 (to be hereinafter referred to as 'rules on December 8, 1955, seeking a directicon to the State Government to grant to him the lease asked for by him by his application of September 15, 1953.
He further requested the Central Government to direct the State Government to stop granting further areas to other appli cants in Appalanarasimhapuram village pending investigation of the matter and pending decision of the Central Goverrunent.
Meanwhile on December 27, 1955, the State Government granted on mining lease 1 acre and 20 cents of land to the appellant from out of the area included in the 1st respondents application.
On July 18, 1956, the Central Government dismissed the review petition made by the 1st respondent on December 8, 1955 with these observations "Sir, I am directed to refer to your application dated the 8th December, 1955, on the subject and to say that after careful consideration of the facts stated therein, the Central Government have come to the conclusion that there is no valid ground for interfering with the decision of the Government of Hyderabad, rejecting your application for grant of mining lease for iron ore in Appanarasimhapuram and Raigudam villages, Khammameth district.
Your application for revision is, therefore, rejected.
Yours faithfully, Sd/ G. C. Jerath, Under Secretary to the Government of India.
" Evidently the Central, Government proceeded on the basis that the order of the State Government dated January 9, 1954 granting 57 acres and 20 cents of land to the 1/st respondent, by implication amounted to a rejection of his claim in respect of the other areas.
Meanwhile on September 15, 1956, some of the rules were amended.
After rule 28(1) anewsub rule 28(1 A)was inserted.
That sub rule reads : "Every application under rule 27 shall be disposed of by the State Government within 9 months from the date of receipt of the application.
" At the same time rule 57 was also amended.
Amended rule 57 reads thus : (1) "Application for review. (1) Where a State Government passes as under. (i) refusing to grant a certificate of approval, prospecting license or mining lease; 160 (ii)refusing to renew a certificate of approval, prospecting license or mining lease; (iii) cancelling a prospecting license or mining lease; (iv) refusing to permit transfer of a prospecting license or any right, title or interest therein under clause (iv) of sub rule (1) of rule 23 or a niping lease or any right, title or interest therein under rule 37, it shall communicate in writing the reasons for such order to the person against whom the order is passed and any person aggrieved by such order may, within two months of the date of receipt of such order, apply to the Central Government for reviewing the same.
(2) Where a State Government has failed to dispose of an application for the grant or renewal of a certificate of approval or prospecting license or a mining lease within the period prescribed therefore in these Rules, such failure shall, for the purpose of these rules, be deemed to be a refusal to grant or renew such certificate, license or lease, as the case may be, and any person aggrieved by such failure may, within two months of the expiry of the period aforesaid apply to the Central Government for reviewing the case.
(3) An application for review under this rule may be admitted after the period of limitation prescribed under this rule, if the applicant satisfies the Central Government that he had sufficient cause for not making the application within the said period.
" A further amendment to that rule 57(2) was made on August 31, 1957.
The concerned notification No. S.R.O. 2753 reads "In exercise of the powers ' conferred by section 5 of the Mines and Minerals (Regulation and Development) Act, 1948, the Central Government hereby makes the following further amendment in the Mineral Concession Rules, 1949, namely Provided that any such application pending with the State Government on the 14th September, 1956, and remaining undisposed of on the 24th August, 1957, shall be disposed of by the State Government within six months from the latter date.
" On April 16, 1957, the 1st respondent filed another review petition before the Central Government.
On September 26, 1957, 161 that petition was dismissed by the Central Government as being premature.
The relevant portion of that order reads "With reference to your application dated 16th April, 1957, on the above subject, I am directed to invite your attention to this Ministry 's notification No., MII 152(26)/57 dated the 21 8 57 (copy enclosed) amending the Mineral Concession Rules, 1949.
It will be noticed therefrom that the application for concessions received by the State Govt.
prior to the 4th September, 1956 and remaining undisposed of on the 31st August 1957 shall be disposed of by them within six months from the latter date.
Your application fo r review is therefore premature at this stage and in case your application for Mining Lease is not disposed of by the State Government within the prescribed period you may apply to the Central Government at the appropriate time." While making this order, evidently the Central Government had overlooked its earlier order dated July 18, 1956.
After the aforementioned order of the Central Government, the 1st respondent moved the High Court of Andhra Pradesh under article 226 of the Constitution in Writ Petition No. 888 of 1957 seeking a writ of mandamus to the State Government of Andhra Pradesh to dispose of his application for lease made on September 15, 1953, expeditiously.
To that petition he made only the State of Andhra Pradesh as the respondent.
Neither the Central Government nor the appellant herein were parties to that petition.
That petition came tip for hearing before Basi Reddy J. on November 4, 1958.
At the hearing the learned Government Pleader who appeared for, the State Government conceded that the application of the petitioner for mining lease on September 15, 1953 had not been disposed of by the State Government in the manner prescribed by rule 17 of the 'Rules ' but he contended that that application must be deemed to have been rejected in view of rule 57(2).
The learned judge rejected that, contention with the following observations: "In my opinion this deeming provision is intended for the benefit of the applicant add does not relieve the State Government from performing the statutory functions imposed on it by rules 17(1) and 17(2) viz., of granting or refusing the licence, and in case of refusal of recording in writing the reasons for the refusal and of refunding the application fee." He accepted the petition and issued the mandamus prayed for. 162 During the pendency of the writ petition No. 888 of 1957, ,the 1st respondent filed another writ petition on December 16, 1957 seeking the very relief that he had sought in his earlier writ ,petition.
That petition was disposed of by Bhimasankaram J. ,on August 20, 1959, with these observations : "It is stated by the learned 3rd Government Pleader that the Government is prepared to dispose of the application of the petitioner on the merits without relying upon rule 57(2) of the Mineral Concession Rules, 1949.
in the circumstances the petitioner does not want to press his petition.
The writ petition is accordingly dismissed.
There will be no order as to costs.
" The State Government by its order dated May 27, 1961, :granted on mining lease to the respondent all the areas for which he had applied an September 15, 1953 less those areas which had been earlier leased out to others.
Aggrieved by the above order, the appellant moved the Central Government under rule 57 on July 7, 1961 for review ing the said order.
Even before that he had moved the Andhra Pradesh High Court under article 226 of the Constitution on June 13, 1961 to issue a writ of mandamus to the State Government .to consider his application for mining lease in preference to that of the 1st respondent as according to him the 1st respondent 's application should be deemed to have been rejected under rule 57(2).
The High Court rejected that application observing that the appropriate course for him was to move the Central Government under rule 57 against the order of the State Government.
Thereafter on 15 2 1965, the Central Government allowed the review petition filed by the appellant and set aside the grant made in favour of the 1st respondent on May 27, 1961.
It came to the conclusion that the applications made by the appellant, the 1st respondent as well as others which were pending before the Andhra Pradesh Government should be deemed to have been rejected on the 1st March 1958, in view of rule 57(2).
Aggrieved by that order the 1st respondent filed Writ Petition No. 464 of 1965 praying that the High Court may be pleased to call for 'the relevant records from the Central Government by issuing a writ of certiorari and quash the order of the Central Government and issue a further writ to the Central Government and to the :State Government to grant the lease asked for by him.
During ,the pendency of that petition the appellant filed Writ Petition 'No. 602 of 1965 seeking a writ of mandamus against the Central 'Government and the State Government to grant him the mining lease for which he had applied.
The High Court has allowed 'the writ petition filed by the 1st respondent and dismissed that of the appellant.
Hence these appeals.
163 So far as Civil Appeal No. 2122 of 1969 is concerned there is no merit in the same.
No ground in support of that appeal was urged before us.
Hence it fails and it is dismissed.
In Writ Petition No. 464 of 1965 from which Civil Appeal ' No. 2121 of 1969 arises, the High Court set aside the order of the Central Government on various grounds and upheld the grant made by the State Government in favour of the 1st res pondent.
We shall now proceed to consider the correctness of the reasons given by the High Court in support of its order.
The High Court was of the opinion that rule 57(2) was enacted only for the benefit of the applicants for lease, license etc.
so that they may have an early opportunity to move the Central Government for appropriate orders.
In the view of the High Court that rule does not take away the, power of the State Government to dispose of the applications made for mining lease etc.
even after the period prescribed expires.
In support of this conclusion, it relied on the decision of the Patna High Court in Dey Gupta and Co. vs State of Bihar and Anr.(1) as well as on the decision of Basi Reddy J. in Writ Petition No. 888 of 1957 to which reference has already been made.
Neither the Patna decision nor the judgment of Basi Reddy J. nor the decision under appeal gives any cogent reason An support of the conclusion that the deemed dismissal under rule '57(2) does not take away the right of the State Government to grant the lease asked for.
The Patina High Court in support of its conclusion observed "No doubt, reading rule 27(1 A) with rule 57(2) of the Rules, it is clear that, if the State Government fails to dispose of an application for the grant of a mining lease within nine months, it must be deemed to have been refused by it.
But this provision is made, in my opinion only for the purpose of filing a review application before the Central Government, so that an applicant desirous to have a mining lease may not have to wait unnecessarily for a long period without any order being passed on his application.
That however, does not mean that after the lapse of nine months from the date of receipt of the application, the State Govt.
ceases to have jurisdiction over the matter so as not to pass any order on any application after the lapse of nine months from the date of its receipt.
The expression "deemed to be a refusal" in rule 57(2) is only for the purpose of a review application to (1) A.I.R. 1961 Pat.
164 be filed before the Central Government, and it is not a part of rule 28(1 A).
In this view of the matter the legality of the order passed by the State Government granting a mining lease to respondent No. 2 cannot be Challenged on the above ground.
" We think that these observations are not correct.
If it is otherwise, even when a review petition is pending before the Central Government under rule 57, the State Government can make an order on the application made and thus compel the parties to file another review petition.
Further, if the Central Government gives one direction ins the review petition and the State Government passes an inconsistent order in the original petition, there is bound to be confusion.
If we read rule 27(1A).
and rule 57(2) together, there is hardly any doubt that after the period prescribed, the State Government is incompetent to deal with the applications pending before it.
According to rule 57(2), where a State Government has failed to dispose of an application.
for the grant of a mining lease within the period prescribed therefor in the rules, such failure shall, for the purpose of the rules be deemed: to be refusal to grant the lease.
The rules referred therein include rule 28 as well.
This deemed refusal, if read with the mandate given to the State Government under rule 28(1 A) requiring it to dispose of the applications within 9 months of the receipt of those applications, there can be hardly any doubt that if the State Government does not dispose of the applications within the time prescribed, it is deemed to have refused those applications, for the purpose of rule 28 as well as rule 57.
The High Court was wrong in thinking that in the absence of a provision providing for deemed rejection in rule 28(1 A), the contravention of that rule does not take away the jurisdiction of the State Government.
That conclusion ignores the words in rule 57(2) that deemed rejection is 'for the purpose of these rules '.
In view of those words in rule 57(2), it was unnecessary for the rule making authority to prescribe in rule 28(1A) the consequences of the failure on the part of the State Gov ernment to implement the mandate of rule 28(1 A).
Hence, in our opinion, the Central Government 's decision that the applications made by the appellant, the 1st respondent and others for mining lease should be deemed to have been refused on March 1, 1958 is correct.
Therefore the High Court was wrong in quashing the order of the Central Government on that ground.
The High Court was also wrong in opining that in view of the representations made by the learned Government Pleader before Bhimasankaran J. on August 25, 1959, in Writ Petition No. 1237 of 1957, the State Government is estopped from con 165 tending that the application made by the 1st respondent on September 15, 1953 must be deemed to have been refused.
There can be no estoppel against a statute.
Rule 28(1 A) and rule 57 (2) are statutory rules.
They bind the Government as much as they bind others.
The requirement of those rules cannot be waived by the State Governments.
Therefore the fact that the learned Government Pleader represented to the Court that the petition filed by the 1st respondent on September 15, 1953 was still pending disposal cannot change the legal position nor could it confer on the State Government any power to act in contravention of those rules.
Yet another ground relied on by the High Court is that in view of the writ issued by Basi Reddy J. in Writ Petition No. 888 of 1957, the State Government was bound to consider the application of the 1st respondent and therefore the decision of the State Government taken in obedience to the order of the High Court could not have been set aside the Central Government.
It is true that as far as the State Government is, concerned the writ issued was binding whether the decision rendered by the court was correct in law or not; but then that decision will not bind either the appellant herein or the Central Government who were not parties to that writ petition.
It is not a judgment in rem.
In obedience to the writ issued by the court, of the State Government did consider the application of the 1st respondent.
It granted him the lease asked for by him.
Therefore the State Government has complied with the direction issued to it by the High Court.
The Central Government had been constituted as the revisional authority under rule 57.
That authority is a quasi judicial body created by statutory rules.
It is bound by law to discharge the duties imposed on it by rule 57.
Therefore it had to obey the mandate of rule 57.
In so doing, it cannot be said that it had infringed the mandamus issued by the High Court in writ petition No. 888 of 1957 to which, as pointed out before, the appellant was not a party and the order made in which could not be 'binding either on the Central Government or the appellant.
For the reasons mentioned above, we allow Civil Appeal No. 2121 of 1969 and set aside the order of the High Court and dismiss the writ petition No. 464 of 1965 but in the circum stances of the case, we make no order as to costs in these appeals.
ORDER In accordance with the opinion of the majority Civil Appeal No. 2121 of 1969 is allowed and Civil Appeal No. 2122 of 1969 is dismissed.
No order as to costs in these appeals.
| In September, 1953, the first respondent applied for a mining lease for over 900 acres in the then Hyderabad State.
He was granted a lease of about 57 acres in January, 1954 by an order of the State Government which was silent as regards the other areas included in his application.
While the respondent kept pressing ' for a lease of the remaining areas, the State Government began to grant, some of these areas to other persons including the appellant.
Meanwhile,, on December 8, 1955, the respondent moved the Central Government under Rule 57 of the Mineral Concession Rules, 1949, seeking a direction to the State to grant to him the lease of the areas sought by him and to stop granting further areas to other applicants.
This review petition was dismissed on the basis that the order of the State Government granting only 57 acres by implication amounted to a rejection of the respondent 's claim for the balance area.
On September 15, 1956, the Mineral Concession Rules were amended and a new sub rule 28(1) (A) was introduced which provided that every application under Rule 27 shall be disposed of within 9 months from the date of its receipt.
The amended Rule 57 provided that the failure of the State Government to dispose of an application within the prescribed period would be deemed to be a refusal to grant a lease and that the aggrieved person may, within two months, apply to the Central Government for a review.
A further amendment of Rule 57(2) provided that any application pending with the State Government an 14th September, 1956 and remaining undisposed of on the 24th August, 1957, shall be disposed of by the State Government within 6 months from the latter date.
Prior to this amendment the respondent had filed another review petition before the Central Government and on September 26, 1957, that petition was dismissed by the Government as being premature; this was on the basis that the respondent 's original application was pending on 31st August, 1957, and the period of 6 months from that date, as prescribed by the amended Rule 57(2) had not yet expired.
The respondent then moved the High Court by a petition under Article 226.
making the State Government alone party and seeking a writ of mandamus to the Government to dispose of his application of September, 1953, expeditiously.
The High Court allowed this petition and did not accept the contention, on behalf of the State Government that in view of section 57(2) the respondent 's application must be L11Sup CI/11 154 deemed to have been rejected.
it held that section 57(2) was intended to be for the benefit of the applicant and did not relieve the State Government from performing the statutory function imposed on it under rule 17 of granting or refusing the licence.
During the pendency of the first petition, the respondent had also filed a second petition seeking the same relief and this was disposed of in August, 1959 on the basis of a statement by the Government Advocate that the State Government was prepared to dispose of the first respondent 's application on the merits without relying on rule 57(2).
By an order on May 27, 1961, the State Government granted on.
mining lease to the, respondent all the areas for which he had applied in September, 1953 excluding those areas which had been earlier leased to others.
, However.
the Central Government allowed a review petition under Rule 57 filed by the appellant and set aside the order on the ground that the application made by the appellant, the first respondent, as well as others which were pending before the State Government 'should be deemed to have been rejected on 1st March, 1958 in view of rule 57(2).
The 1st respondent then challenged this order by a writ petition in the High Court which was allowed and the order was quashed.
The court held that rule 57(2) was enacted only for the benefit of the applicants and did not take away the power of the State Government to dispose of applications even after expiry of the prescribed period; that in view of the Government Advocate 's concession the State Government Was stopped from contending that the respondent 's application of September, 1953 must be deemed to have 'been refused; and furthermore that in view of the writ of mandamus issued in the first writ petition, the State Government was bound to consider the application of the 1st respondent and the decision of the State Government taken in obedience to the order of the High Court could not have been set aside by the Central Government.
HELD : (Per Hedge and Grover, JJ); The appeal must be allowed (By the Court) (1) Reading rule 28 (1 A) and rule 57 (2) together, there is no doubt that after the period prescribed, the State Government is incompetent to deal with the applications ' pending before it.
The High Court was, therefore, wrong in holding that even if an application stands rejected for failure to pass an order within the time prescribed, the State Government has power to issue a licence.
[164 C] Dey Gupta & Company vs State of Bihar A.I.R. 1961 Pat. 487; referred to.
(2) There can be no estoppel against a statute.
Rule 28(1 A) and rule 57(2) are statutory rules.
They bind the Government as much as they bind others.
The requirement of those rules cannot be waived by the State Governments.
Therefore the fact that the Government Advocate represented to the Court that the 1st respondent 's application was still pending could not change the legal position nor could it confer on the State Government any power to act in contravention of those rules.
[165 A B] (3)Per Hegde and Grover JJ.); As far as the State Government was concerned the writ issued was binding whether the decision rendered by the Court was correct in law or not; but that decision could not bind the appellant or the Central Government who were not parties to that writ petition.
It was not a judgment in rem.
In obedience to the writ issued by the court, the State Government did consider the 155 application of the 1st respondent and granted him the lease asked for by him.
The Central Government had been constituted as the revisional authority under rule 57.
That authority is a quasi judicial body created by statutory rules.
It is bound by law to discharge the duties imposed on it by rule 57.
Therefore it had to obey the mandate of rule 57.
In so doing it cannot be said that it had infringed the mandamus issued by the High Court.
[165 D F] (Per Shah J, dissenting) : The appeal must be dismissed, Granting that the High Court erroneously issued a writ of mandamus directing the State Government to perform its functions it was, not open to the Central Government in effect to exercise appellate authority over the judgment of the High Court.
To accede to the contention that the executive has the power, when exercising quasi judicial functions, to sit in appeal over the decision of the High Court is to destroy the scheme of division of powers under our Constitution.
There was no distinction between the effect of an order made by the High Court and carried out by the State, and an order made by the High Court and confirmed in appeal by this Court and carried out by the State.
Article 141 of the Constitution has no bearing on that question.
If this Court decided a question of law or of fact or a mixed question of law and fact arising in an appeal against an order passed by the High Court in a writ petition against the action of the State Government granting or refusing to grant a licence, it would not be open to the Central Government, hearing a review petition against the order of the State Government in compliance with the order of this Court, to set aside the order so as to upset the order of this Court.
[156 H] It is well settled that a person who has not been made a party to a proceeding may still appeal with leave of the Appellate Court provided he might have properly been made 'a party to the proceeding.
The appellant could undoubtedly have been made a party to the petition before the High Court.
He could, therefore, challenge the correctness of the order and no objection could be raised against the granting of leave to him to appeal on the ground that he was not a party to the writ petition.
C] Re.
"B" an Infant C.A., The Province of Bombay vs Western India Automobile Association I.L.R. ; Ponnalagu vs State of Madras I.L.R. [1953] Mad. 808; Pullayya vs Nagbhushanain I.L.R. F.B.; referred to.
| 2817.txt |
ISDICTION: Writ Petition Nos.
147 to 151 of 1976.
(Under Article 32 of the Constitution) WITH SPECIAL LEAVE PETITION (CIVIL) No.7905 OF 1979 From the Judgment and Order dated 29 8 1978 of the Allahabad High Court, in S.A. No. 887/70.
M.C. Bhandare, Mrs. section Bhandare and T. Sreedharan for the Petitioners.
L.N. Sinha, Attorney General, Mr. M.K. Banerjee, Addl.
Solicitor General, R.B. Datar, A.K. Ganguli, R.N. Sachthey and Miss A. Subhashini for RR 1 and 2.
F.S. Nariman, Anil B. Dawan, P.H. Parekh, C.B. Singh and R. Karanjwala for RR 1 & 19.
S.C. Gupta and Ramesh Chand for RR 14.
Madan Bhatia and D. Goburdhan for RR 20.
Y.S. Chitale, V.M. Tarkunde, and A.N. Karkhanis for RR 28 and 31.
S.D. Gupta in person for impleading RR in WP 147/76.
Girdharee Singh and S.K. Jain for the Intervener.
147 The Judgment of the Court was delivered by, CHINNAPPA REDDY, J.
Several hundred Railway Engineers who should have been busy elsewhere, building bridges, laying or doubling tracks and so on have found themselves in the corridors of this Court in pursuit of the leaves of career.
Quite a contingent was present in Court anxiously watching the proceedings and listening with expect attention to every word that fell from counsel and judge.
One could not help wondering whether this multitiered. 'multi varne ' Service system was itself not productive of a career neurosis, destructive of the very efficiency which is sought to achieve.
In this case, as in most other service matters that reach this Court, the question which arise for consideration relate to classification, confirmation, seniority, promotion etc., questions which appear to agitate the minds of the members of all services.
Administrators seeking to find solutions to some of the problems very soon discover that their solutions are no more than illusions and have created other problems.
First one party and then another party, all seek the protection of the Court.
The Court is no expert administrator.
Lacking expertise, lacking the administrator 's access to information, there are obvious limitations to what the Court may be.
The Court may at best attempt to solve some basic legal issues.
That the Court strives to do without disturbing the administrative equilibrium.
The service with which we are concerned in this Case is the Indian Railway Service of Engineers, Class I.
While the petitioners claim that they were appointed to this service after selection by the Union Public Service Commission, the respondents allege that the petitioners were appointed as temporary Engineers only, constituting a special class and service by themselves, and were not appointed to the Indian Railway Service of Engineers Class I at all.
It appears that from the time of the first Five Year Plan onwards several important assignments such as the construction of major bridges, new lines, doubling of electrification of existing lines etc. were taken up by the Civil Engineering Department of the Indian Railways.
It became necessary to create a number of temporary posts of Class I (Indian Railway Service of Engineers) and Class II Engineers to carry out these works.
In 1955 it was estimated that about 200 additional Engineers would be necessary within the next two years to deal with the planning, surveying, estimating and construction of the multitude of the proposed development works.
It was not thought possible to 148 meet the additional personnel requirements from existing sources, which were direct recruitment to Class I on the basis of the results of a competitive examination and promotion to Class II from Class III.
Though the conversion of some of the temporary posts into permanent ones might meet part of the requirement, it was thought, recruitment through normal channel to such posts would necessarily have to be spread over a period of years so as to avoid 'bunching of officers within particular age group '.
It was, therefore, decided to recruit, in the first instance, fifty temporary Engineers immediately.
Their scale of pay was to be the same as that of the Indian Railway Service of Engineers.
The age limit was to be 25 to 35 years so as to attract Engineers with practical experience.
The appointments were to be normally made on the minimum of the time scale but persons with previous experience could be fitted into the scale at a higher stage.
As the posts were to be temporary, it was decided that an incentive should be given to attract suitable candidates by reserving a proportion of the permanent vacancies in the Indian Railway Service of Engineers each year for being filled by such temporary Engineers.
Six vacancies in the Indian Railway Service of Engineers were to be so earmarked annually to start with.
The quota could be increased later.
On permanent appointment to the Indian Railway Service of Engineers seniority would count from the date of such appointment.
Proposals on these lines were conveyed by the Railway Board to the Union Public Service Commission on February 21, 1955 with a request to take steps for the early recruitment of temporary Engineers.
A formal requisition in the prescribed form was also sent to the Union Public Service Commission.
In this form, the post was designated as "Assistant Engineer", the number of posts was mentioned as 50, and, the class of service to which the post belonged was mentioned as "Gazetted Railway Service".
Against the heading "whether permanent or temporary", the posts were mentioned as "temporary".
Against the column "if the post is temporary, please state : (a) when it was sanctioned; (b) the period for which it has been sanctioned and (c) irrespective of the period of sanction how long it is expected to last and whether it is expected to be retained on a permanent basis eventually", it was mentioned that the posts would be sanctioned shortly in connection with a number of projects, that the period would be two years in the first instance but was likely to be extended upto five years and that the employment might continue indefinitely but on a temporary basis.
It was specified that the candidates would be eligible to be considered for absorption in permanent vacancies at the rate of six per year.
The scale was mentioned as Rs. 350 350 380 380 30 590 E.B. 30 770 40 850, this being the Junior Scale of pay of Indian Railway Service of Engineers Class I.
It was 149 said that higher initial salary was permissible according to experience and qualifications.
The academic qualifications were to be the same as for regular recruitment to Indian Railway Service of Engineers.
Against the heading prospects of promotion to higher post it was stated that they might be considered for promotion to senior scale posts in the grade of Rs. 600 40 1000 50/2 1150 according to the exigencies of service.
Similar proposals and "indents" for recruitment of temporary officers to six other departments of the Railways were also simultaneously made.
Pursuant to the requisition by the Railway Board, the Union Public Service Commission issued an advertisement inviting applications for "50 posts of Assistant Engineers, Ministry of Railways, Service Class I (Gazetted), posts temporary for two years in the first instance but likely to continue".
The minimum educational qualification was stated to be a Degree in Civil Engineering, but an additional qualification of 'about 3 years experience as a Civil Engineer ' was also prescribed.
The qualification was relaxable at the discretion of the commission in the case of candidates otherwise well qualified.
It was mentioned in the advertisement that the candidates would be eligible 'for being considered for absorption in permanent vacancies at the rate of six per year ' and might be considered 'for promotion to senior grade posts in the scale of Rs. 600 40 1100 50/2 1150 according to the exigencies of service '.
It appears that the reference to Class I in the advertisement was considered by the Railway Board to be a mistake.
The Railway Board, therefore, addressed a letter dated October 31, 1955 to the Union Public Service Commission pointing out that in their requisition they had indicated "Gazetted Railway Service" as the service to which recruitment was to be made and that it was not intended that it should be either Class I or Class II.
It was also mentioned that statements had been made on the floor of the Lok Sabha and Rajya Sabha that the posts were "temporary" and "neither in Class I nor in Class II".
The Commission was accordingly requested to issue a suitable correction slip.
Thereafter, in the subsequent advertisements issued by the Union Public Service Commission there was no reference to Class I.
It was merely mentioned that applications were invited for specified number of posts of "Assistant Engineers (Civil), Ministry of Railways, posts temporary but likely to continue".
The petitioners in the various Writ Petitions who submitted their applications in response to such advertisements, were selected by the Union Public Service Commission, at various times between 1955 150 and 1964 and were offered appointments as 'Temporary Assistant Engineers ' by the Railway Board.
Everyone of them was told that the appointment would be on a temporary basis in the scale of Rs. 350 350 380 380 30 590 E.B. 30 770 40 850.
They were also expressly told that the posts to which they were appointed would be neither in Class I nor in Class II, service though they were eligible, on completion of three years service, to be considered alongwith other temporary Assistant Engineers for absorption in Class I (Junior Scale) against vacancies ear marked from time to time for the absorption of temporary Assistant Engineers in the Indian Railway Service of Engineers Cadre upto a maximum of six per year.
They were also expressly informed that in the event of their being selected in Class I Service their seniority would count from the date of their permanent appointment to Class I Service.
They were required to execute service agreements "as applicable to temporary officers".
It was also stipulated that in all matters not specifically referred to in the order of appointment, the person appointed would be governed by the provisions of the Indian Railway Establishment Code and the extant orders issued from time to time.
The petitioners accepted the terms offered to them and joined duty in the posts to which they were appointed.
The agreements which the petitioners and others like them were required to execute and which they presumably did execute (were in a standard form known as 'Agreement for Temporary Assistant Officers of the Indian Railways '.
Paragraph 2 of the standard form and agreement specified that the appointment was in a gazetted post C which is neither in Class I nor in Class II service) on scale Rs. 350 350 380 380 30 590 E.B. 770 40 850.
Paragraph 5 mentioned that the person appointed would be eligible along with other temporary Assistant Officers "for being considered for absorption in the permanent vacancies in the Class I (junior scale) of the. . department upto a maximum number of vacancies in a year as may be fixed by the Government" and that in the event of his being selected for that service his seniority would count from the date of confirmation.
Paragraph 6 recited that he would be considered for appointment to a Senior Scale post.
The agreement provided that in respect of matters for which no provision was made in it, the provisions of the Indian Railway Establishment Code from time to time in force or rules made thereunder shall apply to the extent they were applicable to temporary Assistant officers.
It was further provided that the decision of the Government as to their applicability, interpretation and effect shall be final.
It should be mentioned here that though there was no previous Presidential sanction for making appointments to posts which were 151 neither in Class I nor in Class II but merely in 'gazetted service ', the matter was rectified and Presidential sanction was subsequently obtained in November, 1956.
This was communicated by the Railway Board to the General Managers of all Indian Railways by letter No. E 55RC 16 (Pt.
A) dated November, 22, 1956.
It was also decided by the President that the Railway Board of the competent authority to appoint Temporary Assistant Officers in the various departments of the Railways.
This was mentioned by the Board in letter No. E. (GF P) 56RC 16 Pt.
A dated 18 12 57 addressed to the General Managers of all Indian Railways.
Between the years 1955 and 1964 as many as 553 temporary Assistant Engineers were appointed after selection by the Union Public Service Commission.
Though in their orders of appointment as temporary Assistant Engineers, the petitioners and others were told that six of them would be absorbed into the Indian Railway Service of Engineers Class I every year, the quota was increased to eight per year in 1957 and fifteen per year in 1961.
In 1960 the quota was fixed at "60% of the actual intake of Probationers from the CES etc.
examinations".
Again in 1975 the quota was increased to 25 per year.
The net result was that all but a 107 temporary Assistant Engineers were left unabsorbed by the time of the filing of the Writ Petitions and they too were finally absorbed in 1979 by what was described to us as a 'blanket order '.
We were informed that the validity of the absorption on this mass scale is under challenge in some Writ Petitions filed by members of the Indian Railway Service of Engineers, Class I.
At this juncture we also find it necessary to mention that the Railway Board decided, on September 17, 1965, that the temporary officers so absorbed into the Indian Railway Service of Engineers should also be given weightage in seniority "on the basis of half the total number of years of continuous service in working posts on Railways prior to their permanent absorption into Class I, subject to a maximum weightage of five years".
This, of course, was the result of representations made by the temporary officers.
This too we are told is under challenge.
The petitioners have filed these Writ Petitions in a representative capacity purporting to represent all temporary Assistant Engineers appointed on the recommendation of the Union Public Service Commission, claiming that, in law, they could only be and were appointed to the Indian Railway Service of Engineers Class I right from the beginning and that the Railway Board was wrong in treating them as belonging to neither Class I nor Class II.
They claim that they were appointed to temporary posts in the cadre of Indian Railway Service 152 of Engineers Class I and that their seniority had to be reckoned on the basis of their length of continuous service, though they concede that in any given year those appointed on the basis of the results of the competitive examination might be placed above those appointed on the basis of the selection by the Union Public Service Commission.
They contend that the Railway Board had no authority to create an unclassified service, as it were, outside the provisions of the Indian Railway Establishment Code.
Notwithstanding the requisitions issued by the Railway Board, the advertisements issued by the Union Public Service Commission and the letters of appointment issued to the petitioners, they contend that they were appointed to the cadre of Indian Railway Service of Engineers Class I and to no other service.
They contend that they were recruited to Class I service under rule 130(d) of the Indian Railway Establishment Code which provides for "occasional admission of other qualified persons on the recommendations of the Union Public Service Commission".
They question the vires of the note to Rule 106 which was added by way of amendment in 1956 and which provided that 'temporary Assistant Officers would not be classified either as Class I or as Class II '.
The petitioners claim that the distinction made by the Railway Administration between Assistant Officers recruited on the basis of the results of the competitive examination and the temporary Assistant Officers recruited on the recommendation of the Union Public Service Commission was discriminatory and offended Articles 14 and 16.
They contend that all Assistant Officers formed one class under the Indian Railway Establishment Code.
The further classification of Assistant Officers into those that were recruited on the basis of a competitive examination and those that were recruited on the recommendation of the Union Public Service Commission was a "micro classification" not permissible under the law.
They point out that the minimum academic qualifications and the scales of pay of the Permanent and the Temporary Engineers (for the sake of brevity the Assistant Officers appointed on the basis of the results of the competitive examination may hereafter be described as permanent Engineers while those appointed on the basis of the recommendation of the Union Public Service Commission may be described as Temporary Engineers) were identical, the duties and functions were the same and they occupied interchangeable posts.
They further allege that, in any case, the right of absorption of six temporary Engineers only every year into the Indian Railway Service of Engineers were arbitrary and inequitous.
It had resulted in such gross injustice that two decades of service of several of the petitioners.
was to be counted for nothing.
153 11.
Before proceeding to consider the various contentions raised on behalf of the petitioners it is necessary to make a brief reference to the history, service and legal, of one of the many petitioners.
Shri Katyani Dayal was working as an Assistant Engineer in the service of the Punjab Government from 1952 onwards.
He was one of those who was selected by the Union Public Service Commission and appointed as a temporary Engineer in 1958.
He was drawing pay in the junior scale.
He crossed the Efficiency Bar in 1966 and according to him he was thereafter entitled to be considered for promotion to the senior scale to the post of District Officers.
He founded his claim on r. 133(3) (c) on the basis that he was an Assistant Officer within the meaning of that expression as then defined by r. 102(3).
As he was not so promoted and as it was proposed, on the basis of some circulars, to promote permanent Engineers of four years standing, he filed a Writ Petition in the High Court of Allahabad claiming that he was entitled to be considered for promotion to officiating post of District Officer.
The Railway Board opposed the claim of Katyani Dayal on the ground that he was a temporary Assistant Engineer and not an Assistant Officer and therefore, not entitled to be promoted in terms of r. 133(3)(c).
The Railway Board 's contention was over ruled by a learned Single Judge of the High Court and a direction was given to the Railway Administration to consider the claim of the petitioner for appointment in officiating vacancies to the posts of District Officers as soon as vacancies arose.
The Railway Administration was directed to ignore the circulars which gave preference to Class I junior scale officers of four years standing or more as against temporary Assistant Engineers.
An appeal filed by the Railway Administration under the Letters Patent was dismissed by a Division Bench of the High Court.
Though the Division Bench dismissed the appeal on August 1, 1974, the Railway Administration did not implement the judgment but instead on December 12, 1975 amended rule 102(3), 133(3)(c) and (f) and introduced new rule 102(17) so as to expressly exclude temporary Assistant Officer [newly defined by r. 102(7) from the category of Assistant Officer and thus make him ineligible for promotion to the senior scale under r. 133 (3)(c) and (f)].
It appears that the status of the temporary Assistant Engineers recruited on the recommendation of the Union Public Service Commission has been the subject matter of the decisions of several High Courts.
Some of them have been placed before us.
The relevant provisions of the Indian Railway Establishment Code may now be referred to.
154 14.
Rule 102(3) originally defined an Assistant Officer to mean 'a Gazetted Railway Servant drawing pay on the scale applicable to Junior Scale Officers ', but 'was not to include a Class II Officer '.
By an amendment made on December 31, 1975, the expression was redefined and an 'Assistant Officer ' now 'means a Gazetted Class I Railway Servant drawing pay in the junior scale.
It does not include a Class II Officer or a temporary Assistant Officer who is not classified either as Class I or Class II '.
Prior to December 31, 1975 "Temporary Assistant Officer" was not defined but by an amendment dated December 31, 1975 "Temporary Assistant Officer" has been defined and now means "a gazetted Railway servant drawing pay on the scale applicable to junior Scale Officers but not classified either as Class I or as Class II Officer".
Rule 102(13) defines a 'Railway, Servant ' as meaning a person who is a member of a service or who holds a post under the administrative control of the Railway Board, including a person who holds a post in the Railway Board.
Rules 105 and 106 to the extent they are relevant are as follows: "105.
For the purpose of the rules in this Volume the railway services shall be classified as follows: Gazetted (1) The Railway Services, Class I. (2) The Railway Services, Class II.
Non gazetted.
(3) The Railway Services, Class III.
(4) The Railway Services, Class IV.
(5) The Workshop Staff.
Establishments and categories (including probationers), falling under the services mentioned in rule 105, are shown below Class I (1) Posts in the Railway Board; 155 (2) Directors, Joint Directors, Deputy Directors, Assistant Directors, Railway Board and Research, Designs and Standards Organisation; Secretary, Deputy Secretary, Under Secretary and Section Officers, Grade II, Railway Board.
(3) Indian Railway Service of Engineers; (4) Indian Railway Accounts Service; (5) Indian Railway Traffic Services; (6) Indian Railway Service of Mechanical Engineers; (7) Indian Railway Service of Electrical Engineers; (8) Indian Railway Service of Signal Engineers; (9) Indian Railway Medical Service; (10) Indian Railway Stores Service; (11) Senior Revenue Establishment, Indian Railways, comprising such specialist and Miscellaneous posts as have been included in Class I e.g., Chemist and Metallurgists (Senior Scale) and Chief Cashiers (Senior Scale).
Class II Gazetted posts not included in Class I. Note.
Temporary Assistant Officers will not be classified either as Class I or Class II.
Class III * * * * * Class IV * * * * * It must be mentioned here that this Note to rule 106 was not there originally but was added in 1956.
Rule 107 provides that the prescribed scale of pay admissible to Railway servants belonging to Railway Service Class I and Class II shall be as specified in appendix XIV.
156 Rule 108 may also be extracted here and it is as follows: "108.
Sanctioned strength of cadres.
Subject to any statutory provision in this regard, the strength, including both the number and character of posts of the Railway Services, Class I and II, shall be determined by the Railway Board, General Managers of Indian Railways may create temporary posts in the Railway Services, Class I and Class II, subject to such limits as may be laid down by the Railway Board.
Provided the total number of sanctioned gazetted post in any grade (Heads of Departments, Deputy Heads of Departments, District Officers, Assistant Officers are Class II Officers) of the service concerned is not exceeded, General Managers are empowered to vary solely in the public interest having regard to changes in the work and responsibilities of the posts, concerned (and not in the interest of individual officers), the distribution of posts within that grade for a period not exceeding 12 months".
Rule 109 to the extent it is relevant in this case is as follows: "109.
The cadres of the services and departments included in Railway Services, Classes I and II (other than the Medical Department and specialists posts) on Indian Railways shall be fixed in accordance with the principles stated below : (1) Separate cadres shall be maintained for each Indian Railway.
(2) The number of permanent working posts, that is, posts required for ordinary duty on the railway, shall be first determined for each service or department and divided into the following grades : (i) Administrative, (ii) District Officers, 157 (iii)Assistant Officers and Class II Services.
(b) * * * * (c) The number of posts to be allotted to the Assistant Officers ' grade shall be calculated with reference to the total number of Administrative and District Officers ' Posts, and shall be so fixed as to allow of a continuous flow of promotion from the Assistant Officers ' grade to the higher grade after a given period of service.
For this purpose, all the administrative posts, including the general administrative posts, shall be taken into account.
(d) The rest of the posts included in (a) (iii) shall be allotted to the Class II Service.
(e) The total number of posts thus arrived at for each grade in a department shall form the permanent duty strength of each service or department.
(3) * * * * (4) * * * * Rule 112 provides that the number of posts sanctioned in each grade in a department shall in no case be exceeded without the sanction of the authority competent to create a post, either permanent or temporary in the grade.
Rule 116 prescribes that except as provided in r. 133(4) officiating promotion to the Assistant Officer 's grade or to a higher grade of gazetted Railway Servants from Class II service or from the non gazetted establishment is not permissible.
Rule 118(1) provides that the number of Gazetted Railway servants on duty in a department shall not exceed the permanent duty strength sanctioned for that department.
Rule 125 prescribes that all appointments to a Railway Service Class II shall be made by the President on the recommendation of the Union Public Service Commission from time to time in accordance with the rules framed by them.
158 Rule 129 provides that the rate of normal recruitment shall be determined by the President with reference to the sanctioned strength of a service or Department.
Rule 130 is important and may be fully extracted here.
It is as follows: "130.
Method of recruitment.
Recruitment to Class I service in the various departments of Railways shall be made through (a) competitive examination held in India by the Union Public Service Commission; (b) promotion of specially qualified gazetted railway servants of the Class II Service including officiating gazetted railway servants of the service or department; (c) in the case of Transportation (Power) and Mechanical Engineering Department, by appointment of candidates as Special Class Apprentices; and (d) occasional admission of other qualified persons on the recommendation of the Union Public Service Commission.
The quota reserved for permanent promotion from Class II to Class I has been fixed at 33 1/3% of the vacancies in the Junior Scale, Class I (Senior Scale in the case of Medical Department).
Rule 131 provides that Probationers to the Railway Service Class I shall be required to undergo a period of training as may be prescribed by the President.
Rule 132 provides for recruitment to Railway Service Class II.
Rule 133 deals with promotions to gazetted posts.
We are concerned with rule 133(3)(c) and (f) which to the extent relevant were previously as follows: "133.
Promotions to gazetted posts. (1) * * * * (2) * * * * 159 (3) The General Manager may appoint (a) * * * * (b) * * * * (c) An Assistant Officer to officiate as District Officer, provided that such a gazetted railway servant who has not passed the efficiency bar may be so appointed only, if (i) a gazetted railway servant who has passed the efficiency bar is not available; or (ii) the vacancy is not expected to exceed three months; (d)(e) * * * (f) substantively, an Assistant Officer to the District grade provided such promotions are made in strict order of seniority subject further to the condition that no officer shall be so promoted unless he has rendered not less than ten years of total service and has been declared fit to cross the efficiency bar in the junior scale.
The period of 10 years of total service will also include the two years of training in the case of direct recruits.
In respect of promoted gazetted railway servants all those placed in the Seniority list above the last direct recruit who fulfils the above condition will receive confirmation in their turn.
" These provisions were also amended on December 31, 1975, and they are now as follows : "(c) an Assistant Officer to officiate in the Senior Scale provided that such an Assistant Officer who has not passed the efficiency bar may be so appointed only, if an Assistant Officer, who has passed the efficiency bar is not available; (d) * * * * 160 (f) substantively, an Assistant Officer to the Senior Scale, provided such promotions are made in strict order of seniority subject further to the condition that no officer shall be so promoted unless he has rendered not less than eight years of total service and has been declared fit to cross the efficiency bar in the junior scale.
The period of eight years of total service will also include the two years of training in the case of direct recruits.
In respect of promoted gazetted railway servants all those placed in the seniority list above the last direct recruit who fulfils the above condition will receive a confirmation in their turn".
Rule 139 makes provision for the making of recruitment rules and the note to rule 139 provides that in the case of recruitment to gazetted posts, the rules should be published in the Gazette of India in the section allotted to Statutory Rules and Orders.
Rule 144 obliges every railway servant to execute an agreement with the President of India at the time of his substantive appointment and further provides that those appointed for a limited period may also be required to execute such agreements.
Rule 2003(3) defines cadre as meaning 'the strength of a service or a part of a service sanctioned as a separate unit '.
Rule 2003(22) defines a permanent post as meaning a post carrying a definite rate of pay sanctioned without limit of time.
Rule 2003(29) defines a temporary post as meaning a post carrying a definite rate of pay sanctioned for a limited time.
Rule 2003(30) defines a tenure post as meaning a permanent post which an individual Railway servant may not hold for more than a limited period.
Rule 2003(31) defines time scale of pay and whole of it may be extracted here: "(31) (a) Time scale pay means pay which subject to any conditions prescribes in these rules, rises by periodical increments from a minimum to a maximum.
It includes the slabs of pay formerly known as progressive.
(b) Time scales are said to be identical if the minimum, the maximum, the period of increment and the rate of increment of the time scales are identical 161 (c) A post is said to be on the same, time scale as another post on a time scale if the two time scales are identical and the posts fall within a cadre, or a class in a cadre, such cadre or class having been created in order to fill all posts involving duties of approximately the same character or degree of responsibility, in a service or establishment or group of establishments; so that the pay of the holder of any particular post is determined by his position in the cadre or class, and not by the fact that he holds that post".
The earlier narrated facts show that for quite several years it was distinctly understood by the appointing authority as well as the persons appointed that those who were appointed as Temporary Assistant Engineers on the basis of the selection made by the Union Public Service Commission did not belong either to Class I or to Class II of the Indian Railway Service of Engineers.
It was understood that they would be eligible for being considered for absorption in the Indian Railway Service of Engineers Class I in an annual quota reserved for such absorption and that their seniority would be reckoned thereafter from the date of their confirmation in Class I.
It was also understood that they would be eligible for being considered for promotion to officiating posts in the senior scale.
This position in regard to their status was made clear, without the possibility of a shadow of doubt, in the letters of appointment issued to them and the agreements which they were required to execute.
Considerable argument as advanced on the question whether a service not contemplated by the Indian Railway Establishment Code could be created and whether appointments of Gazetted Railway servants not falling in Class I or Class II and therefore falling outside the provisions of the Indian Railway Establishment Code could be made.
The submission was that the Indian Railway Establishment Code did not contemplate a class of service which did not belong either to Class I or Class II, and that every gazetted railway servant had to belong either to Class I or Class II and the question whether the posts to which appointments were made belonged to Class I or not had to be determined with reference to the minimum educational qualifications prescribed for the post, the scales of pay, the functions and duties etc.
It was submitted that notwithstanding the clear assertion in the letters of appointment and the agreements, the petitioners must, in law, be considered to have been appointed to the Indian Railway Service of Engineers Class I and to no other service.
article 53 of the Constitution vests the executive power of the Union in the President, to be exercised by him either directly or through 162 officers subordinate to him, in accordance with the Constitution.
article 73(1)(a) stipulates that the executive power of the Union shall extent "to the matters with respect to which Parliament has power to make laws". "Union Public Service and all India Services" are included in item 70 of the Union List (List I of the Seventh Schedule) enumerating the matters with respect to which Parliament has the exclusive power to make laws.
The proviso to article 309 of the Constitution makes it competent for the President or such person as he may direct in the case of services and posts in connection with the affairs of the Union, to make rules regulating the recruitment, and the conditions of service of persons appointed, to such services and posts until provision in that behalf is made by or under an Act of the Parliament to regulate the recruitment and conditions of service of persons appointed to public services and posts in connection with the affairs of the Union.
The inevitable sequitur from these Constitutional provisions is that the President, acting directly or through Officers subordinate to him, is free to constitute a service (with as many cadres as he chooses), to create posts without constituting a service or to create posts outside (the cadres of) the constituted service.
The President (or the person directed by him) may, or, again if he so chooses he may not, make rules regulating the recruitment and conditions of service of persons appointed to such service or posts.
He is also free to make or not to make appointments to such services or posts.
Nor is it obligatory for him to make rules of recruitment etc.
before a service may be constituted or a post created or filled.
But if there is an Act of Parliament or a rule under the proviso to article 309 on the matter, the executive power, under Articles 53 and 73, may not be exercised in a manner in consistent with or contrary to such Act or rule (vide B. N. Nagarajan & Ors.
vs State of Mysore & Ors., State of Kerala vs M. K. Krishan Nair & Ors., etc.
So, the previous existence of the Indian Railway Service of Engineers and the rules made for recruitment to that service do not bar the constitution of another service or the creation of posts outside the cadres of the Indian Railway Service of Engineers.
That, precisely, was what was done in 1956 and subsequent years upto 1965.
The administrative expedience and exigence of the time required the creation of temporary posts outside the cadres of the Indian Railway 163 Service of Engineers.
The circumstances and the reasons necessitating the creation of these posts of Temporary Engineers were fully set out in the 'letters of indent ' addressed by the Railway Board to the Union Public Service Commission, the details of which have already been mentioned by us in paragraph 4 supra.
The posts so created were not to be confused with the posts in the cadre of the Indian Railway Service of Engineers Class I notwithstanding that the scale of pay and the duties were to be the same.
That the posts were not to be treated as in Class I or in Class II of the Indian Railway Service of Engineers was expressly mentioned and clarified in the requisitions made by the Railway Board to the Union Public Service Commission and the correspondence which ensued between the Railway Board and the Union Public Service Commission.
It was also made clear in the letters of appointment and the agreements required to be executed by the persons appointed.
Though to start with there was no Presidential sanction for the creation of the posts of Temporary Assistant Officers in the various Departments of Indian Railways, which were neither in Class I nor in Class II but merely in gazetted service, the matter was soon rectified by the grant of Presidential sanction for the posts in November 1956 and by the President further specifying the Railway Board as the authority competent to make appointments of such temporary Assistant Officers.
This is apparent from the letter No. E 55RC 16(Pt.
A) dated November 22, 1956 and letter No. 5 (GF P)56 RC 16/Pt.
A dated December 12, 1956 to which we have referred in paragraph 8 supra.
The posts of Temporary Assistant Officers were thus created, and appointments made, under valid authority and outside the existing cadres of the Indian Railway Service of Engineers.
The letters of "indent", the advertisements, the letters of appointment and the agreements show that the temporary Assistant Officers appointed in this fashion after selection by the Union Public Service Commission were to be a source of recruitment to the Indian Railway Service of Engineers Class I.
It was so understood from the inception by the persons appointed as well as the Railway Administration.
In fact subsequent absorptions into the Indian Railway Service of Engineers was the sugar, if one may use such an expression, held cut to those seeking appointment as temporary Assistant Officers.
Year by year a few Temporary Assistant Officers were indeed absorbed into the Indian Railway Service of Engineers after selection by a Departmental Promotion Committee and be it noted, not automatically on the basis of seniority.
If Temporary Assistant Officers were to be a source of recruitment to the Indian Railway Service of Engineers Class I, we do not see how any temporary Assistant Officer could possibly be under 164 any misapprehension that he was appointed to the Indian Railway Service of Engineers Class I or could claim that he was appointed to such service.
It is not possible to accept the submission that they must be considered to have been appointed under r. 130(d) of the Indian Railway Establishment Code which provides for occasional admission of other qualified persons on the recommendation of the Union Public Service Commission merely because they were selected for appointment by the Union Public Service Commission, their scale of pay was the same as that of the Class I Junior Scale Officers of the Indian Railway Service of Engineers and their duties were the same.
There were special reasons for recruiting Temporary Assistant Officers outside the cadres of the Indian Railway Service of Engineers and when it was admittedly and avowedly so done, and when right through such officers were merely treated as a source of recruitment to the Indian Railway Service of Engineers, it would not be permissible for us to hold that the Temporary Assistant Officers were recruited to the cadre of the Indian Railway Service of Engineers Class I. 20.
One of the submissions of the petitioners was that whatever the Railway Board might be asserting now or might have asserted even from the inception, factually, the Temporary Assistant Officers were appointed to temporary posts borne on the cadre of Indian Railway Service of Engineers Class I and not to any ex cadre posts.
It was submitted that the posts to which appointments were made were not temporary posts in the sense that they were posts of short duration; they were posts, which admittedly were likely to continue indefinitely and even made permanent.
The appointments could, therefore, have only been made to temporary posts borne on the cadre of the Indian Railway Service of Engineers.
We do not think that there is any substance in these submissions.
It is no doubt true that a cadre may consist of permanent as well as temporary posts and there may be permanent vacancies in permanent as well as temporary posts borne on the cadre.
But it does not follow that appointments stated to be made to posts outside the vary service and therefore necessarily outside the cadre must be considered to be made to temporary posts borne on the cadre merely because the posts were likely to continue indefinitely and did so continue.
We do not see how we can ignore the very purpose of scheme of recruitment of Temporary Assistant Officer which was to recruit Temporary Assistant Officers outside the existing Service and cadres to meet the anticipated requirements of certain special objects.
Even in the requisition made in the prescribed form by the Railway Board to the Union Public Service Commission it was men 165 tioned "the posts will be sanctioned shortly in connection with a number of projects".
It was not mentioned that the posts were already borne on the cadre of the Indian Railway Service of Engineers.
Our attention was invited to the Annual Administrative Reports where, it was said, no distinction was made between classified and unclassified service.
We do not think that these reports are of the slightest help.
The reports merely refer to appointments, temporary as well as permanent, made in the gazetted service by direct recruitment.
Gazetted Railway services must include both the Indian Railway Service of Engineers and the Gazetted Railway Service constituted by the temporary Assistant Officers.
Therefore, by merely taking into account the number of Temporary Assistant Officers for the purpose of calculating the total number of persons appointed to Gazetted Railway Service it cannot conceivably be said that Temporary Assistant Officers were appointed to cadre posts in the Indian Railway Service of Engineers.
Our attention was also invited to the classified lists of Officers published by the Railway Board.
This list takes the case of the petitioners no further.
There is nothing in the list to indicate that persons who were appointed as Temporary Assistant Officers were appointed to posts borne on the cadre of Indian Railway Service of Engineers.
On the other hand under the column "Date of appointment to Class" no entry is made against the names of any of the Temporary Assistant Officers who had not yet been absorbed into the Indian Railway Service of Engineers.
We were also referred to the reports of the Administrative Reforms Commission where it is said "In the Railways there is a sizeable number of unclassified posts equivalent to Junior Class I and only a small number of them are taken each year into the regular service".
This statement does not support the case of the petitioners that they were appointed to posts borne on the cadre of Indian Railway Service of Engineers.
Far from it.
Passages from the reports of the Central Pay Commission were also read out to us to emphasize that the posts have continued over the years indefinitely.
If posts were initially created and sanctioned for short periods, we do not see how the subsequent continuance of the posts indefinitely would make persons appointed to the posts members of the regular service, namely, the Indian Railway Service of Engineers Class I. 21.
Considerable argument was advanced on the question of the 'status ' and the effect of the 'note ' found below rule 106.
It was said that the note did not form part of the rules made by the President under the proviso to Article 309 of the Constitution and therefore it could not amend the other statutory rules.
The note was neither declaratory nor explanatory and was of no affect whatever.
We think that the argument regarding the 'status ' and the effect of the note is of no real 166 relevance.
The note merely states an existing fact known to all concerned.
It was known that posts of Temporary Assistant Officers in gazetted railway service who were not to be classified 'either as Class I or as Class II ' had been sanctioned by the President who had designated the Railway Board as the authority competent to make appointments to those posts.
The note below rule 106 merely stated this fact.
With or without the note, the Temporary Assistant Officers would still not be classified either as Class I or Class II.
Their classification outside Class I and Class II was not dependant on the note but on the Presidential action in regard to the creation of the posts.
This is perhaps an appropriate stage for referring to the amendments, introduced in 1975, to the Indian Railway Establishment Code.
The expression 'Temporary Assistant Officers ', which was not previously defined in the Railway Establishment Code, was sought to be defined by new clause 17 of R. 102 to mean "a Gazetted Railway Servant drawing pay on the scale applicable to Junior Scale Offices but not classified either as Class I or as Class II Officer".
The expression Assistant Officer was redefined so as not to include a Temporary Assistant Officer who was not 'classified either as Class I or as Class II '.
Apart from the principal submission that the 1975 amendments were violative of articles 14 and 16 of the Constitution, it was submitted that the amendments were prospective in nature and did not affect the petitioners all of whom had been appointed as Temporary Assistant Officers long prior to the 1975 amendment.
We do not think that the amendments have any effect one way or the other on the status of the Temporary Assistant Officers.
What was always well known to the Temporary Assistant Officers and the Railway Board and what was the inevitable result of the Presidential sanction for the creation of posts which were not to be classified either as Class I or Class II, was made explicit in the Indian Railway Establishment code also by the introduction of these amendments.
This became necessary because in the Writ Petition filed by Katyani Dayal, the Allahabad High Court, while appearing to hold that Temporary Assistant Officers belonged neither to Class I nor to Class II service, held that they came within the then existing definition of 'Assistant Officer ' so as to entitle them for promotion under r. 133 of the Indian Railway Establishment Code.
We are afraid it was the use of the expression 'Temporary Assistant Officer ' that has led to considerable confusion.
The expression 'Temporary Assistant Officer ' was coined to describe the new post created for the first time in 1955.
The expression was not used to signify officers temporarily holding the posts of Assistant Officers in the several established Railway Services.
For instance a Class II Assistant Engineer 167 who is temporarily promoted to hold the post of an Assistant Engineer Class I may be described as a Temporary Assistant Officer but he certainly would not be a 'Temporary Assistant Officer ' appointed to any of the posts specially created by the President which were neither in Class I nor in Class II.
The word 'Temporary ' in the expression 'Temporary Assistant Officer ' was not used to qualify the words Assistant Officer.
The whole of the expression was intended to describe the particular post, which was neither in Class I nor Class II, which was created in 1955.
There would not have been any confusion and it would have been much happier if instead of the expression Temporary Assistant Officer some other expression such as Special Assistant Officer or Special Assistant Engineer had been chosen.
We are of the view that the Allahabad High Court was not justified in looking at the amended definition of 'Assistant Officer ' in isolation and concluding that the expression 'Assistant Officer ' included Temporary Assistant Officer because Temporary Assistant Officer was also a gazetted Railway servant who drew the junior scale of pay.
The definition of Assistant Officer was not to be read in isolation in that manner.
It should have been read conjunctively with Rules 105, 106 and 108.
A reference to Rule 105 would show that for the purposes of the rules in the Indian Railway Establishment Code, Railway services were to be classified into Class I, Class II, Class III, Class IV and Workshop staff.
Rule 106 specified the appointment and categories falling under the services mentioned in Rule 105.
Rule 108 required the Railway Board to fix the strength of the Railway Services ' Class I and Class II.
There could therefore, be no question of an officer not falling within the class, category or cadre specified in rules 105, 106 and 108 claiming to be an 'Assistant Officer ' within the meaning of that expression.
A person recruited to the post of 'Temporary Assistant Officer ' not classified as Class I or Class II Officer could not claim to belong to the Class, category or cadre specified in Rules 105, 106 and 108 and was, therefore, not an Assistant Officer within the meaning of that expression even before the 1975 amendment.
We now come to the principal submission made to us namely that the classification of Temporary Assistant Officers separately from the Indian Railway Service of Engineers Class I was discriminatory and had no nexus to the object to be achieved namely efficiency of service and was, therefore, violative of Articles 14 and 16 of the Constitution.
It was argued that the minimum academic qualification for the posts of 'Temporary Assistant Officer ' was the same as that prescribed for entry into the Indian Railway Service of Engineers Class I, the scale of pay of 'Temporary Assistant Officer ' was the same as hat of a Class I Officer of Junior Scale, the functions and duties were 168 similar and on all matters not expressly provided, the Temporary Assistant Officers like Class I officers were to be governed by the provisions of the Railway Establishment Code and the Rules made thereunder.
There was so much identity on all vital and important matters that the classification of 'Temporary Assistant Officers ' outside the Indian Railway Service of Engineers Class I was arbitrary.
It led to all manner of discrimination in the matter of advancement in service, seniority, promotion etc.
The unfairness of it all was sought to be graphically demonstrated by pointing out how after twenty years of service Temporary Assistant Officers continued to be Temporary Assistant Officers while Class I officers recruited much later were placed much higher than them in order of seniority and had risen to much higher positions in the service.
Another limb of the argument on the question of discrimination was that all Assistant Officers whether they were permanent Assistant Officers or Temporary Assistant Officers constituted a single cadre and it was not permissible to further classify them on the basis of the manner of their recruitment, namely, by competitive examination or by selection by the Union Public Service Commission.
Part of this submission has already been met by us and we have shown how Temporary Assistant Officers are not Assistant Officers within the meaning of that expression in the Indian Railway Establishment Code.
It is true that the minimum educational qualification for the post of Temporary Assistant Officer was the same as that for recruitment to the Indian Railway Service of Engineers Class I.
It is true that the scale of pay is the same, and the functions and duties are the same.
It is also true that except to the extent provided, the Temporary Assistant Officers were also subject to the provisions of the Indian Railway Establishment Code and the rules made thereunder.
But, there are certain fundamental differences between two classes which cannot be ignored and which demand attention.
To begin with, the object of recruitment to the Indian Railway Service of Engineers is to provide Officers of the highest quality to meet the requirements of all posts in the service including Senior Administrative posts.
Rule 109(2)(c) of the Indian Railway Establishment Code, extracted earlier expressly provides that the number of posts to be allotted to the Assistant Officers ' grade shall be calculated with reference to the total number of administrative and District Officers ' posts, and shall be so fixed as to allow of a continuous flow of promotion from the Assistant Officers ' grade to the higher grades after a given period of service.
For this purpose all the administrative posts including the general Administrative posts are required to be taken into account.
On the 169 other hand the object of recruiting Temporary Assistant Officers was to meet specific requirements of various projects with a prospect of promotion in a temporary capacity to a senior scale post and absorption into the Indian Railway Service of Engineers Class I. They were not to be members of the Indian Railway Service of Engineers but were to be a source of recruitment to the Indian Railway Service of Engineers.
Thus the very appointments of Temporary Assistant Officers were to temporary posts outside the cadre and outside the recruitment rules of the Indian Railway Service of Engineers Class I and the very nature of this tenure was precarious, whereas Class I Officers recruited on the basis of a result of competitive examination were appointed to cadre posts strictly in accordance with the recruitment rules.
Next and equally important, is the fundamental qualitative differences, linked with the method of recruitment.
True, the minimum educational qualification is the same.
But, those who are recruited directly to the Indian Railway Service of Engineers Class I are subjected to stiff and competitive, written and personality tests.
Only the very best can aspire to come out successful.
The Temporary Assistant Officers were not subjected either to a written or to a personality test but were selected on the basis of an interview by the Union Public Service Commission.
In addition to the minimum educational qualification, three years ' experience as a Civil Engineer was also prescribed.
Thus while brilliance was the beacon light which beckoned those aspiring to become members of the Indian Railway Service of Engineers Class I, it was replaced by experience in the case of those wanting to be Temporary Assistant Officers.
Again the appointing authority in the case of Indian Railway Service of Engineers Class I is the President while the appointing authority in the case of Temporary Assistant Officers was the Railway Board, no doubt, pursuant to the authority given by the President.
Different courses of training were prescribed for the Indian Railway Service of Engineers and the Temporary Assistant Officers.
For the Indian Railway Service of Engineers the training is an intensive and comprehensive one designed to equip them for higher posts in the Department too, while the training for Temporary Assistant Engineers was a brief six months ' training intended merely to equip them for carrying out the specific jobs.
In the matter of terms and conditions of service, while the provisions of the Indian Railway Establishment Code are fully applicable to the Indian Railway Service of Engineers Class I, those provisions are applicable to "Temporary Assistant Officers" to the extent there is no specific provision in their letter of appointment and agreement.
170 26.
Keeping in mind these similarities and dissimilarities, let us examine the legal position.
We cannot do better than to refer to the decisions cited at the Bar, not all, but a few illustrative cases.
In State of Punjab vs Joginder Singh, the question arose whether the constitution by the State of two Services consisting of employees doing the same work but with different scales of pay or subject to different conditions of service such as promotional opportunities was violative of Articles 14 and 16 of the Constitution.
The argument based on the postulate that equal work must receive equal pay was repelled by quoting the following observations from an earlier decision of the Court in Kishori Mohanlal vs Union of India.
: "The only other contention raised in that there is discrimination between Class I and Class II officers inasmuch as though they do the same kind of work their pay scales are different.
This, it is said, violates article 14 of the Constitution.
If this contention had any validity, there could be no incremental scales of pay fixed dependant on the duration of an officer 's service.
The abstract doctrine of equal pay for equal work has nothing to do with article 14.
The contention that article 14 of the Constitution has been violated therefore, also fails.
" The second postulate that if there was equality in pay and work there must be equal conditions of service was rejected as unsound.
It was observed (at p. 191 192): "If, for instance, an existing service is recruited on the basis of a certain qualification, the creation of another service for doing the same work, it might be in the same way but with better prospects of promotion cannot be said to be unconstitutional, and the fact that the rules framed permit free transfers of personnel of the two groups to places held by the other would not make any difference.
We are not basing this answer on any theory that if a government servant enters into any contract regulating the conditions of his service he cannot call in aid the constitutional guarantees because he is bound by his contract.
But this conclusion rests on different and wider public grounds, viz., that the government which is carrying on the administration has necessarily to have a choice in the constitution of the services to man the administration and that the limitations imposed by the constitution are not 171 such as to preclude the creation of such services.
Besides, there might, for instance, be temporary recruitment to meet an exigency or an emergency which is not expected to last for any appreciable period of time.
To deny to the government the power to recruit temporary staff drawing the same pay and doing the same work as other permanent incumbents within the cadre strength but governed by different rules and conditions of service, it might be including promotions, would be to impose restraints on the manner of administration which we believe was not intended by the constitution. ' Examining the facts of the case before them the Court noticed that the two services started as independent services, the qualifications prescribed for entry into each were different, the method of recruitment and the machinery for recruitment were different and they continued as different services and were never interpreted into one service.
The Court said (at p. 193): "If they were distinct services, there was no question of inter se seniority between members of the two services, nor of any comparison between the two in the matter of promotion for founding an argument based upon article 14 or article 16(1).
They started dissimilarity and they continued dissimilarly and any dissimilarity in their treatment would not be a denial of equal opportunity, for it is common ground that within each group there is no denial of that freedom guaranteed by the two Articles".
In State of Jammu & Kashmir vs Triloki Nath Khosa & Ors.
a rule which provided that only those Assistant Engineers who possessed a degree in Engineering would be eligible for promotion as Executive Engineer and which totally denied any opportunity for promotion to Assistant Engineers who were Diploma holders was challenged as infringing the fundamental rights guaranteed by Articles 14 and 16 of the Constitution.
Under the rules, recruitment to the cadre of Assistant Engineer was to be made by direct recruitment of Degree holders in Civil Engineering or by transfer of degree or diploma holders who had served as Supervisors for a period of not less than five years.
The argument was that degree holders and diploma holders having been integrated into a common class of Assistant Engineers, there was no justification for the classification for promotion to the post of Executive Engineer.
The Court upheld the rule and held that the classification of Assistant Engineers into degree holders 172 and Diploma holders could not be said to rest on any unreal or unreasonable basis.
Classification made with a view to achieving administrative efficiency in the Engineering Service was clearly co related to higher educational qualifications since higher educational qualifications was atleast presumptive evidence of higher mental equipment.
Educational qualification was always recognised as a safe criteria for determining the validity of classification.
The earlier decisions of the Court in Roshan Lal Tandon vs Union of India, and Moryan Coutindo & Ors.
vs Collector of Customs, Bombay & Ors., were distinguished on the ground that they were cases where direct recruits and promotes who were fused into a common stream of service were sought to be treated differently by reference to the consideration that they were recruited from different sources whereas in the case before the Court the classification rested fairly and squarely on the consideration of educational qualifications.
It was pointed out that the earlier cases did not rule out a classification on a basis other than that they were drawn from different sources.
However, while upholding the validity of the rule Chandrachud, J., and Krishna Iyer, J., uttered words of caution and it is upon these words of caution that the petitioners rely.
Chandrachud, J., said (at p. 790): "But we hope that this judgment will not be construed as a charter for making minute and microcosmic classifications.
Excellence is, or ought to be, the goal of all good government and excellence and equality are not friendly bed fellows.
A pragmatic approach has therefore to be adopted in order to harmonize the requirements of public services with the aspirations of public servants.
But let us not evolve through imperceptible extensions, a theory of classification which may subvert, perhaps submerge, the previous guarantee of quality.
The eminent spirit of an ideal society is equality and so we must not be left to ask in wonderment.
What after all in the operational residue of equality and equal opportunity?" Krishna Iyer, J., said (at p. 792): "Mini classifications based on micro distinctions are false to our egalitarian faith and only substantial and straightforward classifications plainly promoting relevant goals can have constitutional validity.
To overdo classification is to undo equality".
173 29.
In Mohammed Shujat Ali & Ors. etc.
vs Union of India & Ors. etc.
one of the questions which arose for consideration was whether the distinction made between Graduate Supervisors and non Graduate Supervisors and the allocation, to these categories, of three and one vacancies respectively out of every four vacancies in the next higher promotional posts was violative of Articles 14 and 16 of the Constitution.
After quoting with approval the observations of Chandrachud, J., and Krishna Iyer, J., in State of J. & K vs Trilokinath Khosa (supra).
Bhagwati J., observed (at p. 481): "To permit discrimination based on educational attainments not obliged by the nature of the duties of the higher post is to stifle the social thrust of the equality clause.
A rule of promotion which, while conceding that non graduate Supervisors are also fit to be promoted as Assistant Engineers, reserves a higher quota of vacancies for promotion for graduate supervisors as against non graduate Supervisors, would clearly be calculated to destroy the guarantee of equal opportunity".
After saying so much the Court, however, upheld the rule which made the differentiation between Graduate and non Graduate Supervisors on the ground that the differentiation had not been made for the first time by the impugned rule and graduate Supervisors had always been treated as a distinct and separate class and the two were never integrated into one class.
Since the two categories of Supervisors were never fused into one class, it was held, there was no question of unconstitutional discrimination on the ground of differential treatment being given to them.
In section B. Patwardhan & Ors.
vs State of Maharashtra & Ors.
the question concerned a formula of seniority.
Direct recruits and promotees, though drawn from two different sources, constituted, in that case, a single integrated cadre.
They discharged identical functions, bore similar responsibilities and acquired an equal amount of experience in their respective assignments.
Yet, the formula provided that probationers recruited during any year shall in a bunch be treated as senior to promotees confirmed in that year.
While the formula gave to the direct recruits the benefit of even the one year 's period of training and another year 's period of probation for the purposes of seniority, it denied to promotees the benefit of their long and valuable experience.
There was no intelligible ground for the differentiation, bearing nexus with efficiency in public service.
174 'Confirmation was one of the inglorious uncertainties of government service depending neither on efficiency of the incumbent nor on the availability of substantive vacancies, and it was on confirmation that the promotees seniority was made to depend.
The formula was struck down by the Court.
Reliance was placed on the decision of the Court in A. K. Subraman vs Union of India, where it had been held, while interpreting rules relating to Central Engineering Service Class that though in cases where recruitment was made from different sources a quota system could be validly applied, the quota rule was to be enforced at the time of initial recruitment to the post of officiating Executive Engineer and not at the time of their confirmation.
The Court had further observed that there was a well recognised distinction between promotion and confirmation and that the tests to be applied for the purpose of promotion were entirely different from those that had to be applied at the time of confirmation.
In H. section Verma & Ors.
vs Secretary, Ministry of Shipping & Transport & Ors.(2), the facts were somewhat peculiar.
Certain persons were directly recruited to the Engineering Service of the Ministry of Shipping and Transport (Roads Wing) as a result of a written competitive examination.
Certain other persons were also directly recruited but by interview through the Union Public Service Commission, although such a method of selection was not contemplated by the rules.
In 1966 a rule was added providing for selection by interview through the Union Public Service Commission.
The 1966 rule was held not to be retrospective in some Writ Petitions filed in the Delhi High Court by the persons who had been recruited as a result of written competitive examination.
The High Court while holding that the amendment was not retrospective did not hold that those appointed prior to 1966 by the interview method were not regularly appointed.
Instead, the High Court held that they were appointed and promoted to ex cadre posts.
In 1973 a notification was issued by the Government to the effect that the Officers appointed by the interview method must be deemed to have been industed into the service as temporary officers in 1966.
Later in 1976 the Government decided to set up two Services to be called the Central Engineering Service (Roads).
Group 'A ', comprising of Officers appointed by the method of examination and the other the Central Engineering Pool, Group 'A ', comprising of officers appointed by the method of interview.
Officers of both the services were eligible to be promoted to certain posts called "isolated posts".
Appointments to the 'isolated posts ' were to be made by selection or promotion, as the case may be, on the recommendation of a Departmental Pro 175 motion Committee from an integrated list of officers to be drawn up on the basis of the length of their continuous service in their respective grades.
The officers appointed by the method of interview assailed the rules contending that though they were appointed to their posts long before the officers appointed by the method of competitive examination, they would rank much below the latter in the list of seniority and would consequently be denied promotional opportunities to higher posts.
Having regard to the very complicated nature of the facts, the Court after discussion with the learned counsel appearing for the various parties and the Government made an order, which they thought was best and just in all the circumstances of the case.
While issuing the directions certain observations were made.
It was said (at p. 427): ".
We are unable to suggest the contention that persons holding similar posts and having similar responsibilities to discharge can be classified into different categories for the mere reason that some of them were recruited directly by the interview method and some were recruited directly on the result of a competitive examination.
Were it permissible to make such classifications, ingenuity may suggest the nature of curriculum in different years as the basis of classification.
If subjection to different kinds of tests as a condition of eligibility produces qualitative difference in the ability of persons recruited to similar posts, it may perhaps become necessary to limit the promotional opportunities, in regard to the relatively higher posts, to those whose abilities are remarkably higher.
But, it is nobody 's case and the Government has made no grievance that the petitioners who were appointed by the interview method are in any way inferior in ability, efficiency or educational qualifications to those who were appointed after a written competitive examination.
In the matter of experience too, the petitioners are in no way inferior to the contesting respondents".
The Court however, took care to add: "Though classification which proceeds merely on the basis that certain persons were recruited after going through one test and certain others after going through another test would be unscientific, it cannot be said on the facts of the instant case that there can be no valid basis or justification for classifying the various officers of the Roads Wing into separate categories.
As we have stated earlier, 176 the appointments of some of the petitioners and some of the respondents were made in violation of the rules which were in force at the relevant time.
It is in respect of that class of persons that the Delhi High Court was driven to hold that they must be deemed to have been appointed to ex cadre posts. .
But, the fact remains that persons who were appointed contrary to the rules but to ex cadre posts were taken initially for purposes of certain projects to which we have already referred.
Their precarious tenure was continued from time to time but that will not furnish justification for treating them on the same footing as others whose appointments were made strictly in accordance with the rules and who were appointed to posts borne on the cadre of the Central Engineering Service.
A division of these two classes of officers into separate categories will remove possible injustice to those who were appointed to cadre posts in that their promotional opportunities will not be blocked or hindered by ex cadre officers who were recruited on a large scale to meet an urgent necessity.
Such a classification will also minimise the injustice which would otherwise have been caused to those who were appointed to ex cadre posts".
We have referred, without comment, to a few earlier decisions of this Court and quoted the observations of learned Judges therein.
These decisions and the observations extracted therefrom illustrate and emphasise that there are and there can be no absolutes when we consider claims to justice on complaints of inequality.
The Marxian ultimate of a classless society, however laudable that may be, is evidently not what is sought to be achieved by Articles 14 and 16 of the Constitution.
The goal is a limited one.
It is equality among comparables.
A necessary, but not necessarily cynical, implication of equality among comparable is the permissibility of reasonable classification, having nexus with the object to be achieved.
So, it was said that if two services started and continued dissimilarly, though they apparently discharged similar duties, they were not comparable services so as to furnish a basis for the claim to equality (State of Punjab vs Joginder Singh) (supra).
But, if in the same service there were two sources of recruitment to the same posts, a classification based solely on source of recruitment was not permissible (Roshan Lal Tandon vs Union of India, and Mervyn Coutinda & Ors.
vs Collector of Customs, Bombay & Ors.) (supra).
This was also the principle of the decision in section B. Patwardhan & Ors.
vs State of Maharashtra & Ors.
(supra).
Even so, Chandrachud, J., Krishna Iyer, 177 J., and Bhagwati, J., had to recognise, even if reluctantly, that even among the members of the same service, a classification based otherwise than on mere source of recruitment such as educational qualification was at times permissible.
But necessary words of caution against making 'minute and micro cosmic ' classifications were uttered.
(State of Jammu & Kashmir vs Trilokinath Khosa, (Supra) and Mohammad Shujat Ali & Ors. etc.
vs Union of India & Ors. etc.
(supra).
Chandrachud, J., however drew the line when among members of the same service a classification was sought to be made between those who had been recruited on the basis of results of a competitive examination and those who had come in by the method of interview.
But, here again he felt constrained to say that those who were appointed to ex cadre posts outside the rules and whose tenure was therefore precarious could not claim to be treated on the same footing as those who were appointed strictly in accordance with the rules and to posts borne on the cadre of the service (H. section Verma & Anr.
vs Secretary, Ministry of Shipping & Transport & Ors.) (supra).
If we now look at the facts of the case before us, we find that the service comprising the Temporary Assistant Officers and the Indian Railway Service of Engineers Class I started separately and never became one.
The objects of their recruitment were different as explained earlier, the methods of recruitment were dissimilar and the appointing authority was not the same.
The training that was imparted was also unlike.
The very tenure of the Temporary Assistant Officers was precarious and their immediate aspiration was only to be absorbed into the Indian Railway Service of Engineers class I.
These distinctive features marked out the Temporary Assistant Officers as a Class apart from the Indian Railway Service of Engineers Class I and therefore there was no question of entitlement of equal rights with the latter.
Of course, once they were absorbed into the Indian Railway Service of Engineers they would be entitled not to be treated differently thereafter.
Their seniority would ordinarily be reckoned from the date of their absorption into the Indian Railway Service of Engineers, as promised in their letters of appointment.
No doubt these officers merited something more than the 'long wait ' at the portals of the Indian Railway Service of Engineers.
The Railway Board however, appears to have tried to make the 'long wait ' a little less tedious by giving them weightage of half of their length of service as Temporary Assistant Officers, subject to a maximum of five years.
We wish to say nothing about the validity of such weightage as we understand it is in question elsewhere.
Though we are denying the claim of the petitioners to equality because of the history, origin, and structure of the Services and the 178 existing legal position in relation thereto, we do not wish to be understood as saying that there is any thing 'doctrinaire ' in the principles of 'equal pay for equal work ' and 'equal status for equal pay and equal work '.
They are not goals to be scoffed at.
It may be that in the present societal context the goals appear to be distant.
But they are goals worthy of attainment and let us hope, with no overtones of cynicism, that these goals will be achieved in the not too distant future.
All the Writ Petitions and applications for the grant of Special Leave are dismissed but without any order as to costs.
S.R. Petitions dismissed.
| Several assignments such as the construction of major bridges, new lines, doubling of and electrification of existing lines etc.
were taken up the Engineering Department of the Indian Railways and to carry out these works, a number of temporary posts of Class I (Indian Railway Service of Engineers) and Class II engineers were created.
It was not thought possible to meet additional personnel requirements from existing sources, i.e. direct recruitment to Class I by competitive examination and promotion to class II from class III.
Instead, under a special scheme the various writ petitioners were appointed at various times between 1955 and 1964 as temporary Assistant Engineers by the Railway Board.
Everyone of them was told that the appointment, would be on a temporary basis, that the post to which they were appointed would be neither in Class I nor in Class II service though they were eligible, on completion of three year 's service, to be considered along with other temporary Assistant Engineers for absorption in Class I (Junior Scale) against vacancies ear marked from time to time for such absorption in the Indian Railway Service of Engineers cadre upto a maximum of six per year, and that in the event of their being selected in Class I Service their seniority would count from the date of the permanent appointment to Class I service.
They were required to execute service agreements "as applicable to temporary officers".
The petitioners accepted the terms offered to them and joined duty in the post to which they were appointed.
The petitioners also executed agreements in a standard form known as "Agreement for Temporary Assistant Officers of the Indian Railways".
140 Though in their orders of appointment as temporary Assistant Engineers the petitioners and others were told that six of them would be absorbed into the Indian Railway Service of Engineers Class I every year, the quota was increased to eight per year in 1957 and fifteen per year in 1961.
In 1960, the quota was fixed at 60 per cent of the actual intake of probationers from the CES etc.
examinations.
Again in 1975 the quota was increased to 25 per year.
The net result was that all but a 107 temporary Assistant Engineers were left unabsorbed by the time of the filing of the writ petitions and they too were finally absorbed in 1979 by a blanket order.
On September 17, 1965, the Railway Board decided that the temporary officers so absorbed into the Railway Service of Engineers should be given weightage in seniority "on the basis of half the total number of years of continuous service in working posts on Railways prior to their permanent absorption into Class I, subject to maximum weightage of five years.
" One of the writ petitioners, Katyani Dayal field a writ petition in the Allahabad High Court claiming promotion to the Senior scale post of District Officer.
He found his claim on Rule 133(3)(c) of the Railway Establishment Code on the basis that he was an Assistant Officer within the meaning of that expression as then defined by Rule 102(3).
The High Court allowed the writ petition and gave a direction to the Railway Administration to consider the claim of the petitioner for appointment in officiating vacancies to the post of District Officer as soon as vacancies arose, ignoring the circulars which gave preference to Class I junior scale officers of four years standing or more as against temporary Assistant Engineers.
An appeal filed by the Railway Administration under the Letters Patent was dismissed by a Division Bench of the High Court.
Though the Division Bench dismissed the appeal on August 1, 1974, the Railway Administration did not implement the judgment but instead on December 12, 1975 amended the Rule 102(3), 133(3)(c) and (f) and introduced new rule 102(17) so as to expressly exclude temporary Assistant Officers (newly defined by Rule 102 (7), from the category of Assistant Officers and thus make them ineligible for promotion to the senior scale under Rule 133(3)(c) and (f).
The petitioners, therefore, have filed these writ petitions in a representative capacity purporting to represent all temporary Assistant Engineers appointed on the recommendation of the Union Public Service Commission, claiming that, in law they could only be and were appointed to the Indian Railway Service of Engineers Class I right from the beginning and that the Railway Board was wrong in treating them as belonging to neither Class I nor Class II.
They claimed that they were appointed to temporary posts in the cadre of Indian Railway Service of Engineers Class I and that their seniority had to be reckoned on the basis of their length of continuous service, though they 141 conceded that in any given year those appointed on the basis of the results of the competitive examination might be placed above those appointed on the basis of the selection by the Union Public Service Commission.
Dismissing the petitions the Court ^ HELD: (1) articles 53, 73(1)(a) and 309, make it clear that the President, acting directly or through officers subordinate to him is free to constitute a service (with as many cadres as he chooses), to create posts without constituting a service or to create posts outside (the cadres of) the constituted service.
The President (or the person directed by him) may, or, again, if he so chooses he may not make rules regulating the recruitment and conditions of service of persons appointed to such service or posts.
He is also free to make or not to make appointments to such services or posts.
Nor is it obligatory for him to make rules of recruitment etc.
before a service may be constituted or a post created or filled.
But, if there is an Act of Parliament or a rule under the proviso to Article 309 on the matter, the executive power under Articles 53 and 73, may not be exercised in a manner inconsistent with or contrary to such Act or rule.
[162D F] B.N. Nagarajan vs State of Mysore, [1966] SCR 682 @ 686; State of Kerala vs M.K. Krishnan Nair and ors.
; , at 874; referred to.
(2) The previous existence of the Indian Railway Service of Engineers and the rules made for recruitment to that service do not bar the constitution of another service or the creation of posts outside the cadres of the Indian Railway Service of Engineers.
Though to start with there was no Presidential sanction for the creation of the posts of Temporary Assistant Officers in the various departments of Indian Railways, which were neither in Class I nor in Class II but merely in gazetted service, the matter was soon rectified by the grant of Presidential sanction for the posts in November 1956, and by the President further specifying the Railway Board as the authority competent to make appointment of such temporary Assistant Officers.
The posts of Temporary Assistant Officers were thus created and appointments made, under valid authority and outside the existing cadres of the Indian Railway Service of Engineers.
The letters of "indent", the advertisements, the letters of appointment and the agreements show that the temporary Assistant Officers appointed in this fashion after selection by the Union Public Service Commission were to be a source of recruitment to the Indian Railway Service of Engineers Class I.
If Temporary Assistant Officers were to be a source of recruitment to the Indian Railway Service of Engineers Class, no temporary Assistant Officer could possibly be under any misapprehension that he was 142 appointed to the Indian Railway Service of Engineers Class I or could claim that he was appointed to such service.
[162G H, 163G H, 164A] The petitioners cannot be considered to have been appointed under rule 130(d) of the Indian Railway Establishment Code which provides for occasional admission of other qualified persons on the recommendation of the Union Public Service Commission merely because they were selected for appointment by the Union Public Service Commission, their scale of pay was the same as that of the Class I Junior Scale Officers of the Indian Railway Service of Engineers and their duties were the same.
[164A C] (3) It is no doubt true that a cadre may consist of permanent vacancies in permanent as well as temporary posts borne on the cadre.
But it does not follow that appointments stated to be made to posts outside the very service and therefore necessarily outside the cadre must be considered to be made to temporary posts borne on the cadre merely because the posts were likely to continue indefinitely and did so continue.
[164 F G] The Annual Administrative Reports merely refer to appointments, temporary as well as permanent, made in the gazetted service by direct recruitment.
Gazetted Railway services must include both the Indian Railway Service of Engineers and the Gazetted Railway Service constituted by the temporary Assistant Officers.
Therefore, by merely taking into account the number of Temporary Assistant Officers for the purpose of calculating the total number of persons appointed to Gazetted Railway Service it cannot conceivably be said that Temporary Assistant Officers were appointed to cadre posts in the Indian Railway Service of Engineers.
Even the classified lists of Gazetted officers do not indicate that persons who were appointed as Temporary Assistant Officers were appointed to posts borne on the cadre of Indian Railway Service of Engineers.
On the other hand under the column "Date of appointment to Class" no entry is made against the names of any of the Temporary Assistant Officers who had not yet been absorbed into the Indian Railway Service of Engineers.
[165 B C, D E] If posts were initially created and sanctioned, the subsequent continuance of the posts indefinitely would not make persons appointed to the posts members of the Railway Service, namely, the Indian Railway Service of Engineers Class I. [165 F G] (4) The note below Rule 106 of the Railway Establishment Code merely states an existing fact known to all concerned, namely, that posts of Temporary Assistant Officers in gazetted railway service who were not to be classified 'either as Class I or as Class II ' had been sanctioned by the President 143 who had designated the Railway Board as the authority competent to make appointments to those posts.
With or without the note, the Temporary Assistant Officers would still not be classified either as Class I or Class II.
Their classification outside Class I and Class II was not dependant on the note but on the Presidential sanction in regard to the creation of the posts.
[166 A B] (5) Temporary Assistant Officers are not Assistant Officers within the meaning of that expression in the Indian Railway Establishment Code.
The expression "Temporary Assistant Officer", which was not previously defined in the Railway Establishment Code, was sought to be defined by new clause 17 of R.102 to mean "a Gazetted Railway Servant drawing pay on the scale applicable to junior Scale Officers but not classified either as Class I or as Class II Officers.
The expression Assistant Officer was redefined so as not to include a Temporary Assistant Officer who was not 'classified ' either as Class I or as Class II.
[166 C D] The amendments do not have any effect one way or the other on the status of the Temporary Assistant Officers.
What was always well known to the Temporary Assistant Officers and the Railway Board and what was the inevitable result of the Presidential sanction for the creation of posts which were not to be classified either as Class I or Class II, was made explicit in the Indian Railway Establishment Code also by the introduction of these amendments.
This became necessary because in the Writ Petition filed by Katyani Dayal, the Allahabad High Court, while appearing to hold that Temporary Assistant Officers belonged neither to Class I nor to Class II service, held that they came within the then existing definition of 'Assistant Officer ' so as to entitle them for promotion under r. 133 of the Indian Railway Establishment Code.
[166E G] The definition of Assistant Officer was not to be read in isolation but should have been read conjunctively with Rules 105, 106 and 108.
A reference to Rule 105 would show that for the purposes of the rules in the Indian Railway Establishment Code, Railway services were to be classified into Class I, Class II, Class III, Class IV and workshop staff.
Rule 106 specified the appointments and categories falling under the services mentioned in Rule 105.
Rule 108 required the Railway Board to fix the strength of the Railway Services, Class I and II.
There could therefore, be no question of an officer not falling within the class, category or cadres specified in rules 105, 106 and 108 claiming to be an 'Assistant Officer ' within the meaning of that expression.
A person recruited to the post of Temporary Assistant Officer not classified as Class I or Class II Officer could not claim to belong to the Class, category or cadre spe 144 cified in Rules 105, 106 and 108 and was, therefore, not an Assistant Officers within the meaning of that expression even before the 1975 amendment.
[167 D F] (6) There are and there can be no absolutes when the Court considers claims to justice on complaints of inequality.
The Marxian of a classless society, however laudable that may be, is evidently not what is sought to be achieved by articles 14 and 16 of the Constitution.
The goal is a limited one.
It is equality among comparables.
A necessary, but not necessarily cynical, implication of equality among comparables is the permissibility of reasonable classification, having nexus with the object to be achieved.
If two services started and continued dissimilarly, though they apparently discharged similar duties, they were not comparable services so as to furnish a basis for the claim to equality.
But if in the same service there were two sources of recruitment to the same service, a classification based solely on source of recruitment was not permissible.
[176 E G] State of Punjab vs Joginder Singh, [1963] Supp.
2 SCR 169, 191, 192; Roshan Lal Tandon vs Union of India, ; and Mervyn Coutindo & Ors.
vs Collector of Customs, Bombay and Ors.
, ; ; referred to.
(7) Those who were appointed to ex cadre posts outside the rules and whose tenure was therefore precarious could not claim to be treated on the same footing as those who were appointed strictly in accordance with the rules and posts borne on the cadre of the service.
[177 F G] H.S. Varma & Ors.
vs Secretary, Ministry of Shipping and Transport & Ors.
; @ 427, 428; referred to.
(8) The classification of Temporary Assistant Officers separately from the Indian Railway Service of Engineers Class I is neither discriminatory nor is violative of Articles 14 and 16 of the Constitution for the reason that it had no nexus to the object to be achieved namely efficiency of service.
[167 G H] The service comprising the Temporary Assistant Officers and the Indian Railway Service of Engineers Class I started separately and never became one.
The objects of their recruitment were different, the methods of recruitment were dissimilar and the appointing authority was not the same.
The training that was imparted was also unlike.
The very tenure of the Temporary Assistant Officers was precarious and their immediate aspiration was only to be absorbed into the Indian Railway Services of Engineers Class I.
These distinctive features marked out the Temporary Assistant Officers as a Class apart from the Indian 145 Railway Service of Engineers Class I and therefore there was no question of entitlement of equal rights with the latter.
Of course, once they were absorbed into the Indian Railway Service of Engineers they would be entitled not to be treated differently thereafter.
Their seniority would ordinarily be reckoned from the date of their absorption into the Indian Railway Service of Engineers, as promised in their letters of appointment.
No doubt these Officers merited something more than the 'long wait ' at the portals of the Indian Railway Service of Engineers.
The Railway Board however, appears to have tried to make the long wait a little less tedious by giving them weightage of half of their length of service as Temporary Assistant Officers, subject to maximum of five years [177D G] Equally important, is the fundamental qualitative difference, linked with the method of recruitment.
True, the minimum educational qualification is the same.
But, those who are recruited directly to the Indian Railway Service of Engineers Class I are subjected to stiff and competative, written and personality tests.
Only the very best can aspire to come out successful.
The Temporary Assistant Officers were not subjected either to a written or to a personality test but were selected on the basis of an interview by the Union Public Service Commission.
In addition to the minimum educational qualification, three years ' experience as a Civil Engineer was also prescribed.
Thus while brilliance was the beacon light which beckoned those aspiring to become members of the Indian Railway Service of Engineers Class I, it was replaced by experience in the case of those wanting to be Temporary Assistant Officers.
Again the appointing authority in the case of Indian Railway Service of Engineers Class I is the President while the appointing authority in the case of Temporary Assistant Officers was the Railway Board, no doubt, pursuant to the authority given by the President.
Different courses of training were prescribed for the Indian Railway Service of Engineers and the Temporary Assistant Officers.
For the Indian Railway Service of Engineers the training is an intensive and comprehensive one designed to equip them for higher posts in the Department too; while the training for Temporary Assistant Engineers was a brief six months ' training intended merely to equip them for carrying out the specific jobs.
In the matter of terms and conditions of service, while the provisions of the Indian Railway Establishment Code are fully applicable to the Indian Railway Service of Engineers Class I, those provisions are applicable to 'Temporary Assistant Officers ' to the extent there is no specific provision in their letter of appointment and agreement.
[169 C H] State of Punjab vs Joginder Singh, [1963] Supp.
2 SCR 169, @ 191, 192, Kishori Mohanlal vs Union of India, A.I.R. , Jammu & Kashmir vs Triloki Nath Khosa and Ors., ; @ 790, 792 Roshan Lal Tandon vs Union of India, ; ; Mervyn Coutindo and Ors.
vs 146 Collector of Customs, Bombay and Ors.
, ; , Mohammad Sujat Ali and Ors.
vs Union of India and Ors.
; , @ 481, S.B. Patwardhan and Ors.
vs State of Maharashtra and Ors.
; ; A. K. Subraman vs Union of India, [1975] 2 SCR 979 and M.S. Verma and Ors.
vs Secty.
Ministry of Shipping & Transport and Ors.
, ; @ 427, 428; discussed.
Observation: There is nothing 'doctrinaire ' in the principle of "equal pay for equal work" and "equal status for equal pay and equal work".
They are not goals to be scoffed at.
It may be that in the present societal context, the goals may appear to be distant.
But they are goals worthy of attainment and would be achieved in the not too distant future.
[178 A B]
| 4193.txt |
N: Criminal Appeal No. 932 933 of 1981.
Appeals by special leave from the judgment and order dated the 23rd October, 1981 of the Allahabad High Court in CM.
5909 (W) of 1981 in CW No. 8918/81.
R.K. Bhatt for the Appellant.
Shaukat Hussain and Shakil Ahmed for the Respondent.
The Judgment of the Court was delivered by CHANDRACHUD, C.J.
: Heard counsel.
Special leave granted.
The respondents, who are detained under the provisions of the Prevention of Blackmarketing and Maintenance of Supplies of Essential Commodities Act, 1980 filed Habeas Corpus petitions in the High Court of Allahabad challenging the orders of detention passed against them.
Those petitions were almost fully heard by a Division Bench on October 19 and 22, 1981.
The learned Judges, however, released the writ petitions from their list since the Court had Diwali 26 holidays from October 24 until November 2, 1981 and they were not likely to be available, perhaps as a Bench, for concluding the hearing of the writ petitions.
Another Division Bench took up the Writ Petitions for hearing on October 23 but they adjourned the petitions until the reopening of the Court on November 3.
Soon after the Division Bench rose, counsel for the respondents approached a learned Single Judge after Court hours and applied for bail.
It appears that the Deputy Government Advocate was available.
He was sent for and after hearing both the sides, the learned Judge granted bail to the respondents on the ground that the State Government had erred in forwarding the respondents ' representations to the Advisory Board without considering them for itself.
The writ petitions were taken up for hearing by another Division Bench on November 3, 1981.
They concluded the hearing on that date, reserved their judgment and allowed the respondents to continue on bail till November 10 which was fixed for judgment.
The judgment is not yet delivered.
The learned Judges directed: "It may however be inquired as to how file was sent before the learned single Judge for bail when there was no case fixed before him." These Special Leave Petitions are directed against the order passed by the learned Single Judge on October 23, 1981, releasing the respondents on bail "until the next date of hearing of the Habeas Corpus petitions.
" We are unable to appreciate how the learned Single Judge could release the respondents on bail when, in the first instance, the writ petitions filed by them were listed for hearing before a Division Bench.
Secondly, and that involves a question of principle, we are unable to see for what special reason the learned Judge thought it necessary to release the respondents on bail.
The order passed by the learned Judge does not show that there was any pressing or particular reason of a unique kind for which it was imperative to enlarge the respondents on bail.
If persons held in detention are released on bail in the manner done by the learned Judge, the very object and purpose of detention will be totally frustrated.
Grave illness or pressing and personal business may justify an order of release in detention cases for a short period suited to the exigencies of the particular occasion.
But a detenu cannot be released on bail as a matter of common practice, on considerations generally appli 27 cable to cases of punitive detention.
The learned Single Judge virtually took upon himself the decision of the writ petitions of merits.
He found, evidently on an on the spot argument, that the State Government had erred in not considering the representations of the respondents before forwarding them to the Advisory Board and released the respondents on bail as their further continuance in detention was "prima facie" vitiated.
In passing the order of bail, the learned Judge has sought the support of a decision of a Constitution Bench of this Court in State of Bihar vs Rambalak Singh and Others.
In that case, the State of Bihar appealed to this Court against an order of interim bail passed by the Patna High Court in a Habeas Corpus petition which was filed by the respondent to challenge an order of detention issued under Rule 30 of the Defence of India Rules, 1962.
It was held by this Court that though the High Court has jurisdiction to grant bail in Habeas Corpus petitions filed against orders of detention passed under rule 30, the exercise of the said jurisdiction is inevitably circumscribed by the considerations which are special to such proceedings and which have relevance to the object which it intended to be served by orders of detention passed under the said Rule.
If on proof of certain conditions or grounds it is open to the High Court to set aside the order of detention made under Rule 30 and direct the release of the detenu, then it cannot be held that in a proper case the High Court has no jurisdiction to make an interim order giving the detenu the relief which the High Court would be entitled to give him at the end of the proceedings.
The Court, however, hastened to emphasize: ". though we have no hesitation in affirming the jurisdiction of the High Court in granting interim relief by way of bail to a detenu who has been detained under Rule 30 of the Rules there are certain inexorable considerations which are relevant to proceedings of this character and which inevitably circumscribe the exercise of the jurisdiction of the High Court to pass interim orders granting bail to the detenu.
There is no doubt that the facts on which the subjective satisfaction of the detaining authority is based, are not justiciable, and so, it is not open to the High Court to enquire whether the impugned order of detention is justified on facts or not.
The jurisdiction of the High Court to grant relief to 28 the detenu in such proceedings is very narrow and very limited.
That being so, if the High Court takes the view that prima facie, the allegations made in the writ petition disclose a serious defect in the order of detention which would justify the release of the detenu, the wiser and the more sensible and reasonable course to adopt would invariably be to expedite the hearing of the writ petition and deal with the merits without any delay.
Take the case where mala fides are alleged in respect of an order of detention.
It is difficult, if not impossible, for the Court to come to any conclusion, even prima facie about the mala fides alleged, unless a return is filed by the State.
Just as it is not unlikely that the High Courts may come across cases where orders of detention are passed mala fides, it is also not unlikely that allegations of mala fides are made light heartedly or without justification; and so, judicial approach necessarily postulates that no conclusion can be reached, even prima facie, as to mala fides unless the State is given a chance to file its return and state its case in respect of the said allegations; and this emphasises the fact that even in regard to a challenge to the validity of an order of detention on the ground that it is passed mala fides it would not be safe, sound or reasonable to make an interim order on the prima facie provisional conclusion that there may be some substance in the allegations of mala fides.
What is true about mala fides is equally true about other infirmities on which an order of detention may be challenged by the detenu.
That is why the limitation on the jurisdiction of the Court to grant relief to the detenus who have been detained under R. 30 of the Rules, inevitably introduce a corresponding limitation on the power of the Court to grant interim bail.
" The Court, speaking through Gajendragadkar, C.J. added: "It is no doubt true that a detenu is detained without a trial; and so, the courts would inevitably be anxious to protect the individual liberty of the citizen on grounds which are justiciable and within the limits of their jurisdiction.
But in upholding the claim for individual liberty within the limits permitted by law, it would be unwise to ignore the object which the orders of detention are intended 29 to serve.
An unwise decision granting bail to a party may lead to consequences which are prejudicial to the interests of the community at large; and that is a factor which must be duly weighed by the High Court before it decides to grant bail to a detenu in such proceedings.
We are free to confess that we have not come across cases where bail has been granted in habeas corpus proceedings directed against orders of detention under R. 30 of the Rules, and we apprehend that the reluctance of the courts to pass orders of bail in such proceedings is obviously based on the fact that they are fully conscious of the difficulties legal and constitutional, and of the other risks involved in making such orders.
Attempts are always made by the courts to deal with such applications expeditiously; and in actual practice, it would be very difficult to come across a case where without a full enquiry and trial of the ground on which the order of detention is challenged by the detenu, it would be reasonably possible or permissible to the Court to grant bail on prima facie conclusion reached by it at an earlier stage of the proceedings.
If an order of bail is made by that Court without a full trial of the issues involved merely on prima facie opinion formed by the High Court, the said order would be open to the challenge that it is the result of improper exercise of jurisdiction.
It is essential to bear in mind the distinction between the existence of jurisdiction and its proper exercise.
Improper exercise of jurisdiction in such matters must necessarily be avoided by the courts in dealing with applications of this character.
" The learned Single Judge, with respect, has failed to appreciate the weight of these observations while passing the order of interim bail.
A Division Bench had heard the petitions for two days but did not think it fit or proper to grant interim relief to the detenus.
Another Division Bench was going to rehear the petitions after ten days.
It is not proper that, in between, the learned Single Judge should have taken upon himself the task of examining the merits of the matter in order to find whether there was a prima facie case for releasing the detenus on bail.
Shri Shaukat Husain, who appears on behalf of the respondents, has drawn our attention to an order passed by the Division 30 Bench itself on November 10, 1981 by which it has permitted the respondents to continue on bail until the delivery of the judgment by it in the writ petitions.
Learned counsel says that the special leave petitions filed by the State of Uttar Pradesh against the order passed by the learned Single Judge have become infructuous by reason of the order passed by the Division Bench.
We are unable to accept this submission because the primary order of bail under which the respondents are at large is the one passed by the learned Single Judge.
The Division Bench has allowed that order to remain in operation, only for the reason that counsel for the State was unable to say whether the Advisory Board had recommended the confirmation of detention or not.
The Division Bench postponed the delivery of the judgment for that reason and directed that the respondents, who are already on bail, will be allowed to continue on bail until further orders.
For reasons aforesaid, we set aside the order of bail and direct that the respondents shall be taken in custody forthwith.
We hope that the Division Bench which has already heard arguments in the Writ Petitions, will be able to deliver its judgment expeditiously, if it has not already done so.
The appeals will stand disposed of in terms of this judgment.
P.B.R. Appeal allowed.
| After hearing the habeas corpus petitions of the respondents, who were detained under the provisions of the Maintenance of Supplies of Essential Commodities Act, 1980 the Division Bench of the High Court released the writ petitions from their list since the Court was to have holidays for over ten days immediately thereafter.
Another Division Bench, which took up the petitions for hearing, also adjourned the petitions until the reopening of the Court after holidays.
In the mean time a single Judge of the High Court, before whom the detenus made an application for bail, allowed their petitions on the ground that the Government had erred in forwarding their representations to the advisory board without considering them for itself.
On reopening of the Court, a Division Bench heard the habeas corpus petitions.
It however, allowed the detenus to be on bail till the judgment was pronounced.
In its petition for grant of special leave to appeal the State challenged the impugned order of the Single Judge releasing the detenus on bail "until the next date of hearing of the habeas corpus petitions".
Allowing the appeal ^ HELD: 1.
The single Judge erred in releasing the detenus on bail when their writ petitions were listed for hearing before a Division Bench.
Neither was there any pressing or particular reason of a unique kind such as grave illness or pressing and personal business justifying the order of release on bail for a short period.
The detenus cannot be released on bail as a matter of common practice on considerations generally applicable to cases of punitive detention.
[26 F H] In the instant case the single Judge took up on himself the decision on merits.
25 Although the Courts would be anxious to protect the individual liberty of the citizen on justiciable grounds and within the limits of their jurisdiction, it would be unwise to ignore the object which the orders of detention are intended to serve.
The reluctance of Courts to pass orders of bail in detention cases is based on the fact that they are fully conscious of the difficulties legal and constitutional and of the other risks involved in making such orders.
If an order of bail is made by the Court without a full trial of the issues involved merely on prima facie opinion formed by the High Court, such order would be open to challenge that it is the result of improper exercise of jurisdiction.
It is essential to bear in mind the distinction between the existence of jurisdiction and its proper exercise.
Improper exercise of jurisdiction in such matters must necessarily be avoided by the courts in dealing with applications of this character.
[29 A F] State of Bihar vs Rambalak Singh and others, applied.
There is no force in the argument of the detenus that by reason of the decision of the Division Bench, allowing the detenus to be on bail till the delivery of the judgment by it in their writ petitions, the special leave petition filed by the State had become infructuous because the primary order of bail was the one passed by the single Judge.
The Division Bench has allowed that order to remain in operation only because the counsel for the State was unable to say whether the Advisory Board had recommended the confirmation of detention or not.
The Division Bench postponed the delivery of the judgment for that reason and directed that the detenus would be allowed to continue on bail until further orders.
[30 A C]
| 4481.txt |
ivil Appeal Nos. 727 and 962 74 of 1988 Appeal Under Section 35L(b) of the Central Excise and Salt Act, 1944 from the order dated 30.11.87 and 20.11.87 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. 2856, 1856, 1920 1931/87 A in order Nos. 775, 749 to 761/87.
Kuldeep Singh, Additional Solicitor General.
A.K. Ganguli, Mrs. Sushma Suri and K. Swami for the Appellant.
F.S. Nariman, Ravinder Narain, A.K. Verma and D.N. Misra for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
These appeals arise under section 35L(b) of the Central Excises & Salt Act, 1944 (hereinafter called 'the Act ').
The respondents herein M/s. Kelvinator of India Ltd. in these appeals manufacture refrigerators.
They market these through their four exclusive wholesale dealers, namely, M/s. Gem, 658 M/s. Leonard, M/s. Expo Machinery and M/s. Tropicana.
The respondents gave one year warranty for the complete refrigerator and all parts thereof (except the light bulb and the crisper glass).
During this warranty period, they provide free repair and replacement for defects in material and workmanship under normal use and service.
This free service is available only within the municipal limits of the area served by an office of the wholesale dealer of the authorised dealer from whom the refrigerator is originally purchased.
The respondents include the cost of this one year warranty in the sale price as well as assessable value of the refrigerator.
After the free warranty period of one year is over, the respondents offer a four year service contract only for the sealed system or parts thereof.
This contract is not free.
It is on payment basis.
Charges for it during the material period (10.4.81 to 30.6.86), in Civil Appeals Nos.
962 75 of 1988, varied from Rs. 300 to Rs.450 per refrigerator.
It is a fact that these four dealers enter into this contract with the respondents.
The final consumer in turn enters into the service contract with the dealer from whom he buys his refrigerator.
The service is rendered by the respondents and the entire contract money accrues to them.
It is on evidence that during the material period the four dealers referred to hereinbefore entered into service contract in respect of a total of 91% of their purchases.
The remaining 9% did not enter into such contract.
This is optional.
The Assistant Collector by his order dated 18th August, 1986 held that four year service charge is includible in the value of the Refrigerator for the purpose of assessment of central excise duty under section 4 of the Act.
The Assistant Collector further held that for all intents and purposes this charge was not optional as it was not exercised only in respect of 9% of the sales.
The Assistant Collector relied on the decision of this Court in Union of India and others etc.
vs Bombay Tyre International Ltd. etc.
; , where it was held that after sale service charges could not be deducted from the assessable value.
The Assistant Collector confirmed the demands totalling Rs.17,40,68,326.32 against the respondents (in Civil Appeals No. 962 74 of 1988) and Rs.7,07,535 (in Civil Appeal No. 727 of 1988).
The respondents herein filed an appeal before the Appellate Collector.
The Appellate Collector upheld the decision of the Assistant Collector.
There was an appeal to the Tribunal and the Tribunal held that the optional service charge during the second and third year after the expiry of the first year warranty period was not includible in the assessable value.
The Tribunal allowed the appeals of the assessee with consequential relief.
Hence these appeals come to this Court.
659 The point involved in these appeals is whether the four year service contract charge is includible in the value of the refrigerators for the purpose of assessment of Central Excise Duty under section 4 of the Act.
It was found as a fact by the Tribunal that after the free warranty period of one year is over, the respondent herein offer a four year service contract only for the sealed system or parts thereof.
This contract is not free.
It is on payment basis.
The contract is not compulsory and the four dealers entered into service contract in respect of 91% of their purchase.
They did not make the contract for the remaining 9%.
It is also not necessary that the contract should be made right at the time of purchase of the refrigerator from the respondents.
In fact it was found as a fact that some time contract was made only in less than 10% of the sales.
For the remaining 81% of the purchases, the dealers took time from one week to over six months from the date of purchase.
It was explained by the respondents that depending upon the demand pattern in a particular area, the dealer purchased about 10% of the refrigerators straightaway with the service contract; for the remaining purchases, he exercised the option later, as and when the dealer anticipated further demand from his customers.
The Tribunal on an analysis of the evidence came to the conclusion that it was after sale service and it was optional.
Therefore, such service charges were not includible in the assessable value of the respondents herein.
The principle under which these will be includible has been laid down in Union of India and others.
vs Bombay Tyre International Ltd. (supra), where Pathak, J., as the learned Chief Justice then was, inter alia, observed as follow: ". expenses incurred by the assessee upto the date of delivery on account of storage charges, outward handling charges, interest on inventories (stocks carried by the manufacturer after clearance), charges for other services after delivery to the buyer, namely, after sales service and marketing and selling organisation expenses including advertisement expenses cannot be deducted.
It will be noted that advertisement expenses, marketing and selling or organisation expenses and after sales service promote the marketability of the article and enter into its value in the trade.
Where the sale in the course of wholesale trade is effected by the assessee through its sales organisation at a place or places outside the factory gate, the expenses incurred by the assessee upto the date of delivery under the aforesaid heads cannot, on the same grounds, be deducted.
660 But the assessee will be entitled to a deduction on account A of the cost of transportation of the excisable article from the factory gate to the place or places where it is sold.
The cost of transportation will include the cost of insurance on the freight for transportation of the goods from the factory gate to the place or places of delivery.
" This aspect was later clarified by this Court in Assistant Collector of Central Excise and others vs Madras Rubber Factory Ltd. and others, , where Bhagwati C.J. at page 562 of the report observed as follows.
"Interest on finished goods from the date of the stocks are cleared till the date of the sale was disallowed by the Assistant Collector, Kottayam.
This head has again been urged for our consideration as a proper deduction for determination of the assessable value.
As quoted in our judgment in Union of India and Ors.
vs Bombay Tyres International Ltd. (supra), we have held that expenses incurred on account of several factors which have contributed to its value upto the date of sale which apparently would be the date of delivery at the factory gate are liable to be included.
The interest on the finished goods until the goods are sold and delivered at the factory gate would therefore necessarily, according to the judgment in Bombay Tyres International case (supra) have to be included but interest on finished goods from the date of delivery at the factory gate upto the date of delivery from the sales depot would be an expense incurred after the date of removal from the factory gate and it would therefore, according to the judgment in Bombay Tyres International case (supra) not be liable to be included since it would add to the value of the goods after the date of removal from the factory gate.
We would therefore have to allow the claim of MRF Ltd. as above.
" It was mentioned before us by the learned Additional Solicitor General that this judgment is under review.
The Tribunal in its judgment herein has observed as follows: "We have given enough facts in paragraph 2 above to show that the four year service contract charge in the present was 661 not compulsory one.
As to why the appellants ' buyers chose not to enter into such contract only for about 9% of the purchases and not more is a matter between the manufacturer and his customers.
The percentages may look small but the statement of sales filed before us for the five year period (1981 86) shows that the number of Refrigerators in respect of which the option was not exercised was in thousands, ranging from over 18,000 to over 39,000 per year.
We find no force in the department 's pleading that the service charge, for all intents and purposes, was a compulsory one.
As to what machinery the appellants devised for extending this service is not material.
If any customer did not like to have the service, there was no compulsion on him to go in for it.
That is the important thing.
Once we reach the conclusion that the post warranty service activity could not be subjected to excise, it ceases to be material that 91% of the customers had opted for the service contract.
The ordinary or normal price referred to in section 4(1)(a) can take in the costs upto the stage of factory gate and not beyond as held by the Hon 'ble Supreme Court.
" The Tribunal also observed that the respondents herein offered the four years service by a stamped endorsement on their sale invoice itself, it did not mean that the subsequent exercise of option by the buyer related back to the date of purchase itself.
It was also found that there was no evidence to conclude that the service contract was a facade to split the true value of refrigerators into taxable and nontaxable components.
In that view of the matter, the Tribunal set aside the order of the Collector of Central Excise (Appeals) and allowed the appeals.
The contract for four years warranty service was optional, which was entered into later on.
This is clearly after sale facility and cannot be includible in the assessable value of the refrigerators.
In the aforesaid view of the matter, the Tribunal was right in the view it took.
These appeals fail and are accordingly dismissed.
G.N. Appeals dismissed.
| The Respondents, manufacturers of refrigerators, give one year warranty for the complete refrigerator and all parts thereof.
During this warranty period, they provide free repair and replacement for defects in material and workmanship under normal use and service.
They include the cost of this one year warranty in the sale price as well as assessable value of the refrigerator.
After the free warranty period of one year, the respondents offer a four year service contract only for the sealed system or parts thereof.
This contract is on payment which may vary from Rs.300 and Rs.400 per refrigerator.
The dealers enter into contract with the Respondents, and the consumer in turn enters into contract with the dealer from whom he buys his refrigerator.
The service is rendered by the Respondents and the entire contract money accrues to them.
Though the contract is optional, 91% of Customers did enter into this contract, and only 9% did not.
The Assistant Collector held that the four year service charge is includible in the value of the refrigerator for the purpose of Central Excise dub under section 4 of the Act.
The Appellate Collector upheld the said decision.
On appeal the Tribunal held that the said optional service charge was not includible in the assessable value.
These appeals by Revenue under Section 35L(b) of the Act are against the Tribunal 's decision.
Dismissing the appeals, this Court, ^ HELD: 1.
The contract for four years warranty service was optional which was entered into later on.
This is clearly after sale 657 facility and cannot be includible in the assessable value of the refrigerator.
[661G] 1.2 The Tribunal was right in the view it took that the optional service charge after the expiry of the first year warranty period was not includible in the assessable value.
It rightly observed that if any consumer did not like to have the service, there was no compulsion on him to go in for it and once the conclusion is reached that post warranty service activity could not be subjected to excise, it ceases to be material that 91% of the customers had opted for the service contract.
The Tribunal also observed that the respondents offered the four year service by a stamped endorsement on their sale invoice itself, but it did not mean that the subsequent exercise of option by the buyer related back to the date of purchase itself and that there was no evidence to conclude that the service contract was a facade to split the true value of refrigerators into taxable and non taxable components.
[658H;661D F] Union of India and Others etc.
vs Bombay Tyre Interna tional Ltd.; , and Assistant Collector of Central Excise and others vs Madras Rubber Factory Ltd. and others, , referred to.
| 5842.txt |
Civil Appeal No. 1266 of 1975.
Appeal by special leave from the Judgment and order dated 3rd March, 1971 of the Madras High Court in Writ Petition No. 583 of 1971.
K. section Ramamurthi, A. T. M. Sampath and E. C. Agarwala, for the Appellant.
B. Sen and Vineet Kumar for Respondent No. 2.
The Judgment of the Court was delivered by KRISHNA IYER, J.
A single fundamental flaw in the order of the Appellate Tribunal (under the ), constrains us to allow this Appeal challenging the High Court 's refusal to interfere with the grant of the permit in favour of Respondent No. 2.
Many applicants for one permit for a "short route" pressed their claims before the Regional Transport Authority which evaluated the relevant merits and awarded the permit to Applicant No. 6, who is the Appellant before us.
On appeal, Applicant No. 3, who is respondent No. 2 before us, succeeded.
Whereupon a Writ Petition was filed without success and the disappointed appellant has come to this Court by special leave.
The system of marks, under the Rules framed under the Act by the Tamil Nadu Government, prescribes the various qualifications for applicants for permits for passenger transport under the , Rule 155 A crystallises these considerations and describes them as guiding principles for the grant of stage carriage permits.
The rule itself emphasizes what is obvious, that the paramount consideration of the interest of the public, as enshrined in Section 47 (1), must given full weight while awarding permits.
That means to say that the various factors set out in rule 155 A are subject to Section 47(1).
This is clarified by sub rule (4) of Rule 155 A, which runs thus: "After marks have been awarded under sub rule (3), the applicants shall be ranked according to the total marks obtained by them and the applications shall be disposed of in accordance with the provisions of sub section (1) of Section 47".
There is no doubt that bus transport is calculated to benefit the public and it is in the fitness of things that the interest of the travelling public is highlighted while evaluating the relevant worth of the various claimants.
There are two circumstances which require to be stressed because they have been overlooked by the appellate tribunal in its disposal of the comparative merits of the rival claimants.
Sub rule (5)(i) of Rule 155 A states that preference shall, other things being equal, be given in the disposal of applications in respect of short routes. .to persons who have not held any permit for a stage carriage.
Among the considerations which must weigh with the authorities entrusted with the power to grant permits, is business or technical experience in the 216 field of motor vehicles operation.
Rule 155 A in Item (D), sub rule (3) specifically states "two marks shall be awarded to the applicants who have business or technical experience in the road transport service as defined in clause (a) of Section 68 A of any class of transport vehicles for a period of ten years or more".
Having regard to the marking system as adumbrated in rule 155 A, a broad sheet was apparently prepared and the appellant before us (Applicant No. 6) secured 4 marks as against the second respondent (Applicant No. 3) who got 3.10 marks.
Ordinarily, therefore, the applicant who got higher marks should have won the battle.
Moreover, in a short route, as in this case, the rule contemplates preference being given to a new entrant, of course, other things being equal.
In this case, therefore, the appellant before us, being admittedly a new entrant, was entitled to preference, the route being a short one, other things being equal.
The short question that, therefore, fell before the Appellate Authority was as to whether other things were equal.
This aspect attracted the attention of the Appellate Authority, but its consideration unfortunately was unsatisfactory.
The Appellate Tribunal observed that though the Applicant No. 6 had secured higher marks than Applicant No. 3: "I am inclined, having regard to the public interest in the matter of passenger transport service, to agree with the appellant 's contention that the respondent 's experience as lorry operator cannot be equated with the appellant 's experience in bus operation.
" This view, according to him, is tenable under Section 47 (1) since this matter involves grant of bus permit.
"The fact that the appellants are bus operators, must necessarily over ride the fact of the respondent being a lorry operator.
Though the route in question is a short route and there is a new entrant like the respondent, the respondent cannot automatically be preferred in the absence of other things being equal, in accordance with clause 5(1) of Rule 155 A".
The error that has crept into the order of the Appellate Tribunal consists in thinking that the rules or guidelines could be discarded in the name of Section 47(1).
Actually, Rule 155 A is in implementation of Section 47(1), but is not exhaustive of all the considerations that will prevail in a given situation.
Therefore, it is that there is jurisdiction given to the Tribunal to take note of other considerations in public interest flowing out of Section 47(1).
Not that the sub rules of Rule 155 A can be discarded, but that they may be supplemented or outweighed.
Not that, in the name of public interest, something opposed to the sub rules of Rule 155 A can be done but that, within the combined framework of Section 47(1) and rule 155 A, there is scope for play of the jurisdiction of the Tribunal to promote public interest.
Viewed in this perspective the Appellate Tribunal has actually contravened Rule 155(3)(D).
That provision expressly accords two marks for applicants who have a certain experience in road transport service. 'Road transport service ' is defined in clause (a) of Section 68 A and this definition is specifically incorporated in Rule 155 A (3) (D).
It follows that the rule makes no distinction between the type of transport vehicle in which experience has been gained whether it be a passenger transport or a lorry transport.
The view taken by the appellate tribunal 217 that because the permit is for passenger transport, lorry service experience, even if it falls under Rule 155 A (3) (D), can be ignored, is therefore, illegal.
A relevant factor has thus been wrongly excluded.
Connected with the same flaw is what we have earlier indicated namely, that the Appellate Tribunal has held that the new entrant (Applicant No. 6) need not be given the preference he is eligible for under Rule 155 A (5) because other things are not equal.
According to him, other things not equal because Applicant No. 6 has lorry transport experience while Applicant No. 3 has bus transport experience.
We have already explained that this is a fallacy.
In this view, the preference that flows in favour of applicant No. 6 under Rule 155 A (5) should not have been denied to him for the reasons set out by the Tribunal.
For these reasons, the order of the Appellate Tribunal is liable to be quashed.
The well worn ground that mat material consideration, if ignored, makes the order vulnerable, applied.
Moreover, these is an apparent mis construction of the relevant rule by the Appellate Tribunal, as we have explained above.
This does not mean that this Court will award the permit to one party or the other.
That is the function of the statutory body created under the .
Moreover, as Mr. Sen, appearing for the second respondent, has rightly pointed out, his client had many other grounds to urge before the Appellate Tribunal to establish his superiority, which have not been adverted to by the Appellate Tribunal because on one ground he succeeded.
It is only fair, therefore, that the case is remanded to the Appellate Tribunal for being heard de novo wherein both sides (no other applicant will be heard), will be entitled to urge their respective claims, for the single permit that is available to be awarded.
The only point that remains to be decided is as to what is to happen for bus operation during the period the Appeal is to be heard and the further proceedings which may follow.
We direct that the second respondent be allowed to ply the bus as he is doing it now until disposal of the appeal by the Appellate Tribunal.
It is represented by Mr. Ramamurthy, appearing for the Appellant, that his client had been plying the bus on the route on and earlier occasion till the High Court dismissed the Writ Petition.
If there had been any period when both operators had been plying their buses on the route during the course of this litigation, especially at the time the Writ Petition was pending in the High Court, it will be open to the Appellate Tribunal to allow thee Appellant before us (Applicant No. 6) also to ply his bus on the same route.
With these directions, we allow the Appeal and direct the Appellate Tribunal to dispose of the motor vehicles Appeal No. 542 of 1970.
Parties will bear their own costs throughout.
P.H.P. case remanded.
| Many applicants for one permit for a short route pressed their claims before the Regional Transport Authority under the .
The Transport Authority evaluated the relevant merits and awarded the permit to the appellant.
The system of marks under the Rules framed under the Act by the Tamil Nadu Government, prescribes various qualifications for applicants for permits for passenger transport under the Act.
The rule emphasises that the paramount consideration of the interest of the public as enshrined in section 47(1) must be given full weight while awarding permits.
One of the rules provides that preference shall, other things being equal, be given in respect of the routes to persons who have not held any permit for stage carriage.
One of the considerations which must weigh with the authorities is the business of technical experience in the field of motor operation.
The appellant secured 4 marks as against 3.1 marks secured by respondent No. 1.
In addition, the appellant was entitled to a preference for being a new entrant since the route was a short one.
The Appellate Tribunal reversed the order of the Transport Authorities and granted the permit to respondent No. 2 and set aside the permit granted in favour of the appellant on the ground of public interest in the matter of passenger transport service and held that the appellant 's experience as lorry operator cannot be equated with respondent No. 2 's experience in Bus operation.
This view was taken by the Tribunal following section 47(1).
The appellant filed a Writ Petition in the High Court which was rejected.
On appeal by Special Leave, ^ HELD: (1) The rules or guidelines could not be discarded in the name of section 47(1).
The Rules made are really in implementation of section 47(1) but is not exhaustive of all the considerations that would prevail in a given situation.
The jurisdiction is given to the Tribunal to take note of other considerations in public interest flowing out of section 47(1).
The Rules, are, however, not to be discarded but they can be supplemented or outweighed.
In the name of public interest something opposed to the Rules cannot be done.
The Appellate Tribunal has actually contravened rule 155(3) which accords 2 marks for applicants who have a certain experience in road transport service.
Road Transport Service is defined by section 68A(a) and it makes no distinction between the type of transport vehicles in which experience has been gained whether it be of passenger transport or a lorry transport.
The distinction made between passenger transport and lorry service experience by the Tribunal is illegal.
A relevant factor has thus been wrongly excluded.
The order of the Appellate Tribunal is liable to be quashed on the well worn ground that material consideration if ignored makes the order vulnerable.
More over, there is an apparent mis construction of the relevant rule.
The respondent No. 1 stated that there were many other grounds which he could have urged before the Tribunal but which have not been adverted to by the Tribunal because he could have urged before the Tribunal but which have not been adverted to by the Tribunal because respondent No. 2 succeeded on one ground.
It is, therefore, fair that the case should be remanded to the Appellate Tribunal for being heard de novo.
[216 E H, 217A E] 215
| 3344.txt |
Civil Appeal No. 80 of 1981.
From the Judgment and Order dated 10.7.80 of the Allahabad High court in Civil Miscellaneous W.P.No.
5661 of 1979.
Manoj Swarup for the Appellant.
S.K. Bagga for the Respondent.
The Judgment of the Court was delivered by VENKATACHALIAH, J.
This appeal, by special leave, by the tenant arises out of and is directed against the Judgment dated 10.7.1980 of the Allahabad High Court in Civil Misc.
Writ Petition No. 5661 of 1979 rejecting the appellant 's challenge to of the decrees of ejectment 249 granted in favour of the third respondent landlord on the ground that there was a denial of the title of the landlord within the meaning, and for purposes, of Section 3(1)(f) of the Uttar Pradesh (Temporary) Control of Rent and Eviction Act, 1947 (Act III of 1947).
The appeal raises a short question whether, in the circumstances of the case, there was a disclaimer on the part of the appellant of the landlord 's title, so as to incur forfeiture of the tenancy.
The necessary and material facts may briefly be stated: The premises in question, i.e. No. 7/3, Shambhoo Barracks, Allahabad, originally belonged to a certain Shambhoo Lal Jain.
Shamboo Lal died in the year 1943 leaving behind him his widow Rajul Devi; his two sons, Dayachand and Dhoomchand; and a daughter Mainavati.
Dayachand, it is stated, went away in adoption to the family of one Banvarilal, a brother of Shamboo Lal.
Pursuant to and in execution of a money decree obtained by the said Mainavati against her brother Dhoomchand, she brought the said premises for sale and claimed to have purchased the same at a Court sale on 21.5.1956.
Mainavati, thereafter, conveyed the property by sale in favour of a certain Gopinath Agrawal.
Appellant who was in occupation of the premises as a tenant even prior to the sale attorned the tenancy in favour of the purchaser Gopinath and came to pay the rents to Gopinath accordingly.
Gopinath, in turn, sold the property in favour of Chhaya Gupta, the third respondent herein.
Both the vendor Gopinath and the purchaser Chhaya Gupta issued notices to the appellant to attorn the tenancy in favour of the purchaser, Chhaya Gupta.
But appellant tenant declined to do so and assailed not only the derivative title of the third respondent to the property but also the validity of the sale in favour of Gopinath himself.
The provocation for the denial on the part of the appellant of the third respondent 's title was this: It would appear that in a separate litigation which culminated in the judgment dated 6.7.1971 of the Allahabad High Court in First Appeal No. 260 of 1968 between the said Mainavati on the one hand and a certain Chamanlal on the other, it was held that what Mainavati had acquired under the execution sale of 24.4.1956 was not the totality of all rights and interests in the property, but was only such right, title and interest as the judgment 250 debtor, i.e. Dhoomchand, had and that the Court sale did not convey to Mainavati the interest of Rajul Devi, the widow of Shamboolal Jain.
It was also held that Chamanlal who obtained a decree against both Dhoomchand and the estate of Shamboolal would, notwithstanding the sale in favour of Mainavati, be entitled to bring the residuary interests in the same property for sale in his execution.
Appellant sought to raise this defect in Mainavati 's title.
But the point to note, however, is that the appellant had attorned the tenancy in favour of Gopinath Agarwal, paid rents through out the period during which Gopinath 's interest subsisted.
The question was whether despite this attornment, the appellant could assail Gopinath 's title.
Appellant sought to assert that the sale in favour of Gopinath was void and conveyed nothing.
This act, on the part of the appellant, of denial and disclaimer of the title was the foundation of the proceedings in ejectment.
The High Court, dismissing the appellant 's writ petition, has upheld the order of ejectment made by the Courts below.
We have heard Shri K.B. Asthana, learned Senior Counsel for the appellant and Shri B.D. Aggarwal, learned Senior Counsel for the contesting third respondent.
The point that Shri Asthana sought to put across was that the High Court was in error in its view that the stand taken by the appellant in his reply dated 3.4.1972 amounted in law to a denial of title of the land lord and that, at all events, the view of the High Court on the scope of a tenant 's estoppel was clearly untenable.
Learned counsel submitted that the estoppel of a tenant does not go so far as to bar him from questioning the derivative title of an assignee of the reversion or from contending, as here, that, in addition to the particular person claiming to be the successor or assignee of the reversion, there were also others who were co owners of the reversion.
On the first aspect, learned counsel submitted that where a tenant requires from the person, claiming to be assignee or successor in interest of the reversion, proof of the vestitive facts on which the claim rests or where the tenant alleges that the reversion vested not exclusively in the person so claiming, but in a body of co owners, there was no disclaimer of the position of the tenant as tenant.
On the second aspect, learned counsel submitted that estoppel of a tenant is in respect of, and confined to, the title as at the time the tenant was inducted or let into possession, that appellant could yet show that the attornment made in favour of Gopinath Agarwal, from 251 whom the third respondent claims, was in ignorance of the full facts and the result of fraud and mis representation, and that under these circumstances, appellant 's acknowledgment of Gopinath Agarwal as the landlord, would not debar him from contending that Gopinath himself was not the full owner, but had acquired only an undivided share and interest in the property.
The law as to estoppel of a tenant under Section 116 of the Evidence Act is a recognition, and statutory assimilation, of the equitable principles underlying estoppel in relation to tenants.
The section is not exhaustive of the law of estoppel.
The section, inter alia, predicates that no tenant of immovable property shall, during the continuance of the tenancy, be permitted to deny that the landlord of such tenant had, at the beginning of the tenancy, title to such property.
Referring to the reason underlying this branch of the doctrine of estoppel Marton B said: (Cuthberton vs Irwing, ".
This state of the law in reality tends to maintain right and justice and the enforcement of contracts which men enter into with each other for so long as a lessee enjoys every thing which his lease purports to grant how does it concern him that the title of the lessor. is?" Shri Asthana may be right in his submission that a tenant who, without disclaiming his own position as tenant, however, seeks proof of title from an alleged assignee of the reversion cannot be held to have denied the landlord 's title.
It may also be true that the estoppel of a tenant is primarily in relation to his landlord who had let him into possession and that, accordingly, such tenant is not precluded from questioning the alleged derivative title of a person claiming to be the successor to, or assignee of, the reversion, for want of proof of the vestitive facts on which the claim for attornment is based.
The rule of estoppel does not also preclude a tenant from contending that the landlord 's title has since terminated by transfer or otherise or has been lost or defeated by title peramount.
In English case law there was some authority for the proposition that the tenant was only estopped from denying his landlord 's title only if at the time he took the lease from the landlord he was not already in possession of the land.
In Kumar Krishna Prasad Lal Singha Deo vs Baraboni Coal Concern Ltd. and Ors., the judicial committee noticed this contention thus: 252 "The defendant company contended before the High Court that the section only applies where it is shown that the landlord put the tenant into possession of the property, and that when a person already in possession of land becomes tenant to another there is no estoppel against his denying his lessor 's title. " However, it was held: "There is in English case law some authority for the view that a tenant is only estopped from denying his landlord 's title if at the time when he took his lease he was not already in possession of the land.
But in Section 116, the Indian Legislature has formulated no such condition.
The words 'at the beginning of the tenancy ' give no ground for it.
When a demise of land is made and acted on, when the tenant proceeds to occupy and enjoy under the grant, gets the shelter of the grantor 's title and the benefit of his covenants, it is difficult to see why 'during the continuance of the tenancy ' he should be free of this form of estoppel. 'Tenant who has occupied but not entered ' is a difficult notion to thrust into Section 116 and quite impossible to find therein.
In the present case the plea of the landlord is that the general principles of estoppel preclude the tenant from denying the title of the person to whom he has attorned.
In Kumar Krishna Prasad 's case their Lordships observed: ".
The principle does not apply to disentitle a tenant to dispute the derivative title of one who claims to have since become entitled to the reversions, though in such cases there may be other grounds of estoppel e.g., by attornment, acceptance of rent etc. ." "The section does not deal or profess to deal with all kinds of estoppel or occasions of estoppel which may arise between landlord and tenant . . .
Whether during the currency of a term the tenant by attornment to A who claims to have the reversion, or the landlord by acceptance of rent from B who claims to be entitled to the term is estopped from disputing the claim which he has once admitted are important questions, but they are instances of cases which are outside Section 116 altogether . " (emphasis supplied) 253 In regard to the effect of attornment Spencer Bower on Estoppel says: "192.
Where a tenant, with full knowledge of the facts, either expressly in writing, or impliedly by acts, such as the payment of rent, attorns tenant to a person other than his original landlord or one who is claiming the estate or interest of such original landlord by assignment, succession, or otherwise, he is ordinarily estopped from questioning the title of the person to whom he has so attorned.
But, here too, it is open to the party sought to be estopped to explain away the attornment, and so escape the estoppel to which is would otherwise be subject, by proof that, when he so attorned, he was labouring under mistake or ignorance as to material facts affecting the title of the person to whom he attorned, particularly if such error or ignorance was due to the fraud of that person." (emphasis supplied) (Estoppel by Representation by Spencer Bower & Turner III Edn.) The concurrent findings of facts in this case it is indeed a matter of admission of the appellant that ever since the purchase by Gopinath Agarwal the appellant attorned the tenancy in his favour and paid rent to him.
Appellant did not establish that there was misrepresentation on the part of Gopinath or mistake on the part of the appellant misleading appellant into this attornment.
High Court observes: ".
In the courts below, an attempt was made to get over the effect of the defendant having attorned to Gopinath Agrawal by trying to demonstrate that the attornment was as the result of fruad and mis representation practised by Gopinath Agrawal.
Both the Courts below have rejected this plea, which is undisputably purely one of fact.
Counsel for the petitioner made no attempt to show that the said finding of the courts below is wrong.
Now, Section 3(1)(f) which refers to one of the grounds for eviction under the Act envisages: "(f) that the tenant has renounced his character as such or denied the title of the landlord and the latter has not 254 waived his right or condoned the conduct of the tenant;" There can be a denial of the title of his landlord without the tenant renouncing his character as such where, for instance, he sets up a plea of Jus tertii.
The stance of the appellant against the third respondent 's title was not on the ground of any infirmity or defect in the flow of title from Gopinath, but on the ground that the latter 's vendor Mainavati herself had no title.
The derivative title of the third respondent is not denied on any ground other than the one that the vendor, Gopinath to whom appellant had attorned had himself no title, the implication of which is that if appellant could not have denied Gopinath 's title by virtue of the inhibitions of the attornment, he could not question third respondent 's title either.
Appellant did himself no service by this stand.
It must, accordingly, be held on both the aspects contended for by Shri Asthana that what appellant did, indeed, amounted to a denial of title and that appellant was precluded from doing so on the general principles of estoppel between landlord and tenant.
The principle, in its basic foundations.
means no more than that under certain cricumstances law considers it unjust to allow a person to approbate and reprobate.
Having regard to the circumstances of this case and the findings of fact recorded by the High Court it appears to us to be a clear case which attracted the grounds under Section 3(1) of the Uttar Pradesh (Temporary) Control of Rent and Eviction Act, 1947 (Act 3 of 1947).
The view taken by the High Court does not call for interference.
We accordingly find no merit in this appeal which is dismissed but without an order as to costs.
R.S.S. Appeal dismissed.
| Mainavati, who had purchased the premises in question at a court sale, conveyed the same by sale in favour of Gopinath.
The appellant who was in occupation attorned his tenancy in favour of Gopinath.
Gopinath, in turn, sold the property in favour of Chhaya Gupta, the third respondent.
The appellant tenant on being asked to attorn the tenancy in favour of Chhaya Gupta, declined to do so and assailed not only the derivative title of the third respondent to the property but also the validity of the sale in favour of Gopinath himself on the ground that Mainavati had not acquired the totality of all rights and interests in the property and, as such, her title was defective.
This act of disclaimer of the title of Gopinath to whom the appellant had attorned was the foundation of proceedings in ejectment.
The High Court, dismissing the appellant 's writ petition, upheld the order of ejectment made by the Courts below.
Before this Court it was contended by the appellant: (1) that the High Court was in error in its view that the stand taken by the appellant amounted in law to a denial of title of the landlord, and (2) that the view of the High Court on the scope of a tenant 's estoppel was erroneous.
Dismissing the appeal, it was ^ HELD: (1) The law as to the estoppel of a tenant under Section 116 of the Evidence Act was a recognition, and statutory assimilation, of the equitable principles underlying the doctrine of estoppel in rela 248 tion to tenants.
The Section was not exhaustive of the law of estoppel.
The section inter alia, predicated that no tenant of immovable property during the continuance of the tenancy, would be permitted to deny that the landlord of such tenant had, at the beginning of the tenancy, title to such property.
[251B C] (2) There could be a denial of the title of his landlord without the tenant renouncing his own character as a tenant, where, for instance, he had set up a plea of Jus tertii.
[254B] (3) The derivative title of the third respondent was not denied on any other ground than the one that the vendor, Gopinath to whom appellant had attorned had himself no title, the implication of which was that if appellant could not have denied Gopinath 's title by virtue of the inhibitions of the attornment, he could not question third respondent 's title either.
What appellant did, indeed, amounted to a denial of title which appellant was precluded from doing on the general principles of estoppel between landlord and tenant.
[254C D] (4) Having regard to the findings of fact recorded by the High Court, it appeared to be a clear case which attracted the grounds for eviction under section 3 (1) of the Uttar Pradesh (Temporary) Control of Rent and Eviction Act, 1947.
[254E F] Kumar Krishna Prasad Lal Singha Das vs Baraboni Coal Concern Ltd., , referred to.
| 5739.txt |
Appeal No. 1065 of 1965.
Appeal by special leave from the judgment and order dated February 27, 1963 of the Mysore High Court in Writ Petition No. 1096 of 1961.
M. K. Ramamurthi, for the appellants.
O. P. Malhotra, P. C. Bhathari and O. C. Mathur, for respondent No. 1.
The Judgment of the Court was delivered by Sikri, J.
This appeal by special leave is directed against the judgment of the Mysore High Court in Writ Petition No. 1096 of 1961 by which the High Court allowed the Writ Petition and quashed the impugned award dated June 30, 1961, made by the Labour Court, Bangalore, in Reference No. 51 of 1960.
In order to appreciate the points raised before us it is necessary to give the relevant facts.
The second appellant before us, R. Mahalingam, was engaged as a Foreman in the workshop of Sri Rangavilas Motors (P) Ltd., the first respondent, hereinafter referred to as the Company, in the month of April, 1956.
By an order dated January 21, 1960, Mahalingam was transferred from Bangalore to Krishnagiri where the head office of the Company is situated.
Mahalingam entered into correspondence with the Company alleging that according to the conditions of his employment he could not be transferred from Bangalore to Krishnagiri.
Ultimately, the Company framed charges against Mahalingam and removed him from service by an order dated April 7, 1960.
On April 8, 1960, Mahalingam complained in writing to the Assistant Commissioner of Labour who was functioning as the Conciliation Officer at Bangalore.
Later on, one Selvaraj took part in the conciliation proceedings on the authority of the resolution dated July 21, 1960, passed at the General Body 530 meeting of Krishnagiri Motor Workers ' Union, among whose members 112 out of 170 were employees of the Company.
Selvaraj filed a statement of claims before the Conciliation Officer on September 1, 1960.
The Conciliation Officer reported to the Government that the conciliation proceedings had failed, and thereupon the State Government by its order dated November 1, 1960, made in exercise of the powers conferred by cl.
(c) of sub section
(1) of section 10 of the (XIV of 1947) hereinafter referred to as the Act referred for adjudication by the Labour Court, Bangalore, the following points in dispute : " 1.
Whether the order of the management of Sri Rangavilas Motor (Private) Ltd., in transferring the workman Sri It.
Mahalingam, Foreman, from their branch at Fort, Bangalore, to Krishnagiri, is illegal or unjustified.
If so, is the workman entitled to reinstatement in Bangalore Branch with benefits of back wages or to any other relief ? 2.
Is Sri R. Mahalingam, Foreman, entitled to arrears of increments and overtime wages, if so, what is the amount he is entitled to ? Selvaraj, inter alia, prayed in his statement of claims, filed on behalf of Mahalingam, as follows ". it is prayed that the Hon 'ble Court may be pleased to direct the second party (the Company) to cause the payment of overtime wages due, increments due (as mentioned in the annexure to this statement) as also the arrears of wages from 1 2 60 to 15 3 1960 and order payment of back wages with effect from the date of termination of service by setting aside the said order of termination and to reinstate the workman with continuity of service.
" The Company, in reply, contended that the reference was limited only to the question of transfer, and hence no question of reinstatement or back wages could be adjudicated upon.
Further, the Company contended that the reference was bad because it did not fall under any of the items enumerated in the Second Schedule to the Act.
It was also contended that the dispute was an individual dispute.
One further objection was raised to the effect that the reference should have been made to the National Tribunal and not to the Labour Court The Labour Court overruled all the objections regarding jurisdiction raised by the Company and made the award holding that both the transfer as well as the removal from service of Mahalingam were illegal and that he Was entitled to overtime wages as well as 531 increments.
The Labour Court made the following further direction: "The workman Sri Mahalingam should be reinstated in ore branch with full back wages in continuity of the past service and with same emoluments.
The second party should also pay the arrears of Rs. 4629/27 towards the overtime wages and as well as the increments due.
(sic.) As stated above, the Company filed writ petition challenging the award.
The High Court formulated the points which arose out of the arguments addressed before it thus: 1.
Whether the dispute referred by the State Government to the Labour Court is an industrial dispute ? 2.
If it is such a dispute (a) Whether the State Government of Mysore was not the appropriate Government to make the reference ? and (b) Whether the reference should have been made by the Central Government to a National Tribunal 3.
Whether any dispute relating to the termination of the service of the fourth respondent is included in the order of reference ? 4.
Whether the points of dispute actually referred fall within the scope of the items enumerated in the second Schedule of the and are therefore within the competence of the Labour Court ? 5.
Whether on the question of transfer there was any dispute at all for adjudication On the first point the High Court, agreeing with the Labour Court, held that on the facts what was originally an individual grievance of Mahalingam did assume at the time the reference was made by the Government the character of an industrial dispute.
On the first part of the second point, the High Court held that the State Government of Mysore was the appropriate Government to make the reference.
On the second par ' it held that it was for the Central Government to decide to refer or not to refer the dispute but the State Government which is the appropriate Government in relation to the dispute does not lose its power of making 'a reference.
On the third point the High Court held that the question of legality or otherwise of the Company 's action in removing Mahalingam from service was not the subject matter of reference to the M2 Sup.
CI/67 5 532 Labour Court and its award to the extent it dealt with that topic was without jurisdiction.
On the fourth point, the High Court held that the first proviso to cl. '(d) to section 10 (1) of the Act did not apply and that the dispute relating to increments and overtime wages was beyond the jurisdiction of the Labour 'Court and could not have been validly referred to it.
It also held that the dispute regarding transfer was included in the expression "rules of discipline" enumerated as item 8 of the Third Schedule, and was therefore pot within the, competence of the Labour Court to adjudicate upon in view of these findings the Award was quashed.
Regarding point No. 5 formulated by it, the High Court observed that it was.
unnecessary to examine that point, but as the matter had been, argued at some length, the High Court stated its opinion thereon.
In its opinion, there was no scope far making the order of transfer the subject matter of any dispute.
The same points that were formulated by the High Court were . argued before us.
Mr. Ramamurti, appearing on behalf of the appellants, urged regarding point No. 3 that on its true interpretation the order of reference was quite clear and that the question of termination of services of Mahalingam was included in the order of reference.
We have already reproduced the order of reference and, in our opinion, there is force in what Mr. Ramamurti urges It seems to us that the order of reference is quite clear if regard is: had to the words "reinstatement in Bangalore branch with benefits of back wages.
" If the words with benefits of back wages" considered,and with respect,the High Court did not consider them, the High Court 's conclusion might possibly be justified.
It seems to us that by the time the reference tame to be made everybody knew that Mahalingam had been removed from service.
The words "with benefits of back wages" coup led with the word "reinstatement" are appropriate only to a case of removal and not to a case of transfer.
On the facts of this case it is quite clear that the contention of Mahalingam was that the transfer was illegal and if the transfer as illegal, his removal from service would fall automatically with the finding that the transfer was illegal, and one of the appropriate reliefs that would be given would be reinstatement in the Bangalore Branch with benefits of back wales.
In our view it is because of the above considerations that the word "removal" was not expressly mentioned.
In this connection the High Court relied on the provisions of section 10(4) of the Act which reads as under "10(4) Where in an order referring an industrial dispute to a Labour Court, Tribunal or National Tribunal under this section or in a subsequent order, the appropriate Government has specified the 'points of dispute for adjudication, the Labour Court or the Tribunal or the National 533 Tribunal, as the case may be, shall confine its adjudication to those points and matters inidental thereto.
" We are unable to appreciate how this sub section has any re levance to the question of construction of the order of reference made by the Government.
It is true that he points in dispute must be specified, but the point with which we are concerned is, whether as a matter of construction the point in dispute has been specified or not, and according to us the dispute regarding removal has been specified.
Regarding the fourth point, with respect, the High Court misinterpreted the first proviso to cl.
(d) to s."10(1).
This proviso reads as follows "Provided that where the dispute relates to any matter specified in the Third Schedule and is not likely to affect more than one hundred workmen, the appropriate Government may, if it so thinks fit, make the reference to a Labour Court under clause (c) The High Court negative the, plea of Mahalingam on two grounds: First that there is nothing either in the order of reference.
or in any, other material placed before it to indicate that the Government have applied their mind to the applicability of the proviso to the facts of this case or have actually acted pursuant to the proviso in making the references to the Labour Court and secondly, that there can be no doubt that more than one hundred.
per sons are interested in, and are therefore likely to be affected by the dispute in question.
In our view it is not necessary that the order of reference should expressly state that it is because of the proviso that a reference is, being made to the Labour Court, and if the reference can be justified on the facts, there is nothing in the Act which makes such a reference invalid.
The second reason given by the High Court, with respect is erroneous because it seems to have equated, the words "interested ' and ",affected".
It would be noticed that section 10(1A) uses both the words "interested" or "affected".
Section 10(5) also uses both the words "interested" or "affected".
It seems to us that there is a difference in the import of the words " interested" or, "affected".
The Union which sponsors the cause of an individual workman is interested in the dispute but the workmen who are the members of the Union are not necessarily affected by the dispute.
The dispute in this case was regarding the validity of the transfer and consequent removal of the appellant.
The other workmen would naturally be interested in the dispute but they are not affected by this dispute.
In our opinion, the High Court erred in holding that the first proviso to section 10(1)(d) did not apply to the facts of this case.
In view of our decision on this point, it is not necessary to go into the question whether the points in dispute fell within the second or the third Schedule to the Act.
534 Therefore, the appeal must succeed unless the Company can satisfy us that the points decided against it should have been decided in its favour.
This takes us to the other points.
Mr. O. P. Malhotra strongly urges that the State Government of Mysore was not the appropriate Government to make the reference.
He .says that although the dispute started at Bangalore, the resolution sponsoring this dispute was passed in Krishnagiri, and,, that the proper test to be applied in the case of individual disputes is where the dispute has been sponsored.
It seems to us that on the facts of this case it is clear that there was a separate establishment at 'Bangalore and Mahalingam was working there.
There were a number of other workmen working in this place.
The order of transfer, it is true, was made in Krishnagiri at the head office, but the order was to operate on a workman working in Bangalore.
In our view the High Court was right in holding that the proper question to raise is : Where did the dispute arise ? Ordinarily, if there is a separate establishment and the workman is working in that establishment, the dispute would arise at that place.
As the High Court observed, there should clearly be 'some nexus between the dispute and the territory of the State and not necessarily between the territory of the State and the industry concerning which the dispute arose.
This Court in Indian Cable Co. Ltd. vs Its Workmen(1) held as follows: "The Act contained no provisions bearing on this question, which must, consequently, be decided on the principles governing the jurisdiction of Courts to entertain actions or proceedings.
Dealing with a similar question under the provisions of the Bombay Industrial Relations Act, 1946, Chagla, C. J., observed in Lalbhai Tricumlal Mills Ltd. vs Vin and Others , 558 'But What we are concerned with to decide is: where did the dispute substantially arise ? Now, the Act does not deal with the cause of action, nor does it indicate what factors will confer jurisdiction upon the labour court.
But applying the well known tests of jurisdiction, a Court, or Tribunal would have jurisdiction if the parties reside within jurisdiction or if the subject matter of the dispute substantially arises within jurisdiction. ' In our opinion, those principles are applicable for deciding which of the States has jurisdiction to make a reference under section 10 of the Act".
Applying the above principles to the facts of this case it is quite.
clear that the subject matter of the dispute in this case substantially arose within the jurisdiction of the Mysore Government.
(1) [1962] Supp. 3 S.C.R. 589 : 535 Mr. Malhotra further urges that the High Court erred in holding that it was an industrial dispute.
We see no force in this contention.
The High Court rightly observed that once the findings of fact recorded by the Labour; Court are accepted, there is no doubt in law that in the circumstances of this case, what was originally an individual grievance of Mahalingam did assume, at the time the reference was made by the Government, the character of an industrial dispute.
Mr. Malhotra urges that the finding of the Labour Court that the transfer was illegal was perverse.
It is not necessary to go into this question because once it is held that there is an agreement between the Company and Mahalingam that he could not be transferred from Bangalore, the transfer would be bad.
The Labour Court had observed that one of the terms of agreement was that the Company had agreed not to transfer Mahalingam to any place out of Bangalore, for a period of ten years; the Company had transferred Mahalingam from Bangalore to the head office at Krishnagiri and this action of the Company was in contravention of the terms of the agreement.
Then Mr. Malhotra tried to urge the fifth point formulated by the High Court.
This point was not taken before the Labour Court and we did not allow him to raise this point. ' In the result the appeal is allowed, judgment of the High Court set aside and the Award of the Labour Court restored.
The appellant will have his costs here and in the High Court.
| The second appellant was a workman in the workshop of the first respondent dent company any in its Bangalore branch in the Mysore State.
The head,office of the Company at Krishnagiri, in the Madras State, transferred him to Krishnagiri, contrary to the agreement that he would not be transferred .from
Bangalore for ten years.
On the workman raising objections, the Company removed him from service.
The Krishnagiri Motor Workers ' Union, a majority of whose members numbering more than one hundred were employees of the Company, took up the workman 's grievance, and the Government of Mysore referred the industrial dispute to the Labour Court under section 10(1) (c) of the .
One of the questions referred was : whether the order of transfer was illegal and if so" Whether the workman was entitled to "reinstatement in the Bangalore branch with benefits of back wages".
The Labour Court ordered the reinstatement of the workman in the Bangalore branch.
The Company challenged the award by a writ petition in the High Court.
The High Court while holding that the Mysore Government was the appropriate Government to make the reference, quashed the award on the grounds : (1) that the legality of the removal of the workman was not the subject matter of reference, and (2) that the reference to the Labour Court could not be justified under section 10(1)(c), because the dispute fell within the Third and not the Second Schedule to the Act; nor under the first proviso to section 10(1)(d), because, the Government did not act under that proviso, and because, more than one hundred persons were interested in and therefore likely to be affected by the dispute.
In appeal to this Court, the Company sought to support the judgment of the High Court also on the ground that the Mysore Government was not the appropriate Government to make the reference.
HELD : (1) The legality of the termination of the service of the workman wag included in the order of reference.
[532 D E] The words "with benefit of back wages" coupled with the word "reinstatement" are appropriate only to a case of removal.
On the facts of the case, the transfer of the workman was illegal and so, his removal from service should be set aside and be should be reinstated with benefits of 'back wages.
[532 F G] (2) The reference to the Labour Court was valid under the first proviso to section 10(1) (d).
[533 H] (a) High Court misinterpreted the proviso by equating the two ,words interested and affected.
The members of the Union which sponsored the cause of the workman were interested in the dispute, but they would not necessarily be affected by the dispute.
[533 F G] 529 (b) It is not necessary that the order of reference should expressly state that it was because of the proviso that the reference was being made to the Labour Court.
If it could be justified on the facts, there is nothing in the Act which makes such a reference invalid.
[533 E F] (3) The Mysore Government was the appropriate Government to make the reference, because, the subject matter of the, dispute substantially arose within the jurisdiction of the Mysore Government.
[534 H] The proper question to raise is : where did the dispute arise and not where was the dispute sponsored : that is, whether there is a nexus between the dispute and the territory of the State making the reference.
Ordinarily if there is a separate establishment and the workman is working in that establishment, the dispute would arise at that place.
[534 A E] Indian Cable Co. Ltd. vs Its Workmen, [1962] Supp.
3 S.C.R. 589,followed.
| 2177.txt |
Appeals Nos. 213 and 214 of 64.
Appeals from the judgment and order dated April 4, 1961, of the Madras High Court in Case Referred No. 130 of 1956.
Niren De,Additional Solicitor General R. Ganapathy Iyer and R.N. Sachthey, for the appellants (in both the appeals.
A. V. Vishwanatha Sastri, M.M. Ismail and R. Gopalakrishnan, for the respondent in both the appeals.
The Judgment of the Court was delivered by Subba Rao, J.
In the t,own of Nagore in Tanjore District, Madras State, there is a Durgha consecrated to Hazerath Sayed Shahul Hameed Quadir Ali Ganja Savoy Andavar, who lived some 400 years ago.
The said Durgha receives large income from immovable properties endowed to it and the offerings in cash and kind made by the devotees.
The Durgha and its properties are now being administered under a scheme settled by the Madras High Court on March 16, 1955.
Under the scheme the management of the administration of the affairs of the said Durgha vests hereditarily in 8 trustees called Nattamaigars, who constitute a board of trustees.
The said board of trustees shall from among themselves elect one as a managing trustee and he shall hold office for a term of 3 years.
The managing trustee shall at the end of each fasli prepare a balance sheet verified by the manager and ascertain the net amount available for payment to kasupangudars, who are the descendants of Saiyed Muhammed Eusoof, the foster son of the saint.
The Managing Trustee shall declare the amount due to each of the kasupangu (share) and shall allocate the amount to each kasupangudar (sharer) in the list to be prepared for that purpose 661 in each year.
He shall pay the amount to each kasupangudar in accordance with the list.
It is said that at present there are 640 kasupangudars.
Briefly stated under the scheme the management of the properties of the Durgha, both movable and immovable, vests in Nattamaigars, and the kasupangudars are entitled to the surplus in accordance with their shares.
For the assessment years 1953 54 and 1954 55 the Income tax Officer assessed the surplus income in the hands of the Managing Trustee as an association of persons.
The Appellate Assistant Commissioner, on appeal, confirmed the same.
On further appeal, the Income tax Appellate Tribunal took the same view.
At the instance of the assessee, the Tribunal submitted the following question for the opinion of the High Court of Madras under s.66(1) of the Income tax Act.
1922, hereinafter called the Act: "Whether the provisions of Section 41 can be said to apply to the assessees in this case.
" A Division Bench of the High Court, which heard the reference.
held that the Managing Trustee qua the surplus income managed the property and derived the income on behalf of the kasupangudars and that the assessment should be made on the said Managing Trustee to the extent of the interest of each of the kasupangudars in the income received by him.
In the result it answered the question in the affirmative and in favour of the assessee.
The Commissioner of Income tax, Madras, on a certificate of fitness granted by the High Court, has preferred the present appeals against the said Order.
The learned Additional Solicitor General, appearing for the Revenue, contended that the Natmaigars being trustees, the properties of the Durgha vested in them and, therefore, they or the Managing Trustee administered the trust properties in their own right and not on behalf of the kasupangudars and hence s.41 of the Act did not apply, with the result the Income tax Officer had rightly assessed the surplus income in the hands of the trustees as an association of persons.
Mr. A.V. Viswanatha Sastri, learned counsel for the assessee respondent, argued, on the other hand, that the Nattamaigars of the Durgha were not trustees as understood in the law of trust but were only managers managing the properties on behalf of the Durgha and kasupangudars.
On that assumption, his argument proceeded.
as the Nattamaigars, as managers, held the surplus on behalf of the kasupangudars for distribution in definite shares, s.41 of the Act was attracted.
At the outset we may make it clear that in this appeal we are concerned only with the surplus remaining on hand with the Nattamaigars after meeting the expenses of the Durgha.
662 The problem presented in these appeals falls to be decided on a true construction of s.41 of the Act.
The material part of s.41 reads: (1) In the case of income, profits or gain chargeable under this Act, which the Courts of Wards, the Administrators General, the Official Trustees or any receiver or manager (including any person whatever his designation who in fact manages property on behalf of another) appointed by or under any order of a Court, or any trustee or trustees appointed under a trust declared by a duly executed instrument in writing whether testamentary or otherwise (including the trustee or trustees under any Wakf deed which is valid under the ), are entitled to re ceive on behalf of any person, the tax shall be levied upon and recoverable from such Court of Wards, AdministratorsGeneral, Official Trustee, receiver or manager or trustee or trustees, in the like manner and to the same amount as it would be leviable upon and recoverable from the person on whose behalf such income, profits or gains are receivable, and all the provisions of this Act shall apply accordingly.
Under this section the income of properties receivable by the enumerated persons for the benefit of others is liable to be assessed to tax in their hands in the like manner and to the same amount as it would be leviable upon and recoverable from the person or persons on whose behalf such income is receivable.
This section centres on the basic fact that the person in whose hands the income is assessable shall be entitled to receive the same on behalf of any person; if he is not so entitled, the provisions of the section cannot be invoked.
it is contended that, as the properties vested in the managing trustee and he received the income in his own right and not on behalf of the beneficiaries, though for their benefit,, the said income in the hands of the managing trustee fell outside the scope of s.41 of the Act.
There are two answers to this contention.
The doctrine of vesting is not germane to this contention.
In some of the enumerated perso,ns in the section the property vests and in others it does not vest, but they only manage the property.
In general law the property does not vest in a receiver or manager but it vests in a trustee, but both trustees and receivers are included in s.41 of the Act.
The common thread that passes through all of them is that they function legally or factually for others: they manage the property for the benefit of others.
That the technical doctrine of vesting is not imported in the section is apparent from the fact that a trustee appointed under a trust deed is brought under the section though legally the property vests in him.
In the case of a Muslim Wakf the property vests in the Almighty; even so the mutawallis are brought under the section.
A reasonable interpretation of the 663 section is that all the categories of persons mentioned therein are deemed to receive the income on behalf of another person or persons or manage the same for his or their benefit.
None of them has any beneficial interest in the income; he collects the income for the benefit of others.
In this view, even if the Nattamaigars were trustees in whom the properties of the Durgha vested, they should be deemed to have received the income only on behalf of the kasupangudars in definite shares.
The same conclusion will be reached even if the problem was approached from a different angle.
In the well known decision of the Privy Council in Vidya Varuthi Thirtha vs Balusami Ayyar(1) the inappropriateness of the use of the expression "trustee" to the manager of a Hindu or Mahommedan religious endowments was brought out.
Therein their Lordships observed: "Neither under the Hindu Law nor in the Mahommedan system is any property "conveyed" to a shebait or a mutawalli, in the case of a dedication.
Nor is any property vested in him; whatever property he holds for the idol or the institution he holds as manager with certain beneficial interests regulated by custom and usage.
Under the Mahommedan Law, the moment a wakf is created all rights of property pass out of the wakf, and vest in God Almighty.
The curator, whether called mutawalli or saijadanishin, or by any other name, is merely a manager.
He is certainly not a "trustee" as understood in the English system." The Privy Council, in the context of a wakf property, reaffirmed the said observations, in Allah Rakhi vs Mohammad Abdur Rahirn(2).
The effect of the said decisions is that Nattamaigars are only the managers of the properties in which the Durgha and the kasupangudars have beneficial interests.
The properties do not vest in them.
They receive the income therefrom on behalf of both of them.
After meeting the expenses of the Durgha they hold the.
balance on behalf of the kasupangudars and distribute the same in accordance with their shares.
In this view, in terms of section 41 of the Act the Nattamaigars are the managers of the properties on behalf of others and, are entitled to receive the income therefrom on behalf of them.
With the result, the income which they hold on behalf of the kasupangudars can be assessed only in their hands in the manner prescribed thereunder.
But it is said that whatever may the doctrine of Hindu or Mohammadan law, under the terms of the aforesaid scheme the properties vested in the Nattamaigars and, therefore, they receive the income in their own right and* not on behalf of the kasupangudars.
A careful reading of the relevant (1)(1921) L.R. 48 I.A. 302, 315.
(2) (1933) L.R.61. '.
I.A. 50.
664 part of the scheme does not countenance this argument.
Clause 3 of the scheme, which is the material clause, reads: "The management and administration of the affairs of the Nagore Durgha at Nagore, Tanjore District, and other thakias and shrines connected therewith (mentioned in Schedule A hereunder) and all properties movables and ' immovables which belong to or have been or may hereafter be given, dedicated, endowed thereto, shall subject 10 the provisions thereof vest hereditarily in the eight trustees or nattamaigars of the Durgha who shall constitute the Board of Trustees.
Each trustee or nattamaigar is entitled to hold ' office for life, and after him the trusteeship shall devolve on his next male heir in accordance with the custom prevailing in respect of such office in the Durgha.
" Under this clause the management and administration of the Nagore Durgha and its properties vest in the Nattamaigars.
What vests in the Nattamaigars is not the properties of the Durgha but the management and administration thereof.
Unless the words are clear we are not prepared to hold that the High Court in framing a scheme for the endowments of the Durgha had introduced a foreign concept of "trust" in derogation of Mohammadan law. 'We, therefore, hold that the scheme did not vest the properties of the Durgha in the Nattamaigars.
Lastly, a faint argument was raised to the effect that under the scheme the managing trustee was not appointed under any order of a Court but was appointed by an agreement among the trustees.
But in cl. 4 of the scheme the High Court gave a specific direction that the managing trustee shall be elected from among the Board of Trustees.
The Managing Trustee elected was certainly appointed under an order of a Court, for the election was held pursuant to the order of the Court.
That apart, in the view we have taken, namely, that the Nattamaigars are not trustees in the English sense of the term, this question does not arise for consideration.
In the result, we hold that the High Court has rightly answered the question referred to it in the affirmative and in favour of the assessee.
The appeals fail and are dismissed with costs.
One hearing fee.
Appeals dismissed.
| A scheme was settled in 1955 by the Madras High Court for the management of the income and properties of the Durgah consecrated to a saint in Tanjore District.
Under the scheme the management of the properties of the Durgah was to be in the hands of eight trustees called Nattamaigars one of whom was to be elected by them as Managing Trustee.
The net income of the trust was to be distributed among descendants of the foster son of the saint, called Kasupangudars, whose definite shares were to be determined each year by a list prepared by the Managing Trustee.
For the assessment years 1953 54 and 1954 55, the Income tax Officer assessed the surplus income of the wakf in the hands of the Managing Trustee as an association of persons.
The trustees unsuccessfully appealed to the Appellate Assistant Commissioner and the Appellate Tribunal.
The controversy centred round the question whether s.41 of the Indian Income tax Act, 1922 applied to the case.
In a reference made by the Tribunal at the instance of the assessee the High Court held that that section 41 applied to the case and that the income was received by the trustees on behalf of the beneficiaries.
Aggrieved, the Commissioner of income Tax appealed, by certificate, to this Court.
It was contended on behalf of the appellant that as the properties vested in the managing trustee and he received the income in his own right and not on behalf of the beneficiaries, though for their benefit, the said income in the hands of the managing trustee fell outside the scope of s.41 of the Act.
HELD: The High Court had rightly answered the question in favour of the assessee.
(i) The technical doctrine of vesting is not imported into section 41.
This is apparent from the fact that a trustee appointed under a trust deed is brought under the section though legally the property vests in him.
In the case of a Muslim Wakf the property vests in the Almighty; even so the mutawallis are brought under the section.
Thus in some of the persons enumerated in the section property vests and in others it does not.
A reasonable interpretation of the section is that all categories of persons mentioned therein are deemed to receive them on behalf of another person or persons or manage the same for his or their benefit.
None of them has any beneficial interest in the income; he collects the income for the benefit of others.
In this view even if the Nattarnaigars were trustees in whom the 65 660 properties of the Durgah vested, they should be deemed to have received the income only on behalf of the Kasupangudars in definite shares.
[662G 663B] (ii) The mutawalli of a Muslim Wakf is merely a manager and not a "trustee" as understood in the English system.
[663E] Vidya Varuthi Thirtha vs Balusami Ayyar, (1921) 48 I.A. 32 and Allah Rakhi vs Mohammad Abdur Rahim, (1933) 61 I.A. 50, relied on.
Therefore in terms of s.41 of the Act the Nattamaigars were the manager of the properties on behalf of other and were entitled to receive the income therefrom on behalf of them.
[663G H] (iii) Under c1.3 of the scheme it was the "management and administration" of the Durgah and its properties which was vested in the Nattamaigars and not the properties themselves.
In the absence of clear words it could not be held that the High Court in framing a scheme for the endowments of the Durgah had introduced a foreign concept of "trust" in derogation of Mohammadan Law.
The scheme therefore did not vest the properties of the Durgah in the Nattamaigars and the contention on behalf of the Revenue could not succeed.
[664D, E]
| 1971.txt |
Writ Petition (Crimi nal) No. 184 of 1989.
(Under Article 32 of the Constitution of India).
Kapil Sibbal, K.K. Lahiri, K.R. Nagaraja and R.S. Hegde for the Petitioner.
V.C. Mahanjan, T.V.S.N. Chari and Ms. A. Subhashini for the Respondents.
344 The Judgment of the Court was delivered by DUTT, J.
In this writ petition the petitioner has chal lenged the validity of the detention order dated January 19, 1989 passed under the , hereinaf ter referred to as 'the Act ', by virtue of which the peti tioner has been under detention since the said date.
The allegations made in the grounds of detention need not be stated, for only legal submissions have been made on behalf of the petitioner in challenging the order of detention.
The order of detention dated January 19, 1989 reads as follows: "WHEREAS, I, Vijay Karan, Commissioner of Police, Delhi, am satisfied that with a view to prevent Sh.
Jitender Tyagi s/o Sh.
Ram Nath Tyagi, R/o VIII.
Khajuri, Police Station.
Kila, Distt.
Meerut (Uttar Pradesh) aged at about 25/26 from acting in a manner prejudi cial to the maintenance of public order, it is necessary to make an order directing that the said Sh.
Jitender Tyagi may be detained.
Now, therefore, in exercise of the powers conferred vide sub section (2) of section 3 of the as delegated to me vide Delhi Administration, Delhi 's order No. F2/1/88 H.P. II, dated 11.1.89.
I hereby direct that the said Sh.
Jitender Tyagi be detained and kept in Central Jail, Tihar, Delhi.
" It, thus, appears from the order of detention that it was passed by the Commissioner of Police, Delhi, in exercise of the powers conferred by sub section (2) of section 3 of the Act as delegated to him by the Delhi Administration.
The order of detention was approved by the Administrator of Delhi by his order dated January 31, 1989.
Paragraph 3 of the said order is in the following terms: "3.
Now, therefore, in exercise of the powers conferred upon him by sub section (4) of section 3 of the , the Administrator hereby approves the order of the Police Commissioner dated 19.1.1989 de taining Sh.
Jitender Tyagi and further directs that Sh.
Jitender Tyagi be kept in custody in Central Jail, Tihar, New Delhi.
The first point that has been strenuously urged by Mr. Kapil Sibal, learned Counsel appearing on behalf of the petitioner, is that the order of detention not having been approved within a period of 345 twelve days, as provided in sub section (4) of section 3 of the Act, it had spent its force on the expiry of the said period and, accordingly, the detention of the petitioner is illegal.
Section 3 of the Act provides for the power to make orders of detention under certain circumstances.
Sub section (4) of section 3 reads as follows: "(4).
When any order is made under this sec tion by an officer mentioned in sub section (3), he shall forthwith report the fact to the State Government to which he is subordinate together with the grounds on which the order has been made and such other particulars as, in his opinion, have a bearing on the matter, and no such order shall remain in force for more than twelve days after the making thereof unless, in the meantime, it has been approved by the State Government: Provided that where under section 8 the grounds of detention are communicated by the officer making the order after five days but not later than ten days from the date of detention, this sub section shall apply sub ject to the modification that, for the words "twelve days", the words "fifteen days" shall be substituted.
" Under sub section (4) of section 3, "no such order shall remain in force for more than twelve days after the making thereof unless, in the meantime, it has been approved by the State Government".
The question that arises for our consid eration relates to the computation of the period of twelve days.
To be more explicit, the question is whether in com puting the period of twelve days, the day on which the order of detention is passed should be included or not.
It is submitted on behalf of the petitioner that the day on which the order of detention was passed should be included and the order approving the detention having been passed on January 31, 1989, that is, on the thirteenth day after the expiry of twelve days, it had ceased to be in force.
On the other hand, it is contended on behalf of the respondents that the day on which the detention order was passed should be excluded and, accordingly, the detention of the petitioner having been approved on January 31, 1989, it was quite within the period of twelve days.
Further, it is the case of the respondents that the order of detention was, as a matter of fact, approved on January 26, 1989 and by the order dated January 31, 1989, the order of approval was communicated to the authorities concerned.
346 We may first consider the contention of the respondents that the order of detention was duly approved on January 26, 1989.
A statement in that regard has been made in the coun ter affidavit of the respondents.
We are, however, unable to accept the same.
We have already extracted above paragraph 3 of the order of detention dated January 31, 1989 in which it has been categorically stated "the Administrator hereby approves the order of the Police Commissioner dated 19.1.1989 detaining Sh.
Jitender Tyagi.
" After the said categorical statement in paragraph 3, it is difficult to accept the contention of the respondents that the said order dated January 31, 1989 was made for the purpose of communi cating the approval of the order of detention.
In our view, there can be no doubt, whatsoever, that the order of deten tion was approved by the said order dated January 31, 1989.
Now, we may consider the question as to the computation of twelve days as referred to in sub section (4) of section 3.
Sub section (4), inter alia, provides that when an order is made by an officer mentioned in sub section (3), he shall forthwith report the facts to the State Government.
It is contended on behalf of the petitioner that under sub section (4), the officer has to act forthwith after the making of the order in reporting the fact to the State Government and this is sufficient indication that the day on which the order of detention is made should be included in computing the period of twelve days.
In our opinion, sub section (4) has given a clear indi cation as to the computation of twelve days.
The period of twelve days has to be calculated 'after ' the making of the order of detention.
Thus, it is apparent that the period of twelve days comes after the making of the order of deten tion.
It is true that in sub section (4), the officer making the order of detention shall forthwith report the fact to the State Government, but the word 'forthwith ' will not be taken into consideration for the purpose of computing the period of twelve days inasmuch as there is a clear indica tion that the said period shall be computed after the order is made.
In other words, sub section (4) itself excludes the day on which the order is made.
Computation of twelve days including the day on which the detention order is made will be ignoring the direction of the legislature, as given in sub section (4) itself, that the said period of twelve days will commence after the making of the detention order.
It is, however, submitted that when two interpretations are possible, that which enures to the benefit of the detenu should be accepted.
In our opinion, sub section (4) admits of only one interpretation regarding the computation of twelve days and, accord 347 ingly, the question as to the adoption of the interpretation which enures to the benefit of the detenu does not arise.
The view which we take, is in accordance with the well established canons of interpretations.
It has been stated in Stroud 's Judicial Dictionary, Third Edition, Volume I, page 86, as follows: "Where an act has to be done within so many days "after" a given event, the day of such event is not to be reckoned In Smt.
Manjuli vs Civil Judge, AIR 1970 Bom.
1, the provision of section 15(1) of the Village Panchayats Act, 1958 came up for interpretation before the Nagput Bench of the Bombay High Court.
Section 15(1), inter alia, provides that any person who is qualified to vote is entitled to challenge the validity of the election "within 15 days after the date of the declaration of the result of the election".
The High Court in interpreting the provision rightly laid stress on the word "after" and held that the day of which the result was declared must be excluded.
This Court had also occasion to construe rule 119 of the Election Rules framed under the Representation of the People Act in T.C. Basappa vs T. Nagappa, ; Rule 119 provides, inter alia, that an election petition against a returned candidate is to be presented at any time after the publica tion of the name of such candidate under section 67 of the Act, but not later than 14 days from the date of publication of the notice in the official gazette under rule 113.
Mukh erjea, J. (as he than was) speaking for the Bench observed as follows: The High court seems to think that in comput ing period of 14 days the date of publication is to be included.
This seems to us to be an unwarranted view to take which is opposed to the ordinary canons of construction.
Dr. Tek Chand appearing for the respondent No. 1, plainly confessed his inability to support this view and we must hold therefore that there is no question of the Tribunal 's enter taining election petition after the prescribed period in the present case.
" In re: V.S. Mehta, AIR 1970 A.P. 234 which is a decision of the Andhra Pradesh High Court, relating to the computa tion of the period of three months in section 106 of the Factories Act Section 106 provides that no court shall take cognizance of any offence punishable 348 under the Act unless complaint thereof is made within three months of the date on which the alleged commission of the offence came to the knowledge of an Inspector.
The question before the High Court was whether in computing the said period of three months, the day on which the offence was alleged to be committed should be excluded or not.
The Andhra Pradesh High Court has taken the view that the term "within three months of the date" in section 106 of the Factories Act means 'within three calendar months after the commission of the offence came to the knowledge of an In spector ' and, consequently, the date of the knowledge, that is, the date of inspection should be excluded in computing the period of three months.
That interpretation resulting in the exclusion of the date of knowledge should be made as the High Court considered the expression "within three months of the date on which the alleged commission of the offence came to the knowledge of an Inspector" as "within three months after the date on which etc . . ".
Thus, what is significant to be noticed is the word "after" which the High Court has substituted for the word 'of ' in the expression "of the date" in section 106.
In Haru Das Gupta vs State of West Bengal, ; , the question was whether under section 12 of the West Bengal (Prevention of Violent Activities) Act, 1970, the order or decision of the State Government confirming the detention order was made within three months from the date of detention.
In holding that in computing the said period of three months, the date of detention shall be excluded, this Court has laid down that the effect of defining a period from such a day until such a day within which an act is to be done is to exclude the first day and to include the last day.
This Court has agreed to the view expressed by Wills, J. in Ratcliff vs Bartholomew, that a complaint under the Prevention of Cruelty to Animals Act filed on June 30 in respect of an act alleged to have been committed on May 30 was "within one calendar month after the cause of such complaint shall arise".
The principle on the basis of which that view was expressed by Wills, J. is that the day on which the cause for the complaint arose had to be excluded while computing the period within which under the Act, the complaint had to be filed.
Thus, it is apparent from the above decision that the day on which the cause of action arises has to be excluded in computing a particular period of time and, in the instant case, such an exclusion has to be made in view of the word "after" in sub section (4) of section 3 of the Act.
349 The petitioner has, however, placed reliance on a few decisions which will be stated presently.
In Prabhu Narain Singh vs Superintendent, Central Jail, Varanasi, ILR (1961) 1 All.
427 the Allahabad High Court has, on an interpreta tion of sub section (3) of section 3 of the , which is verbatim the same as subsec tion (4) of section 3 of the Act, with which we are con cerned, held that in computing the period of twelve days, the day on which the order of detention is passed should be included.
One of the reasons for the view expressed by the Allahabad High Court, which is strongly relied on by the learned Counsel for the detenu, is that if the day on which the order is passed is to be excluded .
from twelve days prescribed for the approval of the said order, then the consequence of the acceptance of this interpretation would be that it would not be possible for the State Government to approve of the order until after the day on which it was passed had expired.
It has been observed that such an unrea sonable consequence was not contemplated by the legislature.
When the language of a statute is plain and simple, the question of ascertaining the intention of the legislature does not arise.
In our opinion, the word 'after ' in sub section (4) of section 3 of the Act is very significant and clearly excludes any contention that in computing the period of twelve days the day on which the order of detention is passed should be included.
The Allahabad High Court has omitted to consider the word "after" in the section.
We are unable to subscribe to the view of the High Court that if the day on which the order of detention was made is excluded from the calculation of the period of twelve days, in that case, the position would be that it would not be possible for the State Government to approve of the order of deten tion until after the day on which it was passed had expired.
The expression "in the meantime" in sub section (4) of section 3 of the Act clearly indicates that the State Gov ernment can approve of the order of detention even on the day it is passed.
The language of sub section (4) of section 3 is plain and simple and the question whether the order of detention can be approved on the day it is passed or not does not at all arise.
In our opinion, Prabhu Narain Singh 's case (supra) has not correctly interpreted the provision of section 3(3) of the in regard to the computation of the period of twelve days.
The learned Counsel for the detenu has placed reliance upon two other decisions, namely, Nillapareddi Chandrasekhra Reddy vs The Government of Andhra Pradesh and Another, and C. Krishna Reddy and Another vs Commissioner of Police, Hyderabad 350 and Others, , both are of the Andhra Pradesh High Court.
These two decisions relate to the commu nication to the detenu of the grounds of detention not later than five days from the date of detention as provided in section 8(1) of the Maintenance of Internal Security Act, 1951.
We do not think that we should be justified in ex pressing any opinion as to the correctness or otherwise of the computation of the said period of five days as made in these two decisions, for the language that is used in sub section (4) of section 3 of the Act, with which we are concerned, is different from that used in section 8(1) of the Maintenance of Internal Security Act, 1951.
Similarly, the decision of the Patna High Court in Gulam Sarwar vs State of Bihar and Others, relied on by the respondents also related to the computation of the period of five days, as contained in section 8(1) of the Maintenance of Internal Security Act, 1951.
In this case, a contrary view has been expressed.
In our view all these decisions are of no help to us having regard to the differ ence in language of the provision with which we are con cerned.
Be that as it may, we have no hesitation in holding that in computing the period of twelve days referred to in sub section (4) of section 3 of the Act, the day on which the order of detention was passed should be excluded and, upon such computation, it must be held that the approval of the order of detention was made within twelve days after the making of the order of detention.
The next point that has been urged on behalf of the detenu is that the order dated January 11, 1989 of the Administrator of the Union Territory of Delhi, directing that during the period from 19.1.1989 to 18.4.
1989 the Commissioner of Police, Delhi, may also exercise the powers of detaining authority under sub section (2) of section 3 of the Act, is ultra vires section 3(3) of the Act.
Section3(3) provides that if, having regard to the circumstances pre vailing or likely to prevail in any area within the local limits of the jurisdiction of a District Magistrate or a Commissioner of Police, the State Government is satisfied that it is necessary so to do, it may, by order in writing, direct that during such period, as may be specified in the order, such District Magistrate or Commissioner of Police may also, if satisfied as provided in subsection (2), exer cise the powers conferred by the said sub section.
It is contended that as no circumstances, as mentioned in section 3(3) in respect of which satisfaction has to be made by the Administrator of Delhi, have been stated in the order, nor in the grounds of detention, the said order dated January 11, 1989 is illegal and invalid.
This point has not been taken in the writ petition and, accordingly, the Delhi Administration did not get an opportunity to controvert the allega 351 tions made for the first time in the argument.
The point is not one involving only a question of law, but it also in volves question of fact.
In the circumstances, we do not think we shall be justified in allowing the petitioner to take the point for the first time in the argument.
The next point that has been urged by the learned Coun sel for the petitioner is that the detaining authority, that is, the Commissioner of Police, Delhi, not having supplied to the detenu a copy of the said order dated January 11, 1989 of the Administrator of Delhi directing him to exercise the powers of the detaining authority under subsection (2) of section 3 of the Act, a serious prejudice has been caused to the detenu in that, if the copy of the said order had been supplied, the detenu might have contended that no such circumstances, as contemplated by sub section (3) of section 3 of the Act, were prevailing and that the delegation of the powers on the Commissioner of Police of Delhi was illegal and invalid and, consequently, the order of detention was inoperative and void.
The Act does not provide for supplying a copy of an order under section 3(3) of the Act.
The said order has not been relied upon by the Commissioner of Police in passing the impugned order of detention.
It may be that by virtue of the said order dated January 11, 1989 passed under section 3(3) of the Act, the Commissioner of Police could exercise the powers of the detaining authority under section 3(2) of the Act.
But, that has nothing to do as to the subjective satisfaction of the Commissioner of Police in making the impugned order of detention.
We do not think there is any substance in the contention made on behalf of the detenu and it is, accordingly, rejected.
In the grounds of detention it is, inter alia, stated as follows: "Though Sh.
Jitender Tyagi is in judicial custody, it is reported that applica tion for his bail has been filed in the court in case FIR No. 6 dated 7.1.89 u/s 25/54/59 Arms Act, P.S. Yamuna Vihar, Delhi.
It is likely that he may be released in these cases on bail and again indulge in nefarious activi ties of extortion and intimidation.
Keeping in view his activities, I have issued order for his detention under section 3(2) of the Na tional Security Act, 1980, so that his crimi nal activities which are prejudicial to the maintenance of public order, could be stopped.
" It is urged on behalf of the detenu that only in one case the detenu has made an application for bail, but in the said statement of 352 the Commissioner of Police in the grounds of detention, he was proceeding on the assumption that in all the cases the detenu had made applications for bail.
Accordingly, it is submitted that this shows complete non application of mind by the detaining authority.
We are unable to accept the contention.
Mr. Mahajan, learned Counsel for the respond ents, has produced before us the records of the detaining authority from which it appears that a copy of the applica tion for bail was with the detaining authority before he made the order of detention.
So, the contention that the detaining authority proceeded on the basis that the detenu had made applications for bail in all the cases pending against him is not correct.
There is, therefore, no sub stance in this contention.
Equally non meritorious is the contention that a copy of the application for bail has not been supplied to the de taining authority for his consideration.
It is submitted that if such a copy had been supplied to the detaining authority, he would have considered the statement of the detenu that he was falsely implicated in these cases.
The contention is based on erroneous assumption that a copy of the bail application was not supplied to the detaining authority.
Indeed, as noticed already, a copy of the bail 'application was with the detaining authority before he had passed the order of detention.
This contention is also rejected.
No other point has been urged in this writ petition.
For the reasons aforesaid, the writ petition is dismissed.
T.N.A. Petition dismissed.
| Sub section (4) of section 3 of the provides that no order passed by an officer men tioned in sub section (3) shah remain in force for more than twelve days after the making thereof unless, in the mean time, it has been approved by the State Government.
The Commissioner of Police, Delhi, in exercise of the powers conferred by sub section (2) of section 3 of the Act, as delegated to him by the Delhi Administration, passed an order on 19.1.1989 detaining the petitioner The order of detention was approved by the Administrator on 31.1.1989.
The petitioner filed a writ petition in this Court challenging the validity of the detention order contending that (i) the day on which the order of detention was passed should he included in the period of computation of twelve days and since the order of detention was approved on 31.1.1989, that is, on the thirteenth day after the expiry of twelve days, it had ceased to be in force; (ii) the non supply of the copy of order delegating the power of deten tion on the Commissioner of Police has seriously prejudiced the detenu; and (iii) there was serious non application of mind by the detaining authority.
342 Dismissing the petition, this Court, HELD: 1.
In computing the period of twelve days referred to in sub section (4) of section 3 of the Act, the day on which the order of detention was passed should be excluded.
Therefore the approval of the order of detention was made within twelve days after the making of the order of deten tion.
[350D] 1.1 Sub section (4) of section 3 has given a clear indication as to the computation of twelve days.
It excludes the day on which the order is made.
The word 'after ' in sub section (4) of section 3 of the Act is very significant and clearly excludes any contention that in computing the period of twelve days the day on which the order of deten tion is passed should be included.
The period of twelve days has to be calculated 'after ' the making of the order of detention, i.e. the day on which the cause of action arises has to be excluded in computing the period of time.
[346E F; 349D; 348H] 1.2 It is true that in sub section (4) the officer making the order of detention shall forthwith report the fact to the State Government, but the word 'forthwith ' will not be taken into consideration for the purpose of computing the period of twelve days inasmuch as there is clear indica tion that the said period shah be computed after the order is made.
Computation of twelve days including the day on which the detention order is made will be ignoring the direction of the legislature, as given in sub section (4) itself, that the said period of twelve days will commence after the making of the detention order.
[346F G] 2.
When the language of a statute is plain and simple, the question of ascertaining the intention of the legisla ture does not arise.
[349D] 2.1 Sub section (4) of section 3 admits of only one interpretation regarding the computation of twelve days and, accordingly, the question as to the adoption of the inter pretation which ensures to the benefit of the detenu does not arise.
[346H; 347A] T.C. Basappa vs T. Nagappa, ; ; Haru Das Gupta vs State of West Bengal, ; and Ratcliff vs Bartholomew, , followed.
Nillapareddi Chandrasekhara Reddy vs The Government of Andhra Pradesh and Anr., ; C. Krishna Reddy and Anr.
vs Commissioner of Police Hyderabad & Ors., 343 and Gulam Sarwar vs State of Bihar & Ors.
, , distinguished.
Manjuli vs Civil Judge, AIR 1970 Bom.
1 and In re: V.S. Mehta, AIR 1970 AP 234, approved.
The expression "in the meantime" in sub section (4) of section 3 of the Act clearly indicates that the State Government can approve of the order of detention even on the day it is passed.
The language of sub section (4) of section 3 is plain and simple and the question whether the order of detention can be approved on the day it is passed or not does not at all arise.
[349F] Prabhu Narain Singh vs Superintendent, Central Jail, Varanasi, ILR 1961 1 All. 427, disapproved.
The Act does not provide for supplying a copy of an order under Section 3(3) of the Act.
In the instant case, the said order has not been relied upon by the Commissioner of Police in passing the impugned order of detention.
It may be that by virtue of the said order under section 3(3) of the Act, the Commissioner of Police could exercise the powers of the detaining authority under section 3(2) of the Act.
But, that has nothing to do as to the subjective satis faction of the Commissioner of Police in making the impugned order of detention.
[351D E] 5.
In the instant case, a copy of the application for bail was with the detaining authority before he made the order of detention.
So, it is not correct to say that the detaining authority proceeded on the basis that the detenu had made applications for bail in all the cases pending against him.
Accordingly there was no non application of mind by the detaining authority.
[352A B & C]
| 6201.txt |
Civil Appeal No. 1682 of 1984.
From the Judgment and order dated 23.12.1983 of the Punjab and Haryana High Court in Civil Revision No. 959 of 1979 V.M. Tarkunde, A.D. Sikri for the Appellant.
Hardev Singh and R.S. Sodhi for the Respondents.
The judgment of the Court was delivered by NATARAJAN, J.
What falls for consideration in this appeal by special leave by a tenant against the judgment of the High Court of Punjab and Haryana in a Civil Revision is whether the High Court had transgressed its revisional powers in interfering with the concurrent findings rendered by the Rent Controller and the Appellate Authority and ordering the eviction of the appellant herein from the leased premises and secondly whether the High Court had erred in holding that the leased premises had become unsafe and unfit for human habitation as envisaged in Section 13(3)(a)(iii) of the East Punjab Urban Rent Eviction Act, 1949 (hereinafter the Act).
205 The respondent 's petition for eviction was originally based on other grounds such as bona fide requirement of the premises for own use and change of user of the premises by the tenant.
As he failed before the Rent Controller, the respondent preferred an appeal and during the pendency of the appeal he obtained orders and amended the petition and raised an additional ground under Section 13(3)(a)(iii) for seeking the eviction of the appellant viz. the leased premises had become unsafe and unfit for human habitation.
The Appellate Authority called for a finding on the additional ground from the Rent Controller and the finding went against the respondent.
The Appellate Authority concurred with the Rent Controller on the said finding and dismissed the appeal.
Before the appellate Authority the respondent did not seriously press the original grounds on which eviction was sought for and laid stress only upon the ground under Section 13(3)(a)(iii) of the Act.
The respondent then preferred a Civil Revision wherein the High Court sustained his case and ordered the eviction of the appellant under Section 13(3)(a)(iii) and hence the present appeal by the appellant tenant.
Section 13(3)(a)(iii) was resorted to for seeking eviction of the tenant on the footing that one room in the rear side of the leased premises had fallen down.
We may state, even at this juncture that the High Court had wrongly assumed that besides the falling down of the roof, one of the walls had also crumbled.
This assumption was a mistaken one because the expert witnesses examined during the trial by the parties have spoken about the good condition of three walls alone of the room and not the fourth because they are the outer walls of the room while the fourth wall was a common wall for the room in question and the adjoining room and hence there was no need to certify its good condition.
It was therefore wrong for the High Court to have assumed that only three walls of the room were in good condition and not the fourth wall.
The High Court deemed it necessary to allow the Revision and set aside the order of the Rent Controller and the Appellate Authority because of its view that the falling down of the roof of one of the rooms afforded by itself a cause of action to the landlord to seek eviction of the tenant under Section 13(3)(a)(iii) and the said cause of action would subsist even if the tenant had repaired the roof under orders of the Rent Controller, under Section 12 of the Act.
It is necessary to mention here that during the pendency of the proceedings before the Rent Controller, the appellant obtained the permission of the Rent Controller under Section 12 to replace the roof fallen down and re 206 cover the cost from the respondent since the respondent had failed to do the work himself.
The High Court relied upon two decision Balbir Singh vs Hari Ram, AIR 1983 Punjab and Haryana 132 and Chander Mohini vs Jiva Singh, for holding that once a cause of action ensued under Section 13(3)(a)(iii), it would subsist inspite of any repairs effected by the tenant.
It also relied on another decision Sardarni Sampurna Kaur vs Sant Singh & Anr., for holding that even if the rest of the building was in good condition, the falling down of the roof of one room would constitute sufficient material to sustain a landlord 's claim under Section 13(3)(a)(iii) of the Act for seeking the tenant 's eviction.
A few facts may now be set out.
The leased portion comprises of four rooms in the ground floor where the appellant is running his office.
There is a room in the first floor in the possession of the respondent himself but we are not concerned with it.
It is common ground that the roof of one room in the rear side of the leased portion had fallen down and it had been replaced by the appellant after obtaining orders of the Rent Controller under Section 12.
The appellant 's contention is that the falling down of the roof in one of the four rooms would not by itself render the entire building unsafe and unfit for human habitation as envisaged under Section 13(3)(a)(iii) of the Act and, as such, the High Court had erred in ordering eviction under the said provision.
It was further urged that the Rent Controller and the Appellate Authority had concurrently found that the building was neither unsafe nor unfit for human habitation and as such the High Court was not justified in interfering with those findings especially when they were findings of fact.
In reply to the above said contentions, the learned counsel for the respondent argued that the falling down of the roof in a room was indicative of the damaged condition of the building and, therefore, the High Court was fully justified in ordering the eviction of the appellant under Section 13(3)(a)(iii) of the Act.
It was further urged that the replacement of the roof by the appellant would not extinguish the right which had accrued to the respondent under Section 13(3)(a)(iii) to seek recovery of possession of the leased premises and the High Court had rightly adverted to this aspect of the matter also while allowing the revision filed by the respondent.
On a careful consideration of the matter with reference to the contentions put forth by the learned counsel for the parties, we are clearly of opinion that the High Court was not justified in allowing the revision and directing the eviction of the appellant under Section 13(3)(a)(iii).
It is true that a roof of one of the rooms on the rear side 207 had fallen down and required replacement but there was no evidence whatever that the entire building or a substantial portion of it was in a damaged condition and consequently the building as a whole had become unfit and unsafe for human habitation.
Unless the evidence warranted an inference that the falling down of the roof in one room was fully indicative of the damaged and weak condition of the entire building and that the collapse of the roof was not a localised event, we fail to see how the High Court could have concluded that the entire building had become unsafe and unfit for human habitation.
In fact, the appellant had replaced the roof only at a cost of about Rs.200 and this would independently show that the damage that had occurred could not have been of a serious or disquieting nature.
The High Court has failed to notice two factors of relevance, viz., (1) that the respondent had given his consent to the Rent Controller granting permission under Section 12 of the Act to the appellant to replace the roof and (2) that inspite of the alleged cause of action having arisen due to the falling down of the,roof, the respondent did not immediately seek amendment of the petition so as to seek eviction of the appellant on the additional ground under Section 13(3)(a)(iii) but instead he chose to prosecute his petition only on the original grounds for eviction set forth therein and only after failing before the Rent Controller and preferring an appeal to the Appellate Authority, he deemed it necessary to amend the petition and ask for eviction of the appellant or the additional ground under Section 13(3)(a)(iii).
The above said conduct of the respondent would clearly reveal that he himself had not attached any significance to the falling down of the roof in one of the rooms and had not seriously considered that a sustainable cause of action had accrued to him under Section 13(3)(a)(iii) for seeking the eviction of the appellant.
The High Court has not only failed to appreciate these factors but has also proceeded on the erroneous assumption that the falling down of the roof in one room was by itself sufficient to warrant a finding that the entire building had become unfit and unsafe for human habitation and called for a declaration to that effect.
It is this basic error which has affected the reasoning of the High Court lead the High Court to apply the ratio laid down in certain cases where the facts and circumstances were entirely different.
What arose for consideration in Balbir Singh 's case (supra) was whether a tenant would stand deprived of his right under Section 12 to carry out repairs of the tenanted premises by reason of an application filed by a landlord under Section 13(3)(c) of the Haryana Urban Control on Rent and Eviction Act (Corresponding to Section 13(3)(a)(iii) of the East Punjab Urban Rent Restriction 'Act, 1949) and con 208 versely whether a landlord would stand deprived of his right to seek eviction of his tenant under Section 13(3)(c) by reason of an order passed under Section 12 empowering the tenant to carry out repairs to the tenanted premises.
It was in that context, the High Court held that the two sections operated in their respective spheres and they were not mutually destructive of each other and consequently, when a right accrued to a landlord under Section 13(3)(c) of the Haryana Act to seek eviction of a tenant, the right would not get extinguished on account of an order passed under Section 12 of the Act.
In other words, it was held that once a cause of action had arisen for a landlord to seek eviction under Section 13(3)(c) of the Haryana Act that the said cause of action would ensure to the benefit of the landlord in spite of the tenant effecting repairs to the building for his benefit in pursuance of permission obtained under Section 12 of the Act.
The decision does not lay down that each and every damage to a building, without reference to the seriousness of its nature or to the condition of the building as a whole would by itself entitle a landlord to invoke Section 13(3)(a)(iii) to seek eviction of the tenant.
In Chander Mohini 's case (supra) wherein Balbir Singh 's case (supra) was followed, it was held that if the tenants had pulled down the roof of one of the rooms under their tenancy and replaced the same, obviously for their own convenience and for pre empting the landlord from filing a petition for eviction under Section 13(3)(a)(iii), the landlord would undoubtedly, acquire a cause of action under Section 13(3)(a)(iii) as soon as the tenants had pulled down the roof of the room and his rights could not be defeated by the tenants by the replacement of the roof of their own volition.
The other decision in Sardarni Sampurna Kaur vs Sant Singh has also no relevance because it was found in that case that even though the portion under the ocupation of the tenant was in a sound condition, a substantial portion of the composite building had become unfit and unsafe for human habitation.
In that situation, the High Court held that what was relevant for consideration for passing an order of eviction under Section 13(3)(a)(iii) was the condition of the building viewed as a whole and not in parts or blocks.
In the instant case, the admitted position is that except for the roof in one of the rooms falling down, no other damage to the building was noticed and in such circumstances, there is no scope for holding that a substantial or major part of the building had become unfit and unsafe for human habitation and hence an order of eviction was called for.
It is therefore obvious that the ratio laid down in the earlier decisions were not at all attracted to the facts of the case and the High Court had wrongly applied them because of its erroneous assumptions.
209 Learned counsel for the respondent tried to contend that apart from the building having become unsafe and unfit for human habitation, the respondent had also sought eviction on the ground he was genuinely in need of additional accommodation but the Appellant Court had unjustly rejected the plea by saying that since the respondent was jointly living with his son, he can secure additional accommodation from out of the portion in his son 's occupation.
We do not find any merit in this contention because the requirement of the building on this ground was not canvassed before the High Court.
Even the Appellant Authority has observed that the only ground pressed for seeking eviction of the tenant was under Section 13(3)(a)(iii) and the other grounds were not pressed seriously and only incidentally a halfhearted argument was advanced regarding the requirement of the leased premises by way of additional accommodation.
In the result, the appeal is allowed and the judgment of the High Court is set aside.
The respondent 's application for eviction of the appellant will stand dismissed as ordered by the Rent Controller and the Appellate Authority.
The parties are, however, directed to pay and bear their respective costs.
N.V.K. Appeal allowed.
| The suit premises consisted of four rooms in the ground floor where the appellant tenant was running his office.
One room in the first floor was in the possession of the landlord respondent.
The roof of one room in the rear side of the leased portion had fallen down, and it has been replaced by the appellant after obtaining orders of the Rent Controller under Section 12 of the East Punjab Urban Rent Restriction Act, 1949.
The landlord filed a petition for eviction on the ground of bona fide requirement of the premises for his own use and occupation, and change of user of the premises by the tenant.
As he failed before the Rent Controller, he preferred an appeal and during the pendency of the appeal he obtained the court 's order and amended the petition and raised an additional ground under Section 13(3)(a)(iii) of the Act, seeking eviction of the tenant on the ground that the leased premises had become unsafe and unfit for human habitation.
The Appellate Authority called for a findings on this additional ground from the Rent Controller and the finding went against the landlord.
The Appellate Authority concurred with the Rent Controller on the said finding and dismissed the appeal.
The respondent preferred a Civil Revision Petition before the High Court which sustained the case, and ordered the eviction of the appellant under Section 13(3)(a)(iii) of the Act.
The High Court came to the finding that the falling down of the roof of one of the rooms afforded by itself a cause of action to the landlord to seek eviction of the tenant under the said section, and the said cause of action would subsist even if the tenant had repaired the roof under orders of the Rent Controller under Section 12 of the Act.
203 In the appeal to this Court by the tenant it was contended that the Rent Controller and the Appellate Authority had concurrently found that the building was neither unsafe nor unfit for human habitation and as such the High Court was not justified in interferring with those findings especially when they were findings of fact.
On behalf of the respondent, the appeal was contested on the ground that the falling down of the roof in a room was indicative of the damage condition of the building and, therefore, the High Court was fully justified in ordering eviction, and that the replacement of the roof by the appellant would not extinguish the right which had accrued to the respondent under Section 13(3)(a)(iii) to seek recovery of the possession of the leased premises.
Allowing the appeal, ^ HELD: 1.
The High Court was not justified in allowing the revision and directing eviction of the appellant under Section 13(3)(a)(iii).
[206H] 2.
The High Court proceeded on the erroneous assumption that the falling down of the roof in one room was itself sufficient to warrant a finding that the entire building had become unfit and unsafe for human habitation and called for a declaration to that effect.
[207F] In the instant case, the admitted position was except for the roof in one of the rooms falling down, no other damage to the building was noticed and in such circumstances, there is no scope for holding that a substantial or major part of the building had become unfit and unsafe for human habitation and hence an order of eviction was called for.
[208G H] 3.
The High Court had wrongly assumed that besides the falling down of the roof, one of the walls has also crumbled.
This assumption was a mistaken one because the expert witnesses examined during the trial by the parties have spoken about the good condition of three walls alone of the room and not the fourth because they are the outer walls of the room while the fourth wall was a common wall for the room in question, and the adjoining room and hence there was no need to certify its good condition.
[205E F] 4.
The High Court had also failed to notice two factors of relevance: viz. (1) that the respondent had given his consent to the Rent Controller granting permission under Section 12 of the Act to the appel 204 lant to replace the roof, and (2) that in spite of the alleged cause of action having arisen due to the falling down of the roof, the respondent did not seek amendment of the petition so as to seek eviction of the appellant on the additional ground under Section 13(3)(a)(iii) but instead he chose to prosecute his petition only on the original ground for eviction set forth therein and only after falling before the Rent Controller and preferring an appeal to the Appellate Authority, he deemed it necessary to amend the petition and ask for eviction of the appellant on the additional ground.
[207C E] 5.
The aforesaid conduct of the respondent clearly reveals that he himself has not attached any significance to the falling down of the roof in one of the rooms and has not seriously considered the sustainable cause of action that had arisen to him under Section 13(3)(a)(iii) for seeking eviction of the appellant.
[207E F] Balbir Singh vs Hari Ram, AIR 1983 Punjab and Haryana 132; Chander Mohini vs Jiva Singh, and Sardarni Sampurna Kaur vs Sant Singh & Anr., , distinguished.
| 5723.txt |
Civil Appeal No. 2036 of 1969.
Appeal by special leave from the Judgment and Order dated 18 12 1968 of the Kerala High Court in W.A. No. 167/67.
Dr. V. A. Sayied Muhammed and K. M. K. Nair for the Appelant.
A. section Nambiar and D. D. Gupta for the Respondents.
The Judgment of the Court was delivered by SARKARIA, J.
This appeal by special leave, directed against a judgment, dated December 18, 1968, of the High Court of Kerala, arises out of these facts: 245 Koyakutty, Respondent herein, entered service of the former, Madras State on May 1, 1943 as temporary Section Writer on probation in the Registration Department.
He did not possess the minimum, general educational qualification prescribed by Rule 29 of the Madras Ministerial Service Rules.
This rule, inter alia, provided that no person shall be eligible for appointment to the service in any post either by direct recruitment or by recruitment by transfer on promotion unless he possesses the minimum general educational qualification prescribed in the Schedule to the General Rules.
The General Rules provided that the passing of the Secondary School Leaving Examination or other equivalent examination shall be the minimum educational qualification for appointment to the Ministerial Service.
The State Government, however, had the power to exempt a person from this qualification.
The Madras Government passed an Order, dated April 15, 1954, (exhibit P II), exempting, him from the said qualification for being appointed as a Lower Division Clerk in the Registration Department.
It will be useful to quote this order in extenso: "The Government consider that in view of the fact that Sri M. B. Koyakutty belongs to a community which is educationally backward, the petitioner should be exempted from the minimum general educational qualification, so as to enable him to be appointed as a Lower Division Clerk in the Registration Department under G.O. MS.
No. 2858 Rev. dt. 2 11 50 in his turn. .
The Governor of Madras accordingly relaxes rules 28 and 29 of the Special Rules for the Madras Ministerial Service in favour of Sri M. B. Koyakutty, a temporary Section Writer in the Registration Department in the Registration District of Palghat in order to enable him to be appointed as a Lower Division Clerk in that department.
Sd/ section K. Chettu, Secretary to Govt.
" As a result of this exemption, Koyakutty was appointed a Lower Division Clerk in the Registration Department on May 19, 1954.
Consequent on the reorganisation of the States in 1956, Koyakutty was allotted to the Kerala State Service as Lower Division Clerk in the Registration Department.
On May 16, 1961, the Government of Kerala issued an Order, in consultation with the Public Service Commission, that "all such 246 persons who did not possess the general minimum educational qualification and were appointed as Lower Division Clerks, after granting them exemption from that qualification", may be allowed to sit for a qualifying test to be conducted by the Commission, and in case they secure a certain minimum percentage of marks, they may be regarded as possessing the minimum general qualification of the S.S.L.C. Standard for purpose of promotion to Upper Division and higher grades or continuance in the Upper Division, as the case may be.
The order further stated that the case of those who have been appointed and are continuing in the Upper Division, they need not be disturbed for the present, but they should be reverted, if they fail to qualify at the next such examination of the Commission.
According to para 3 of the Order, "the minimum marks to be obtained for being declared eligible for promotion to or continuance in the Upper Division etc. . will be issued separately.
" A gradation list of Clerks was prepared by the District Registrar, Palghat, in which Koyakutty was shown at No. 1 among the officiating Lower Division Clerks, while the original respondents 1 and 2 were shown at Nos. 7 and 6, respectively.
In July 1966, two vacancies occurred in the cadre of Upper Division Clerks in the Department.
The original respondents 1 and 2, who were junior to Koyakutty, were promoted against those vacancies as Upper Division Clerks.
Koyakutty thereupon filed a writ petition under Article 226 of the Constitution in the Kerala High Court, praying that the promotion of original respondents 1 and 2 be quashed and a direction be issued requiring the District Registrar, Palghat, and the State of Kerala to consider his claim and to promote him in preference to the original respondents 1 and 2.
Koyakutty 's contention was that under the Rules, seniority should be the basis for promotion; and promotion of his juniors amounted to a denial of equable treatment guaranteed under Article 14 and 16 of the Constitution.
His stand was that the exemption granted to him by the Government, removing the bar from being appointed in the Ministerial Service enured for all purposes.
This contention was rejected by the trial Judge, who held that the exemption granted to Koyakutty was for the limited object of enabling him to be appointed and continued in the post of a Lower Division Clerk and did not remove the bar of minimum educational qualification for his promotion to the post of Upper Division Clerk.
In the result, Koyakutty 's writ petition was dismissed.
247 On appeal by Koyakutty, a Division Bench of the High Court reversed the judgment of the learned Single Judge, and directed the District Registrar, Palghat, and the State Government to treat Koyakutty as eligible for promotion as an Upper Division Clerk and pass necessary orders on that basis.
The Division Bench further directed that Koyakutty 's rank in the cadre of Upper Division Clerks will, also, be determined after he is promoted to that Cadre.
Hence this appeal by the District Registrar, Palghat and the State.
The first question that falls to be considered is, whether in the matter of promotion to the cadre of Upper Division Clerks, the respondent was governed by the Madras Ministerial Service Rules or by the Kerala State and Subordinate Service Rules, 1958 ? The Government of Kerala, on February 25, 1957, issued an Order S(D)S 43405/56/PD to the effect that as an interim arrangement, every officer in the service of the new State would be bound by the Service Rules of Travancore Cochin or Madras, as the case may be, to which he belonged prior to November 1, 1956 until common service rules are framed and issued.
Thereafter, in exercise of the powers under the proviso to Article 309 of the Constitution, the Governor of Kerala in supersession of all rules on the subject, framed the Kerala State and Subordinate Services Rules, 1958.
Part I of these Rules deals with preliminary matters.
Rule 2(16) in Part I defines "Special Rules" as meaning "the rules in Part III applicable to each service or class of service." Such Special Rules have not, however, been framed by the Governor.
Part II contains the General Rules.
Rule 1 in Part II delineates the scope of the General Rules.
It runs thus: "The rules in this Part shall apply to all State and Subordinate Services and the holders of all posts, whether temporary or permanent in any such service, appointed thereto before, or after the date on which these rules come into force as provided in sub rule (b) of rule 1 in Part 1 except to the extent otherwise expressly, provided (a) by or under any law for the time being in force, or (b) in respect of any member of such service by a contract or agreement subsisting between such member and the State Government.
" 248 Rule 2 in the same Part provides: "2. Relation to the Special Rules.
If any provision in the General Rules contained in the Part is repugnant to a provision in the Special Rules applicable to any particular service contained in Part III, the latter shall in respect of that service, prevail over the provision in the General Rules in this Part.
" It will bear repetition that since no Special Rules, as defined in Rule 2(16) of Part I, have so far been framed by the Governor under Article 309 of the Constitution, Rule 2 in Part II has remained otise.
Rule 28 in Part II provides regarding promotion.
Clause (i) of clause (b) of this rule deals with promotion and appointment by transfer to a selection category or Selection Grade in a service.
Such promotion shall be made on the basis of merit and ability, seniority being considered only where merit and ability are approximately equal.
Sub clause (ii) of clause (b) of Rule 28 is captioned: "Promotion and appointment by transfer to higher posts according to seniority".
Its material part, as it stood before the amendment of December 28, 1970, reads as under: "All other promotions or appointments by transfer shall, subject to the provisions of these rules and the special rules, be made in accordance with seniority subject to the person 's fitness for appointment.
" It is contended on behalf of the appellants that by virtue of the Kerala Government Order dated February 25, 1957, referred to earlier, the Special Rules contained in the Madras Ministerial Service Rules, continued to govern the respondent because those Special Rules have not been superseded by the Kerala Rules of 1958.
The point sought to be made out is that the Special Rules, within the meaning of Rule 2 in Part II read with the aforesaid Government Order dated February 25, 1957, will mean the Special Rules contained in the Madras Rules.
A similar argument was raised before the Appellate Bench of the High Court, also, and it was repelled, and, in our opinion, rightly.
Special Rules for the purpose of the Kerala Rules, 1958, will be as defined in Rule 2(16) in Part I.
That definition contemplates that Special Rules in Part III will be framed by the Governor of Kerala.
But, no such rules have so far been framed.
We have, therefore, no hesitation in holding, in agreement with the High Court, that in the matter of promotion as an Upper Division 249 Clerk, the appellant was governed by Rule 28(b)(ii) in Part II.
The alternative contention that has been advanced on behalf of the appellant is that even if Rule 28(b)(ii) was applicable, then also, it was well within the power of the State Government to prescribe a test to judge the fitness of those persons who did not possess the minimum educational qualification and were appointed as Lower Division Clerks on being exempted from that qualification by Government Order.
In this connection, reference has been made to Article 162 of the Constitution, to show what the State Government could do by framing a statutory rule under Article 309, proviso, could well be done by an executive order, the executive power of the State being co extensive with its legislative power.
It is maintained that the power of the Government to prescribe selective test for promotion to higher service has been recognised by this Court in several decisions.
Reference has been made in this connection to the decisions of this Court in B. N. Nagarajan & Ors.
vs State of Mysore & Ors., Union of India etc.
vs Majji Jangamayya etc., State of Jammu & Kashmir vs Triloki Nath Khosa & Ors.
It was further submitted that the possession of the minimum educational qualification, i.e. a certificate of having passed the S.L.C. Examination or any equivalent examination is presumptive proof of the fitness of the holder thereof, for promotion to the cadre of Upper Division Clerks.
Therefore, according to the counsel, there was a reasonable basis for classifying those who did not possess this minimum educational qualification as a category apart from those who possessed such a qualification.
In this context, it is further emphasised that the exemption was granted only for the purpose of being appointed as a Lower Division Clerk, and not for the purpose of further promotion.
As against this, Mr. Nambiar, appearing for the respondents, submits that once the bar of minimum educational qualification was removed for appointment as Lower Division Clerk, further promotion of the respondent was governed by Rule 28(b)(ii), Part I of the Kerala Rules of 1958.
After their appointment, the respondent or others like him who had been exempted from possessing the minimum educational qualification, had become integral members of the same cadre.
They could not be singled out for hostile treatment.
Counsel has submitted that the rule enunciated by this Court in Triloki Nath 250 Khosa 's case (ibid), is not applicable because the facts of that case were entirely different.
Counsel further stated that any executive order issued by the Government, cannot supplant the statutory rules framed by the Governor under Article 309.
Executive instructions can operate only in areas not covered by the rules.
But here the area was fully occupied by the statutory rule 28(b)(ii).
There can be no quarrel with the proposition that if the statutory rules framed by the Governor or any law enacted by the State Legislature under Article 309 is silent on any particular point, the Government can fill up that gap and supplement the rule by issuing administrative instructions not inconsistent with the statutory provisions already framed or enacted.
The Executive instructions in order to be valid must run subservient to the statutory provisions.
In the instant case, however, it could not be said that there was a gap or a void in the statutory provisions in the matter of promotion from the cadre of Lower Division Clerks to that of Upper Division Clerks.
After the enactment of the Kerala Public Services Act of 1968, the position was that by virtue of Section 3 of that Act, the Kerala State Subordinate Services Rules of 1958 framed by the Governor under the proviso to Article 309 of the Constitution were deemed to have been made under the Act and were continued until superseded by rules made under that Act.
As noticed already, no Special Rules relating to Upper Division Clerks have been framed.
The General Rules in Part II will, therefore, be applicable to Upper Division Clerks, also.
It will bear repetition that the preamble to the Rules and Rule 1 in Part II, indicate that all the previous rules have been superseded.
These General Rules do not provide any minimum general educational qualification for promotion to the cadre of Upper Division Clerks from that of Lower Division Clerks.
All that is required by rule 28 (b) (ii) which governs the promotions from the Lower Division to the Upper Division, is that promotions shall be made in accordance with seniority subject to the person 's fitness for appointment.
There is nothing in this sub rule or elsewhere which provides that a member of the Lower Division will be presumed to be unfit for promotion to the Upper Division unless he possesses the minimum general educational qualification, or 251 passes a qualifying test.
It is conceivable that the State Government may prescribe a general test for all Clerks of the Lower Division to judge their fitness for promotion to the Upper Division.
But, such is not the case here.
The respondent and the others like him who were appointed as Lower Division Clerks after granting them exemption from possessing the minimum general educational qualification have been singled out for this discriminatory treatment.
There is nothing on the record to show that the case of the respondent was considered for promotion and he was found unfit.
The ratio of Triloki Nath Khosa 's case (ibid) does not advance the case of the appellant State.
Therein, persons appointed directly and by promotion were integrated into a common class of Assistant Engineers.
Rule 12 provided that Graduates among the Assistant Engineers, shall be eligible for promotion to the cadre of Executive Engineers, to the exclusion of diploma holders.
This rule was a statutory rule.
Its constitutional validity was challenged on the ground that it violated Articles 14 and 16 of the Constitution.
This Court, speaking through Chandrachud J. (as he then was), repelled this contention with the reasoning that the classification of Assistant Engineers into degree holders and diploma holders could not be held to rest on any unreal or unreasonable basis.
The classification was made with a view to achieving administrative efficiency in the Engineering Services.
It will be seen that Triloki Nath 's case, is distinguishable from the one before us, at least, in three important aspects.
Firstly, in that case, the statutory rule in question did not make any discrimination in relation to the source of recruitment, it simply provided that Graduates alone shall go into the higher cadre of Executive Engineers, irrespective of whether they were appointed as Assistant Engineers directly or by promotion.
In the present case, the impugned notification prescribes a qualifying test for promotion, not for all but only for one category of persons with reference to the manner in which they initially entered service.
Secondly, in Triloki Nath 's case the post of the Executive Engineer carries higher responsibility and duties of a supervisory character requiring higher mental equipment and administrative skill.
Thus, there, the classification rested on intelligible differentia having a direct nexus to the object (viz., administrative efficiency), to be achieved.
In the instant case, there is nothing on record to show that the duties discharged by the clerks of the Upper Division are substantially different from those in the Lower Division.
Thirdly, in the instant case the statutory rule does not warrant the classification made by the impugned Government Order.
The primary criterion for promotion to the Upper Division prescribed by Rule 28(b) (ii) in seniority if the person concerned is otherwise not unfit.
The 252 impugned Government Order impinges upon that statutory rule inasmuch as it lays down that even if a Lower Division Clerk who entered service as a result of exemption from possession minimum educational qualification, satisfied the criterion of seniority cum fitness prescribed by this Rule, he shall not be considered for promotion unless he qualifies in the test.
The relevant statutory Rules governing the appellant do not provide any minimum general education qualification for promotion to the Upper Division.
The case in point is Roshal Lal Tandon vs Union of India.
In that case, before the impugned notification was issued, there was only one rule of promotion for both the departmental promotees and the direct recruits, and that rule was seniority cum suitability, and there was no rule of promotion separately made for application to direct recruits.
As a result of the impugned notification, a discriminatory treatment was made in favour of the direct recruits, i.e. existing Apprentice Train Examiners who had already been absorbed in Grade 'D ' by March 31, 1966, because the notification provided that this group of Apprentice Train Examiners should first be accommodated en bloc in Grade 'C ' upto 80 per cent of vacancies reserved for them without undergoing any selection.
Ramaswami J., speaking for a Bench of five learned Judges, held that the impugned notification violated the guarantee under Articles 14 and 16 of the Constitution.
The reason was that once the direct recruits and promotees were absorbed in one cadre, they formed one class and they could not be discriminated against for the purpose of further promotion to the higher Grade 'C '.
In that case, it was not disputed that before the impugned notification was issued there was only one rule of promotion for both the departmental promotees and the direct recruits and that rule was 'seniority cum suitability '.
The impugned notification was discriminatory because in the case of that category who were appointed as Train Examiners by promotion the aforesaid test of 'seniority cum suitability ' prescribed by the rule for further promotion to the higher Grade 'C ' was abandoned and, instead, selection on merit only was adopted.
The principle enunciated in Roshan Lal Tandon vs Union of India applied with greater force to the facts of the present case because here the classification made by the impugned Government Order is not only unfair and irrational but also, virtually amounts to abandonment of the test of seniority cum fitness provided in rule 28 (b) (ii).
The last point for consideration is, whether it was proper for the High Court to issue a positive direction requiring the appellant to 253 promote the respondent to the Upper Division and thereafter to determine his rank in the cadre of Upper Division Clerks.
Ordinarily, the court does not issue a direction in such positive terms, but the peculiar feature of this case is that it has not been disputed that Koyakutty respondent satisfies the two fold criterion for promotion laid down in the statutory rule 28(b)(ii).
Indeed, the District Registrar, Palghat, who was impleaded as respondent 3 in the writ petition, expressly admitted in paragraph 8 of his counter affidavit filed before the High Court, "that the seniority of service is the basis of promotion from the ranks of Lower Division Clerks to the ranks of Upper Division Clerks provided they are fully qualified by passing the departmental tests for the purpose".
It was never the case of the Registrar that Koyakutty was not otherwise fit for promotion.
Indeed, even in the grounds of appeal to this Court, incorporated in the Special Leave Petition, it is not alleged that Koyakutty did not satisfy the criterion of seniority cum fitness prescribed by Rule 28(b)(ii).
The position taken by the appellant, throughout, was that this rule should be deemed to have been "supplemented" by the impugned Government Notification.
It is not correct that the impugned Notification merely "supplements" or fills up a gap in the statutory rules.
It tends to super add or super impose by an Executive fiat on the statutory rules something inconsistent with the same.
Since the existence of both the criteria viz., seniority and fitness for promotion to the Upper Division prescribed by the statutory Rule 28(b)(ii), in the case of Koyakutty was not disputed, the High Court was justified in issuing the direction, it did.
For the foregoing reasons the appeal fails and is dismissed with costs.
| The respondent, who originally belonged to the Madras Ministerial Service, was allotted to the State of Kerala as a lower division clerk on the reorganisation of States.
On the ground that he belonged to a community which was educationally backward the State Government of Madras appointed him as a lower division clerk relaxing the requirements of r. 29 of the Special Rules for Madras Ministerial Service which prescribed minimum general educational qualification for appointment to service under the State Government.
In 1957 the State Government of Kerala issued an order providing that, until common service rules were framed, every officer in the service of the new State of Kerala would be bound by the service rules of Travancore Cochin or Madras, to which he belonged prior to November 1, 1956.
Thereafter in supersession of all earlier rules the Kerala State and Subordinate Service Rules, 1958 were framed.
Rule 1 of the General Rules in Part II stated that the rules in that part shall apply to all State and Subordinate Services and the holders of all posts appointed before or after the date on which those rules came into force.
The Special Rules contemplated by r. 2(16) of Part I had however, not been framed.
Rule 28(b) (ii) of Part II provided that all promotions or appointments by transfer [other than those mentioned in cl.
(i) of this rule] shall be made in accordance with the seniority, subject to the person 's fitness for appointment.
In 1961, persons who did not possess the general minimum educational qualifications but were appointed as lower division clerks, were allowed to sit for a qualifying test for promotion to upper division clerks.
In the gradation list of officiating lower division clerks prepared, the respondent was shown at No. 1 place.
Even so, when two vacancies of upper division clerks occurred, two persons junior to him in the gradation list were promoted ignoring the respondent.
In his writ petition under article 226 of the Constitution the respondent contended that the exemption granted to him removing the bar of educational qualification enured to him for all purposes, and therefore, promotions of two juniors, ignoring r. 28(b)(ii) under which seniority was the basis for promotion, amounted to denial of equal treatment guaranteed under articles 14 and 16 of the Constitution.
243 A single Judge of the High Court dismissed the petition on the ground that the exemption granted was for the limited purpose of enabling the respondent to be appointed and continued in the post of lower division clerk but that it did not remove the bar of minimum qualification for promotion.
On appeal the division bench reversed the order of the single Judge, and directed the Government to promote him and determine his rank in the cadre of upper division clerks.
On appeal to this Court it was contended on behalf of the appellant that (1) the Special Rules contemplated by r. 2 of Part I read with the State Government 's order of 1957, were the Special Rules contained in the Madras Ministerial Service Rules; (2) even if r. 28(b)(ii) was applicable it was well within the power of the State Government to prescribe a test to judge the fitness of persons who were exempted from the minimum educational qualifications when appointed as lower division clerks and (3) there was a reasonable basis for classifying those persons who did not possess the minimum educational qualification as a category apart from those who possessed such a qualification.
Dismissing the appeal, ^ HELD: 1 (a) The Special Rules, for the purposes of Kerala Rules of 1958, would be as defined in r. 2(16) of Part I.
That definition contemplated that Special Rules would be framed by the Governor but no such rules had been framed.
[248 H] (b) In the matter of promotion as on upper division clerk the respondent was governed by r. 28(b)(ii) in Part II.
[249 A] 2.
It cannot be said that the impugned notification merely "supplemented" or filled up a gap in the statutory rules.
It tended to superimpose or super add by an executive flat on the statutory rules something inconsistent with the same.
If the statutory rules framed by the Governor or any law enacted under article 309 is silent on any particular point, the government can fill up that gap and supplement the rule by issuing administrative instructions not inconstant with the statutory provisions already framed or enacted.
[253 D; 250 C] In the instant case, however, it could not be said that there was a gap in the statutory provisions in the matter of promotion from the cadre of lower division clerks to that of upper division clerks.
3(a) The classification made by the impugned government order was not only unfair and irrational but also, virtually amounted to abandonment of the test of seniority cum fitness provided in r. 28(b)(ii).
[252 G H] (h) By virtue of section 3 of the Kerala Public Services Act, 1968, the 1958 Rules were deemed to have been made under the Act and were continued until superseded by rules made under that Act.
No Special Rules relating to upper division clerks having been made the General Rules in Part II would be applicable to upper division clerks, also.
[250 E] (c) The 1958 Rules superseded all earlier rules.
The General Rules did not provide any minimum general educational qualification for promotion to 244 the cadre of upper division clerks.
There is nothing in r. 28(b)(ii) or elsewhere, which provides that a lower division clerk would be presumed to be unfit for promotion to upper division unless he possessed the minimum general educational qualification or passed the qualifying test.
[250 G H] There is nothing to show that the respondent was considered for promotion but was found unfit.
[251 B] (d)(i) The impugned notification prescribed the qualifying test for promotion, not for all, but only for one category of persons with reference to the manner in which they initially entered service.
The respondent and others like him, appointed as lower division clerks after granting them exemption, had been singled out for this discriminatory treatment.
[251 F] (d)(ii) There is nothing on record to show that the duties discharged by the clerks of the upper division were substantially different from those in the lower division.
[251 G H] (iii) The statutory rule did not warrant the classification made by the impugned order.
It impinged upon the statutory rule inasmuch as it laid down that even if a lower division clerk who entered service as a result of exemption from possessing minimum educational qualification satisfied the criterion of seniority cum fitness prescribed by this rule, he shall not be considered for promotion unless he qualified in the test.
The relevant rule did not provide any minimum general educational qualification for promotion to upper division.
[252 A B] Roshan Lal Tandon vs Union of India, ; ; followed.
State of Jammu & Kashmir vs Triloki Nath Khosa & Ors. ; ; held inapplicable.
Though ordinarily the court would not issue a direction requiring the government to promote an aggrieved employee and thereafter determine his rank in the cadre, in the peculiar facts of this case the respondent satisfied the two fold criterion for promotion laid down in r. 28(b)(ii) and since the existence of both the criteria for promotion were not in dispute the High Court was justified in issuing the direction, it did.
[253 A B; E]
| 3984.txt |
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