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Civil Appeal No. 300 of 58.
A. N. Sinha, N. H. Hingorani and P. K. Mukherjee, for the appellants.
C. K. Daphtary, Solicitor General of India, R. Ganpathy Iyer and R. H. Dhebar, for respondent No. 1.
C. K. Daphtary, Solicitor General of India and K. L. Hathi, for respondent No. 3.
1961 December 13.
The Judgment of the Court was delivered by SARKAR, J.
This appeal raises certain questions as to the validity of an order made under section 36 of the , sanctioning the transfer of its life insurance business by one insurance company to another.
The appellants had challenged that order by a petition field under article 226 of the Constitution in the High Court of Punjab.
The High Court having dismissed the petition they have come to this Court in appeal.
There are three appellants, one of whom is a shareholder of the transferor company, another a policy holder in it and the third, one of its agents who claims to have become entitled under the to receive from it commission on renewal premiums paid on life insurance business 132 introduced by him.
They complain that their respective rights have been adversely and illegally affected by the sanction.
The transferor company is the India Equitable Insurance Company Ltd. and the transferee company, the Area Insurance Company Ltd. Under the transfer all the life insurance business including liabilities issued and all the life fund of the transferor company were taken over by the transferee company.
It is said and perhaps that is the correct position that as a result of the transfer all the transferor company would vest in the transferee company and the transferor company would really become defunct.
The first point argued by Mr. Sinha for the appellants is that the transfer offends sections 10 and 12 of the Companies Act.
The Companies Act with which we are concerned, is the Companies Act of 1913 as it stood in 1954.
Section 10 of the Companies Act provides that a company shall not alter the conditions contained in its memorandum except as provided in that Act.
Section 12 states that a company may by special resolution alter the provisions of its memorandum with respect to its objects but that the alteration shall not take effect until it is confirmed by court on petition.
The contention of the learned Advocate is that the arrangement of transfer really amounts to abandonment of the business of the transferor company and therefore to an alteration of its memorandum without following the procedure laid down in section 12 and this cannot be done.
The obvious answer to this contention is that the transfer does not effect any alteration in the memorandum of the transferor company.
Clause 3(27) of the memorandum of the transferor company gives it the power to sell its undertaking.
The transfer in this case is an exercise of this power and hence within the objects of the company.
An exercise by a company of a 133 power given by its memorandum cannot amount to an alteration of the memorandum at all.
It is then said that clause only authorised a sale and that a sale is a transfer for a consideration.
It is contended that in the present case there was no consideration moving from the transferee company and, therefore, the transfer was not by way of a sale.
This, it is contended, was, therefore, a transfer without any power in that regard in the memorandum and hence in substance amounts to unauthorised alteration of it.
We were referred to various balance sheets and other figures in support of this contention.
This point as to want of consideration was not taken in the petition and the High Court did not permit it to be raised.
We have, therefore, to proceed on the basis that the transfer was a sale.
We wish however to make it clear that we are not deciding what is enough consideration for a sale, nor whether a transfer not authorised by the memorandum would amount to an alteration of the memorandum.
What we have said furnishes enough answer to the contention raised.
Mr. Sinha then contends that the result of the transfer was a virtual winding up and that it was not one of the corporate objects of a company to wind it up.
The contention was that the winding up could be effected only under the provisions of the Companies Act.
We were referred to Bisgood vs Henderson 's Transvaal Estates Ltd(1) as authority for this proposition.
We think, this contention is misconceived.
What was done in this case was done under the provisions of the and not by way of carrying out a corporate object of the transferor company.
Now, section 117 of the provides that nothing in that Act would affect the liability of an insurance company to comply with the provisions of the Indian Companies Act, in matters not otherwise specifically provided for by it.
Section 36, of the , which has for the present purpose to be read with section 35 of that 134 Act, makes certain specific provisions which, as we shall presently show, override the provisions of the Companies Act.
The objection based on Bisgood 's case(1) is ill founded.
There a company was sought virtually to be wound up and its assets distributed in purported exercise of a power to sell the undertaking and other cognate powers contained in its memorandum of association, and this the Court said could not be done as it would make the provisions for winding up in the Companies Act ineffective.
In the present case the thing has been done under express statutory power.
No question here arises of a corporate power in the sense it arose in Bisgood 's case (1).
Further there is not here, as there was in Bisgood 's case (1), a distribution of the assets of the transferor company after its undertaking had been transferred.
Hence we have here no winding up really.
The next contention of Mr. Sinha is that the arrangement for the transfer had been made by the directors and the directors had no power in view of section 86H of the Companies Act, to transfer the undertaking of the company.
That section gave the directors power to transfer the undertaking with the consent of the company in a general meeting.
In the present case, what had happened was that an agreement between the two companies for the purpose of the transfer had been made by the directors and it was subsequently approved by the shareholders of the transferor company at a general meeting by about 82 per cent, majority.
It was after such approval that the transfer had been sanctioned under section 36 of the , and may be, though we do not have this on the record, the transfer was effected by proper documents executed between the companies.
An agreement only to transfer the undertaking by the directors clearly does not violate section 86H for it is merely 135 tentative subject to final approval by the Company in general meeting.
This we think is by itself sufficient answer to Mr. Sinha 's present contention.
Mr. Sinha however says that the approval by the Company at its general meeting was of no use because the defect in the original agreement, namely, that the directors had no power to transfer in view of section 86H, was not pointed out at that meeting to the shareholders.
It is somewhat difficult to appreciate this point.
There was no defect in the directors ' making the agreement to transfer; such agreement did not effect the transfer.
Even assuming that the agreement was beyond the power of the directors, it cannot be said that the approval of it by the shareholders had been without any knowledge of the defect.
The defect was of the want of the directors ' power to transfer in view of the provisions of section 86H of which the shareholders cannot be heard to deny knowledge.
The case of Permila Devi vs Peoples Bank of Northern India Ltd.(1) on which Mr. Sinha relied for the present purpose is of no assistance to him.
There certain shares had been illegally forfeited but it was contended that the shareholders had ratified the forfeiture.
It was held that the ratification, if any, was of no use because it had not been shown that the attention of the shareholders and creditors had been drawn to the illegality which depended on facts of which no knowledge by the shareholders could be presumed.
In the present case, the defect, if any, arose from a statutory provision itself of which the shareholders must be deemed to have had knowledge.
Mr. Sinha then says that the transfer was bad as it involved a reduction of share capital of the transferor company.
His point is that as all the assets were gone there was necessarily a reduction of its share capital.
He says that a reduction of share capital can be effected only as provided in section 55 and the succeeding sections of the Companies Act.
This contention is, in our view, wholly 136 misconceived.
Reduction of share capital under these sections, is not brought about by loss of assets.
A bare perusal of the sections, we think, is enough to establish that.
The disappearance of the assets of the Company, for whatever reason, does not cause a reduction of the share capital.
Another point raised by Mr. Sinha is that the transfer was bad it offended section 44 of the .
Under that section certain insurance agents have been given certain rights against their employer companies to receive commission in respect of renewal premiums paid.
We will assume for the present purpose that the petitioner who is an agent, had acquire such a right against the transferor company under section 44.
We do not however see that such rights are in any way affected by the transfer.
The right of the petitioner agent against the Company remains.
It may be that he cannot realise the amount due, by enforcing that right because the transferor company has no assets left after the transfer out of which to pay the commission.
But section 44 does not say that an insurance company shall not be entitled lawfully to deal with its assets where the effect of such dealing might be that nothing is left out of which the agents can be paid their commission.
Further, more it has to be remembered that what has been done in this case has been done under the same Act.
Section 36 of the does not say that a transfer shall not be sanctioned if the effect of it is to leave no assets with the transferor company.
Reading the two sections together, as we must do, it is not possible to take the view that transfer cannot be sanctioned under section 36 if the result of that is to denude the transfer or company of all its assets out of which an agent can be paid his commission.
A further point is based on article 14 of the Constitution.
It is said that there were other insurance companies in the same insolvent position 137 as the transferor company and that the policy holders of the latter company alone were being made to suffer.
It may be stated here that the transfer involved a condition affecting slightly adversely the rights of the policy holders.
It does not seem to us however that any question of discrimination arises in the present case.
The transfer was sanctioned with the assent of the shareholders of the two companies concerned.
The sanction was given after the policy holders of the transferor company were heard.
Again, section 36 of the applies to the insurance companies where the companies in general meeting agree to a transfer.
No action under section 36 can be taken except on the initiative of the companies concerned.
It is done in the best interests of the policy holders.
Then it is argued that the terms of sections 35 and 36 had not been complied with.
It is necessary now to be set out the relevant portions of the sections and some of the facts of this case.
section 35.
(1) No life insurance business of an insurer specified in sub clause (a)(ii) or sub clause (b) of clause (9) of section 2 shall be transferred to any person or transferred to or amalgamated with the life insurance business of any other insurer except in accordance with a scheme prepared under this section and sanctioned by the Controller.
(2) Any scheme prepared under this section shall set out the agreement under which the transfer or amalgamation is proposed to be effected, and shall contain such further provisions may be necessary for giving effect to the scheme.
(3) Before an application is made to the Controller to sanction any such scheme, notice of the intention to make the application together with a statement of the nature of 138 the amalgamation or transfer, as the case may be, and of the reason therefor shall, at least two months before the application is made, be sent to the Controller and certified copies, four in number, of each of the following documents shall be furnished to the Controller, and other such copies shall during the two months aforesaid be kept open for the inspection of the members and policy holders at the principal and branch offices and chief agencies of the insurers concerned, namely.
[Here certain documents are specified.
] section 36.
(1) When any application such as is referred to in sub section (3) of section 35 is made to the Controller, the controller shall if for special reasons he so directs, notice cause, of the application to be sent to every person resident in India who is the holder of a policy of any insurer concerned and shall cause statement of the nature and terms of the amalgamation or transfer, as the case may be, to be published in such manner and for such period as he may direct and after, hearing the directors and such policy holders as apply to be heard any other persons whom he considers entitled to be heard, may sanction the arrangement, if he is satisfied that no sufficient objection to the arrangement has been established and shall make such consequential orders as are necessary to give effect to the arrangement, including orders as to the disposal of any deposit made under section 7 or section 98: It would appear from the terms of section 35 (3) that it contemplates the following steps: (a) A notice of the intention to make an application to the Controller of Insurance for sanction of the transfer has to be given to him.
139 (b) Thereafter, together with the notice, certain specified documents have to be kept open for the inspection of the shareholders for two months.
(c) After the expiry of the period of two months, an application has to be made to the controller of insurance for sanction of the transfer.
Now, what had happened in this case was that the notice contemplated by section 35 (3) was given on July 27, 1951, and the necessary documents were kept open for inspection.
Before the application to the Controller was made, the directors of the companies were in touch with the Controller in regard to the proposed transfer and the latter suggested various modifications in the proposed scheme which was one of the documents which had to be kept open for the inspection of the shareholders.
On October 30, 1951, an application to sanction the transfer was made under section 35 (3) of Subsequently, also further modifications were suggested by the Controller.
On July 28, 1952, the transferor company in its general meeting considered the suggestions of the Controller and approved of the scheme with certain modifications, to the details of which it is not necessary to refer.
The scheme so modified contained the following clause: CL. 16.
That this arrangement is conditional upon the sanction on a subsequent date either with or without any modification of the terms hereof imposed or approved by the Controller and accepted by the parties here to and subject as aforesaid, the provisions as mentioned herein shall be operative on and from the thirty first of December 1950.
It was this scheme which was approved by the Company in its general meeting by the following resolution: "Read, considered and thoroughly discussed the proposed scheme of transfer. and resolved 140 that the proposed transfer. having been found to be arranged by the directors of the Company in the best interests of the Policy holders, the same be and are hereby approved and confirmed, and resolved further that the directors be and are hereby authorised to make and accept further modifications and alterations in the scheme if any suggested by the Controller of Insurance.
" It appears that certain further modifications in the scheme were thereafter made.
The Controller directed notice to be issued to all policy holders giving them full information of the scheme and fixed a date for hearing.
All policy holders desiring to be heard, were heard.
Before however the Controller passed his order sanctioning the scheme, the petition, out of which this appeal arises was filed on February 13, 1954.
Apparently, on this date further hearing of the matter by the Controller was pending.
On March 8, 1954, the controller gave his sanction to the scheme as modified.
Thereafter, the petitioners on May 14, 1954, filed a supplementary petition asking for writ quashing the order, the first petition having only for asked a writ to quash the proceeding then pending before the Controller.
Mr. Sinha points out and in this he is right that after notice under section 35 (3) had been issued, the scheme of transfer had been modified and it was such modified scheme that was sanctioned by the Controller.
Mr. Sinha 's point is that under section 36 the Controller could only sanction the scheme of which notice had been given under section 35.
He, therefore, contends that the sanction granted by the Controller in this case was not in terms of the section and hence a nullity.
The learned Solicitor General appearing to oppose the appeal contends that on a proper construction of the sections the Controller had power to sanction a scheme modified after notice under section 35 (3) had been issued.
It is however unnecessary in this case to decide the question so raised.
141 We will resume for the present purpose that under section 36 (1) only the scheme of transfer in respect of which notice under section 35 (3) had been given could be sanctioned and not a modified version of it.
The scheme and the resolution of the shareholders of the transferor company approving it, however both provided for its modification later at the suggestion of the Controller and gave power to the directors to accept the modifications on behalf of the Company.
The modifications were pursuant to the terms of the scheme as approved by the share holders of the transferor Company.
Therefore, in substance, it was the scheme of which notice had been given under section 35 (3) which was sanctioned.
A similar view was taken in England in regard to sections 153 and 154 of the English Companies Act, 1929.
Those sections dealt with compromises with creditors and for reconstruction and amalgamation of companies.
These could be effected by an order of court after the relative scheme had been approved by the companies or creditors concerned.
It was generally felt that the court could either sanction the scheme approved by the shareholders or reject it but had no power to modify it.
The contention of Mr. Sinha in the present case it will be remembered, is substantially the same.
To remove the doubt as to the power to modify the scheme after it had been approved by the share holders of the companies concerned, the author of Palmer 's Company Precedents appears to have recommended the device of inserting in the scheme a clause giving power to the court to modify the scheme and the directors to accept the modification.
In the 16th Edition of this well known book the following passage appears at p. 844, "It is more than doubtful whether, if a particular scheme is agreed to at a general meeting of creditors, the court can sanction 142 that scheme with modifications, unless there is some provision in the scheme providing for possible modifications.
In cases whether has no such provision, and some modification has been thought expedient, the court has required the calling of a second meeting to consider the scheme as modified; but to avoid this inconvenience it has for some time past been usual to insert in schemes a clause (originated by the author) expressly empowering the liquidator to assent to any modifications or conditions approved or imposed by the court, and this provision was approved by Chitty J. in Dominion of Canada, etc.
Co., and has frequently been acted on.
This practice seems to have obtained approval in our country to : see Mihirendrakishore Datta vs Brahmanbaria Loan Company Ltd., (1) turning on section 153 of the Companies Act, 1913, which corresponded to the sections of the English Act earlier mentioned.
Mr. Sinha contends that the authorities on the Companies Act earlier referred to had no application to the present case.
He says that the sections of the Companies Acts on which these authorities turned were not pari materia with sections 35 and 36 of the .
His contention is that the object of these sections of the was to protect the shareholders and policy holders of the Company and that they would be deprived of that protection if a scheme modified subsequently to the issue of the notice under section 35 (3) could be sanctioned.
We do not think that this contention is well founded.
So far as the policy holders are concerned, they have nothing to do with the approval of the scheme.
The scheme of transfer was agreed to between the shareholders of the companies concerned in the deal.
Assume, as Mr. Sinha says, that under the , as it is under the 143 the Companies Act, it is the shareholders who must agree to the scheme.
In the cases falling under the Companies Act, it is for protecting the shareholders that it has been held that the court cannot modify the scheme unless the scheme itself gives the court the power to do so.
On the assumption made we think it perfectly clear that the position under the is the same.
If Mr. Sinha is wrong and under the it is not for the shareholders to sanction the scheme, then there would be less reason for saying that what could be done under the Companies Act, cannot be done under the .
The intention of sections 35 and 36 of the would on the basis of Mr. Sinha 's contention, be to protect the shareholders from having to accept a scheme to which they have not agreed.
Such protection however may be given up by shareholders by inserting in the scheme approved by them, a clause empowering the directors to modify it.
So far as the policy holders are concerned, their protection is left in the hands of the controller.
That is the policy of the and, hence, the Controller hears them.
In the present case, he actually heard policy holders.
Therefore it does not seem to us that it can be contended with substance that sections 35 and 36 of the are not pari materia with the sections of the Companies Act to which we have earlier referred.
The last point of Mr. Sinha must also fail.
The result is that this appeal must be dismissed with costs and we order accordingly.
There will be one set of hearing costs.
| In an application under article 226 of the Constitution, to challenge the validity of the transfer of a life insurance company 's business to another company under section 36 of the : ^ Held, the transfer though it brought about an abandonment of the business of the company was not bad as resulting in an alteration of the memorandum of the company without recourse to section 12 of the Indian Companies Act, 1913.
The Company 's memorandum of association contained a power to sell its undertaking and an exercise of that power does not amount to alteration of the memorandum.
The transfer was not a winding up of the company without following the procedure laid down in the Companies Act and hence invalid.
It was effected under the provisions of the .
Bisgood vs Hendersons Transval Estate, , distinguished.
An agreement by the directors of a company to transfer its undertaking subject to confirmation by the company in general meeting did not offend section 86H of the Companies Act.
Section 55 and the connected sections of the Companies Act do not contemplate reduction of share capital brought about by loss of assets and loss of assets does not amount to reduction of share capital.
Section 44 of the does not prevent an insurance company from dealing with its assets though as a result thereof no asset was left out of which the agents of the company might be paid commission to which they are entitled under the . 131 Section 36 of the does not offend article 14 of the Constitution.
That section applies to all insurance companies which in general meeting agree to a transfer.
Even if it is assumed that under section 36 (1) of the only that scheme of transfer of which notice under section 35 (3) of the Act had been given could be sanctioned and not a modified version of it, there would be power to sanction a modified version where the scheme itself or the resolution of the company approving of it, gave power to the directors to accept modifications of that scheme on behalf of the company suggested by the controller of Insurance before final sanction by him.
Mihirendrakishore Datta vs Brahmanbaria Loan Co., Cal. 913, referred to.
|
ns Nos. 89 to 92 and 94 of 1968.
Petitions under article 32 of the Constitution of India for enforcement of the fundamental rights.
M.K. Ramamurthi, for the petitioners (in all the petitions).
Niren De, Solicitor General and R.N. Sachthey, for the respondent (in all the petitions ).
The Judgment of the Court was delivered by Hidayatullah, C.J.
These are five writ petitions under Article 32 of the Constitution of India by persons detained under the (4 of 1950) by virtue of orders passed by the District Magistrate Tripura on February 2, 1968.
These detenus (and another since released) were arrested on February 11, 1968.
State Government was informed of the fact of deten sup.
CI/68 5 564 tion on February 13, and the grounds of detention were communicated to the detenus on February 15.
State Government gave the approval on February 19 and telegraphically communicated to the Central Government the fact of the detention on February 22 under section 3(4).
On March 11, the Advisory Board considered the cases.
The present petitions were filed on March 12, 1968.
The Advisory Board made its report to the State Government under section 10 of the Act on April 17, 1968.
On April 26, 1968, the State Government made the order detaining the petitioners for a period of one year.
This detention is challenged before us.
The petitions were argued by Mr. Ramamurthy together.
The law points raised by him in these cases were common and will be dealt with together.
Part of the facts were also common although some special features were pointed out in some cases.
We propose to deal with the common,points of law and facts together and then to consider the special facts separately.
The points of law were (1 ) that the detention was illegal as the report of the District Magistrate was not submitted forthwith as required by section 3(3) of the Act, (2) that the detention was again illegal as the order of approval of State Government under section 3 (3) was not communicated to the petitioners, (3) that the detention was illegal as the State Government had not reported the fact to the Central Government as soon as possible and without avoidable delay.
The common points of fact are that the grounds were vague and the detention was for a collateral purpose and mala fide.
The order of detention in each case was made on the 9th of February.
The arrest and detention commenced from the 11th.
The communication .was on February 13.
Section 3 (3) of the Act lays down: "3.
The Central Government or the State Government may (1) (3) When any order is made under this section (by an officer mentioned in sub section (2) he shall forthwith report ' the act 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 made after the commencement of the Preventive Detention (Second Amendment) Act, 1952, 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).
" 565 The question is whether the detention became illegal because 4 days were allowed to pass from the order of detention and 2 days from the date of arrest.
The third sub section quoted above uses the word 'forthwith '.
, Explaining this word Maxwell in Interpretation of Statutes (Eleventh Edn.) at p. 341 observes as follows: "When a statute requires that 'something shall be done "forthwith", or "immediately" or even "instantly", it should probably be understood as allowing a reasonable time for doing it.
" The word 'forthwith ' in section 3 (3) and the phrase 'as soon as may be ' used in the fourth sub section were considered in Keshav Nilkanth Joglekar vs The Commissioner of Police, Greater Bombay(1).
In that case the delay was of 8 days.
Giving proper meaning to the expression it was observed: "We agree that "forthwith" in section 3 (3) cannot mean the same thing as "as soon as may be" in section 7, and that the former is more preemptory than the latter.
The difference between the two expressions lies, in our opinion, in this that while under section 7 the time that is allowed to the authority to send the communication to the detenu is what is reasonably convenient, under section 3 (3) what is allowed is only the period during which he could not, without any fault of his own, send the report.
" The delay of 8 days was held explained thus: "What happened on the 16th and the following days are now matters of history.
The great city of Bombay was convulsed in disorders, which are among the worst that this country has witnessed.
The Bombay police had a most difficult task to perform in securing life and property, and the authorities must have been working at high pressure in maintaining law and order.
It is obvious that the Commissioner was not sleeping over the orders which he had passed or lounging supinely over them.
The delay such as it is, is due to causes not of his making, but to causes to which the activities of the petitioners very largely contributed.
We have no hesitation in accepting the affidavit, and we hold that the delay in sending the report could not have been avoided by the Commissioner and that when they were sent by him, they were sent "forthwith" within the meaning of section 3(3) of the Act.
" In the present case the delay is much shorter.
The 10th and 1 ith of February were close holidays.
The communication was (1) ; at pages 658 660. 566 on the 13th.
Thus there was only delay because the report was not made on the 12th.
Explaining the delay the District Magistrate in his affidavit says: "I say that 10th February, 1968 was a holiday, being the second Saturday of the month and 11th February, 1968 was Sunday.
I say that serious reports about the activities of the Mizo National Front and Sangkrak Party, which are tribal groups of hostiles who had set up an independent Government and were indulging in subversive acts against the local Govern.
ment and were committing dacoities, murder, arson etc.
particularly aimed at non tribals, were received at that time which kept me extremely busy during those days.
Besides this, I also say that I was in the midst of paddy procurements and there was very heavy rush of work in my office in those days.
I say that 10th and 11th February, 1968, being holidays and order being communicated on the ' 13th to the State Government, was communicated "forthwith" as required by law.
" In our judgment even if the meaning from the ruling is applied with strictness, the delay was explained sufficiently.
The District Magistrate was hard put to for time and the surrounding circumstances explain the very short delay.
A much larger delay was held in this Court not to militate against section 3 (3) and we think there is less room for interference in this case than existed in the former case.
We accordingly reject the first of .the law The second point has no force.
There is no provision in the Act that such an approval must be communicated to the detenu.
The argument is that this must be implied from the object of the Act.
The detaining authority is answerable to the State Government, Sub section (3 ) gives validity to the order for a period of 12 days even without approval.
The approval was done within the time and began to operate as soon as made.
It was contended that the approval ought to have been communicated to the detenu and without this communication the detention could not be legal.
Reliance was placed upon certain cases to show that persons affected by an order must be communicated that order if it is to be effective.
In Raja Harish Chandra Raj Singh vs The Deputy Land Acquisition Officer and another(1) (a case under the Land Acquisition Act 1894) it was held that the award of the Collector must be communicated, and that this was an essential requirement of fair play and natural justice.
The Court was considering a question of limitation Which ran 'from the date of the Collector 's (1) [1962] 1 S.C.R. 676.
567 award ' in the proviso to section 18 and was not prepared to construe those words in a literal or,mechanical way.
The reason which prevailed for making a distinction between an order passed and an order communicated do not obtain here.
In Bachhittar Singh vs The State of Punjab(1) an order of dismissal of a public servant passed by the Minister on the file was not communicated and it was held 'that it was only provisional fill communicated.
This case is not in point.
The next case Biren ' Dutta and others vs Chief Commissioner of Tripura and another(2) deals with detention under the Defence of India Rules 1962 rules 30(1)(b) and 30A(8).
The reason of rule 30A(8) was stated by this Court to be that it is in the nature of an independent decision and further detention can be justified only if the decision is recorded as required by the rule, and it must be in writing clearly and unambiguously to indicate the decision.
It was further observed that the decision must be communicated.
This case is really no authority in the context of the present ease.
Section 3 (3 ) of the does not specify that the order of approval is anything more than an administrative approval by the State Government.
If this be so the necessity of communication of the approval does not arise with that strictness as does the decision under Rule 30A(8) of the Defence of India Rules.
The Solicitor General on that occasion conceded this position.
The dispute then narrowed to the question whether article 166 applied.
This point was not decided by this Court but basing itself on the admission that the deeision to continue the detention must be in writing, this Court considered whether there was substantial compliance with this requirement.
A brief memorandum was produced which merely recorded that a decision was reached.
This Court held that the memorandum could not reasonably be said to.
include a decision that the detention of the detenus was thought necessary beyond six months.
Sueh orders were held not to contain a written record of the decision with appropriate reasons.
In our opinion the provisions of the cannot be equated to those of the Defence of India Act and the Rules.
While we are of opinion that even in detention under the it would be fair to inform the detenu of all the stages through which his detention passes and a provision to that effect should be included in it, we are not satisfied that in view of the state of the existing law we can import the strict rule here.
The scheme of the is merely to approve the original detention by the District Magistrate and the continued detention after 12 days is not under any fresh order but the same old order with the added approval and what the detenu can question if he be so minded, is the original detention and not the approval thereof.
(See in this connection also (1) [1962] Supp. 3 S.C.R. 713.
(2) ; 568 Mohammed Afzal Khan vs State of Jammu & Kashmir(1).
We accordingly consider the ruling inapplicable.
It is next contended that the State Government was also guilty of undue and unreasonable delay in reporting to the Central Government.
The State Government communicated the decision on February 22.
State Government received the communication from the District Magistrate on February 13, and approved the action on February 19.
The communication to the Central Government on February 22 was not so much delayed that it is not covered by the expression 'as early as may be ' explained by this Court in Keshav Nilkanth Joglekar vs The Commissioner of Police Greater Bombay 's(2) case.
Mr. Ramamurthy desired us to calculate the time from February 9 but we do not think that is possible.
Time can only be calculated from the moment the matter reached the State Government.
The State Government took a week to consider these cases and it is reasonable to think that there might be a few more cases which are not before us.
Having reached the decision on the February 19, the action of the State Government in communicating the matter to the Central Government on February 22 cannot be said to be so delayed as to render the detention illegal.
Various things have to be done before the report to the Central Government can be made and a gap of 3 days is understandable.
We see no forces in this point.
This brings us to the merits of the detention.
Here the charge is that the grounds furnished to the detenus were vague and the detention itself mala fide.
The grounds are practically the same except for very minor changes to which attention will be drawn when we deal with individual cases.
We may set down the grounds of detention from Petition No. 89 of 1968 as sample.
"You are being detained in pursuance of the Detention order made under sub clauses (ii) and (iii) of clause (a) of sub section (1) of section 3 as you have been acting in manner prejudicial to the maintenance of public order and supplies essential to the community as evidenced by the particulars given below : 1.
That you have been instigating the loyal villagers particularly the tribals living in and around the Forest Reserve areas to damage the forest plantation and to do Jhuming in Reserve Forest areas in violation of forest laws.
Towards the end, you have been attending a number of secret meetings in which it was decided to urge the public to start campaign against the Forest Department and to destroy the forest plantation.
That you have by your activities created resentment against (1)[1957] S.C.R. 63.
(2) 1950 S.C.R. 569 the forest ,departments and the Forest Laws under Teliamura P.S. thereby endangering the maintenance of public order.
That you have been instigating the loyal cultivators from delivering the paddy to the Government which has been requisitioned under the Tripura Foodgrains Requisition Order for the maintenance of sup plies of foodgrains to the people in lean months.
You have been instigating and inciting the people to offer organised and violent resistance against the paddy procurement staff.
Towards this end, you have been attending a number of secret meetings in which it was decided to urge the public to start campaign against the procurement of paddy.
You have been directly in 'citing the people in a number of mass meetings also.
That you have by your speeches and activities induced the people of certain areas to offer violent resistance to paddy procurement thereby preventing the Government from maintaining supplies essential to the community during times of need.
The above reports are evident from the facts that on 12 11 67 you artended a mass meeting at Kalyanpur, a secret meeting on 13 11 67 at Asha rambari, again mass meetings at Teliamura on 28 11 67 at Moharchhara Bazar on 16 12 67, on 6 1 68 at Telia mura and on 21 1 68 at Stable ground, Agartala.
Because of your activities and incitement, on 2 2 68 the procurement staff were offered a strong and violent resistance by an unruly mob at Chalitabari P section Telia mura.
" It is submicted that the grounds do not give anydetails since no particulars of time, place and circumstances have been mentioned, and relevant and irrelevant matters have been included.
Reference is made to two cases decided recently by this Court in which the grounds were found insufficient.
They are: Rameshwar Lal Patwari vs State of Bihar(x) and Motilal Jain vs State of Bihar & Others(2).
We find no such vagueness in the grounds as was found established in the two cases.
The grounds begin by stating generally what the activities were.
They consisted of instigation of tribal people to practise jhuming and preventing the authorities from delivering paddy to Government under the procurement schemes.
This instigation it is said was through mass and secret meetings and resulted in violent resistance to Government.
Having said this the grounds then specify the places where and the dates on which the meetings were held and the date on which and place at which the resistance took place.
In our judg (1) ; (2) ; 570 ment more detailed information was not necessary to give .the detenus an opportunity to make their representations.
The grounds here are specific and very unlike those in the cases relied upon.
We reject the contention.
As regards mala fides and collateral purpose alleged to be the real reason, the averment is that the detention was ordered to prevent the detenus from actively campaigning for the Panchayat elections that were to take place on the 19th and 20th February, 1968.
This has been denied and looking to the circumstances of this area which are notorious there is no doubt in our minds that the affidavit of the District Magistrate is reliable.
This ends the submissions which are common to these five cases.
We now pro ceed to discuss individual objections.
Writ Petition 89 of 1968.
There is no special objection in Writ Petition 89 of 1968 beyond what has been discussed above and it is accordingly dismissed.
Writ Petition 90 of 1968: Here too there is no special ground urged before us and the petition is accordingly dismissed.
Writ Petition 91 of 1968: The first objection is that there is a mistake of identity.
The petitioner claims to be Dasrath s/o Kfishna Deb whereas in the order of detention and other papers is described as Dasrath s/o the Late Krishna Chandra Deb Barrna.
It is also submitted that Krishna Chandra Deb is alive and, there fore, the order of detention concerned some other person.
It is denied by the District Magistrate that the order was not passed against the present detenu himself.
The addition of Barma is explained by the District Magistrate as a popular suffix to the name.
The District Magistrate has further said that in Tripura it is usual to have Barma in addition to Deb in the surname and that this ground of identity has been raised for the first time in this Court.
The address of the petitioner is accurate and the I father 's name is also correct.
Nothing much turns on the fact that the father was described as dead.
The petitioner ha.s not objected till he reached this Court and the authorities would hardlybe expected to hold a wrong man and let the real man go free.
We reject this contention.
The next contention concerns the discrepancy in the dates of meetings and what happened as a result of his activitiesand incitement.
The two sets of dates may be put side .by side: Meetings Result 25 11 67 18 6 67 16 12 67 21 6 67 26 12 67 24 6 67 27 12 67 25 6 67 30 12 67 23 12 67 3 1 68 21 1 68 571 It is argued that the results in all but two dates could not follow activities which were later.
The explanation is simple.
The results were said to be because of the activities of the peritioner.
The mention of dates of meetings is merely some evidence to show the kmd of activity.
We are concerned with preventive detention.
Ordinarily what we have to satisfy ourselves about is the satisfaction of the authority and the absence of mala fides and whether all the opportunities of making representation were given.
There were enough instances cited of the conduct on which detention was ordered for the petitioner to make an effective representation.
The situation in this area was already bad and the later activities would not make it any better.
We do not think that the detention suffers from any defect.
The petition will be dismissed.
Writ Petition 92 of 1968.
The objection here is of the same character as in Writ Petition 89/91.
An additional complaint here is that he is supposed to ' have instigated people to go on strike and prevented the motor drivers and rickshaw pullers from plying their vehicles on the ' roads and.
government employees from going to office and threatened individual shop keepers to keep their shops closed, but no details are supplied.
It is submitted that this brings the case within the rulings of this Court.
We think this case is distinguishable from the case of a black marketer who is charged with having sold contraband articles or at higher prices or hoarded goods.
General allegations there without concrete instances would be difficult to represent against.
Here the matter is different.
It is an integrated conduct of instigation against law and order which is being charged.
Several aspects of it are mentioned.
They range from jhuming in forests and resistance to procurement to arranging for strikes.
Instances Of mass and secret meetings are furnished and the ramifications of conduct in other directions are mentioned.
In these circumstances the petitioner is expected to represent against the instances and if he convinces that he took no part in the agitation, the other aspects of his activity will be" sufficiently answered.
A_case of this type stands on slightly different footing from the cases of black marketing earlier decided by this Court.
In our judgment no successful ground has been ' made out and the petition must fail.
It will be dismissed.
Writ Petition 94 of 1968.
The petitioner in this case has complained that the order of detention and the grounds supplied to him were in English and he knows only Bengali and Tripuri.
He refers to Harikisan vs The State of Maharashtra & Others(1).
In that case the detenu had" asked for a Hindi translation and had been denied that facility.
(1) [1962] 2 Supp.
S.C.R. 918.
572 We find that this objection was taken here but no request was.
made at any earlier time.
The original petition did not contain any such objection.
It was raised for the first time in the rejoinder.
The petitioner does not seem to have suffered at all.
He has filed the petition in English and questioned the implications of the language of the order and the grounds.
Of course, he had the assistance of the other detenus who know English.
If there had been the slightest feeling that he was handicapped, we would have seriously considered the matter but in his case it appears that this point was presented not to start with but after everything was over.
We cannot entertain such a belated complaint.
The petition will be dismissed.
In conclusion all the petitions fail and will be dismissed.
G.C. Petitions dismissed.
| On the 7th of March, 1968, the proceedings in the Punjab Legislative Assembly led to rowdy scenes and the Speaker, acting under r. 105 of the Rules of Procedure and Conduct of Business in the Punjab Legislative Assembly made under _article 208 of the Constitution, adjourned the Assembly for two months.
This led to an impasse.
The Assembly was in session but it was put in a state of inaction by the adjournment.
The Budget 'Session of the Assembly had to reach a conclusion before 31st March, as, after that date, no money could be drawn from the Consolidated Fund and no expenditure in the State could be incurred.
The Governor, therefore, on 11th March prorogued the Assembly under article 174(2) (a).
The order of the Governor was caused to be printed in the State Gazette the same day by the Chief Secretary under the Business Rules, and copies of the Gazette were dispatched to the Secretary of the Assembly, the Speaker and other members on the following day.
On 13th March, the Government promulgated the Punjab Legislature (Regulation of Procedure in Relation to Financial Business) Ordinance, 1968.
Section 3 of the Ordinance provides that the sitting of either House of Legislature was not to be adjourned without the consent of the House until completion of financial Business.
On 14th March, the Governor summoned the Legislative Assembly under article 174, fixing 18th March for its sitting, and, under article 175(2), directed the Assembly to consider the Estimates of Expenditure, the Demands for Supplementary Grants and two Appropriation Bills.
On 18th March, after considering certain other matters, the Speaker ruled that the House was prorogued not on the 11th March but on the 18th.
and that in accordance with his earlier ruling dated 7th March, the House stood adjourned for two months.
After some commotion the Deputy Speaker occupied the Chair and the Assembly kept sitting.
The proceedings were conducted without demur even from the opposition.
The Bills were passed.
The Bills were then transmitted to the Legislative Council certified by the Deputy Speaker that they were Money Bills.
The Speaker wrote to the Chairman of the Legislative Council pointing out that there was no certificate by him as required article 199(4) and that he had adjourned the Assembly when the Bills were adopted.
The Legislative Council, however, considered and passed the two Bills and the Governor assented to them.
On the questions whether: (1) the prorogation took effect on 18th March and therefore the summoning of the Legislature before prorogation was invalid; (2) the Ordinance could not be passed by the Governor, because, the prorogation was a fraud on the Constitution and since the 479 prorogation was invalid the House continued to be in session; (3) The Governor 's power to promulgate an Ordinance is confined to Lists II and Iii of the Seventh Schedule to the Constitution; (4) Section 3 of the Ordinance was unconstitutional as there was a conflict with, (a) r. 105 of the Rules of Procedure made under article 208 which gives power to Speaker to adjourn the Assembly or suspend sitting in case of grave disorder, and (b) article 189(4) which gives power to the Speaker to adjourn the Assembly or suspend the meeting for want of quorum; (5) ruling of the Speaker given on 18th March was not open to challenge in courts; (6) the further proceedings in the Assembly were illegal and (7) the two Appropriation Acts were ultra vires because, the Deputy Speaker and not the Speaker, certified them as Money Bills to the Legislative Council and the Governor.
HELD: (1) Under r. 7 of the Rules of Procedure framed under article 208.
when a session of the Assembly is prorogued the Secretary of the Assembly shall notify the order in the Gazette and inform the members.
The words indicate that there is already a prorogation and the rest of the rule is intended for communication of the fact to the public and conveying the order to the members.
It cannot be said from this that only the Secretary of the Assembly could so notify and that the Governor could not notify his order of prorogation.
[489 E F; 490 B] Article 174(2), which enables the Governor to prorogue the Legislature does not indicate the manner in which he is to make known his orders.
The means open to him are 'public notification ' that is, notification in the Official Gazette and 'proclamation '.
If he notifies in the Gazette through his Chief Secretary acting under the Business Rules, it becomes a public act of which the Court should take judicial notice.
Therefore, in the present case the prorogation to place on the 11th March, '1968, the date of publication in the Gazette, and the Legislature was resummoned only thereafter.
The resummoning of the Legislature by the Governor was also a step in the right direction as it set up once again the democratic machinery which had been disturbed by the Speaker.
[490 A E] (2) Under article 174(2) there are no restrictions on the power of the Governor to prorogue.
The power being untrammeled and an emergency having arisen, there was no abuse of power by him nor can his motives be described as msla fide.
In fact it was the only reasonable method of getting rid of the adjournment and solving the political crisis.
The House, in fact, transacted other business showing that the prorogation and resummoning were considered valid.
After the prorogation there was no further curb on the legislative power of the Governor to promulgate the Ordinance.
[448 D, F G; 490 E F] Kalyanam vs Veerabhadrayya, A.I.R. 1950 Mad.
243, referred to.
(3) The Governor 's power under article 213 of the Constitution, of legislation by Ordinance is as wide as the power of the Legislature of the State and therefore, includes the power to pass a law under article 209 in relation to financial business.
[490 G H] (4) (a) The inconsistency between the section and r. 105 has to be resolved in favour of the section because the latter part of article 209 itself provides that in cases of repugnancy between the rules of procedure framed under article 208 and a law made under article 209.
, the tatter shall prevail; (b) As regards the conflict with article 189(4) the rule of statutory interpretation namely, that, even if the language of a statute is prima facie wide it should be understood, if possible, as not attempting something beyond the competence of the legislative body applies, because, 480 whether a provision should be struck down or read down depends upon how far it is intended to go.
In the present case, the Ordinance could never provide for want of quorum which is dealt with in the Article and in therefore a constitutional requirement.
The Article continues to operate in situations contemplated by it and section 3 of the Ordinance can only deal with other situations.
Therefore the section could be read down so as to harmonise with the Article.
[492 B C; F H; 493 A] Diamond Sugar Mills vs
U.P. ; ; Romesh Thappar vs State of Madras ; and Kameshwar Prasad vs State of Bihar, [1962] Supp. 3 S.C.R. 369, referred to (5) Whether the Speaker adjourned the Assembly afresh or declared that the former adjournment continued to operate made no difference, because: (a) the former adournment had come to an end by a valid prorogation and [493 F G] (b) on the 18th March the Speaker was faced with a valid Ordinance, which was binding on the Assembly, including the Speaker, by virtue of article 209.
Therefore, the Speaker was powerless and the fresh adjournment by him of the session with out taking the mandete of the Assembly by majority as required by section 3 of the Ordinance was null and void.
[493 D E] It could not be urged that whatever the merits of the Speakers ruling may be, it should be treated as final and beyond challenge in courts.
A decision of the Speaker on a point of order is final under r. 112 of the Rules of Procedure, only if it is raised in relation to the interpretation and enforcement of the rules and the interpretation of the Articles of the Constitution regulating the business of the House and if the question to be decided was within/he Speakers cognizance In the present case, the Speaker did not attempt to interpret articles 208, 209 and 213, and instead of a resolution (which was the proper method of questioning the Ordinance) being passed under article 213(2)(a) disapproving the Ordinance the Speaker asserted himself against a law which was binding on him.
[494 A B, G H] (6) The continuance of the proceedings under the Deputy Speaker was vaild, complying as it did, with the law promulgated by the Governor, and therefore.
the finaneial business transacted before the Assembly had legal foundation.
[495 C D] (7) A provision of law is usually regarded as merely directory, even though a public duty is imposed by it and the manner of performance is also indicated in imperative language when general injustice or inconvenience result to others if strict compliance is deemed mandatory, and they have no control over those exercising the duty.
Judged by this test.
article 199(4) requiring the Speakers certificate cannot be viewed as mandatory but only as director in view of the inconvenience to the State and to the public at large that may be caused by holding the provision imperative and not directory.
If the Constitution s law the necessity of providing a Deputy Speaker to act as the Speaker during the latter 's absence or to perform the office of the Speaker when the office is vacant, it stands to reason that the Constitution could never have reposed a power of mere certification absolutely in the Speaker and Speaker along Further article 212(1) provides that the validities of any proceeding in the Legislature of a State shall not be called in question on the t, round of any alleged irregularity of procedure.
[496 D G; 497 B C, D E] State of Bombay v R.M. 1).
Chamarbauewala, [1957] section R. 874, State of U.P. v Manbodhan Lal Srivastava [1958] SC.R. 533, State of 481 U.P. vs Babu Ram Upadhya ; , M/s. Mangalore Ganesh Bidi Works vs State of Mysore, [1963] Supp. 1 S.C.R. 275, Patna Zilla Brick Owners Association vs State of Bihar, and May 's Parliamentary Practice p. 842.
referred to.
|
Appeal No. 435 to 437 of 1959.
Appeals from the judgment and decree dated April 24, 1953 of the Patna High Court in First Appeals Nos. 119, 192 and 189 of 1948 respectively.
section T. Desai, U. P. Singh and D. Goburdhan, for the appellants.
G. section Pathak, B. Dutta & K. K. Singh, for the respondents Nos. 2, 3 (a), 3 (d), 4 (a) to 4 (c), 5, 6, 7 (a), 8 to 14, 15 (a) to 15 (c), 16, 18 to 20, 21 (a), 21 (b), 22, 23, 25 to 32, 33 (a), 33 (b), 34 to 38, 39(a) to 39(d), 40 to 42, 44, 45, 46(a) to 46(d), 47, 48, 49, 74 to 79 and legal representatives of respondent No. 1 (in C. As.
435 and 436 of 1959) and respondents Nos.
14 759 to 16, 18(a), 18(d), 19(a) to 19(c), 21, 23, 25, 26 and legal representatives of respondent No. 1 (in C.A. No. 437 of 1959).
Sarjoo Prasad, Kanhaiyaji and A. G. Ratnaparkhi, for respon dent No. 80 (in C.As.
435 and 436/1959) and respondent No. 1 (in C.A. No. 437 of 1959).
D. P. Singh, for respondent No. 81 (in C.As.
435 and 436 of 1959).
The Judgment of the Court was delivered by Bachawat J.
After stating the facts of the case and discussing the evidence his Lordship proceeded :] On the question of title also, the plaintiffs must fail.
In the plaint, the basis of their claim of title was (a) occupation of 426 bighas 18 kathas and 9 dhurs of Dubha Taufir by their ancestor Naurang Thakur as occupancy tenant and the record of his rights in the survey papers of 1892 and (b) the oral arrangement with the Dumraon Raj.
The first branch of this claim is obviously incorrect.
The survey papers of 1892 do not record occupancy tenancy rights of Naurang Thakur in 426 bighas 18 kathas and 9 dhurs.
In the High Court, counsel for the plaintiffs conceded that in the Khasra of 1892 1893 survey the plaintiffs ' branch was recorded as tenant for about 19 bighas only.
The oral arrangement is not established, and the second branch of this claim also fails.
The Subordinate Judge did not examine the basis of the plaintiffs ' claim of title.
His finding in favour of the plaintiffs ' title was based chiefly on (1) oral evidence, (2) depositions of witnesses in previ ous litigations, (3) possession, (4) an admission of the Maharaja.
The oral evidence on the point is not convincing.
The claim is not supported by the documentary evidence.
The survey papers of 1892, 1895, 1904, 1909 and 1937 do not support the plaintiffs ' claim of occupancy rights in the lands in suit.
The depositions of witnesses in other litigations do not carry the matter further.
The deposition of defendant No. 1 1, Ram Dass Rai, in Suit No. 217 of 1911 is of weak evidentiary value.
Though admissible against him as an admission, it is not admissible against the other defendants.
The other depositions relied upon do not satisfy the test of section 33 of the Indian Evidence Act, and are not admissible in evidence.
We have already found that the plaintiffs and their ancestors were not in possession of the disputed land since 1909.
The oral evidence as to their possession before 1909 is not convincing, and we are not inclined to accept it.
The documentary evidence does not support the story of their possession before 1909.
With 760 regard to the admission of the Maharaja in Suit No. 247/10 of 1913 relating to the plaintiffs ' title to 244 bighas, we find that in his written statement the Maharaja asserted his khas zeraiti rights and denied the alleged guzashta kastha rights of the plaintiffs ' ancestors.
It seems that in Bihar 'guzashta kasht ' means a holding on a rent not liable to enhancement.
Later, on June 10, 1913, a petition was filed on his behalf stating that the plaintiffs ' ancestors were tenants in occupation of the disputed land having guzashta kasht rights.
The Maharaja was interested in the success of the suit, and it was necessary for him in his own interest to make this admission.
The admission was made under somewhat suspicious circumstances at the end of the trial of the case when the arguments had begun.
Though this petition was filed, the written statement of the Maharaja was never formally amended.
In the circumstances, this admission has weak evidentiary value.
In this suit, the plaintiffs do not claim tenancy right either by express grant or by adverse possession.
Title cannot pass by mere admission.
The plaintiffs now claim title under cl.
(1) of section 4 of Regulation XI of 1825.
The evidence on the record does not establish this claim.
The claim of title based upon cl.
(1) of section 4 of Regulation XI of 1825 was not clearly made in the pleading.
It was clearly put forward for the first time in the High Court.
It was contended that the decision in Suits Nos. 22 to 31 and 199 of 1937 conclusively established this claim.
The High Court rightly pointed out that those suits did not relate to any portion of the subject matter in the present suit, and the decision in those suits cannot operate as res judicata.
The plaintiffs now contend that the judgment is admissible to show that the plaintiffs ' ancestors asserted title to other Taufir lands as an accretion to frontier Dubha Mal plots under the Regulation and their claim was recognised.
But the plaintiffs ' ancestors did not consistently assert such a title.
In Attestation Dispute Cases Nos. 1 to 253 of village Dubha they claimed title to the lands in suit as an accretion to their 77 bighas, and this claim was negatived.
The survey records of 1892, 1895, 1904 and 1909 disclose that the ancestors of the plaintiffs held some of the frontier plots of Dubha Mal.
The High Court was, therefore, asked to draw the inference that their ancestors held those plots during 1845 to 1863 when the Taufir lands accreted.
The question is whether such an inference should be drawn.
Now, if a thing or a state of things is shown to exist, an inference of its continuity within a reasonably proximate time both forwards and backwards may sometimes be drawn.
The presumption of future continuance is noticed in Illustration (d) to section 114 of the .
In 761 appropriate cases, an inference of the continuity of a thing or state of things backwards may be drawn under this section, though on this point the section does not give a separate illustration.
The rule that the presumption of continuance may operate retrospectively has been recognished both in India, see Anangamanjari Chowdhrani vs Tripura Soondari Chowdhrani (1) and England, see Bristow vs Cormican(2), Deo vs Young(1).
The broad observation in Manmatha Nath Haldar vs Girish Chandra Roy(4) and Hemendra Nath Roy Chowdhury vs Jnanendra Prasanna Bhaduri(5) that there is no rule of evidence by which one can presume the continuity of things backwards cannot be supported.
The presumption of continuity weakens with the passage of time.
How far the presumption may be drawn both backwards and forwards depends upon the nature of the thing and the surrounding circumstances.
In the present case, the High Court rightly refused to draw the inference from the state of things during 1892 to 1909 that the ancestors of the plaintiffs held frontier plots of Dubha Mal in 1863.
The High Court pointed out that even during 1894 to 1905 the ownership of some of the plots had changed, and also that the frontier Mal plots and the corresponding Taufir plots were not always held by the same person.
In 1845, part of the Mal lands was under water.
The frontier Mal lands reformed between 1845 to 1863 were subject to annual inundation.
It is well known that settlements of char lands are seasonal and temporary.
There is a considerable gap of time between 1892 and 1845.
It is not safe to assume that the state of things during 1894 to 1905 existed during 1845 to 1863.
In exhibit L 1 (13), the Khatian of Mauza Dubha published on January 2, 1912, the tenancies of serveral plots held by the ancestors of the plaintiffs are described as Sharah Moaiyan (at fixed rate of rent).
The plaintiffs contend that this record read in conjunction with section 50(2) of the Bengal Tenancy Act, 1885 shows that the ancestors of the plaintiffs must have held those plots from the time of the, Permanent Settlement.
The contention is based on fallacious reasoning.
Section 50(2) of the Bengal Tenancy Act, 1885 raises in a suit or proceeding under the Act a presumption that a raiyat has held at the same rate of rent since the Permanent Settlement, if it is shown that the rate of rent has not been changed during the last 20 years.
Fixity of rent may arise not only from this presumption but also from express grant.
An entry in the 1.
(1887) L.R. 14 I.A. 101, 110.
2. , 669 670.
; , 4. , 770.
5. 5, 117.
762 record of rights showin that the tenancy was at a fixed rate of rent does not necessarily mean that the tenant was holding the land from the time of the Permanent Settlement.
The point based on the entries in exhibit L 1(13) was not taken in the Courts below, and the circumstances under which they came to be made and the question whether they relate to the frontier plots of Dubha have not been investigated.
We think that this new point ought not to be allowed to be raised at this stage.
The suit as framed must fail, even if we presume that the ancestors of the plaintiffs ' branch held some of the frontier plots in Dubba Mal between 1845 and 1863, when the Taufir lands accreted.
The ancestors of the defendants third party 's branch also held numerous frontier plots of Dubha Mal between 1892 and 1909, and making the same presumption in their favour, it would appear that they also held numerous frontier plots of Dubha Mal between 1.845 and 1863.
The ancestors of the plaintiffs ' branch and defendants 3rd party 's branch separately held and enjoyed the several frontier plots of Dubha Mal, and on the plain tiffs ' own case, the ancestors of the plaintiffs ' branch would be entitled to the alluvial accretions in front of their plots and similarly, the ancestors of the defendants 3rd party 's branch would be entitled to the alluvial accretions in front of their plots.
The alluvial accretions of each plot must be apportioned by drawing perpendicular lines from its boundary points to the new course of the Ganges, so that each plot acquires a new river frontage in proportion to its old river frontage.
The plaintiffs could claim no more than the alluvial accretions to the plots, held by the ancestors of their branch.
In the Courts below, no attempt was made by the plaintiffs to apportion the accretions amongst the several frontier plots.
Without further investigation, the alluvial accretions in respect of each plot cannot be ascertained.
This is not a fit case for remand at this late stage.
The further case of the plaintiffs that the defendants3rd party lost their title to their portion of the Taufir lands is not established.
It is neither alleged nor proved that the plaintiffs and the defendants 3rd party jointly owned and possessed the Taufir lands.
In the absence of pleading and proof of joint title and possession, the plaintiffs ' claim for recovery of the entire Taufir lands must fail.
Realising this difficulty, counsel for the plaintiffs made an entirely new case before us.
He submitted that Dihal Thakur.
the common ancestor of the plaintiffs and defendants 3rd party owned all the frontier plots of Dubha Mal between 1845 and 76 3 1863 and consequently acquired occupancy rights in all the Taufir lands accreted in front of his plots, those rights have now devolved jointly upon the plaintiffs and defendants 3rd party, and the plaintiffs and defendants 3rd party are jointly entitled to the entire Taufir lands.
There is no trace of this case in the pleadings and the judgment of the trial Court.
This case was not made even in the High Court.
On the contrary, the plaintiffs ' case all along has been that the branches of the plaintiffs and defendants 3rd party separately possessed and enjoyed their respective plots.
Moreover, we are not inclined to draw the presumption that Dihal Thakur owned all the frontier plots of Dubha Mal between 1845 and 1863.
Even if we assume that the descendants of Dihal Thakur owned the frontier plots in 1892 or even in 1882, we are unable to infer that Dihal Thakur held them between 1845 and 1863.
The case is made here for the first time, and was not the subject matter of an enquiry in the Courts below.
There is neither pleading nor proof that Dihal Thakur held any of the frontier plots of Dubha Mal at any time, or that the branches of the plaintiffs and defendants 3rd party inherited their respective holding from Dihal Thakur.
To establish their claim based upon cl.
(1) of section 4 of Regu lation XI of 1825, the plaintiffs must also prove that the Taufir lands were gained by gradual accession from the recess of the river.
Having regard to our conclusions on the other points, we do not wish to express any opinion on this question.
Even if the Taufir lands were gained by gradual accession, this gain did not accrue for the benefit of the plaintiffs.
The plaintiffs have failed to establish that they or their ancestors held any plot or plots to which the accretions were annexed.
The plaintiffs have failed to prove their title based upon cl.
(1) of section 4 of Regulation XI of 1825.
They have also failed to establish their claim of title based upon oral arrangements.
Their claim of title based upon occupation of the disputed lands is also not established.
They have failed to prove that they were in occupation of the disputed lands.
Moreover, mere occupation does not confer tenancy rights.
The result is that Civil Appeals Nos. 435 and 436 of 1959 must fail.
C. A. Nos.
435 to 437 dismissed.
| The first respondent was detained by the Government of Maharashtra under r. 30(1) (b) of the Defence of India Rules, 1962.
The conditions of detention under sub rule 4 of r. 30 of the said rules were prescribed to be the same as those under the Bombay Conditions of Detention Order, 1951.
While so detained the first respondent wrote a book of scientific interest and sought permission from The State Government to send it out of jail for publication.
The request having been rejected he filed a writ petition under article 226 of the Constitution praying for a direction to the State Government to permit him to send out the manuscript for Publication.
The High Court held that The book was in no way prejudicial to the defence of India etc., and allowed the petition.
The State Government by special leave appealed to this Court.
It was contended on behalf of the, appellant that the first respondent not being a free person could exercise only such privileges a, , were conferred on him by the order of detention, and the Bombay Conditions of Detention Order, 1951 which regulated the terms of the respondent 's detention did not confer on him any privilege or right to write a book and send it out of the prison for publication.
HELD : (i) It cannot be said that the Bombay Conditions of Detention Order, 1951 which lays down the conditions regulating the restrictions on the liberty of a detenu, conferred only certain privileges on the detenu.
If this argument were to be accepted it would mean that the detenu could be starved to death, if there was no condition providing for giving food to the detenu.
In the matter of liberty of a subject such a construction shall not be given to the said rules and regulations unless for compelling reasons.
[7O8 C D] (ii) The said conditions regulating the restriction on the personal liberty of a detenu are not privileges conferred on him, but are the conditions subject to which his liberty can be restricted.
As there is no condition in the Bombay Conditions of Detention Order, 1951, prohibiting a detenu from writing a book or sending it for publication, the State of Maharashtra in refusing to allow the same infringed the personal liberty of the first Respondent in derogation of the law whereunder he was detained.
[708 E] (iii) The effect of the President 's order under article 359 of the Constitution was that the right to move the High Court or the Supreme Court remained suspended during the period of emergency if a person was deprived of his personal liberty under the Defence of India Act, 1962, or any rule or order made thereunder.
If a person was deprived of his personal liberty not under the Act or rule or order made thereunder but in contravention thereof his right to move the said courts in that regard would not be suspended.
[705 C D] 703 Since the State Government 's refusal to allow publication of the first respondent 's book was in contravention and derogation of the 'law under which he was detained he had the right to move the High Court under article 226 and the said High Court was empowered to issue an appropriate writ or direction to the said Government to act in accordance with law.
|
DICTION: Civil Appeal Nos.
3797 3798 of 84 and 3926 of 1986.
From the Judgment and Order dated 2.12.1983 of the Allahabad High Court in Writ Petition Nos. 2451 and 2155 of 1983.
Anil Dev Singh, G.L.Sanghi, M.K. Ramamurthi, Mrs. S.Dikshit, S.K. Mehta, M.K. Dua, Aman Vachhar and S.C. Birla for the Appellants/Petitioners.
S.N. Kacker and R. B. Mehrotra for the Respondents.
The Judgment of the Court was delivered by RAY, J.
We allowed the Civil Appeal No. 3926 of 1986 and dismissed Civil Appeal No. 3797 of 1984 and writ petition No.3796 of 1986 filed by Dr. M.C. Bindal and Civil Appeal No. 3798 of 1984 filed by the State of Uttar Pradesh by our order dated December 19, 1986 and we indicated therein that the reasons for the above order would be given later on.
Accordingly, we are giving the reasoned judgment hereinbelow.
The U.P. Public Service Commission made an advertisement in various newspapers on September 13, 1981 inviting applications for the post of Food & Drug Controller, U.P. The qualifications for this post stated in the said advertisement are set out hereunder: "Necessary qualifications: (1) A degree from any recognised University in Medicine Science/Pharmaceutical Chemistry.
PG NO 39 (2) Experience of 5 years in Drug Standardization and problems relating to controlling of Drug standards or drug manufacturing or drug testing in a renowned institution.
Pursuant to the said advertisement Dr. M.C. Bindal, I)r.
S.K. Majumdar, Shri Ram Chander Singh and others filed applications.
The appellant Dr. Bindal stated in his application that he has seven years ' experience as per the advertisement.
He also stated that he had three and a half years ' specific experience i.e. experience in the field of drug testing and four years other experience namely experience in the field of teaching Pharma analysis including testing of transfusion fluids in the hospitals, pharmacy manufacturing units attached to LLRM Medical College, Meerut.
It has also been stated that in the four years of teaching experience in addition to his teaching responsibility he also conducted the laboratories in which drug testing was carried out.
Of the applicants, Dr. S.K. Majumdar was not called for interview.
The U.P. Public Service Commission after holding interview of the candidates recommended the following candidates for appointment to the post of Food & Drug Controller, U.P.: (a) In the main list .
Shri R.C. Singh (b) In the Reserve List .
Dr. M.C. Bindal (Prov.) The Commission also recommended for relaxation of age of Shri R.C. Singh.
The Commission also made it clear that "the word 'Provisional ' denoted that the recommendation was sub ject to the petitioner meeting the necessary qualification experience of 5 years for the appointment to the office of the Drug Controller." On December 5, l982, the State of Uttar Pradesh intimated the Commission that the candidate Shri R.C. Singh did not appear to be suitable in view of the fact that there had been a vigilance enquiry against him.
It was also pointed out in the said letter that the appointment of Shri R.C. Singh as Food & Drug Controller would not be in public interest.
The State further pointed out that Dr. Bindal had the requisite experience of 5 years and he had al60 excellent academic and other qualifications.
In reply to the said letter sent by the Secretary, Medical and Health, U.P. Government.
the U.P. Public Service Commission by its letter dated February 23, 1983 intimated to the State of U.P. that the right to appoint or not to PG NO 40 appoint a candidate vested with the State of U.P. and it was for the State Government to take a decision accordingly.
On eceipt on this letter the State Government appointed Dr. M.C. Bindal as Food & Drug Controller, U.P. by its letter dated April 6. 1983.
Thereafter two writ petitions were filed in the High Court at Allahabad, Lucknow Bench; one by Shri R.C. Singh and another by Dr. S.K. Majumdar challenging the appointment of Dr. M.C. Bindal on the ground that he had not the requisite experience as required for the said post of Food & Drug Controller, U.P.
These writ petitions are writ petition No. 2451 of 1983 and writ petition No. 2155 of 1983.These were heard together and were allowed in part by a common judgment on December 22, 1983.
The relevant portions of the findings are set out herein: "To sum up: ( I) The order appointing Dr. Bindal to the post finally was premature (2) Before final decisions taken in the matter, the State Government has to take a decision on: (a) whether to allow or reject Shri R.C. Singh s representation against the censure entry based on vigilance report and then to consider the question of his suitability for appointment.
(b) Whether to relax the age limit for Shri R.C. Singh (c) If Shri R.C. Singh was not to be considered suitable, then to consider in consultation with the Public Service Commission the question whether Dr. Bindal fulfilled the requisite qualification relating to practical experience in accordance with law (d) If Dr. Bindal is found not to fulfil the qualification, then to consider whether the qualification relating to practical experience has to be modified or not (e) As Dr. Bindal is not perse unsuitable or disqualified for the post, he will continue to hold the post provisionally till a decision is taken as above.
The final decision should however be taken at an early date, say within a period of three months from today.
Accordingly, the petitioners succeed in part.
The matter will have to be considered afresh by the State Government in some respects as set out above in consultation with the Commission.
Dr. Bindal 's appointment cannot, however, be held to be illegal because it is not in violation of any statutory provision.
Indeed, ii an I.A.S. Officer could hold the post for such a long time, Dr. Bindal being certainly better qualified can also hold the post.
PG NO 41 However, his appointment shall be treated as only provisional and will be subject to the final decision of the State Government as indicated herein above.
The writ petitions are, accordingly, allowed in part to the extent indicated above.
No order is made as to costs.
" Aggrieved by the said judgment Dr. Bindal who was one of the respondents in the said writ petitions filed a special leave petition being SLP (C) No. 10330 of 1984 which was numbered as Civil Appeal NO.
3797 of 1984 after the grant of special leave.
The State of Uttar Pradesh also filed SLP (C) NO.9084/84 and this was numbered subsequently as Civil Appeal NO.3798 of 1984 after grant of special leave.
The U.P. Public Service Commission however, in the meantime on March 15, 1984 directed one of its officers i.e. Deputy Secretary to verify whether Dr. Bindal fulfilled the qualifications relating to practical experience in drugs standardization or drug manufacturing or drug testing in a renowned institution.
The Deputy Secretary after enquiry sent a report to the U.P. Public Service Commission stating that the total period of experience of Dr. Bindal on the date of submission of his application was only 3 years 4 months and 9 days whereas the essential qualification required was experience should be for 5 years from any repute concern.
The U.P. Public Service Commission took a decision on April 17, 1984 to the effect "that the Commission withdraws and cancels the provisional recommendation and the candidature because Shri Bindal does not possess the requisite qualifications" and the same was sent to the Government on April 23, 1984.
Dr. Bindal moved a writ petition being writ petition No. 756 of 1986 against this impugned order made by the Public Service Commission withdrawing the candidature of Dr. Bindal and cancelling its recommendation of the petitioner for the post of Food and Drug Controller, U .
It is necessary to mention in this connection that on September 21, 1984 this Court while granting special leave made an order of stay of operation of the High Court judgment pending hearing of the appeal.
But subsequently on March 18, 1986 after hearing the learned counsels the interim order of stay was recalled in consideration of the fact that U.P. Public Service Commission had already cancelled the candidature of the appellant and withdrawn the recommendation made in his favour for the reason inter alia that he lacked in five years experience in Drug testing.
This Court also directed the State Government to appoint a member or one Indian Administrative Service to function as the Food & Drug Controller, U.P. PG NO 42 It has been urged on behalf of the appellant, Dr. Bindal that the order of the Public Service Commission in cancelling the candidature of the appellant and withdrawing the recommendation made in his favour is wholly illegal and bad in as much as the Government has considered the certificates produced by the appellant and found that the appellant had the requisite experience of five years in Drug testing and as such he was appointed by the Government as Food and Drug Controller, U.P.
The U.P. Public Service Commission was wrong and patently in error in withdrawing the candidature of the appellant and in cancelling its recommendation without properly considering the opinion of the Government to the effect that the appellant had the requisite experience of five years in drug testing.
It has been further contended in this connection that the Provision of Article 320 of the Constitution of India providing for consultation with the Union Public Service Commission or providing for consultation with the State Public Service Commission is not mandatory and as such the recommendation of the Commission was not binding on the State Government.
It has been submitted that the recommendation of the Commission is in the nature of advisory function and it is for the State to take the ultimate decision.
Some decisions of this Court have been cited at the bar on this score.
In the instant case, the advertisement for the post was made at the instance of the U.P. Public Service Commission and the requisite qualification for the post had been specified in the advertisement.
It is therefore, essential that a candidate in order to be considered for appointment for the said post must have to comply with the requisite qualification namely the educational qualification as well as the experience in drug testing etc.
for a period of five years.
If any of these essential qualifications is lacking then the candidate cannot claim to be appointed in the said post.
Undoubtedly, it is the Public Service Commission who has to receive the applications of the candidates and has to scrutinise them and then to decide which of the applicants have got the requisite qualifications and so be called for interview.
It is the duty of the Commission with the help of experts in the particular subject to hold interview and to find out and select the candidates having the requisite qualifications and experience fit to be recommended to the Government for appointment to the said post of Food & Drug Controller.
Therefore, under Article 320(3)(a) and (b), it is the duty of Public Service Commission to consider and to get itself satisfied as to which of the candidates has fulfilled the requisite qualifications specified in the advertisement.
The Commission in this particular case has duly got verified the certificate of the Dr. Bindal in regard to his experience of five years in drug testing by a Deputy Secretary of the Commission and after considering his PG NO 43 report as well as the certificates came to the conclusion that the appellant though fulfilled educational qualifications, lacked in the requisite experience of five years in drug testing.
The Commission, therefore, revised its earlier decision and withdrew the candidature of the appellant and also cancelled its recommendation earlier given in favour of the appellant.
This decision of the Public Service Commission, in our considered opinion cannot be faulted.
It is the constitutional requirement envisaged in Article 320 that the Commission will have to perform the duty of recommending the candidate fulfilling all the requisite qualifications for the post to the Government for being considered for appointment to the post concerned.
It is, of course, a well settled legal position that the duty to consult the Commission in the matter of appointment to civil posts by the Government is not mandatory but directory and as such the absence of consultation with the State Public Service Commission does not render any appointment made by the Government in Civil posts invalid or illegal.
It cannot also be contended that since the duty to consult the Public Service Commission in the matter of making appointments to Civil Services of the State is directory and not mandatory, the appointment of Dr. Bindal as Food & Drug Controller, U.P. by the Government of Uttar Pradesh cannot be questioned or interfered in by the Court in as much as the candidature of the appellant, Dr. Bindal for the post in question has already been withdrawn by the Public Service Commission and as such the question of validity or invalidity of the appointment of the appellant.
Dr. Bindal to the said post is no longer open to be considered by the Court.
In such circumstances the only course open for the Government is to re advertise the post.
If such advertisement is made the appellant.
Dr. Bindal will be free to apply for the same.
It has been brought to our notice by a subsequent affidavit sworn by Dr. S.K. Majumdar that the said post with a changed name as Drug Controller was advertised and Dr. Bindal 's name was recommended for the said post by the U.P. Public Service Commission and the deponant was not called for interview.
We do not think it proper to take notice of the subsequent fact and we refrain from expressing any opinion in this respect.
It is open to the parties to take appropriate steps in accordance with law.
For the reasons aforesaid the Civil Appeal No. 3926 of 1986 is allowed and Civil Appeal No. 3797 of 1984.
Writ Petition No. 756 of 1986 filed by Dr. M.C. Bindal and Civil Appeal No. 3798 of 1984 filed by the State of Uttar Pradesh are dismissed with costs.
| The U.P. Public Service Commission made an advertisement in various newspapers inviting applications for the post of Food & Drug Controller, U.P. The requisite qualification for the said post were specified in the advertisement as: (l) a degree from any recognised University in Medicine/Science/Pharmaceutical Chemistry, and (2) experience of five years in Drug Standardization and problems relating to control of Drug standards or Drug manufacture or Drug testing in a renowned institution.
Pursuant to the said advertisement Dr. M.C. Bindal, Dr. S.K. Majumdar, the appellants in the two appeals C.A. No. 379/84 and C.A. No. 3926/84 respectively, and Ram Chander Singh.
the respondent in the first appeal along with others filed applications.
The Commission after holding interview recommended the appointment of (a) in the main list R.C. Singh and (b) in the reserved list Dr.
M.C. Bindal (Provisional) and made it clear that the word `Provisional ' denoted that the recommendation was subject to the candidate meeting the necessary qualification experience of five years.
The State of Uttar Pradesh intimated the Commission that the candidature of R.C. Singh did not appear to be suitable in view of the vigilance enquiry against him, and that Dr. Bindal had the requisite experience of five years.
In its reply the Commission intimated that the right to appoint or not to appoint a candidate vested with the State of U.P. and it was for the State Government to take a decision accordingly.
On receipt of this letter, the State Government appointed Dr. M.C. Bindal as Food & Drug Controller.
Two writ petitions were filed in the High Court, one by PG NO 36 PG NO 37 R.C. Singh and another by S.K. Majumdar challenging the appointment of Dr. M.C. Bindal on the ground that he had not the requisite experience.
The High Court by a common judgment allowed in part the writ petitions, and held that though Dr. Bindal is not per se unsuitable or disqualified for the post, his appointment was to be treated as only provisional and subject to the final decision of the State Government.
Dr. Bindal appealed to this Court.
In the meantime the Service Commission directed one of its officers to verify whether Dr. Bindal fulfilled the qualifications relating to practical experience of 5 years in Drug Standardization or Drug testing in a renowned institution.
The Deputy Secretary after enquiry sent a report that the total period of experience of Dr. Bindal on the date of submission of his application was only 3 years 4 months and 9 days whereas the essential qualification required was experience should be for 5 years.
The Commission thereafter took the decision: 'that the Commission withdraws and cancels the provisional recommendation and the candidature because Dr. Bindal did not possess the requisite qualification 'section In the appeal and the writ petition it was contended on behalf of Dr. Bindal that the Service Commission was wrong and patently in error in withdrawing the candidature of the appellant and in cancelling its recommendation.
Allowing C.A. No. 3926 of l986 filed by Dr. Majumdar, and dismissing C.A. No. 3797 of l984, W.P. No. 756 of 19X6 filed by Dr. Bindal and C.A. No. 3798 of l984 filed by the State of l .P., the Court, HELD: 1.
A candidate in order to be considered for appointment for the post must have to comply with the requisite qualification, namely the educational qualification as well as experience.
If any of these essential qualifications is lacking then the candidate cannot claim to be appointed in the said Post.
[42E] 2.
Under Article 320(3)(a) and (b), it is the duty of the Public Service Commission to consider and to get itself satisfied as to which of the candidates has fulfilled the requisite qualifications specified in the advertisement.
[42G] 3.
The Commission in the instant case has duly got verified the certificates of Dr. Bindal in regard to his experience of five years in drug testing by a Deputy Secretary of the Commission, and after considering his report as well as the certificates came to the conclusion that the appellant though fulfilled educational PG NO 38 qualification, lacked in the requisite experience of five years in drug testing.
The Commission therefore, revised its earlier decision and also cancelled the recommendation earlier given in favour of the appellant.
The decision of the Public Service Commission, cannot be faulted.
[42H; 43A B] 4.
It is the constitutional requirement envisaged in Article 320 that the Commission will have to perform the duty of recommending the candidate fulfilling all the requisite qualifications for the post to the Government for being considered for appointment to the post concerned.
[143B C]
|
it Petition (Civil) No. 10 18 of 1989.
(Under Article 32 of the Constitution of India) Ranjit Kumar for the Petitioner.
A.D. Singh, (N.P.) R.B. Misra, and Ms. A Subhashini, (N.P.) for the Respondents.
The Order of the Court was delivered by MISRA, J. This is an application under Article 32 of the Constitution and the President of the National Council of Bio Medical Scientists is the petitioner.
The reliefs asked for are on the allegation that the Group 'A ' scientists of the Ministry of Health and Family Welfare who are the mem bers of the Council, are being discriminatingly treated; they have not been given any promotional benefits and, therefore, there is a large scale stagnation in the service.
It has been alleged that the Group 'A ' scientists are re cruited through the Union Public Service Commission.
These scientists possess a Master Degree in the relevant disci plines and 3 years ' experience to entitle them to be re cruited.
It has been indicated in a chart filed along with the Writ Petition that the total posts in this category are 243 including post of Drug Controller of India.
The promo tional posts available are filled up by direct recruitment and open competition and there is no promotional channel provided.
Similar scientists in other Ministries, such as Ministry of Science and Technology, Ministry of Defence, Ministry of Environment and Ministry of Oceanography are recruited in terms of rules made under the proviso to Arti cle 309 of the Constitution and for their Group 'A ' scien tific and technical officers, promotional avenues are avail able.
The petition further alleges that on their representa tions from time to 179 time, meetings have been held but decisions taken in such meetings have not been given effect to and, therefore, all the representations have gone unheeded.
Particular reference has been made to the Minutes of a meeting held on 15.5.
1989, where Shri Basudeven, Joint Secretary in the Ministry of Health and Family Welfare presided; several officers from different wings of the Ministry attended and representatives of the petitioner 's Council participated.
It has been al leged that though several demands were pressed by the repre sentatives of the Council, only a few were considered and yet there was no follow up action for their implementation.
Notice was issued to the Union of India in the Minis tries of Health, Human Resources, Science and Technology and Bio Technology and the notice indicated that the matter would be taken up for final disposal.
Though no return has been filed to the Rule Nisi, counsel appeared for the re spondents and upon appropriate instructions, participated in the hearing of the matter.
Annexure P 1 indicates the institutions located in different parts of the country where the posts of 'A ' Group scientists who are members of the Council work.
Their total number is 243 and this is not disputed.
The petitioner has placed on record the rules framed in exercise of powers under proviso to Article 309 of the Constitution in the Ministry of Science and Technology, covering Group 'A ' scientists.
Rule 13 thereof provides avenues for promotion.
This also is not disputed.
Annexure P 3 is a tabuler state ment prepared by the petitioner, showing the disparities in the service conditions between the BioMedical scientists and other similar scientists and the discrimination that Group 'A ' specialists/scientists under the establishment of Direc tor General of Health Services suffer.
The pay scale for different categories of Group 'A ' scientists in the non medical posts and of doctors in the medical posts have been separately shown.
It has been pointed out therein that while there is a difference in the pay scale in the establishment of Director General of Health Services, there is no dispari ty in respect of similar posts in the Indian Council of Medical Research (ICMR) or in the All India Institute of Medical Sciences, Delhi or the Post Graduate Institute at Chandigarh.
It has been further pointed out in the said chart that various kinds of allowances are admissible to the doctors in the medical wing, such as book allowance, higher degree allowance, risk allowance and conveyance allowance in the establishment of Director General of Health Services while the non medical category manned by the 'A ' Group scientists is denied all these allowances.
It has also been alleged that while the medical category doctors get non practising allowance the benefit of 180 such allowance is not extended to the non medical category.
Such discrimination, according to the petitioner, is not noticed in the I.C.M.R. or in the two Institute at Delhi and Chandigarh respectively.
The 4th Pay Commission in Chapter 29, paragraph 29.8 recommended: "The question of granting incentive to offi cers and staff who acquire higher qualifica tion has also engaged our attention.
Railways have suggested a scheme for giving such incen tives in the context of the need for updating the skills of the employees for the more efficient discharge of their duties in these days when modernisation and adoption of ad vanced technology is being undertaken in different fields of railway working.
Sugges tions have also been made for grant of post graduate allowance to veterinary surgeons and special allowances to EDP personnel.
Some such schemes are in existence in the defence serv ices.
We suggest that some incentive should be given to employees who acquire qualifications which are useful for their work and contribute to their efficiency." On 15th of December, 1986, the Office Memorandum in the Ministry of Personnel, Public Grievances and Pension indi cated that this recommendation of the Pay Commission has been accepted by the Government.
Undoubtedly, in regard to the three other allowances, namely, book allowance, risk allowance and conveyance allow ance, there is no scope for discrimination between Group 'A ' scientists in non medical and medical wings.
In fact, at the hearing of the writ petition, respondent 's counsel found it difficult to support the prevailing position.
We are of the opinion that these four kinds of allowances, which are admissible to the medical doctors are also admissible to the Group 'A ' scientists under the non medical category employed in the establishment of Director General of Health Services.
The claim for nonpractising allowance stands on a somewhat different footing and we do not think on the present state of the record of this proceeding, we can come to a definite conclusion that the Group 'A ' scientists in the non medical category would be also entitled to such allowance.
We, however, leave the question open and Government at their level in the appropriate Ministry would examine tenability of this claim as and when raised.
It has been canvassed by petitioner 's counsel at the hearing that there is no justi fication for the disparity in the scale of pay between the two categories of officers.
Government counsel has taken 181 the stand that the qualifications of officers in the two wings are different and the difference in the pay scales has always existed.
It is difficult for us on the material available to take any final view of the matter but the respondent should examine tenability of the claim to equal scales of pay.
This Court, has on more than one occasion, pointed out that provision for promotion increases efficiency of the public service while stagnation reduces efficiency and makes the service ineffective.
Promotion is thus a normal inci dence of service.
There too is no justification why while similarly placed officers in other Ministries would have the benefit of promotion, the non medical 'A ' Group scientists in the establishment of Director General of Health Services would be deprived of such advantage.
In a welfare State, it is necessary that there should be an efficient public serv ice and, therefore, it should have been the obligation of the Ministry of Health to attend to the representations of the Council and its members and provide promotional avenue for this category of officers.
It is, therefore, necessary that on the model of rules framed by the Ministry of Science and Technology with such alterations as may be necessary, appropriate rules should be framed within four months from now providing promotional avenue for the 'A ' category scien tists in the non medical wing of the Directorate.
This Writ Petition is allowed and the following direc tions are issued: 1.
Within four months from today, the Ministry of Health and Family Welfare of the Union of India shall frame a set of appropri ate rules, inter alia, providing suitable promotional avenue for the 'A ' Group scien tists in the non medical wing of the estab lishment of Director General of Health Serv ices; 2.
These 'A ' Group scientists shall be entitled to book allowance, higher degree allowance, risk allowance and conveyance allowance at the same rate as is admissible to doctors in the medical wing in the Directorate w.e.f. 1.4.1989; 3.
Government shall examine the tenability of the claim of equal pay scales for this category of officers within four months from today.
There shall be no directions for costs.
T.N.A. Petition allowed.
| The petitioner, group 'A ' scientist belonging to the non medical wing of the Directorate General of Health Serv ices, filed a wit petition in this Court seeking parity in pay scales and allowances with his counter part in the medical wing.
It was contended that group 'A ' scientists are treated discriminately vis a vis their counter parts in other Ministries, because the former are not given any promotional benefits while the latter are provided with avenues for promotion.
Allowing the writ petition, this Court, HELD: 1.
Provision for promotion increases efficiency of the public service while stagnation reduces efficiency and makes the service ineffective.
Promotion is thus a normal incidence of service.
There is no justification why while similarly placed officers in other Ministries would have the benefit of promotion, the non medical 'A ' group scientists in the establishment of Directorate General of Health Serv ices would be deprived of such advantage.
[181B] 2.
In a welfare State, it is necessary that there should be an efficient public service and, therefore, it should have been the obligation of the Ministry of Health to pro vide promotional avenue for this category of officers, [181 C] 3.
On the model of rules framed by the Ministry of Science and Technology, appropriate rules should be framed providing promotional avenue for the 'A ' category scientists in the non medical wing of the Directorate.
[181D] 178 4. 'A ' Group scientists shall be entitled to book allow ance, higher degree allowance, risk allowance and conveyance allowance at the same rate as is admissible to doctors in the Medical wing in the Directorate.
[18IF] 5.
Government shall examine the tenability of the claim of Group 'A ' scientists for equal pay scales with their counterparts in medical wing.
[181G]
|
Appeals Nos.
484 to 489 of 1958.
Appeals by special leave from the judgement and order dated August 6, 1954, of the U.P. Board of Revenue, Allahabad, in petitions Nos.
203 to 208 of 1947 48.
G. C. Mathur, for the appellants.
M. L.Agarwala, for the respondents (in.
C. As.
484 &485 of 1958) and respondent No.3 (In C.A No. 488.
of 1958).
August 31.
The Judgment of the Court was delivered by RAGHUBAR DAYAL, J.
These appeals, by special leave, against the orders of the Board of Revenue, Utter Pradesh, arise in the following circumstances : The appellants presented applications against each set of the respondents in these six appeals under s.175, U.P. Tenancy Act, 1939 U.P. XVII of 1939, hereinafter called the Act, for ejectment stating that they were the sir bolders of the land occupied by the respondents as non occupancy tenants and that the period of five years during which the respondents were entitled to retain possession under s.20 of the Act had expired.
The respondents contested the notice of ejectment alleging that the land in suit was not air, that the appellants were not sir holders, that appellants paid local rate exceeding Rs. 25/ in the United Provinces, Agra and Oudh, and held more than 50 acres of sir land.
They claimed to be hereditary tenants of the land in dispute, in accordance with sections 14, 15 and 16 of the Act.
The paper were thereafter forwarded by the Tehsilder to the Assistant Collector in charge of the sub division, in accordance with the provisions of section 179 of the Act 907 The applications which were presented for the ejectment of the respondents were deemed to be plaints and the proceedings continued as suits, in view of sub section
(2) of a. 179 of the Act.
The Court called upon the appellants to file necessary extracts of papers and to join all tenants of air as parties.
The sub Divisional Officer did not accept the contention of the respondents and decreed the suits on February 28, 1946, holding that the land in suit was air, that the appellants were air holders, that each of them did not pay a local rate exceeding Rs. 25/ either in 1938 or in 1940, that he did not hold more than fifty acres of air land or more than fifty acres of air and khudkasht land which had not been sublet in 1317 F., corresponding to the period from July 1, 1939 to June 30,1940.
The respondents appealed against the decree to the Additional Commissioner, Benaras, and repeated their contentions which had not found favour in the Trial Court.
They also contended that the appellants had not complied with the requirements of s, 19 of the Act as amended by the U.P. Tenancy (Amendment) Act, 1947 (U.P. X of 1947) which came in to force on June 14.
1947 after the appeals had been instituted.
The Additional Commissioner confirmed the findings of the Sub Divisional Officer and further hold that there had been substantial compliance with the spiritof the law as laid down in the amended a. 19 of the Act.
He accordingly dismissed the appeals.
The respondents then instituted second appeals in the Board of Revenue.
The Board of Revenue did not agree with the additional Commissioner about there having been sufficient compliance with the provisions of amended a. 19 of 908 the Act and of the rules framed thereunder.
It therefore set aside the decree against the respondents and remanded the cases for fresh disposal in accordance with law and further directed the Trial Court to decide the further contention raised by the respondents before the Board to the effect that they had acquired adivasi rights in the land in suit after the coming into force of the U. P. Zamindari Abolition and Land Reforms Act, 1950 (U. P. 1 of 1951).
It is against these orders of the Board of Revenue that these six appeals have been filed after obtaining special leave from this Court.
It appears that there was no particular procedure laid down for the progress of the proceedings in the suit before the Sub Divisional Officer after the papers had been sent to him in accordance with the provisions of section 179 of the Act.
The ordinary procedure for the conduct of suits was followed.
The Sub Divisional Officer therefore called upon the appellants to file necessary extracts of documents.
Naturally evidence had to be led, documentary or oral, to substantiate the allegations made by the parties and, especially by the appellants, who bad to prove their right to eject the respondents.
They had to prove that the land in suit was sir and that they were sir holders.
Section 6 of the Act defines `sir '.
This section reads: "Sir" means (a) land which immediately before the commencement of this Act was air under the provisions of the Agra Tenancy Act, 1926, or the Oudh Rent Act, 1886: Provided that if at the commencement of this Act, the sir holder is assessed in the United Provinces to a local rate of more than 909 twenty five rupees, land which was sir, under the provisions of clause (d) or clause (e) of Section 4 of the Agra Tenancy Act, 1926, or of clause (c) or clause (d) of sub Section (17) of Section 3 of the Oudh Rent Act, 1886, ,shall on this Act coming into force cease to be sir unless it was (i)before the first day of July, 1938, received otherwise than in accordance with the provisions of Section 122 of the United Provinces Land Revenue Act, 1901, or (ii)before the commencement of this Act, received in accordance with the provisions of that section, in exchange for land which was sir under the provisions of clause (a) or clause (b) or clause (c) of Section 4 of the Agra Tenancy Act, 1926, or of clause (a) or clause (b) of sub Section (17) of Section 3 of the Oudh Rent Act, 1886.
Provided further that the provisions of the first proviso shall apply to a sir holder who was not at the commencement of this Act assessed in the United Provinces to a local rate of more than twenty five rupees if be or his predecessor in interest was so assessed on the 30th June, 1938 unless the local rate assessed on him has been decreased by resettlement or by revision of settlement or unless since that day he obtained his sir rights by succession or survivorship Provided also that if the land to which the provisions of the first proviso apply was joint air of several air holders and all, such joint air holders are not air holders to whom such provisions apply, such land shall not 910 cease to be sir at the commencement of this Act, but shall remain sir until that portion of it which is the sir of those joint holders to whom such provisions apply is demarcated under the provisions of this Act; (b) land which was khudkasht and which is demarcated as sir under the provisions of this Act.
Explanation If any portion of the land revenue assessed on the sir holder 's land has been remitted owing to a fall in the price of agricultural produce, the local rate payable by him shall, for the purposes of this section, be deemed to have been reduced in the same proportion.
" It follows from these provisions that the appellants bad to establish the following facts : (i) The land in suit was `sir ' on January 1, 1940, when the Act came into force.
(ii) Each sir holder was not assessed in the United Provinces to a local rate of more than Rs. 25/ .
(iii) The sir holder or his predecessor in interest was not assessed to a local rate exceeding Rs. 25/ on June 30, 1938.
The appellants proved these facts and the trial Court held that the land in suit did not cease to be 'sir '.
Further, if the finding had been that the first proviso to section 6 applied, section 16 would have come into play and it would have been necessary for the Court to determine whether each of the sir holders possessed more than fifty acres of sir or of sir and khudkasht land which had not been let.
On this point too, the finding of the Trial Court, however, is that each sir holder bad less than fifty acres of sir and khudkasht land.
Section 19 of the Act, before its amendment, in 1947, provided that if a sir bolder could apply under the provisions of B. 15 or 16 of the Act, the 911 Court was to take action under those sections.
The amended section also repeated these provisions in its sub section
Its sub sections
(1) and (2) were, however new and read as follows. "(1) In a suit or proceeding for the ejectment of a tenant of sir the sir holder shall before the first date fixed for recording evidence,furnish to the court such particulars as the Board may by rule made in this behalf prescribe for ascertaining ' (a) whether the sir holder is a person to whom the provisions of the first proviso to clause (a) of Section 6 apply; and (b) the total area and nature of the sir holder 's air and.
khudkasht: Provided that if the sir holder satisfied the Court that he had sufficient cause for not filing the particulars before the date fixed, it way, subject to the payment of costs to the opposite party, extend the time.
(2)If the.
sir holder does not file the particulars mentioned in sub Section (1) within the time fixed thereunder, or deliberately furnishes inaccurate particulars, the Court shall dismiss the suit or proceeding, as the case may be, and shall declareare the tenant to be hereditary tenant.
" It is tobe noticed I that sub section
(1) requires a air holder tofurnish particulars prescribed by the Board and ' that the purpose of furnishing those particulars 'is to assist the Court in ascertaining whether the provisions of the first proviso to clause (a) of section 6 apply to the sir holder and what is the total area and nature of the sir holder 's sir and khudkasht.
Section 19 ' therefore, did not bring 912 about any real change in the substantive law affecting the question whether certain land is `sir ' or not, according to the definition of 'sir ' in section 6 of the Act.
After the amendment, a sir holder, in order to succeed in his suit, had to establish the same facts which he had to establish prior to the amendment, What proof he had to lead to support his case, he has to give even after the amendment.
The only difference brought about by the amendment is in the procedural conduct of the suit and is that prior to the amendment the sir holder had simply to lead evidence to prove his case, without informing the Court before hand about the material on which he would rely to establish that the provisions of the proviso (a) of section 6 did not apply to him and in case they applied how effect would be given to the provisions of s 16.
The amended Section made it incumbent on the sir bolder to furnish such information to the Court and thereby to the tenant before the parties proceeded to lead evidence.
Such information has to be furnished according to sub section
(1) of amended section 19, before the first date fixed for recording evidence.
The time for furnishing such information can be extended under the proviso to that sub section.
Great importance however, has been attached to the new provision as sub section
(2) of amended s.19 provides that the consequences of not filing those particulars, or filing those particulars inaccurately, would be that the Court shall dismiss the suit or proceeding and also declare the tenant to be a hereditary tenant.
Now, it is contended for the appellants, that the provisions of amended s.19 do not apply to the facts of this case as the amended section was enacted long after the first date of recording evidence and that therefore it could not have been possible for the appellant to furnish the necessary particulars in accordance with its provisions and that if its provisions apply to the facts of this case 913 the appellants have substantially complied with those provisions inasmuch as they had actually filed in Court documents which gave the necessary particulars required under rr.
239A and 239B made by the Boara of Revenue under s 19.
The contention for the respondents is that amended section 19 is retrospective in view of the provisions of section 31 of the Amendment Act of 197 and that the appellants had not complied with requirements of section 19 (1) and rules framed thereunder.
The aforesaid section 31 reads : "Disposal of pending suits and appeals (1)All proceedings, suits; appeals and revisions pending under the said Act on the date of the commencement of this Act and all appeals and revisions filed after that date against orders or decrees passed under that Act and all decrees and 'orders passed there under which have not been satisfied in full, shall be decided or executed, as the case may be, and where necessary such decrees and orders shall be amended, in accordance with the provisions of the said Act as amended by this Act: Provided firstly that if such a decree or order cannot be so amended, or the execution of or the appeal or revision from such an amended decree or order cannot be proceeded with, it shall be quashed.
In such a case the aggrieved party shall, notwithstanding any law of limitation be entitled to claim, within six months from the date on which such decree or order is quashed such rights and remedies as he had on the date of the institution of the suit or proceedings in which such decree or order was passed, except in so far as such rights or remedies are, inconsistent with 914 the provisions of the said Act as amended by this Act: Provided secondly that the proceedings under Section 53 between a landlord and his tenant and all proceedings under section 54 shall be quashed: Provided thirdly that appeals and revisions arising out of the proceedings under Section 53 between a landholder and his tenant or out of those under section 54 shall be so decided as to place the parties in the same position in which th ey were immediately before the institution of such proceedings Provided fourthly that all suits, appeals and revisions pending under Section 180 of the said Act, on the date of the commencement of this Act for the ejectment of any person who was recorded as an occupant on or after the first day of January, 1938, in a record revised under Chapter IV of the United Provinces Land Revenue Act, 1901, or corrected by an officer specialty appointed for the correction of annual registers in any tract shall be dismissed, and all decrees and orders for the ejectment of such persons, which have not been satisfied in full on the date of the commencement of this Act shall be quashed .
Provided fifthly that nothing in this subsection shall affect the forum of appeal or revision from a decree or order passed by a Civil Court under the said Act.
(2)In counting the period of limitation in respect of an application for the execution of a decree or order which was passed under the said Act and the execution of which was 915 stayed pending the enactment of this Act, the period during which execution was so stayed shall be excluded.
" In view of this section, the appeals which.
were pending before the additional Commissioner when the amendment Act came into force bad to be decided in accordance with the provisions of the Act as amended.
It has been stated above that no change in the substantive law affecting the rights of the parties has been brought about by the Amendment Act.
The only provision which could affect the rights of the parties is contained in sub s.(2) of amended s.19 and provides the consequences of the failure of the sir holder to furnish the necessary particulars.
It follows therefore that if the necessary particulars had been furnished in this case even prior to the Amendment Act coming into force, there could be no difficulty in deciding the appeals by the Additional Commissioner in accordance with the provisions of the Act as amended by the Amending Act.
This is exactly what the Additional Commissioner did.
He held that subs tantial compliance has been made with the provisions of the amended section and the rules framed thereunder.
The Board of Revenue is itself of the opinion that if substantial compliance bad been made of those provisions that would have been sufficient.
It however did riot agree with the Additional Commissioner 's view that the appellants had sufficiently complied with the provisions of amended s.19 aid the rules framed thereunder.
We are of opinion that in this the Board of Revenue was wrong.
Rules 239A and 239B framed by the Board are: "239A.
In a suit or proceeding for the ejectment of a tenant of sir, the sir holder shall before the first date fixed for recording 916 evidence, furnish to the Court the following particulars: (1)The amount of local rate to which the sir holder was assessed on 1st January, 1940, in the United Provinces.
(2) If the amount shown under the preceding subclause (1) is Rs. 25, or less, then (a) the amount of local rate to which the sir holder or his predecessor in interest was assessed on June 30, 1938.
(b)Whether the local rate assessed on 30th June, 1938, was decreased before 1st January, 1940, as a result of resettlement or revision 'of settlement, and if so, the amount by which it was decreased; (c)Whether the sir holder obtained his sir rights by succession or survivorship between 30th June, 1938, and 1st January, 1940.
(1)The area and khasra numbers of the plots, if any, held by him in severally or jointly with others, on 31st December, 1939, as sir in the United Provinces under the provisions of clause (d) or clause (e) of section 4 of the Agra Tenancy Act 1926, or of clause (c) or clause (d) of sub section (17) of section 3 of the Avadh Rent Act, 1886.
(2) Such of the plots, if any shown under the preceding sub clause (1) along with their areas, as were received by him in exchange for the land which was his sir under the provi sions of clause (a) or clause (b) or 917 clause (c) of Section 4 of the Agra Tenancy Act, 1926, or clause (a) or clause (b) of, subsection (17) of the Avadh Rent Act, 1886 (a) before the first day of July 1938 otherwise than in accordance with the provisions of Section 122 of the United Provinces Land Revenue Act, 1901, or (b) before the first day of January, 1940, in accordance with the provisions of that section.
(3) The area and: khasra numbers of the plots, if any, held by him in severally or jointly with others and khudkasht in the United Provinces, along with the period of cultivation and nature of khudkasht of each such plot.
(4) The extent of his share in the joint air and khudkasht, if any shown under the preceding sub clauses (1) and (3).
The particulars furnished in accordance with rule 239A shall be accompanied by the following documents: (1) If the local rate payable by the sir holder in the United Provinces is claimed to be Rs.25 or less, copies of the khewat khatas of 1345 Fasli and of 1347 Fasli, in which he was recorded as a co sharer; 918 (2) a certified copy of the khatauni khatas of his air and khudkasht; (3) a certified copy of the khewat to which such sir or khudkasht appertains, unless such copy is filed under sub rule (1); (4) a list giving the amount of local rate to which each co sharer of the sir holder in the joint sir and khudkasht, if any, is assessed; (5) in the case of sir or khudkasht of a joint Hindu family, a genealogical table and a list showing the share of each living member of the family having an interest in such sir or khudkasht and the share of local rate which each member would be liable to pay on ratable distribution.
" The documents filed by the appellants in the Trial Court consisted of (1) khewats of the various villages for the years 1345, 1346 and 1347 Fasli, i.e. for the periods between July 1, 1937 to June 30, 1940 (2) khatauni jamabandis of the various villages for the years 1345 and 1347 Fasli, corresponding to July 1, 1937 to June 30, 1938 and July 1, 1939 to June 30, 1940, respectively; (3) (a) a statement showing the shares of the appellants as recorded in the khewats and khataunis of 1347 Fasli, this statement showed the total of the air area held by the appellants to be 152.33 acres, their khudkasht area to be 19.93 acres and the total of the local rate payable by them to be Rs. 75.5.11; (b) a statement showing the air, khudkasht and local rate of each plain in 1317 Fasli.
This shows that none of them held sir or sir and khudkasht in excess of 50 919 acres, or was assessed to local rate exceeding Rs. 25/ (4) Copy of the pedigree.
These documents clearly furnish the particulars required by the rules as the periods covered by these documents include June 30, 1938, December 31, 1939 and January 1, 1940.
Rule 239AI required particulars regarding the amount of local rates on June 30, 1938 and January 1, 1940 and also about sir holders ' obtaining sir rights by succession or survivorship during the period.
The particulars required under sub rules (3) and (4) of rule 239AII were available from these documents.
Rule 239B required copies of the khewat khatas of 1345 Fasli and of 1347 Fasli; certified copies of khatauni khatas of sir and khudkasht; certified copies of the khewats to which that sir or khudkasht appertained; a list giving the amount of local rate to which each co sharer of the sir holder was assessed and a genealogical table in the case of sir or khudkasht of a joint Hindu family showing the share of each living member of the family.
The only particulars which can possibly be not had directly from the documents on record are those required by sub rules (1) and (2) of rule 239AII.
These require particulars about such sir which was the sir of the appellants under the provisions of cls.
(d) and (e) of s.4 of the Agra Tenancy Act, 1926 i.e., land which became sir on account of the landlord 's cultivation at the commencement of that Act, i.e., on September 7, 1926, and had been recorded as khudkasht in the previous agricultural year, i.e, in 1333 Fasli, or land which became air on account of the landlord 's continuously cultivating it for a period of ten years subsequent to the enforcement of the Agra Tenancy Act.
It is clear from the findings of the Trial Court that the land in suit had been sir from the time of 920 the settlement, presumably, the first settlement, which took place in the Nineties of the last Century.
This seems to be based on the fact that khatauni jamabandhis of 1345 and 1347 Fasli did not record a period of cultivation against the sir entry, indicating thereby that the sir is not of the kind mentioned in cls.
(d) and (e) of s.4 of the Agra Tenancy Act, 1926.
The Trial Court could and did record findings on all the facts which had to be proved by the appellants to establish their case.
The first Appellate Court confirmed them.
The particulars required by sub section
(1) of amended section 19 of the Act and the rules framed thereunder, were for the purpose of ascertaining those facts.
In the circumstances it is reasonable to hold that there had been substantial compliance with the provisions of amended section 19 and the rules framed thereunder.
The Board of Revenue was therefore in error in stating that the appellants had not given the amount of local rate to which they were assessed in U.P. on January 1, 1940, and that compliance did not appear to have been made of rule 239AII of the Revenue Court Manual and that there had not been sufficient compliance with the mandatory provisions of rules 239A and 239B.
From the judgment of the Board it is clear that its attention was not drawn to the several relevant documents filed by the appellants in the trial Court.
We have no doubt that if the Board had considered the said document it would not have held that section 19 had not been substantially complied with.
We therefore hold that the Board of Revenue was in error in setting aside the decree of the Additional Commissioner and remanding the case for fresh trial on the ground that there had not been compliance with the provisions of amended section 19 of the Act and the rules framed thereunder.
921 We accordingly allow the appeals, set aside the order of the Board of Revenue and remand the cases to it for decision in accordance with law.
We further direct it to decide itself the contention raised by the respondents about their having acquired adivasi rights under the U.P. Zamindari Abolition and Reforms Act.
In case the Board takes the view that for deciding the said issue any finding of fact is necessary, it.
may call for the said finding from the Trial Court and, on receiving it, proceed to deal with the appeals on the merits.
In the circumstances of these cases, we direct that the parties on either side bear their own costs.
Appeals allowed.
| The appellants filed suit under the U.P Tenancy Act, 1939.
for the ejectment of the respondents who were tenants of sir.
The appellants filed the necessary extracts of papers in support of their case.
The trial court decreed the suits 905 holding the land in suit was sir, that the appellants were sirholders, that each of them did not pay a local rate exceeding Rs 25, that he did not hold more then 50 acres of sir land or more than 50 acres of sir and khudkast land which had not been sublet and that the respondents had not become hereditary tenants.
The respondents preferred appeals before the Commissioner.
During the pendency of the appeals the U.P Tenancy (Amendment) Act.1947, amended s.19 of the Act Amended section 19 provided that in suits for ejectment of tenants of sir the sir holder shall, before the first day fixed for recording evidence, furnish such particulars as may be prescribed and further provided that for failure to file such particulars the suit shall be dismissed.
Section 31 of the Amending Act provided that its provision shall apply to pending suits, appeals etc.
The respondents contended that the appellants had failed to comply with the provisions of amended section 19 and that the suits should be dismissed.
The Commissioner confirmed all the findings of the trial court and held that there had been sufficient compliance with the provisions of amended section 19 and according dismissed the appeals.
The respondents preferred second appeals before the Board of Revenue.
The Board held that the provisions of amended section 19 and of the rules framed thereunder had not been complied with and remanded the case to the trial court for compliance therewith and retrial.
Held, that there had been sufficient compliance with the provisions of amended section 19 and the rules framed thereunder and that the Board was riot justified in remanding the cases for retrial.
Section 19 did not bring about any real change in the substantive law affecting the question whether land was sir or not.
Even after the amendment, a sir holder, in order to succeed in his suit, had to establish the same facts which he had to establish prior to the amendment.
The only difference brought about by the amendment was in procedure and whereas prior to the amendment a sir holder could lead his evidence without informing the Court before hand about the material he would produce, after the amendment it was incumbent upon him to furnish such information to the Court before the date fixed for recording evidence, The necessary particulars had been furnished even prior to the amendment and the Commissioner could decide the appeals in accordance with the provisions of the Act as amended by the amending Act.
The attention of the Board was not drawn to the relevant documents filed by the appellants and it erred in stating that there had been no substantial compliance with the provisions of amended section 19 and of the rules framed thereunder.
|
iminal Appeal No. 3 of 1970.
63 Appeal by special leave from the judgment and order dated June 24, 1969 of them Calcutta High Court in Cr.
Appeal No. 378 of 1969.
I. N. Shroff for the appellant.
P. K. Chatterjee and G. section Chatterjee, for the respondent.
The Judgment of the Court was delivered by DUA, J.
This appeal by special leave is directed against the order of summary dismissal of the appellant 's appeal by the High Court of Calcutta from the judgment and order of a learned Additional Sessions Judge, Asansol dated June 18, 1969 convicting the appellant for offences under sections 25 (1) (a) and 27 of the .
According to the prosecution case, on receipt of secret information, Inspector Kali Prasanna Chaudhury of Detective Department, along with Circle Inspector, section L. Routh, S.I. K. D. Chakravarty, Officer incharge of Hirapur police station and S.I. K. D. Chatterjee, Town Sub Inspector of Asansol and some constables searched the appellant 's house on May 14, 1968 between 6.40 a.m. and 9 a.m. in the presence of some other witnesses.
In the Central Room of the house there was an almirah of which the key was produced by the appellant and handed over to Inspector Kaliprasanna Chaudhury (P.W. 1).
The almirah was opened with the said key wherein was found a bag containing seven.12 bore live cartridges, seven .410 bore live cartridges, nine rifle ammunition and one 12 bore fired cartridge case.
There was also found a gun folded into two parts under a bundle of clothes on the lowest shelf.
The appellant could not produce any licence or permit for the possession of the gun and the cartridges.
As a result of this recovery the appellant was arrested and challenged.
He was duly com mitted by a magistrate to the court of Sessions.
The principal question which fell for decision at his trial was whether it could be said that he was in possession of the articles found from the almirah, as contemplated by section 25 of the .
After discussing the evidence and the legal position on the question of presumption of conscious pos session in circumstances like the present, the learned Additional Sessions Judge came to the conclusion that these articles were in the appellant 's conscious possession.
No licence or permit for these articles having been produced, the appellant was convicted both under section 25(1) (a) and under section 27 of the .
Under section 27 of the no separate sentence was considered necessary but under section 25 (1) (a) he was sentenced to rigorous imprisonment for two years.
It may incidentally be mentioned that in the trial court on behalf of the appellant the legality of the investigation into the offence in question was also assailed, it being further contended that the S.I. K. D. Chakravarty, Officer in charge of Hirapur police station was not empowered to investigate the case.
As these questions are not agitated in this Court, we need say nothing on those points.
Against his conviction the appellant appealed to the High Court under section 410, Cr P.C. but this appeal was dismissed summarily on June 24, 1969 without indicating any reasons in support of the order of summary dismissal.
64 Before us on behalf of the appellant it was contended that the order of summary dismissal by the High Court is contrary to the consistent view taken by this Court in numerous decisions where it has been firmly laid down that if an appeal raises arguable points of fact or law, then, it is undesirable and improper to dismiss it summarily without indicating, at least broadly the reasons for such dismissal.
In this case, according to the submission, the question of the conscious possession of the articles, on the facts and circumstances of this case.
was of considerable importance and it required scrutiny of the evidence on the record.
The appeal also raised some other questions relating to the alleged infirmities in the search conducted during the investigation.
Indeed, according to the appellant 's counsel, there were nearly ten grounds of appeal in the memorandum which suggest that the question of the conscious possession of these articles clearly required a closer scrutiny of the evidence in the case.
In our view, there is force in the appellant 's contention.
Beginning with the decision in Mushtak Hussein vs The State of Bombay(1) this Court has, in numerous cases, emphasised the extreme desirability of indicating, however broadly, the reasons which prevail with the High Court in dismissing summarily an appeal in which questions of act or law are raised, which do not seem to be unarguable or insubstantial.
This, however, does not mean that the statute does not empower the High Court to dismiss an appeal in limine where in its opinion there is no substance in the appeal.
The latest decision of this Court was given on March 13, 1973 in Mustaq Ahmed Mohamed Hussain and Mukhtar Hussain Ali Hussain vs The State of Gujarat(2) in which some of the previous decisions of this Court on this point have been digested.
In arguable cases not only would the reasons recorded by the High Court be helpful to this Court in better understanding and appreciating the High Court 's line of approach, but it would also serve to assure the accused that the arguable points in his appeal were properly argued and duly considered by the High Court.
This assurance cannot be considered to be without importance and value.
The question, however, arises whether it is desirable and necessary in the larger interest of justice to send the present case back to the High Court for re decision or it would be more conducive to the cause of 'justice that we ourselves examine the evidence and dispose of the appeal finally without further prolonging the proceedings against the appellant.
It may be pointed out that the recovery of the articles in question was effected as far back as May, 1968 and the appellant 's conviction by the trial court is dated June 16, 1969.
The High Court dismissed his appeal on June 24, 1969, land this Court granted special leave on January 8, 1970 when the appellant was released on bail.
More than 3 years have now elapsed since the grant of special leave and the appellant 's release on bail.
We consider it would be highly unfair and unjust to the appellant to prolong the uncertainty of the final fate of this case by sending it back to the High Court for final disposal of the appeal after rehearing.
We have.
therefore, undertaken to examine the evidence ourselves because that would guarantee speedy disposal of the case against the appellant.
We may in this con (1) (2) Crl.
A. No. 9 of 1973 decided on 13 3 73.
65 nection point out that undue delay in the final disposal of criminal cases tends, to some extent, to defeat the very purpose of criminal justice.
Speedy disposal of criminal cases for commission of offences promotes confidence of the society in the administration of criminal justice which is essential for sustaining the faith of the law abiding members of the society in the effectiveness of the rule of law.
It also saves the accused from avoidable harassment inherent in unreasonably prolonged trials and appeals.
After having been taken through the evidence, we find that the testimony of K. P. Choudhary, P.W.1 that the appellant had produced the key of the almirah in question and handed it over to the witness who opened the almirah with that key is trust worthy and no infirmity is found in his evidence.
The evidence of Dharmadas Thakur, P.W.2, fully supports the evidence of P.W.1 on this point.
So does the evidence of Santosh Lal Routh, P.W.4.
No doubt P.W.1 and P.W.4 are police officers, but P.W.2 is an employee of Indian Iron & Steel Company Ltd. The appellant worked in the department of P.W. 2.
Now once it is held that the appellant had produced the key of the almirah the presumption arises that the arms found in that almirah were in his possession.
No doubt, there were certain articles belonging to women, but that is immaterial.
It is not the appellant 's case that this key used to be taken by the other members of his family who used to place their articles in this almirah without the appellant 's knowledge and that anyone of them might, therefore, have Placed the arms in question in that almirah without his knowledge.
In fact, the appellant has on the other hand, completely denied the recovery of these articles from the almirah.
His plea is not wholly irrelevant and can certainly be taken.
into consideration.
On the evidence on the record, therefore, it is not possible to hold that the existence of the arms in the almirah were without the appellant 's knowledge or that his possession of the arms was unconscious.
Ms conviction under section 25(1) (a) of the Arms Act, 1969 is, therefore,.
fully justified.
It is, however, difficult to sustain his conviction under section 27 of the Arms Act.
There is no evidence to support the offence under that section and indeed the trial court has convicted him without properly applying its mind to the ingredients of that offence.
judgment of the trial court seems to suggest that mere possession of the arms would also constitute an offence under section 27 of the Arms Act.
This view is clearly not correct.
But since no separate sentence was imposed under section 27, it is unnecessary to say anything more about it than that the conviction under section 27 must be quashed.
The question, however, arises as to what sentence in the circumstances of the case would meet the ends of justice.
As already observed, the offence was committed in May, 1968 and the appellant was convicted in June, 1969.
We are now in April, 1973.
The possession of the arms in question has not been shown to be inspired by any sinister purpose.
There is no evidence of any undesirable antecedents of the appellant, nor is there any suggestion that the arms were likely to be used for some antisocial purpose.
Their possession by the appellant might well have been intended to be utilized for the purpose 944 Sup.
CI/73 66 of self defence, though undoubtedly the possession was without a proper licence.
Considering all the relevant circumstances of the case, we feel that it would meet the ends of justice if the sentence of imprisonment is reduced to that already undergone and a sentence of fine of P.s. 5001 ' is in addition imposed on the appellant and in default of payment of fine, the appellant is directed to serve a sentence of rigorous imprisonment for one month.
We order accordingly.
The appeal succeeds in part to the extent just stated.
V.P.S. Appeal partly allowed.
| The appellant, a Railway Guard, was convicted and sentenced for an offence under section 509, I.P.C.
The High Court uphold his conviction.
On appeal this Court set aside.the conviction and acquitted him.
In the meanwhile the appel lant, was dismissed from service with effect from 31st March, 1956.
The appellant impugned the order of dismissal in the High Court which held that his dismissal was wholly void and ineffective.
Thereupon the appellant was reinstated and was informed that the matter of his back wages for the period between the date of his dismissal and the date of reinstatement would be decided later.
By another letter he was informed that this period was treated as leave due.
He was paid Rs. 81.51 as his wages for the entire period ending on March 7, 1959.
The appellant made an application under section 15(2) of the claiming Rs. 9,016.60 plus ten times the said amount as compensation.
In addition, he first claimed 'traveling allowance ' but later sought to amend the application by replacing 'traveling allowance by 'running allowance This was rejected by the Prescribed Authority.
The Authority allowed a part of the claim but the appellant preferred an appeal to the Appellate Authority under the Act.
The Appellate Authority held that the claim was barred by time as limitation had commenced from the date of dismissal from service and not from the date of reinstatement Or the date on which it was decided to treat the period of dismissal as leave due.
On the question (i) whether the.
claim application filed by the appellant tinder s 15(2) was time barred and (ii) whether he was entitled to running allowance.
Allowing the appeal, HELD : (i) the first proviso to sub sections
(2) of section 15 indicates two alternative starting points for limitation, namely, (i) the date on which deduction from wages was made or (ii) the date on which the payment of the wages was due to be made.
[183 A] From a reading of section 15 it is clear that the legislature has deliberately used, first.
in sub section
(2) and then in sub section
the expressions "deduction of wages" c and "delay in payment of wages ' as two distinct concepts.
Terminus a quo (i) in the proviso expressly relates to the deduction of wages, while (ii) is referable to the delayed wages.
If both these terminii were always relatable to the same Point of time, then there would be nor point in mentioning terminus a quo (i) and the legislature could have simply said that limitation for a claim under section 15(2) would always start from the date on which the wages "fall due" or "accrue" as has been done under Article 102 of the Limitation Act which applies only to suits for recovery of wages.
The very fact that two distinct starting points of limitation referable to two distinct concepts have been stated in the proviso.
shows that the legislature had visualised that the date of deduction of wages and the due date of delayed wages.
may not always coincide.
Conjunction "or" which in the context means "either" and the phrase "as the 179 case may be" at the end of the proviso are clinching indicate of this interpretation.
They are not mere surpluses and must be given their full effect.
The legislature is not supposed to indulge in tautology; and when it uses analogous words or phrases in the alternative, each may be presumed to convey a separate and distinct meaning.
the choice of either of which may involve the rejection of the other.
To hold that the two expressions "wages deducted" and "wages delayed" though used in the alternative.
carry the same meaning, and in the proviso are always referable to one and the same point of time, would be contrary to this primary canon of interpretation.
(183B E] Ordinarily where an employee was dismissed on one date and reinstated on another, the deduction of wages may synchronize with the act of reinstatement.
In the instant case the deduction did not take place on the date of reinstatement because the order of reinstatement expressly stated that decision with regard to his wages for the period would be taken later.
Therefore the deduction would coincide with the decision deducting the wages.
Such a decision was taken on February, 18, 1959 and limitation under the first part of the proviso commenced from that date.
[183G H] Jai Chand Sawhney vs Union of India ; ; Divisional Superintendent.
Northern Railway vs Pushkar Dutt Sharma (1967] ; held inapplicable.
(ii) Running allowance was counted towards average pay in those cases only where the leave did not exceed one month.
Travelling allowance or running allowance was eligible if the officer had travelled or run, not otherwise.
it could not be said that running allowance was due to the appellant as part of his wages for the entire period of his inactive service.
[185H; 186A] Per Krishra Iyer J. (Concurring) In this country the State is the largest litigant today and the huge expenditure involved makes a big draft on the public exchequer, In the context of expanding dimensions of State activity and responsibility, it is not unfair to expect finer sense and sensibility in its litigation policy, the absence of which in the present case had led the Railways callously and cantankerously to resist an action by its own employee.
a small man, by urging a mere technical plea which had been pursued right up to the highest court and had been negatived, It was not right for a welfare State like ours to be Janus faced and while formulating the humanist project of legal aid to the poor contest the claims of poor employees under it pleading limitation and the like, [186 E]
|
Civil Appeal No. 236 of 1969.
Appeal from the Judgment and Order dated 24/25th August 1967 of the Gujarat High Court in SCA No. 585/63.
section K. Dholakia and R. C. Bhatia for the Appellant.
1026 P. Ram Reddy, Amicus Curiae for Respondent No. 2.
The Judgment of the Court was delivered by SARKARIA, J.
The appellant is the Gujarat State Cooperative Land Development Bank Ltd. (hereafter referred to as the Bank).
It is a Society registered under the Bombay Cooperative Societies Act, 1925, as applicable to the erstwhile State of Saurashtra.
According to the appellant 's writ petition, it is doing banking business.
It has 127 Branches spread all over the State of Gujarat.
One of its Branches is in Dasada, Surendranagar District.
The Head Office of the Bank is at Ahmedabad.
The second respondent, Babu Bhai Negracha, was serving as an Additional Supervisor in the Dasada Branch of the Bank.
His services were terminated by an order, dated February 21, 1962, by giving him one month 's pay in lieu of notice under Staff Regulation No. 15.
The Gujarat Cooperative Societies Act, 1961, came into force from May 1, 1962, and the appellant Bank, being a Society, under the Cooperative Societies Act, came to be governed by the said Act.
By Notification No. BIR 1362 5 H, dated March 2, 1963, published in the Gujarat Gazette in March 1963, the Government of Gujarat directed under Section 2(4) of the Bombay Industrial Relations Act, 1946 (Bombay Act 11 of 1947) that all the provisions of the said Act shall apply with effect from March 15, 1963 to the business of banking by Cooperative Banks in the Saurashtra and Kutch areas of the State, registered and deemed to be registered under the Gujarat Cooperative Societies Act, 1961.
Aggrieved by the termination of his service, the second respondent approached the appellant 's Dasada 's Branch by a letter, dated August 20, 1962, stating that since his services were terminated illegally by way of victimisation, he should be reinstated in the service.
Thereafter, the second respondent filed an application in the Labour Court at Rajkot, alleging that his service had been illegally and maliciously terminated as an act of victimisation on account of his trade union activities.
He prayed for setting aside the order of his termination of service and for reinstatement with full back wages.
The Bank filed a written statement, raising a preliminary objection that the Bombay Industrial Relations Act, 1946, under which the application was made by the respondent, was not applicable to its case, as it was a Cooperative Society governed by the Gujarat Co operative Societies Act, under which only the Registrar or his nominee 1027 had jurisdiction to decide the dispute, and the Labour Court had no jurisdiction to entertain and decide the application of the second respondent.
By its Order, dated June 11, 1963, the Labour Court overruled this objection and held that it had jurisdiction to hear the application.
The Bank then filed a writ petition under Article 226 of the Constitution in the High Court to challenge the Order of the Labour Court.
The High Court by a common judgment dated August 25, 1967 dismissed the writ petition, but in view of the importance of the question of law involved, granted a certificate of fitness for appeal to this Court.
On the strength of that certificate, the Bank has come in appeal before us against the aforesaid judgment of the High Court.
In this Court on January 22, 1969, the Bank made an application for leave to urge as additional ground, namely, that the Bank is not doing banking business, i.e. accepting for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise as defined in Section 5, Clauses (b) and (c) of the Banking Companies Act, 1949; and that this being the true position, the Notification No. DIR 1362 IV H dated March 2, 1963, published in the Gujarat Government Gazette dated March 7, 1963, under Section 2(4) of the Bombay Industrial Relations Act, 1946 (Bombay Act XI of 1947) is not applicable to the appellant.
This application was strenuously opposed by Shri Ram Reddy, who is assisting the Court as amicus curiae on behalf of respondent 2, who has not been able to appear and defend himself in this appeal.
We have declined permission to raise this new plea for the first time in this Court, for these reasons: (i) It is much too belated; (ii) It stands in direct contradiction to the position taken by the appellant in its writ petition and the affidavit in support thereof filed in the High Court.
Therein, the appellant had categorically pleaded: "The petitioner is a Society registered under the Bombay Cooperative Societies Act, 1925 (Bombay Act VII of 1925). and is engaged in the business of banking." (iii) It is not a purely legal plea but a mixed plea of law and fact, and cannot be determined on the basis of material already on the record.
We, therefore, take it that the appellant is a Cooperative Society engaged in the business of banking and, as such, the Bombay Industrial 1028 Relations Act, 1946 is applicable to it by virtue of the aforesaid Notification dated March 2, 1963, issued by the State Government under Section 2(4) of that Act.
The arguments of Mr. Dholakia, appearing for the appellant, may be summarised as follows: (i) The case is governed by the Gujarat Cooperative Societies Act, 1961 (hereafter called the Act of 1961) and not by the Bombay Cooperative Societies Act, 1925 (hereafter referred to as the Act of 1925).
(ii) The phrase "any dispute touching. .the business of the Society", particularly the word "touching" therein, is of very wide amplitude.
It would comprehend any matter which relates to, or concerns or affects the business of the Society.
Every society, ex necessitiate employs some servants for the purpose of carrying on its business.
That being so, the payment of wages, appointment and removal of its servants under law is a part of the business or "touches" the business of the Society.
(Reliance for this argument has been placed on Farkhundali Naunhay vs V. B. Potdar (1).
(iii) Even if contention (ii) is not accepted, the dispute raised by the respondent, Babu Bhai Negracha is one "touching the management of the Society".
The expression 'management ' takes in the entire staff or establishment of servants which run the affairs of the Society.
(iv) Once it is held that the dispute between the Society and its past servant, Babu Bhai Negracha, touches the "business" or the "management" of the Society, or both, within the meaning of Section 96, the Registrar or his nominee, alone, shall have jurisdiction to adjudicate such dispute by compulsory arbitration; and the non obstante clause in the Section shall bar the determination of that dispute by the Industrial Tribunal or the Labour Court under the Bombay Industrial Relations Act.
As against the above, Mr. Rama Reddy, amicus curiae, submitted as under: (i) Since the services of the second respondent were terminated on February 21, 1962, before the Act of 1961 came into force, the Act relevant for this discussion is the Act of 1925.
(ii) Irrespective of whether the Act of 1925 or the Act of 1961 governs the appellant Society, the expression "any dispute" commonly occurring in Section 54 of the Act of 1925 and Section 96 of the 1029 Act of 1961, is restricted in its scope to a dispute of a civil nature which is capable of being resolved by the Registrar or his nominee, and does not take in an industrial dispute between the Society and its workmen which under the B.I.R. Act is triable by the Labour Court/Industrial Tribunals, only.
(iii) B.I.R. Act is a special law, dealing with the special subject of industrial disputes, which in their nature are essentially different from ordinary Civil disputes between an employer and his employee governed by the Law of Contract, B.I.R. Act provides for a special machinery for adjudication of industrial disputes.
As against this, the Cooperative Societies Act of 1925/or of 1961 is a general enactment and it must yield to the B.I.R. Act whenever the provisions of the latter by their language are clearly applicable to a dispute.
Reference has been made to Jullundur Transport Cooperative Society Ltd. vs Punjab State(1).
(iv) The scope of the expression "any dispute touching the business of the Society", occurring in Section 54 of the Act of 1925/or Section 96 of the Act of 1961 is limited to disputes directly relating to the actual trading or commercial activities of the Society.
This expression does not take in a dispute between the Society and its employee relating to the conditions of his employment, which will include the termination of his employment.
This point is concluded by the decision of this Court in Cooperative Central Bank Ltd. vs Additional Industrial Tribunal, Hyderabad(2), which follows the ratio of its earlier decision in Deccan Merchants Cooperative Bank Ltd. vs Dalichand Jungraj Jain(3).
In view of these decisions, the ratio of Farkhundali 's case (ibid) decided by the Bombay High Court, is no longer good law.
(v) The expression "management" in Section 96 of the Act of 1961, means "the Board of Directors", or "the Board of Trustees", or the "Managing Committee" or "Executive Body" which has the overall control of the affairs and business of the Society, and it does not include the individual workers or employees, individual workmen or employees of the Society who carry on the day to day administration of the Society; nor will it take in matters touching the service conditions of the servants of the Society such as their appointment to service or their discharge, removal from service and their wages.
A dispute of the kind raised by the second respondent, therefore, 1030 will not fall within the purview of the phrase "any dispute touching the management of the Society" used in Section 96.
Before appreciating the contentions canvassed on both sides, it is necessary to notice the relevant provisions of the Act of 1925 and the Act of 1961.
The relevant part of Section 54 of the Act of 1925, reads thus: "(1) (a) If any dispute touching the constitution or business of Society arises between members or past members of the Society or persons claiming through a member or a past member or between members or past members or persons so claiming and any officer, agent or servant of the Society or its Committee, and any officer, agent, member or servant of the Society past or present, it shall be referred to the Registrar for decision by himself or his nominee. " The corresponding Section 96 of the Act of 1961 lays down: "(1) Notwithstanding anything contained in any other law for the time being in force, any dispute touching the constitution, management or business of a Society shall be referred in the prescribed form. .if the parties thereto are from amongst the following: (a) a Society, its Committee, any past Committee, any past or present officer, any past or present agent, any past or present servant or nominee, heir or legal representative of any deceased officer, deceased agent or deceased servant of the Society, or the Liquidator of the Society. " A comparison between the portions of the two Sections, extracted above, brings out two points of difference.
Firstly, in Section 54, there is no non obstante clause, while Section 96(1) begins with the words "Notwithstanding anything contained in any other law for the time being in force".
Secondly, while in Section 54, the word 'management ' does not occur, in the corresponding Section 96(1) of the 1961 Act, the word 'management ' has been inserted in between the words 'constitution ' and 'business '.
It is significant to note that the phrase "any dispute touching the constitution. or business of the Society" is a common feature of both the aforesaid Sections.
We emphasise this fact, because it is this common feature, rather than the points of difference between the two Sections, that holds the key to a correct solution of the problem before us.
1031 From a conspectus of the decisions cited at the Bar, we may devise two broad tests to determine the points in controversy in the instant case.
First, whether the expression "any dispute" spoken of in Section 54 of the Act of 1925, and Section 96 of the Act of 1961, is one which is capable of being resolved by the Registrar or his nominee under the relevant Cooperative Societies Act? Second, whether a dispute raised by a servant against his employer, the Cooperative Society, for setting aside his removal from service on the ground that it was an act of victimisation and for reinstatement in service with back wages, is one "touching the management or business of the Society" within the contemplation of the said provisions? As regards the first test, it is to be noted that the expression "any dispute" has not been defined in the Acts of 1925 and 1961.
The term "dispute" means a controversy having both positive and negative aspects.
It postulates the assertion of a claim by one party and its denial by the other.
The word "any" prefixed to "dispute" may at first glance, appear to give the expression "any dispute" a very wide amplitude covering all classes of disputes, whatever be their nature.
But the context of these provisions, the object and scheme of the Acts of 1925/1961 show that the Legislatures never intended to give such a wide scope to this expression.
The related provisions and the scheme of the Acts unerringly indicate that the expression "any dispute" has been used in a narrower sense limited to contested claims of a civil nature, which could have been decided by civil or revenue courts, but for the provisions with regard to compulsory arbitration by the Registrar or his nominee, found in Section 54 of the Act of 1925/96 of the Act of 1961.
The first indication of this being the right construction, is discernible in sub section (2) of Section 96 which states that when any question arises whether for the purposes of sub section (1) a matter referred to for decision is a dispute or not, the question shall be considered by the Registrar, whose decision shall be final.
This means, it is incumbent on the Registrar to decide as a preliminary issue, whether the dispute is of a kind under sub section (1) of Section 96 falling within his jurisdiction.
If this preliminary issue is found in the negative, he will have no further jurisdiction to deal with the matter.
A further clue to the interpretation of "any dispute" used in Section 96(1) is available in Section 97(1) which prescribes periods of limitation for disputes of the kind specified in its clauses (a) and (b), referred to the Registrar under Section 96.
Sub section (2) of Section 97 which is in the nature of a residuary provision, states that the period of limitation in the case of any dispute other than those mentioned in sub section (1) which are required to be referred to the 1032 Registrar under Section 96, shall be regulated by the provisions of the Indian Limitation Act, "as if the dispute were a suit, and the Registrar as Civil Court".
The last clause of sub section (2) which has been underlined, unmistakably shows that only disputes of a civil nature which could be the subject of civil suits triable by ordinary civil courts, will fall within the scope of the expression "any dispute" used in Section 96(1).
Another definite pointer to the above being the right construction of "any dispute" is available in sub section (3) of Section 98 which provides: "Notwithstanding anything contained in Section 96, the Registrar may, if he thinks fit, suspend proceedings in regard to any dispute, if the question at issue between a society and a claimant or between different claimants, is one involving complicated question of law or fact, until the question has been tried by a regular suit instituted by one of the parties or by the society.
If any such suit is not instituted within two months from the Registrar 's order suspending proceedings, the Registrar shall take action as is provided in sub section (1).
" It is noteworthy that this sub section is substantially in the same terms as the proviso to sub section (1) of Section 54 of the Act of 1925, extracted earlier.
The proviso to sub section (1) of Section 54 of the Act of 1925 corresponding to sub section (3) of Section 98 of the Act of 1961, unmistakably shows that the compulsory arbitration by the Registrar, on a reference under Section 96, only a substitute for adjudication of disputes of a civil nature normally tried by civil courts.
Further indication regarding the nature of disputes which the Registrar may determine, is furnished by Section 166(1) which provides: "166(1).
Bar of jurisdiction of Courts : Save as expressly provided in this Act, no Civil or Revenue Court shall have any jurisdiction in respect of (a) . . (b) any dispute required to be referred to the Registrar, or his nominee, or board of nominees, for decision.
" It will be seen that Section 166, in terms, bars the jurisdiction only of Civil or Revenue Court, and not of the Labour Court or any 1033 Industrial Tribunal constituted under the B.I.R. Act or Industrial Disputes Act to adjudicate industrial disputes.
It is clear that the Legislature never intended to oust the jurisdiction of the Labour Court or the Industrial Tribunal to determine claims and industrial disputes which cannot be adjudicated by the ordinary Civil Courts.
Now, let us turn to the nature of the dispute raised by the second respondent.
Is it a dispute relating to a right which he could establish by filing a suit in a Civil Court? assuming for the moment that nothing in the relevant Cooperative Societies Act is a bar to such a suit.
The answer must be in the negative.
The respondent is not claiming a civil right arising from the contract of employment with the appellant Bank.
What he is claiming is not enforcement of any term of the contract of his employment on the part of his employer.
He is alleging that his services have been terminated unfairly and vindictively because of his legitimate trade union activities, as an act of victimisation.
The relief claimed by him is of reinstatement in service with back wages.
The rights and reliefs which he is claiming could not be determined and granted by a Civil Court in a suit.
As Luding Teller puts it, "a Court of Law proceeds on the footing that no power exists in the Courts to make contracts for people and the parties must make their own contracts.
The Courts reach their limit of power when they enforce contracts which the parties had made." (Quoted with approval in Rohtas Industries Ltd. vs Brijnandan Pandey.(1) The rights claimed by the second respondent are those which are conferred on workmen and employees under the Bombay Industrial Relations Act, to ensure social justice.
Such rights which do not stem from the contract of employment can be enforced only in the Labour Court constituted under the B.I.R. Act.
The Labour Court is competent to grant the relief of reinstatement claimed by the respondent, while in view of Section 21(b) of the Specific Relief Act, then in force, the Civil Court was not competent to grant that relief.
The dispute was raised by the second respondent by writing an approach letter to his employer, the appellant, as required by the Bombay Industrial Relations Act.
In substance, it was an industrial dispute.
It was not restricted to a claim under the contract or agreement of employment.
The Civil Court cannot grant the reliefs claimed by the second respondent.
As rightly submitted by Mr. Rama Reddy, if a Court is incapable of granting the relief claimed, normally, the proper construction would be that it is incompetent to deal with the matter.
1034 The matter can be looked at from another angle, also.
The law of industrial disputes or industrial relations is a special law dealing with rights and obligations specially created by it.
As against this, the provision in Section 54 of the Act of 1925/Section 96 of the Act of 1961 is a general provision.
In accordance with the maxim generalia specialibus non derogant, therefore, nothing in these general provisions can derogate from B.I.R. Act and the Cooperative Society Act must yield to the special provisions in the Bombay Industrial Relations Act, whenever a dispute clearly comes within the language of the latter Act.
In the light of the above discussion, the conclusion is inescapable that the expression "any dispute" referred to in Section 54 of the 1925 Act/Section 96 of the 1961 Act, does not cover a dispute of the kind raised by respondent 2 against the appellant Bank.
Coming now to the second test, it may be observed that to a part of it, the pronouncement of this Court in Cooperative Central Bank Ltd. vs Additional Industrial Tribunal, Hyderabad (ibid), furnishes a complete answer, wherein the interpretation of this very phrase "touching the business of the Society" occurring in Section 61 of Andhra Pradesh Cooperative Societies Act, 1964, which largely corresponds to Section 96 of the Gujarat Act, 1961, came up for interpretation.
The subject matter of the dispute was divided into three issues.
The first issue comprised a number of service conditions including inter alia salary, scales and adjustment or dearness allowance, conveyance charges, provident fund and gratuity, etc.
It was contended on behalf of the Bank that the effect of Section 61 and other provisions of Andhra Pradesh Cooperative Societies Act was to exclude the jurisdiction of the Industrial Tribunal to deal with such disputes under the Industrial Disputes Act.
After noticing a number of decisions and after referring to the previous decision of this Court in Deccan Cooperative Bank, the Court negatived the contention with these observations: "The dispute related to alteration of a number of conditions of service of the workmen which relief could only be granted by an Industrial Tribunal dealing with an industrial dispute.
The Registrar, it is clear from the provisions of the Act, could not possibly have granted the reliefs claimed under this issue because of the limitations placed on his powers in the Act itself.
The word "business" is equated with the actual trading or commercial or other 1035 similar business activity of the society, and since it has been held that it would be difficult to subscribe to the proposition that whatever the society does or is necessarily required to do for the purpose of carrying out its objects, such as laying down the conditions of service of its employee, can be said to be a part of its business, it would appear that a dispute relating to conditions of service of the workmen employed by the society cannot be held to be a dispute touching the business of the society.
Thus it is clear that in respect of the dispute regarding the alteration of various conditions of service, the Registrar or other person dealing with it under Section 62 of the Act is not competent to grant the relief claimed by the workmen at all.
On the principle laid down by this Court in the case of the Deccan Merchants Cooperative Bank Ltd., Civil Appeal No. 358 of 1967 dated 29 8 68, (supra) therefore, it must be held that this dispute is not a dispute covered by the provisions of Section 61 of the Act.
Such a dispute is not contemplated to be dealt with under Section 62 of the Act and must therefore, be held to be outside the scope of Section 61.
" The observations quoted above, negate contention (ii) advanced by Mr. Dholakia.
It however, remains to be considered whether the dispute raised by the second respondent in the present case, comes within the purview of the expression "touching the management of the Society" used in Section 96(c) of the Act of 1961.
In this connection, it may be noticed that just as in Section 96(1), in Section 61 of the Andhra Pradesh Corporation Societies ' Act, 1964, also, which came up for consideration in Cooperative Central Banks ' case before this Court, the term management does occur in the collocation of words "constitution, management or business".
But no specific argument seems to have been then raised that a dispute between the Society and its former servants relating to the conditions of service, comes within the purview of the expression 'touching the management of the Society '.
Perhaps, it was taken for granted that if the dispute was not comprehended by the expression "business of the Society", it would not be covered by the words "management of the Society", either.
Although there is little discussion in the judgment about the ambit and import of the expression "management", yet in conclusion, it was clearly and emphatically held 1036 that the dispute in that case was "outside the scope of Section 61.
" We will now, focus attention on the expression "management of the Society" used in Section 96(1) of the Act of 1961.
Grammatically, one meaning of the term 'management ' is: 'the Board of Directors ' or 'the apex body ' or Executive Committee at the helm which guides, regulates, supervises, directs and controls the affairs of the Society '.
In this sense, it may not include the individuals who under the over all control of that governing body or Committee, run the day to day business of the Society.
(see Words and phrases, by West Publishing Co. Permanent Edition, Vol. 26, page 357, citing, Warner & Swasey Co. vs Rusterholz D. C. Minn.(1).
Another meaning of the term 'management ', may be: 'the act or acts of managing or governing by direction, guidance, superintendence, regulation and control the affairs of a Society. ' A still wider meaning of the term which will encompass the entire staff of servants and workmen of the Society, has been canvassed for by Mr. Dholakia.
The use of the term 'management ' in such a wide sense in Section 96(1) appears to us, to be very doubtful.
Be that as it may, what has been directly bidden "out of bounds" for the Registrar by the very scheme and object of the Act, cannot be indirectly inducted by widening the connotation of 'management '.
A construction free from contexual constraints, having the effect of smuggling into the circumscribed limits of the expression "any dispute", a dispute which from its very nature is incapable of being resolved by the Registrar, has to be eschewed.
Thus considered, a dispute raised against the Society by its discharged servant claiming reliefs, such as reinstatement in service with back wages, which are not enforceable in a Civil Court, is outside the scope of the expression "touching the management of the Society" used in Section 96(1) of the Act of 1961, and the Registrar has no jurisdiction to deal with and determine it.
Such a dispute squarely falls within the jurisdiction of the Labour Court under the B.I.R. Act.
Learned counsel for the appellant tried to argue as a last resort that the relief sought by the second respondent could be granted by the Registrar by relaxing or moulding the Staff Regulations and Bye laws which lay down conditions of service governing the employees of the Society.
It is pointed out that under the Act of 1961, the Registrar has the power to amend or modify such Regulations and Bye laws.
1037 We find no merit in this contention, also.
A similar argument was advanced before this Court in Cooperative Central Bank 's Case, ibid, and was repelled inter alia, with the reasoning that the bye laws of the Bank, containing the conditions of service were in the nature of a contract between the Bank and its employees and a change of such bye laws, embodying the conditions of employment, "could not possibly be directed by the Registrar where, under section 62 (4) of the (ANDHRA) Act, he is specifically required to decide the dispute referred to him in accordance with the provisions of the bye laws".
It was further observed that a dispute referred to the Registrar can even be transferred for disposal to a person who may have been invested with powers in that behalf, or may be referred for disposal to an arbitrator.
But neither the Registrar nor his nominee will be competent to grant the relief requiring a change in the service conditions of the employees, under section 62 of the Andhra Act.
Such a relief could be granted only by the Industrial Tribunal which under the Industrial Disputes Act, has the jurisdiction even to vary contracts of service between an employer and employees.
This reasoning is applicable mutatis mutandis to the instant case.
For all the foregoing reasons, the appeal fails and is dismissed with costs.
In token of our gratitude for the valuable assistance rendered to us by Shri Rama Reddy as amicus curiae, we direct that an honorarium of Rs. 1500/ be paid to him, which shall be taxed as costs awarded against the appellant.
V.D.K. Appeal dismissed.
| The appellant assessee is a firm carrying on business of manufacturing ice and preservation of potatoes in its cold storage.
By an assessment order dated July 5, 1961 it was assessed to income tax for the assessment year 1961 62 on a total income of Rs. 53,548/ .
The Income Tax Officer, in his proceedings started on December 21, 1961 under section 34(1) of the 1922 Act, found certain property income and income to the extent of one lakh from potato transaction put through in the name of benami persons by the assessee had escaped assessment and therefore, by his order dated December 22, 1965 he brought them to tax.
The said order of the Income Tax Officer was annulled in appeal, on May 10, 1967 on the ground that the initiation of reassessment was not justified.
This order became final as the department did not take further steps.
On July 14, 1967 the Income Tax Officer issued a notice under section 148 of the Income Tax Act, 1961 in respect of the self same assessment year after obtaining the sanction of the Commissioner of Income Tax.
Pursuant to the notice the appellant filed a return under protest on August 14, 1967.
The appellant challenged the said notice by filing a writ petition in the Allahabad High Court, inter alia on the ground that under section 297(2)(d)(ii) of the 1961 Act no reassessment proceedings could be undertaken under section 147 of the 1961 Act inasmuch as in respect of the self same escaped income, proceed ings under section 34(1) of the 1922 Act had been undertaken and were pending on April 1, 1962 when the 1961 Act came into force.
The High Court rejected the contention on the ground that in order that section 297(2)(d)(ii) should apply, proceedings under section 34 of the 1922 Act must be legal proceedings with jurisdiction.
Allowing the appeal by certificate, the Court ^ HELD : The factual pendency of the proceedings under Section 34 of the 1922 Act on the relevant date, and not their legality is material for purposes of section 297(2)(d)(ii) of the 1961 Act.
[238 D E] In the instant case: (a) admittedly proceedings under section 34(1) of the 1922 Act in respect of the item of Rupees one lakh (which was said to have escaped assessment) were factually pending on April 1, 1962 and therefore, the notice under section 148 of the 1961 Act would be incompetent, and [239 C D] 237 (b) The initiation of the proceedings under section 34 by the Income Tax Officer cannot be regarded as being without jurisdiction and hence non est.
The reassessment order made by the Income Tax Officer on December 22, 1965 clearly shows that he had initiated the proceedings (in respect of property income) under section 34(1) (b) i.e., in consequence of information gathered by him from Assistant Appellate Commissioner 's order for earlier year and not under section 34(1)(a).
[239 F H] section B. Jain vs Mahendra, and Gujar Mal Modi vs Commissioner of Income Tax, ; applied.
|
ns Nos. 108 and 174 177 of 1976.
(Under Article 32 of the Constitution of India).
R. K. Garg, section C. Agarwala & Aruneshwar Gupta for the petitioners in WP 108 Somnath Chatterjee, P. K. Chatterjee & Rathin Das for the petitioners in 174 77 section V. Gupte, Attorney Genl., U. R. Lalit, R. N. Sacluhey & A. Subhashini for r. 2 in all the WPs.
section V. Gupte, Attorney Gent. & D. N. Mishra for rr. 2 & 3 in WP 108 and rr.
2 4 in WP 174 77.
P. section Khera for the Intervener (AIN LIC Employees Federation) The following Judgments were delivered BEG, C.J. The Life Insurance Corporation was constituted under the Life Insurance Corporation Act 31 of 1956 (hereinafter to be referred to as "the Act").
On 1 6 1957, the Central Government issued, under section 11 (1) of the Act, an order prescribing the 'Pay scales, dearness allowance and conditions of service applicable to Class III and IV employees.
Among these conditions it is, stated that no bonus would be paid but amenities like insurance and medical treatment free of cost would be provided.
On 26 6 1959, an order was passed by the Central Government under section 11(2) of the Act, amending para 9 of the 1957 Order inasmuch as it was provided that bonus other than profit sharing bonus would be paid to the employees drawing the salary not exceeding Rs. 5001 per month.
On 2nd of July 1959, there was.
a settlement between the L.I.C. and the employees providing for payment of cash bonus at the rate of one and a half month 's basic salary which was to be effective from 1 9 1956 and valid upto 31 12 1961.
In July 1960, regulations were framed under section 49 to regulate the conditions of service of classes of employees and regulation 58 provided for payment of non profit sharing bonus to the employees.
Orders were again passed on 14 4 1962 and 3rd August 1963, the effect of which was to remove the restriction of Rs. 5001 for eligibility for payment of bonus.
On 29th January 1963, another settlement was arrived at between the L.I.C. and its employees for payment of cash bonus at the rate of one and a half month 's basic salary.
This was to continue in operation until 31st March 1969.
On 20th June 1970, a third settlement was reached for payment of cash bonus at the same rate which was to be effective upto 31st March 1972.
On 26 6 1972, a fourth settlement for payment of cash bonus at the rate of 10 per cent of gross wages (basic and special pay and dearness allowance) was made effective from 1st 'April 1972 to 1973.
On 21st January 1974 and 6th February 1974, settlements for payment of cash bonus at 15 per cent of gross wages, valid for four years from 1st April 1973 to 31st March 1977, were reached.
It is clear that this so called "bonus" did not depend upon profits earned but was nothing short of increas 340 ed wages.
The settlements were approved by the Board of Directors of the L.I.C. and also by the Central Government.
On 29th March, 1974, a circular was issued by the L.I.C. for payment of bonus in accordance with the settlement along with the salary in April.
In April 1974, the payment of bonus for the year 1973 74 was actually made in accordance with the settlement.
Again, in April 1975, *bonus for the year 1974 75 was made in accordance.
with the settlements.
On 25th September 1975, however, a Payment of Bonus Amendment Ordinance was promulgated.
On 26 9 1975, the L.I.C. issued a circular stating that, as the payment of bonus was being reviewed in the light of the Ordinance, and, on 22nd of March, 1976, payment of bonus for the year 1975 76 was to, be withheld until a final decision was) taken.
Against this, a writ petition was filed in the; High Court of Calcutta.
On 21st May 1976, the Calcutta High Court passed an order recognising the right of petitioners to payment of bonus for the year 1975 76 which had become payable along with the salary in April 1976 and ordered that it must be paid to the employees.
Apparently, bonus was treated as part of the right of the petitioners to property protected by Article 19( and 31(1) of the Constitution.
On 29th May 1976, the Life Insurance Corporation Modification of Settlement Act 1976 was enacted by Parliament denying to the petitioners the right which had been recognised by the settlements, approved by the Central Government and acted upon by the actual payment of bonus to the employees, and, finally, converted into right under the decision of the Calcutta High Court on 21st May 1976.
Provisions.
of section 1 1 (2) may read as follows "(2) Where the Central Government is satisfied that for the purpose of securing uniformity in the scales of remuneration and the other terms and conditions.
of service applicable to employees of insurers whose controlled busi ness has been transferred to, and vested in, the Corporation, it is necessary so to do, or that, in the interests of the Corporation and its policy holders,, a reduction in the remuneration payable, or a revision of the other terms and conditions of service applicable, to employees or any class of them is called for, the Central Government may, notwithstanding anything contained in sub section (1), or in the , or in any other law for the time being in force, or in any award, settlement or agreement for the time being in force, alter (whether by way of reduction or otherwise) the remuneration and the other terms and conditions.
of service to such extent, and in such manner as it thinks fit; and if the alteration is not acceptable to any employee, the Corporation may terminate his employment by giving him compensation equivalent to three months ' remuneration unless the contract of service with such employee provides for a shorter notice of termination.
Explanation : The compensation payable to an employee under this sub section shall be in addition to, and shall not affect, any pension, gratuity, provident fund money 341 or any other benefit to which the employee may be entitled under his contract of service.
" Section 1 1 (2) of the Act shows that the Central Government had ample power to revise the scales of remuneration and other terms and conditions of service if it was satisfied that the interest of the Corporation or the policy holders demanded this.
Of course, such orders had to be passed as a result of satisfaction upon material placed before the Central Government relating to the interests of the Corporation or its policy holders.
But, no such order was passed.
What was actually done was that the Act was passed to set aside the terms of the settlements which had been incorporated in the Judgment inter parties of the Calcutta High Court.
The objects and reasons of the Act were set out as follows "The provisions of the do not apply to the employees employed by the Life Insurance Corporation of India.
However, the Corporation has, as a matter of practice, been paying bonus to its employees.
The bonus to Class I and Class II employees is being paid in pursuance of agreements between the Corporation and such employees.
The bonus to Class III and ,Class IV employees is being paid under the terms of settlement arrived at between the Corporation and such employees from time to time.
In terms of the settlement arrived at between the Corporation and its Class III and class IV employees on 24th January, 1974 under the , which is in force upto the 31st March, 1977, bonus is payable by the Corporation to its Class III and Class IV employees at the rate of fifteen per cent, of their annual salary without any maximum limit.
It is proposed to set aside, with effect from the 1st April, 1975, these provisions of the settlement arrived at between the Corporation and its Class III and Class IV employees on 24th January, 1974 to enable the Corporation to make ex gratia payments to such employees at the rates determined on the basis of the general Government policy for making ex gratia payments to the employees of the non competing public sector undertakings.
The bill seems to, achieve the above object.
" The statement of objects and reasons discloses that the purpose ,of the impugned Act was to undo settlements which had been arrived at between the Corporation and Class III and Class IV employees on January 24 and February 6, 1974, and actually recognised by the order of the Calcutta High Court.
The question could well arise whether this was really the exercise of a legislative power or of a power comparable to that of an appellate authority considering the merits of what had passed into a right to property recognised by the This Court has decided in Shrimati Indira 342 Narain(1) that even a constitutional amendment cannot authorise the assumption of a judicial power by Parliament.
One of the tests laid down there was whether the decision is of a kind which requires hearing to be given to the parties, or, in other words, involves at least a quasi judicial procedure, which the Parliament does not, in exercise of its legislative power, follow.
A decision reached by the Central Government, under section 11(2) of the Act, is the result of a satisfaction on matters stated there and would imply quasi judicial procedure where the terms of a settlement had to be reviewed or revised.
But, the legislative procedure, followed here, does not require that to be done.
It would, in any event, be unfair to adopt legislative procedure to undo such a settlement which had become the basis of a decision of a High Court.
Even if legislation can remove the basis of a decision it has to do it by an alteration of general rights of a class but not by simply excluding two specific settlements between the Corporation and its employees from the purview of the section 18 of the , which had been held to be valid and enforceable by a High Court.
Such selective exclusion could also offend Article 14.
If Parliament steps in to set aside such a settlement, which the Central Government could much more reasonably 'have examined after going into the need for it or for its revision, the question also arises whether it violates the fundamental right to property guaranteed under Article 19 (1 ) (f ) of the Constitution, inasmuch as the right to get bonus is part of wages and, by its deprivation, a judicially recognised right to property is taken away and not saved by the provisions of Article 19 (6) of the Constitution? A restriction upon a right may even cover taking away of the right to increased remuneration in the interests of the general public.
Where was the question of any restriction here in the interests of the general public ? it seems a pure and simple case of a deprivation of rights of Class III and Class TV employees without any apparent nexus with any public interest.
The first hurdle in the way of this attack upon the Act undoing the settlement under Article 19 (1) (f) of the Constitution placed before us what that the Act of 1976 notified on 29 5 1976 was passed during the emergency.
Hence, it was submitted that Article, 358 of the Constitution is an absolute bar against giving effect to any right arising under Article 19 of the Constitution.
Furthermore, it was submitted that the effect of the Act was to wash off.
the liability altogether after 1 4 1975 so that nothing remained to be enforced after 1 4 1975.
The Act is a very short one of 3 sections.
After defining the settlement as the one which was arrived at between the Corporation and their workers on 24 1 1974 under section 18, read with clause (p) of section 2, of the and the similar further settlement of 6 2 1974, section 3 lays down (1) [1976](2)S.C.R.347.
343 "Notwithstanding anything contained in the , the provisions of each of the settlements, in so far as they relate to the payment of an annual cash bonus to every Class, III and Class IV employees of the Corporation at the rate of fifteen per cent of his annual salary, shall not have any force or effect and shall not be deemed to have any force or effect on and from 1st day of April, 1975.
" The object of the Act was, in effect, to take away the force of the judgment of the Calcutta High Court recognising the settlements in favour of Class III and Class IV employees of the Corporation.
Rights under that judgment could be said to arise independently of Article 19 of the Constitution.
I find my self in complete agreement with my learned brother Bhagwati that to give effect to the judgment of the Calcutta High Court is not the same thing as enforcing a right under Article 19 of the Constitution.
It may be that a right under Article 19 of the Constitution becomes linked up with the enforceability of the judgment.
Nevertheless, the two could be viewed as separable sets of rights.
If the right conferred by the judgment independently is sought to be set aside, section 3 of the Act, would, in my opinion, be invalid for trenching upon the judicial power.
I may, however, observe that even though the real object of the Act may be to set aside the result of the mandamus issued by the Calcutta High Court, yet, the section does not mention this object at all.
Probably this was so because the jurisdiction of a High Court and the effectiveness of its orders derived their force from Article 226 of the Constitution itself, These could not be touched by an ordinary act of Parliament.
Even if section 3 of the Act seeks to take away the basis of the judgment of the Calcutta High Court, without mentioning it, by enacting what may appear to be a law, yet, I think that, where the rights of the citizen against the State are concerned, we should adopt an interpretation which upholds those rights.
Therefore, according to the interpretation, I prefer to adopt the rights which had passed into those embodied in a judgment and became the basis of a Mandamus from the High Court could not be taken away in this indirect fashion.
Apart from the consideration mentioned above there are also other considerations put forward, with his usual vehemence, by Mr. R. K. Garg who relies upon the directive principles of the State Policy as part of the basic structure of our Constitution.
At any rate, he submits that in judging the reasonableness of a provision the directive principles of State policy can be used, as this Court has repeatedly done, as criteria of reasonableness, and, therefore, of validity.
Garg bad relied strongly upon the provisions of Article 43 of the Constitution which says : "43.
The State shall endeavour to secure by suitable legislation or economic Organisation or in any other way, to all workers, agricultural, industrial or otherwise, work, a living wage,, conditions of work ensuring a decent standard 344 of life and full enjoyment of leisure and social and cultural opportunities and, in particular, the State shall endeavour to promote cottage industries on an individual or co operative basis in rural areas.
" He submits that Article 43 casts an obligation on the State to secure a living wage for the workers and is part of the principles "declared fundamental in the governance of the country".
In other words, he would have us use Article 43 as conferring practically a fundamental right which can be enforced.
I do not think that we can go so far as that because, even though the directive principles of State policy, including the very important general ones contained in Article 38 and 39 of the Constitution, give the direction in which the fundamental policies of the State must be oriented yet, we cannot direct either the Central Government or Parliament to proceed in that direction.
Article 37 says that they "shall not be enforceable by any court, but the principles therein laid down are nevertheless fundamental in the governance of the country and it shall be the duty of the State to apply these principles in making laws." Thus, even if they are not directly enforceable by a court they cannot be declared ineffective.
They have the life and force of fundamentals.
The best way in which they can be, without being directly enforced, given vitality and effect in Courts of laws is to use them as criteria of reasonableness, and, therefore, of validity, as we have been doing.
Thus, if progress towards goals found in Articles 38 and 39 and 43 are desired, there should not be any, curtailment of wage rates arbitrarily without disclosing any valid reason for it as is.
the case here.
It is quite reasonable, in my opinion, to submit that the measure which seeks to deprive workers of the benefits of a settlement arrived at and assented to by the Central Government, under the provisions of the , should not be set at naught by an Act designed to defeat a particular settlement.
If this be the purpose of the Act, as it evidently is, it could very well be said to be contrary to public interest, and, therefore, not protected by Article 19(6) of the Constitution.
Furthermore, I think that the principle laid down by this Court in Union of India & Ors.
vs M/s. Indo Afghan Agencies Ltd.(1) can also be taken into account in judging the reasonableness of the provision in this case.
It was held there (at p. 385) : "Under our jurisprudence the Government is not exempt from liability to carry out the representation made by it as to its future conduct and it cannot on some undefined and undisclosed ground of necessity or expediency fail to carry out the promise solemnly made by it, nor claim to be the judge of its, own obligation to the citizen on an ex parte appraisement of the circumstances in which the obligation has arisen." (1) [1968] (2)S.C.R.365.
34 5 In that case, equitable principles were invoked against the Government.
It is true that, in the instant case, it is a provision of the Act of Parliament and not merely a governmental order whose validity is challenged before us.
Nevertheless, we cannot forget that the Act is the result of a proposal made by the Government of the day which, instead of proceeding under section 11(2) of the Life Insurance Corporation Act, chose to make an Act of Parliament protected by emergency provisions.
I think that the prospects held out, the representations made , the conduct of the Government, and equities arising therefrom, may all be taken into consideration for judging whether a particular piece of legislation, initiated by the Government and en acted by Parliament, is reasonable.
Mr. Garg has also strongly attacked section 3 of the Act as, violative of Article 14 of the Constitution which was also not available to the petitioners during the emergency.
He alleges that the Corporation has been making very handsome profits so that the question of jeopardising the interests of the Corporation or Policyholders could not arise.
He submits that the Act is nothing more than selective discrimination practised against the lower levels of the staff of the Life Insurance Corporation.
I do not think that these contentions are devoid of force.
I am sorry that due to the very short interval left for me to dictate my opinion in this case I have not been able to fully set out the reasoning or to cite all the authorities I would have liked to have done.
The pressure of work on hand is too great.
I have several judgments to pronounce tomorrow, the last day on which I shall have the authority to participate as a Judge in the decisions of this Court.
I have, however, thought it to be my duty to indicate my line of thinking briefly as I have my doubts whether Article 31(2A) is not an effective answer to complete reliance upon Article 31(2) of the Constitution.
It is true that the right to receive bonus which had been recognised by the Central Government both by its orders and conduct under a settlement is a right to property.
Nevertheless, since acquisition is defined by Article 31(2A) of the 'Constitution, I seriously doubt whether that definition of acquisition really satisfied by the facts in the case before us.
The provision reads as follows : "31(2A) Where a law does not provide for the transfer of the ownership or right to possession of any property to the State or to a Corporation evened or controlled by the State, it shall not be deemed to provide for the compulsory acquisition or requisitioning, of property, notwithstanding that it deprives any person of his property.
" I have, however, no doubt that the conclusion reached by my learned brother Bhagwati is quite correct inasmuch as the benefits of the rights recognised by the judgment of the Calcutta High Court could not be indirectly taken away by section 3 of the Act selectively directed against specified settlements only.
346 I think that section 3 of the impugned Act is struck by the provisions of Article 19(1) (f) of the Constitution and not saved by Article 19(6) of the Constitution.
It is also struck by Article 14.
If the fundamental rights guaranteed by Articles 14 and 19 are not suspended, but their operation is only suspended, a view which I expressed in A. D. M. Jabalpur vs Shivkant Shukla(1) the effect of the suspension is to restore the status quo ante.
Would this not mean that only the validity of an attack based on Articles 14 and 19 is suspended during the Emergency ? But, once this embargo is lifted Articles 14 and 19 of the Constitution whose use was suspended, would strike down any legislation which would have been bad.
In other words, the declaration of invalidity is stayed during the emergency.
Both Articles 358 and 359(1A) provide that, as soon as a proclamation of emergency ceases to operate, the effect of suspension must vanish "except as respects things done or omitted to be done before the law so ceases to have effect".
The things done or omitted to be done could certainly not mean that the rights conferred under the settlements were washed off completely as the learned Attorney General suggested.
To hold that would be to convert the suspension of invalidity into a validation of law made during the emergency.
If the law was not validated but only its invalidation was suspended, we should not give any wider effect to the suspension.
I think we should interpret "things done or omitted to be done" very narrowly.
If this be so, it means that the settlements are not to be deemed to be wiped off.
No doubt payments under them were temporarily suspended.
This must obviously mean that no payment could be demanded under them during the emergency, but, as soon as the emergency was over, the settlements would revive and what could not be demanded during the emergency would become payable even for the period of emergency for which payment was suspended.
Otherwise the enactment will have effect even after the emergency had ceased.
This would clearly be contrary to the express provisions of Article 358 and 359(1A).
In other words, valid claims cannot be washed off by the emergency per se.
They can only be suspended by a law passed during the operation of Article 358 and 359(1A) of the Constitution.
For the reasons given above, I reach the same conclusion as my learned brother Bhagwati although perhaps by a difference route.
concur in the final order made by my learned Brother Bhagwati.
BHAGWATI, J.
These writ petitions are filed by employees of the Life Insurance Corporation challenging the constitutional validity of the Life Insurance Corporation (Modification of Settlement) Act, 1976.
This unusual piece of legislation was enacted by Parliament during the emergency at a time when there could hardly be any effective debate or discussion and it sought to render ineffective a solemn and deliberate Settlement arrived at between the Life Insurance Corporation and four different associations of its employees for payment of cash bonus.
It is necessary, in order to appreciate the various (1) A.T.R. Suppl.
S.C.R. 172.
347 contentions arising in the writ petitions to recapitulate briefly the facts leading up to the enactment of the Life Insurance Corporation (Modification of Settlement) Act, 1976, hereinafter referred to as the impugned Act.
The Life Insurance Corporation is a statutory authority established under the and under section 6 it is the general duty of the Life Insurance Corporation to carry On life insurance business, whether in or outside India, and it is required to so exercise its powers as to secure that life insurance business is developed to the best advantage of the community.
It is not necessary to refer to the various provisions of the which define the powers, duties and functions of the , since we are not concerned with them in these writ petitions.
It would be enough to refer to section 49 which confers power on the Life Insurance Corporation to make regulations. 'Sub section (1) of that section provides that the Life Insurance Corporation may,.
with the previous approval of the Central Government, make regulations, not in consistent with the Act, "to provide for all matters for which provision is expedient for the purpose of giving effect to the provisions" of the Act and sub section (2) enacts that in particular and without prejudice to the generality of the power conferred under sub section (1), such regulations may provide for "(b) the method of recruitment of employees and agents of the Corporation and the terms and conditions of service of such employees or agents; (bb) the terms and conditions of service of persons who have become employees of the Corporation under subsection (1) of section 11;" The Life Insurance Corporation has in exercise of the power conferred under clauses (b) and (bb) of sub section (2).
of section 49 and with the previous approval of the Central Government, made the Life Insurance Corporation (Staff) Regulations, 1960 defining the terms and conditions of service of its employees.
There is only one Regulation which is material for our purpose, and that is Regulation 58 which is in the following terms "The Corporation may, subject to such directions as the Central Government may issue, grant non profit sharing bonus to its employees and the payment thereof, including conditions of eligibility for the bonus, shall be regulated by instructions issued by the Chairman from time to time.
" We have set out Regulation 58 in its present form as that is the form in which it stood throughout the relevant period.
It will be a matter for consideration as to what is the effect of this Regulation on the Settlement arrived at between the Life Insurance Corporation and its employees in regard to bonus.
348 It appears that right from 1959 Settlement were arrived at between the Life Insurance Corporation and its employees from time to time in regard to various matters relating to the terms and conditions of service of Class III and Class IV employees including bonus payable to them.
The last of such Settlement dated 20th June, 1970, as modified by the Settlement dated 26th June, 1972, expired on 31st March, 1973.
Thereupon four different associations of employees of the Life Insurance Corporation submitted their charter of demands for revision of scales of pay, allowances and other terms and conditions of service on behalf of Class III and Class IV employees.
The Life Insurance Corporation carried on negotiations with these associations.
between July 1973 and January 1974 at which there was free and frank exchange of views in regard to various matters including the obligation of the Life Insurance Corporation to the policy holders and;.
the community and ultimately these negotiations culminated in a Settlement: dated 24th January, 1974 between the Life Insurance Corporation and these associations.
The Settlement having been arrived at other wise than in the course of conciliation proceeding, was binding on the parties under section 18, sub section (1) of the and since the four associations which were parties to the.
employees, the Settlement was binding on the Life Insurance Corporation and all its Class III and Class IV employees.
The Settlement provided for various matters relating to the terms and conditions of: service but we are concerned only with Clause (8) which made provision in regard to bonus.
That clause was in the following terms "(i) No profit sharing bonus shall be paid.
However, the Corporation may, subject to such directions as the Central Government may issue from time to time, grant any other kind of bonus to its Class III & IV employees.
(ii) An annual cash bonus will be paid to all Class III and ' Class IV employees at the rate of 15% of the annual salary (i.e. basic pay including of,special pay, if any, and dearness allowance and additional dearness allowance) actually drawn by an employee in respect of the financial year to which thebonus relates.
(iii) Save as provided herein all other terms and conditions attached to the admissibility and payment of bonus shall be as laid down in the Settlement on bonus dated tile 26th, June, 1972.
" It is also necessary to reproduce here Clause (12) as that has some bearing on the controversy between the parties "PERIOD OF SETTLEMENT: (1) This Settlement shall be effective from 1st April, 1973 and shall be for a period of four years, i.e., from 1st April,, 1973 to 31st March, 1977.
349 (2) The terms of this Settlement shall be subject to the approval of the Board of the Corporation and the Central Government.
(3) This Settlement disposes of all the demands raised by the workmen for revision of terms and conditions of their service.
(4) Except as otherwise provided or modified by this Settlement, the workmen shall continue to be governed by all the terms and conditions of service as set forth and regulated by the Life Insurance Corporation of India (Staff) Regulations, 1960 as also the administrative instructions issued from time to time and they shall, subject to the provisions thereof including any period of operation specified therein be entitled to, the benefits thereunder.
" It was common ground between the parties that the Settlement was approved by the Board of the Life Insurance Corporation as also by the Central Government and the Chief of Personnel by his Circular dated 12th March, 1974 intimated to the Zonal and Divisional Managers that the approval of the Central Government to the Settlement having been received the Life Insurance Corporation should proceed to implement the terms of the Settlement.
The Executive Director also issued a circular dated 29th March, 1974 containing administrative instructions in regard to, payment of cash bonus under clause 8 (ii) of the Settlement.
These administrative instructions set out directions in regard to Various matters relating to payment of cash bonus and of these, two are material.
One was that in case of retirement or death, salary up to the date of cessation of service shall be taken into account for the purpose of determining the amount of bonus payable to the employee, or his heirs and the other was that the bonus shall be paid along with the salary for the month of April, but in case of retirement or death, payment will be made "soon after the contingency".
There was no dispute that for the first two years, 1st April, 1973 to 31st March, 1974 and 1st April, 1974 to 31st March, 1975, the Life Insurance Corporation paid bonus to its Class III and Class IV employees in accordance with the provisions of Clause 8(ii) of the Settlement read with the administrative instructions dated 29th March, 1974.
But then came the declaration of emergency on 26th June, 1975 and troubles began for Class III and Class IV ,employees of the Life Insurance Corporation.
On 25th September, 1975 an Ordinance was promulgated by the President of India called the Payment of Bonus (Amendment) Ordinance, 1975 which came into force with immediate effect.
Subsequently, this Ordinance was replaced by the Payment of Bonus (Amendment) Act, 1976 which was brought into force with retrospective effect from the date of the Ordinance, namely, 25th September, 1975.
This amending law considerably curtailed the rights of the employees to bonus in industrial establishments, but it had no impact so far as the employees of the Life Insurance Corporation were concerned since the original was not applicable to the life Insurance Corporation by reason of section 32 which exempted the Life Insurance L5 277SCI/78 350 Corporation from its operation.
The Central Government, however, decided that the employees of establishments which were not covered by the would not be eligible for payment of bonus but ex gratia cash payment in lieu of bonus would be made "as may be determined by the Government taking into account the wage level, financial circumstances etc.
in each case and such payment will be subject to a maximum of 10% and pursuant to this decision, the Life Insurance Corporation was advised by the Ministry of Finance that no further payment of bonus should be made to the employees "without getting the same cleared by the Government".
The Life Insurance Corporation thereupon by its Circular dated 26th September, 1975 informed all its offices that since the question of payment of bonus was being reviewed in the light of the Bonus Ordinance dated 25th September,, 1975, no bonus should be paid to the employees "under the existing provisions until further instructions".
The ' All India Insurance Employees ' Association protested against this stand taken by the Life Insurance Corporation and pointed out that the Life Insurance Corporation was bound to pay bonus in accordance with the terms of the Settlement and the direction not to pay bonus was clearly illegal and unjustified.
The Life Insurance Corporation conceded that payment of bonus was covered by the settlement but contended that it was subject to such directions as the Central Government might issue from time to time and since the Central Government had advised the Life Insurance Corporation not to make any payment of bonus without their specific approval, the Life Insurance Corporation was justified in not making payment to the employees.
This stand was taken by the Life Insurance Corporation in its letter dated 7th February, 1976 addressed to, the All India Insurance Employees ' Association and this was followed by a Circular dated 22nd March, 1976 instructing all the offices of the Life Insurance Corporation not to make payment by way of bonus.
The All India Insurance Employees ' Association and some others thereupon filed writ petition No. 371 of 1976 in the High Court of Calcutta for a writ of Mandamus and Prohibition directing the Life Insurance Corporation to act in accordance with the terms of the Settlement dated 24th January.
1974 read with the administrative instructions dated 29th March, 1974 and to rescind or cancel the Circulars dated 26th September, 1975, 7th February, 1976 and 22nd March, 1976 and not to refuse to pay cash bonus to Class III and Class IV employees along with their salary for the month of April 1976 as provided by the Settlement read with the administrative instructions.
The writ petition was resisted by the Life Insurance Corporation on various grounds to which it is not necessary to refer since we are not concerned with the correctness of the judgment of the Calcutta High Court disposing of the writ petition.
Suffice it to state, and that is material for our purpose, that by a judgment dated 21st May, 1976 a Single Judge of the Calcutta High Court allowed the writ petition and issued a writ of Mandamus and Prohibition as prayed for in the writ petition.
The Life Insurance Corporation preferred a Letters Patent Appeal against the judgment of the learned Single Judge but in the mean time the impugned Act bad already come into force and it was, therefore, stated on behalf of the Life Insurance Corporation before the Division Bench that there was 351 no necessity for proceeding with the appeal and hence the Division Bench made no order in the appeal.
The result was that the judgment of the learned Single Judge remained intact : with what effect, is a matter we shall presently consider.
On 29th May, 1976 Parliament enacted the impugned Act providing inter alia for modification ' of the Settlement dated 24th January, 1974 arrived at between the Life Insurance Corporation and its employees.
The impugned Act was a very short statute consisting only of three sections.
Section 1 gave the short title of the impugned Act, section 2 contained definitions and section 3, which was the operative section, provided as follows : "Notwithstanding anything contained in the , the provisions of the settlement in so far as they relate to the payment of an annual cash bonus to every Class III and Class IV employees of the Corporation at the rate of fifteen per cent, of his annual salary, shall not have any force or effect and shall not be deemed to have had any force or effect on and from the 1st day of April, 1975.
" Since the impugned Act did not set at naught the entire settlement dated 24th January, 1974 but merely rendered without force and effect the provisions of the Settlement in so far as they related to payment of annual cash bonus to Class III and Class IV employees and that too not from the date when the Settlement became operative but from 1st April, 1975, it was said to be a statute modifying the pro visions of the Settlement.
The plain and undoubted effect of the impugned Act was to deprive Class III and Class IV employees of the annual cash bonus to which they were entitled under clause 8(ii) of the Settlement for the years 1st April, 1975 to 31st March, 1976 and 1st April, 1976 to 3 1 St March, 1977 and therefore, two of the associations along with their office bearers field the present writ peti tions challenging the constitutional validity of the impugned Act.
There were two grounds on which the constitutionality of the impugned Act was assailed on behalf of the petitioners and they were as follows : A.
The right of Class III and Class TV employees to annual cash bonus for the years 1st April, 1975 to 31st March, 1976 and 1st April, 1976 to 31st March, 1977 under clause 8(ii) of the Settlement was property and since the impugned Act provided for compulsory acquisition of this property without payment of compensation, the impunged Act was violative of Article 31(2) of the Constitution and was hence null and void.
B. The impugned Act deprived Class III and Class IV employees of the right to annual cash bonus for the years 1st April, 1975 to 31st March, 1976 and 1st April, 1976 to 31st March, 1977 which was vested in them under clause 8(ii) of the Settlement and there was, therefore, clear infringement of their fundamental right under Article 3 52 19(1) (f) and since this deprivation of the right to annual cash bonus, which was secured under a Settlement arrived at as a result of collective bargaining and with full and mature deliberation on the part of the Life Insurance Corporation and the Central Government after taking into account the interests of the policy holders and the community and with a view to approximating towards the goal of a living wage as envisaged in Article 43 of the Constitution, amounted to an unreasonable restriction, the impugned Act was not saved by Article 19(5) and hence it was liable to be struck down as invalid.
We shall proceed to consider these grounds in the order in which we have set them out, though we may point out that if either ground succeeds, it would be unnecessary to consider the other.
But before we proceed, further, it would be convenient at this stage to refer to one other contention of the petitioner based on the judgment of the Calcutta High Court in Writ Petition No. 371 of 1976.
The contention was that since the Calcutta High Court had by its judgment dated 21st May, 1976 issued a writ of Mandamus directing the Life Insurance Corporation to pay annual cash bonus to Class III and Class IV employees for the year 1st April, 1975 to 31st March, 1976 along with their salary for the month of April, 1976 as provided by the Settlement and this judgment had be come final by reason of withdrawal of the Letters Patent Appeal preferred against it, the Life Insurance Corporation was bound to obey the writ of Mandamus and to pay annual cash bonus for the year 1st April, 1975 to 31st March, 1976 in accordance with the terms of clause 8(ii) of the Settlement.
It is, no doubt, true, said the petitioners, that the impugned Act, if valid, struck at clause 8(ii) of the Settlement and rendered it ineffective and without force with effect from 1st April, 1975 but it did not have the effect of absolving the Life Insurance Corporation from its obligation to carry out the writ of Mandwnus.
There was, according to the petitioners, nothing in the impugned Act which set at naught the effect of the judgment of the Calcutta High Court or the binding character of the writ of Mandamus issued against the Life Insurance Corporation.
This contention of the petitioners requires serious consideration and we are inclined to accept it.
It is significant to note that there was no reference to the judgment of the Calcutta High Court in the Statement of Objects and Reasons, nor any non obstante clause referring to a judgment of a court in section 3 of the impugned Act.
The attention of Parliament does not appear to have been drawn to the fact that the Calcutta High Court had already issued a writ of Mandamus commanding the Life Insurance Corporation to pay the amount of bonus for the year 1st April, 1975 to 31st March, 1976.
It appears that unfortunately the judgment of the Calcutta High Court remained almost unnoticed and the impugned Act was passed in ignorance of that judgment.
Section 3 of the impugned Act provided that the provisions of the Settlement in so far as they relate to payment of annual cash bonus to Class III 353 and Class IV employees shall not have any force or effect and shall not be deemed to have had any force or effect from 1st April, 1975.
But the writ of Mandamus issued by the Calcutta High Court directing the Life Insurance Corporation to pay the amount of bonus for the year 1st April, 1975 to 31st March, 1976 remained untouched by the impugned Act.
So far as the right of Class III and Class IV employees to annual cash bonus for the year 1st April, 1975 to 31st March, 1976 was concerned, it became crystallised in the judgment and thereafter they became entitled to enforce the writ of Mandamus granted by the judgment and not any right to annual cash bonus under the settlement.
This right under the, judgment was not sought to be taken away by the impugned Act.
The judgment continued to subsist and the Life Insurance Corporation was bound to pay annual cash bonus to Class III and Class IV employees for the year 1st April, 1975 to 31st March, 1976 in obedience to the writ of Mandamus.
The error committed by the Life.
Insurance Corporation was that it withdrew the Letters Patent Appeal and allowed the judgment of the learned Single Judge to become final.
By the time the Letters Patent Appeal came up for hearing, the impugned Act had already come into force and the Life Insurance Corporation could, therefore, have successfully contained in the Letters Patent Appeal that, since the Settlement, in as far as it provided for payment of annual cash bonus, was annihilated by the impugned Act with effect from 1st April, 1975, Class III and Class IV employees were not entitled to annual cash bonus for the year 1st April, 1975 to 31st March, 1976 and hence no writ of Mandamus could issue directing the Life Insurance Corporation to make payment of such bonus.
If such contention had been raised, there is little doubt, subject of course to any constitutional challenge to the validity of the impugned Act, that the judgment of the learned Single Judge would have been upturned and the Writ petition dismissed.
But on account of some inexplicable reason, which is difficult to appreciate, the Life Insurance Corporation did not press the Letters Patent Appeal and the result was that the judgment of the learned Single Judge granting writ of Mandamus became final and binding on the parties.
It is difficult to see how in these circumstances the Life Insurance Corporation could claim to be absolved from the obligation imposed by the judgment to carry out the Writ of Mandamus by relying on the impugned Act.
The Life Insurance Corporation leaned heavily on the decision of this Court in Shri Prithvi Cotton Mills Ltd. vs Broach Borough Municipality( ' ) in support of its contention that when the settlement in so far as it provided for payment of annual cash bonus was set at naught by the impugned Act with effect from 1st April, 1975, the basis on which the judgment proceeded was fundamentally altered and that rendered the judgment ineffective and not binding on the parties.
We do not think this decision lays down any such wide proposition as is contended for and on behalf of the Life Insurance Corporation.
It does not say that whenever any actual or legal situation is altered by retrospective legislation, a judicial decision rendered by a court on the basis of such factual or legal situation prior to the alteration, would (1) [1970]1 S.C.R. 388.
354 straightaway, without more, cease to be effective and binding on the parties.
It is true that there, are certain observations in this decision which seem to suggest that a court decision may cease to be binding when the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances.
But these observations have to be read in the light of the question which arose for consideration in that case.
There, the validity of the Gujarat Imposition of Taxes by Municipalities (Validation) Act, 1963 was assailed on behalf of the petitioners.
The Validation Act had to be enacted because it was held by this Court in Patel Gordhandas Hargovindas vs Municipal Commissioner, Ahmedabad(1) that since section 73 of the Bombay Municipality Boroughs Act, 1925 allowed the Municipality to levy a 'rate? on buildings or lands and the term 'rate? was confined to, an imposition on the basis of annual letting value, tax levied by the Municipality on lands, and buildings on the basis of capital value was invalid.
Section 3 of the Validation Act provided that notwithstanding anything contained in any judgment, decree or order of a court or tribunal or any other authority, no tax assessed or purported to have been assessed by a municipality on the, basis of capital value of a building or land and imposed, collected or recovered by the municipality at any time before the commencement of the Validation Act shall be deemed to have invalidly assessed, imposed, collected or recovered and the imposition, collection or recovery of the tax so assessed shall be valid and shall be deemed to have always been valid and shall not be called in question merely on the ground that the assessment the tax on the basis of capital value of the building or land was not authorised by law and accordingly any tax so assessed before the commencement of the Validation Act and leviable for a period prior to such commencement but not collected or recovered before such commencement may be collected or recovered in accordance with the relevant municipal law.
It will be seen that by section 3 of the impugned Act the Legislature retrospectively imposed tax on building or land on the basis of capital value and if the tax was already imposed, levied and collected on that basis, made the imposition levy, collection and recovery of the tax valid, notwithstanding the declaration by the Court that as 'rate, the levy was incompetent.
This was clearly permissible to the Legislature because in doing so, the Legislature did not seek to reverse the decision of this Court on the interpretation of the word 'rate,, but retrospectively amended the law by providing for imposition of tax on land or building on the basis of capital value and validated the imposition, levy, collection and recovery of tax on that basis.
The decision of this Court holding the levy of tax to be incompetent on the basis of the unamended law, therefore, became irrelevant and could not stand in the way of the tax being assessed, collected and recovered on the, basis of capital value under the law as retrospectively amended.
That is why this Court held that the Validation Act was effective to validate imposition, levy, collection and recovery of tax on land or building on the basis of capital value.
It is difficult to see bow this decision given in the context of a validating statute can be of any help to the life Insurance Corporation.
Here, the judgment given by the (1) [1964] 2S.C.R.608.
355 Calcutta High Court, which is relied upon by the petitioners, is not a mere declaratory judgment holding an impost or tax to be invalid, so that a validation statute can remove the defect pointed out by the judgment amending the law with retrospective effect and validate such impost or tax.
But it is a judgment giving effect to the right of the petitioners to annual cash bonus under the Settlement by issuing a writ of Mandamus directing the Life Insurance Corporation to pay the amount of such bonus.
If by reason of retrospective, alteration of the factual or legal situation, the judgment is rendered erroneous, the remedy may be by way of appeal or review, but so long as the judgment stands, it cannot be disregarded or ignored and it must be obeyed by the Life Insurance Corporation.
We are, therefore, of the view that, in any event, irrespective of whether the impugned Act is constitutionally valid or not, the Life Insurance Corporation is bound to obey the writ of Mandamus issued by the Calcutta High Court and to pay annual cash bonus for the year 1st April, 1975 to 31st March, 1976 to Class III and Class IV employees.
Now, to the grounds of constitutional challenge Re: Ground A : This ground raise & the question whether the impugned Act is violative of clause, (2) of Article 31.
This clause provides safeguards against compulsory acquisition or requisitioning of property by laying down conditions subject to which alone property may be compulsorily acquired or requisitioned and at the date when the impugned Act was enacted, it was in the following terms "No property shall be, compulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for acquisition or requisitioning of the property for an amount which may be fixed by such law or which may be determined in accordance with such principles and given in such manner as may be specified in such law; and no, such law shall be called in question in any court on the ground that the amount so fixed or determined is not adequate or that the whole or any part of such amount is to be given otherwise than in cash Clause (2) in this form was substituted in Article 31 by the Constitution (Twenty fifth Amendment) Act, 1971 and by this amending Act, clauses (2A) and (2B) were also introduced in Article 31 and they read as follows : "(2A) Where a, law does not provide for the transfer of the ownership or right to, possession of any property to the State or to a corporation owned or controlled by the State, it shall not be deemed to provide for the compulsory acquisition or requisitioning of Property, notwithstanding that it does any person of his property.
(2B) Nothing in sub clause (f) of clause (1) of Article 19 shall effect any such law as is referred to in clause (2) 356 The argument of the petitioners was that the right of Class III and Class IV employees to annual cash bonus ' for the, years 1st April, 1975 to 31st March, 1976 and 1st April, 1976 to 31st March, 1977 under Act provided for Insurance, Corporation 12, it was a law providing for compulsory acquisition of property as contemplated under clause (2A) of Article 31 and it was, therefore, required to meet the challenge of Article 31, clause (2).
The compulsory acquisition of the right to annual cash bonus ' sought to be effectuated by the impugned Act, said the petitioners, was not supported by public purpose nor did the impugned Act.
provide for payment of any compensation for the same and hence the impugned Act was void as contravening clause (2) of Article 21.
The first question which arises for consideration on this.
contention is whether the right of Class III and Class IV employees to 'annual cash bonus ' for the years 1st April, 1975 to 31st March, 1976 and 1st April, 1976 to 31st March, 1977 under the Settlement was property so as to attract the inhibition of Article 31, clause (2).
The Life Insurance Corporation submitted that at the date when the, impugned Act was enacted, Class III and Class IV employees had no absolute right to receive 'annual cash bonus ' either for the, year 1st April, 1975 to 31st March, 1976 or for the year 1st April, 1976 to 31st March, 1977 and there was, therefore,, no property which could be compulsorily acquired under the impugned Act.
The argument of the Life Insurance Corporation was that the Life Insurance Corporation (Staff) Regulations, 1960 which laid down the terms and conditions of services inter alia of Class III and Class IV employees did not contain any provision for payment of bonus except Regulation 58 and since under this Regulation, grant of annual cash bonus by the life Insurance Corporation was subject to such directions as the Central Government might issue, the right of Class III and Class IV employees to receive annual cash bonus could not be said to be an absolute right.
It was a right which was liable to, be set at naught by any directions that might be issued by the Central Government and in fact the Central Government did issue a direction to the life Insurance Corporation not to make payment of bonus to the employees "without getting the same cleared by the Government" and consequently, Class III and Class IV employees had no absolute right to claim bonus.
The result, according to the Life Insurance Corporation, also followed on a proper interpretation of clauses 8 (i) and 8(ii) of the Settlement, for it was clear on a proper reading of these two clauses that annual cash bonus payable to Class III and Class IV employees under clause 8 (ii) was, by reason of clause 8 (i) , subject to such directions as the Central Government might issue from time to time and the Central Government having directed that no further payment of bonus should be made to the employees, Class III and Class TV employees were not entitled to claim annual cash bonus from the Life Insurance Corporation.
This argument of the Life Insurance Corporation is plainly erroneous and it is, not possible to accept it.
Regulation 58 undoubtedly says that non profit sharing bonus may be granted by the Settlement was property and since the impugned transfer of the ownership of this right to the Life which was 'State ' within the meaning of Article 35 7 the Life Insurance Corporation to its employees, subject to such directions as the Central Government may issue and, therefore, if the Central Government issues a direction to the contrary, nonprofit sharing bonus cannot be granted by the Life Insurance Corporation to any class of employees.
But here, in the present case, grant of annual cash bonus by the Life Insurance Corporation to Class III and Class IV employees under clause 8(ii) of the Settlement was approved by the Central Government as provided it clause 12 and the 'direction contemplated by Regulation 58 was given by the Central Government that annual cash bonus may be granted as provided in clause 8(ii) of the Settlement.
It was not competent to the Central Government thereafter to issue another contrary direction which would have the effect of compelling the Life Insurance Corporation to commit a breach of its obligation under section '18, sub section (1) of the to pay annual cash bonus in terms of clause 8 (ii) of the Settlement.
Tumina to clause 8(i) of the Settlement, it is true that under this, clause non profit sharing bonus could be granted by the Life Insurance Corporation 'subject to such directions as the Central Government may issue from time to time but these words giving overriding power to the Central Government to issue directions from time to time are conspicuously absent in clause 8(ii) and it is difficult to see bow they could be projected or read into that clause,.
Clauses 8(i) and 8(ii are distinct and independent clauses and while clause 8(i) enacts a general provision that non profit sharing bonus may be paid by the Life Insurance Corporation to Class III and Class IV employees subject to such directions as the Central Government might issue from time to time, clause 8(ii) picks out one kind of non profit sharing bonus and specifically provided that annual cash bonus shall be paid to all Class III and Class IV employees at the rate of 15 per cent of the annual salary and this specific provision in regard to payment of annual cash bonus is made subject to only the approval of the Central Government which was admittedly obtained.
It is, therefore, clear that Class III and Class IV employees had absolute right to receive annual cash bonus from the Life Insurance Corporation in terms of clause 8(ii) of the Settlement and it was not competent to the Central Government to issue any directions to the Life Insurance Corporation to refuse or withhold payment of the same.
It is true that under clause 8(ii) of the Settlement the annual cast bonus for a particular year was payable at the rate of 15 per cent.
of the annual salary actually drawn by the employee in respect of the financial year to which the bonus, related and it would, therefore, seem that the bonus was payable at the end of.
the year and not before, but it was not disputed on behalf of the Life Insurance Corporation that even an employee who retired or resigned before the, expiration of that year, as also the heirs of a deceased employee who died during the. currency of the year, were entitled to receive, proportionate bonus and the Life Insurance Corporation in fact recognised this to be the correct position in its administrative instructions dated 29th March, 1974 and actually paid proportionate bonus to the retiring or resigning employee and the heirs; of the deceased employee.
The annual cash bonus payable under clause 8(ii) of the Settlement, therefore, accrued 358 from day to day, though payable in case of retirement resignation or death, on the happening of that contingency and otherwise, on the expiration of the year to which the bonus related.
There was thus plainly and unquestionably a debt in respect of annual cash bonus accruing to each Class III or Class IV employees from day to day and consequently, on the expiration of the year 1st April, 1975 to 31st March.
1976, the annual cash bonus payable under clause 8(ii) of the Settlement was a debt due and owing from the Life Insurance Corporation to each Class III or Class IV employee and so also at the date when the impugned Act came into force, each Class III or Class IV employee was entitled to a debt due and owing to him from the Life Insurance Corporation in respect of the annual cash bonus from 1st April, 1976 upto that date.
The question is whether these debts due and owing from the Life Insurance Corporation were property of Class III and Class IV employees within the meaning of Article 31(2).
So also, was the right of each Class III and Class IV employee to receive annual cash bonus for the period from the date of commencement of the impugned Act upto 31st March, 1977 property for the purpose of Article 31(2) ? These questions we shall now proceed to consider, for on the answer to them depends the applicability of Article 31(2).
It is clear from the scheme of fundamental rights embodied in Part III of the Constitution that the guarantee of the right to property is contained in Article 19 (1 ) (f) and clauses ( 1 ) and (2) of Article 31.
It stands to reason that 'property ' cannot have one meaning in Article 19(1) (f), another in Article 31 clause (1) and still another in Article 31, clause (2).
'Property ' must have the same connotation in all the three Articles and since these are constitutional provisions intended to secure a fundamental right, they must receive the widest interpretation and must be held to refer to property of every kind.
While discussing the scope and content of Entry 42 in List III of the Seventh Schedule to the Constitution, which confers power on Parliament and the Legislatures to legislate with respect to "acquisition and requisitioning of property" It was J., speaking on behalf of the majority in R. India(1) that property which can be compulsorily aquired by legislation under this Entry means the "highest anything, being that right which one has to with respect to "acquisition and requisition of property", it was pointed out by Shah, C. Cooper vs Union of acquired by legislative a man can have to lands or tenements, goods or chattels which does not depend on another 's courtesy : it includes ownership, estates and interests in corporeal things, and also rights such as trade marks, copyrights, patents and even rights in persona capable of transfer or transmission, such, as debts; and signifies a beneficial right to or a thing considered as having a money value, especially with reference to transfer or succession, and to their capacity of being injured".
It would, therefore, seem that, according to the decision of the majority in R. C. Cooper '.s case, debts and other rights in personam capable of transfer or transmission are property which can form the subject matter of compulsory acquisition.
And this would seem to be unquestionable on principle, since even jurisprudentially debts and other rights of action are property and there is no (1) ; 359 reason why they should be excluded from the protection of the constitutional guarantee.
Hidayatullah, C.J., had occasion to consider the true nature of debt in H. H. Maharajadhiraja Madhav Rao Jiwaji Rao Scindia Bahadur & Ors.
vs Union of India(1) where the question was whether the Privy Purse payable to the Ruler was property of which he could be said to be deprived by the Order of the President withdrawing his recognition as Ruler.
The learned Chief Justice, making a very penetrating analysis of the jural relationship involved, in a debt, pointed out that " a debt or a liability to pay money passes through four stages.
First there is a debt not yet due.
The debt has not yet become a part of the obliger 's 'things ' because.
no net liability has yet arisen.
The Second stage is when the liability may have arisen but is not either ascertained or admitted.
Here again the amount due has not become a part of the obligor 's things, The third stage is reached when the liability is both ascertained and admitted.
Then it is property proper of the debtor in the creditor 's hands.
The law begins to recognise such property in insolvency, in ,dealing with it in fraud of creditors, fraudulent preference of one creditor against another, subrogation, equitable estoppel, stoppage intransitive etc.
A credit debt is then a debt fully provable and which is fixed and absolutely owing.
The last stage is when the debt becomes a judgment debt by reason of a decree of a Court." and apply ing this test, concluded that the Privy Purse would be property and proceeded to add : "As, soon as an Appropriation Act is passed there is established a credit debt and the outstanding Privy Purse becomes the property of the Ruler in the hands of Government.
It is also a sum certain and absolutely payable." Since the effect of the Order of the President was to deprive the, Ruler of his Privy Purse which was his property the learned Chief Justice held that there was infringement of the fundamental right of the Ruler under Article 3 1 (2).
Hegde, J., also pointed out in a separate but concurring judgment that since the right to get the Privy Purse was a legal right "enforceable through the courts", it was undoubtedly property and its deprivation was sufficient to, found a petition based on contravention of Article 31(2).
It was also held by this Court in State of Madhya Pradesh vs Ranajirao Shinde & Anr.
(2) that a right to receive cash grant annually from the State was property within the, meaning of that expression in Article 19(1)(f) and clause (2) of Article 31.
The right to pension was also regarded as property for the purpose of Article 19(1) (f) by the decisions of this Court in Deokinanda Prasad vs State of Bihar(1) and State of Punjab vs K. R. Erry & Sobhag Rai Mehta(4).
This Court adopted the same line of reasoning when it said in State of Gujarat and Anr.
vs Shri Ambica Mills Lid.
, Ahmedabad(5) that "unpaid accumulations represent the obligation of the, employers to the employees and they are the property of the employees".
Mathew, J., speaking on behalf of the Court, observed that the obligation to, the employees owned by the employers was (1) ; (3) [1971] Supp.
S.C.R. 634.
(4) ; (5) ; (2) 360 "property from the standpoint of the employees".
It would, therefore, be seen that Property within the meaning of Article 19(1)(f) and clause (2) of Article 31 comprises every form of property, tangible or intangible, including debts and chooses in action, such as unpaid accumulation of wages, pension, cash grant and constitutionally protected Privy Purse.
The debts due and owing from the Life Insurance Corporation in respect of annual cash bonus were, therefore, clearly property of Class III and Class IV employees within the meaning of Article 31, clause (2).
And so also was their right to receive annual cash bonus for the period; from the date of commencement of the impugned.
Act upto 31st March, 1977, for that was a legal right enforceable through a court of law by issue of a writ of Mandamus, Vide the observation of Hegde, J., at page 194 in the Privy Purse case.
But a question was raised on behalf of the Respondents whether debts and choses in action, though undoubtedly property, could form the subject matter of compulsory acquisition so as to attract the applicability of Article 31, clause (2).
There is divergence of opinion amongst jurists in the United States of America on this question and though in the earlier decisions of the American courts, it was said that the power of eminent domain cannot be exercised in respect of money and choses in action, the modern trend, as pointed by Nicholas on Eminent Domain, Vol. 1, page 99, para 2, seems to be, that the right of eminent domain can be exercised on choses in action.
But even if the preponderant view in the United States were that choses in action cannot come within the power of eminent domain, it would not be right to allow us to be unduly influenced by this view in the interpretation of the scope and ambit of clause (2) of Article 31.
We must interpret Article 31, clause (2) on its own terms without any preconceived notions borrowed from the law in the United States on the subject of eminent domain.
Let us see how this interpretative exercise has been performed by this (Court in the decisions that have been rendered so far and what light they throw on the question as to whether choses in action can be compulsorily acquired under clause (2) of Article 31.
We shall confine our attention only to the question of compulsory acquisition of choses in action and not say anything in regard to compulsory acquisition of money, for in these appeals the question arises only in regard to choses in action and it is not necessary to consider whether money can form the subject matter of compulsory acquisition.
This question came to be considered by a constitution Bench of this Court in State of Bihar vs Kameshwar Singh( ',).
Section 4(b) of the Bihar Land Reforms Act, 1950, which provided.
for vesting in the State, of arrears of rent due to the pro prietors or tenure holders for the period prior to the date of vesting of the estates or tenures held by them, on payment of only 50 per cent of the amount as compensation, was challenged as constitutionally invalid on the ground that there was no public purpose for which such acquisition could be said to have been made.
The necessity for existence of public purpose was not sought to be spelt out from Article 31, clause (2), because even if there were violation of that (1) 361 clause, it would be protected by Article 31A and the Ninth Schedule read with Article 31 B, the.
Act being included as Item in the Ninth Schedule, but it was said that public purpose was an essential element in the very nature of the power of acquisition and even apart from Article 31, clause (2), no acquisition could be made save for a public purpose.
It was in the context of this argument that Mahajan, J., observed that money and choses in action could not be taken under the power of compulsory acquisition, since the only purpose which such taking would serve would be to augment the revenues of the State and that would clearly not be a public purpose.
The learned judge pointed out at pages 942 944 of the Report : "It is a well accepted proposition of law that property of individuals cannot be appropriated by the State under the power of compulsory acquisition for the, mere purposes of adding to the, revenues of the State no instance is known in which it has been taken for the mere purpose of raising a revenue by sale, or otherwise Taking money under the right of eminent domain, when it must be compensated in money afterwards is nothing more or less than a forced loan Money or that which in ordinary use passes as such and which the Government may reach by taxation and also rights in action which can only be available when made to produce money, cannot be taken under this power".
for the taking would not be for a public purpose, and proceeded to and that the only purpose, to support the acquisition of the arrears of rent was "to raise revenue to pay compensation to some of the zamindars whose estates are being taken" and this purpose did not fall within any definition, however, wide, of the phrase 'public purpose and the law was, therefore, to this extent unconstitutional.
Mukherjea, J., came to the same conclusion and observed at page 961 of the Report "Money as such and also rights in action are ordinarily excluded from this List by American jurists and for good reasons.
There could be no possible necessity for taking either of them under the power of eminent domain.
Money in the hands of a citizen can be reached by the exercise of the power of taxation, it may be confiscated as a penalty under judicial order But, as Cooley has pointed out, taking money under the right of eminent domain when it must be compensated by money afterwards could be nothing more or less than a forced loan and it is difficult to say that it comes under the head of acquisition and is embraced within its ordinary connotation.
" Chandrasekhara Aiyer, J., also took the same view and held that money.
and choses in action were exempt from compulsory acquisition "not on the ground that they are movable property, but on the ground that generally speaking there could be no public purpose in their 362 acquisition".
Patanjali Sastri, C.J., and Das, J., on the other hand held that the arrears of rent constituted a debt due by the tenants.
It was nothing but an actionable claim, against the tenants which was undoubtedly a species of 'property ' which was assignable and, therefore, it could equally be acquired by the State as a species of 'property '.
These two rival views were referred to by Venkatarama Aiyer, J. speaking on behalf of the Court in Bombay Dyeing & Manufacturing Co. Ltd. vs The State of Bombay & Ors.(1) but the learned Judge did not treat the majority view as finally settling the law on the subject.
It appears that in the subsequent case of State of Madhya Pradesh vs Ranajirao Shinde (supra) Hegde, J., delivering the judgment of the Court observed that the majority view in Kameshwar Singh 's case was followed by this Court in Bombay Dyeing & Manufacturing Co. 's case, but we do not think that this observation correctly represents what was decided in Bombay Dyeing & Manufacturing Co 's case.
Venkatarama Aiyer, J., rested his decision in Bombay Dyeing & Manufacturing Co '$ case on alternative grounds : if, the impugned section provided for the acquisition of money, and if money could not be acquired, then the section was void under Article 19 (1) (f) as imposing an unreasonable restriction on the right to hold property.
If, on the other hand, money could be acquired , the section was void as offending Article 31, clause (2) since the section did not provide for payment of compensation.
The decision in Bombay Dyeing & Manufacturing Co. 's case did not, therefore, lay down that money and choses in action could not be acquired under Article 31, clause (2).
But in State of Madhya Pradesh vs Ranojirao Shinde (supra) this Court did hold that money and choses in action could not form the subject matter of acquisition under Article 31, clause (2) and the reason it gave for taking this view was the same as that which prevailed with the majority judges in Kameshwar Singh 's case.
This Court held that the power of compulsory acquisition conferred under Article 31, clause (2) could not be utilised for enriching the coffers of the State; that power could be exercised only for a public purpose and augmenting the resources of the State could not be regarded as public purpose.
Hegde, J., speaking on behalf of the Court, pointed out that if it were otherwise, "it would be permissible for the legislatures to enact laws acquiring all public debts due from the State, annuity deposits returnable by it and provident fund payable by it by providing for the payment of some nominal compensation to the persons whose rights are acquired, as the acquisitions in question would augment the resources of the State", but nothing so bad could be said to be within the contemplation of clause (2) of Article 31.
Let us first examine on principles whether this reasoning qua choses in action is sound and commends itself for our acceptance.
This premise on which this reasoning is based is that the only purpose for which choses in action may be acquired is augmenting the revenues of the State and there can be no other purpose for such (1) ; 363 acquisition.
But this premise is plainly incorrect and so is the reasoning based upon it.
Why can choses in action 'not be acquired for a public purpose other than mere adding to the revenues of the State ? There may be debts due and owing by poor and deprived tillers, artisans and landless labourers to moneylenders and the State may acquire such debts with a view to relieving the weak and exploited debtors from the harassment and oppression to which they might be subjected by their economically powerful creditors.
The purpose of the acquisition in such a case would not be to enrich the coffers of the State.
In fact, the coffers of the State would not be enriched by such acquisition, because having regard to the financial condition of the debtors, it may not be possible for the State to recover much, or perhaps anything at all, from the impoverished debtors.
The purpose of such acquisition being relief of the distress of the poor and helpless debtors would be clearly a public purpose.
We have taken one example by way of illustration, but in a modern welfare State, dedicated to a socialist pattern of society, myriad situations may arise where it may be necessary to acquire choses in action for achieving a public purpose.
It is not correct to say that in every case where choses in action may be acquired, the purpose of acquisition would necessarily and always be augmenting of the revenues of the State and nothing else.
Even the theory of forced loan may break down in case of acquisition of choses in action.
There is a fundamental difference between chose in action and money, in that the former has not the same mobility and liquidity as the latter and its values is not measured by the amount recoverable under it, but it depends on a variety of factors such as the financial condition of the person liable, the speed and effectiveness of the litigative process and the eventual uncertainty as to when and to what extent it may be possible to realise the chose in action.
Even after the chose in action is acquired, the State may not be able to recover the amount due under it and there may even be cases where the chose in action may be released by the State.
Where money is given as compensation for taking of money, the theory of forced loan may apply,.
but it is difficult to see how it can be applicable where chose in action is taken and money representing its value, which in a large majority of cases would be less than the amount recoverable under it, is given as compensation.
Moreover, the theory of forced loan stands considerably eroded after the amendment of Article 31, clause (2) by the Constitution (Twenty fifth Amendment) Act, 1971, because under the amended clause, even if an amount less than the just equivalent is given as compensation for acquisition of property, it would not be violative of the constitutional guarantee.
It is true, and this thought was also expressed by Krishna Iyer, J., and myself in our separate but concurring Judgment in the State of Kerala vs The Gwalior Rayon Silk Manufacturing (Wvg.) Co. Ltd.(1) that, notwithstanding the amended clause (2) of Article 31, the legislature would be expected, save in exceptional socio historical setting to provide just compensation for acquisition of property, but if for any reason the legislature provides a lesser amount than the just equivalent, it would not be open to challenge on the ground of infringement of clause (2) of Article (1) [1974] 1 S.C.R.671.
364 31.
Then, how can the theory of forced loan apply when chose in action is acquired and what is paid for it is not the just equivalent but a much lesser amount, which is of course not illusory.
Moreover, there is also one other fallacy underlying the argument that there can be no public purpose in the acquisition of choses in action and that is based on the assumption that the public purpose contemplated by Article 31, clause (2) lies in the use to which the pro perty acquired is to be put as for example, where land or building or other movable property is acquired for being used for a public purpose.
But this assumption is hot justified by the language of Article 31, clause (2), because all that this clause requires is that the purpose for which the acquisition is made must be a public purpose, or, in other words, the, acquisitions must be made to achieve a public purpose.
Article 31, clause (2) does not require that the property acquired must itself be used for a public purpose.
So long as the acquisition subserves a public purpose, it would satisfy the requirement of clause (2) of Article 31 and, therefore, if it can be shown that the acquisition of choses in action is for subserving a public purpose, it would be constitutionally valid.
Hegde, J., expressed an apprehension in State of Madhya Pradesh vs Ranojirao Shinde (supra) that if this view were accepted, it would be permissible for the legislature to enact laws acquiring the public debts due from the State, the annuity deposits returnable by it and the provident fund payable by it by providing for payment of some nominal compensation to the persons whose rights were acquired.
We do not think this apprehension is well founded.
It is difficult to see what public purposes can possibly Justify a law acquiring the public debts due to the State or the annuity deposits returnable by it or the provident fund payable by it.
If the legislature enacts a law acquiring any of these choses in action, it could only be for the purpose of augmenting the revenues of the State or reducing State expenditure and that would clearly not be a public purpose and the legislation would plainly be violative of the constitutional guarantee embodied in Article 31, clause (2).
We would, therefore, prefer the minority view of Das, J., in Kameshwar singh 's case (supra) as against the majority view of Mahajan, J., Mukherjea, J. and Chandrasekhara Aiyer, J. So much on principle.
Turning now to the authorities, we find that, apart from the view of the majority judges in Kameshwar Singh 's case and the decision in the State of Madhya Pradesh vs Ranojirao Shinde (supra), there is no other decision of this Court which has taken the view that choses in action cannot be compulsorily acquired under Article 31, clause (2).
There are in fact subsequent decisions which clearly seem to suggest the, contrary.
We have already referred to R. C. Cooper 's case.
The majority judgment case gives the widest meaning to 'property which of Shah, J., in that can be, compulsorily acquired and includes within it ::rights in personam capable of transfer or transmission, such as debts.
The majority view in Kameshwar Singh 's case (supra) and the decision in State of Madhya Pradesh vs Ranojirao Shinde (supra) on this point can no longer be regarded as good law in view of this statement of the law in the majority judgment of Shah, J. Then again, in the Privy Purse case (supra), 365 Hidayatullah, C.J., held that the Privy Purse payable to a Ruler was a credit debt owned by him and since he was deprived of it by the Order of the President, there was violation of his fundamental right under Article 31, clause (2).
The learned Chief Justice thus clearly recognised that debt or chose in action could form the subject matter of compulsory acquisition under Article 31, clause (2).
Hegde, J., also took the same view in his separate but concurring judgment in the Privy Purse case.
It will, therefore, be seen that the trend of the recent decisions has been to regard debt or chose in action as property which can be compulsorily acquired under clause (2) of Article 31.
We are accordingly of the view that the debts due and owing from the Life Insurance Corporation to Class III and Class IV em ployees in respect of annual cash bonus were 'property ' within the meaning of Article 3 1, clause (2) and they could be compulsorily acquired under that clause.
The question, however, still remains whether by the impugned Act there was compulsory acquisition of the debt due and owing from the Life Insurance Corporation to Class III and Class IV employees in respect of annual cash bonus.
It was not disputed on behalf of the Life Insurance Corporation that if the impugned Act had the affect of compulsorily acquiring these debts belonging to Class III and Class IV employees, it would be void as offending Article 31, clause (2), since it admittedly did not provide for payment of any compensation.
The Statement of Objects and Reasons undoubtedly said that the provisions of the Settlement in regard to payment of annual cash bonus were being set aside with effect from 1st April, 1975 with a view to enabling the Life Insurance Corporation to make ex gratia payment to the employees "at the rates determined on the basis of the general Government policy for making ex gratia payments to the, employees of non competing public sector undertaking".
But the impugned Act did not contain any provision to that effect and Class III and Class IV employees were deprived of the debts due and owing to them without any provision in the statute for payment of compensation.
The learned Attorney General on behalf of the Life Insurance Corporation, however, strenuously contended that there was no compulsory acquisition of the debts due and owing to, Class III and Class IV employees under the impugned Act, but all that the impugned Act did was to extinguish those debts by annihilating the provisions of the Settlement in regard to payment of annual cash bonus with effect from 1st April, 1975.
The debts due and owing from the Life Insurance Corporation to Class III and Class IV employees, said the learned Attorney General, were extinguished and not compulsorily acquired and hence there was no contravention of Article 31, clause (2).
Now, prior to the Constitution (Fourth Amendment) Act, 1955, which introduced clauses (2A) and (2B) in Article 3 1, there was considerable controversy as to the inter relation between clauses (1) and.
(2) and that coloured the interpretation of the words "taken possession of or acquired" in clause (2) as it stood prior to the amendment.
The majority view in The State of West Bengal vs Subodh Gopal Bose & Ors.(1) and Dwarkadas Shrinivas of (1) ; 6 277SCI/78 366 Bombay vs The Sholapur Spinning & Weaving Co. Ltd. & Ors:(1) was that clauses (1) and (2) of Article 31 were not mutually exclusive; but they dealt with same topic and the deprivation contemplated in clause (1) was no, other than the compulsory acquisition or taking possession of property referred to in clause (2) and hence where the deprivation was so substantial as to amount to compulsory acquisition or taking possession, Article 31 was attracted.
The introduction of clause ( ' )A) in Article, 31 snapped the link between clauses (1) and (2) and brought about a dichotomy between these two clauses.
Thereafter, clause.
(2) alone dealt with compulsory acquisition or requisitioning of property by the State and clause (1) dealt with deprivation of property in other ways and what should be regarded as compulsory acquisition or requisitioning of property for the Purpose of clause (2) was defined in clause (2A).
It was if clause (2A) supplied the dictionary for the mean of 'compulsory acquisition and requisitioning of property in clause (2).
Clause (2A) declared that a law shall not be deemed, to provide for the compulsory acquisition or requisitioning of property, if it does not provide for the transfer of the ownership or right to possession of the property to the State or to a corporation owned or controlled by the State.
It is only where a law provides for the transfer of ownership or right to possession of any property to the State or to a corporation owned or controlled by the State that it would have to meet the challenge of clause (2) of Article 31 as a law providing for compulsory acquisition or requisitioning of property.
Whenever, therefore, the constitutional validity of a law is challenged on the ground of infraction of Article 31, clause (2), the question has to be asked whether the law provides for the transfer of ownership or right to possession of any property to the State or to a corporation owned or controlled by the State.
Here, the Life Insurance Corporation is a corporation owned by the State as its entire capital has been provided by the Central Government.
The debts due, and owing to Class III and Class IV employees from the Life Insurance Corporation are cancelled or extinguished by the impugned Act.
Does that amount to transfer of ownership of any property to the Life Insurance Corporation within the meaning of clause (2A) of Article 31 ? If it does, Article 31, clause (2) would be attracted, but not otherwise.
That depends on the true interpretation of Article 31, clause (2A).
Now, whilst interpreting Article 31, clause (2A), it must be remembered that the interpretation we place upon it will determine the scope and ambit of the constitutional guarantee under clause (2) of Article 31.
We must not, therefore, construe clause (2A) in a narrow pedantic manner nor adopt a doctrinaire or legalistic approach.
Our interpretation must be guided by the substance of the matter and not by lex scripts.
When clause (2A) says that in order to attract the applicability of clause (2) the law must provide for the transfer of ownership of property to the State or to a corporation owned or controlled by the State, it is not necessary that the law should in so many words provide for such transfer.
No particular verbal formula need be adopted.
It is not a ritualistic mantra which is required to be repeated in the law.
What (1) ; 3 67 has to be considered is the substance of the law and not its form.
The question that is to be asked is : does the law in substance provide for transfer of ownership of property, whatever be the linguistic formula employed ? What is the effect of the law : does it bring about transfer of ownership of property ? Now, 'transfer of ownership is also a term of wide import and it comprises every mode by which ownership may be transferred from one person to another.
The mode of transfer may vary from one kind of property to another : it would depend on the nature of the property to be transferred.
And moreover, the court would have to look to the substance of the transaction in order to determine whether there is transfer of ownership involved in what has been brought about by the law.
There is no doubt that in the present case the impugned Act extinguished or put an end to the debts due and owing from the Life Insurance Corporation to Class III and Class IV employees.
that was the, direct effect of.
the impugned Act and it can, therefore, be legitimately said that in substance the impugned Act provided for extinguishment of these debts, though it did not say so in so many words.
This much indeed was not disputed on behalf of the Life Insurance Corporation and the controversy between the parties only centred round the question whether the extinguishment of these debts involved any transfer of ownership of property to the Life Insurance Corporation.
The learned Attorney General on behalf of the Life Insurance Corporation sought to make a distinction between extinguishment and transfer of ownership of a debt and contended that when ownership of a debt is transferred, it continues to exist as a debt in the hands of the transferee, but when a debt is extinguished it ceases to exist as a debt and it is not possible to say that the debtor has become the owner of the debt.
There can be no transfer of ownership of a debt, said the learned Attorney General unless the debt continues to exist as such in the hands of the transferee, and, therefore, extinguishment of a debt does not involve transfer of ownership of the debt to the debtor.
This contention of the learned Attorney General, though attractive at first blush, is, in our opinion not well founded.
It is not correct to say that there can be no transfer of ownership of a right or interest unless such right or interest continues to have a separate identifiable existence in the hands of the transferee.
It is not difficult to find instances where ownership of a right or interest may be transferred from one person to, another by extinguishment.
Take for example, a case where the lessor terminates the lease granted by him to the lessee by exercising his right of forfeiture or the lessee surrenders the lease in favour of the lessor.
The lease would in such a case come to an end and the interest of the lessee would be extinguished and correspondingly, the reversion of the lessor would be enlarged into full ownership by the return of the leasehold interest.
There would clearly be transfer of the lease hold interest from the lessee to the lessor as a result of the determination of the lease and the extinguishment of the interest of the lessee.
The same would be the position where A law provides for cancellation, of the lease and in such a case, if the lessor is the State or a corporation owned or controlled by the State, it would amount to compulsory acquisition of the leasehold interest of the lessees within meaning of clause (2A) of Article 31.
It was in fact to held by this 368 Court and in our opinion rightly in Ajit Singh vs State of Punjab(1) where sikri, J., speaking on behalf of the majority, pointed out at page 149 that if "the State is the landlord of an estate and there is a lease of that property and a law provides for the extinguishment of leases held in an estate it would properly fall under the category of acquisition by the State because the beneficiary of extinguishment would be the State".
Where by reason of extinguishment of a right or interest of a person, detriment is suffered by him, and a corresponding benefit accrues to the State, there would be transfer of ownership of such right or interest to the State.
The question would always be : who is the, beneficiary of the extinguishment of the right or interest effectuated by the law? If it is the State, then there would be transfer of ownership of the right or interest to the State , because what the owner of the right or interest would have lost by reason of the extinguishment would be the benefit accrued to the State.
This was precisely the reason why Hegde, J., speaking on behalf of the Court observed in the State of Madhya Pradesh vs Ranojirao Shinde (supra) that it was possible to view the abolition of cash grants under the Madhya Pradesh law impugned in that case "as a statutory transfer of rights of the grantees to the State".
It was pointed out in that case that there was no difference between taking by the State of money that is in the hands of others and the abrogation of the liability of the State to make payment to others, for in the former case the State would be compulsorily taking others ' property, while in the latter it would be seeking to appropriate to itself the property of others which is in its hands.
It is, therefore, clear that when a debt due and owing by the State or a corporation owned or controlled by the State is extinguished by law, there is transfer of ownership of the money representing the debt from the creditor to the State or the State owned/controlled corporation.
So long as the debt is due and owing to, the creditor, the State or the State owned/controlled corporation is under a liability to pay the amount of the debt to the creditor and, therefore, if the amount of the debt is X, the total wealth of the creditor would be A plus X, while that of the State or State owned/controlled corporation would be B minus X.
But if the debt is extinguished, the total wealth of the creditor would be reduced by X and that of the State or State owned/controlled corporation augmented by the same amount.
Would this not be in substance and effect of transfer of X from the creditor to the State or State owned/controlled corporation ? The extinguishment of the debt of the creditor with corresponding benefit to the State or State owned/controlled corporation would plainly and indubitably involve transfer of ownership of the amount representing the debt from the former to the latter.
This is the real effect of extinguishment of the debt and by garbing it in the form of extinguishment, the State or State owned/controlled corpo ration cannot obtain benefit at the cost of the creditor and yet avoid the applicability of Article 31, clause (2).
The verbal veil constructed by employing the device of extinguishment of debt cannot be permitted to conceal or hide the real nature of the transaction.
It is necessary to remember that we are dealing here with a case where a constitutionally guaranteed right is sought to be enforced and the protection of such right should not be allowed to be defeated or rendered illusory by legis 3 69 lative stratagems.
The courts should be ready to rip open such stratagems and devices and find out whether in effect and substance the legislation trenches upon any fundamental rights.
The encroachments on fundamental rights are often subtle and sophisticated and they are disguised in language which apparently seems to steer clear of the constitutional inhibitions.
The need for a perspective and alert Bar is, therefore, very great and the courts too have to adopt a bold and dynamic approach, if the fundamental rights are to be protected against dilution or erosion.
In the light of this discussion, the conclusion is inevitable that the direct effect of the impugned Act was to transfer ownership of the debts due and owing to Class III and Class IV employees in respect of annual cash bonus to the Life Insurance Corporation and since the Life Insurance Corporation is a corporation owned by the State, the impugned Act was a law providing for compulsory acquisition of these debts by the State within the meaning of clause (2A) of Article 31.
If that be so, the, impugned Act must be held to be violative of Article 31, clause (2) since it did not provide for payment of any compensation at ail.
for the compulsory acquisition of these debts.
Re : Ground (B) Since the impugned Act has been held void as offending Article 3 1, clause (2) under Ground (A), it is unnecessary to consider Ground (B) based on infraction of Article 19 ( 1) (f).
It is the settled practice of this Court to decide no more than what is absolutely necessary for the decision of a case.
Moreover, once it is held that the impugned Act falls within Article 31, clause (2), its validity cannot be tested by reference to Article 19 (1) (f) by reason of clause (2B) of Article 31.
Hence we do not propose to discuss the very interesting arguments advanced before us in regard to Article 19 (1) (f).
We accordingly allow the writ petitions and declare the Life Insurance Corporation (Modification of Settlement) Act, 1976 void as offending Article 31, clause (2) of the Constitution and issue a writ of Mandamus directing the union of India and the Life Insurance Corporation to forebear from implementing or enforcing the provisions of that Act and to, pay annual cash bonus for the years 1st April, 1975 to 3 1 st March, 1976 and 1 st April, 1976 to 3 1 st March, 1977 to, Class III and Class IV employees in accordance with the terms of clause 8(ii) of the Settlement dated 24th January, 1974.
The respondents will pay the costs of the writ petitions to the petitioners.
ORDER We agree with the conclusion of Brother Bhagwati but prefer to rest our decision on the ground that the impugned Act violates the provisions of Article 31(2) and is, therefore, void.
We consider it unnecessary to express any opinion on the effect of the judgment of the Calcutta High Court in W.P. No. 371 of 1976.
P.B.R. Petitions allowed.
| In connection with the offences under Sections 302 and 376, medical opinion was sought by the Police as to (1) the nature of injuries on the person of the accused.
(2) the accused potency to perform the sexual intercourse and (3) Whether the accused had performed sexual intercourse during the last 24 28 hours, from one Dr. P. K. Mittal, Medical Officer, Nehru Municipal Hospital Abohar.
As according to the Government instructions in force at the relevant time, medico legal cases were to be examined by two doctors, Dr. P. K. Mittal examined the accused in the presence of Dr. Mrs. L. K. Grewal attached to the same hospital.
On examination of the private parts of the accused, the doctors observed the whole of the glans penis and corona of the accused covered with a thick layer of yellowish material which smelt like stigma.
They therefore advised a thorough chemical and microscopic examination of the yellowish material to find out if it was a layer of smegma or not to enable them to answer third query of the police and referred to the accused to the appellant who was posted as Chief Medical Officer, Ferozepur.
The doctors in their forwarding letter stated that they had not at all disturbed the layer so that the appellant would examine the case in its original condition and order the sample of smegma to be taken and sent for chemical examination if he felt like doing so".
The accused could be taken to Ferozepur by the police only two days later.
On going through the letter, the appellant wrote back saying that no special opinion by him was necessary and that Dr. Mittal himself could take the scrapping of the yellowish material and send the same to the chemical examiner Punjab for opinion.
The chemical examiner Punjab, as well as the Professor of Pathology, Medical College, Patiala, whose opinion was sought expressed their inability to carry out any test for smegma as they had no arrangement for the same.
The accused was convicted and sentenced to death under section 302 I.P.C. subject to confirmation of the High Court and to imprisonment for life under section 376 I.P.C. The accused in his appeal claimed benefit of doubt contending that the appellant as well as the other two doctors failed to examine the glans penis of the accused with a view to find out whether there were any injuries thereon or not.
On this argument being raised, the learned Judges constituting the Division Bench felt that it was necessary in the interest of justice to examine the appellant as a court witness.
They, therefore summoned the appellant as a court witness and recorded his statement.
At the conclusion of the examination of the appellant, the learned Judges felt that the appellant had intentionally made a false statement with a view to shield his own guilt and to help the accused.
They accordingly ordered the prosecution of the appellant under section 193 I.P.C.
Allowing the appeal by special leave the Court.
723 ^ HELD: (1) What the courts have to see before issuing the process against the accused is whether there is evidence in support of the allegations made by the complainant to justify the initiation of proceedings against the accused and not whether the evidence is sufficient to warrant his conviction, but this does not mean that the Courts should not prima facie be of the opinion that there are sufficient and reasonable grounds for setting the machinery of criminal law in motion against the accused.
The moment, this guiding principle is overlooked, the prosecution degenerates itself into prosecution which often is fought with evil consequences.
In the instant case, the language in which the observations of the High Court about the exercise of pressure by the appellant on Dr. Mrs. L. K. Grewal are couched shows that the High Court was itself not prima facie satisfied about the validity of the action that it was taking.
[732D F] (2) Prosecution for perjury should be sanctioned by courts only in those cases where it appears to be deliberate and conscious and the conviction is reasonably probable or likely.
There must be prima facie case of deliberate falsehood on a matter of substance and the court should be satisfied that there is reasonable foundation for the charge.
[732G H] In the present case, as the examination of smegma lost all importance after the lapse of the performance of the alleged sexual intercourse, the appellant 's statement was not a matter of substance and the appellant does not appear to have made any false statement with a malafide intention.
In the circumstances, no useful purpose will be served by subjecting the appellant to a lengthy, vexatious and expensive trial which is not likely to end in his conviction.
[732H, 733A B] Chajoo Ram vs Radhey Shyam & Anr.
[1971] 1 SCC p. 744 referred to.
(3) In the instance case (a) the appellant had not intentionally made a false statement.
The words used by the appellant in answer to the question put to him by the High Court taken as whole make it manifest that what the appellant meant to convey was that the accused was never physically produced before him which fact is amply proved by the strong documentary evidence viz. the affidavit of Harjit Singh Head Constable dt.
27th August, 1975 corroborated by the entries in Roznamacha of the Police Station, city Abhor of dt.
17th March, 1973.
(b) The question of disagreement between that two doctors and of refusal on the part of Dr. Mrs. L. K. Grewal to give opinion about smegma were purposely introduced subsequently by someone other than the appellant with some oblique motive and (c) It is well known in the medical world that the examination of smegma loses all importance after 24 hours of the performance of the sexual intercourse.
Non invitation of this fact to the notice of the learned Judges of the High Court has led to the error, regarding the examination of smegma after two or three days after the occurrence.
[728H, 729A D, 730G, 731A, E F] Observation: The show cause notice besides being not happily worded is laconic.
It does not satisfy the essential requirements of law.
Nor does it specify the offending portions in the appellant 's lengthy statements which in the opinion of the High Court were false.
In cases of this nature, it is highly desirable and indeed very necessary that the portions of the witness 's statement in regard to which he has, in the opinion of the Court, perjured himself, should be speci 724 fically set out in or form annexure to the notice issued to the accused so that he is in a position to furnish an adequate and proper reply in regard thereto and able to meet the charge.
[734A B]
|
ivil Appeal Nos.
728 730 of 1975.
823 Appeals by Special Leave from the Judgment and Order dated 19 7 1973 of the Kerala High Court in S.A. Nos. 340 and 341/73 and A.S. No. 176/73.
M. K. Ramamurthy, Amicus Curiae, section Balakrishnan, Amicus Curiae, Miss R. Vaigai and Lilly Kurian (In person) for the Appellant.
V. A. Seyid Muhammed and K. R. Nambiar for the State of Kerala.
L. N. Sinha (for RR 1, 2 and 11 in CA 728), M. I. Joseph (CA 729), P. P. Singh, (C.A. 729, 728 and 730/78) A. G. Puddissery (C.A. 730/75) and K. M. K. Nair for RR 1, 2, 11 and 12 in C.A. 728, RR. 3, 11, 12 and 13 and RR 1, 3 5 in C.A. 730/75.
P. K. Keshava Pillai, Frank Anthony, M. K. D. Namboodiry, K. R. Choudhury, Baby Krishnan, B. Parthasarthi and Panduranga Rao for the Interveners.
The Judgment of the Court was delivered by SEN, J.
These appeals by special leave directed against the Judgment of the Kerala High Court dated July 19, 1973, raise a question of far reaching importance.
The question is whether an educational institution established and managed by a religious or linguistic minority is bound by the provisions of Ordinance 33(4), Chapter LVII of the Ordinances framed by the Syndicate of the University of Kerala, under section 19(j) of the Kerala University Act, 1957.
Lilly Kurian, the appellant herein, was appointed as Principal of the St. Joseph Training College for Women, Ernakulam in the year 1957.
The College was established by the Congregation of the Mothers of Carmal, which is a religious society of Nnus belonging to the Roman Catholic Church, and is affiliated to the University of Kerala.
It is administered by a Managing Board, and the Provincial of the Congregation is its President.
On October 30, 1969, there was an unfortunate incident between the appellant and one P. K. Rajaratnam, a lecturer of the College, placed on deputation by the Government.
On the basis of a complaint by Rajaratnam, the Managing Board initiated disciplinary proceedings against the appellant and appointed a retired Principal of the Maharaja 's College, Ernakulam, to be the Enquiry Officer.
The appellant did not participate in the proceedings.
The attitude adopted by the appellant unfortunately was one of supreme indifference, taking the stand that the Managing Board had no competence whatsoever to initiate any such disciplinary action.
The Enquiry Officer by his 824 report dated November 27, 1969, held the appellant guilty of misconduct.
The Secretary of the Managing Board accordingly served her with a notice dated December 2, 1969 stating that a meeting of the Board was to be held on December 19, 1969, to consider the representation, if any, made by her and also the punishment to be imposed, on the basis of the findings recorded by the Enquiry Officer.
In the wake of the disciplinary action, on December 16, 1969, the appellant filed a suit O.S. No. 819 of 1969 in the Munsiff 's Court, Ernakulam, challenging the validity of the proceedings of the Managing Board.
On December 19, 1969 the Munsiff issued an interim injunction restraining the Management from implementing the decision, if any, taken by it at the meeting to be held on that day.
A meeting of the Board had, in fact, been held and a decision was taken to remove the appellant from service.
The Provincial of the Congregation by virtue of her office as the President of the Managing Board, by order dated January 2, 1970, dismissed the appellant from service.
It was stated that the Managing Board had after giving due notice to the appellant, and on a careful consideration of the enquiry report, and the findings thereon, found that the charges of misconduct were proved.
The appellant was accordingly directed to hand over all papers, files, vouchers and documents connected with the College to Sr.Lewina, Professor, without further delay, stating that the order for her dismissal from service would be implemented immediately after the decision of the Munsiff on the application for temporary injunction.
On January 17, 1970, the Munsiff held that the dismissal of the appellant was free from any infirmity and was by the competent authority, that is the Managing Board, and, therefore, she had no prima facie case.
The Munsiff accordingly vacated the injunction with a direction that temporary injunction already issued will remain in force for two weeks to enable the appellant, if she wanted to move the Vice Chancellor and obtain from him a stay of the order of dismissal.
The appellant had, in the meanwhile, on January 9, 1970; already filed an appeal before the Vice Chancellor under Ordinance 33(4), Chapter LVII of the Ordinance framed by the Syndicate, against the order of dismissal.
The Vice Chancellor by his order dated January 24, 1970, stayed the operation of the order of dismissal.
The suit filed by the appellant was subsequently dismissed by the Munsiff as withdrawn.
It appears that the appellant was all the while functioning as principal of the College.
It was brought to light that she had sent two communications dated October 6, 1969, and November 5, 1969, to 825 the Secretary to the Government, Education Department, calling for termination of deputation of Rajaratnam, appointed as a Lecturer in the College by the Management, as a result of which his deputation was cancelled by the Government on December 9, 1969.
The Managing Board viewed the sending of these communications by the appellant without reference to it as an act of insubordination, and, therefore, decided to conduct an enquiry against the appellant and she was suspended pending enquiry.
A substitute Principal, Sr.Lewina, was appointed and the appellant was relieved of the duties on April 10, 1970.
On April 13, 1970 the appellant filed an appeal to the Vice Chancellor against the order of suspension under Ordinance 33(1) of Chapter LVII, and the Vice Chancellor by his order dated April 20, 1970 directed that the status quo be maintained.
In view of this order, the Management was presumably apprehensive that the appellant might force herself upon the College.
The substitute Principal, Sr.Lewina, appointed by the Management in place of the appellant accordingly on July 2, 1970 filed the suit O.S. No. 405 of 1970 in the Munsiff 's Court, Ernakulam for an injunction restraining the appellant from functioning and from interfering with her discharging the duties as Principal.
The Munsiff granted a temporary injunction, in the terms prayed for, which was subsequently confirmed.
The Vice Chancellor, University of Kerala, by his two orders dated October 19, 1970 held that the order of dismissal from service and the order of suspension passed against the appellant were in breach of the rules of natural justice and fair play and were consequently illegal and null and void, and accordingly directed the Management to allow her to function as Principal.
Before the orders were communicated, the Management filed the suit O.S. No. 110 of 1970 in the Munsiff 's Court, Ernakulam on October, 22, 1970, seeking an injunction restraining the appellant from functioning as Principal of the College and obtained a temporary injunction.
While these two injunctions were in force, the appellant wrote to the Superintendent of the Post Offices demanding delivery of letters addressed to the Principal at her residence.
The non delivery of letters created a dead lock in the administration of the College.
On July 22, 1972, the substitute Principal, Sr.Lawine accordingly filed a suit O.S. No. 569 of 1972 in the Munsiff 's Court, Ernakulam against the appellant and the Postal Authorities for prohibiting the one from receiving and the other from delivering, the postal articles addressed to the Principal of the College.
All the three suits pending in the Munsiff 's Court, Ernakulam were transferred, by the order of the District Judge, Ernakulam to the 1st Additional Sub Court, Ernakulam for disposal.
826 The trial court by its judgment dated December 6, 1972 dismissed the suits holding that the appellate power conferred on the Vice Chancellor by cls.
(1) and (4) of Ordinance 33, Chapter LVII of the Ordinance framed by the Syndicate under section 19(j) of the Act, was a valid conferment of power on the Vice Chancellor and even after the commencement of the Kerala University Act, 1969, both the Vice Chancellor and the Syndicate had concurrent powers of appeal.
It, therefore, upheld the orders of the Vice Chancellor directing reinstatement of the appellant in service.
On appeal, the District Judge, Ernakulam by his judgment dated March 17, 1973 held that the orders of the Vice Chancellor were perfectly valid and within jurisdiction, and that his direction to the Management to continue the appellant as Principal in her office was also legal.
He, accordingly dismissed the appeals.
The Kerala High Court, however, by its judgment dated July 19, 1973 reversed the judgment and decree of the court below and decreed the plaintiffs ' suit holding that (i) the conferment by the Syndicate of a right of appeal to a teacher against his order of dismissal from service to the Vice Chancellor cannot be said to be in excess of the permissible limits of the power to prescribe the duties and conditions of service of teachers in private colleges in terms of section 19(j) of the Act, and (ii) the provisions for a right of appeal contained in Ordinance 33(1) and (4), Chapter LVII of the Ordinance were not violative of the rights guaranteed to the religious minorities under Article 30(1), and were, therefore, valid, following certain observations of its earlier Full Bench decision in V. Rev. Mother Provincial vs State of Kerala.
According to the High Court, although the Vice Chancellor had the power to hear an appeal against an order of dismissal under Ordinance 33(4), he had not, expressly or impliedly, the power to order reinstatement or even to grant a declaration that the services of the appellant had been wrongly terminated.
It held that a statutory tribunal like the Vice Chancellor could not grant such a relief as the same would amount to specifically enforcing the contract of service.
In reaching the conclusion, the High Court observes that this, in effect, "amounts to eviscerating the right of appeal to the Vice Chancellor, but the remedy lies elsewhere", in the light of the authorities cited by it.
The Kerala University Act, 1957, "the Act", as the preamble shows, was enacted to reconstitute the University of Travancore into a teaching University for the whole of the State of Kerala.
Section 2(a) defines "college" to mean a college maintained by, or affiliated 827 to the University.
The definition of "teacher" in section 2(j) of the Act is wide enough to take in a Principal, as any 'other person imparting instruction '.
Section 5(viii) confers power on the University to affiliate to itself colleges within the State in accordance with the conditions to be prescribed in the statutes regarding management, salary and terms of service of members of the staff, and other such matters, and to withdraw affiliation from colleges.
Section 15(2)(ii) enjoins that the Senate shall make, amend or repeal statutes of its own motion or on the motion of the Syndicate.
The powers of the Syndicate are enumerated in section 19, the relevant provisions of which read: "19.Powers of the Syndicate Subject to the provisions of this Act and the Statutes, the Executive Authority of the University including the general superintendence and control over the institutions of the University shall be vested in the Syndicate; and subject likewise, the Syndicate shall have the following powers, namely: (a) to affiliate institutions in accordance with the conditions prescribed in the Statutes; (b) to make Ordinance and to amend or repeal the same; x x x x x x x x (j) to fix the emoluments and prescribe the duties and the conditions of service of teachers and other employees in Private Colleges.
" The Kerala University Act, 1957 was repealed by the Kerala University Act, 1969 which came into force with effect from February 28, 1969.
Section 75(2) of the Act provides that the statutes, ordinances, rules and byelaws in force immediately before the commencement of the Act shall, in so far as they are not inconsistent with its provisions, continue to be in force unless they are replaced.
The material provisions of Ordinance 33, Chapter LVII of the Ordinances framed by the Syndicate under section 19(g) are as follows: "33(1) Suspension: The management may at any time place a teacher under suspension where a disciplinary proceedings against him is contemplated or is pending.
He shall be paid subsistence allowance and other allowances by the management during the period of suspension at such rates as may be specified by the University in each case.
The teacher shall have right to appeal against the order of suspension to the Vice Chancellor of the University within a period of two months from the date on which he receives the order of suspension.
(2) Nature of penalties: The following penalties may for good and sufficient reasons be imposed on a teacher by the Management: (i) Censure.
(ii) Withholding of increment.
(iii) Recovery from pay of any pecuniary loss caused to the institution/monetary value equivalent to the amount of increment ordered to be withheld.
(iv) Reduction to a lower rank in the seniority list or to a lower grade or post.
(v) Dismissal from service.
The Management shall be the Disciplinary Authority in imposing the penalties.
X X X X X X X X (4) Appeal: A teacher shall be entitled to appeal to the Vice Chancellor of the University against any order passed by the management in respect of the penalties referred to in items (ii) to (v).
Such appeal shall be submitted within a period of 60 days the appellant receives the order of punishment.
" The expression "conditions of service" covers a wide range, as explained by the Privy Council in N.W.F. Province vs Surai Narain which was approved by this Court in State of U.P. vs Babu Ram.
These decisions and also a later decision of this Court in State of M.P. & Ors.vs Shardul Singh have made it clear that the expression conditions of service ' includes everything from the stage of appointment to the stage of termination to service and even beyond, and relates to matters pertaining to disciplinary action.
Thus, the expression 'conditions of service ' as explained in the decisions of the Privy Council and of this Court includes the power to take disciplinary action.
The rules regarding these matters are contained in Chapter LVII of the Ordinances.
The Management of a private college under Ordinance 33(2) is constituted the appointing and the disciplinary 829 authority in respect of imposition of punishment.
In the course of any disciplinary proceeding, a right of appeal before the Vice Chancellor is given to a teacher dismissed from service under Ordinance 33(4) of the Ordinances.
The High Court thus rightly held that the right of appeal conferred by Ordinance 33(4) forms part of the 'conditions of service ' and, therefore, is valid.
The High Court was, however, wrong in two ways.
Firstly, it fell into an error in holding that the Vice Chancellor while exercising the appellate powers under Ordinance 33(4), had not the power to direct reinstatement of a teacher or grant a declaration that his dismissal was wrongful.
It also fell into an error in holding that a right of appeal before the Vice Chancellor given to the teachers of private colleges under Ordinance 33(1) and (4), in the matter of suspension and dismissal, was not violative of the rights of religious minorities under article 30(1) of the Constitution.
Under Ordinance 33(1), a teacher placed under suspension, has a right of appeal against the order of suspension to the Vice Chancellor.
Under Ordinance 33(4), a teacher shall be entitled to appeal to the Vice Chancellor against any order passed by the management in respect of penalties referred to in items (ii) to (v) of Ordinance 33(2).
Merely because a right of appeal is provided without defining the powers of the appellate authority, it cannot be implied that such right does not include the power to direct reinstatement.
The conferment of a power to hear an appeal necessarily invests the appellate authority with the power to annul, vary or set aside the order appealed from.
Such power is incidental to or is implied in, the power to hear an appeal.
It necessarily has the power to grant an appropriate relief.
Indeed, the extent of the appellate power under Ordinance 33(4) is not defined.
When a teacher is dismissed from service, the Vice Chancellor can not only direct reinstatement but also modify the nature of Punishment.
The whole matter is at large before him.
In V. Rev. Mother Provincial vs State of Kerala (supra) a Full Bench of the Kerala High Court while dealing with section 56(4) of the Kerala University Act, 1969, observed that the right of appeal to the Syndicate, which being a large body comprising of as many as seventeen members will be subject to pulls and pressures, was not a body which could be entrusted with a judicial function of this nature.
In that view, it held that sub section (4) suffers from the defect of the appeal being to a forum which seems to be entirely unsuitable for the purpose, being unreasonable, and so much against the interests of the 830 institution, that it can hardly be justified either as a regulation of, or as a reasonable restriction on the power of the management.
Incidentally, it observed: "Though the appeal lies not, as one would have expected, to a judicial or quasi judicial tribunal but to an executive body which, having regard to its composition, would hardly be able to produce what is ordinarily called a speaking order."
The High Court has read more into the Full Bench decision than there is, and from the mere observation that the proper remedy against any abuse of the disciplinary power would be an appeal, seem to assume that a provision like Ordinance 33(4) would not affect the right guaranteed to a minority under Article 30(1), in matters pertaining to discipline.
On the contrary, the Full Bench observed: "The Vice Chancellor can hardly be expected to have the time to deal with such matters, and in any case, the long delay that will necessarily be involved would, by itself render the managing body 's powers of disciplinary control largely ineffectual.
" It is contended on behalf of the appellant that the right to administer guaranteed by Article 30(1) of the Constitution does not carry with it a 'right to maladminister '.
It is urged that while autonomy in administration means right to administer effectively and to manage and conduct the affairs of the institution, the University will always have a right to see that there is no maladministration.
If there is maladministration, the University must take steps to cure the same.
The right to administer is, therefore to be tampered with regulatory measures to facilitate smooth administration.
Regulations which will serve the interests of the students, regulations which will serve the interests of the teachers are of paramount importance under good administration.
Regulations in the interest of efficiency of teachers, discipline and fairness in administration are necessary for preserving harmony among affiliated institutions.
It is urged that if the State has any role to play in the system of general education, its power cannot be confined merely to the laying down of a prescribed standard of education for minority educational institutions but should also extend to all necessary measures to secure an orderly, efficient and sound administration of such institutions.
Once the role of the State in the system of general education is properly understood its regulatory power over the minority educational institutions, it is submitted, would depend upon the nature or type of the educational institutions set up by a minority and all other relevant factors, and no universal or general test can be 831 laid down.
The degree of permissive State control must depend upon the circumstances of each case.
The right under Article 30(1) forms part of a complex and inter dependent group of diverse social interests.
There cannot be any perpetually fixed adjustment of the right and those social interests.
They would need adjustment and readjustment from time to time and in varying circumstances.
Undoubtedly, the management of a minority institution could not be displaced by the regulatory measure.
But the State has a power to regulate through the agency of the University the service conditions of teachers and to secure a fair procedure in the matter of disciplinary action against them.
These safeguards must necessarily result in the security of tenure of teachers and must attract competent and qualified staff and thus could ultimately improve the excellence and efficiency of the educational institution.
It is further urged that the reconciliation of minority rights in education with wider social and educational objectives is inevitably necessary and this involves the judicial task of balancing the guaranteed rights under Article 30(1) with social, national or educational values sought to be regulated or protected by the impugned legislation.
It has to be kept in mind that today the education has to be so designed which would subserve not only the well being of the citizens in the intellectual, ethical and financial spheres but would inculcate amongst them a senses of individual and social consciousness to contribute to the welfare and prosperity of an egalitarian society.
It is, therefore, urged that Ordinance 33(4).
Chapter LVII of the Ordinances farmed by the Syndicate under s.19(j) of the Act is not violative of Article 30(1) as it seeks to ensure justice and fair play to the teachers against arbitrary actions of the management.
It is next urged that the Vice Chancellor, while exercising his appellate power under Ordinance 33(4) is indeed clothed with the State 's inherent judicial power to deal with disputes between the parties and determine them on the merits, fairly and objectively.
It is urged that the contention that the impugned order passed by the Vice Chancellor under Ordinance 33(4) affects the fundamental rights of minority religious institutions under Article 30(1), is based on a complete misconception about the true nature and character of judicial process and of judicial decisions.
If this basic and judicial aspect of the judicial process is borne in mind, it is submitted, it would be plain that the decision given by the Vice Chancellor cannot be said to affect the fundamental rights guaranteed under Article 30(1).
The remedy for a person aggrieved by the decision of a competent judicial tribunal is to approach for redress a superior tribunal, if there be one.
832 Lastly it is urged that the rights of the religious and linguistic minorities in respect of their educational institutions, however, liberally construed, cannot be allowed to dominate every other fundamental rights, directive principles of State policy and broad ideals of the Constitution.
Article 30(1) enables the minorities to establish and administer educational institutions of their choice but it is said they cannot be entitled to exact unjustifiable preferential or discriminatory treatment for minority institutions so as to obtain benefits but to reject obligations of statutory rights.
We fail to see the relevance of these submissions while adjudging the validity of Ordinance 33(1) and (4) in the light of Article 30(1).
The appellant, who appeared in person, supplemented the arguments of the learned counsel appearing as amicus curiae and urged that if the Court does not uphold the powers of the Vice Chancellor under Ordinance 33(4) it would be tantamount to negation of the State 's regulatory power to prevent or cure the abuse of power by the management and throw the teachers to their arbitrary actions without any security of tenure.
She urged that the religious, cultural and linguistic minorities though deserve a generous and sympathetic treatment, cannot at the same time be absolved of their obligations to conform to the norms of natural justice and fair employment.
In assailing the view of the High Court, learned counsel for the Management contends that the right of administration of minority educational institutions rests with the Management and the right of appointment, suspension and dismissal of the staff also is part and parcel of the administration.
In a private college, the appointing and disciplinary authority is the management.
Ordinance 33 relating to the service conditions of teachers in private colleges authorises the management to take any disciplinary proceedings.
The University has no power to interfere into the administration of the college or into the disciplinary action taken against a member of the staff.
The creation of an appellate authority like the Vice Chancellor, which is an outside agency, itself is an illegal abridgment of the right of management enshrined in Article 30(1).
That apart, directing a dismissed Principal, who is the academic head of the college, to hold office against the wishes of the founders of the college without specific power in that regard, is an anathema to the right of administration guaranteed by Article 30(1) of the Constitution.
If the Vice Chancellor were to have power of reinstatement of a dismissed teacher, the result would be, in effect, appointing a person against the will of the founders of the institution.
The conferment of such a power on the Vice Chancellor is destructive of the right of management.
In support of the contention 833 that Ordinance 33(1) and (4) were violative of Article 30(1), reliance was placed on the decision in Ahmedabad St. Xaviers College Society & Anr.vs State of Gujarat & Anr.Learned counsel for the interveners contends that the interposition of an outside authority like the Vice Chancellor, demits the entire disciplinary power of a minority educational institution to the Vice Chancellor.
Under Ordinance 33(4) the Vice Chancellor has the power to veto its disciplinary control.
There is complete interference with the disciplinary power of the minority institution.
The State may 'regulate ' the exercise of the right of administration, but it has no power to impose any 'restriction ' which is destructive of the right itself.
In matters relating to discipline, the process of decision must be left to the institution.
There is direct interference with this right.
The post of principal is of pivotal importance in the life of a college, around whom wheels the tone and temper of the institution, on whom depends the continuity of its traditions, maintenance of discipline and the efficiency of its teaching.
The character of the institution depends on the right choice of the principal by the management.
The right to choose the principal is perhaps the most important facet of the right to administer a college.
In the same way, the right to dispense with the services of the principal is an equally important facet of the same right.
The imposition of any trammel, thereon, except to the extent of prescribing the requisite qualifications and the experience or otherwise fostering the interests of the institution itself, cannot but be considered as a violation of the right warranted under Article 30(1).
Learned counsel appearing for the State of Kerala, however, while conceding that conferral of arbitrary and unguided powers on an outside agency like the Vice Chancellor, would be destructive of the right of management under Article 30(1), contends that the power of the Vice Chancellor under Ordinance 33(4) to hear an appeal against an order of dismissal does not suffer from this vice.
He tries to limit the appellate power of the Vice Chancellor under Ordinance 33(4) to a case where the action of the management is mala fide or where the order of dismissal is a nullity or where the management has acted in breach of the rules of natural justice.
When so read, it is urged, that the conferment of the right of appeal to the Vice Chancellor in case of disciplinary powers of a minority educational institution, amounts only to a regulation of such power, and, therefore, Ordinance 33(4) is not violative of Article 30(1).
Article 30(1) of the Constitution provides: 834 "30.(1) All minorities, whether based on religion or language, shall have the right to establish and administer educational institutions of their choice.
" It is clear beyond doubt that Article 30(1), though couched in absolute and spacious terms in marked contrast with other fundamental rights in Part III, has to be read subject to the regulatory power of the State.
Though this Court has consistently recognized this power of the State as constituting an implied limitation upon the right guaranteed under Article 30(1), the entire controversy has centred around the extent of its regulatory power over minority educational institutions.
In re the Kerala Education Bill, 1957(1), section R. Das, C.J. explained the content of the right under Article 30(1) of the Constitution, in these words: "We have already observed that Article 30(1) gives two rights to the minorities, (1) to establish and (2) to administer educational institutions of their choice.
The right to administer cannot obviously include the right to maladminister.
The minority cannot surely ask for aid or recognition for an educational institution run by them in unhealthy surroundings, without any competent teachers possessing any semblance of qualification, and which does not maintain even a fair standard of teaching or which teaches matters subversive of the welfare of the scholars.
It stands to reason, then, that the constitutional right to administer an educational institution of their choice does not necessarily militate against the claim of the State to insist that in order to grant aid the State may prescribe reasonable regulations to ensure the excellence of the institutions to be aided."
Thus, a contention based on the absolute freedom from State control of the minorities ' right to administer their educational institutions was expressly negatived in this case.
The Court clearly laid down a principle, namely, a regulation, which is not destructive or annihilative of the core or the substance of the right under Article 30(1), could legitimately be imposed.
The right of a minority community to establish and administer educational institutions of their choice was subject matter of decision by this Court in more than one case.
In Rev. Sidhajbhai Sabhai vs State of Bombay, Shah J. (as he then was) speaking for the Court, negatived an argument advanced on 835 behalf of the State that a law could not be deemed to be unreasonable unless it was totally destructive or annihilative of the right under Article 30(1), stating: "The right established by article 30(1) is a fundamental right declared in terms absolute.
Unlike the fundamental freedoms guaranteed by article 19, it is not subject to reasonable restrictions.
It is intended to be a real right for the protection of the minorities in the matter of setting up of educational institutions of their own choice.
The right is intended to be effective and is not to be whittled down by so called regulative measures conceived in the interest not of the minority educational institution, but of the public or the nation as a whole.
If every order which while maintaining the formal character of a minority institution destroys the power of administration is held justifiable because it is in the public or national interest, though not in its interest as an educational institution, the right guaranteed by article 30(1) will be but a 'teasing illusion ', a promise of unreality.
" The learned Judge then went on to say: "Regulation which may lawfully be imposed either by legislative or executive action as a condition of receiving grant or of recognition must be directed to making the institution while retaining its character as a minority institution effective as an educational institution.
Such regulation must satisfy a dual test the test of reasonableness, and the test that it is regulative of the educational character of the institution and is conducive to making the institution an effective vehicle of education for the minority community or other persons who resort to it.
" Unlike Article 19(1) the fundamental freedom under Article 30(1) is absolute in terms; it is not made subject to any reasonable restrictions of the nature the fundamental freedoms enunciated in Article 19 may be subjected to.
All minorities, linguistic or religious, have by Article 30(1) an absolute right to establish and administer educational institutions of their choice; and any law or executive direction which seeks to infringe the substance of that right under Article 30(1) would to that extent be void.
The extent of the regulatory power of the State was explained by Shah J., thus : "This, however, is not to say that it is not open to the State to impose regulations upon the exercise of this right.
836 The fundamental freedom is to establish and to administer educational institutions : it is a right to establish and administer what are in truth educational institutions, institutions which cater to the educational needs of the citizens, or sections thereof.
Regulation made in the true interests of efficiency of instruction, discipline, health, sanitation, morality, public order and the like may undoubtedly be Imposed.
Such regulations are not restrictions on the substance of the right which is guaranteed; they secure the proper functioning of the institution, in matters educational."
In Rev. Father W. Proost & Ors.vs The State of Bihar & Ors.(1) Hidayatullah C.J. while dealing with Articles 29(1) and 30(1), said : "In our opinion, the width of Article 30(1) cannot be cut down by introducing in it considerations on which article 29(1) is based.
The latter article is a general protection which is given to minorities to conserve their language, script or culture.
The former is a special right to minorities to establish educational institutions of their choice.
This choice is not limited to institution, seeking to conserve language, script or culture and the choice is not taken away if the minority community having established an educational institution of its choice also admits members of other communities.
That is a circumstance irrelevant for the application of Article 30(1) since no such limitation is expressed and none can be implied, although it is possible that they may meet in a given case.
" Incidentally, in dealing with the right under Article 30(1) and the extent of the State 's power of regulatory control of such right, this Court in State of Kerala vs V. Rev. Mother Provincial observed: "Administration means 'management of the affairs ' of the institution.
This management must be free of control so that the founders or their nominees can mould the institution as they think fit, and in accordance with their ideas of how the interests of the community in general and the institution in particular will be best served.
No part of this management can be taken away and vested in another body without an encroachment upon the guaranteed right.
There is, however, an exception to this and it is that the standards of education are not a part of management as such.
These standards concern the body politic and are dictated 837 by considerations of the advancement of the country and its people.
Therefore, if universities establish syllabi for examinations they must be followed, subject however to special subjects which the institutions may seek to teach, and to a certain extent the State may also regulate the conditions of employment of teachers and the health and hygiene of students.
Such regulations do not bear directly upon management as such although they may indirectly affect it.
Yet the right of the State to regulate education, educational standards and allied matters cannot be denied.
The minority institutions cannot be allowed to fall below the standards of excellence expected of educational institutions, or under the guise of exclusive right of management, to decline to follow the general pattern.
While the management must be left to them, they may be compelled to keep in step with others.
" Projection of the minorities is an article of faith in the Constitution of India.
The right to the administration of institutions of minority 's choice enshrined in Article 30(1) means 'management of the affairs ' of the institution.
This right is, however, subject to the regulatory power of the State.
Article 30(1) is not a charter for maladministration; regulation, so that the right to administer may be better exercised for the benefit of the institution is permissible; but the moment one goes beyond that and imposes, what is in truth, not a mere regulation but an impairment of the right to administer, the Article comes into play and the interference cannot be justified by pleading the interests of the general public; the interests justifying interference can only be the interests of the minority concerned.
The conferment of a right of appeal to an outside authority like the Vice Chancellor under Ordinance 33(4) takes away the disciplinary power of a minority educational authority.
The Vice Chancellor has the power to veto its disciplinary control.
There is a clear interference with the disciplinary power of the minority institution.
The State may 'regulate ' the exercise of the right of administration but it has no power to impose any 'restriction ' which is destructive of the right itself.
The conferment of such wide powers on the Vice Chancellor amounts in reality, to a fetter on the right of administration under Article 30(1).
This, it seems to us, would so affect the disciplinary control of a minority educational institution as to be subversive of its constitutional rights and can hardly be regarded as a 'regulation ' or a 'restriction ' in the interest of the institution.
In St. Xaviers College vs Gujarat (supra) a Bench of nine Judges, by a majority of seven to two, held that clauses (b) of sub sections (1) and (2) of section 51A of the Gujarat University Act, 1949 were violative 838 of Article 30(1).
Section 51A(1)(b) enacts that no member of the teaching, other academic and non teaching staff of an affiliated college shall be dismissed or removed or reduced in rank except after an enquiry in accordance with the procedure prescribed in clause (a) and the penalty to be inflicted on him is approved by the Vice Chancellor or any other officer of the University authorised by the Vice Chancellor in this behalf.
Similarly, clause (b) of sub section (2) requires that such termination should be approved by the Vice Chancellor or any officer of the University authorised by the Vice Chancellor in this behalf.
It was argued that the requirement that such termination must be with the approval of the Vice Chancellor, creates a fetter in matters relating to disciplinary control over the members of the teaching and non teaching staff.
The approval by the Vice Chancellor, it was said, may be intended to be a check on the administration but there were no guidelines provided and, therefore, clauses (b) of sub section (1) and (2) of section 51A cannot be said to be a permissive regulatory measure.
These contentions were upheld by the majority.
While seven Judges who constituted the majority upheld the provisions of clauses (a) of sub section (1) and (2) of section 51A, as they provided for a reasonable opportunity of showing cause against a penalty to be imposed as being 'regulatory ', they held that clauses (b) of sub sections (1) and (2) of section 51A of the Act, which confer a blanket power on the Vice Chancellor to interfere with the disciplinary control of the management of a minority educational institution over its teachers, make a serious inroad on the right of the minority to administer an educational institution guaranteed under Article 30(1).
To appreciate the point involved, we may refer to certain passages of the judgment.
In dealing with the question, Ray C.J., with whom Palekar, J. agreed, observed: "In short, unlimited and undefined power is conferred on the Vice Chancellor.
The approval of the Vice Chancellor may be intended to be a check on the administration.
The provision contained in section 51A, clause (b) of the Act cannot be said to be a permissive regulatory measure inasmuch as it confers arbitrary power on the Vice Chancellor to take away the right of administration of the minority institutions.
Section 51A of the Act cannot, therefore, apply to minority institutions.
" The provision for approval of the Vice Chancellor was held to be bad because it acted as a check on administration.
Further, it was 839 held to confer arbitrary powers on the Vice Chancellor because there was no guidelines on the basis of which the Vice Chancellor could withhold his approval.
Jaganmohan Reddy J., speaking for himself and for Alagiriswami J. agreed with the opinion of Ray C.J.
In explaining the extent of regulatory control, Khanna J. stated : "Although disciplinary control over the teachers of a minority educational institution would be with the governing council, regulations, in any opinion, can be made for ensuring proper conditions of service of the teachers and for securing a fair procedure in the matter of disciplinary action against the teachers.
Such provisions which are calculated to safeguard the interest of teachers would result in security of tenure and thus inevitably attract competent persons for the posts of teachers.
Such a provision would also eliminate a potential cause of frustration amongst the teachers.
Regulations made for this purpose should be considered to be in the interest of minority educational institutions and as such they would not violate article 30(1).
" He accordingly upheld the validity of clause (a) stating : "Clause (a) of sub sections (1) and (2) of section 51A of the impugned Act which make provision for giving a reasonable opportunity of showing cause against a penalty to be proposed on a member of the staff of an educational institution would consequently be held to 'be valid.
" But he held clause (b) to be invalid saying : "Clause (b) of those sub sections which gives a power to the Vice Chancellor and officer of the University authorised by him to veto the action of the managing body of an educational institution in awarding punishment to a member of the staff, in my opinion, interfere with the disciplinary control of the managing body over its teachers.
It is significant that the power of approval conferred by clause (b) in each of the two sub sections of section 51A on the Vice Chancellor or other officer authorised by him is a blanket power.
No guide lines are laid down for the exercise of that power and it is not provided that the approval is to be withheld only in case the dismissal, removal, reduction in rank or termination of service is mala fide or by way of victimisation or other similar cause.
The conferment of such blanket power on the Vice 840 Chancellor or other officer authorised by him for vetoing the disciplinary action of the managing body of an educational institution makes a serious inroad on the right of the managing body to administer an educational institution.
Clause (b) of each of the two sub sections of section 51A should, therefore, be held to be violative of article 30(1) so far as minority educational institutions are concerned.
" It was held that clause (b) interferes with the disciplinary control of the managing body over its teachers.
The provision does not restrict its operation in cases of mala fides or victimisation, etc.
In other words, the power of the Vice Chancellor was complete.
He could refuse his approval on facts, that is to say, on reaching a conclusion that the action of the management was improper or invalid.
Mathew J., speaking for himself and one of us, Chandrachud J. (as he then was) observed : "It was argued for the petitioners that clause (1)(b) of s.51A has the effect of vesting in the Vice Chancellor a general power of veto on the right of the management to dismiss a teacher.
The exact scope of the power of the Vice Chancellor or of the office of the University authorised by him in this sub section is not clear.
If the purpose of the approval is to see that the provisions of sub section 51A(1) (a) are complied with, there can possibly be no objection in lodging the power of approval even in a nominee of the Vice Chancellor.
But an uncanalised power without any guideline to withhold approval would be a direct abridgement of the right of the management to dismiss or remove a teacher or inflict any other penalty after conducting an enquiry."
The Learned Judge then proceeded to observe: "The relationship between the management and a teacher is that of an employer and employee and it passes one 's understanding why the management cannot terminate the services of a teacher on the basis of the contract of employment.
Of course, it is open to the State in the exercise of its regulatory power to require that before the services of a teacher are terminated, he should be given an opportunity of being heard in his defence.
But to require that for terminating the services of teacher after an inquiry has been conducted, the management should have the approval of an outside agency like the Vice Chancellor or of his nominee would be an abridgement of its right to administer the educational institution.
No guidelines are provided by the legis 841 lature to the Vice Chancellor for the exercise of his power.
The fact that the power can be delegated by the Vice Chancellor to any officer of the University means that any petty officer to whom the power is delegated can exercise a general power of veto.
There is no obligation under the sub sections (1)(b) and 2(b) that the Vice Chancellor or his nominee should give any reason for disapproval.
As we said a blanket power without any guideline to disapprove the action of the management would certainly encroach upon the right of the management to dismiss or terminate the services of a teacher after an enquiry."
He was of the opinion that such a provision constitutes a direct abridgement of the right of the management to dismiss or remove a teacher or inflict any other penalty, after conducting an enquiry.
Dissenting two of the other Judges, namely Beg, and Dwivedi, J. struck a discordant note.
Beg J. (as he then was) observed: "Section 51A of the Act appears to me to lay down general conditions for the dismissal, removal, reduction in rank and termination of services of members of the staff of all colleges to which it applies.
Again, we have not to consider here either the wisdom or unwisdom of such a provision or the validity of any part of section 51A of the Act on the ground that it violates any fundamental right other than the ones conferred by article 30(1) of the Constitution.
" Dwivedi J. stated: "The purpose of section 51A is to check this kind of misuse of the right to fire an employee.
So the Vice Chancellor 's power of approval is not unguided and unreasonable.
After the Chancellor, the Vice Chancellor is the next highest officer of the University.
It should be presumed that in granting or withholding approval 'he would act according to reason and justice '.
When the matter goes before the Vice Chancellor for approval, both the management and the teacher or the member of the non teaching staff should be heard by him.
Hearing both parties is necessarily implied, because without hearing either of them it will be difficult for him to make up his mind whether he should grant or withhold approval to the action proposed by the managing body of the educational institution.
It would also follow that while granting approval 842 or disapproval, the Vice Chancellor should record reasons, for the exercise of his power is subject to control by courts.
The statute does not make his order final, and courts would surely nullify his order if it is arbitrary, mala fide or illegal.
" An analysis of the judgments in St. Xaviers College 's case (supra) clearly shows that seven out of nine Judges held that the provisions contained in clauses (b) of sub sections (1) and (2) of section 51A of the Act were not applicable to an educational institution established and managed by religious or linguistic minority as they interfere with the disciplinary control of the management over the staff of its educational institutions.
The reasons given by the majority were that the power of the management to terminate the services of any member of the teaching or other academic and non academic staff was based on the relationship between an employer and his employees and no encroachment could be made on this right to dispense with their services under the contract of employment, which was an integral part of the right to administer, and that these provisions conferred on the Vice Chancellor or any other officer of the University authorised by him, uncanalised, unguided and unlimited power to veto the actions of the management.
According to the majority view, the conferment an such blanket power on the Vice Chancellor and his nominee was an infringement of the right of administration guaranteed under article 30(1) to the minority institutions, religious and linguistic.
The majority was accordingly of the view that the provisions contained in clauses (b) of sub sections (1) and (2) of section 51A of the Act had the effect of destroying the minority institutions disciplinary control over the teaching and non teaching staff of the college as no punishment could be inflicted by the management on a member of the staff unless it gets approval from an outside authority like the Vice Chancellor or an officer of the University authorised by him.
On the contrary, the two dissenting Judges were of the view that these provisions were permissive regulatory measures.
The power of appeal conferred on the Vice Chancellor under Ordinance 33(4) is not only a grave encroachment on the institution 's right to enforce and ensure discipline in its administrative affairs but it is uncanalised and unguided in the sense that no restrictions are placed on the exercise of the power.
The extent of the appellate power of the Vice Chancellor is not defined; and, indeed, his powers are unlimited.
The grounds on which the Vice Chancellor can interfere in such appeals are also not defined.
He may not only set aside an order of dismissal of a teacher and order his reinstatement, but may also interfere with any of the punishments enumerated in items 843 (ii) to (v) of Ordinance 33(2); that is to say, he can even interfere against the infliction of minor punishments.
In the absence of any guidelines, it cannot be held that the power of the Vice Chancellor under ordinance 33(4) was merely a check on maladministration.
As laid down by the majority in St. Xaviers College 's case (supra), such a blanket power directly interferes with the disciplinary control of the managing body of a minority education institution over its teachers.
The majority decision in St. Xaviers College 's case squarely applies to the facts of the present case and accordingly it must be held that the impugned Ordinance 33(4) of the University of Kerala is violative of Article 30(1) of the Constitution.
If the conferment of such power on an outside authority like the Vice Chancellor, which while maintaining the formal character of a minority institution destroys the power of administration, that is, its disciplinary control, is held justifiable because it is in the public and national interest, though not in its interest as an educational institution, the right guaranteed by Article 30(1) will be, to use the well known expression, a 'testing illusion ', a 'promise of unreality '.
A distinction is, however, sought to be drawn between the provisions contained in clauses (b) of sub section (1) and (2) of section 51A of the Gujarat University Act, 1949 which provided that no penalty could be inflicted on a member of the teaching staff without the prior approval of the Vice Chancellor or his nominee, and that contained in Ordinance 33(4) which confer on the Vice Chancellor the power to hear an appeal against an order of dismissal.
It is said that while a provision making the prior approval of the Vice Chancellor a condition precedent against dismissal, removal or reduction in rank of an employee creates a fetter on the exercise of a disciplinary control, which the employer undoubtedly has, the provision conferring on the Vice Chancellor a power to hear an appeal leaves the power of the employer untouched.
We are afraid, the distinction tried to be drawn is without any basis.
We must, accordingly, hold that Ordinance 33(4), Chapter LVII of the ordinances framed by the Syndicate of the University under section 19(J) of the Kerala University Act, 1969 would not be applicable to an educational institution established and managed by a religious or linguistic minority like St. Joseph 's Training College for Women, Ernakulam.
Incidentally, the Kerala University Act, 1969 has been repealed by the Kerala University Act, 1974, which has come into force with effect from August 18, 1974.
Section 65 of that Act confers power on the Government to constitute an Appellate Tribunal.
Any 844 teacher aggrieved by an order in any disciplinary proceedings taken against him may under section 60(7) appeal to the Appellate Tribunal and the Appellate Tribunal may, after giving parties an opportunity of being heard, and after such further inquiry as may be necessary, pass such orders thereon as it may deem fit, including an order of reinstatement of the teacher concerned.
Section 61 of the Act provides that (i) pending disputes between the management of a private college and any teacher relating to the conditions of service are to be decided under and in accordance with the provision the Act, and (ii) past disputes of such nature which have arisen after August 1, 1967, and had been disposed of before the commencement of the Act, shall, if the management or the teacher applies to the Appellate Tribunal in that behalf within thirty days of the commencement of the Act, be reopened and decided in accordance with the provisions of the Act.
We have been informed that the appellant has filed an appeal before the Appellate Tribunal, Kerala under section 61 (a) of the Kerala University Act, 1974.
We refrain from making any observation with regard to that appeal.
We wish to say that the validity of sections 60(7), 61 and 65 was not in question before us, and so we express no opinion in regard thereto.
The result, therefore, is that the appeals fail and are dismissed.
The judgment of the High Court setting aside the two orders of the Vice Chancellor of the University of Kerala dated October 19, 1970, is upheld though on a different ground, namely, the Vice Chancellor under Ordinance 33(1) and (4) had no power to entertain the appeals from the impugned orders of dismissal or suspension of the appellant.
The costs shall be borne by the parties throughout as incurred.
We are thankful to Sri M. K. Ramamurthi, who appeared as an amicus curiae for the appellant, for the able assistance he has rendered.
P.H.P. Appeals dismissed.
| The Appellant was appointed as Principal of the St. Joseph Training College for Women, Ernakulam in the year 1957.
In October 1969, there was an unfortunate incident between the Appellant and on Rajaratnam a lecturer of the College placed on deputation by the Government.
On the basis of a complaint by Rajaratnam, the Managing Board initiated disciplinary proceedings against the Appellant and appointed a retired Principal of a College to be an Inquiry officer.
The Appellant did not participate in the proceedings.
The Inquiry officer held the Appellant guilty of misconduct.
A show cause notice was given to the Appellant.
The Appellant however, filed a suit challenging the validity of the proceedings.
An interim injunction was issued by the Civil Court restraining the Management from implementing the decision, if any.
taken in the meeting.
The Managing Board after due notice to the Appellant found that the charges of misconduct were proved.
Subsequently, the Court held that the dismissal of the Appellant was legal and proper.
During this period the Appellant was functioning as a Principal and had sent two communications to the Secretary to the Government calling for termination of deputation of Rajaratnam.
The Managing Board viewed the sending, of these communications by the Appellant without reference to it as an act of insubordination, and therefore, decided to conduct inquiry against the Appellant and she was suspended pending inquiry.
A substitute Principal was appointed.
The Appellant filed an appeal against the order of suspension and the Vice Chancellor directed that the status quo be maintained.
The substitute Principal filed a suit for an injunction restraining the appellant from functioning or interfering with the discharge of duties of the substitute Principal which was granted by the Munsif.
The Vice Chancellor by his orders held that the orders of dismissal and suspension passed against the Appellant were in breach of natural justice and fair play and were consequently illegal, null and void.
He therefore, directed the Management to allow the Appellant to function as Principal.
The Kerala.
University Act, 1957 was enacted to reconstitute the University of Travancore into a teaching University for the whole of the State of Kerala.
The definition of "teacher" in section 2(j) of the Act is wide enough to take in a Principal.
Section 19 empowers the Syndicate to make ordinances fixing the conditions of service of teachers.
The Kerala University Act 1957 was repealed by the Kerala University Act, 1969.
The earlier ordinances have been saved and continued under the new Act.
Ordinance 33 provides for an appeal to the Vice Chancellor against any order passed by the Management in respect of the penalties including penalty of dismissal.
821 The Management filed a suit in the Munsif 's Court.
The substitute Principal also filed a further suit against the Appellant and the postal authorities for prohibiting the postal authorities from delivering and the Appellant from receiving the articles addressed to the Principal of the College.
The Trial Court dismissed the suits holding that the Appellate power conferred on the Vice Chancellor by ordinance framed by the Syndicate was a valid conferment of power and even after the commencement of the Kerala University Act, 1969, both the Vice Chancellor and Syndicate had concurrent powers of Appeal.
It, therefore, upheld the orders of the Vice Chancellor directing reinstatement of the Appellant in service.
On appeal the District Judge held that the orders of the Vice Chancellor were perfectly valid and with jurisdiction and that his direction to the Management to continue the Appellant as Principal was legal.
The Kerala High Court reversed the judgment of the Courts below holding that the conferment by the Syndicate of the right to appeal to a teacher against the order of dismissal from service to the Vice Chancellor cannot be said to be in excess of the permissible limits of the power to prescribe the duties and conditions of service of teachers in private colleges in terms of section 19(j) of the Kerala University Act, 1957, and the provisions for a right to appeal were not violative of the rights guaranteed to the religious minorities under Article 30(1) and were, therefore, valid.
According to the High Court although the Vice Chancellor had the power to hear an appeal against an order of dismissal he did not have expressly or impliedly, the power to order reinstatement or even to grant a declaration that the services of the appellant had been wrongly terminated.
It was held that a statutory tribunal like Vice Chancellor could not grant such a relief as the same would amount to specifically enforcing the contract of service.
Dismissing the appeals the Court, ^ HELD: 1.
The expression conditions of service includes everything from the stage of appointment to the stage of termination of service and even beyond and relates to matters pertaining to disciplinary action.
The High Court thus, rightly held that the right of the appeal conferred by ordinance 33 (4) forms part of the conditions of service and is, therefore, valid.
[828F G, 829A] N.W.F. Province vs Suraj Narain, 75 I.A. 343, State of U.P. vs Babu Ram, ; and State of M.P. and Ors.
v Shardul Singh ; relied on.
Protection of the minorities is an article of faith in the Constitution of India.
The right is subject to the regulatory power of the State.
Article 30(1) is not a charter for maladministration; however regulation, so that the right to administer.
may be better excised for.
the benefits of the institution, is permissible; but the moment one goes beyond that and imposes what is in truth not a mere regulation but an impairment of the right to administer the Article comes into play and the interference cannot be justified by pleading the interests of the general public.
the interests justifying interference can only be the interests of the minority concerned.
[837C E] 3.
It is clear from the judgment in St. Xaviers College case that 7 out of 9 judges held that the provisions contained in clauses (b) of sub sections 1 and 2 of Section 51(A) of the Act therein providing for the disciplinary control of the 822 Management, over the staff of its educational institution were not applicable to an education institution established and managed by religious and linguistic minorities.
The reasons given by the majority were that the power of the Management to terminate the services of any member of the teaching or other academic and non academic staff was based on the relationship between the employer and his employees and no encroachment can be made on this right to dispense with their services under the contract of employment, which was an integral part of the right to administer.
[842B D] 4.
The High Court went wrong in holding that the Vice Chancellor while exercising the appellate powers under Ordinance 33(4) cannot direct rein statement of a teacher or grant a declaration that his dismissal was wrongful.
It also fell into error in holding that the right of appeal before the Vice Chancellor against the teachers of Private Colleges in the matter of suspension and dismissal was not violative of the rights to religious minorities under Article 30(I) of the Constitution.
[829B C] Ahmedabad st.
Xaviers College Society and Anr.
vs State of Gujarat and Anr.
; ; relied on.
Unlike Article 19, the fundamental freedom under Article 30(1) is absolute in terms; it is not made subject to any reasonable restrictions of the nature the fundamental freedoms enunciated in Article 19 may be subjected to.
All minorities, linguistic or religious have by article 30(1) an absolute right to establish and administer educational institution of their choice, and any law or executive direction which seeks to infringe the substance of that right under Article 30(1) would be to that extent void.
[835F G] Rev. Sidhajbhai Sabhai vs State of Bombay, ; 6.
The conferment of a right of appeal to an outside authority like the Vice Chancellor under Ordinance 33(4) takes away the disciplinary power of a minority educational authority.
The right of the vice Chancellor to veto the disciplinary power of the minority institution is a clear interference with its right.
It amounts to a letter on the right of administration under Article 30(1).
[837E G] 7.
The power of appeal conferred on the Vice Chancellor in ordinance 33(4) is not only a grave encroachment on the right of the institution to enforce and cover discipline in its administration but it is uncanalised and unguided in the sense that no `restrictions ' are placed on the exercise of the power.
The extent of the appellate power of the Vice Chancellor is unlimited and undefined.
The grounds on which the Vice Chancellor can interfere are not defined and indeed, the powers are unlimited.
He can even interfere against the infliction of punishment.
There is complete interference with the disciplinary power of a minority institution.
In the absence of any guidelines, it cannot be held that power of the Vice Chancellor under order 33(4) was merely a check on mal administration.
The ratio of St. xavier Colleges case is fully applicable.
[842G H, 843A B] 8.
Accordingly, the judgment of the High Court setting aside the two orders of the Vice Chancellor upheld by this Court although for different reasons.
[844E. F]
|
Civil Appeal No. 710 of 1991.
From the Judgment and Order dated 8.5.1990 of the Delhi High Court in Civil Writ No. 3257 of 1989.
G.L. Sanghi, Harish N. Salve, H.K. Puri, Rajeev Sharma, Ravinder Nath, V.B. Saharya, P.K. Jain and Prem Malhotra for the Appellants.
Y.S. Chitale, T.S. Krishnamurthy Iyer, R.L. Jain, S.K. Tredal, Kitty Kumarmanglam, R.P. Dave and Ashok Mathur for the Respondents.
The Judgment of the Court was delivered by SAWANT, J.
SLP (C) No. 12 1 11 of 1990.
Leave granted.
This appeal raises the question of the validity and interpretation of Section 14 D of the Delhi Rent Control Act, 1958 (hereinafter referred to as the "Act").
In companion matters, we have already pronounced upon the validity and interpretation of Section 14 B of the Act.
Hence, it is not necessary to discuss in this judgment the points which are common to both sections.
These points will be deemed to have been concluded by the said decision.
The only point which remains to be dealt with and is peculiar to Section 14 D is whether to claim possession of such premises under the said Section, the landlady must become a widow after the premises are let out either by herself or her husband.
Section 14 D of the Act reads as follows: "14 D. Right to recover immediate possession of premises to accrue to a widow (1) Where the landlord is a widow and the premises let out by her (2) or by her husband, are required by her for her own residence, she may apply to the Controller for recovering the immediate possession of such premises.
383 (2) Where the landlord referred to in sub section (1) has let out more than one premises, it shall be open to her to make an application under that sub section in respect of any one of the premises chosen by her.
The object of the Act, as stated in its preamble, is to provide for the control of rents and evictions, and of rates of hotels and lodging houses, and for the lease of vacant premises to Government, in certain areas in the Union Territory of Delhi.
The original Act came into force on February 9, 1959 having received the assent of the President on December 31, 1958.
The working of the Act disclosed certain deficiencies, inconveniences and hardships both to the landlords and the tenants.
Their associations, therefore, made representations.
Various committees and commissions also recommended amendments of certain provisions of the Act.
Considering the grievances of the landlords and the tenants as well as the recommendations of the committees/commissions, the Act was amended in 1988 with the object of (a) rationalising the law by bringing out the balance between the interests of landlords and tenants, (b) giving a boost to house building activity and maintaining the existing housing stock in a reasonable state of repairs, (c) reducing litigation between landlords and tenants and of ensuring expeditious disposal of disputes between them.
By this amendment Sections 14 B to 14 D were added.
The object of Section 14 D is obvious.
It is to assist a vulnerable and needy section of the Society to recover possession of the premises as expeditiously as Possible and without the usual trials and tribulations.
We have already held in the accompanying judgment that classified landlords such as the widow landlady under Section 14 D can apply for possession of the premises under the respective provisions even if the premises are not let for residence.
It is not necessary to repeat the said discussion in this judgment.
Section 14 D makes no distinction between the landladies who become widows before and after letting out of the premises.
It merely says that where the landlady is a widow and the premises are let out by her or by her husband, are required by her for her own residence, she may apply to the Controller for recovering the immediate possession of such premises.
The language of the section in that respect is very clear.
The premises might have been let out by her as a widow or they might have been let out by her husband or even by herself before she had become widow.
The legislature wanted to give a special privilege to the landlady who is a widow notwithstanding whether the premises were let out before or after she became widow.
Such conferment of special benefit on a 384 widow landlady is permissible even under the provisions of Article 15(3) of the Constitution which is an express exception to the provisions of sub clauses (1) and (2) of that Article.
It states that nothing in the said Article shall prevent the State from making any special provision for women and children.
A widow is undoubtedly a vulnerable person in our society and requires special protection.
We further see no merit in the contention that if the benefit given by Section 14 D is allowed to be availed of by widows, they may make a business of it.
There is no warrant for such apprehension.
For, in the first instance, the right to recover possession under Section 14 D can be availed of by the widow only once.
That is a sufficient guarantee against the abuse of the privilege granted by the section.
Secondly, she has to prove her bona fide need for the occupation of the premises in question for her own residence like any other landlord.
Thirdly, the provisions of Section 19 of the Act come into play in her case also, when the order for possession on the ground of bona fide requirement for occupation as residence is made in her favour.
In this view of the matter, we find no substance in this appeal and the same is dismissed with no order as to costs.
Writ Petition No. 902 of 1990 7.
In the view that we have taken above, it is not necessary to admit this writ petition.
The authorities under the Act while disposing of the applications under Section 14 D will have to abide by this decision and not by the decision of the Delhi High Court in Civil Writ No. 2686 of 1989 in the matter of Dr. P.P. Kapur vs Union of India & Ors.
which was brought to our notice and stands overruled.
R.S.S. Appeal dismissed.
| The petitioner Corporation imported certain goods.
The goods were bounded.
and could not be got released due to the ban imposed by the Income Tax authorities, under Section 132(1) of the Income Tax Act.
Subsequently after the ban was lifted, the petitioner approached the authorities for clearance of the goods, but the customs authorities demanded payment of customs duty at the enhanced rate which was prevailing at the time of clearance.
Hence the petition er filed a Writ Petition before this Court challenging the demand as arbitrary.
illegal and unconstitutional.
It was contended that though the petitioner was willing to clear the goods on payment of the then prevailing custom duty, the goods could not be cleared due to circumstances beyond its control, by the order of the Income Tax authori ties and, therefore, the authorities could not claim en hanced duty.
On behalf of the respondents it was contended that in view of Section 15(1)(b) of the , especially the expression "actually removed" used therein, the liability of the petitioner to pay the duty was the duty at the time of clearance of the goods.
Disposing of the Writ Petition, this Court, 622 HELD: 1.
Section 15(1)(b) of the clearly requires that the rate of duty, rate of exchange and tariff applicable to any imported goods shall be the rate and valuation in force on the date on which goods are actu ally removed from the warehouse.
Therefore, in view of the language used in Section 15(1)(b) of the Act, specially in the light of the expression 'actually removed ' the petition er was liable to pay excise duty at enhanced rate prevailing on the date the goods were cleared.
The prohibitory orders, arbitrary or not, would postpone the date of clearance, and as such would postpone the determination of the duty.
[626F; 627C] Prakash Cotton Mills (P) Ltd. vs B. Sen & Ors., [1979] 2 SCR 1142, relied on.
2.1 Recourse to article 32 of the Constitution can be had if there is a breach of the fundamental rights, provided the other conditions are satisfied.
BUt in a matter where li ability of a citizen to pay a particular duty depends on interpretation of law and determination of facts and the provision of a particular statute, for which elaborate procedure is prescribed, enforcing of those provisions of the Act would not breach fundamental right and, without taking any resort to the provisions of the Act, it is not permissible to move this Court on the theoretical basis that there is breach of fundamental right.
Whenever a person complains and claims that there is a violation of law, it does not involve breach of fundamental right for the en forcement of which alone article 32 of the Constitution is attracted.
[627E; 628A D] Smt.
Ujjam Bai vs State of Uttar Pradesh, [1963] 1 SCR 778, relied on.
2.2 In a particular situation whether customs duty is payable at the rate prevalent on a particular date or not has to be determined under the four corners of the .
[627F] In the instant case, the petitioner has no fundamental right as such to clear any goods imported without payment of duties in accordance with the law.
There is procedure pro vided by law for determination of the payment of customs duty.
The revenue has proceeded on that basis.
The petition er cannot seek to remove the goods without payment at that rate or without having the matter determined by the proce dure envisaged and enjoined by the law for that determina tion.
The petitioner, without seeking to take any relief within the procedure envisaged under the Act, had moved this Court for breach of funda 623 mental right.
This is not permissible and should never be entertained.
[627F H] Relief under Article 32 of the Constitution is there fore, wholly inappropriate in the facts and circumstances of the instant case.
[628B]
|
Civil Appeal No. 918 of 1973 From the Judgment and Order dated 10.12.1986 of the Punjab and Haryana High Court in Civil Revision No. 895 of 1972.
S.K. Mehta, M.K. Dua and Aman Vachher for the Appellant.
S.N. Kacker and B.P. Maheshwari for the Re spondent; The Judgment.
of the Court was delivered by B.C. RAY, J.
This appeal by special leave is directed against the judgment and order passed on 27th February, 1973 in Civil Revi sion No. 895 of 1972 by the High Court of Punjab and Haryana whereby the revision case was allowed reversing the judgment and order of the appellate authority and allowing the application for ejectment.
The tenant appellant was granted three months ' time to vacate the shop and was also directed to deposit arrears of rent, if any within one month from the date of the order.
He was also directed to deposit advance rent for three months on the date of the order failing which he will be evicted on the expiry of one month.
511 The appellant is a tenant in respect of a room forming part of the property unit No. B VI 33(old) and B IX I48(New), Chaura Bazar, Ludhiana, which has been rented on a monthly rental of Rs. 23 by the landlady Smt.
Goran Devi on the basis of rent deed dated 7th July, 1967 for a period of three months.
After the expiry of the term of the tenancy, he contin ued in possession of the suit premises as a statutory tenant under Smt.
Guran Devi.
Guran Devi however, gifted away this property in favour of the Respondent on February 13, 1968 and from that date the appellant became a tenant under the respondent.
The ejectment was sought on the ground of default in payment of rent from 13.2.1968 till the date of filing of the application for ejectment in July, 1969 under Sec. 13 of East Punjab Urban Rent Re striction Act, 1949.
The summons of this application was served on the tenant appellant and the returnable date was fixed for 26.6.1969.
On that date, the appellant ap peared before the Rent Controller, Ludhiana with his counsel and prayed for adjournment for filing written statement.
The case was adjourned to 2.7.1969.
On that date the writ ten statement was filed and the tenant ten dered a sum of Rs. 336 on account of arrears of rent from 13.2.1968 to 12.6.1969 together with Rs. 15 as interest and Rs. 25 as costs as fixed by the Rent Controller.
The landlord accepted the amount under protest.
One of the issues framed in the said case was whether the tender was avalid tender within the meaning of proviso to Sec.
13(2) of East Punjab Urban Rent Restriction Act, 1949.
The Rent Controller after hearing the parties found that the tenant appellant having failed to tender the arrears of rent and interest at 6% per annum on such arrears together with the costs of the application, on 26.6.1969 which according to him was the first hearing of the application for ejectment, the tenant was not entitled to get the protection of Sec. 13(2)(i) proviso.
The Rent Controller repelled the contention made on behalf of the tenant that the said date was not the date of first hearing and that the cost of the appli cation having not been assessed on 26.6.1969, that day cannot be taken as the first day of heating of the application and the tenant having deposited all the arrears of rent together with interest and costs as assessed on the next date i.e. 2.7.1969 he could not be considered to be a defaulter.
In that view of the matter the Rent Controller allowed the application for ejectment and directed the tenant to vacate the premises and to deliver possession to 'the landlord petitioner in respect of the room in question within one month of the date of the order.
Against this judgment and order the tenant filed an appeal being M.C.A. No. 165/131 of 1970 before the appellate authority Ludhiana under the East Punjab Urban Rent Restriction Act.
The appellate authority reversed the order of the Rent Controller by holding that as the Rent Controller failed to discharge his duty in assessing the costs to be deposited by the tenant along with the arrears of rent and interest on 26.6.1969, the tenant cannot be 512 penalised for the mistake of the Court and the deposit that has been made by the tenant on the next date i.e. 2.7.1969 when the cost of the application was assessed by the Rent Controller, should be treated as deposit made in accordance with the provisions of Sec. 13 of the said Act.
It has been further held that for the mistake of the Court or its officers nobody could be made to suffer.
The appellate authority further held that the words 'first day of hearing ' presuppose the existence of an occasion enabling the parties to be heard and the court to hear them in respect of the cause.
The tender was accordingly held to be valid tender within the meaning of the provi sions of the said Act.
The appeal was allowed and the order of eviction made by the Rent Controller was set aside.
Against this judgment and order a Revi sion Application being Civil Revision No. 895 of 1972 was filed before the High Court of Punjab and Haryana.
The said Revision Case was allowed by holding that the day of first heating was 26.6.1969 when the tenant appeared before the Rent Controller with his counsel and sought time for filing written statement and the tender of the arrears of rent together with interest and costs of the application being not made on that date, the subsequent tender of the same on 2.7.1969 was not a valid tender within the meaning of proviso (i) to sub Sec. 2 of Section 13 of the said Act.
An order was made directing the tenant appellant to vacate the premises within three months.
The tenant was also directed to deposit the.
rent for three months within one month from the date of this order, in default he will suffer eviction after expiry of one month.
It is against this judgment and order the instant appeal on special leave has been preferred before this Court.
The only question that poses itself for consideration in this appeal is whether the date of appearance as mentioned in the summons i.e. 26.6.1969 is the date of first hearing of the application for ejectment and non payment or non tendering of arrears of rent together with interest and costs of the application on that very date will make the tenant liable for eviction from the rented premises on the ground of default.
In the instant case on the returnable day of the summons the tenant defendant appeared with his counsel i.e. on 26.6.1969 and prayed for an adjournment for filing written statement.
The case was accordingly a djourned to 2.7.1969.
It is also pertinent to note that on the re turnable day i.e. 26.6.1969 the Rent Controller did not make any order assessing the costs of the application which was required to be deposited along with arrears of rent and interest at 6% per annum on such arrears.
It is on 2.7.1969, the Rent Controller assessed the cost of the application and the tenant appellant deposited the arrears of rent up to date together with interest at the rate of 6% on such ar rears and the costs assessed by the Rent Controller on that date.
The said amount tendered in the Court was accepted by the landlord under protest.
513 The day mentioned in the summons i.e. 26.6.1969 in our considered opinion cannot be treated to be the day of first hearing of the ejectment application but it is the day for appearance of the defendent as on that day the Court does not take up the hearing or apply its mind to the hearing of the application.
It is only after written statement is filed, the issues are framed and hearing commences.
We draw inspiration and support from a decision of this Court ren dered in Ved Prakash vs Vishwa Mohan , wherein this Court was concerned with the same expression viz. 'first hearing ' employed in Sec.
20(4) of the U.P. Rent Act of 1972 (prior to the amendment of U.P. Act XXVIII of 1976) which is in pari materia with the corresponding provi sion in the Punjab Rent Act.
The analogous provisions in these two Rent Acts in so for as material are reproduced in juxtaposition hereunder.
20(4) of U.P. Urban Buildings Sec. 13 of the East (Regulation of Letting, Rent and Punjab Urban Rent Eviction) Act,1972 Restriction Act,1949 "In any suit for eviction on the "Eviction of tanants (1) ground mentioned in clause (a) of xxx(2)xxxx If the Contr Sub Sec.(2) if at the first heari oller,after giving the ng of the suit the tenant uncondi tenent a reasonable opp tionally pays or tenders to the ortunity of showing cau landlord the entire amount of rent se against the applicat and damages for use and occupation ion, is satisfied: of the building from him (such) (i) that the tenant has damages for use and occupation not paid or tendered the being calculated at the same rate rent due by him in resp as rent) together with interest ect of the building or thereon at the rate of nine per rented land. provided cent per annum and the landlord 's that if the tenant on costs of the suit in respect there the first hearing of the of. the court may,in lieu of pass application for ejectme ing a decree for eviction on that nt after due service,pay ground pass an order relieving the or tenders the arrears tenent against his liability for of rent and interest at eviction on that ground." (Emphasis six per cent per annum added).
on such arrears together with the cost of applicat ion assesed by the Contro ller, the tenent shall be deemed to have duly paid or tendered the rent with in the time aforesaid.
(ii) X X X (iii) X X X (iv) X X X (v) X X X the controller may make an order directing the tenant to put the landlord in po ssession of the building or granted land. " (Emphaise added) 514 This Court whilst interpreting the critical expression "first hearing" enunciated the law as under: "The question of law raised before us may perhaps be pronounced upon as it is of general importance.
Section 20(4) of the Act which we have excepted above fixes the crunical date for deposit of rent as "at the first hearing of the suit.
" What is "the first hearing of the suit"?.
Certain decisions have been cited before us of the Allahabad High Court which indicate that "the first hearing of the suit" is when, after framing of issues, the suit is posted for trial, that is, production of evidence .
We see none here and therefore, adopt as correct the decision of the High Court regarding the meaning of the expression "at the first hearing of the suit".
We may however add that the expression "at the first hearing of the suit" is also to be found in Order 10, Rule 1, Order 14 Rule 1(5) an Order 15, Rule 1 of the Code of Civil Procedure.
These provisions indicate that "the first hearing of the suit" can never be earlier than the date fixed for the preliminary examination of the parties (Order 10 Rule 1 ) and the settlement of issues (Order 14, Rule 1(5).
" The Punjab and Haryana High Court itself in Mangat Rai vs Ved Prakash ( 1969 Vol. 1 Rent control Reporter p. 96) has expressed the same view in paragraph 15 of the judgment: "15.
The principles that can be deduced from the plethora of case law on the point, including the authorities referred to above, are consistent with the literal meaning of word 'hearing ' which in its Dictionary sense means 'the listening of evidence and pleading in Court of law, the trial of a cause '.
It seems to be abundantly clear that in order to constitute, 'first hearing ' within the meaning of Sec. 13(2)(i) proviso, the following prerequisites must co exist: (i) There should be a 'hearing ' which presupposes the existence of an occasion enabling the parties to be heard and the court to hear them in respect of the cause.
(ii) Such hearing should be the first in point of time after due service of the summons/notice on the tenant.
Both these essentials are positive, and in the absence of either of them, there can be no "first hearing" It appears that there is consensus in regard to the interpretation of the expression 'first day ' in the context of the rent legislations of several other 515 states, for instance, the Gujarat High Court in Shah Ambalal Chhotalal and others.
vs Shah Babal Das Dayabhai and Ors., AIR [1964] (Gujarat) p. 9, dealing with the identical ques tion as to the meaning of the words "the first day of the hearing of the suit" as provided in sub Sec.
3(b) of Sec. 12 of Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947 has observed after considering several decisions that "the words 'the first day of hearing ' as meaning not the day for the return of the summons or the returnable day, but the day on which the Court applies its mind to the case which ordinarily would be at the time when either the issues are determined or evidence taken.
" Similar view was also taken by the High Court of Bombay earlier in the case of Khanderao Malkarjun Dhotre vs
Anandrao Laxmanrao Mashalkar.
AIR [1959] (Bombay) p. 47| It has been observed in this case as follows: "I am of opinion that "the first day of hearing" in S.12(3)(b) means, not the day fixed for return of the sum mons or what is sometimes called the returnable day, but the day on which the learned Judge applies his mind to the case, which ordinarily he would do at the time when the issues are determined, is the day mentioned and that is the day before which the rent should have been paid.
" It was tried to be contended that these decisions being rendered in connection with the 'suit ' cannot be taken into consideration in the case of a 'proceeding ' before the Rent Controller.
We do not find 'any substance in this contention which seeks to draw a distinction without a difference in substance.
It is appropriate to point out in this connection that the object of the East Punjab Urban Rent Restriction Act as stated in the Preamble to the Act is to restrict the increase of rent of certain premises situated within the limits of urban areas and eviction of tenants therefrom.
From the objects of this Act it is abundantly clear that this Act was enacted with the object of affording protection to the tenants against arbitrary increase of rent of certain premises within the limits of urban areas as well as from eviction of the tenants from the rented premises.
In this context, it is imperative that the word "the first hearing of the application" have to be interpretted in a manner which promote the object of this beneficial legislation.
Viewed from this aspect we cannot but hold that the words "first hearing of the application" as used in provise (i) to sub section 2 of Section 13 of the said Act does not mean the day fixed for return of the summons or the returnable day but the day when the Court applies its mind to the case.
In the premises aforesaid, we allow the appeal and set aside the order of eviction passed by the High Court and confirm the judgment and order of the lower appellate court dismissing the application for eviction.
There will however be no order as to costs in the peculiar circumstances of the case.
S.R. Appeal allowed.
| Clause (1) of article 323 A, brought in by Constitution (42nd Amendment) Act, 1976, authorised Parliament to provide by law for the adjudication or trial by administrative tribunals of disputes and complaints with respect to re cruitment and conditions of service of persons appointed to public services.
Clause (2)(d) of that Article envisaged exclusion of the jurisdiction of all courts, except the jurisdiction of the Supreme Court under article 136 with re spect to the disputes or complaints referred to in cl.
Section 28 of the originally enacted within the ambit of article 323 A, provided for exclusion of jurisdiction of the Supreme Court under article 32.
The Act as amended by the Administrative Tribunals (Amendment) Ordinance, 1986, replaced by Act No. 19 of 1987 now saves the jurisdiction of Supreme Court both under article 32 in respect of original proceedings as also under article 136 for entertaining appeals.
Section 6(1)of the Act which lays down qualifications of Chairman, states that he should be or have been (a) a Judge of a High Court, or (b) has for at least two years held office of Vice Chairman, or (c) has for at least two years held the post of Secretary to the Govern ment of India.
Sub section (2) provides that a Vice Chairman should be or have been (a) a Judge of a High Court, or (b) for at least two years held the post of a Secretary to the Government of India, or (bb) for at least five years held the post of Additional Secretary to the Government of India, or (c) for a period of not less than three years held office as a Judicial Member of an Administrative Tribunal.
Sub section (3) states that the Judicial Member (a) should or should have been qualified to be a Judge of a High 436 Court, or (b) has been a member of the Indian Legal Service, Grade 1, for at least three years.
Sub section (3A) provides that a person to be appointed as Administrative Member (a) should have for at least two years held the post of Addi tional Secretary to the Government of India, or (b) has for at least three years held the post of a Joint Secretary to the Government of India.
The petitioners in these writ petitions and transfer petitions challenged the vires of the 1985 Act.
It was contended that the exclusion of the jurisdiction of the High Court under articles 226 and 227 in service matters specified in s.28 of the Act was unconstitutional and void, and that the composition of the Tribunal and mode of appointment of Chairman, Vice Chairman and Members was outside the scope of the power conferred on Parliament under article 323 A.
Allowing the petitions in part, the Court, By the Court HELD: It is the High Court which is being supplanted by Administrative Tribunal.
The office of Chairman of the Tribunal, therefore, for all practical purposes should be equated with the office of the Chief Justice of a High Court.
Judicial discipline generated by experience and training in an adequate dose is a necessary qualification for that post.
It is thus essential that he should have been a Judge of the High Court or he should have for at least two years held office as Vice Chairman.
A person who has merely held the post of Secretary to the Government of India and who has no legal and judicial experience if appointed Chair man would not only fail to inspire confidence in the public mind but would also render the Administrative Tribunal a much less effective and efficacious mechanism than the High Court.
Clause (c) of s.6(1) of the Act, therefore, must be struck down as invalid.
[445 C, 455 DE, 445 ABE] Per Bhagwati, CJ.
1.1 Judicial review is a basic and essential feature of the Constitution and no law passed by Parliament in exercise of its constituent power can abrogate it or take it away.
It is, however, within the competence of Parliament to amend the Constitution so as to substitute in place of the High Court another alternative institutional mechanism or ar rangement for judicial review without in any way violating the basic structure doctrine, provided it is no less effica cious than the High Court.
Then it would be another authori ty which would be exercising the power of judicial review with a view to enforcing the constitutional limitations and maintaining the rule of law.
[441 B, Minerva Mills Ltd. & Ors.
vs Union of India & Ors.
[1981]1 SCR 206, referred to.
1.2 Clause (2Xd) of article 323 A specifically authorises the exclusion of the jurisdiction of the High Court under articles 226 and 227 by any law made by Parliament under cl.(1).
If this constitutional amendment were to permit a law to exclude the jurisdiction of the High Court under article 226 and 227 without sating up an effective alternative institutional mechanism or arrangement for judicial review it would be violative of the basic structure doctrine and hence outside the constitutent power of Parliament.
It must, therefore, be read as implicit in the amendment that such a law to be coustitutionally valid must not leave a void but it must set up another equally effective alternative author ity and vest the power of judicial review in it.
[443 F, H, 44 A B] 2.1 What is needed in a judicial tribunal which is intended to supplant the High Court is legal training and experience.
Service matters which are removed from the jurisdiction of the High Court under articles 226 and 227 and entrusted to the Administrative Tribunal invariably involve questions of interpretation and applicability of articles 14, 15, 16 and 311 which require for their determination not only judicial approach but also knowledge and expertise in this particular branch of constitutional law.
[445 D, 444 D] 2.2 The Chairman of the Administrative Tribunal should be or should have been a Judge of a High Court or he should have for at least two years held office as Vice Chairman.
It is the High Court which is being supplanted by the Adminis trative Tribunal.
Substituting the Chief Justice of a High Court by a Chairman of the Administrative Tribunal who has merely held the post of a Secretary to the Government of India and who has no legal or judicial experience would not only fall to inspire confidence in the public mind but would also render the Administrative Tribunal a much less effec tive and efficacious mechanism than the High Court.
Clause (c) of s.6(1) of the Act, therefore, must be struck down as invalid.
[445 A, C, B, E] 3.
Since the Administrative Tribunal has been created in substitution of the High Court, its Vice Chairman would be in the position of a High Court Judge.
Therefore, a District Judge or an advocate who is qualified to be a Judge of the High Court should be regarded as digible for being Vice Chairman of the Administrative Tribunal.
The provisions of the Act in regard to the composition of the Administrative Tribunal are weighted in favour of members of the Services.
This value discounting of the judicial members does have the effect of making the Administrative Tribunal less effective and efficacious than the High Court.
Unless an amendment to that effect is carried out on or before 31st March, 1987 the Act would have to be declared to be invalid because the 438 provision in regard to the composition of the Administrative Tribunal cannot be severed from the other provisions con tained in the Act.
A, 445 G, 446 B] 4.1 Under the Act the sole and exclusive power to make appointment of Chairman, Vice Chairman and Administrative Members is conferred on the Government.
No obligation is cast on the Government to consult the Chief Justice of India or to follow any particular selection procedure in this behalf.
Total insulation of the judiciary from all forms of interference from the coordinate branches of Government is a basic essential feature of the Constitution.
In case of High Court Judges the President cannot make any appointment without consultation with the Chief Justice of the High Court and the Chief Justice of India.
This check or safe guard is totally absent in the case of appointment of the Chairman, Vice Chairman and Administrative Members of the Administrative Tribunal.
If the Tribunal is created in substitution of the High Court and the jurisdiction of the High Court under articles 226 and 227 is taken away and vested in it, it is but essential that the same independence from possibility of executive pressure or influence must also be ensured to the Chairman, Vice Chairman and Members of the Tribunal.
[446 D, 447 D, B, E] 4.2 The appointment o[ Chairman, Vice Chairman and Administrative Members, therefore, should be made by the concerned Government only after consultation with the Chief Justice of India and such consultation must be meaningful and effective.
Alternatively, a High Powered Selection Committee headed by the Chief Justice of India or a sitting Judge of the Supreme Court or concerned High Court nominated by the Chief Justice of India may be set up for making these appointments.
If either of these two modes of appointment is adopted, it would save the impunged Act from invalidation.
Otherwise, it will be outside the scope of the power con ferred on Parliament under article 323 A. [447 F, G, 448 B] 5.
The Government should set up a permanent bench and if that is not feasible having regard to the volume of work, then at least a circuit bench of the Administrative Tribunal wherever there is a seat of the High Court on or before 31st March 1987 so that the provisions of the Act could be sus tained.
[448 D] 6.
Judgment to operate only prospectively and not to invalidate appointments already made.
[448 B] Per Ranganath Misra, J. 1.
The Administrative Tribunal Act, 1985, as amended by Act No. 19 of 1986 saves jurisdiction of the Supreme Court both under Article 32 in respect of original proceedings as also under Article 136 for entertaining appeals.
There is thus a forum where matters of importance and grave injustice can be brought 439 for determination or rectification.
The exclusion of the jurisdiction of the High Court, therefore, does not totally bar judicial review.
[451 C, 453 A] 2.1 It is open to Parliament to make effective alterna tive institutional mechanisms or arrangements in place of the High Court for providing judicial review.
But such an authority or tribunal must be a worthy successor and real substitute of the High Court not only in form and de jure but in content and de facto so as to be effective and effi cient as also capable of upholding the constitutional limi tations enshrined in Articles 14, 15 and 16 of the Constitu tion.
[453 B, 454 C, 453 E] 2.2 The Tribunal under the scheme of the Act has been contemplated as a substitute and not as supplemental to the High Court.
It is not designed as an additional froum from where parties could go to the High Court.
Under sections 14 and 15 of the Act all the powers of the Courts, except those of the Supreme Court, in regard to matters specified therein vest in the Tribunal either Central or State.
Barring of the jurisdiction of the High Court under articles 226 and 227 cannot, therefore, be said to be ultra vires the Constitu tion.
[443 CD, FG, 449 A] Minerva Mills Ltd. & Ors.
vs Union of India & Ors.
, ; , 287 and K.K. Dutta vs Union of India, ; , referred to.
3.1 The Office of Chairman of the Tribunal should for all practical purposes be equated with the office of Chief Justice of a High Court.
Judicial discipline generated by experience and training in an adequate dose being a neces sary qualification for that post, ordinarily a retiring or retired Chief Justice of a High Court or when such a person is not available, a senior Judge of proved ability, either in office or retired should be appointed.
In order that the Tribunal may be acceptable to the litigants, who are them selves members of the various Services, therefore, s.6(1)(c) of the Act, which makes a Secretary to the Government of India also eligible for the post of Chairman, should be omitted.
[455 D F] 3.2 The selection of Vice Chairman and Members, when it is not of a sitting Judge or retired Judge of a High Court, should be done by a high powered committee with a sitting Judge of the Supreme Court, to be nominated by the Chief Justice of India, as its Chairman.
This will ensure selec tion of proper and competent people to man these high of fices of trust and help to build up reputation and accept ability.
The Central Government to bring the provisions of the Act in accord within a reasonable time not beyond March 31, 1987.
Or else, the constitution of Tribunal as a substi tute of the High Court would be open to challenge.
[455 G, 456 A, H] 3.3 The judgment to operate prospectively and not to affect the 440 appointments already made to the office of Vice Chairman and Members.
[456 B] 4.
The term of five years prescribed under s.8 of the Act for Chairman, Vice Chairman and Members of the Tribunal requiting them to retire at the end of it is too short, which is neither convenient to the person selected for the job nor expedient to the scheme.
When amendments to the Act are undertaken this aspect of the matter deserves to be considered.
[456 C, F, G]
|
minal Appeal No. 135 of 1956.
188 Appeal by special leave from the judgment and order dated November 25, 1955, of the Allahabad High Court, in Criminal Appeal No. 702 of 1955 and Referred No. 77 of 1955 arising out of the judgment and order dated May 17, 1955, of the Court of Sessions Judge, at Moradavad in Sessions Trial No. 29 of 1955.
P. section Safeer, for the appellant.
G. C. Mathur and C. P. Lal, for the respondent.
November 21.
The Judgment of the Court was delivered by IMAM J.
The appellant was sentenced to death for the marder of Daya Ram by shooting him with a country made pistol.
He was also convicted for being in possession of an unlicensed firearm under the Arms Act for which offence he was sentenced to two years rigorous imprisonment.
He appealed to the High Court of Allahabad, but his appeal was dismissed and the conviction and sentence was affirmed.
Against the decision of the Allahabad High Court the appellant obtained special leave to appeal to this Court.
According to the prosecution, the occurrence took place at about midnight of July 4, 1954, when Daya Ram was sleeping on a cot on a platform.
Near him were sleeping Gokul, Doongar and Jai Singh, while two women Ratto and Bhuri slept in a room to the north of the platform and adjoining it.
The report of the shot fired woke up these people.
According to them, they saw the appellant running towards the east.
He was accompanied by three others who were armed with lathis.
Daya Ram died almost instantaneously as the result of the injuries on his chest and stomach from where pellets were recovered at the time of the post mortem examination.
Daya Ram had been shot from a close distance because the skin was charred over the entire area of the wound.
Near the cot, on which he slept, a cartridge exhibit I. was found which was handed over to the Police Officer when he arrived for investigation.
A first information report was lodged at the police station five miles away at 8 10 a. m. on July 5, 1954.
189 The motive for the murder, as alleged by the prosecution, was that on the death of one Bhai Singh the appellant hoped to become guardian of Ratto 's property, who, however, appointed Daya Ram to take charge of it.
The appellant resented this very much.
Three days before the murder of Daya Ram there had been a quarrel between the appellant and his wife on the one side and Ratto and Bhuri on the other.
The quarrel arose over an attempt by the appellant to construct a wall over Ratto 's land. ' The appellant uttered a threat that he would soon settle with the person on whom Ratto was depending, that is to say, the deceased Daya Ram.
According to the High Court, the defence did not seriously challenge these allegations and the appellant himself admitted that Ratto wanted him to be turned out of his house.
The appellant was arrested on the night between July 5 and July 6, 1954, at a village fourteen miles away from the village of "occurrence Dhakeri.
On July 7, he informed the Sub Inspector that he was prepared to produce the pistol exhibit III.
The SubInspector and the appellant went to village Dhakeri and Kartar Singh, Mahtab Singh and Khamani were invited to witness the events that might follow.
On reaching the appellant 's house, which adjoins the resid ential house of Ratto, the appellant stated that the pistol exhibit III had been concealed by him in a corn bin.
From a secret place he took out a key and opened the lock of his house with it.
He then took the SubInspector and the witnesses to a mud corn bin inside his house, which appeared to be freshly plastered at one place.
The appellant removed the plaster at this place and from inside took out the country made 12bore pistol exhibit III, and three live 12 bore cartridges.
The cartridge exhibit I, which was found near the cot of Daya Ram, and the pistol exhibit III were sent to Shyam Narain, a Deputy Superintendent of Police, who is ,a fire arms expert of the C. I. D. of Uttar Pradesh Government.
He made scientific tests.
He came to the conclusion as the result of the various tests made by him that the cartridge Ex, I was fired from the pistol exhibit III and no other fire arm.
190 While the Sessions Judge believed the testimony of the eye witnesses, the learned Judges of the.
High Court were of the opinion that they were unable to accept the assertion of the eye witnesses that they actually saw the appellant with a pistol by the bedside of the deceased.
The High Court, however, relied upon the circumstantial evidence in the case in upholding the conviction of the appellant.
There was motive for the crime and a few days before the killing of.
Daya Ram the appellant had held out a threat against him.
The appellant was arrested fourteen miles away from his village which is the place of occurrence.
He produced a pistol exhibit
III from his house in circumstances which clearly showed that he only could have known of its existence there.
The opinion of the fire arms expert clearly established that the cartridge exhibit 1, found near the cot of Daya Ram, was fired with the pistol exhibit III produced by the appellant.
All these circumstances, in the opinion of the High Court, left no doubt in the minds of the learned Judges of that Court that the appellant murdered Daya Ram by shooting him with his pistol.
The learned Advocate for the appellant urged that the appellant could not have placed the pistol in his house and it must have been planted there by someone because none of the witnesses stated that they had seen him going to his house after the murder and the appellant was certainly not found in his house in the morning.
According to the situation of the house of the appellant and where the witnesses were immediately after the occurrence, it was impossible for the appellant to have entered his house without being seen.
It was further unlikely that after having committed the murder, the appellant, after having run away, would return to his house.
Both the Courts below, however, found no reason to disbelieve the Sub Inspector and the witnesses that the appellant had produced the pistol exhibit III from the corn bin inside his house.
The appellant had the key of the house which was hidden in a secret place and the com bin was itself freshly plastered at one place.
These circumstances clearly showed that no one but the appellant could have 191 known of the existence of the pistol in the corn bin in his house.
As to whether the appellant could or.could not have gone to his house after the occurrence that is a matter of pure speculation.
It does not appear that any witness was asked anything about it.
The High Court found that the witnesses might have caught a glimpse of the people who were fast disappearing from the scene but who had no reasonable opportunity of marking their features.
In the confusion of the occurrence the witnesses may not have observed where the culprits had disa speared except that they were seen running towards the east.
On the record, there is nothing to show that to enter the appellant 's house, after the occurrence, the appellant had necessarily to go into his house within the view of the witnesses.
It is quite unnecessary to examine this matter any further because the evidence concerning the production of the pistol exhibit III by the appellant from his house is ' clear and reliable and, therefore, it is certain that the appellant did enter his house after the occurrence without being seen by anyone.
It was next urged on behalf of the appellant, that,it was impossible for a cartridge to have been near the cot of Daya Ram, because after the shot had been fired the cartridge would still remain in the barrel of the firearm.
This again is pure speculation.
That the cartridge was ejected from the fire arm is certain.
Why it was ejected none can say.
It may be that the miscreant reloaded his weapon to meet any emergency.
The evidence of the Sub Inspector is clear that on his arrival at the place of occurrence the cartridge exhibit I was handed over to him by the witness Khamani who cannot be said to be unfavorable to the appellant.
The Courts below had no reason to disbelieve the evidence in the case that the cartridge exhibit I was found near the cot of Daya Ram and we can find no extraordinary circumstance to justify us saying that the Courts below took an erroneous view of the evidence.
On the facts found there was a motive for the murder.
Apparently, for no good reason the appellant was not found at his house on the morning of July 5, but was 192 in a village fourteen miles away at the time of his arrest.
The appellant produced the pistol exhibit III in circumstances clearly showing that he had deliberately kept it concealed.
We have no reason to doubt the evidence in this respect.
The real question is, whether it is safe to act upon the opinion of the fire arms expert that the cartridge exhibit I was fired from the pistol exhibit III produced by the appellant and none other, because without that evidence the circumstantial evidence in the case would be insufficient to convict the appellant of the crime of murder.
The opinion of 'the fire arms expert, based on the result of his tests, does not seem to have been challenged in cross examination or before the High Court.
If there is no reason to think that there is any room for error in matters of this kind and it is safe to accept the opinion of the expert, then clearly it is established that the cartridge exhibit I, found near the cot of Daya Ram, was fired from the pistol exhibit III produced by the appellant.
To satisfy ourselves we have looked into the works of some authors dealing with the marks left on cartridges and shell cases by fire arms in order to ascertain that there is no error in the opinion of the fire arms expert in the present case.
Kirk in his book "Crime Investigation" at page 346 states: "Fired cases are less often encountered in criminal investigation than are bullets, but when found they are usually of greater significance because they receive at least as clear markings as do bullets, have a greater variety of such markings, and are not ordinarily damaged in firing. . . . . . . . .
The questions which may be asked as a result of finding such materials are similar to those that require answers when only bullets are located.
In the ordinary case, quite definite answers can be given.
This is true both of shotgun shells and of cartridge cases from pistols, revolvers, and rifles. . . . . .
In general, it is possible to identify a certain firearm as having fired a particular shell or cartridge.
It is often possible to identify the type or make of gun ' which fired it, though in many instances this must be tentative or probable identification only." ` 193 After :dealing with the marks left by breech block, firing pin impressions, marks from extractors and ejectors, marks due to expansion, magazine marks and loading mechanism marks,he states, "Summarizing, the cartridge or shell case us.
ally carries markings which are quite distinctive of the gun in which the charge is fired, and can be used for positive identification of the latter.
Those marks arise from a variety of contacts with various parts of the gun, an analysis of which is useful in, determining the type of weapon in case no suspected gun is available . . . .
Thus, the recovered shell or cartridge case is one of the most useful types of physical evidence which can be found in shooting cases.
" Soderman and O 'Connel in their book "Modern Criminal Investigation" also deal with the subject and they refer to the marks from the fire pin, the extractor, the. ejector and the breech block.
After referring to comparison being made of the cartridge or shell fired from a fire arm for the purpose of test, they state at page 200, If they are in the same position in relation to one another and their general appearance is the same, one may conclude that they have been fired from a pistol of the same make.
An absolute conclusion about the origin of the shells, however, can be reached only after a photomicrographic examination of the markings from the breech block on the rear of the shell. . . . . .
Identification, with the aid of the enlargement, should not prove difficult.
The characteristic scratches can be easily seen.
A photograph of the incriminating shell and one of a comparison shell should be pasted side by side on cardboard, and the characteristic marks should be recorded with lines and ciphers, following the same method as that used in the ' identification of fingerprints.
" In Taylor 's book on Medical Jurisprudence, Tenth Edition, Vol. 1, at page 459, it is stated, " It is never safe to say that a cartridge case was not fired from a given pistol unless the marks are quite 25 194 different, and a case which bears no marks at all may quite well have been fired from the same pistol as one which leaves well defined marks.
In general, however, though it is unlikely that all marks will be equally good, it is usually possible to obtain definite information from the marks of the firing pin, extractor, ejector, or breech block.
on the base or rim, or from grooves or scratches on the surface.
In weapons of the same manufacture, the marks are of the same general nature, but in each weapon there are individual differences which usually enable it to be definitely identified.
" The expert 's evidence in this case shows that he had fired four test cartridges from the pistol exhibit III He found the individual characteristics of the chamber to have been impressed upon the test cartridges Exs. 9 and 10 and that exactly identical markings were present on the paper tube of the cartridge exhibit 1.
He made microphotographs of some of these individual marks on Exs. 1 and 10.
In giving his reasons for his opinion, the fire arms expert stated that every fire arm has individual characteristics on its breach face striking pin and chamber.
When a cartridge is fired gases.
are generated by the combustion of the powder, creating a pressure of 2 to 20 tons per square inch.
Under the effect of this pressure the cap and the paper tube of the cartridge cling firmly with the breach face striking pin and chamber and being of a softer matter the individualities of these parts are impressed upon them.
By firing a number of test cartridges from a given fire arm and comparing them under a microscope with the evidence cartridge, it can definitely be stated, if the marks are clear, whether the evidence cartridges had been fired or not from that fire arm.
It seems to us that the fire arms expert made the necessary tests and was careful in what he did.
There is no good reason for distrusting his opinion.
The learned Judges of the High Court examined the micro photographs in question and were satisfied that there was no ground for distrusting the evidence of the expert.
They were accordingly justified in coming to the conclusion that the cartridge exhibit 1, found nor the cot of Dava Ram, 195 was fired from the pistol exhibit III produced by the appellant from his house.
There can, therefore, be no room for thinking, in the circumstances established in this case, that any one else other than the appellant might have shot Daya Ram.
He was, therefore, rightly convicted for the offence of murder.
The appeal is accordingly dismissed.
| The petitioner (wife) filed a suit (O.P. 72/79) in forma pauperis seeking maintenance from the respondent (husband) in the court of subordinate Judge, Eluru (Andhra Pradesh).
On the receipt of the notice of the suit, the respondent filed a divorce suit (Petition Case No. 28/1980) against the wife under section 13 of the in the court of the District Judge, Udaipur (Rajasthan).
By the instant transfer petition filed under section , the wife sought to get the suit at Udaipur transferred to Eluru.
A preliminary objection was raised to the effect that section 25 of the Civil Procedure Code, which gets excluded by reason of the provisions of sections 20 and 21 of the , is not applicable to proceedings under the said Act and as such the Supreme Court has no power to transfer the husband 's suit from Udaipur District Court, Udaipur (Rajasthan) to Eluru District Court, Eluru (A.P.).
Rejecting the preliminary objection, the Court ^ HELD: Per curiam On merits, it is expedient for the ends of justice to transfer the husband 's suit pending in the District Court Udaipur (Rajasthan) to the District Court at Eluru (Andhra Pradesh), where both the proceedings could be tried together and for that purpose, the wife is agreeable to have her maintenance suit transferred to the District Court at Eluru (A.P.).
[226 A B] Per Tulzapurkar J. 1.
It will invariably be expedient to have a joint or consolidated hearing or trial by one and the same Court of a husband 's petition for restitution of conjugal rights on the ground that the wife has withdrawn from his society without reasonable excuse under section 9 of the and the wife 's petition for judicial separation against her husband on ground of cruelty under section 10 of the said Act in order to avoid conflicting decisions being rendered by two different Courts.
In such a situation resort will have to be had to the 224 powers under sections 23 to 25 of the Civil Procedure Code for directing transfer of the petitions for a consolidated hearing.
[228 G H, 227A] 2:1.
On a proper construction of the relevant provisions, it cannot be said that the substantive provision contained in section 25 Civil Procedure Code is excluded by reason of section 21 of the .
In terms, section 21 C.P.C. does not make any distinction between procedural and substantive provisions of C.P.C. and all that it provides is that the Code, as far as may be, shall apply to all proceedings under the Act and the phrase "as far as may be" means and is intended to exclude only such provisions of the Code as are or may be inconsistent with any of the provisions of the Code.
It is impossible to say that such provisions of the Code as partake of the character of substantive law are excluded by implication as no such implication can be read into section 21 of the Act and a particular provision of the Code irrespective of whether it is procedural or substantive will not apply only if it is inconsistent with any provisions of the Act.
[226 G H, 227 A B] 3.
Section 21A of the does not exclude the power of transfer conferred upon the Supreme Court by the present section 25 C.P.C., in relation to proceedings under that Act.
The marginal note of section 21A itself makes it clear that it deals with power to transfer petitions and direct their joint or consolidated "trial in certain cases" and is not exhaustive.
Section 21A does not deal with the present section 25 C.P.C. which has been substituted by an amendment which has come into force with effect from February 1, 1977 (section 11 of the Amending Act 104, 1976).
By the amendment very wide and plenary power has been conferred on the Supreme Court for the first time to transfer any suit, appeal or other proceedings from one High Court to another High Court or from one Civil Court in one State to another Civil Court in any other State throughout the country.
Conferral of such wide and plenary power on the Supreme Court could not have been in contemplation of Parliament at the time of enactment of section 21A of the .
[227 C D, F H, 228 A B] Smt.
Rama Kanta vs Ashok Kumar, AIR 1977 Punjab & Haryana 373 and Priyavari Mehta vs Priyanath Mehta, AIR 1980 Bombay 337, overruled.
Per Amrendra Nath Sen, J. 1.
A plain reading of section 25 C.P.C. clearly indicates that very wide jurisdiction and powers have been conferred on the Supreme Court to transfer any suit, appeal or any other proceedings from a High Court or other Civil Court in any State to a High Court or other Civil Court in any other State for the ends of justice.
Supreme Court enjoys the power and jurisdiction to entertain the transfer application under section 25 of the Code of Civil Procedure.
D] 2 : 1.
Sections 21 and 21A of the do not in any way, exclude, effect or curtail the power conferred on the Supreme Court under section 25 of the Code of Civil Procedure.
If the jurisdiction clearly conferred 225 on any court has to be ousted, the exclusion of such jurisdiction must be made in clear and unequivocal terms.
[232E, 233D] 2 : 2.
Section 21 of the only provides that "all proceedings under the shall be regulated as far as may be by the Code of Civil Procedure, 1908".
Section 21 of the does not deal with the question of jurisdiction of any court and it cannot be construed to exclude the jurisdiction conferred on the Supreme Court under section 25 C.P.C. [232 E G] 2 : 3.
Section 21A of the has, indeed, no bearing on the question of jurisdiction conferred on the Supreme Court under section 25 C.P.C. Section 21A has no application to the case of transfer of any suit or proceeding from one State to another.
[233 B C] 2 : 4.
The Supreme Court must necessarily enjoy the power and jurisdiction under the provisions of section 25 C.P.C. of transferring such a suit or proceeding for the ends of justice unless the power and jurisdiction of the Supreme Court are specifically taken away by any statute.
[232D E] 3.
Section 25 of the Code of Civil Procedure came into force after section 21 and 21A of the have been incorporated in the and as such section 25 of the Code overrides sections 21 and 21A of the .
[233 A E]
|
Appeal No. 1768 of 1969.
Appeal by special leave from the judgment and order dated October 8, 1968 of the Mysore High Court in Writ Petition No. 657 of 1968.
189 M. C. Setalvad, Ram Punjwani and section P. Nayar, for the appellants.
R. B. Datar and M. section Narasimhan, for the respondent.
M. K. Ramamurthi, Shyamala Pappu and J. Ramamurthi, for intervener No. 1.
section Ramasubramanian and J. Ramamurthi, for intervener No.2.
The Judgment of the Court was delivered by Vaidialingam, J.
In this appeal, by special leave, the question that arises for consideration is regarding the validity of the new Note substituted in place of the old Note on December 23, 1967 to cl.
(b) of rule 2046 (F.R. 56) of the Indian Railway Fundamental Rules.
The High Court by its judgment and order, under appeal, dated October 8, 1968, has struck down the new Note as dis criminatory and violative of article 14 of the Constitution.
The respondent was originally an employee of the Madras and Southern Mahratta Railway Company (hereinafter to be referred as the Company) having joined the service on August 16, 1927 as Clerk Grade 1.
His date of birth, there is controversy, was April 15, 1910.
The Company was amalgamated with the Indian Railway Administration in the year 1947 and on .such amalgamation, the respondent became the employee of the Indian Railway Administration.
There is also no controversy That he came within the classification of a "ministerial railway servant" within the meaning of that expression, occurring in rule 2046.
Rule 2046 deals with retirement of a railway servant At the time of amalgamation, under cl.
(1) of the said rule, the date of retirement of a railway servant, other than a ministerial railway servant was the date on which he attained the age of 55 years.
It was also provided therein that the said railway servant, ,after attaining the age of retirement, may be retained in service with the sanction of the competent authority on public ground to be recorded in writing.
But there was a prohibition regarding retention of such a railway servant after the age of 60 years except in very special circumstances.
Clause (2) of the said rule, which deals with a ministerial railway servant, under which category the respondent falls, at the time of amalgamation was as follows : "2046 (2) (a) A ministerial servant, who is not governed by sub clause (b), may be required to retire at the age of 55 years, but should ordinarily be retained in service, if he continues efficient up to the age of 60 190 years.
He must not be retained after that age except in very special circumstances, which must be recorded in writing, and with the sanction of the competent authority.
(b) A ministerial servant (i) who has entered Government service on or after the 1st April, 1938, or (ii) who being in Government service on the 31st March, 1938 did not hold a lien or a suspended lien on a permanent post on that date.
shall ordinarily be required to retire at the age of 55 years.
He must not be retained after that age except on public grounds which must be recorded in writing,, and with the sanction of the competent authority and he must not be retained after the age of 60 years except in very special circumstances.
" It will be noted that under sub clause (a), quoted above, a ministerial servant, who is not governed by sub clause (b) may be required to retire at the age of 55 years; but if he continues to be efficient, he should ordinarily be retained in service upto the 'date of 60 years.
Retention in service after the age of 60 years, can only be under very special circumstances, to be recorded in writing and with the sanction of the competent authority.
There was a further special provision made under cl.
(b) in respect of a ministerial servant who had entered Government service on or after April 1, 1938 or being in Government service on that date, did not hold a lien or a suspended lien on a permanent post oh that date.
On December 5, 1962, the Railway Board addressed a com munication to the General Managers of All Indian Railways that the Government were considering the question for some time whether the age of compulsory retirement of railway servants should be raised above 55 years.
It is further stated that the President is pleased to direct that the age of compulsory retirement of railway servants should be 58 years subject to the three exceptions mentioned in the order.
The only relevant exception is Exception No. 1 relating to ministerial railway servants, which was as follows : "(i) The existing rule 2046 (F.R. 56) (2)(a) RII, under which ministerial railway servants who held a lien or suspended lien on a permanent post on 31st March, 1938 are to be retained in set vice upto the age 191 of 60 years subject to their continuing to be efficient and physically fit after attaining the age of 55 years, will remain in force.
It will be seen from the decision,of the Government, as com municated in the above letter, that the age of retirement of railway servants was raised from 55 to 58 years.
But this was subject to the restriction regarding the continuance of a ministerial servant after 55 years upto the age of 60 years as provided for under sub clause (b) of cl.
(2) of rule 2046.
On January 11, 1967, the old rule 2046 as amended in 1962 was substituted by the new rule.
The new rule consisted of four clauses, but we are not concerned with clauses (c) and (d) The material part of the said rule relevant to be noted are clauses (a) and (b) together with the note to clause (b) which ran as follows : "2046 (FR. 56) (a) Except as otherwise provided in this rule, every railway servant shall retire on the day he attains the age of fifty eight years.
(b) A ministerial railway servant who entered Government service on or before the 31st March, 1938 and held on that date (i) a lien or a suspended lien on a permanent post, or (ii) a permanent post in a provisional substantive capacity under Clause (d) of Rule 2008 and continued to told the same without interruption until he was confirmed in that post,shall be retained in service till the day he attains the age of sixty years.
NOTE : For the purpose of this Clause, the expression "Government Service" include service rendered in ex company,, and ex State Railways, and in a former provincial Government." Two aspects broadly emerge from the above new rule : (a) every ministerial railway servant who had entered Government service on or before March 31, 1938 and who satisfied the conditions mentioned in sub clause (i) or (ii) of clause (b) had a right to continue in service till he attained the age of sixty years; and (b) under the Note, the expression "Government Service" in clause (b) takes in service rendered in ex company, ex State Railways and in a former provincial Govern 192 ment.
There is no controversy that the respondent held a permanent post in the Company on March 31, 1938.
Therefore,, under this new rule, he would be entitled to continue in service till he attained the age of sixty years, as provided in cl.
(b) read with the Note thereto.
On December 12, 1967, the Note to cl.
(b) of rule ' 2046 defining the expression "Government Service" as per the order dated January 11, 1967 was deleted, and a new Note was substituted in its place.
The order dated December 23.
1967 together with the new Note is as follows : "For the existing note, substitute the following For the purpose of this clause the expression "Government Service" includes service rendered in a former provincial government and in ex.
Company and ex.
State Railways, if the rules of the Company or the State had a provision similar to Clause (b) above.
" From the new Note, extracted above, it will be seen that the definition of the expression "Government Service" was changed.
The effect of the new Note, so far as the respondent is concerned, is that whereas he was entitled to continue in service upto 60 years, as per clause (b) read with the note thereto under rule 2046 as substituted on January 11, 1967, now he can get service upto 60 years only if the Company had a provision similar to cl.
(b) of rule 2046.
There is no dispute, that under the service conditions applicable to the respondent, when he was an employee of the Company, he had no right to continue in service till he attained the age of sixty years.
On the other hand, under the service conditions of the Company he had to retire at the age of 55 years.
It appears, that after the introduction of the new rule 2046 on January 11, 1967, the Divisional Accounts Officer, Hubli, passed an order on March 31, 1967 that the respondent was entitled to continue in Office till he attained the age of 60 years.
But after the new Note to cl.
(b) to rule 2046 was substituted on December 23, 1967, the Divisional Accounts Officer, Hubli, passed an order on January 17, 1968 to the effect that the respondent is to retire from service on April 14, 1968 on which date he would be attaining the age of 58 years.
The said order also states that this action was being taken in view of the new Note substituted on December 23, 1967 to cl.
(b) of rule 2046.
The respondent filed on March 6, 1968 in the Mysore High Court, Writ Petition No. 657 of 1968 challenging the legality and validity of the order dated January 17, 1968 retiring him from service with effect from April 4, 1968.
In the writ petition 193 he had referred to his previous service in the Company and to the latter being amalgamated with the Indian Railway Administration in 1947.
According to him, after such amalgmation he has become a ministerial railway servant under the Indian Railway Administration and all the rules applicable to the employees of the latter became applicable to him.
In particular, he pleaded that he was entitled to continue in service, until he attained the age of sixty years, as per the new rule 2046 introduced on January 11, 1967, as he satisfies all the conditions prescribed under cl.
(b) thereof.
He particularly attacked the new Note to cl.
(b) substituted on December 23, 1967 as discriminatory and violative of article 14 of the Constitution.
According to him, the members of the Indian Railway Service, similarly situated like him, will be.
entitled to continue in service till 60 years, whereas that right has been denied, to persons like him, under the new Note.
He also referred to the order passed on March 31, 1967 by the Divisional Accounts Officer, Hubli in and by which it was directed that he was entitled to continue in service till 60 years.
According to the respondent, the Railway Administration was not entitled to go back on this order.
On these grounds, the respondent challenged the validity of the order directing him to retire on the basis of the new Note.
The appellant contested the writ petition on the ground that the order dated March 31, 1967 was passed on the basis of the rule 2046, read with the Note, as it existed on January 11, 1967 But the position was changed by the deletion of the original Note to cl.
(b) and its substitution by the new Note on December 23, 1967.
The appellant claimed that the service conditions of persons, like the respondent, have always been different from those serving under the Railway Administration and that by the introduction of the new Note, no discrimination has been practised on any officer.
On the other hand, according to the appellant, the new Note only gave effect to the conditions of service, which obtained in the Company, where the respondent originally joined service.
The appellant further pleaded that the new Note does not violate article 14 of the Constitution.
The High Court, by its judgment and order dated October 8, 1968 has accepted the contentions of the respondent and held that the new Note substituted to cl.
(b) of rule 2046 on December 23, 1967 is discriminatory and violative of article 14 of the Constitution.
In this view, the said Note was struck down.
In consequence, the High Court set aside the order dated January 17, 1968 and gave a declaration that the respondent was entitled to continue in service till he attained the age of sixty years.
Mr. M. C. Setalvad, learned counsel for the appellant, Rail way Board, has strenuously attacked the finding of the High 194 Court that the new Note, substituted on December 23, 1967 to cl.
(b) is discriminatory and violative of article 14 of the Constitution.
On the other hand, he urged that a distinction has always been made in the case of ministerial railway servant who is governed by cf.
(b) and those who are not so governed by that clause of rule 2046.
Different provisions regarding the age of retirement have been provided in respect of those two classes of ministerial railway servants.
The new Note, Mr. Setalvad pointed out only gives recognition to the practice that has been obtain ing in respect of the ministerial railway servants under their previous employers.
He further pointed out that the Note to cf.
(b) of rule 2046, incorporated on January 11, 1967 gave the benefit of the expression "Government Service ' 'to persons, like the respondent, who have previously been working in ex Company, provincial Government or ex State Railways.
The new Note keeps the same categories of employees within the expression "Government Service", but adds a qualification that in order to have the benefit of a longer period of service, they should have had such benefit under their previous employers.
Mr. Setalvad further pointed out that a government servant has no right to continue in service till the age of 60 years and that the option to so continue him upto that age, vests exclusively within the discretion of the authority concerned.
For this proposition the counsel relied on the decision of this Court in Kailash Chandra vs Union of India(1) interpreting clause (2) of rule 2046 as it existed prior to the amendment in 1962.
In any event, Mr. Setalvad pointed out, that the officers who had worked under a former provincial Government, Ex Company or Ex State Railways and who have been dealt with under the new Note substituted on December 23, 1967 form a class by themselves and therefore there is a reasonable classification of such officers, and that satisfies the requirement of article 14 of the Constitution.
On all these grounds, Mr. Setalvad urged that the new Note is not discriminatory and it does not violate article 14 of the Constitution.
Mr. R. B. Datar, learned counsel for the respondent and M/s M. K. Ramamurthi and J. Ramamurthi, who appeared for the two interveners have supported the reasoning of the High Court for holding that article 14 is violated by the new Note to cl.
(b) of rule 2046.
We are of the opinion that the contentions of Mr. Setalvad cannot be accepted.
No doubt, the counsel is justified in his contention only to this limited extent, namely, that under cl.
(2) of rule 2046, as it existed prior to its amendment on January 11, 1967 that ministerial railway servant falling under that clause, has no right to continue in service beyond the age of 55 and that (1) ; 195.
the appropriate authority has the option to continue him in service after his attaining the age of 55 years, subject to the condition that the servant continues to be efficient.
This Court in Kailash Chandra 's case(1) had an occasion to consider rule 2046 (2) (a) as it originally stood.
It was held that the ministerial railway servants falling under the said clause may be compulsorily retired on attaining the age of 55 years.
But when the servant is between the age of 55 and 60 years, the option to continue him in service, subject to the servant continuing to be efficient, exclusively vests with the appropriate authority.
It was further laid down that the authority is not bound to retain a railway servant after the age of 55 years, even if the continues to be efficient.
It was.
further emphasised that the rule gave no right to a ministerial railway servant to continue in service beyond the age of 55 years.
It is in view of the above principles laid down by this Court,.
we have observed, earlier, that Mr. Setalvad 's contention in respect of the rule 2046, as it originally stood, is well founded.
But this Court, in the above decision, had no occasion to consider the problem that now arises, by virtue of the new Note added to, cl.
(b) of rule 2046.
There is no controversy that after the amalgamation of the Company with the Indian Railway Administration, the respondent has become an employee of the latter.
If so, in our opinion, the respondent is entitled to be given the same rights and privileges that are available to the other emplo yees employed by the Indian Railway Administration.
That exactly was the position under the rule 2046, as it originally stood; after its amendment on December 5, 1962 increasing the age of retirement to 58 years; as also under the new rule 2046, incorporated on January 11, 1967.
All these rules upto and inclusive of January 11, 1967 treated the former employees of the Ex Company, Ex State Railways and former provincial Governments, who were amalgamated with the Indian Railway Administration in 1947, on a par the other original employees of the Indian Railway Administration.
In fact, the Note to cl.
(b) of rule 2046 incorporated on January 11, 1967, reinforced this position, by making it clear that the expression "Government Service ' 'in cl.
(b) will include service under the various employers referred to therein.
Mr. Setalvad placed reliance on the fact that rule 2046, as it existed upto and inclusive of January 11, 1967, dealt differently with the age of retirement in respect of : (i) a railway servant coming under cl.
(a) and (ii) a ministerial railway servant coming under cl.
He further pointed out that even in respect of a ministerial railway servant coming under cl.
(b), the latter, in order to be eligible to have a longer age of retirement should be one who complies with the conditions mentioned there 1. ; 196 in.
These conditions are as per el.
(b) existing on January 1 1, 1967, that the officer should have entered government service on ,or before March 31, 1938.
The said officer should also have the ,one or the other of the qualifications mentioned in sub clauses (i)and (ii).
That is, according to the learned counsel, if a ministerial railway servant has not entered government service before March 31, 1938, he will not be eligible for the longer age ,of retirement.
These circumstances will clearly show, according to Mr. Setalvad that the rule has been through out maintaining a distinction even amongst the ministerial railway servants working under the Indian Railway Administration.
This argument, may on the face of it appear to be attractive; but in our opinion, it cannot be accepted.
The point to be noted is that though a distinction has been made in the rule between a railway servant coming under el.
(a) and a ministerial railway servant coming under el.
(b), those clauses will apply uniformly to all members of the Indian Railway Administration depending upon whether .they are railway servants coming under el.
(a) or a ministerial railway servant coming under el.
(b), as the case may be.
To all railway servants coming under el.
(a) the age of retirement is the same.
Similarly to all ministerial railway servants coming under el.
(b), the age of retirement is again the same.
Further .if a ministerial railway servant does not satisfy the requirements of cl.
(b) he will not be eligible to get the extended period Of retirement.
That again will apply to all ministerial railway servants, who do not satisfy the requirements of el.
We are emphasising this aspect to show that no distinction has been made either in el.
(a) or el.
(b) regarding the uniform application in respect of the age of retirement to the officers mentioned ,therein and who are governed by those clauses.
That is, there is no inter se distinction made.
The distinction made in el.
(b) regarding the ministerial railway servants who entered government service on or before March 31, 1938 is again of uniform application.
That rule only makes a broad distinction between the ministerial railway servants who entered government service on or before March 31, 1938 and who entered government service after that date.
As per the Note to el.
(b) to rule 2046, incorporated on January 11, 1967, the respondent is a person who has entered government service on or before March 31, 1938 .and satisfies also the requirements under sub cl.
(ii) or el.
(b) Similarly, another railway servant may have entered government service under the Indian Railway Administration on or before March 31, 1938.
He also, under el.
(b) will be a ministerial railway servant who has entered government service on or before March 31, 1938 and if he satisfies one or other of the conditions mentioned in sub clauses (i) and (ii) of el.
(b), he will be entitled to continue in service till 60 years.
That means both persons, like the respondent, and the officers who have straight 197 joined the service under the Indian Railway Administration, prior March 31, 1938 and who satisfy the requirements under sub clause (i) or sub clause (ii) of clause (b) will be equally entitled continue in service till they attain the age of 60 years.
These acts clearly show that cls.
(a) and (b) of rule 2046 had uniform application to all the employees of the Indian Railway Administration.
Coming to the new rule 2046, incorporated on January 11, 1967, the conditions of service of persons, like the respondent, have been better crystalised.
Read with the Note, under cl.
(b), the respondent is a ministerial railway servant, who had entered government service on or before March 31, 1938.
By virtue of cl.
(b), he was entitled to be retained in service till he attains the age of 60 years.
It is to be noted that there is no option left with the employer, but to retain such a ministerial railway servant upto 60 years.
In other words, if the ministerial railway servant satisfies the requirements of cl.
(b), he is, as of right, entitled to be in service, till he attains the age of 60 years.
Similarly, cl.
(a) introduced on January 11, 1967, gives a right to a railway servant to continue in office, till he attains the age of 58 years.
Here again, there is no option vested with the authorities except to continue him till that age.
The option to extend the period of service of the officers mentioned in cls.
(a) and (b) is dealt with under sub,, clauses (d) and (c) respectively, which we have not quoted.
Sub clauses (c) and (d) deal with the granting of extension of service beyond the period mentioned in sub clauses (b) and (a).
The option to extend the service beyond the period mentioned in sub causes (a) and (b) may be with the authorities; but they have no voice in a railway servant coming under cl.
(b), continuing upto 60 years.
That the authorities also understood the position in the manner mentioned above, is clear from the order dated March 31, 1967, of the Divisional Accounts Officer, Hubli declaring the right of the respondent to continue in service upto 60 years.
in fact, this order was passed in consequence of the new rule 2046 substituted on January 11 1967.
Therefore, from what is stated above, it is clear that upto and inclusive of January 11, 1967, no distinction inter se apart from that made by clauses (a) and (b), between the officers of the Indian Railway Administration, from whatever source they may have come, was made.
Even at the risk repetition, we may state that under cl.
(b) of rule 2046, as introduced on January 11, 1967, the original employees of the Indian Railway Administration, as well as persons, like the respondent, who came into the Indian Railway Administration in 1947, were both entitled, as of right, to continue in service till they attained the age of 60 years.
This position admittedly has been changed, by altering the definition of the 198 ,expression "Government Service" by the new Note to cl.
(b) introduced on December 23, 1967.
Under that Note, it cannot be gain said, that a distinction has been made between the original employees of the Indian Railway Administration, and the new ,employees, who were amalgamated with the Indian Railway Administration in 1947, but who had their previous service, with either a former provincial Government, or an Ex Company or Ex State Railways.
In the case of such employees, the benefit ,of the extended age of retirement, that has been given to the other employees of the Indian Railway Administration, was made available, only if the new 'employees had the same benefit under their previous employers.
Therefore, the position is that on and after December 23, 1967, though all the employees are under the Indian Railway Administration, there will be two sets of rules relating to the age of retirement, depending upon the fact whether they were in the original employment of the Indian Railway Administration or on the fact of their coming from one or , the ,other of the employers mentioned in the new Note.
It is in consequence of the new Note, that the order dated January 17.
1968 was issued by the Divisional Accounts Officer, Hubli, that the respondent has to retire at the age of 58 years, on April 14, 1968.
The question is whether the distinction made under the new Note to cl.
(b) substituted on December 23, 1967 valid? In our opinion, such a rule, which makes a distinction between the employees working under the same Indian Railway Administration is not valid. The position, after the new Note was added, is that the employee who had through out been under the Indian Railway Administration is entitled to continue in service till he attains the age of 60 years; whereas the persons, like the respondent, who are also the employees of the Indian Railway Administration, but whose previous services were with the Company, will have to refire at the age of 58 years, because a provision similar to cl.
(b) did not exist in the service conditions of the Company.
Discrimination, on the face of it, is writ large in the new Note, which is under challenge.
Mr. Setalvad, no doubt, urged that the ministerial railway servant, who was originally employee of a Company, Ex State Railway or a former Provincial Government dealt with under the new Note are a class by themselves, and, therefore, there is a reasonable classification.
Once the employees dealt with under the new Note, have taken up service under the Indian Railway Administration and have been treated alike upto January 11, 1967, it follows, in our opinion, that they cannot again be classified separately from the other employees of the lndian Railway Administration.
Therefore, we are not inclined to accept the 199 contention that the classification of these officers, under the new Note, is a reasonable classification and satisfies one of the essential requisites of article 14 of the Constitution, as interpreted by this Court.
We will assume, that in dealing with the types of employees under the new Note, there is a reasonable classification.
Nevertheless, the further question arises whether the reasonable classification, with the added condition in the Note incorporated on December 23, 1967, can be said to have a nexus or a relation to the object sought to be achieved by cl.
(b) of rule 2046 ? The object of rule 2046 itself is to provide for the age of retirement of the two types of officers coming under cls.
(a) and (b).
Where there is no indication that any further distinction inter se is sought to be made amongst the officers mentioned in cls.
(a) and (b) and when an uniform age of retirement has also been fixed in respect of the officers coming under these two clauses, the classification, carving out the ex employees of the three authorities mentioned therein, with the added condition that the rules of the Company or the State should have a provision similar to clause (b), has, in our opinion, no nexus or relation to the object of the rule.
For the reasons given above, we are of the view that the High Court was justified in striking down the order of the Divisional Accounts Officer, Hubli, dated January 17, 1968 directing the respondent to retire from service on April 14, 1968, on which date he will attain the age of 58 years.
However, it is not clear from the judgment of the High Court whether the entire new Note substituted under cl.
(b) of rule 2046 on December 23, 1967 has been struck down or whether it has struck down only the new condition incorporated in the said Note.
Even as per the Note under cl.
(b), incorporated along with the new rule 2046 on January 11, 1967, the expression "Government Service" included service rendered in Ex Company, Ex State Railways and in a former provincial Government, and such a provision is beneficial to the employees like the respondent.
In the new substituted Note dated December 23, 1967.
the first part of the Note including in "government service" any service rendered in a former provincial Government, Ex Company and Ex State Railways is more or less identical with the original Note of January 11, 1967, though in the new Note the order of the former employees has been slightly changed.
In our opinion, that part of the new rule providing that for the purpose of cl.
(b) the expression "Government Service" includes service rendered in a former provincial Government and in a Ex Company and Ex State Railways can be allowed to stand to this extent.
Therefore, the offending part in the new Note are the further words "if the 200 rules of the Company or the State had a provision similar to Clause (b) above".
This offending part can be deleted without doing violence to the definition of the expression "Goverment Service" even under the new Note.
Therefore, it is only necessary to strike down the offending part in the Note, namely, "if the rules of the Company or the State had a provision similar to Clause (b) above" and this part of the Note alone is struck down as discriminatory and violative of article 14 of the Constitution.
Subject to the above directions, the judgment and order of the High Court are confirmed and this appeal dismissed.
Special leave to appeal has been granted on August 7, 1969 subject to the conditions that the appellant is to pay the costs of the respondent in any event.
The respondent, accordingly, will be entitled to his costs in the appeal.
K.B.N. Appeal dismissed.
| Rule 2046 (F.R. 56) of the Indian Railway Fundamental Rules was substituted on January 11, 1967, by a new Rule.
Undo cl.
(b) of the new Rule 2046 every ministerial railway servant who had entered government service on or before March 31, 1938 and who satisfied the conditions mentioned in sub cls.
(i) and (ii) of cl.
(b) had a right to continue in service till he attained the age of 60 years.
The Note to the Rule, defined the expression 'government service ' as including service rendered in ex company and ex State Railway, and in a former provincial government.
On December 23, 1967 a new Note was substituted which stated that the expression "government service" ' included "service rendered in a former provincial government and in ex company and ex State Railways, if the rules of the company or the State had a provision similar to cl.
(b) above".
The respondent joined the service of the Madras and Southern Mahratta Railway company on August 16, 1927.
The company was amalgamated with the Indian Railway Administration in 1947 and on such amalgamation the respondent became the employee of the Indian Railway Administration He was a "ministerial servant" within the meaning of that expression in r. 2046.
On March 31, 1938, he held a permanent post in the company.
After the introduction of r. 2046 on January 11, 1967, the Divisional Accounts Officer passed an order that the respondent was entitled to continue in office till he attained the age of 60 years.
But, after the new Note to cl.
(b) to r. 2046 was substituted on December 23, 1967, another order was passed to the effect that the respondent was retired from service on April 14, 1968, on attaining the age of 58 years.
The order also stated that this action was being taken in view of the new Note substituted on December 12, 1967.
The respondent filed a writ petition in the High Court challenging the legality of the order retiring him from service.
The High Court struck down the order and gave a declaration that the respondent was entitled to continue in service till he attained the age of 60 years, on the ground that the order was discriminatory and, therefore, violative of article 14 of the Constitution.
Dimissing the appeal to this Court, HELD : The High Court was justified in striking down the order directing the respondent to retire from service.
(1) Rule 2046 as it stood originally and on January 11, 1967 treated the former employees of the ex company, ex State Railway and former provincial Government 188 who were amalgamated with the Indian Administration in 1947 on a par with the other original employees of the Indian Railway Administration.
In fact the Note to cl .
(b) of r. 2046 incorporated in January 11, 1967 only reinforced this position.
Read with the Note, under el.
(b), the respondent is a ministerial servant who had entered government service on or before March 31, 1938 and, therefore, by virtue of el.
(b) he was entitled to be retained in service till he attained the age of 60 years.
C] (2) Up to and inclusive of January 11, 1967, no distinction, inter se, apart from that made by cls.
(a) and (b) between officers of Indian Railway Administration, from whatever source they may have I come, was made.
The position admittedly has been changed by altering the definition of the expression "government service" by the new Note to el.
(b) Thus on and after December 23, 1967, though all the employees are under the Indian Railway Administration, there will be two sets of rules relating to the age of retirement, depending upon the fact whether they were in the original employment of Indian Railway Administration or on the fact of their coming from one or the other employers mentioned in the new Note.
Discrimination, is writ large on the face of the new Note.
Once the employees dealt with under the new Note have taken up service under the Indian Railway Administration and have been treated alike up to January 11, 1967, if follows that they cannot again be classified separately from the other employees of the Indian Railway Administration.
Therefore the classification of these officers under the new Note is not a reasonable classification.
[197 G, 198 F] (3) Assuming there is a reasonable classification, the classification cannot be said to have a nexus or relation to the object sought to be achieved by el.
(b) of r. 2046 which is to provide for the age of retirement of the two types of officers coming under cls.
(a) and (b).
Where there is no indication that any further distinction inter se is sought to be made amongst the officers mentioned in cls.
(a) and (b) and when a uniform age of retirement has also been fixed in respect of officers coming under these two clauses, the classification carving out the ex employees of the three authorities mentioned therein with the added condition that the rules of the company or the State should have a provision similar to el.
(b) has no nexus or relation to the object of the Rule.
[199 B] (4) Though a distinction has been made in the Rule between a railway servant coming under el.
(a) and a ministerial railway servant coming under el.
(b) in regard to age of retirement, those clauses will apply uniformly to all members of the Indian Railway Administration depending upon whether they are railway servants coming under el.
(a) or ministerial railway servants coming under el.
The distinction made in el.
(b) regarding the ministerial railway servants who entered government service on or before March 31, 1938, is again of uniform application.
[196 H] (5) It is only necessary to strike down the offending part in the Note, namely, "if the rules of the company or the State had a provision similar to el.
(b)," and this part of the Note alone is struck down as discriminatory and violative of article 14 of the Constitution.
[200 B]
|
ivil Appeal No. 1654 of 1966.
395 Appeal from the judgment and order, dated March 8, 1963 of the Bombay High Court in Appeal No. 7 of 1963.
and Civil Appeals Nos. 1019 and 1020 of 1967.
Appeals from the judgment and order, dated August 20, 1964 of the Bombay High Court in Appeals Nos.
53 and,55 of 1963.
C.K. Daphtary, Attorney General, N.S. Bindra, R. Gopalakrishnan and S.P. Nayar, for the appellant (in C.A. No. 1654.
of 1966).
Niren De, Solicitor General, G.L. Sanghi, and 1.
B. Dadachanji, for the appellants (in C.As.
1019 and 1020 of 1967) and respondents Nos. 3 and 4 (in C.A. No. 1654 of 1966).
Sen and 1.
N. Shroff, for respondents Nos. 1 and 2 (in C.A. No. 1654 of 1966) K.K. Singhvi, S.C. Agarwala, R.K. Garg, D.P. Singh and K. Gupta, for the respondents (in C.A. No. 1020 of 1967).
The Judgment of the Court was delivered by Shah, J.
The High Court of Bombay has declared section 372(g) and a part of section 385 of the Bombay Municipal Corporation Act 3 of 1888 as amended by Act 14 of 1961 ultra vires because in their view these provisions infringe the guarantee of articles 19 (1 ) (f) & (g) of the Constitution.
The State of Maharashtra and the Municipal Corporation of Greater Bombay have appealed to this Court.
The first respondent in Appeal No. 1654 of 1966 is a society registered under the , and carries on, within the limits of Greater Bombay, the business of skinning carcasses of dead animals and utilising the products for industrial uses.
The second respondent is an owner of a stable of milch cattle at Andheri within the limits of Greater Bombay.
By Act 14 of 1961 the Legislature of the State of Maharashtra amended, amongst others, sections 367, 372 and 385 of Act 3 of 1888 enacting that an owner of the carcass of a dead animal shall deposit it at the place appointed in that behalf by the Corporation, and entrusted the Corporation with power to arrange for disposal of the carcasses.
On October 14, 1961 the Assistant Head Supervisor of the Municipal Corporation called upon the first respondent to stop removing carcasses from the "K" Ward of the Corporation.
On November 27, 1961, the Corporation published a notification inviting the attention of the public concerned to the provisions of section 385 and other provisions of the Act and warned the persons concerned that violation of the provisions was liable 396 to be punished.
On January 10, 1962, the Corporation resolved to grant a contract authorising removal and disposal of carcasses under section 385 of the Act in respect of Wards, H, K, L, M, E, P, B & T to the Harijan Workmens Co operative Labour Society Ltd., and declared that no other person or agency was authorised to remove and dispose of carcasses under the provisions of section 385 of the Act.
Respondents Nos. 1 & 2 to this appeal moved a petition in the High Court of Bombay for an order canceling or setting aside the notice dated October 14, 1961, and the notification dated November 27, 1961, for an order restraining the Corporation from demanding fee for removal of such carcasses, from taking any steps or proceedings against the respondents for enforcement of the provisions of sections 366,.
367(c), 372(g) and 385 of the Act and from claiming ownership in the carcasses of the dead animals of private owners.
The State of Maharashtra was later impleaded as a party respondent to the petition.
Kantawalla, J., dismissed the petition.
He held that sections 366, 367(c) and 385 of the Act were "enacted for the promotion of public health and for the prevention of danger to life of the community and in the larger interest of the public", and that the restrictions upon the rights of the owners of cattle and persons carrying on business in carcasses were, because of the special protection granted by article 31(5)(b)(ii) not inconsistent with or repugnant to the fundamental rights guaranteed under article 31(2) of the Constitution, and since the impugned provisions were protected, the second respondent could not claim that his fundamental right guaranteed by article 19(1)(f) of the Constitution was infringed.
The learned Judge also held that the restrictions imposed by the impugned provisions were reasonable and in the interest of the general public and were on that account not within the protection of article 19(1)(g) of the Constitution.
In appeal under the letters patent the High Court modified the order passed by Kantawalla, J., and declared section 372(g) and a part of section 385 of the Act invalid.
The High Court did not pass any order consequential on the declaration.
Against that order the State of Maharashtra has preferred this appeal with certificate granted by the High Court.
Section 3 (z) defines 'nuisance ': it includes any act, omission, place, or thing which causes or is likely to cause .injury, danger, annoyance or offence to the sense of sight,.
smelling or hearing, or which is or may be dangerous to life or injurious to health or property. ' Section 61 sets out the obligatory and discretionary duties of the Corporation.
It is thereby incumbent upon the Corporation to make adequate provision, inter alia, for scavenging, removal and disposal of excrementitious and other filthy matters, 397 and of all ashes, refuse and rubbish, reclamation of unhealthy localities, removal of noxious vegetation and generally the abatement of all nuisances.
By sections 365, 366, 367, 368, 372 and 385 it was provided that section 365 "For the purposes of securing the efficient scavenging and cleansing of all streets and premises.
the Commissioner shall take measures for securing (a). . . . . . (b) the removal of the contents of all receptacles and depots and of the accumulations at all places provided or appointed by him under section 367 or 368 for the temporary deposit of any of the matters specified in the said sections.
" section 366 "A11 matters collected by municipal servants or contractors in pursuance of the last preceding section and of section 369 and carcasses of dead animals deposited in any public receptacle, depot or place under section 367 shall be the property of the Corporation.
" section 367 "The Commissioner shall provide or appoint in proper and convenient situations public receptacles, depots and places for the temporary deposit or final disposal of (a) dust, ashes, refuse and rubbish; (b) trade refuse; (c) carcasses of dead animals and excrementitious and polluted matter; Provided that (i) the said matters shall not be finally disposed of in any place or manner in which the same have not heretofore been so disposed of, without the sanction of the corporation or in any place or manner which the State Government think fit to disallow; (ii) any power conferred by this section shall be exercised in such manner as to create the least practicable nuisance." section 368 "(1) It shall be incumbent on the owners and occupiers of all premises to cause all dust, ashes, refuse, rubbish and trade refuse to be collected from their respective premises and to be deposited at such times as the Commissioner, by public notice, from time to time prescribes in the public receptacle, depot or 398 place provided or appointed under the last preceding section or the temporary deposit or final disposal thereof. .
" section 372 "No person (a) who is bound, under section 368 or section 370, to cause the removal of dust, ashes, refuse, rubbish and trade refuse or of excrementitious or polluted matter, shall allow the same to accumulate on his premises for more than twenty four hours or neglect to cause the same to be removed to the depot, receptacle or place provided or appointed for that purpose; .
" (g) shall deposit the skin or otherwise dispose of the carcass of any dead animal at a place not provided or appointed for this purpose under section 367.
" section 385 "(1) It shall be the duty of the Commissioner to provide for the removal of the carcasses of all animals dying within Greater Bombay; (2) The occupier of any premises in or upon which the animals shall die or in or upon which the carcass of any animal shall be found, and the person having the charge of any animal which dies in the street or in any open place, shall within three hours after the death of such animal, or if the death occurs at night, within three hours after sunrise, report the death of such animal at the municipal health department office of the division of the Greater Bombay in which the death occurred or in which the carcass is found and shall not unless authorised by the Commissioner in this behalf, remove or permit to be removed the carcass of any animal dying in or upon any place within Greater Bombay; "(3) For every carcass so removed by municipal agency, a fee for the removal of such amount as shall be fixed by the Commissioner, shall be paid by the owner of the animal or, if the owner is not known, by the occupier of the premises in or upon which, or by the person in whose charge, the said animal died.
" The provisions are manifestly enacted with the object of ensuring expeditious removal of carcasses .of dead animals which, if allowed to remain, are likely to constitute a grave nuisance and are likely to endanger public health.
The carcass of a dead animal is a noxious thing, which in the hot and humid climate of Bombay petrifies within a short time after the death of the animal and defiles the place and atmosphere with foul smells, and is likely 399 to spread disease if immediate and proper steps for removal and disposal are not taken.
The Municipal Corporation is entrusted with authority to take steps to ' protect the health of the residents within the municipal area.
To ensure against a grave nuisance to the residents, duty is imposed by the Act upon the owner of the animal or occupier of the premises in or upon which the animal dies or the person having charge of the animal to remove the carcass with the permission of the Commissioner in that behalf at his own expense, or to have it removed through the agency of the Corporation.
If it is removed by the Corporation, the owner is required to pay the prescribed fee for such removal.
After it is deposited by the owner or by the Corporation in a receptacle, depot or place which is set apart for that purpose, the carcass may be disposed of by the Corporation in a manner which is likely to cause the least public nuisance.
For that purpose the carcass is at the disposal of the Corporation.
The Act does not make any provision relating to the manner in which the Corporation is to dispose of the carcass, but it is implicit in the scheme of the Act that the Corporation will provide a place removed from the inhabitated localities where the carcasses may be disposed of without involving any danger to public health.
To facilitate this object it is enacted by the Legislature that the carcasses of dead animals deposited in any public receptacle, depot or place shall be the property of the Corporation.
Unquestionably it is in the interest the residents of the Municipal Corporation and for promotion of public health and for prevention of danger to the community that carcasses of the dead animals shall be removed expeditiously and shall be disposed of in a manner which is likely to cause the least nuisance.
The carcass of a dead animal is private property and belongs to the owner of the animal, and the carcass on sale by the owner, when it.
is of a bull, cow or buffalo, fetches a small price.
Counsel for the second respondent urged that the provisions of the Act which place restrictions upon the right of the owner to dispose of the carcass and compel him to incur expenditure for removal or to pay a fee for that removal to the appointed place, and extinguish his ownership in the carcass when it is deposited in the place appointed, infringe the fundamental right to property guaranteed under article 19(1)(f) and article 31 (2) of the Constitution.
Counsel for the first respondent urged that by the impugned provisions the first respondent is deprived of his right to carry.
on business, and on that account infringe the right guaranteed by article 19(1)(g) of the Constitution.
Counsel for the Corporation conceded that a carcass is property which is capable of being owned.
Counsel, however, submitted that a carcass is not commercial property and the first respondent could not claim to carry on business in disposal of 400 carcasses.
The judgment of the Supreme Court of the United States in Gerrit W. Clason vs State of Indiana(1) on which reliance was placed by counsel for the Corporation merely decided that a State statute requiring the owner of a dead animal not slaughtered for food to bury or burn such .body on his premises or to deliver it W the representative of a disposal plant licensed to do business within the State, and prohibiting transportation over the high ways of the State of the body of such animal except to a licensed disposal plant and with certain sanitary. precautions, did not unduly discriminate against and burden toter state commerce.
The judgment does not support the plea that a citizen carrying on the business in the disposal of the carcasses is not entitled to the constitutional protection against unreasonable restrictions on the carrying on of any lawful business or occupation.
The second respondent is not a dealer in carcasses.
He has a right of ownership in the carcass.
He claims that before the enactment of the impugned provisions he was accustomed to sell the carcass of an animal dying in his/stable for a price; he is under the Act enjoined to deposit the carcass in an appointed place and for that purpose to incur expenditure for removal of the carcass or to pay a fee to the Corporation for arranging for its removal.
On account of the impugned provisions he says that he cannot sell the carcass, and when he deposits the carcass in the appointed place his ownership in the carcass ceases and he has to pay for removal of the carcass.
Article.
19(1)(f) of the Constitution confers upon all citizens the right to acquire, hold and dispose of property.
Carcass of an animal belonging to a person is his property and he has the right of disposal of the carcass.
But that fundamental right, like all other rights in article 19( 1 ).
is not absolute: it is subject to reasonable restrictions.
By el.
(5) it is enacted that: "Nothing in sub clauses (d), (e) and (f) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, reasonable restrictions on the exercise of any of the rights conferred by the said subclauses either in the interests of the general public or for the protection of the general public or for the protection of the interests of any Scheduled Tribes.
" 401 the Municipal agency with the least practicable delay is conceived in the interests of the general public and no serious argument to the contrary was advanced before us.
A law designed to abate a grave nuisance and for protection of public health is prima facie one enacted for the protection of the interests of the general public.
But that alone is not sufficient: the restriction imposed by the law must be reasonable, i.e., the restriction must not be arbitrary or excessive, and must not place upon the right of the citizen a limitation which is not calculated to ensure protection of the interests of the general public.
In the view of the High Court the law which compels the owner to deposit the carcass in the appointed place and thereby prevents him from selling it, and involves him in expenditure for removing it, or in the payment of a fee for removal, imposes an unreasonable restriction.
The High Court also observed that a law which declares that as soon as the carcass which is a valuable property is deposited, it becomes the property of the Corporation makes an unreasonable provision since "it makes no difference whether the carcass is disposed of by a purchaser from the owner of the carcass or by a contractor who purchased it from the Corporation".
But in so holding, in our judgment, the High Court ignored the hazard to the public health arising from adulteration of the food of the people.
There is evidence on the record which is not controverted that meat and fat from the carcasses are used by unscrupulous persons for adulterating the food of the community.
Mere imposition of an injunction to remove the carcass within the prescribed period abates the nuisance likely to result from the carcass remaining on the premises of the owner: it does not eliminate grave hazard to public health by the adulteration of the food of the people by the products from carcasses.
By merely enacting that the carcass will be removed expeditiously, the second object cannot be served.
The Corporation has control over the contractor to whom the carcasses are entrusted for disposal.
It has set apart a place for skinning and has supervision over the disposal of the products.
Even by imposing stringent supervision upon persons carrying on the business of skinning carcasses protection of the community against adulteration of its food cannot be effectively secured, because it would not be difficult for a purchaser not subject to the control of the Corporation to remove the carcasses beyond the Corporation limits and then to bring contaminated meat and the fat back into the Corporation area.
The Legislature has designed a scheme by which reasonable restrictions are placed upon the right of a citizen to dispose of his property: possibility of an alternative scheme which might have been but has not been designed, will not justifiably expose the first scheme to the attack that it imposes unreasonable restrictions.
402 Reasonableness of restrictions imposed by a law has to be adjudged in the light of the nature of the right, danger or injury which may be inherent in ' the unbridled exercise of the right and the necessity of protection against danger which may result to the public by the exercise of the right.
In each case the test is whether the restriction is commensurate with the need of protection of the interest of the public against the exercise of the right.
But the fact that the owner is unable to sell for a price the carcass and required to pay a fee for removal of the carcass does.
not, in judgment, render a provision which is essentially conceived in the interests of the general public, as indicated .earlier, unreasonable.
The Corporation has to arrange for effectively disposing of the carcass, and it would be necessary for effectuating that purpose to provide that the title of the owner in the carcass should be extinguished.
Unless the title of the owner in the carcass is extinguished, various complications may arise in the way of disposal of the carcass.
We are unable to agree with the High Court, that for/he purpose of ensuring proper disposal, transfer of ownership to the Municipal Corporation was not necessary or that the provisions went "far beyond the legitimate purpose of making them." In determining the extent of the right which a citizen may claim to exercise, the Court is concerned to deal with the reasonableness of the restriction imposed upon the exercise of the right.
As observed by Patanjali Sastri, C.J., in State of Madras vs If.
G. Row(1) "the test of reasonableness, wherever prescribed, 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.
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.
" As stated by Mahajan, I., in Chintamanrao vs State of Madhya Pradesh(2) at p. 763: 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.
" The High Court was of the view that looking to the object intended to be achieved it was not necessary to impose "such wholesale restriction on the owner of carcasses as also on those who carry (1) ; 607.
(2) ; 403 on the trade as has been imposed.
" We do not think, however, that the provisions incorporated by Act 14 of 1961 were arbitrary or excessive.
Reasonableness of the restriction imposed upon the right to acquire, hold and dispose of property must be evaluated in the light of the nature of the commodity and its capacity to be detrimental to the public weal.
The power of the State to impose reasonable restrictions may extend to prohibiting acquisition holding or disposal of a commodity if the commodity is likely to involve grave injury to the health or welfare of the people.
In adjudging the reasonableness of restrictions imposed upon the holding or disposal of a carcass which is noxious, maintenance of public health is the paramount consideration.
Restriction imposed upon the right of an owner of a carcass to dispose it of in the manner indicated, in the Act, being enacted solely in the interest of the general public, cannot be deemed arbitrary or excessive merely because they involve the owner into a small financial burden.
Under the Constitution a proper balance is intended to be maintained between the exercise of the right conferred by article 19(1 )(f) and (g) and the interests of a citizen in the exercise of his right to 'acquire, hold or dispose of his property or to carry on occupation, trade or business.
In striking that balance the danger which may be inherent in permitting unfettered exercise of right in a commodity must of necessity influence the determination of the restrictions which may be placed upon the right of the citizen to the commodity.
The law which compels the removal of the carcass expeditiously from the place where it is lying is not contended to be arbitrary or excessive.
The law which compels removal to the appointed place and disposal of the carcass under the supervision of the Corporation to which is entrusted the power and duty to take steps to maintain the public health cannot also be regarded as arbitrary or excessive, merely because the enforcement of the law involves some pecuniary loss to the citizen.
We are unable to agree that by compelling disposal of carcasses by leaving to the owner of the carcass to dispose it in any manner he thinks fit, danger to the public health could be effectively avoided.
was faintly argued that the levy of Rs. 20 as fee for removal of each carcass was excessive.
But there is no evidence before the Court about the expenses which the Corporation is required to incur in performing the service relating to the removal of carcasses of all animals some of which may yield in the disposal valuable by products and others not.
Evidently in a large and crowded metropolitan city it would be necessary to maintain covered wagons for removal of carcasses, to maintain an inspecting staff.
to, make adequate arrangements for deposit of carcasses at certain places.
and for their disposal under the supervision of the Municipal staff.
Whether the fee levied from the owner of the 404 carcass of an animal in excess of the expenditure which the Corporation will have to incur for the maintenance of the service is not commensurate is a matter on which no investigation appears to have been made and this Court cannot enter upon that question for the first time.
It was, however, urged that a provision which not only extinguishes the title of the owner in the carcass thereby involving him in the loss of the value which he would have obtained by sale of the carcass, but ' simultaneously imposes upon him a liability to remove the carcass at his own expense is per se unreasonable.
We do not think so.
If the carcass is likely to be deleterious to public health and its removal from the place where it is lying being in the interests of the public health, imposition of an obligation upon the owner to remove the carcass at his own expense or to pay for its removal, cannot be regarded as unreasonable, even if the charge which falls upon the owner is in addition to the loss which he suffers by reason of the extinction of his title in the carcass.
If the owner 's right to dispose of his property is by the enactment of the impugned section subjected to reasonable restrictions, it must follow that the right of the skinner, assuming that he has a right in the carcass, is also subjected to reasonable restrictions, imposed in the interests of the general public.
The impugned provisions do not infringe the guarantee of freedom under article 19(f) of the Constitution.
But even if it be established that the law which imposes a reasonable restriction upon the right of a citizen to acquire, hold and dispose of property, is not on that account free from the challenge that it infringes the guaranteed freedom under article 31.
Article 31, after it was amended by the Constitution (Fourth Amendment) Act, 1955, provides: "(1) No person shall be deprived of his property save by authority of law.
(2) No property shall be compulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for compensation for the property so acquired or requisitioned and either fixes the amount of the compensation or specifies the principles on which, and the manner in which the compensation is to be determined and given; and no such law shall be called in question in any court on the ground that the compensation provided by that law is not adequate.
(2A) Where a law does not provide for the transfer of the ownership or right to possession of any property to the State or to a corporation owned or controlled by 405 the State, it shall not be deemed to provide for the com pulsory acquisition Or requisitioning of property, not withstanding that it deprives any person of his property.
. . (5) Nothing in clause (2) shall affect (a) the provisions of any existing law other than a law to which the provisions of clause (6) apply, or (b) the provisions of any law which the State may hereafter make (i) .
(ii) for the promotions of public health or the prevention of danger to life or property, or (6) .
Before the Constitution (Fourth Amendment) Act, 1955, the prevailing opinion in this Court was that articles 31(1) & (2) dealt with the same subject matter and were not mutually exclusive in their scope and content, and should be read together and understood as dealing with the same subject, namely, the acquisition or taking possession of property referred to in cl.
(2) of article 31, and that article 31 (before amendment) is a self contained Article providing for a subject different from that dealt with in article 19.
But since the enactment of the Constitution (Fourth Amendment) Act, 1955, clauses (2) & (2A) of article 31 and cl.
(1) of article 31 deal with different subjects: Clauses (2) & (2A) deal with acquisition and requisitioning of property; and cl.
(1) with deprivation of property by authority of law: Kavalappara Kottarathil Kochuni and Ors.
vs The State of Madras and Ors.(x) It was also held in that case that the word 'law ' used in article 31 (1 ) indicates its limitation and refers back to article 19 and any law made under article 31 (1 ) can be sustained only if the restrictions it imposes are reasonable and in the interest of the general public, and that the correct approach should be first to ascertain the fundamental right and then to see whether the law infringes that right.
If ex facie it does so, it has to stand the test of article 19(5).
In certain circumstances, however, deprivation of fundamental right to property may also amount to a reasonable restriction under that Article.
It was also observed that the word 'law ' in article 31 ( 1 ) must mean a valid law, and such a law must satisfy two tests ( 1 ) that the legislature is competent to enact it; and (2) that it (1) 916.
406 does not infringe any fundamental right.
A law that deprives a citizen of his property may, therefore, be invalid if it infringes article 19(1) (f) of the Constitution, unless it is protected by cl, (5) of article 19.
It was however ruled by a unanimous decision of this Court in Smt.
Sitabati Debi and Anr.
vs State of West Bengal and Anr.(1) that the decision in Kavalappara Kottarathil Kochuni 's case(2) was not concerned with a law of requisition or acquisition and a law relating to acquisition and requisition of property falling within the terms of article 31(2) of the Constitution need not stand the test of reasonableness under article 19 (5).
In the present case the restrictions imposed by the impugned law upon the right of the owner however satisfy, for reasons already stated, the test of reasonableness under article 19(5).
The question still remains whether the impugned law is void because it does not provide for payment of compensation for the loss occasioned to the owner of the carcass resulting from the extinction of his title thereto.
Since the amendment by the Constitution (Fourth Amendment) Act, 1955, cls.
(2) & (2A) of article 31 deal with the acquisition or requisitioning of property movable or immovable for a public purpose.
The protection of cl.
(2) is attracted only if there is acquisition or requisitioning of the property for a public purpose i.e., for using the property for some purpose which would be beneficial to the public.
The right guaranteed by article 31(2) is that property shall not be compulsorily acquired or requisitioned for a public purpose save by authority of law which provides.
for compensation for the property so acquired or requisitioned.
The expression "acquired or requisitioned . . for a public purpose means acquired or requisitioned for being appropriated to or used for a public purpose.
But the law which provides for extinction of the ownership and creation of an interest in the Corporation for the purpose of disposal of the carcass is not a law for acquisition of property for a public purpose: its primary purpose is destruction of the carcass in the public interest, and not utilisation of the property for a public purpose.
The case would not, therefore, fall within the terms of article 31 (2).
In any case the statute is squarely protected by cl.
(5)(b)(ii) of article 31 and on that account the owner is not entitled to compensation for loss of his property.
The words of article 31 (5) (b) (ii) are express and specific.
Nothing in cl.
(2) shall affect the provisions of any law which the State may hereafter make for the promotion of public health or the prevention of danger to life or property.
If a law is enacted directly for the promotion of public health or for ,the prevention of danger to life or property, then, notwithstanding that it may incidentally (1) (2) 407 fall within the terms of cl.
(2), no compensation is payable.
Where the State acquires property and seeks to utilise it for promotion of public health or prevention of danger to life or property, the State is liable to pay compensation.
But a law which directly and immediately seeks W promote public health or to prevent danger to life or property falls within the exemption under cl.
(5)(b)(ii) even if thereby the interest of the owner in perry is extinguished and interest in that property is vested in the State for destruction of that property.
Reliance was placed by counsel for the respondents upon a recent judgment of this Court in The Deputy Commissioner and Collector, Kamrup and Ors.
vs Durganath Sarma(1).
In this case the Government of Assam took possession of lands belonging to a citizen.
Thereafter the Assam Acquisition of Land for Flood Control and Prevention of Erosion Ordinance 2 of 1955 was promulgated by the Governor which authorised the State Government to acquire lands for works or other development measures in connection with flood control or prevention of erosion.
The Ordinance was with the assent of the President replaced by the Assam Acquisition of Land for Flood Control and Prevention of Erosion Act 6 of 1955.
Under the Act the owner of the land was not entitled to the market value of the land at the date of acquisition.
The owner of the land moved a petition in the High Court Assam for a declaration that the Act 6 of 1955 was invalid, and for an order directing the State Government to forbear from giving effect to the notices of acquisition of his land issued thereunder.
Act 6 of 1955 was enacted before the Constitution (Fourth Amendment) Act, 1955, which Came into force on April 29, 1955.
The High Court held, inter alia, that Act 6 of 1955 was a law for acquisition of property and was not protected by cl.
(5)(b)(ii) of article 31.
This Court confirmed the order passed by the High Court.
It was observed by this Court (p. 402): "It is to be noticed that cl.
(5)(b)(ii) saved laws for the promotion of public health or the prevention of danger to life or property.
It did not save laws for the acquisition of property.
We are satisfied that cl.
(5) (b) (ii) was not intended to except laws for the acquition of property from the purview of el.
(2) . .A law for promotion of public health or for prevention of danger to life or property sometimes has to provide for destruction and impairment of value of private property and the taking of temporary possession of the property by the State.
It may be necessary to destroy contaminated food or to burn plague infested buildings for the promotion of public health, to pull down a building to prevent a fire from spreading and consuming other (1) ; 408 buildings in the locality, to demolish a building in a ruinous condition endangering the safety of its occupants and other persons in its vicinity.
The destruction and .the temporary talking of property for such purposes, though necessary for promoting public health or preventing danger to life or property, mounted to taking of property within cl.
But for cl.
(5)(b)(ii), a law authorising such a taking of property would have been invalid unless it provided for compensation.
Clause (5)(b)(ii) saved such laws from the operation of cl.
(2 ) and those laws were not invalid because they authorised such a taking without payment of compensation.
A law authorising the abatement of a public menace by destroying or taking temporary possession of private properties if the peril cannot be abated in some other way can be regarded as a law for promotion of public health or prevention of danger to life or property within the purview of cl.
(5)(b)(ii).
" Counsel for the second respondent, however, invited our attention to the following passage in the judgment of the Court: "Clause 5(b)(ii) will protect laws providing for requisitioning or temporary occupation of property strictly necessary for promotion of public health or prevention of danger to life or property.
The law may authorise the State to requisition the property temporarily for abating the public menace without payment of compensation if the menace cannot be abated in some other recognised way.", and contended that el.
(5)(b)(ii) only applies where there is "temporary occupation of property"; where there is deprivation of property with a view to destroy it, el.
(5) (b) (ii) has no application.
But evidently the expression is used in dealing with the claim to compensation for acquisition of immovable property.
Where possession of movable property is under the authority of law taken with a view to destroy it in the interest of the general public i.e., for prevention of grave danger to life or property, the guarantee of article 31(2) is not attracted.
The law enacted by the Legislature extinguishing the interest of the owner in the carcass and creating an interest in the Corporation being a law directly enacted for _prevention of grave danger to the health of the community fell within the terms of cl.
(5) (b) (ii) and no compensation was _payable in respect thereof, article 31(2) notwithstanding.
We may observe that this Court in Deputy Commissioner Kamrup 's case(1) _proceeded to observe that even though since the amendment by the Constitution (1) ; 409 (Fourth Amendment) Act, cls.
(1) & (2) of article 31 dealt with separate.
subject matters, since el.
(5) (b) (ii) of article 31 has not been amended, its connotation could not be deemed to have been altered.
If originally it was intended to be a restriction on the right to property as delineated by cls.
(1) and (2) of article 31, it continued to have the same operation.
In Deputy Commissioner, Kamrup 's case(1), however, the Court was not directly called upon to declare the precise inter relation between cl.
(5) (b) (ii) and 'el.
(2) as amended for the impugned Assam Act was enacted before the amendment of the Constitution by the Constitution (Fourth Amendment) Act.
It is sufficient for the purpose of this case to hold that a law declaring extinction of the right of the owner in movable property not with a view to use it for a public purpose but to destroy it for abating nuisance and preventing danger to public health and vesting it in the Corporation entrusted with power to take steps to maintain public health is not a law for acquisition of property for a public purpose.
In any event the law is not, because of the exemption contained in el.
(5)(b)(ii) of article 31 of the Constitution, invalid.
even if It does not provide for payment of compensation for deprivation of the right to property.
The owner of the carcass is, therefore, unable to sustain his plea that article 19(1)(f) or article 31(2) were infringed by the impugned provisions.
The claim of the first respondent who.
would, but for the law have been able to purchase carcasses from the second respondent does not require any elaborate discussion.
The first respondent is carrying on business as a skinner of carcasses and claims protection of its fundamental right under article 19(1)(g) of the Constitution.
Evidently it has no right in the carcass until it purchases the carcass.
Restriction upon the right of the owner to sell the carcass does not directly infringe the fundamental right of the purchaser, who, but for the restriction, may have been able to purchase it.
Assuming, however, that the imposition by law of the restriction upon the owner of the carcass involves also a restriction upon the right of the first respondent, we are of the view, having regard to the character of the legislation and its avowed object that it imposes reasonable restrictions upon the right to carry on occupation or business within the meaning of article 19 (6) of the Constitution.
The first respondent cannot claim the protection of article 31(2) of the Constitution, because until it purchases the carcasses from the owner it has no right in the .property, and it cannot set up a grievance for loss of property which it does not own.
(1) A.I.R. 968 S.C. 394.
CI/69 9 410 It was urged that the Corporation instead of disposing of the carcasses under its own supervision had given contracts to the rivals in business of the first respondent and the law which authorised the Corporation, by exercise of legislative authority, to destroy the business of the first respondent must be regarded as imposiag unreasonable restrictions upon the right of the first respondent to carry on business.
The Act, however, contains no provisions about the manner in which the Corporation shall dispose of the carcasses which may come into its possession; it leaves it to the Corporation to take adequate and effective steps for the purpose of disposal.
Whether by virtue of the contracts given by the Corporation to other persons who are claimed to be rivals in business of the first respondent unreasonable restrictions may be deemed to be placed upon their fundamental right is a matter on which no argument was advanced at any stage before the trial Court or the High Court, though it was strenuously urged before us.
Prima facie, the argument has no substance: in any case, it cannot affect the validity of the statute or the provisions which have been declared to be invalid by the High Court.
The facts which give rise to the two other appeals are the same and for reasons already stated the claim made by the respondents must be The appeals are allowed and the orders passed by the High Court set aside.
The petitions shall stand dismissed.
No order as to costs throughout.
V.P.S. Appeals allowed.
| The returned candidate 'at an election to the Gujarat Legislative Assembly held in February 1967 had taken his oath as prescribed by article 173 of the Constitution in the Gujarati version of the relevant form set out in the Third Schedule to the Constitution.
In the said version the term "Legislative Assembly" was translated as "Rajya Sabha".
In an election petition it was urged that the term "Raiya Sabha" was equivalent not to "Legislative Assembly" but to "Legislative Council", 'and there fore the oath was not taken by the returned candidate in the proper form and his election was liable to be set aside.
The High Court having decided against the election petitioner appeal against its judgment was filed in this Court.
HELD: (i) The word 'sabha ' means a gathering or a meeting or an assembly of persons for a definite purpose.
Giving the word 'sabha ' the said meaning in the word 'Raiya Sabha ' it would not be possible to hold that the oath was not in compliance with the form prescribed in article 173(a) of the Constitution.
No doubt by common parlance in many of the States in Northern India the expression 'Rajya Sabha ' has come to mean the Legislative Council of a State while the State Legislative Assembly is known as Rajya Vidhan Sabha.
But in the absence of any authoritative translation of the expression "State Legislative Assembly" in Gujarati the popular meaning of the expression could not give proper guidance.
The State of Gujarat has no Legislative Council of the State.
The Legislature consists of one house only, namely, the State Legislative.
Assembly.
There could therefore be no misapprehension either in the person taking the oath or in the Returning Officer when he was accepting the nomination paper with the oath in Gujarati form that the candidate who afterwards won the election was being nominated as a candidate to fill a seat in the Legislative Council of the State and not in the Legislative Assembly.
[630 D G] As the essential requirements of the oath given in the form in the Third Schedule were not deviated from in the Gujarati form used in this case it could not be held that the oath subscribed in this case was not in compliance with article 173 merely because of the popular meaning of the word "Rajya Sabha".
(ii) Non, compliance with the provisions of a statute or Constitution will not necessarily render a proceeding invalid if by considering its nature, its design and the consequences which follow from its non observance one is not led to the conclusion that the legislature or the Constitution makers intended that there should be no departure from the strict words used, [633 G H] 628 In the present case the essential requirement of article 173 read with Form VII A was that the person taking the oath or making the affirmation would bear true faith and allegiance to the Constitution and would uphold the sovereignty and integrity of India.
The words which precede this portion are merely descriptive of the person and of his nomination as a candidate.
It is reasonable to think that a mere misprint in the form of the oath or a mere inaccuracy in rendering the expression "Legislative Assembly" in Gujarati would not be fatal to the election of the candidate, if otherwise valid.
[634 A] Kamaraja Nadar vs Kunju Thevar, , Murarka Radhey Shyam Ram Kumar vs Roop Singh Rathore, ; ; Ch.
Subbarao vs Member, Election Tribunal, Hyderabad, ; ; State of U.P. vs Manbodhan Lal Srivastava; , and State if Punjab vs Sat Pal Dang and State of Punjab vs Dr. Bolder Prakash & Ors.
, ; , applied.
|
Appeals Nos.
347 to 350 of 1960.
Appeals by special leave from the judgment and order dated January 18, 1953, of the Incometax Appellate Tribunal, Calcutta Bench, in Incometax , Appeals Nos. 7062 7064 and C.P.T.A. No. 548 of 1951 52.
N.C. Chatterjee, A. V. Viswanatha Sastri and D.N. Mukherjee, for the appellants.
K.N. Rajagopal Sastri, and D. Gupta, for respondent.
July 17.
The Judgment of the Court.
was delivered by HIDAYATULLAH, J. These appeals with special leave, were filed by one Kanhaiyalal Lohia, who died during the pendency of the appeals, and who 841 is now represented by the executors appointed under his will.
By these appeals, which are consolidated, the appellants question an order dated January 8, 1953, of the Income tax Appellate Tribunal (Calcutta Bench) in appeals filed by the Department against the order of the Appellate Assistant Commissioner.
The Tribunal reversed the order of the Appellate Assistant Commissioner and restored that of the Income tax Officer.
Kanbaiyalal Lohia made petitions under section 66 (1) to the Tribunal, setting out a number of questions of which the following was I referred to the High Court : "Whether in the cirumstances of this case where the Income tax Officer, District III (2), separately assessed the business run in the name of Brijlal Nandkishore as belonging to a partnership firm consisting of Brijlal and Nandkishore, the Income tax Officer, Non Companies E. P. T., District can assess the income from the same business in the hands of the assessee ?" This question was answered against him.
Kanhaiyalal Lohia also applied under section 66 (2) to the High Court of Calcutta for reference of the other questions, but failed.
No appeal has been filed by him against the order of the High Court refusing to direct the tribunal to state a case or against the decision on the question referred, and the present appeals have been filed against the decision of the Tribunal.
At the hearing of these appeals, we asked counsel for the appellants how, in view of the recent decisions of this Court in Chandi Prasad Chokhani vs State of Bihar (1) and Indian Aluminium Co. Ltd. vs Commissioner of Income tax (2), these appeals were maintainable, if the two decisions of the High Court had become final.
Mr. A. V. Viswanatha Sastri relied upon the decisions in (1) ; (2) Civil Appeal No. 176 of 1959 decided on April 24, 1961.
842 Dhakeswari Cotton Mills Ltd. vs Commissioner of Income tax West Bengal (1) and Sardar Baldev Singh vs Commissioner of Income tax Delhi and Ajmer (2), and pointed out that in those cases, appeals were entertained from the Tribunal 's order, though he conceded with his usual frankness that special circumstances must exist.
He contended that this was a case in which such circumstances existed.
We shall deal with the appeals from that point of view, because unless special circumstances exist, the appeals must be regarded as not competent, in view of our recent rulings above mentioned.
Kanhaiyalal Lohia, who was a prosperous dealer in jute, had his head office in Calcutta.
He had no issue, and his family consisted of his wife,, his brother, Brijlal Lohia and Brijlal 's son, Nandkishore Lohia.
The properties of Kanhaiyalal Lohia were self acquired, and he was always assessed as an individual.
He maintained accounts according to the Ramaswami year.
In his return for the account year, April 14, 1943 to April 1, 1944 corresponding to the assessment year, 1944 45), he indicated that he had closed down in the middle of 1943 his purchasing centres in East Bengal, which stood in the name of Nandkishore, and that, he had gifted to his brother Rs. 5,1 1, 1. 01 on July.
12, 1943, and to his nephew, Rs. 2,50,000 on September 30, 1943.
He showed income of his East Bengal business only up to the closure of that business.
Brijlal and Nandkishore entered into partnership between themselves, and started a business under the name and style of "Brijlal Nandkishore.
" They took over the purchasing centres in East Bengal.
They opened accounts in banks in the name of "Brijlal Nandkishore", and became members of the Baled Jute Association, and the Jute ,Baler,sAssociation, and traded in their own names.
A deed of partnership between them was also executed on August 5, 1953.
The business of Kanhaiyalal Lohia and of "Brijlal Nandkishore (1) ; (2) ; 843 was within the jurisdiction of the same Incometax Officer.
In the assessment of the partnership firm, notices were issued to the partnership both under section 22(2) and section 34, and the partner ship also applied for registration under section 26A of the Income tax Act,which was granted.
The partnership was also assessed for the years, 1945 46 and 1946 47.
The assessment of Kanhaiyalal Lohia was completed by the Income tax Officer, Non Companies Income Tax cum Excess Profits Tax District, and during the assessment for the year, 1945 46 a notice was issued under section 22(4) of the Income Tax Act on August 24, 1949, calling for accounts of the head office at Calcutta and also the branches including the business being carried on as "Brijlal Nandkishore", Kanhaiylal Lohia proved, the above facts, producing the books of account, bank statements, registration certificate of "Brijlal Nandkhore" and evidence showing the membership of "Brijlal Nandkishore" of the two Associations.
He also produced letters from four persons including one Sri A.L. Mazumdar who was questioned by the Income tax Officer without notice to ' Kanhaiyalal Lohia and whose statement was also recorded.
Kanhaiyalal Lohia objected to this procedure, but the Income tax Officer, it is alleged, paid no heed to his protests, and on.
March 31, 1950 the assessment was completed, and the income of the branches under the direct control of "Brijlal Nandkishore" was pooled with the income of Kanhaiyalal Lohia.
The Income tax Officer held that the gifts were not bonafide, and were colourable transactions.
He relied upon the statement of Sri A. L. Mazumdar, which was recorded when Kanhaiyalal Lohia was not present.
Against the assessment, Kanhaiyalal Lohia, appealed to the Appellate Assistant Commissioner before whom two more letters from leading businessmen were filed.
The Appellate Assistant Commissioner accepted the letters which were filed, and held that the gifts were proved and were bona fide and directed the exclusion 844 of the income of "Brijlal Nand kishore" from the assessment of Kanhaiyalal Lohia.
The order of the Appellate Assistant Commissioner was pronounced on December 27, 1951.
The Department appealed to the Appellate Income tax Tribunal, Calcutta Bench.
The Tribunal disagreed with the Appellate Assistant Commissioner, all held on January 8, 1953, that the gifts were not proved by the assessee by unimpeachable evidence, and that the income of "Brijilal Nandkishore" was rightly included in the assessment.
As stated already,.
applications under section 66 (1) and section 66 (2) were made to the Tribunal and the High Court respectively.
The Tribunal referred one question, but declinedto refer the.
other quest ions.
The High Court then moved under section 66 (2) but without success.
The High Court agreed with the Tribunal and answered the question which was referred, against Kanhaiyalal Lohia.
Before the High Court, Kanhaiyalal 's counsel, Dr. Pal, admitted that he.
could not persuade the Court to answer the referred question against the, Department, and it appears that it was conceded by the Department before the High Court that the assessment of "Brijlal Nandkishore" would be cancelled.
Kanhaiyalal Lohia then filed the present appeals against the order of the Tribunal dated January 8, 1953.
This Court has pointed out in Chandi Prasad, Chokhani vs State of Bihar(1) and Indian Aluminium Co., Ltd. vs Commissioner of Income tax (2) that the two cases in which this Court interfered with appellate orders of a Tribunal and relied upon before us, were of a special kind.
In Dhakheshwari Cotton Mills case(3) there was a breach of the principle, of natural justice, and that was held sufficient to entitle an aggrieved party to come to this Court against the appellate order of the Tribunal under article 136.
In (1) ; (2)Civil Appeal No. 176 of 1959 decided on April 24, 1961.
(3) ; 845 Baldev Singh 's case (1) this Court entertained an appeal against the appellate order of the Tribunal, because limitation to take other remedies was IS barred without an fault of the assessee concerned.
The ratio in each of these cases is that a circumstance which cannot be corrected by the procedure of a stated question of law on a statement of the case may afford a ground for invoking the jurisdiction of Court under article 136.
That ratio does not apply, where a question of law can be raised, and is capable of being answered by the High Court or on appeal by this Court.
An appeal against an order of the High Court deciding a question referred or against a refusal to call for a statement can be brought before this Court under section 66A, if the High Court decides the question referred and under article 136, if the High Court refuses to call for a statement.
In the present case, the order of the High Court on the question referred was not brought before this Court by the ordinary, mode indicated in the Indian Income tax Act, presumably because of the concession of counsel that he could not claim that the question be answered in favour of the assessee and the attitude of the Department that the assessment of "Brijlal Nandkishore" would be cancelled.
The order refusing to call for a statement on questions other than the one referred is also not questioned before us.
The attempt is to bring this case within the ratio of Dhakeshwari Cotton Mills ' case(2),and in support, it has been pointed out mainly that the examination of Sri A. L. Mazumdar in the absence of Kanhaiyalal Lohia was against the principles of natural justice.
The statement of Sri A. L. Mazumdar was taken on March 28, 1950, and it is recorded as follows : "Mr. Mazumdar is questioned by me as to what be knows regarding the alleged gift as recorded in the books of Kanhaiyalal Lohia in favour of Brijlal and Nand Kishore.
He says (1) ; (2) ; 846 that I don 't remember things very distinctly but 1 can say that the gifts to Brij Lal or Nand.
Kishore were not made in my presence as alleged.
Mr. Kanhaiyalal Lohia used to tell me that his brother and nephew are idling away their time hence I shall give them a. gift and make them work by that money.
The partnership deed was most probably drawn up by me.
The gift, was reported to have been made to Brij Lal and Nand Kishore before I should have taken up the drafting of the deed.
Kanhaiyalal told me several times that he wanted to separate his brother and nephew.
When the firm was started then Brijlal came to me and asked me if father and son 's partnership deed could be drawn up.
I don 't know anything else than this in the matter.
" The lie given by Sri Mazumdar to the statement of Kanhaiyalal Lohia has affect his credibility.
The order sheet shows that Mr. B. Sen Gupta took a copy of Sri Mazumdar 's statement and expressed a desire to cross examine him; but when the opportunity was given, he failed to appear.
It is impossible to think in these circumstances that there has been any breach of the principles of natural justice.
The order sheets of March 29 and 30, 1950 clearly record the absence of Mr. B. Sen Gupta.
In our opinion, there is no breach of the principles of natural justice in this case to entitle the appellants to invoke the ruling in Dhakeshwari Cotton Mills case It was contended before us that the finding of the Tribunal was perverse, and that on an examination of the total circumstances, it is quite clear that the gifts were not only real, but were acted upon.
This was a matter within the jurisdiction of (1) ; 847 the Appellate Tribunal as the final fact finding authority.
The Tribunal acted within its powers in refusing to accept the evidence tendered, and looking at the circumstances of the. case, we cannot say that the finding has been perversely reached.
For a number of years, the brother and the nephew were supported by Kanhaiyalal Lohia, and it does not appear that a gift of even a small sum was made to them to put them on their legs.
Suddenly in the year 1943, 'Kanhaiyalal Lohia made up ' his mind to put them in business with a gift of the order of Rs. 7,60,000 odd.
For this purpose, he had to overdraw his accounts with the Bank and to pay interest to the Bank.
It does not appear why he felt that the establishment of his brother and nephew in business should be made on such a grand scale, which involved him in debt.
This circumstance, taken with the fact that Mr. Mazumdar stated that he had always complained that they were good for nothing and were idlers, makes the transactions auspicious.
It was presumably done with a view to reduce the assessable profits in the hands of Kanhaiyalal Lohia, and on the evidence, the Tribunal was entitled to hold, as it did, that this was a sham transaction.
In our opinion, no special circumstances exist, on which the appellants can claim to come to this Court against the decision of the Tribunal, by passing the decision of the of High Court on the question referred and there fusal 'the High Court to call for a statement of the case from the Tribunal on questions which the Tribunal refused to refer to the High Court.
The appeals are, therefore, within the rulings of this Court in Chandi Prasad Chokhani vs State of Bihar (1) and Indian Aluminium Co., Ltd. vs Commissioner of Income tax(2), and must be regarded as incompetent.
The appeals are dismissed with costs, one set.
Appeal dismissed.
| The appellant supported his brother and his nephew for a number of years as they were doing no work.
In the year 1943 he made a gift of Rs. 7,60,000 odd to them though he had to overdraw his account with the Bank and to pay interest or the amount borrowed to raise the money.
He also made a transfer of some of his businesses to them.
His explanation was that these gifts were made to set these two persons up in business.
The Income tax Officer held that the gifts were riot bonafide and he assessed, the income of all the businesses in the hands of the appellant.
The appellant had produced letters from some businessmen in support of his case.
One such person was one M. who was examined by the Income tax Officer without notice to the appellant.
Later, however, a copy of the statement of M. was taken by the appellant 's counsel and at his request M. was summoned for cross examination but on the date fixed none appeared for the appellant who was also absent.
The appellant made a petition under section 66(1) of the Income tax Act to the Tribunal asking that a number of questions of law be referred to the High Court.
Only one question was referred by the Tribunal which declined to refer the other questions.
In the High Court the question referred by the Tribunal was answered against the appellant on the admission of his counsel.
The High Court was moved also under section 66(2) to order a reference of the remaining questions but the High Court rejected the application.
The appellant did not appeal against these two orders of the High Court and instead filed appeals against the orders of the Tribunal.
The appellant relied upon two cases of this Court viz. Dhakeshwari Colton Hills ' Case and Baldev Singh 's case and contended that tile appeal to this court was competent.
Held, that the appeals were incompetent in view of the decisions of this Court in Chandi Prasad Chokhani vs State of Bihar and The Indian Aluminium Co., Ltd. 840 Held.
further, that an appeal against an order of the High Court deciding a question referred or against a refusal to call for a statement can only be brought before the Supreme Court under section 66(A) of the Income tax Act, if the High Court decides the question referred, and under article 136 of the Constitution if the High Court refuses to call for a statement.
There can be no direct appeal to the Supreme Court by passing the decisions of the High Court.
Held,.
also, that there was neither any breach of the principles of natural justice in this case nor the existence of circumstances as existed in Baldev Singh 's case to justify the appeal.
Held, that where a witness has been examined by the Income tax Officer behind the back of the assessee but a copy of the statement of the witness is made available, to the assessee and an opportunity is given to him to cross examine the witness, thereis no breach of the principle of natural justice.
ChandiPrasad Chokhani vs State of Bihar.
(1962) 2 S.C.R. 276and Indian Aluminium Co., Ltd., vs Commissioner of Income tax.
(Civil Appeal No. 176 of 1959, decided on April 24, 1961) followed.
Dhakeshwari Cotton Mills Ltd. vs Commissioner of Income.
tax ; and Sardar Baldev Singh vs Commissioner of Income tax, Delhi and Ajmer.
; , explained. ,
|
Appeal No. 154 of 1953.
Appeal by Special Leave against the Judgment and Decree dated the 8th January, 1953, of the High Court of Judicature at Bombay in Appeal No. 117 of 1952 arising out of Suit No. 235 of 1949 in the said High Court.
M. C. Setalvad, Attorney General for India, and C. K. Daphtary, Solicitor General for India, (Porus A. Mehta, with them) for the appellants.
N.A. Palkhivala and section P. Varma for respondent No. 1. 1954.
May 14.
The Judgment of the Court was delivered by BHAGWATI J.
207 BHAGWATI J.
This appeal by special leave from a judgment of the High Court of Judicature at Bombay in Appeal No. 117 of 1952 raises a short point as to the construction of clause 3 of the Requisitioned.
Land (Continuance of Powers) Ordinance, 1946.
The suit out of which this appeal arises was commenced by the first respondent against the appellants and the second respondent for delivery of vacant and peaceful possession of the three shops situated 'on the ground floor of the premises known as "Irani Manzil.
" The first respondent was the owner of the said immovable property which had been requisitioned on the 15th April, 1943, by the Collector of Bombay in exercise of the powers conferred upon him by, rule 75 A(1) of the Defence of India Rules read with the Notification of the Government, Defence Co ordination Department, No. 1336/OR/1/42 dated the 15th April, 1942.
The order of requisition was in the following terms: "Order No. M.S.C. 467/H Whereas it is necessary for securing the public safety and the efficient prosecution of the war to requisition the property specified in the schedule hereto appended. . 1, M.A. Faruqui, the Collector of Bombay, do hereby requisition the said property and direct that possession of the said property be delivered forthwith to the Food Controller, Bombay, subject to the following conditions: (1)The property shall be continued in requisition during the period of the present war and six 'months thereafter, or for such shorter period as may be specified by the Food Controller, Bombay. . . " The said premises were used for the purpose of housing the Government Grain Shop No. 176.
By a letter dated the 30th July, 1946/17th August, 1946, the Controller of Government Grain Shops, Bombay, wrote to the first respondent that as the validity, of the requisitioning order was to expire on the 30th September, 1946, the first respondent should allow the Department to remain as her tenants in respect of the premises.
The first respondent replied by her advocate 's letter dated the 27th August, 1946, 208 offering the tenancy to the Department on certain terms.
These terms were not accepted but the occupation of the premises continued even after the 30th September, 1946, and the first respondent complained about such occupation after the period of requisition of the said shops had come to anend and also complained that it was contemplated to transfer the said shops to a private party or concern without any reference to her in the matter.
By her advocate 's letter dated the 29th August, 1947, she gave to the Collector of Bombay a notice to vacate the said shops giving him two clear calendar months ' time and asking him to deliver over to her peaceful and vacant possession of the said shops.
The Controller of Government Grain Shops, Bombay, wrote to the first respondent on the 1st October, 1947, that the second respondent was being handed over the Government Grain Shop No. 176 and that she should give her consent to the electric connection to be carried out in the said shops by the second respondent.
The first respondent refused to giver her consent and protested against the contemplated action.
The Collector, of Bombay by his letter dated the 15th January, 1948, intimated to the first respondent that the requisitioning of the said shops was continued after the 30th September, 1946, by Act XVII of 1947 and as possession of the said shops had been handed over to the second respondent vacant possession of the same could not be given to the first respondent.
Further correspondence ensued between the first respondent 's attorneys and the Collector of Bombay in the course of which the Collector of Bombay admitted that the said shops had been sublet to the second respondent but contended that the maintenance of essential supplies was the purpose for which the premises in question were requisitioned and that as the second respondent continued to serve the same purpose the first respondent was not entitled to peaceful and vacant possession of the premises.
The first respondent therefore filed a suit on the original side of the High Court.
of Judicature at Bombay being Suit No. 235 of 1949 claiming vacant and peaceful possession 209 of the premises as also compensation for wrongful use and occupation thereof till delivery of possession was given over to her.
The appellants were impleaded as defendants Nos. 1 and 2 in the said suit and the second respondent was impleaded as the third defendant.
The suit was contested by the appellants.
The second respondent did not file any written statement nor did he contest the suit.
The first respondent contended that, the requisitioning order had expired, that the property was no longer under requisition and therefore the possession by the Government was wrongful.
She next contended that the order was made for a specific purpose and as that purpose no longer obtained the order was no longer operative.
She further contended that after August, 1947, the user of the property was not by the appropriate Government, viz., the Dominion of India, but was by the State Government.
She also contended that the requisitioning order had ceased to be operative by reason of Act IX of 1951.
The trial Judge, Mr. Justice Coyajee, upheld all these contentions of the first respondent and decreed the suit.
The appellants preferred an appeal against that decision and the Court of Appeal confirmed the decree passed by the trial.
Court on the short point as to whether clause 3 of Ordinance No. XIX of 1946 had the effect of continuing the requisitioning order.
It affirmed the conclusion of the trial Court that there was no further extension of the duration of the requisitioning order by the provisions of clause 3 of the Ordinance and declined to go into the other questions which had been mooted before the trial Court and which had been decided by the trial Court in favour of the first respondent.
The appellants not being satisfied with that judgment applied for leave to appeal to the Supreme Court, but the High Court rejected that application.
The appellants thereupon applied for and obtained special leave under article 136 of the Constitution.
It is common ground that the Defence of India Act, 1939 (XXXV of 1939), and the rules made thereunder 27 210 were to expire on the 30th September, 1946.
Various immoveable properties had been requisitioned in exercise of the powers conferred by sub rule I of rule 75A of Defence of India Rules and all these requisitioning orders would have come to an end and the immoveable properties released from requisition on the, expiration of the Defence of India Act and the rules made thereunder.
These requisitions had to be continued and an emergency arose which made it necessary to provide for the continuation of certain powers theretofore exercisable under the said Act and the said rules and the Governor General in exercise of the powers conferred by section 72 of the Government of India Act promulgated on the 26th September, 1946, an Ordinance being Ordinance No. XIX of 1946, the relevant provisions of which may be set out hereunder "ORDINANCE NO.
XIX OF 1946.
An Ordinance to provide for the continuance of certain emergency powers in relation to requisitioned land. .
Whereas an emergency has arisen which makes it necessary to provide, in relation to land which, when the Defence of India Act, 1939 (XXXV of 1939), expires, is subject to any requisition effected under rules made under that Act, for the continuance of ' certain powers theretofore exercisable under the said Act or the said rules. . . the Governor General is pleased to make and promulgate the following Ordinance:. . . . 2. DEFINITIONS. . . . (3) " Requisitioned land " means immoveable property which, when the Defence of India Act, 1939 (XXXV of 1939), expires is subject to any requisition effected under the rules made under this Act. . Seen.
Continuance of requisitions Notwithstanding the expiration of the Defence of India Act, 1939 (XXXV.
of 1939), and the rules made thereunder, all requisitioned lands shall continue to be subject to requisition until the expiry of this Ordinance and the appropriate Government may use or deal with any requisitioned land in such manner a& may appear to it to be expedient," 211 It is clear from the preamble as also clause 3 of the Ordinance that the occasion for the enactment of the Ordinance was the impending expiration of the Defence of India Act, 1939, and the rules made thereunder.
All the requisition orders which had been made under the Act and the rules would have ceased to be operative and come to an end with the expiration of the Act and the rules and the immovable properties which had been requisitioned thereunder would have been released from such requisition.
It was in view of that emergency that the Ordinance came to be promulgated and the obvious object of the enactment was to provide for the continuance of the powers exercisable under the Act and the rules and to continue the requisitions of immoveable properties which had been made thereunder.
It was therefore argued that those requisition orders which would cease to be operative and come to an end with the expiration of the Act and the rules were the only orders which were intended to be continued by virtue of clause 3 of the Ordinance and clause 3 would accordingly cover only such requisition orders as would have.
ceased to be operative and come to an end with the expiration of the Act and the rules and not those orders which by reason of their inherent weakness such as the limitation of the period of duration expire ipso facto on the date of the expiration of the Act and the rules.
The latter category of orders would have ceased to be operative and come to an end by reason of the limitation placed on the period of duration within the terms of the orders themselves and their expiration would not have depended upon the expiration of the Act and the rules and were therefore not touched by clause 3 of the Ordinance.
That this was the true construction of clause 3 of the Ordinance was further sought to be supported by the non obstante clause appearing therein, viz., "Notwithstanding the expiration of the Defence of India Act, 1939 (XXXV of 1939), and the rules made thereunder.
" The non obstante clause was invoked in support of the submission that those orders which would have ceased to be operative and come to an end with the expiration of the Act and the rules were the only orders which were intended to be, continued under clause 3 of the Ordinance.
212 There is considerable force in the argument and it found favour with the trial Court as well as the Court of appeal.
It was recognised that but for the non obstante clause the plain wording of the Ordinance was capable of covering the order in dispute.
The preamble in so far as it could be drawn upon for the purpose showed that the Ordinance was being enacted to provide for the continuation of certain powers in relation to land which was subject to any requisition effected under the Act and the rules.
The definition of requisitioned lands contained in clause 2(3) also covered immoveable property which when the Defence of India Act, 1939, expired was subject to any requisition effected under the Act and the rules.
Clause 3 of the Ordinance covered all requisitioned lands which having regard to the definition above mentioned covered immovable properties which when the Defence of India Act, 1939, expired were subject to any requisition effected under the Act and the rules and such requisitioned lands were to continue to be subject to requisition until the expiry of the Ordinance.
On a plain and grammatical construction of these provisions it was obvious that once you had an immovable property which when the Defence of India Act expired, that is on the 30th September, 1946, was subject to any requisition effected under the Act and the rules, that immovable property continued to be subject to requisition until the expiry of the Ordinance, no matter whether the requisition order to which the immovable property was subject was of a limited duration or an indefinite duration.
The only test was whether the immovable property in question was on the 30th September, 1946, subject to any requisition effected under the Act and the rules.
This construction was sought to be negatived by having resort to the non obstante clause which, it was submitted, restricted the operation of clause 3 of the Ordinance only to those cases where the requisition order would have ceased to be operative or come to an end merely by reason of the expiration of the Act and the rules.
If there was in existence on the 30th September, 1946, any requisition order which would have ceased to be operative or come to an end by reason of the fact that it was limited in duration and 213 was to expire on the 30th September, 1946, the non obstante clause saved that from the operation of clause 3 of the Ordinance and such requisition order could not continue in operation until the expiry of the Ordinance as therein provided.
Such orders could not have been in the contemplation of the legislative authority because they would cease to be operative and come to an end by reason of the inherent weakness of the orders and not by reason of the fact that the Act and the rules were to expire on the 30th September, 1946, and it would not be at all necessary to make any provision for the continuance of such requisitions, because they could never have been intended to be continued.
While recognising the force of this argument it is however necessary to observe that although ordinarily there should be a close approximation between the non obstante clause and the operative part of the section, the non obstante clause need not necessarily and always be co extensive with the operative part, so as to have the effect of cutting down the clear terms of an enactment.
If the words of the enactment are clear and are capable of only one interpretation on a plain and grammatical construction of the words thereof, a non obstante clause cannot out down that construction and restrict the scope of its operation.
In such cases the non obstante clause has to be read as clarifying the whole position and must be understood to have been incorporated in the enactment by the Legislature by way of abundant 'caution and not by way of limiting the ambit and scope of the operative part of the enactment.
Whatever may have been the presumed or the expressed intention of the legislating authority when enacting the Ordinance No. XIX of 1946, the words of clause 3 read along with the definition of requisitioned land contained in clause 2(3) of the Ordinance are quite clear and it would not be within the province of the Courts to speculate as to what was intended to be covered by clause 3 of the Ordinance when the only interpretation which could be put upon the terms thereof is that all requisitioned lands, that is, all immoveable properties which when the Defence of India Act, 1939, expired were subject to any requisition effected under the Act and the rules were to continue 214 to be subject to requisition until the expiry of the Ordinance.
No doubt measures which affect the liberty of the subject and his rights to property have got to be strictly construed.
But in spite of such strict construc tion to be put upon the provisions of this Ordinance one cannot get away from the fact that the express provisions of clause 3 of the Ordinance, covered all cases of immoveable properties which on the 30th September, 1946, were subject to any requisition effected under the Act and the rules, whether the requisition was effected for a limited duration or for an indefinite period.
Even those requisition orders, which by accidentor design were to expire on the 30th Septem ber, 1946, would come to an end not only because the fixed term expired but also because the Act and the Rules expired on that date and were therefore covered by_ clause 3 read along with the definition in clause 2(3) of the Ordinance and were by the clear terms thereof continued until the expiry of the Ordinance.
We are not here concerned with the equities of individual cases.
There may be cases in which the Ordinance worked to the prejudice of the owner of the requisitioned land.
In such cases the necessary relief could be granted by the appropriate Government by releasing the immoveable property from requisition.
But the Courts would be helpless in the matter.
Once the conclusion was reached that a particular measure was lawfully enacted by a legislative authority covering the particular case in question the hands of the Court would be tied and the legislative measure would have to be given its legitimate effect, unless mala fides or abuse of power were alleged.
We have therefore come to the conclusion that both the trial Court and the Court of appeal were in error when they reached the conclusion that clause 3 of the Ordinance had not the effect of continuing the requisition order in question.
Mr. Palkhivala at the close of the arguments appealed to us that his client was a petty landlady and the immoveable property which she owned was of a small value and the result of an order of remand would be to put her to further harassment and costs.
He pointed out to us that he had particularly requested the Court of appeal not to decide the appeal merely on the short 215 point in regard to the construction of clause 3 of the Ordinance, but to decide it on all the points which had been canvassed before trial Court.
But the Court of appeal turned down his request and decided the appeal only on that point stating that it; was unnecessary to go into the other points which Mr. Palkhivala wanted to urge before it.
It is to be regretted that the Court of appeal did not respond to Mr. Palkhivala 's request, but we have not had the benefit of the judgment of the Court of appeal on those points which found favour with the trial Court and which were not considered by the Court of appeal and we cannot help remanding the matter to the Court of appeal with a direction that the appeal be disposed of on all the points which were dealt with by the trial Court.
It was unfortunate for the first respondent to be pitted against the appellants who considered that this was a test case and the matter had to be fought out in detail inasmuch as it affected a series of cases And the properties involved would be considerable as alleged by Mr. Seervai before the trial Court.
We are not concerned with the policy of the appellants in making test cases of this character.
The only thing that impresses us in this case is that the unfortunate first respondent has had to bear the brunt of the battle and has been worsted in this preliminary point which was found in her favour both by the trial Court and the Court of appeal.
We cannot make any order for costs in her favour.
But we think that the justice of the case requires that the appellants as well as the first respondent will bear and pay their own respective costs both here and in the Court of appeal.
We therefore allow the appeal, set aside the decree passed by the Court of appeal and remand the Appeal No. 117 of 1952 for hearing and final disposal by the Court of appeal on the other points which have been raised in the matter after hearing both the parties.
There will be no order as to costs here as well as in the Court of appeal.
Appeal allowed.
| The appellant originally joined the service of the State of Junagadh in 1934 and was after the merger of that State in Saurashtra confirmed in September, 1956 as an executive engineer in the service of the latter State.
Rule 3(i) of the Saurashtra Covenanting States Servants (Superannuation age) Rules 1955 provided : "A Govt.
servant shall, unless for special reasons otherwise directed by Govt.
retire from service on his completing 55 years of age.
" After the merger of Saurashtra in the bilingual State of Bombay the old Bombay Civil Service Rules were applied to Saurashtra area with effect from January 7, 1957.
On July 1, 1959 the Bombay Civil Service Rules, 1959 were promulgated.
Accord ing to r. 161 (c) (2) (ii) (1) the age of retirement for class 1 Engineers in the State Service was fixed at 55 years but it was further laid down that they "may be required by the Government to retire on reaching the age of 50 years, if they have attained to the rank of Superintending Engine.
" On the formation of the State of Gujarat the appellant 's 'services were transferred to that State but the Bombay Rules continued to apply.
Under the Bombay Rule aforesaid, namely, r. 161(c)(2)(ii)(1) the Government of the State of Gujarat retired the appellant at the age of about 53 years.
The appellant filed a writ petition in the High Court.
The High Court took into account section 115(7) of the but held that since the Saurashtra Rule 3(i) also empowered the 'State Government to retire the appellant at an age earlier than 55 years there was no variation of conditions of service to his disadvantage under the Bombay Rule and therefore the latter rule was not invalid for want of Presidential assent.
The High Court took the view that the expression "unless for special reasons otherwise directed by Government" in r. 3 (i) of the Saurashtra Rules meant that the Government could for special reasons retire a Government servant before he had attained the normal superannuation age of 55 years.
Against the High Court 's judgment dismissing his writ petition the appellant came by special leave, to this Court.
HELD : Rule 3(i) of the Saurashtra Rules, if construed of interpreted in the manner in which it had been done by the High Court, would bring it into direct conflict with Moti Ram Deka 's case as well as other cases decided by this Court.
In Moti Ram Deka 's case it was laid down that if any rule permitted the appropriate authorities to retire compul sorrily a civil servant without imposing a limitation in that behalf that such 245 civil servant should have put in a minimum period of service.
that rule would be invalid and the so called retirement ordered under the said rule would amount to removal of the civil servant within the meaning of article 311(2) of the Constitution.
The principle is that the rule relating to compulsory retirement of a Government servant must not only contain the outside limit of superannuation but there must also be a provision for a reasonably long period of qualified service which must be indicated with sufficient clarity.
For example if 55 years have been specified as the age of superannuation and if it is sought to retire the servant even before that period it should be provided in the rule that he could be retired after he has attained the age of 50 years or he has put in service for a period of 25 years.
[248 G 249 G] On the above principle rule 3 (i) of the Saurashtra Rules would have to be declared invalid if the expression "unless for special reasons otherwise directed by Government" is so construed as to give a power to order compulsory retirement even before attaining the 'age of 55 years.
A statutory rule, however, should be so interpreted as to make it valid and not invalid.
The correct interpretation of Rule 3(i) is that it gives power to the Government to allow a Government servant to remain in service even beyond the age of 55 years for special reasons; so construed the Rule would not be invalid and the appellant could not under it have been retired before be had attained the age of 55 years.
By applying the Bombay Rule his conditions of service were varied to his disadvantage because he could then be compulsorily retired as soon as he attained the age of 50 years.
As the previous approval of the Central Government was not obtained in accordance with the proviso to section 115(7) of the , the Bombay Rule could not be made applicable to the appellant.
[249 G 250 C] The appellant was thus entitled to remain in service until he attained the age of 55 years and the impugned order directing his retirement was invalid and ineffective.
[250 E F] Bholanath J. Thaker vs State of Saurashtra, A.I.R. (1954) S.C. 680, referred to.
Moti Ram Deka etc.
vs General Manager N.E.F. Railways Maligaon, Pandu etc.
; , State of Bombay vs Saubhag chand M. poshi; , , P. Balakotaiah vs Union of India; , , Dalip Singh vs State of Punjab, and Gurdev Singh Sidhu vs State of Punjab & Anr. ; , applied.
|
Appeal No. 212 of 1976.
(From the Judgment and Order dated 18 2 1975 of the Bombay High Court in Civil Revision Appln.
No. 741/74).
Soli J. Sorabji, P.H. Parekh, Miss Manju letly and M/s Dharia & D.D. Kapadia ' for the appellant.
B.K. Desai, S.S. Khanduja and Vijay Gandotra for the respondent.
P.H. Parekh for the Intervener.
The Judgment of the Court was delivered by UNTWALIA, J.
The appellants in this appeal by special leave had filed an application under section 41 of The Presidency Small Cause Courts Act, 1882 hereinafter re ferred to as the S.C.C. Act, against the respondent to compel him to quit and deliver up the possession of the premises in question.
The Small Cause Court made an order in favour ' of the appellants under section 43 of the S.C.C. Act.
On the filing of an application in revision by the respondent in the Bombay High Court, a learned single Judge of that Court has set aside the order of the Small Cause Court and dismissed the appellants ' application for eviction of the respondent.
Hence this appeal.
This Court does, as it ought to, act with restraint and is loathe to pass any harsh or unpalatable remark concerning the judgment of a High Court.
But sometimes constraint outweighs restraint and compels this Court in discharge of its duty to make some strong observations when it finds the judgment of the High Court running galore with gross and palpable mistakes of law almost amounting to judicial imbalance in the approach to the case.
We regret to say that this is one such case.
The appellants had allowed the respondents to occupy the shop premises in question which are situated outside Swa deshi Market, 405 Kalbadevi Road in Bombay under certain agreements of leave and licence which were renewed from time to time.
The last agreement was dated April 30, 1965.
Duration of the period of licence mentioned in this agreement was in the following terms: "(1) This agreement shall be deemed to have commenced from 1st May 1965 and shall remain in force for 11 months and will automatically come to an end on 31st March, 1966 on which day the Party of the Second Part shall remove himself from the premises of his own accord with all his arti cles and belongings and in event of the Party of the Second Part not clearing out of the premises on the said day viz., 31st March, 1966 the parties of the First Part shall be at liberty to remove the goods and articles of the party of the Second Part by themselves, by employment of labour at the cost and on account of the party of the Second Part and shall be entitled to stop and prevent the, Party of the Second Part from entering the premises and making use of the same by himself or his agent.
" The respondent did not vacate and remove himself from the premises as per the aforesaid term of the agreement.
He purported to claim to be a tenant of the premises and with that end in view his Advocate wrote a letter to appellant No. 1 on May 23, 1966 stating therein that the respondent was a tenant of the shop premises and had remitted the rent for the months of March and April, 1976.
A reply to the letter aforesaid of the respondent 's advocate was given on behalf of the appellants on June 14, 1966 refuting there in the respondent 's claim of being a tenant of the shop premises and asserting that he was a mere licensee.
It was also said that the said licence had automatically come to an end on March 31, 1966 and thereafter he was "no better than a trespasser".
Subsequent correspondence followed between the parties in which the appellants showed their readiness and willingness to accept money from the respondent by way of compensation for the use and occupation of the shop premises without prejudice to their rights and threatening to take legal action for getting the possession of the prem ises.
On the 10th July, 1967 the appellants filed an applica tion under section 41 of the S.C.C. Act.
The respondent contested that application, inter alia, on the ground that he was a tenant of the shop premises and was, therefore, protected against the eviction under The Bombay Rents, Hotel .and
Lodging House Rates Control Act, 1947 (for brevity, the Bombay Rent Act).
As per the requirement of section 42A of the S.C.C. Act, the question whether the respondent was a tenant of the appellants was tried as a preliminary issue by the Small Cause Court, Bombay.
A single Judge of that Court by his Judgment and order dated June 30, 1972 held against the respondent and found that he was not a tenant of the appellants in respect of the shop premises.
An appeal was taken by the respondent to a Bench of two judges of the Small Cause Court under section 406 42A(2) of the S.C.C. Act.
By a reasoned order dated Decem ber 11, 1972 the appellate Bench upheld the finding of the single Judge and summarily dismissed the appeal.
The re spondent filed a writ application in the High Court which after hearing the appellants was dismissed on July 3, 1973.
The Bombay Rent Act was amended by Maharashtra Act 17 of 1973.
By the amending Act, section 5(4A) and Section 15A were introduced in the parent Act to confer on the licensee, who had a subsisting agreement on February 1, 1973 the status and protection of a tenant under the Bombay Rent Act.
The respondent, thereafter, by an amendment of his written defence filed in the Small Cause Court proceeded to take the additional plea of protection under Maharashtra Act 17 of 1973.
Although the amendment was not fully and effec tively allowed by the Small Cause Court Judge, the parties had proceeded on the footing that such a plea became avail able to the respondent.
A learned single Judge of the Small Cause Court held that there was no subsisting agreement for licence on the 1st of February, 1973 as there was nothing on record to show that after 31st March, 1966 the leave and licence agreement between the parties was renewed or any fresh agreement was entered into.
In that view of the matter the Trial Court held that the respondent was not entitled to the protec tion of the Bombay Rent Act conferred on a licensee by Maharashtra Act 17 of 1973.
The Court allowed the appel lants ' application and made an order under section 43 of the S.C.C. Act directing the respondent to vacate and hand over peaceful possession of the premises to the appellants within one month from the date of the order i.e. the 11th Octo ber, 1974.
This order was not appealable.
Hence respondent filed a revision before the High Court.
A learned single Judge of the High Court by his judgment and order dated February 18, 1975 allowed the revision and, as stated above, set aside the order of the Small Cause Court and dismissed the appellants ' application for eviction of the respondent.
Mr. Sorabji, learned counsel for the appellants after drawing our attention to the relevant facts and the law involved in the case placed the judgment of the High Court to point out the glaring errors committed by it which were writ large on its face.
Mr. Desai appearing for the re spondent made a strenuous effect to persuade us to uphold the judgment of the High Court.
But in the circumstances of the case he could do no better than what has been said in the judgment.
Section 52 of The defines "licence" thus: "Where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a licence.
" 407 It was no longer open to debate that the respondent was a mere licensee of the shop premises of which the appellants were the licensors.
Section 62(c) of the Easements Act says: "A license is deemed to be revoked (c) where it has been granted for a limited period, or acquired on condition that it shall become void on the performance or non perform ance of a specified act, and the period expires, or the condition is fulfilled;" By efflux of time, therefore, the licence stood revoked on the 1st of April, 1966.
Yet the licen see under section 63 of the Easements Act was entitled to a reasonable time to leave the property and to remove his goods which he had been allowed to place on such property.
In spite of being asked by the appellants to do so the respondent did not pay any heed.
Hence the appellants took recourse to section 41 of the S.C.C. Act.
The remedy of section 41 is available only after the permission or the licence granted to the licensee to go on the property has been withdrawn or revoked.
If the occupant of the property is not able to show any sufficient cause then order for possession follows under section 43.
We now proceed to quote the relevant words of section 5(4A) of the Bombay Rent Act: ""Licensee", in respect of any premises or any part thereof, means the person who is in occupation of the premises or such part, as the case may be, under a subsisting agreement for licence given for a licence fee or charge . . " The inclusive clauses thereafter in the definition of the 'licensee ' do not include a licensee in occupation of the premises whose licence already come to an end and in such a case the occupant would not be a licensee under a subsisting agree ment.
We now proceed to read section 15A: "( 1 ) Notwithstanding anything contained elsewhere in this Act or anything contrary in any other law for the time being in force, or in any contract, where any person is on the 1st day of February 1973 in occupation of any premises, or any part thereof which is not less than a room, as a licensee, he shall on that date be deemed to have become, for the purposes of this Act, the tenant of the landlord, in respect of the premises or part thereof, in his occupation.
(2) . . . . . . . " It is thus clear beyond doubt that in order to get the advantage of section 15A of the Bombay Rent Act, the occu pant must be in occupation of the premises as a licensee as defined in section 5(4A) on the 1st of February, 1973.
If he be such a licensee, the non obstante clause 10 1104SCI/76 408 of section 15A(1) gives him the status and protection of a tenant in spite ' of there being anything to the contrary in any other law or in any contract.
In other words, even as against the express terms of the subsisting contract of licence the licensee would enjoy the benefits of section 15A.
But if he is not a licensee under a subsisting agree ment on the 1st of February, 1973, then he does not get the advantage of the amended provision of the Bombay Rent Act.
A person continuing in possession of the premises after termination, withdrawal or revocation of the licence contin ues to occupy it as a trespasser or as a person who has no semblance of any right to continue in occupation of the premises.
Such a person by no stretch of imagination can be called a licensee.
If therefore, the respondent was not a licensee under a subsisting agreement in occupation of the premises on the 1st of February, 1973 he could not take shelter under section 15A of, the Bombay Rent Act.
The Trial Judge found against him.
Apart from the position that this was essentially a question of fact and a finding on which could not be interfered with by the High Court in exercise of its revisional power under section 115 of the Code of Civil Procedure, the High Court has done so, as we shall point out, by committing such gross errors of law and fact that we were constrained in the beginning of our judgment, though very reluctantly, to make some strong observations against the judgment of the High Court.
While reciting the facts of the case the learned Judge of the High Court states a fact in paragraph three of the judgment that the respondent was ordered to deposit in Court Rs. 29/ per month which he did.
We are happy to note that the learned Judge has rightly not rested his judgment on this ground of deposit of rent by the respondent.
There was nothing to show in the records of this case that the appel lants had ever accepted any money either in or outside court from the respondent after 31st of March, 1966 by way of any rent of the licenced premises.
A person continuing in occu pation of such premises after revocation of the licence is still liable to pay compensation or damages for their use and occupation.
If at any time such compensation had been paid or accepted it could not undo the effect of the revoca tion of the licence.
In the seventh paragraph of the judgment the learned Judge says: "In my judgment the filing of the proceeding under section 41 without terminating the licence and/or the permission granted to the petitioner does not automatically put an end to the licence which the petitioner had to occupy the premises.
" There are two infirmities in the said observation.
Firstly, according to the appellants ' case the licence stood revoked and withdrawn and then they filed the application under section 41 of the S.C.C. Act.
Secondly, the filing of the application itself may in certain circumstances have the effect of putting an end to the licence if it was subsist ing on the date of its filing.
But in any event, one thing is certain, that cannot have ' the effect of reviving the licence as opined by the learned Judge in the subsequent part of his judgment.
409 In the tenth paragraph of his judgment the learned Judge says: "The respondents have not relied on any notice served on the petitioner to show that they would treat the petitioner as a trespasser from March 31, 1966.
The respondents did not even describe the petitioner as a trespasser in proceed ings.
It must be therefore presumed that the re spondents voluntarily or involuntarily permitted the petitioner to occupy the premises till they filed their application under section 41 of the Presidency Small Cause Courts Act.
" In the next paragraph the learned Judge quotes the words: "position not better than that of a trespasser" from the appellants ' letter written so the respondent.
The contradiction in the judgment is apparent.
It is difficult to understand the significance of the observation "that the respondents voluntarily or involuntarily permitted the petitioner to occupy the premises".
Voluntary permission may amount to a fresh licence.
The use of the expression involuntarily permitted ' is a contradiction in terms.
We are distressed to find the learned Judge repeatedly expressing a view in his judgment that the conduct on the part of the appellants in allow ing the respondent to continue in the occupation of the premises until the filing of the application under section 41 of the S.C.C. Act on July 10, 1967 amounted to a grant of fresh licence.
It is not necessary to extract all the strange passages from the judgment of the High Court.
But we shah do a few more.
In the fifteenth paragraph while refer ring to the expression "deemed to be revoked" occurring in section 62(c) of the Easements Act it is said that "it does not necessarily mean that it is in fact revoked.
" The mistake is so obvious in this observation that it does not require any elaboration.
In the same fifteenth paragraph occurs a passage which we exercised in vain to understand.
It runs thus: "The fact that the respondents did not take any steps till they filed the application under section 41 which also would not automatically make the petitioner 's occupation unlawful means that the respondents impliedly granted a licence to the petitioner to continue to occupy the premises.
" Later on the learned Judge has said in his judgment that by adopting the procedure of filing the application under section 41 of the S.C.C. Act, the appellants impliedly granted to the respondent "a right to continue to occupy the premises till he was evicted by an order under section 43.
" Such a novel proposition of law is beyond our comprehension.
If the filing of the application under section 41 gives a fight to the occupant of the premises to continue to occupy it, then how can the Court pass an order of eviction under Section 43 in derogation or destruction of such a right ? The resulting position is too anomalous and illogical to merit any detailed discussion.
In the eighteenth paragraph of the judgment the learned Judge persuaded himself to say: 410 "The fact that the earlier agreement of licence ex pired on March 31, 1966, does not necessarily mean that there was no subsisting agreement on the date on which the application under section 41 was made or on February 1, 1973.
" It is difficult to understand what further act, conduct or writing of the appellants led to the undoing of the effect of the expiration of the earlier agreement of licence and bring about any subsisting agreement either on the date of the application under section 41 or on February 1, 1973.
We admit that if any such agreement could be culled out, in writing or oral, expressly or impliedly, by the action or the conduct of the appellants the Court would have been happy to cull out such agreement and give protection to the licensee in consonance with the spirit of the Amending Act viz.
Maharashtra Act 17 of 1973.
But the Court cannot and should not cast the law to the winds or twist or stretch it to a breaking point amounting to almost an absurdity.
Our observation is amply demonstrated by the following passage in the judgment of the High Court.
"Relying on the amendment of the Bombay Rent Act the respondents no doubt had withdrawn their permission under the agreements but by filing the proceedings under section 41 they permitted the petitioner to continue as the licensee as stated above; and this itself is a different kind of agreement of licence as defined under section 52 of the Easement Act.
" The learned Judge also seems to be making a difference between the filing of a suit against a licensee whose li cence has been terminated treating him as a trespasser and an application under section 41 of the S.C.C. Act.
For the purpose of the point at issue the distinction is more illu sory than real.
Two remedies, previously, were available to the licensor.
He could avail the one or the other.
The scope of the trial, disposal and further remedies in the two proceedings were different.
But it is wholly wrong to say that if a licensor filed an application under section 41 of the S.C.C. Act instead of filing a regular civil suit by implication treated the occupant of the premises against whom the S.C.C. application was filed as a subsisting.licen see.
In our opinion the judgment of the High Court is wholly wrong and suffers from serious infirmities of law and facts.
We accordingly allow this appeal, set aside the judgment and order of the High Court and restore that of the Small Cause Court.
The respondent must pay the costs to the appellants in this Court as also in the High Court.
P.H.P. Appeal allowed.
| Respondent was a welder in the Civilian Defence Forces.
On his services being terminated, without stating any rea son, he filed a suit for damages for illegal termination on the basis that he would have continued in service upto the age of 60 instead of being thrown out at the age of 41.
The trial Court gave a decree for damages which was affirmed by the High Court on the ground.
that the doctrine of post held during the pleasure of the President, contained in article 310, does not authorise the termination without complying with the procedure prescribed by the Central Civil Service 's (Classification, Control and Appeal) Rules, 1965, framed under article 309.
Allowing the appeal to this Court, HELD: (1) The Rules deal principally with the procedure for disciplinary proceedings and penalties and appeals and reviews against orders passed under the rules.
They are applicable if disciplinary proceedings had been taken against the respondent, but they do not make disciplinary proceedings incumbent or obligatory whenever the services of a person are terminated.
In the present case there were no disciplinary proceedings against the respondent.
[92 D E] (2) The mere termination of the service.
by an apparent ly innocent order, of a Government servant in permanent service, in the sense that he is entitled to remain in service until he reaches the age of retirement, could be deemed, in a given case, to be a punishment.
But, in that event, there had to be a finding on the rule or order under which the respondent was entitled to continue in service until he reached the age of 60.
There is no reference to any such rule and there was no finding that any punishment was imposed upon him or that his services were terminated as a measure of punishment for any wrong done by him or for incompetence.
[94 C; 93 G] P.L. Dhingra vs Union of India ; @ 47 referred to.
(3) Even assuming that the respondent was constructive ly punished, there is no legal obligation to apply the Rules.
The legal obligation to apply them to every case of punishment, flows from the provisions of article 311 and is confined to holders of posts covered by article 311.
But the provisions of article 311 do not apply to the respondent since they do not apply to the holder of a post connected with defence.
[94 E] L.R. Khurana vs Union of India ; followed.
(4) Terefore, when no disciplinary proceedings are instituted, the Rules will not at all apply, and there is no other rule dealing with the conditions under which the service, such as that of the respondent.
may be terminated.
Since there was no violation of any rule no question of a conflict between a rule framed under article 309 and the doc trine of pleasure contained in article 310, which applies to all Government servants including those in the services connected with defence, arises in the present case.
[94 G] 88 (5) The High Court in dealing with the question consid ered the view of a Divisional Bench of this Court in two cases, merely quoted the views expressed by larger Benches of this Court, and then observed that these were insuffi cient for deciding the point before it.
The High Court did not act correctly in thus skirting the views expressed by larger Benches of this Court.
The proper course for the High Court was to try to find out and follow the opinions expressed by the larger Benches in preference to those expressed by smaller Benches.
This practice is followed even by this Court and has crystallized into a rule of law.
If, however, the High Court was of opinion that the views expressed by larger Benches of this Court were not applica ble to the facts of the present case it should have said so, giving reasons in support.
[92 A C]
|
Civil Appeal Nos.
2084 2085/74.
Appeals by Special Leave from the Judgment and Order dated 10/11/10/1974 of the Bombay High Court in First Appeal No. 160 and 173 of 1966.
U. R. Lalit, V. N. Ganpule and Mrs. V. D. Khanna for the appellant.
B. D. Bal, P. H. Parekh and M. Mudgal for the Respondent.
The Judgment of the Court was delivered by DESAI, J.
These two appeals by special leave arise from a suit filed by the respondents plaintiffs for recovering possession of land bearing Survey Nos.
487/1 to 487/6 situated at Shirwal Peta Khandala from the appellant defendant.
During the pendency of this suit a portion of the land in dispute was acquired under the Land Acquisition Act and as both the plaintiffs and the defendant laid a claim to compensation, a reference was made under section 30 of the Land Acquisition Act for determining the eligibility for the amount of compensation.
The trial Court decreed the plaintiffs ' suit and First Appeal No. 160 of 1966 was preferred by the defendant to the High Court of 958 Bombay.
Following the decision of the trial Court, the reference under section 30 of the Land Acquisition Act was answered in favour of the plaintiffs respondents and the defendant preferred First Appeal No. 173 of 1966 to the High Court.
Both the appeals were heard together and by its judgment dated 10/11 October, 1974 a Division Bench of the High Court dismissed both the appeals with costs.
Thereupon the appellant preferred the present two appeals.
As both the appeals arise from a common judgment, they were heard together and are being disposed of by this common judgment.
Facts necessary for appreciating the point of law canvassed in these appeals lie within a narrow compass.
One Dattatraya Govind Kulkarni, husband of plaintiff No. 1 and father of plaintiffs 2 to 6 had borrowed a Tagai loan of Rs. 12,000/ by making an application Exhibit 129 accompanied by prescribed form, Ext. 128 on 7th February, 1949.
The loan was borrowed for constructing wells in Survey Nos. 167 and 170 and he offered as security the lands bearing Survey Nos. 165, 166, 167, 170 and 172.
In the application Ext.
129 that accompanied the prescribed form it was stated that wells have to be sunk to bring barren land under cultivation.
In other words, the loan was for improvement of the land.
The loan was advanced and the borrower failed to repay the loan as per the stipulations.
A revenue recovery proceeding was commenced and as by the sale of the land offered as security the Government could not reimburse itself the total amount outstanding, a proclamation of sale was issued and ultimately the suit land was auctioned and it was purchased by the defendant and the sale in his favour was confirmed and he was put in possession on 20th May, 1960.
The plaintiff stated that prior to the date of auction there was a partition between the father and his sons on 6th July, 1956 evidenced by Ext.
53 and at this partition the suit land with its sub divisions came to the share of the plaintiffs and therefore, the father had no saleable interest in the suit land and it could not have been sold at a revenue auction for recovering the personal debt of the father.
So contending, the plaintiffs brought an action for a declaration that the sale is not binding upon them and possession may be restored to them.
The trial Court held that the suit land was joint family property consisting of Dattatraya and his sons but as there was an effective partition prior to the revenue sale and the partition being a genuine one, the subsequent sale is not binding upon the plaintiffs to whose share the suit land was allotted at the partition and, therefore, the sale was void and the plaintiffs are entitled to be put back in possession.
959 The High Court in appeal by the present appellant examined the question of the validity of the revenue sale in the context of the provisions of the ( 'Loans Act, for short) and held that the auction sale of the lands at the relevant time standing in the names of the plaintiffs, the land being not one in respect of which the Tagai loan was advanced, or which was offered as security for that loan, would not be binding upon the plaintiffs as the plaintiffs were not borrowers within the meaning of section 7(1) of the Loans Act and the plaintiffs ' suit on this ground was rightly decreed.
The submission on behalf of the defendant that Tagai loan was a debt and that it was incumbent on the sons of Dattatraya under the doctrine of pious obligation of the sons of a Hindu father to pay their father 's debts which were not tainted with immorality or illegality, was not accepted and the High Court held that this doctrine of pious obligation cannot be extended to the debts contracted under the Loans Act as the Act applies to all citizens of India irrespective of their religion.
With these findings the appeals were dismissed.
Mr. U. R. Lalit, learned counsel for the appellant urged that Tagai loan was borrowed by Dattatraya, the father for improvement of lands bearing Survey Nos. 167 and 170 which were joint family property and the debt represented by Tagai loan would be joint family debt incurred by the manager for the benefit of the joint family or for the benefit of the estate of the joint family and, therefore, the joint family property, irrespective of the fact whether it was offered as security for the loan or whether it benefited by the loan, would be liable for the repayment of the loan notwithstanding the fact that a partition has taken place before the suit land, which again is a joint family property, was brought to revenue auction.
It was also urged that the partition is not genuine and that it is a sham and bogus one and in fact there was no partition in the eye of law.
It was further urged that the pious obligations of the sons of a Hindu father to pay the debt incurred by the father not tainted with illegality or immorality to the extent of the joint family property in their hands would certainly apply to loan borrowed under the Loans Act and the expression "borrower" under the Loans Act can as well include a joint Hindu family and thereby making the entire joint family property liable for repayment of the loan.
Mr. Bal, learned counsel for the plaintiffs respondents contended that Tagai loan was not a joint family debt nor in borrowing the loan the father was acting as Karta but was acting in his personal capacity, nor the loan was for the benefit of the joint family estate.
It was said that the Loans Act being a complete Code in itself and only 960 recognised borrower in his individual capacity, one cannot import the concept of Karta of a joint family borrowing under the Loans Act in his representative capacity so as to make the joint family property liable for such loans.
The principal contention which goes to the root of the matter is whether the Tagai loan borrowed by Dattatraya, the father, was borrowed in his personal capacity for his personal use or as Karta of the joint family for the benefit of the joint family or joint family estate.
If the loan was borrowed by Dattatraya, the father, as Karta of the joint Hindu family for the benefit of the family, certainly it would be a joint family debt and all the joint family property would be liable for this debt.
Even if there is a subsequent partition before the debt is repaid, the creditor can proceed against the joint family property in the hands of any of the coparceners because the joint family property is liable for the joint family debts.
The Karta or the Manager of a joint Hindu family has implied authority to borrow money for family purposes and such debts are binding on other coparceners and the liability of the coparceners in such a case does not cease by subsequent partition (See Para 240, Mulla 's Hindu Law, 14th Edn., p. 298).
Where father is the Karta of a joint Hindu family and the debts are contracted by the father in his capacity as manager and head of the family for family purposes, the sons as members of the joint family are bound to pay the debts to the extent of their interest in the coparcenary property.
Further, where the sons are joint with their father and the debts have been contracted by the father for his own personal benefit, the sons are liable to pay the debts provided they were not incurred for illegal or immoral purposes.
This liability arises from an obligation of religion and piety which is placed upon the sons under the Mitakshara Law to discharge the father 's debts, where the debts are not tainted with immorality.
This liability of the sons to pay the father 's debts exists whether the father be alive or dead, (para 290, Mulla 's Hindu Law, 14th Edn., p. 354).
A further requirement is that for an effective partition of a Mitakshara joint Hindu family a provision for the joint family debts should be made.
In order to determine what property is available for partition, provision must first be made for joint family debts which are payable out of the joint family property, personal debts of the father not tainted with immorality, maintenance of dependent female members and of disqualified heirs, and for the marriage expenses of unmarried daughter.
This must be so because partition is of joint family property and if joint family debts are repaid before the partition only the residue would be available for partition.
Therefore, if partition is effected before paying 961 the debts, provision to pay the debts should be made so as to determine the residue available for partition.
Having cleared the ground in law, let us look at facts which have been found by the Courts on appreciation of evidence and which unless found to be utterly unconscionable this Court would not interfere with.
The trial Court found that the suit property was joint family property and the High Court has not departed therefrom.
In fact, in an earlier suit filed by these very plaintiffs being Special Suit No. 14 of 1958 it has been in terms stated that the lands described in para 1 of the plaint Ext.
37 which include the suit land, were originally owned by joint family of plaintiffs and Dattatraya.
Therefore, on plaintiffs ' own admission the suit land was joint family property of plaintiffs and Dattatraya.
The next important question is whether the Tagai loan was the personal debt of Dattatraya or was debt incurred by him as Karta of the joint family for the benefit of the joint family.
We would only look at uncontroverted salient features of the evidence.
Prescribed form of application, Ext.
128 with application Ext.
129 would show that the loan was borrowed for constructing wells for improvement in the potentiality of the lands bearing Survey Nos. 167 and 170.
It was submitted that these lands, for the improvement of which the loan was borrowed, were not joint family property.
There again, a reference may be made to the admission of the plaintiffs in plaint Ext.
37 which also includes lands bearing Survey Nos. 167 and 170 being described by the plaintiffs themselves as joint family property.
The High Court held that Dattatraya borrowed the loan for improvement of the land.
Therefore, Dattatraya, the father, borrowed loan in his capacity as the father for improvement of joint family lands and for this purpose offered as security three other pieces of land which were joint family property.
In the face of this unimpeachable evidence the statement in Ext.
128, the application for loan, that Dattatraya was the full owner of the lands therein mentioned would not convey the idea that it was his separate property.
It is not necessary that Karta acting in his capacity as Karta to describe himself as Karta to affirm his representative capacity.
Whether he has acted in his personal capacity or representative capacity can be gathered from all the surrounding circumstances and in this case they are eloquent, in that he mortgaged or gave as collateral security joint family property, to wit land, and it extends to whole of the interest of the family and is not confined to Karta 's share, and therefore, he must be deemed to have acted in the transaction on behalf of the family (see Mulla 's Hindu Law, 14th Edn., page 313, article 251).
It was, however, stated that agriculture 962 was not the avocation of the joint family and, therefore, the father as the Karta did not have the implied authority to borrow loan so to be binding on the joint family property.
One has merely to look at the content of the application for loan, Ext. 129 made by Dattatraya to the Mamlatdar, Taluka Vichitragad, for advancing loan to him, to dispel the contention.
The application recites that applicant Dattatraya, the father had undertaken extensive work to bring barren land under cultivation to raise sufficient crops as well as to improve the quality of Land and for improving the quality of agriculture he had undertaken, loans should be advanced to him.
Mr. Bal, however, pointed out that Dattatraya was carrying on some business which would be evident from Ext.
23, a copy of execution application No. 87/60 filed by Bhor State Bank Ltd., against one Pandurang Krishnaji Kamble and Dattatraya Govind Kulkarni in which the occupation of Dattatraya is shown as business; and Ext.
22 being a copy of Execution Application No. 92/57 in which his occupation is shown as general agent, and Ext.
120 a copy of the decree in Special Civil Suit No. 2/49 wherein the occupation of Dattatraya is shown as business and which further shows that Dattatraya had running account with one Raghunath Shridhar Phadke in which Dattatraya had withdrawn Rs. 56,800/ and had credited Rs. 41,000/ and after adding interest leaving a debit balance of Rs. 19,238 14 00.
It was urged that if all these aspects are taken into consideration, it would appear that agriculture was not the occupation of the joint family.
Now, as against this, one may also refer to Ext.
24 a copy of the BADR Execution Application No. 294/56 for executing an Award made under the Bombay Agricultural Debtors ' Relief Act against Dattatraya which would show that Dattatraya was an agriculturist by occupation and his debts were adjusted by the Courts set up under the Bombay Agriculture Debtors ' Relief Act and this could have only been done if his principal occupation was agriculture.
Therefore, mere description of Dattatraya 's avocation in Exts. 22, 23 and 120 is hardly determinative of the occupation of Dattatraya or his family.
It may be that over and above agriculture Dattatraya may have been carrying on some side business but if his application Ext.
129 shows that he had on his own showing 160 bighas of land most of which are admittedly shown to be joint family property, it cannot be denied that agriculture was one of the occupations of Dattatraya and he was carrying on that avocation as Karta of the joint family consisting of himself and his minor sons.
Now, if agriculture was one of the occupations of the joint family and if loan was borrowed for the purpose of improving the joint family lands, the loan would ipso facto be for legal necessity and it would be joint family debt for which all the joint family property would be liable.
963 If thus the loan for the recovery of which the suit property was brought to auction was joint family debt and if the suit property was joint family property, certainly it would be liable to be sold for recovery of joint family debt.
The question, however, is: does the subsequent partition make any difference in respect of the liability of the joint family property for the joint family debts ? That would necessitate examination of the circumstances in which the partition was brought about though we are not inclined to examine the question whether the partition was a sham or bogus transaction or was a motivated one with a view to defeating the creditors of the joint family.
The partition is evidenced by a registered deed, Ext.
79 dated 6th July 1956.
Partition is between father and his minor sons.
There is no dispute that on that date the debt of Tagai loan was outstanding as well as there were certain other debts.
In the partition deed Ext.
79 there is no express or implied provision for the repayment of joint family debts or even outstanding debts of Dattatraya, the father.
There was some suggestion that the property which was allotted to Dattatraya was sufficient for discharging the debts outstanding on the date of partition.
That at least is not borne out by the partition deed nor has Dattatraya gone into the witness box to say that such was the position.
Therefore, taking into consideration the recitals in the partition deed as well as the relevant evidence on record the position is clear that no provision was made at the time of partition for the joint family debts or alternatively outstanding debts incurred by the father.
It is not for a moment suggested that on this account the partition is bogus and sham, an argument which was put forward before the High Court and negatived.
The substance of the matter is that if at a partition amongst the members of the joint family no provision is made for joint family debts, then despite the partition and allotment of shares to different coparceners the joint family property in their hands which they acquired by partition would still be liable for the joint family debts.
The Judicial Committee in Sat Narain vs Das(1), pointed out that when the family estate is divided, it is necessary to take account of both the assets and the debts for which the undivided estate is liable.
After affirming this ratio, this Court in Pannalal & Anr.
vs Mst Naraini & Ors.(2) observed as under: ". the right thing to do was to make provision for discharge of such liability when there was partition of the 964 joint estate.
If there is no such provision, "the debts are to be paid severally by all the sons according to their shares of inheritance", as enjoined by Vishnu (Vishnu, Chap.
6, verse 36).
In our opinion, this is the proper view to take regarding the liability of the sons under Hindu law for the pre partition debts of the father.
The sons are liable to pay these debts even after partition unless there was an arrangement for payment of these debts at the time when the partition took place.
This is substantially the view taken by the Allahabad High Court in the Full Bench case referred to above and it seems to us to be perfectly in accord with the principles of equity and justice".
If thus the partition makes no provision for repayment of just debts payable out of the joint family property, the joint family property in the hands of coparceners acquired on partition as well as the pious obligation of the sons to pay the debts of the father will still remain.
This position of law was reaffirmed in Vriddhachalam Pillai vs Shaldean Syriam Bank Ltd. & Anr.(1).
The only effect of partition is that after the disruption of joint family status by partition the father has no right to deal with the property by sale or mortgage even to discharge an antecedent debt nor is the son under a legal obligation to discharge the post partition debts of the father.
Assuming we are not right in holding that the debt, was for the benefit of the estate of the joint family and, therefore, a joint family debt, and assuming that Mr. Bal is right in contending that it was the personal debt of the father, yet the doctrine of pious obligation of the son to pay the father 's debt would still permit the creditor to bring the whole joint family property to auction for recovery of such debts.
Where the sons are joint with their father and debts have been contracted by the father for his personal benefit, the sons are liable to pay the debts provided they were not incurred for an illegal or immoral purpose.
This liability to pay the debt has been described as pious obligation of the son to pay the father 's debt not tainted with illegality or immorality.
It was once believed that the liability of the son to pay the debts contracted by the father, though for his own benefit, arises from an obligation of religion and piety which is placed upon the sons under the Mitakshara law to discharge the father 's debts, where the debts are not tainted with immorality, yet in course of time this liability has passed into the realm of law.
965 In Anthonyswamy vs M. R. Chinnaswamy Koundan (dead) by l.r.s. & Ors.(1), following the decision in Muttayan vs Zamindar of Sivagiri(2), this Court held that this obligation of the son to pay the father 's debt not tained with illegality or immorality was not religious but a legal obligation and the rule would operate not only after the father 's death but even in the father 's life time and the pertinent observation is as under: "It is evident therefore that the doctrine of pious obligation is not merely a religious doctrine but has passed into the realm of law.
The doctrine is a necessary and logical corollary to the doctrine of the right of the son by birth to a share of the ancestral property and both these conceptions are correlated.
The liability imposed on the son to pay the debt of his father is not a gratuitous obligation thrust on him by Hindu law but is a salutary counter balance to the principle that the son from the moment of his birth acquires along with his father an interest in joint family property".
It is not the case of the plaintiffs that the debt contracted by the father for which the property was sold was tainted with illegality or immorality or that it was ayyravaharik in the sense opposed to good morals.
Therefore, even assuming that there was a partition, the debt being antecedent debt for which no provision was made in the partition and the debt having not been shown to be tainted with illegality or immorality, the sons were liable to pay this debt to the extent the joint family property came in their hands.
Viewed from either angle, the property sold was liable for the discharge of the debt of Dattatraya, the father, and even if it came in the hands of the sons on partition, the debt admittedly being a pre partition debt not shown to be tainted with illegality or immorality, could be recovered from the joint family property in the hands of the sons.
Mr. Bal, however, raised an interesting contention that if the joint family property which came in the hands of the sons on partition was to be sold for recovery of the debt of the father after partition a suit would have to be filed by the creditor and if the property in the hands of the son was to be made liable for discharge of the debt, the sons ought to be joined as parties to the suit because only in such an event the sons could set up the defence of the debt being tainted 966 with illegality or immorality.
Where a revenue sale takes place, it was said, the sons would have no opportunity to contest the character of the debt, and, therefore, any sale in such circumstances, of the property that has fallen to the shares of the sons at a partition, subsequent to the partition would be void as against the sons.
In support of the submission reliance was placed on an observation in Pannallal 's case (supra) that a decree against the father alone obtained after partition in respect of such debt cannot be executed against the property that is allotted to the sons and that a separate and independent suit must be filed against the sons before their shares can be reached.
After observing that a son is liable even after partition for the pre partition debts of his father which are not immoral or illegal, this Court proceeded to examine the question as to how this liability is to be enforced by the creditor, either during the life time of the father or after his death.
After taking note of a large number of decisions in which it was held that a decree against the father alone obtained after partition in respect of such debt cannot be executed against the property that is allocated to the sons on partition and a separate and independent suit must be instituted against the sons before their shares can be reached, it was held that the principle underlying these decisions is sound.
This Court approved the decision in Jagnarayan vs Somaji (1).
It may be noted that decree for the pre partition debt was made after partition when in the suit father after partition could not represent the sons.
This very question again came up before this Court in section M. Jakati & Anr.
vs section M. Borkar & Ors.(2) In that case the Deputy Registrar of Co operative Societies had made an order against Mr. Jakati for realisation of the amount and an item of property belonging to the joint family of Jakati was attached by the Collector and duly brought to sale under section 155 of the Bombay Land Revenue Code.
The sale was held on 2nd February, 1943 and confirmed on 23rd June, 1943.
In the meantime.
On January 15, 1943, one of the sons of Jakati instituted a suit for partition and separate possession of his share in the joint family property and contended inter alia that the sale in favour of the first respondent was not binding on the joint family.
If the order of the Deputy Registrar was to be treated as a decree, the sale under section 155 of the Bombay Land Revenue Act being execution of that decree, was after the institution of the suit for partition and therefore it was contended that a partition after the decree but before the auction sale limited the efficacy of the sale to the share of the father even though the sale was of a whole estate including the interest of the sons, because after the partition the 967 father no longer possessed the power to sell the shares of sons to discharge his debts.
Negativing this contention it was held as under: "But this contention ignores the doctrine of pious obligation of the sons.
The right of the pre partition creditor to seize the property of the erstwhile joint family in execution of his decree is not dependant upon the father 's power to alienate the share of his sons but on the principle of pious obligation on the part of the sons to discharge the debt of the father.
The pious obligation continues to exist even though the power of the father to alienate may come to an end as a result of partition.
The consequence is that as between the sons ' right to take a vested interest jointly with their father in their ancestral estate and the remedy of the father 's creditor to seize the whole of the estate for payment of his debt not contracted for immoral or illegal purpose, the latter will prevail and the sons are precluded from setting up their right and this will apply even to the divided property which, under the doctrine of pious obligation continues to be liable for the debts of the father.
Therefore where the joint ancestral property including the share of the sons has passed out of the family in execution of the decree on the father 's debt the remedy of the sons would be to prove in appropriate proceedings taken by them the illegal or immoral purpose of the debt and in the absence of any such proof the sale will be screened from the sons ' attack, because even after the partition their share remains liable".
The High Court while examining the ratio in Jakati 's (supra) case observed that even though Ganpatrao Vishwanathappa Barjibhe vs Bhimrao Sahibrao Patil(1), was referred to therein it was not specifically overruled and, therefore, the trial Court was right in relying upon it and incidentally itself relied on it.
In that case it was held that in order to make the share of sons liable after partition they should be brought on record.
This Court referring to Ganpatrao (1) observed that the decision should be confined to the facts of that case and further observed as under : "Therefore where after attachment and a proper notice of sale the whole estate including the sons ' share, which was attached, is sold and the purchaser buys it intending it to be the whole coparcenary estate, the presence of the sons eo nomine is not necessary because they still have the right 968 to challenge the sale on showing the immoral or illegal purpose of the debt.
In our opinion where the pious obligation exists and partition takes place after the decree and pending execution proceedings as in the present case, the sale of the whole estate in execution of the decree cannot be challenged except on proof by the sons of the immoral or illegal purpose of the debt and partition cannot relieve the sons of their pious obligation or their shares of their liability to be sold or be a means of reducing the efficacy of the attachment or impair the rights of the creditor.
" The binding ratio would be one laid down in Jakati 's (supra) case and it cannot be ignored by merely observing that a different approach in Ganpatrao (supra) case holds the field for the High Court as it was not overruled in Jakati 's case.
It is thus crystal clear that the pious obligation of the sons continues to be effective even after partition and if the creditor in execution of a decree obtained prior to partition seizes the property in execution without making sons parties to the suit and the property is sold at an auction and the purchaser is put in possession and the property thus passes out of the family in execution of the decree on the father 's debt, the remedy of the sons would be to challenge the character of the debt in an appropriate proceeding brought by them.
The sale cannot be voided on the only ground that the sale of the property took place after partition and the property sold was one which was allotted to the sons on partition once the property is liable to be sold for recovery of debt of the father incurred prior to partition and which is not tainted with illegality or immorality.
Partition in such a situation merely provides a different mode of enjoyment of property without affecting its liability for discharge of pre partition debts.
In the present case the sons have filed the suit and in this suit issue No. 6 framed by the learned trial judge was whether the Tagai loan of Rs. 12,000/ was incurred by Dattatraya as manager of the family, for legal necessity and the family has benefited by it, and this issue was answered in the affirmative, meaning the debt is not shown to be tainted with illegality or immorality.
No submission was made to us by Mr. Bal on behalf of the respondents that the debt was tainted with illegality or immorality.
In such a situation unless in this suit the sons challenged the character of the debt and established to the satisfaction of the Court that the debt was tainted with illegality or immorality, they cannot obtain any relief against the purchaser who purchased the property at an auction held by the Civil Court or by the revenue authorities for recovering the debt of the father which the sons 969 were under a pious obligation to pay.
Therefore, even if the plaintiffs were not parties to the proceedings held by revenue authorities for sale of the land involved in this dispute, once the sale took place and it was confirmed and purchaser was put in possession, the sons can successfully challenge the sale by establishing the character of the debt thereby showing that they were not bound to pay it and, therefore, their share in the property cannot be sold to discharge the debt.
They cannot succeed merely by showing, as is sought to be done in this case, that as the sale took place subsequent to partition and as they were not parties to the proceedings the sale is not binding on them.
This clearly merges by reading Pannalal and Jakati cases (supra) together.
The loan sought to be recovered was a Tagai loan advanced under the Loans Act.
The amount can be recovered as arrears of land revenue.
Chapter XI of the Bombay Land Revenue Code provides procedure for realisation of land revenue, recovery to be made as if they are arrears of land revenue and other revenue demands.
Section 150 provides that an arrear of land revenue may be recovered inter alia by sale of the defaulter 's immovable property under section 155.
Section 155 provides that the Collector may cause the right, title or interest of the defaulter in any immovable property other than the land on which the arrear is due to be sold.
The sale is subject to sanction and confirmation.
The first contention is that the Collector is authorised to cause the right, title or interest of the defaulter in any immovable property which is sought to be sold in a revenue auction and in this case as the sale was after the partition the defaulter Dattatraya had no interest in the property brought to auction and, therefore, no title passed to the auction purchaser.
This submission overlooks again the pious duty of the sons to pay the father 's debt as also the right of the creditor to recover debts from the joint family property in the hands of the coparceners.
In Jakati 's case (supra) this was the exact contention and after comparing the parallel provision in the Code of Civil Procedure, viz., "the right, title or interest of the judgment debtor", this Court held that it is a question of fact in each case as to what was sold in execution of the decree.
This Court affirmed the ratio in Rai Babu Mahabir Prasad vs Rai Markunda Nath Sahai(1), that it is a question of fact in each case as to what was sold, viz., whether the right, title or interest of the debtor or defaulter was sold or the whole of the property was put up for sale and was sold and purchased.
It 970 was concluded that where the right, title and interest of the judgment debtor are set up for sale as to what passed to the auction purchaser is a question of fact in each case dependent upon what was the estate put up for sale, what the Court intended to sell and what the purchaser intended to buy and did buy and what he paid for.
There is not the slightest doubt that the whole of the property was sold in the instant case and that was intended to be sold and the purchaser purchased the whole of the property and the certificate was issued in respect of sale of the property and, therefore, it is futile to say that only the right, title and interest of Dattatraya was sold and that as he had no interest in the property sold on the date of auction sale, nothing passed to the purchaser.
Assuming, for a moment that if the sale takes place after the partition, to such a proceeding the sons should be a party before the liability arising out of the doctrine of pious obligation to pay the father 's debt is enforced against the joint family property in the hands of the sons, evidence reveals that the sons were fully aware of the intended sale and not only they knew of the intended sale but possession was taken from them by the purchaser after notice to them.
Proceedings for the recovery of the amount of Tagai loan of Rs. 12,000/ were commenced much prior to 25th April, 1955 because the first proclamation of sale in respect of four pieces of land was issued on 25th April, 1955.
79 would show that no bid was received whereupon the Kamgar Patil offered a nominal bid of Re. 1/ for four pieces of land.
It may here be mentioned that this sale was challenged by none other than Dattatraya and it was quashed and he had taken back the land included in the proclamation Ext.
Thus the recovery of the loan started prior to partition which took place on 6th July, 1956.
Where a loan is taken under the Loans Act and it is being recovered as arrears of land revenue, the order of the revenue authority to recover the amount would tantamount to a decree and when a proclamation of sale is issued it amounts to execution of the decree, to borrow the phraseology of the Code of Civil Procedure.
It is thus clear that execution started prior to the partition.
Undoubtedly the proclamation for sale of suit land was issued on 22nd January, 1957 as per Ext.
80 and that was subsequent to the partition but when different properties are brought to auction by different sale proclamations it is nonetheless an execution proceeding.
The sale proclamation was issued under the provisions of the land revenue code.
Amongst others the proclamation of sale is to be fixed on the property which is to be auctioned.
After the sale was confirmed, the purchaser was required to be put in possession.
The plaintiff claimed to be in possession and yet the revenue officer on 20th May, 1960 as per Ext.
82 handed over possession of 971 the land involved in the dispute to the purchaser.
It would be advantageous to point out here that the plaintiffs served notice dated 2nd February, 1957 which would mean that the notice was served prior to the date of the auction.
The plaintiffs therein referred to the proclamation of sale for the land involved in dispute and they also referred to the proclamation of sale for the land involved in dispute and they also referred to the attachment of the land.
They also referred to the date of intended auction sale and they called upon the Collector not to proceed with the sale.
The plaintiffs thereafter filed their first suit being Special Suit No. 14/58, certified copy of the plaint of which is Ext.
37, which would show that it was filed on 6th April, 1957.
In this plaint they sought a declaration that the sale held on 26th May, 1955 and 6th April, 1957 be declared illegal.
It was alleged in the plaint that Dattatraya was a drunkard and was in bad company and had borrowed the Tagai loan for his own vices and in collaboration with the concerned officers of the revenue department and the loan could never be said to be a Tagai loan.
Amongst others, the State of Bombay was impleaded as party defendant.
Subsequently this suit was withdrawn and the present suit was filed deleting State of Bombay as party.
From this narration of facts it clearly emerges that the plaintiffs had the knowledge of the proclamation of sale and yet no attempt was made by them either to appear before the Collector who had issued the proclamation or as was now sought to be urged, offered to repay the loan.
If after this specific knowledge that proceeding for recovery of Tagai loan had commenced and during its pendency the partition was brought about and yet on the subsequent sale the revenue authority sold the whole of the property and the purchaser intended to buy the whole of the property, the only way the sons can challenge this sale is by establishing the character of the debt as being tainted with illegality or immorality and the purchaser would be entitled to defend his purchase and possession on all the contentions which would negative the plaintiffs ' case including the one about the pious obligation of the sons to pay the father 's debt.
Therefore, there is no force in the contention that as the plaintiffs were not parties to the recovery proceedings the sale is not binding on them.
That brings us to the last contention which has found favour with the High Court.
The contention is that a loan borrowed under the provisions of the Loans Act could always be in the individual and personal capacity of the borrower and the Loans Act being applicable to all the communities in this country, it does not admit of a person borrowing loan in his representative capacity as Karta of the joint family and, thereby making joint family property liable for the discharge 972 of the debt.
Section 5 prescribes the mode of dealing with the applications for loans and section 6 provides for the period for repayment of loans.
Then comes section 7 which is material.
It provides for the mode of recovery of the loans borrowed under the Act.
Section 7 reads as under: "7.
(1) Subject to such rules as may be made under section 10, all loans granted under this Act, all interest (if any) chargeable thereon, and costs (if any) incurred in making the same, shall, when they become due, be recoverable by the Collector in all or any of the following modes, namely: (a) from the borrower as if they were arrears of land revenue due by him; (b) from his surety (if any) as if they were arrears of land revenue due by him; (c) out of the land for the benefit of which the loan has been granted as if they were arrears of land revenue due in respect of that land; (d) out of the property comprised in the collateral security (if any) according to the procedure for the realisation of land revenue by the sale of immovable property other than the land on which that revenue is due: Provided that no proceeding in respect of any land under clause (c) shall affect any interest in that land which existed before the date of the order granting the loan, other than the interest of the borrower, and of mortgages of, or persons having charges on, that interest, and where the loan is granted under section 4 with the consent of another person, the interest of that person, and of mortgagees of, or persons having charges on, that interest.
(2) When any sum due on account of any such loan, interest or costs is paid to the Collector by a surety or an owner of property comprised in any collateral security, or is recovered under sub section (1) by the Collector from a surety or out of any such property, the Collector shall, on the application of the surety or the owner of that property (as the case may be), recover that sum on his behalf from the borrower, or out of the land for the benefit of which the loan has been granted, in manner provided by sub section (1).
(3) It shall be in the discretion of a Collector acting under this section to determine the order in which he will resort to the various modes of recovery permitted by it.
" 973 The loan can be recovered from the borrower as if it were an arrear of land revenue due by him or from his surety by the same procedure or out of the land for the benefit of which the loan has been granted by following the same procedure or out of the property comprising as collateral security, if any, according to the procedure for realisation of land revenue by sale of immovable property or by the sale of immovable property other than the land on which the land revenue is due.
Now the word 'borrower ' is not defined.
Could it be said that a borrower for the purpose of section 7 can be an individual and no other person ? The High Court observed that the Act is applicable to all communities in India and not merely to Hindus and there are many communities which do not have the system of joint family and if the legislature intended to include in the word 'borrower ' manager of a family, it should have said so in express terms.
There is nothing in the language of section 7 which would show that the borrower must always and of necessity be an individual.
Even if the Act applies to other communities which do not have the system of joint family, that by itself would not exclude the manager of a joint Hindu family from becoming a borrower under section 7.
If the construction as suggested by the High Court is accepted it would put joint Hindu family at a disadvantage in borrowing loans under the Loans Act because the Karta of a joint Hindu family, if he has no separate property of his own, and if he cannot borrow the loan in his representative capacity, has no security to offer, nor could he take advantage of the beneficial provision of the Act for improving the land belonging to the joint Hindu family.
We see no justification for restricting the word 'borrower ' to be an individual alone.
In fact the Act itself contemplates joint borrowers.
Section 9 provides for joint and several liability of joint borrowers.
A Karta of a joint Hindu family therefore can be a borrower in his representative capacity.
If the Karta of a joint Hindu family is considered eligible for becoming a borrower would it run counter to the position of other communities in which there is no concept of a joint family and joint family properties ? In the absence of any such concept a borrower other than a Hindu can offer all the property at his disposal even if he has not sons, as security for the loan to be borrowed because in other communities governed by their personal laws the son does not acquire interest in the ancestral properties in the hand of the father from the time of his birth.
But in Hindu law there are two seemingly contrary but really complimentary principles, one the principle of independent coparcenary rights in the sons which is an incident of birth, giving to the sons vested right in the coparcenary property, and the other the pious duty of the sons to discharge their father 's debts not tainted with immorality or illegality, 974 which lays open the whole estate to be seized for the payment of such debts (see Jakati 's case) (Supra).
Now, if the sons of a Hindu father take interest in the ancestral property in the hands of the father by the incident of birth, they also incur the corresponding obligation of discharging the debts incurred by the father either for his own benefit or for the benefit of the joint family from the property in which the sons take interest by birth.
Such a concept being absent in communities not governed by Hindu law in this behalf, the father would be free to encumber the property and the sons in such communities would neither get interest by birth nor the liability to pay the father 's debt and would not be able to challenge the sale or property for discharge of the debt incurred by the father.
Therefore, the expression 'borrower ' in section 7 need not be given a restricted meaning merely because the Act applies to all communities.
Hence a father who is the Karta of the joint family consisting of himself and his sons can become a borrower in his capacity as Karta and if the loan is for legal necessity or for the benefit of the joint family estate he would render the joint family property liable for such debt and if it is for his personal benefit the joint family property even in the hands of the sons would be liable if the debt is not tainted with illegality or immorality.
The High Court said that such liability which arises from the obligation of religion and piety cannot be extended to the loans borrowed under the Loans Act because there is no such obligation in other communities to which the Act applies.
In reaching this conclusion the High Court overlooked the principle that this doctrine of pious obligation is not merely a religious duty but has passed into the realm of law (see Anthonyswamy), (supra).
On the facts of that case this principle was applied to parties belonging to Tamil Vannian Christians.
Viewed from this angle, the High Court was in error in holding that Dharmashastras of Hindus never contemplated improvement loans being given by the Governments of the day which were usually monarchies and, therefore, a debt of the kind which is contemplated under the Loans Act could never have been under the contemplation of the writers like Brihaspati and Narada in whose texts the pious liability is imposed on the sons and others.
It is not possible to subscribe to this view for the reasons hereinbefore mentioned.
The decisions in Sankaran Nambudripad vs Ramaswami Ayyar,(1) and Chinnasami Mudaliar vs Tirumalai Pillai,(2) do not touch the question herein raised and are of no assistance in the matter.
It, therefore, clearly transpires that Dattatraya had borrowed a loan from the Government under the Loans Act for the benefit of 975 joint family property.
It was being recovered as arrears of land revenue.
The property which is the subject matter of dispute in this proceeding was joint family property.
It was sold at a revenue auction and the whole of the property was sold and the whole of it was purchased by the purchaser.
The debt of Tagai loan for which the property was sold is not shown to be tainted with illegality or immorality or avyavaharik.
Therefore, the suit property was liable to be sold at court auction for two reasons, one that the debt was joint family debt for the benefit of the joint family estate and, therefore, all segments of the joint family property were liable for the discharge of the debt, and secondly, under the doctrine of pious obligation of the sons to pay the father 's debt.
In the present proceedings no attempt was made to establish that the debt was tainted with illegality or immorality.
Therefore, the sale is valid and the purchaser acquired a full and complete title to the property.
The sale is not void.
Part of the property is acquired and the compensation is taken by the plaintiffs subject to the orders of the Court.
Accordingly, both these appeals are allowed and the plaintiffs ' suit is dismissed but in the facts and circumstances of this case, with no order as to costs throughout.
N.V.K. Appeals allowed.
| The respondents ' father took a Tagai loan from the Government for the purpose of digging wells in his land by offering his land as security for the loan.
When he failed to repay the loan, the suit land was auctioned under the revenue recovery proceeding and it was purchased by the appellants.
In a suit for recovery of possession, the respondents alleged that their father had no saleable interest in the land because, prior to the date of auction.
in the partition between themselves and their father, the suit land came to their share and therefore the land which belonged to them could not have been sold in an auction for recovering a personal debt of their father.
The trial court declared the sale as void.
The High Court affirmed the trial Court 's order.
In appeal to this Court the respondents contended that the debt was not a joint family debt; neither was the father acting as Karta of the joint family nor was the loan for the benefit of the joint family and therefore the joint family property could not be made liable for such loan.
Allowing the appeals the Court, ^ HELD: 1 (a) The suit land was joint family property of the respondents and their father.
[961C] (b) If the loan, for the recovery of which the suit property was brought to auction, was joint family debt and if the suit property was joint family property it would be liable to be sold for recovery of joint family debt.
[963A] (c) Whether the Karta acted in his personal capacity or representative capacity has to be gathered from all the surrounding circumstances.
The father borrowed the loan in his capacity as Karta of the joint family for improvement of the joint family lands and for this purpose he offered as security the land which was joint family property.
It is not necessary that the Karta acting in his capacity as Karta should describe himself as Karta to affirm his representative capacity.
Therefore he must be deemed to have acted in the transaction on behalf of the family.
[961G H] 956 (d) Agriculture was one of the occupations which the father was carrying on as Karta of the joint family.
If agriculture was one of the occupations of the joint family and if the loan was borrowed for the purpose of improving the joint family lands, the loan would ipso facto be for legal necessity and it would be joint family debt.
[962H] (e) Where the sons are joint with their father and debts have been contracted by the father for his personal benefit the sons are liable to pay the debts provided they were not incurred for illegal or immoral purpose.
This liability to pay the debt had been described as pious obligation of the son to pay the father 's debt if it is not tainted with illegality or immorality.
[960F] Muttayan vs Jamindar of Sivagiri, [1883] 9 I.A. 128 Anthonyswmy vs M. R. Chinnaswamy Koundan (dead) by L. Rs. Ors.
; ; referred to.
(f) If at a partition amongst the members of the joint family no provision was made for joint family debts, then despite the partition and allotment of shares to different coparceners, the joint family property acquired by partition would still be liable for the joint family debts.
[964D] Sat Narain vs Das, [1936] 63 I.A. 384; Pannalal & Anr.
vs Mst.
Naraini & Ors.
; at 558; Vriddhachalam Pillai vs Shaldean Syrian Bank Ltd. & Anr. ; ; referred to (g) In the instant case the property sold was liable for the discharge of the father 's debt.
The debt being a pre partition debt which was not shown to be tainted with illegality or immorality, could be recovered from the joint family property in the hands of the sons.
[965F] (h) The pious obligation of the sons continues to be effective even after partition.
If the creditor, in execution of a decree, obtained prior to partition, seizes the property in execution without making the sons parties to the suit and the property was sold at an auction and the purchaser was put in possession, the remedy of the sons would be to challenge the character of the debt in an appropriate proceeding.
The sale cannot be voided on the only ground that it took place after partition and the property sold was one which was allotted to the sons on partition.
Partition in such a situation merely provides a different mode of enjoyment of property without affecting the joint family 's liability for discharge of pre partition debts.
[968D F] section M. Jakati & Sons & Anr.
vs section M. Barkar & Ors., referred to.
(i) In the instant case the debt was not shown to be tainted with illegality or immorality.
Therefore, even if the respondents were not parties to the proceeding held by the Revenue Authorities, once the sale was confirmed and the purchaser was put in possession, the sons can challenge the sale only by establishing the character of the debt.
[968G, 969A] (2) The loan sought to be recovered being Tagai loan advanced under the Loans Act, it can be recovered as arrears of land revenue.
The Bombay land Revenue Code, provides procedure for realisation of land revenue, recovery of which could be made as if it was arrears of land revenue and other revenue demands.
[969C] 957 (3) When a loan was taken under the Loans Act and was being recovered as arrears of land revenue, the order of the Revenue Authority would tantamount to a decree and when a proclamation of sale was issued it amounted to execution of the decree.
[970F] 4 (a) The High Court was wrong in holding that since the Act was applicable to all communities in India and not merely to the Hindus, if it legislature intended to include manager of a family in the word 'borrower ', it should have said so in express terms.
There is nothing in the language of section 7 of the Loans Act to show that the borrower must always and of necessity be an individual.
If the construction suggested by the High Court is accepted it would put the joint Hindu family at disadvantage in borrowing loans under the Loans Act because the Karta of a joint Hindu family, if he has no separate property of his own, and if he cannot borrow the loan in his representative capacity, has no security to offer.
Nor would he be able to take advantage of the beneficial provision of the Act for improving the land belonging to the joint Hindu family.
[973C E] (b) Moreover there is no justification for restricting the word 'borrower ' to be an individual alone.
The Act itself contemplates joint borrowers.
A Karta of a joint Hindu family can be a borrower in his representative capacity.
[973F] Sankaran Nambudripad vs Ramaswami Ayyar, Madras 691; Chinnaswami Mudaliar vs Trimalai Pillai, Madras 572, inapplicable.
|
ivil Appeal Nos.
1639 40 of 1987.
From the Judgment and order dated 20.12.1984 of the Madras High Court in W.P. No. 349 of 1979.
A.K. Sen and A.V. Rangam for the Appellants.
section Rangarajan, Ms. Asha Rani, Sanjay Parikh and Sanjiv Madan for the Respondents.
The Judgment of the Court was delivered by SEN, J.
These appeals by special leave are directed against a judgment of a Division Bench of the Madras High Court dated December 20, 1984 reversing the judgment and order of a learned Single Judge dated March 27, 1979 and allowing the writ petition filed by respondent No. 1 herein Thiru Chaturvedi Badrinath, a senior member of the Indian Administrative Service, and directing the issuance of a writ of mandamus ordaining the State Government of Tamil Nadu from granting the requisite permission of the Government under r. 17 of the All India Services (Conduct) Rules, 1968 for the institution of a suit for damages for defamation by him against respondent No. 2 Thiru V. Karthikeyan, the then Chief Secretary to the State Government of Tamil Nadu by a defamatory statement that he.
493 allegedly, made to a correspondent of the Indian Express against him.
A The facts.
At the relevant time, respondent No. 1 Thiru Badrinath was the Commissioner of Archives & Historical Research, Tamil Nadu.
On September 7,1973 he delivered a speech at a function held by the History Association of the Presidency College, Madras criticising the time capsule buried in the precincts of the Red Fort at Delhi and said that it was full of distortions of historical facts describing it as 'neither history nor fiction '.
This led to a furore both in Parliament as well as in the national press.
The Government feeling greatly embarrassed by the controversy created about the authenticity of the time capsule, started disciplinary inquiry against respondent No. 1 under rr. 6 and 7 of the All India Services (Conduct) Rules on the view that being a civil servant it was not desirable that he should have participated in a public discussion on the time capsule.
However, the State Government by a G.O. dated August 25, 1977 dropped the disciplinary proceedings.
Just a day before i.e. On August 24, 1977 a signed news item appeared in all the editions of the Indian Express about the controversy regarding the time capsule stating that a Government spokesman charged respondent No. 1 as trying to 'sabotage the civil services from within '.
Taking umbrage at the offending utterance, respondent No. 1 addressed a letter dated August 25, 1977 expressing his anguish that such a statement was made by a Government spokesman, and desired to know as to who that Government spokesman was; and whether he indeed uttered the words and if so, whether that reflected the views of the Government.
On the same day, respondent No. 2 in his capacity as the Chief Secretary replied that he had no information to communicate to him on the subject.
On December 5, 1977 respondent No. 1 addressed another letter to respondent No. 2 in the form of a representation complaining of the defamatory attack on him, demanding that the Government should issue a contradiction through the press.
The Government did not accede to the demand.
In the meanwhile, respondent No. 1 apparently addressed a letter to a certain Shastri Ramachandran, the press correspondent of the Indian Express, asking him to disclose the name of the Government spokesman.
The correspondent by his letter dated December 14, 1977 informed that the Government spokesman was respondent No. 2 who during a telephonic conversation with him had made the offending utterance.
There were certain other utterances attributed to respondent No. 2 with which we are not concerned.
Upon this, respondent No. 1 by his letter dated December 19, 1977 sought permission to meet the Chief Minister and personally place before him his grievance set out in his aforesaid representation.
The grievance of 494 respondent No. 1 is that the letter was never replied to.
Eventually, on December 28, 1977 respondent No. 1 applied for sanction of the Government under r. 17 of the Rules seeking permission to institute a suit against respondent No. 2 for damages for defamation.
This was sought on the ground that in an interview with Thiru Shastri Ramachandran, the corresondent of the Indian Express, respondent No. 2 had charged him with trying to sabotage the civil services from within and that the charge was per se defamatory and was made with intent to bring disrepute to his career as a scholar and historian and caused irreparable damage to his reputation as a civil servant.
By the impugned G.O. dated February 7, 1978 the Government refused to grant the permission applied for to respondent No. 1.
Against the refusal respondent No. 1 moved the High Court under article 226 of the Constitution for the issuance of a writ of mandamus and other appropriate writs, directions and orders.
A learned Single Judge (V. Ramaswami, J.) by his judgment and order dated January 23, 1979 dismissed the writ petition on the ground that respondent No. 1 was not entitled to grant of the requisite permission under r. 17 of the Rules as a matter of course and it could not be said that the refusal of the Government to grant such permission was arbitrary, capricious or on irrelevant consideration.
On the contrary, he held that the Government refusal was based on proper grounds inasmuch as the Government had taken into account all the relevant considerations including public interest and the interest of maintenance of discipline in the civil service.
The learned Single Judge further observed that public interest was certainly a proper ground on which the Government could refuse the permission, if they were of the view that grant of such permission would expose another officer to unnecessary harassment through vexatious proceedings or encourage feud among civil servants and that had to be prevented.
Aggrieved, respondent No. 2 preferred an appeal under cl. 15 of the Letters Patent.
A Division Bench (M.M. Chandurkar, CJ and Sathiadev, J.) by its judgment and order dated December 20, 1984 allowed the appeal holding that the refusal of the State Government to grant the requisite permission under r. 17 of the Rules could not be justified on the ground of public interest.
The entire judgment of the Division Bench proceeds on the wrongful hypothesis that the obtaining of prior permission of the Government under r. 17 was a condition precedent for the maintainability of a suit for damages.
It also manifestly erred in its view that the speech delivered by respondent No. 1 at the function was in his official capacity as the Commissioner of Archives & Historical Research and therefore the intended suit fell within the ambit of r. 17 of the Rules in 495 asmuch as it was a suit for the vindication of an official act.
We are afraid, it is difficult to sustain the judgment of the Division Bench.
In exercise of the powers conferred by sub section
(1) of section 3 of the All India Services Act, 1951, the Central Government after consultation with the Government of the States concerned framed the All India Services (Conduct) Rules.
The Rules are a complete code in itself, obviously designed to frame a Code of Conduct for the members of the Service to ensure absolute integrity and devotion to duty and responsibility, in order that there is a fearless and impartial civil service in existence in the country.
They form the bullwork of the executive power of the Union and the States and also form the instrumentality through which such powers have to be exercised.
The key provision is the one contained in r. 3 which is spinal importance and reads: "3.
General (1) Every member of the Service shall at all times maintain absolute integrity and devotion to duty and shall do nothing which is unbecoming of a member of the Service.
(2) Every member of the Service shall take all possible steps to ensure integrity of, and devotion to duty by, all Government servants for the time being under his control and authority.
(3) (i) No member of the Service shall, in the performance of his official duties, or in the exercise of powers conferred on him, act otherwise than in his own best judgment to be true and correct except when he is acting under the direction of his official superior.
(ii) The direction of the official superior shall ordinarily be in writing.
Where the issue of oral direction becomes unavoidable, the official superior shall confirm it in writing immediately thereafter.
(iii) A member of the Service who has received oral direction from his official superior shall seek confirmation of the same in writing as early as possible and in such case,it shall be the duty of the official superior to confirm the direction in writing.
496 Explanation: Nothing in clause (i) of sub rule (3) shall be construed as empowering a Government servant to evade his responsibilities by seeking instructions from or approval of, a superior officer or authority when such instructions are not necessary under the scheme of distribution of powers and responsibilities." After laying down a rigorous code by framing r. 3 to ensure that members of such.
service discharge their duties and functions with absolute integrity and do nothing which is unbecoming of a member of the Service, the Central Government has provided by rr. 4 to 20 the various constraints under which the members of the Service must function.
These rules necessarily form part of their conditions of service under sub section
(1) of section 3 of the All India Services Act.
Rule 4 places a restraint on the use of position or influence to secure directly or indirectly employment of near relations in a private organisation, r. 5 on taking part in politics and contesting elections, r. 6 on having connection with the mass media, the press or the radio, r. 7 on engaging in criticism of Government, r. 8 on giving evidence before any committee, person or other authority except with the previous sanction of the Government, and where such sanction has been accorded, on giving evidence criticising the policy or any action of the Government, r. 9 on unauthorised communication of information, r. 10 on asking for or accepting contributions to or raising of public subscription, r. 11 on accepting gifts, r. 11A on giving or taking of dowry, r. 12 on taking part in public demonstration, r. 13 on private trade or employment, r. 14 on investment, lending and borrowing, r. 15 on insolvency and habitual indebtedness, r. 16 on acquisition of property, movable or immovable, r. 17 on having recourse to any Court or the press for the vindication of an official act or character, r. 18 on convassing for others, r. 19 on taking a second spouse and r. 20 on consumption of intoxicating drinks and drugs.
A close analysis of these Rules clearly brings out that the provision contained in r. 17 is nothing but a restraint on a member of the Service.
Rule 17 of the Rules read with the Explanation thereto provides as follows; " 17.
Vindication of acts and character of members of the Service No member of the Service shall, except with the previous sanction of the Government have recourse to any court or to the press for the vindication of official act which has been the subject matter of adverse criticism or attack of a defamatory character.
497 Explanation Nothing in this rule shall be deemed to A prohibit a member of the Service from vindicating his private character or any act done by him in his private capacity.
Provided that he shall submit a report to the Government regarding such action.
" According to its plain terms, r. 17 is in the nature of a restraint on a member of the All India Services from bringing a suit for damages for defamation for an act done in the exercise of his official duties as a public servant or from going to the press in vindication of his official act or character.
explanation to r. 17 seeks to restrict the scope and effect of the restraint placed by r. 17.
No member of the Service is prohibited from vindicating his private character for any act done by him in his private capacity.
Proviso thereto however casts on him a duty to report to the Government regarding such action.
Analysing the provision of r. 17 Sri Asoke Sen, learned counsel for the appellants contends that to attract r. 17 three conditions must be fulfilled, namely: (1) The intending plaintiff must be a member of the Service.
(2) The suit must be for the vindication of his official act or character.
(3) The official act must be the subject of a defamatory statement.
According to the learned counsel, though two of the conditions are fulfilled, namely: (1) that respondent No. 1 was a member of the Service and (2) the subject matter viz. the statement made by respondent No. 2 and alleged to be of a defamatory character was made by him in his official capacity as the Chief Secretary, there was non fulfilment of the third condition.
He rightly urges that the speech delivered by respondent No. 1 criticising the authenticity of the time capsule was merely an expression of opinion on his private capacity.
In substance, the contention is that r. 17 read with the Explanation thereto clearly places such private acts outside the purview of the restraint placed by r. 17.
The contention to the contrary by respondent No. 1 Thiru Badrinath was that it was not open to the appellants to say that r. 17 was not attracted and he drew our attention to the concession made by the learned Advocate General as reflected in the judgment of the learned Single Judge: "The learned Advocate General also stated that the act complained of was an official act and, therefore, the intended suit was to vindicate an official act which was the subject matter of a defamatory criticism.
Therefore, we H 498 have to proceed on the basis that the criticism which is A complained of as defamatory related to an official act of the petitioner.
In view of this concession, he contends that it is now not open to the t appellants to say that r. 17 was not attracted.
In dealing with these contentions, it is.
rather pertinent to observe that the learned Single Judge did not record a finding that r. 17 of the Rules was not attracted in the facts and circumstances of the case.
After setting out the provision contained in r. 17, he observes that the requirement of r. 17 are that (i) the act which has been the subject matter of adverse criticism should be an official act and (ii) the criticism of the attack must be defamatory in character.
We are entirely in agreement with the view expressed by the learned Single Judge.
No construction other than the one reached by him is possible.
During the course of his judgment, the learned Single Judge adverts to paragraph 17 of the writ petition where respondent No. l has averred that his intended suit was to vindicate his private character and not to vindicate any official act.
The case of respondent No. 1 therefore throughout has been that r. 17 of the Rules was not attracted to the suit and indeed he goes on to aver that he was entitled to file a suit even without the permission of the Government under r. 17.
However, he goes on to say that if a suit were to be filed it might land him into trouble in that disciplinary proceedings might be taken against him for having instituted a suit without previous permission of the Government.
On the assumption that such sanction was necessary under r. 17, he moved the High Court for grant of an appropriate writ under article 226 of the Constitution, apparently by way of ex abundanti cautela.
The learned Single Judge did not deal with the scope and ambit of r. 17 in view of the concession made by the learned Advocate General.
We have no manner of doubt that the appellants are not bound by the concession made by the learned Advocate General before the learned Single Judge.
It is unfortunate that the State Government was not properly advised at the earlier stages of the proceedings in insisting upon the view that such permission was required under r. 17 and that it was justified in refusing to grant the permission prayed for.
The concession made by the learned Advocate General being on a matter of law is not binding.
That apart, Sri Ashoke Sen, learned counsel for the appellants has very fairly accepted the point of view put forth by respondent No. 1 in the writ petition that no such permission was required.
499 In the premises, the decision of the Division Bench appealed from suffers from a serious infirmity.
In the instant case, respondent No. 1 Thiru Badrinath made a speech incidentally at a time when he was holding the post of the Commissioner of Archives & Historical Research, at a function organised by the History Association of the Presidency College, Madras.
He was invited to make a speech on the occasion presumably for his attainments in the field.
But the speech delivered by him on the occasion could not be treated to be an official act of his and therefore the suit brought by him against respondent No. 2 Thiru V. Karthikeyan, the then Chief Secretary of Tamil Nadu could not be treated to be a suit for the vindication of his official act.
It is common knowledge that persons of erudition and eminence are often times asked to grace such occasions or make a speech and when they do so, undoubtedly they give expression to their personal views on various subjects.
By no stretch of imagination can it be said that while doing so they act in the discharge of their official duties merely because they happen to hold public office.
At the end of the day, we wish to mention that Thiru Badrinath stated before us that he had filed the suit in the High Court for damages for defamation against respondent No. 2 Thiru V. Karthikeyan without waiting for the prior permission of the State Government under r. 17 of the Rules and that the suit was filed before the expiry of the period of limitation of one year as provided for by article 75 of the .
He further stated that the Registry of the High Court however returned the plaint with the endorsement that the same be presented after the decision in the writ petition.
He drew our attention to the averment in paragraph 22 of his affidavit in reply to the effect: "I respectfully submit that, at the time I had filed W.P. No. 979/1978 against Go dated the 7th February, 1978, 1 had formally presented to the Registry of the Madras High Court a civil suit for defamation against the Chief Secretary.
I was advised to do this in order to prevent the time limit for such suits from expiring, should the decision in the writ petition be that, the defamatory attack on me by Shri Karthikeyan being of a personal kind I was covered by the proviso in Rule 17 and would not, therefore, require government sanction under Rule 17.
Quite correctly, after a note being made of the date on which the suit was presented, it was returned to me, saying that it would have to wait for a decision in the writ petition.
Following the judg 500 ment in the writ appeal, setting aside the decision in W.P.979/1978, I have been waiting for government sanction.
It also transpires that the suit was filed by respondent No. 1 without serving a notice as required under section 80 of the Code of Civil Procedure, 1908.
We refrain from expressing any opinion as to whether the return of the plaint for representation after the decision of the writ petition would save the running of the time.
The questions whether the suit is barred by limitation or not, or whether the same was competent without a notice under section 80 of the Code, are question to be determined by the High Court in the suit.
Accordingly, the appeals must succeed and are allowed.
The judgment and order passed by the Division Bench of the High Court are set aside and that of the learned Single Judge dismissing the writ petition restored.
The High Court will now proceed with the suit brought by respondent No. 1 in accordance with law.
The rights and n contentions of the parties are left open.
There shall be no order as to costs.
H.L.C. Appeals allowed.
| % In exercise of the powers conferred by Section 239(2)(E)(a) of the Uttar Pradesh Kshetra Samiti and Zila Parishads Adhiniyam, 1961, various Zila Parishads framed a bye law, providing that right to trade in carcass utilisation in the rural area of the respective Zila Parishads shall be put to public auction.
Such activities comprised of taking of the carcass of dead animals to a specified place, skinning of the carcass, storage of bones and skins, curing and dyeing of such skins and preparation of leather goods.
In a writ petition challenging the validity of the said bye law, a Single Judge of the High Court struck down the latter part of the bye law framed by one of the Zila Parishads, providing for farming out of the privilege of utilisation and disposal of carcass of dead animals, on the ground that it created a monopoly in favour of an individual or group of individuals.
A Division Bench reiterated that view in two writ petitions filed before it, and distinguished the decision of this Court in State of Maharashtra vs Mumbai Upnagar Gramodyog Sangh, ; taking a contrary view on the ground that the restrictions were reason able within the meaning of article 19(6), in the context of the thickly populated metropolitan city.
The correctness of the said decision of the Division Bench was open to question.
Another Division Bench referred the matter to a Full Bench, which expressly repelled the aforesaid view, and held that it was competent for the Zila Parishads to frame such bye laws in exercise of the powers conferred by section 239(2)(E)(a) of the Act.
539 Against the various judgments and orders of the High Court, special leave petitions and appeals by special leave challenging the constitutional validity of the aforesaid bye law, were filed in this Court.
In SLP(C) No. 1900 of 1981, this Court, in order to protect the interests of persons traditionally engaged in the work of skinning, tanning etc., directed the State Government to frame a Model Scheme for carcass utilisation in the Etawa district at the village panchayat level on an experimental basis, and passed certain incidental directions as to the price payable for skins, bones and horns.
As nothing further was done, in partial modification of its earlier orders, this Court directed the Zila Parishad, Etawa to issue licence to any person who applied for the same.
In the meantime, the Government of Uttar Pradesh issued a Circular dated June 7, 1986 stating that in future the licences for disposal of carcass of animals should be granted only to registered industrial cooperative societies formed by the persons engaged in this work.
Disposing of the Special Leave Petitions and civil appeals, ^ HELD: It is plain upon the reading of the Circular dated June 7, 1986 issued by the State Government that the contract system envisaged by the impugned bye law framed by the different Zila Parishads in the State has been virtually abandoned, and the State Government proposes to replace the system of auction by a system of licensing, giving preferential right to cooperative societies consisting of members of the traditional occupation, for the disposal of carcass of dead animals.
[544E F] In view of the subsequent policy decision taken by the State Government, the present controversy no longer survives.
It would be open to different Zila Parishads, in view of the directive of the State Government, to frame the appropriate Bye laws consistent with and for the implementations of the policy declared by the State Government.
The Zila Parishads, while considering the question, shall keep in view the directions issued by this Court on April 15, 1983, and also the order passed introducing the licence system in the Zila Parishad, Etawa on an experimental basis.[544F G] For a meaningful effectuation of the policy decision of the Government, which is taken in the larger interests of a sizeable segment of the weaker sections of the society, it is of utmost importance that the 540 work of formation of cooperative society of the members of the traditional occupation, who lack the will and the ability to organise themselves, should be taken up by the social welfare department of the State Government and every effort should be made to bring the members of the traditional occupation within the fold of these cooperative societies.
The social welfare department shall take effective steps to organise such cooperative societies.
[544H; 545A B] Wherever it is not possible to implement the policy decision and there is likely to be a loss of revenue or other compelling reason, it would be open to the Zila Parishads, as a purely transitory measure and with the prior concurrence of the State Government, to arrange for carcass utilisation by auction if the Bye laws permit such auction.
It is only where, for any compelling reason, the said policy decision cannot be implemented effectively in any area, that the concerned Zila Parishad could, with the prior sanction of the State Government, continue the present contract system subject to such variation as may be necessary till the cooperative societies are formed.
[545C D1]
|
Appeals Nos. 92 and 94 of 1950.
24 Appeals from the Judgments and Decrees dated the 20th March 1942 of the Allahabad High Court in First Appeal Nos.
154 and 152 of 1934 arising Out Of the Judgments and decrees dated the 25th August 1932 of the Court of First Additional Subordinate Judge, and First Additional Civil Judge, Moradabad in Original Suit Nos. 90 and 87 of 1931 respectively.
N. C. Chatterji, (section section Shukla with him) for the Appellants.
Gopi Nath Kunzru, (B. P. Maheshwari with him) for Respondent No. 1.
P. C. Agarwala, for Respondent No. 2 in Civil Appeal No. 94 of 1950.
March 22.
The Judgment of the Court was delivered by BosE J.
These appeals arise out of two suits which were heard together along with two other suits with which we are not now concerned.
All four raised the same set of questions except for a few subsidiary matters.
They were tried together and by common consent the documents and evidence in the various cases were treated as common to all.
They were all governed by one common judgment, both in the first Court and on appeal.
The defendants appeal here.
The plaintiff, Mukand Ram, is common to all four cases.
He sues in each suit as the reversioner to one Pandit Nanak Chand who was his materdal grandfather.
The family tree is as below: 25 Nanak Chand d. 23 7 75 W: Mst.
d. Jan. 1875.
Maha Devi Mst.
Durga Devi Mst.
Har Devi d. 1912 d. 1888 d. 10 9 19 H: Nathmal Das H: Jwala Prasad H: Bhawani Shankar Mst.
Ram Pyare Bhukhan Saran Banwari Lal Sital Prasad Shyam Lal Pyare Lal (dead) (dead) (deft.5) Brij Lal Mukand Ram (dead) (Plff.
No.1) 26 The plaintiff 's case is that the properties in the four suits belonged to Nanak Chand who died on 23 7 1856 leaving a widow Mst.
Pato and three daughters, Maha Devi, Durga Devi and Har Devi.
On his death, his widow Mst.
Pato succeeded.
She died in January 1875 and the estate then went to the three daughters.
Of them, Durga Devi died in 1888, Maba Devi in 1912 and Har Devi in 1919.
The plaintiff 's rights as reversioner accrued on Har Devi 's death on 10 9 1919.
But before this came certain alienations which the plaintiff challenges in the present suits.
The suits were filed on 8 9 1931.
In Civil Appeal No. 92 of 1950, the challenge is to a mortgage effected by Durga Devi on 3 3 1887 in favour of Sahu Bitthal Das.
The mortgagee sued on his mortgage, obtained a decree and in execution purchased the properties himself.
The plaintiff 's case is that Durga Devi only had a life estate and, as there was no necessity, the mortgage and the subsequent auction purchase do not bind him.
In Civil Appeal No. 94 of 1950, there are two alienations, both sales.
The first, dated 23 9 1918, was by Pyare Lal (son of Durga Devi) in favour of Shyam Lal, son of Mulchand.
(This is not the Shyam Lal who was Pyare Lal 's brother).
The vendee later sold the properties to the first and second defendants on 5 3 1927.
One of the vendees, the first defendant, is yet another Shyam Lal: Shyam Lal son of Harbilas.
The other sale was by Brij Lal 's guardian on behalf of Brij Lal, Brij Lal then being a minor.
It was on 25 11 1919 in favour of Chheda Lal.
The first and second defendants preempted this sale after a fight in Court and took possession under the decree which they obtained.
The plaintiff 's case is that Har Devi was alive at the date of the first sale and as the reversion had not opened out Pyare Lal bad no power to sell.
In the case of the second sale, the reversion had opened out but Brijlal being more remote than the plaintiff got no title, so that sale is also bad.
The defendants ' case is that the properties in these 27 two suits (as also in the other two suits with which we are no longer concerned) did not belong to Nanak Chand and formed no part of his estate; they belonged exclusively to Mst.
Pato as part of her personal estate.
On 22 1 1864 Mst.
Pato executed a document which she called a deed of agreement but which, if it is anything at all, is a will.
There are no other parties to it and she purports thereby to dispose of her properties after her death.
The defendants in Civil Appeal No. 92 of 1950 have called it a will.
After saying that she will remain in possession and occupation as long as she lives, Pato says that after her death her three daughters will be the owners and will either remain joint possession or will divide the estate in equal shares and, in that event, will take possession of their respective shares and will be the "owners" of them.
But before she died Pato made another disposition of her estate during her life time in the year 1875 which, of course, abrogated the will.
This was done orally.
The defendants say that this was a family arrangement in which each of the three daughters was given certain properties absolutely so that each became the absolute owner of whatever fell to her share.
Pato also gave properties to each of her four grandsons who were then living, namely Kanhaiya Lal, Mukand Ram, Banwari Lal and Sital Prasad.
The defendants asserted that they also took separate and absolute estates immediately and said that each has been holding and dealing with the properties so divided, separately and as absolute owners, ever since.
Thus, at the dates of the transfers now challenged, each alienor had an absolute title to the properties alienated and the plaintiff has none.
The trial Court held that though most of the properties in Pato 's hands came from her husband Nanak Chand, the plaintiff bad not shown that the properties with which his four suits were concerned formed part of Nanak Chand 's estate.
An issue was also framed about the family settlement and one about estoppel.
On both those point 28 the learned Judge found against the plaintiff.
The result was that all four suits were dismissed.
The High Court reversed these findings on appeal and held that all the properties, including the ones in suit, formed part of Nanak Chand 's estate.
The learned Judges also held that though there was a family arrangement, it was a purely voluntary settlement made by Pato and was not made as the result of any dispute and that in any case it did not bind the plaintiff who was not a party to it and who does not claim through any of those who were.
They also held that there was no estoppel.
Accordingly, the plaintiff 's claim was decreed in each of the four suits.
Appeals were filed here in all four suits by the various defendants but Civil Appeals Nos. 91 and 93 of 1950 were dismissed for want of prosecution, therefore the decree of the High Court in the two cases out of which those appeals arose will stand.
We are now only concerned with Civil Appeals Nos. 92 and 94 of 1950.
In the lower Courts much of the effort was concentrated on finding out which items out of a large mass of property belonged to Nanak Chand and which did not.
We do not intend to look into that because it it is unnecessary on the view we take.
We will therefore assume, without deciding, that all the properties in dispute were part of Nanak Chand 's estate.
We will deal first with the family arrangement.
The learned counsel for the plaintiff argued that the defendants never set up a family arrangement though they have used the words "family settlement".
He contended that what they really pleaded was a gift out and out by Pato.
It was pointed out that the defendants never suggested a dispute, neither did they suggest that any one ever questioned or doubted Pato 's absolute title to the property.
Therefore, it was argued, the present case, which is based on the assumption that the property was not Pato 's and that she was laying wrongful claim to it, cannot be allowed because it flies in the face of the defendants ' pleadings.
29 There is not much in this objection.
The defendants did plead a family arrangement and the matter was put in issue and fought out.
The defendants ' case was that all the property was Pato 'section The plaintiff 's case was that it was all Nanak Chand 'section The issues were "4.
Whether Mst.
Pato gave properties separately to each of her three daughters and to daughter 's sons and put them in proprietary possession and they remained absolute owners of their properties and what is its effect on the case? 5.
Whether the arrangement mentioned in issue No. 4 was by way of family settlement and what is its effect on the case?" These issues are broad enough to cover the present point.
If the properties really belonged to Nanak Chand, as the plaintiff claims, then the case for a family settlement becomes all the stronger, for it is clear that Pato laid claim to them as her own properties of which she could dispose by will, for that is what the document of 1864 really is.
If, on the other hand, they were her properties, as the defendants say, then she had the right either to gift them outright or to settle them as the defendants say she did by way of a family arrangement.
In either case, the matter was fully fought out and neither side was misled.
The real question we have to decide is, has the family arrangement been proved? We think it has.
The direct evidence on this point is that of Shyam Lal (D.W. I in C.A. 94/50) and the first defendant there.
He tells us that he had money lending transactions with Har Devi, Kanhaiya Lal, Shyam Lal and Pyare Lal on unregistered bonds from 1902 till 1910 and from 1910 on registered mortgage bonds.
He says that "They" (that is to say, Har Devi, Mukand Ram, Kanhaiya Lal, Shyam Lal and Pyare Lal) "showed one copy of a deed of will and said that Mst.
Pato had given the property to her daughters and grandsons. .
I am illiterate and Kanhaiya Lal brother of Mukand Ram had the deed of will read over to me at 30 the time of mortgaging property in 1909 or 1910.
It was by means of that paper that I came to know that Mst.
Pato had made her daughters and grandsons absolute owners and I know of the property which was mortgaged to me".
Now it is true that the so called will of 1864 does not make provision for the grandsons, nor does it expressly confer an absolute estate on the legatees, but the witness is illiterate and had to depend on what he was told about the contents and meaning of the document, and what we have to test is the truth of his assertion that the plaintiff Mukand Ram and Kanhaiya Lal, and other members of the family, told him that Mst.
Pato had given the property to her daughters and grandsons.
If they told him this, as he says they did, then it operates as an admission against Mukand Ram and shifts the burden of proof to him because he was one of the persons who made the statement.
The statements made by the others are not relevant except in so far as they prove the conduct of the family.
The plaintiff (P.W. 11 in C.A. 91/50) admits that Mst.
Pato divided the estate but says that it was only for convenience of management and that neither she nor her daughters had, or pretended to have, anything more than a life estate.
He denies that there was any gift or family arrangement.
But he had to admit that the grandsons also got properties at the same time.
His explanation is that it was for the purposes of "shradh" and pilgrimage to Gaya and he says that though they were given possession they were not the "owners".
We now have to choose between these two witnesses and see which is telling the truth.
But before doing that we will advert to another member of the family, Pyare Lal, who was examined as a witness (D.W. 17) in C.A. 92/50.
He admits a series of sales made by him but says that he had no wilt of his own and that he did just what Mukand Ram told him.
Now to go back to the year 1864 when Mst.
Pato made the so called will of 1864.
This document was 31 construed by the Privy Council in Mast.
Hardei vs Bhagwan Singh(1) and their Lordships said "In the events which happened this document did not become operative, but it is relevant as showing that at the date of its execution Pato was claiming an absolute right to dispose of the whole of the scheduled property".
Mukand Ram was not a party to that litigation and the decision does not bind him but it operates as a judicial precedent about the construction of that document, a precedent with which we respectfully agree.
She says there that the property "belongs exclusively to me without the participation of anyone else".
That assertion, coupled with the fact that she purported to dispose of the property after her death (which she could not have done as a limited owner), and taken in conjunction with the subsequent conduct of the daughters and that of the grandsons, imports admissions by them that that was her claim and leaves us in little doubt about what she meant.
We therefore reach the same conclusion as the Judicial Committee and hold that Mst.
Pato claimed an absolute estate in 1864.
We will now examine the conduct of the family after Pato 's death and the claims put forward by them from time to time.
First, we have the statement of Mukand Ram in the witness box (P.W. 11 in C.A. 91/50) that on Pato 's death her daughters took separate possession of the properties in the following villages and towns: Har Devi Qutabpur Amawti.
Shakerpore.
Lalpur.
Bagh Alam Sarai.
Houses, Shops, etc.
in Bazaar Kot, Sambhal.
Durga Devi.
Keshopur Bhindi.
Tatarpore Ghosi.
Half Bilalpat.
Qumharwala Bagh.
(1) A.I.R. 1919 P.C. 27.
32 Shehzadi Serai.
Houses, shops, etc.
in Sherkhan Serai, Sambhal.
Maha Devi.
Guretha.
Behrampur Half Bilalpat.
Mahmud Khan Serai.
Houses, etc.
in Kot.
Grove in Alam Serai The plaintiff also admits that the grandsons got some properties but does not give details.
All he says is that they were given properties "for purposes of performance of 'shradh ' and pilgrimage to Gaya".
Next, we have a long series of alienations by different members of the family with claims to absolute ownership which could only have sprung from titles derived either from a gift from Pato or from a family settlement.
We say "family settlement" because we know now that the bulk of the property (and according to the High Court the whole of it) was Nanak Chand 'section We also know that some of it was purchased by Pato after Nanak Chand 's death from the income of the estate.
Pato had the right to purchase properties for herself if she wanted instead of adding them to her husband 's estate and we know she claimed title to the whole as an absolute owner in 1864.
This claim may have been due to a mistaken view of Hindu law that in the absence of sons the widow gets an absolute estate, or it may have been due to other reasons, but that she made the claim is clear, and the subsequent conduct and statements of the family show that they either admitted the correctness of her claim and accepted the properties as gifts from her or they agreed to and acted on a family settlement to avoid disputes on the basis that each got an absolute title to whatever properties fell to his or her share at the time of the division.
The grandsons were minors at the time and were not parties to this arrangement, whatever its origin, and of course the widow and daughters could not enlarge their limited estates so as to bind the grandsons 33 however much they agreed among themselves.
But for the moment we are not considering the legal effect of whatever the arrangement was but whether the conduct of the family gives rise to an inference that there was an arrangement in fact.
A family arrangement can, as a matter of law, be implied from a long course of dealings between the parties: Clifton vs Cockburn(1) and William vs William(1); and we have such a course of dealing here.
First, there is a long series of alienations by Har Devi stretching from 1877 down to 1916.
We tabulate them below with the recitals she made about her title.
17 1 77 Mortgage Qutabpur Amawti "owned by me".
exhibit LL 1 (C.A. 94) 11 1 78 do do Owner: "devolved on me from my exhibit 2J1 mother".
(C.A.91) 20 3 81 do do Owner: "right of Ex.2H1 inheritance from (C.A.91) my father".
7 9 83 Sale.
Lalpur Owner: "right of inheritance".
exhibit 2Gl (C.A. 91) 23 8 87 Mortgage Qutabpur Amawti No recital exhibit
L (C. A. 92) 15 7 05 do do Absolute owner with KanhaiyaEx.
BB 1 (C.A. 94) Laland Mukand Ram.
19 11 08 do do No recital exhibit M 1 (C.A. 94) do 14 11 14 do do do exhibit V (C.A. 92) 23 3 15 do do Owner: with exhibit
X (C.A. 92) Mukand Ram 17 2 16 do do With Mukand exhibit N 1 (C.A. 94) Ram.
No recital 28 3 16 do do Owner: with Mukand Ram and his son exhibit (G.A. 94) Ram Gopal 22 1 18 do Behrampur Owner: with exhibit
DDD 1(C.A. 91) Buzurg Mukand Ram and Bhukan Saran 23 3 18 do do Owner: with exhibit M 1(C. A. 91) Mukand Ram and Pyare Lal It will be observed that Har Devi sometimes claimed to be absolute owner by right of inheritance from her father and at others from her mother in respect of the same village, but whichever way it was, (1) ; (2) 5 34 the claim to absolute ownership Was consistent throughout.
This could only be referable to a family settlement where the origin of the property was in doubt but which was settled by bestowing, or purporting to bestow, an absolute estate on the daughters.
It will also be noticed that in later years Har Devi joined with Mukand Ram but still claimed an absolute estate along with him.
This was for the following reason.
Soon after Mukand Ram attained majority, the mother and sons quarrelled.
On 11 2 1890 they referred their dispute to arbitration, exhibit RR 1 (C.A. 94).
Mukand Ram became a major in 1890 and Kanhaiya Lal in 1884.
It appears from their agreement of 11 2 1890 that Har Deyi claimed an absolute title while her sons said she was only a limited owner.
But the sons agreed to accept a decision to the effect that she had an absolute estate in the whole of the property in dispute between them should the arbitrator so decide.
The properties were Qutabpur Amawti, Shakerpore, Houses, shops, etc.
in Mohalla Kot in Sambhal.
Another significant thing is that in this document both mother and sons agreed that all of Nanak Chand 's grandsons then in being were in separate possession and absolutely entitled to certain other properties which they expressly agreed were not to form the subject matter of the arbitration.
Here again, these titles could only be referable to a family arrangement, for the grandsons could not have got an absolute estate in any other way; nor could Har Devi.
Mukand Ram tells us as P.W. 11 (C.A. 91) that he and his brother Kanhaiya Lal got Shakerpore and some shops in Bazar Kot, Sambhal, as a result of this arbitration, but does not say what happened to Qutabpur Amawti.
But it is significant that Har Devi 's dealings with Qutabpur Amawti after this date were all jointly with Kanhaiya Lal and Mukand Ram.
It may be that the arbitrator awarded it jointly or they agreed to hold it on that basis.
We do not know.
All we know is that they mortgaged it jointly.
35 Behrampur fell to Mukand Ram 's share and in the mortgage of the property in 1918 Har Devi joined with Mukand Ram and Murari Lal 's son Bhukan Saran in one case and with Pyare Lal in the other.
But except for the last two mortgages of 1918 the conduct of Har Devi and her sons for 39 years from 1877 to 1916 as disclosed in these deeds is only consistent with the family arrangement which the defendants allege, for on no other hypothesis could either the mother or the sons have laid claim to an absolute estate.
We will next turn to Durga Devi.
She died in 1888 but before she died she mortgaged Keshopur Bhindi which had fallen to her share on 3 3 1887 by exhibit U 1 (C. A. 93) and claimed to be the owner.
Then there is Maha Devi.
The only direct evidence we have of her conduct is a written statement that she filed in O.S. 177/97, exhibit 2BI (C.A. 91).
She asserted there on 5 1 1898 that she had been in proprietary possession and occupation of her divided share of the property obtained by her from her mother under a deed of will.
The circumstances in which she made this statement are to be found in the judgment in that suit, exhibit GI (C.A. 91).
The suit was by Har Devi against her sister and a transferee who claimed title through the other sister Durga Devi.
Har Devi 's allegation was that Durga Devi had mortgaged Keshopur Bhindi and Tatarpore Ghosi on 3 3 87.
The mortgagee sued on his deed and obtained a decree for sale.
In execution of the decree he purchased the properties himself Durga Devi died in 1888 and Har Devi claimed that Durga Devi had only a limited estate and that Maha Devi and herself were entitled to the properties by survivorship.
Maha Devi refused to support her sister and took up the position that each sister, or at any rate that she, Maha Devi, got an absolute estate in the property that came to her and of which she was placed in separate possession, from Pato.
On 16 12 10 Maha Devi mortgaged Behrampur Buzurg and claimed that it belonged to her, being property left to her by her mother in which no one else had any rights.
The deed 36 is exhibit BB 1 (C.A. 93).
On 2 7 11 she sold Bilalpat and claimed to be its exclusive proprietor, exhibit R 1 (C.A. 93).
We now come to two statements made by Har Devi and Maha Devi as witnesses in that suit.
Strong exception was taken to their admissibility because the plaintiff was not a party to the earlier litigation.
It is a moot point whether they would be admissible under section 32(3) of the Evidence Act, but we need not decide that because we do not intend to use them as proof of the truth of the facts stated in them.
But they are, in our view, admissible to show the conduct of these two ladies.
The conduct of the various members of the family is relevant to show that their actings, viewed as a whole, suggest the existence of the family arrangement on which the defendants rely.
At this distance of time gaps in evidence that would otherwise be available have to be filled in from inferences that would normally have little but corroborative value.
But circumstanced as we are, inferences from the conduct of the family is all that can reasonably be expected in proof of an arrangement said to have been made in 1875.
The statements that Har Devi and Maha Devi made as witnesses are therefore as relevant as recitals made by them in deeds and statements made by them in pleadings.
They do not in themselves prove the fact in issue, namely the family arrangement, because, in the absence of section 32(3), they are not admissible for that purpose, but as their conduct is relevant these statements are admissible as evidence of that conduct.
Maha Devi 's statement is exhibit 2 Al (C.A. 91) and Har Devi 's exhibit 2 Fl (C.A. 91).
Both speak of an arrangement effected by Pato in her life time and say that they entered into separate possession of the properties by reason of that arrangement.
Har Devi says in addition that the grandsons were included in the arrangement and given properties too.
Therefore, we know that this is the title under which each claimed to hold in O.S. No. 177/97.
It is proof of their assertion of this title at that early date and though it is no proof of the truth of those assertions it is proof of the 37 fact that the assertions were made and that is all we need at the moment.
We turn next to the conduct of the grandsons, and first we will consider the plaintiff Mukand Ram and his brother Kanhaiya Lal.
The plaintiff attained majority in 1890 and from that date down to 1922 we have a series of assertions of a title that can only spring from the family arrangement.
First, we have the deed of 11 2 90, exhibit RR 1 (C.A. 94) which we have already considered in connection with Har Devi.
This is the agreement between his brother and himself on the one hand and Har Devi on the other to refer their dispute to arbitration.
We have already commented on the fact that the two brothers asserted an absolute title to properties that were in their possession and acknowledged the absolute title of Pyare Lal and Shyam Lal to the properties of which they were possessed.
The only dispute they were prepared to submit to arbitration was about the properties in Har Devi 's possession and there, they were prepared to accept a decision upholding Har Devi 's claim to an absolute estate.
After this came the following dealings: 20 11 91 Sale Shahzadi Proprietary pos exhibit 2 K1 (C.A. 91) Sarai session "devolved on us by right of inheritance from Pato ".
28 7 93 Sale Dugawatr Proprietary pos exhibit 2 El (C.A. 91) session "by right of inheritance".
2 7 96 Mortgage Qutabpur " ancestral and exhibit KK 1(C.A. Amawti 94) purchased by us": Possessed by us. without the participation of anybody else".
30 1 00 Sale Bazar Mah " Proprietary pos exhibit
U (C.A. 92) mud Khan session" by "right Sarai, Sam of inheritance": bhal " without the par ticipation of anyone else." 15 7 05 MortgageQutabpur Owners:withHarEx.
BB 1(C.A.94) Amawti Devi "without the participation of anyone else".
38 Kanhaiya Lal died about this time and thereafter Mukand Ram continued to make transfers claiming to do so in his own right.
He made the following along with Har Devi.
We have already analysed them.
They were 19 11 08 exhibit
MI (C.A.94) 14 11 14 exhibit
V (C.A.92) 23 3 15 exhibit
X(C A.92) 17 2 16 exhibit
N 1(C.A.94) 28 3 16 EX.MM1(C.A.94) 22 1 18 Ex DDD1(C.A.91) 23 3 18 exhibit
M1(C.A.91) But in addition to these he made the following transfers on his own: 18 2 16 Sale Lashkarpur Absolute owner.
exhibit PP 1 (C.A. 94) 24 4 22 Sale Houses, etc.
do exhibit Y (C.A. 92) in Sambhal 23 11 22 Sale Qutabpur Amawti do exhibit Q (C.A. 92) Next, we come to Shyam Lal.
His alienations were as follows: 19 6 97 Mortgage.
Shops in Sanbhal.
Owner.
exhibit
W 1(C.A. 94) 9 11 07 do House in Sambhal.
No recital exhibit TT 1(C.A. 94) 17 9 09 do Bilalpat.
do exhibit UU 1 (C. A. 94) In addition, he made the following transfers jointly with his brother Pyare Lal: 18 1 06 Mortgage.
Bilalpat & shops No recitals.
exhibit EEE 1 in Sambhal.
(C.A.94) 21 2 10 do Bilalpat & Sabz.
do exhibit AA 1(C.A 94) Pyare Lal also made two transfers on his own 23 9 18 Sale Bilalpat.
"Devolved on exhibit 15(C.A. 94) me"from Nanak Chand by right of inheritance.
2 1 20 do do do exhibit 18 (C. A. 93) Lastly, there is Bhukban Saran, who is Maha Devi 's daughter 's son.
He transferred as follows: 26 3 18 SaleHouses, etc.in Absoluteand Sambhal.
exclusive exhibit MM 1 (C.A.92) owner.
9 1 21 Relinquish Bilalpat do exhibit DD 1 (C.A. 93) ment.
These documents disclose a long line of conduct on the part of the various members of the family and show that from 1877 down to 1922 each dealt with the properties in his or her possession as absolute 39 owner and set up exclusive proprietary title to the properties transferred.
It is true the source of title was not consistently stated, sometimes it was said to be Pato and at others Nanak Chand, but the assertion to a separate, exclusive and absolute title in each is common all through.
There is only one way in which they could have got these exclusive titles and that is by a family arrangement, for whether the property was Nanak Chand 's or whether it was Pato 's, in neither event could any one of these persons have obtained an absolute estate on the dates with which we are concerned: the grandsons, because the reversion had not opened out; the daughters because, either way, they would only be limited owners under the Hindu law.
But if there was a family arrangement assented to by the daughters and later accepted and acted on by the sons when they attained majority, their claim to separate and independent absolute titles is understandable.
It does not matter whether the claims were well founded in law because what we are considering at the moment is not the legal effect of the arrangement but whether there was one in fact.
Now, in spite of all these dealings, the conduct of Har Devi and Mukand Ram and Kanhaiya Lal was not always consistent.
They were greedy and while insisting that they be allowed to hold on to what they had got, they wanted to snatch more if and when they could.
The ball started rolling in 1890 as soon as Mukand Ram attained majority.
There was the reference to arbitration in that year to settle their dispute with their mother Har Devi.
But even there, there was the inconsistency regarding their own properties to which we have already referred.
Mukand Ram 's later explanation in the witness box that they got those properties for shradh purposes and for a pilgrimage to Gaya cannot be believed.
Next, there was the suit by Mukand Ram and Kanhaiya Lal against their aunt Maha Devi in 1895: section No. 21/1895, exhibit 31 (C.A. 91).
That was occasioned by two sales by Maha Devi on 19 2 83 and 20 5 85.
She stoutly maintained that she had an absolute title.
40 The litigation had a chequered career and ultimately the suit was dismissed as barred by time.
Next came suit No. 177 of 1897, exhibit GI (C.A. 91), in which Har Devi sued Maha Devi and a transferee.
This time it was to set aside an alienation by Durga Devi, Durga Devi then being dead.
Har Devi claimed that the property was Nanak Chand 's and that the daughters were limited owners.
But again Maha Devi stood by the family arrangement and asserted an absolute title in all the daughters; exhibit 2BI (C.A. 91).
We have seen that Har Devi entered the box and admitted the arrangement: exhibit 2F 1 (C.A. 91).
The suit very naturally failed, but the result of the litigation is not relevant because the plaintiff was not a party.
What we are examining is the conduct of Har Devi.
In 1913 Har Devi tried again after Maha Devi 's death, this time against alienees from Maha Devi.
This is the suit that went up to the Privy Council, Mst.
Hardei vs Bhagwan Singh(1).
She failed again '.
Having failed against Maha Devi in the 1897 litigation, Har Devi next tried her luck against Maha Devi 's grandson (daughter 's son) Bhukhan Saran, after Maha Devi 's death.
The suit is O.S. 52/14, exhibit 78 (C.A. 94).
This time she succeeded with respect to some items and failed as regards the rest.
But again the result is irrelevant: Exs. 6 and 8 (C. A. 94).
Now what we are examining at the moment is whether Shyam Lal, D. W. I in CA. 94, is to be believed when he says that Mukand Ram, among others, told him about the family arrangement tinder which Pato had divided all her property between her daughters and their sons.
It is evident from what we have said above that Mukand Ram had been consistently asserting such a title for 31 years from 1891 to 1922 despite his aberrations in 1890 and 1895.
In parti cular he did this whenever he wanted to borrow money or to sell property: and he makes a significant admission in the witness box as P. W. 11 in C. A. 91 that (1) A.I.R. 1919 P.C. 27.
41 "In the mortgage or sale of the property over which Mst.
Har Devi was in possession none of her sisters or sisters ' sons joined.
Similarly, in the sale or transfer of the property that came to Durga Devi, none of her sisters or other sisters ' sons joined".
He also admits that there was a division and separate possession from 1876.
He says that it was for convenience of management and says that it was after Pato 's death, but in view of the mass of evidence that we have just analysed, we think it far more likely that he told Shyam Lal just what Shyam Lal says he did.
After all, he was borrowing money from Shyam Lal on each of these occasions; so there is every reason to believe that he would have told Shyam Lal what he had so repeatedly asserted to his other transferees.
We accordingly believe Shyam Lal.
That at once shifts the burden of proof to the plaintiff, and what is his explanation? First, a division of the estate for convenience of management (but that does not explain the long chain of unchallenged transfers bar Har Devi 's efforts in four cases); and second, that the grandsons got property absolutely for the purposes of shradh and pilgrimage: 'an explanation which we disbelieve).
We are therefore left with the plaintiff 's admission to Shyam Lal and that admission, coupled with the conduct and actings of the family, firmly establishes the family arrangement.
We accordingly hold that, whether the property belonged to Pato or to Nanak Chand, Pato claimed an absolute right which the daughters acknowledged, and in return they and their sons were given separate and absolute estates in separate portions of the property immediately.
This arrangement bound the daughters because they were parties to it and received good consideration.
But so far as the sons are concerned, they were minors at that time and were not parties to this arrangement, for no one suggests that they were represented by guardians who entered into it on their behalf.
Therefore, the properties they received were, so far as they are concerned, gifts pure and simple 6 42 from Pato with the assent of her daughters.
It does not matter whether the properties were Pato 's exclusive properties or whether they came to her from her husband because, either way, the title to the properties resided in her and she was the only person competent to pass it on to another.
If her title was absolute, the sons got absolute estates.
If it was the limited title of a Hindu widow, they obtained a limited title good during her life, and, as the daughters consented to the gifts and obtained properties for themselves as a result of the arrangement that resulted in these gifts, they would not be permitted to question the gifts; and the Privy Council so held in Har Devi 's suit against the alienees from Maha Devi: Mst.
Hardei vs Bhagwan Singh(1).
But so far as the grandsons are concerned, the mere, ' fact that each received a separate gift from Pato at a time when they were not competent to assent or to dissent would not in itself bind them.
To achieve that result, there would have to be something more; and it is to that something more that we will now direct our attention.
But before doing that, we will pause to distinguish Rani Mewa Kuwar.
Rani Hulas Kuwar (2); Khunni Lal vs Gobind Krishna Narain (3), and Ramsumran Prasad vs Shyam Kumari (4).
It is well settled that a compromise or family arrangement is based on the assumption that there is an antecedent title of some sort in the parties and the agreement acknowledges and defines what that title is, each party relinquishing all claims to property other than that falling to his share and recognising the right of the others, as they had previously asserted it, to the portions allotted to them respectively.
That explains why no con veyance is required in these cases to pass the title from the one in whom it resides to the person receiving it under the family arrangement.
It is assumed that the title claimed by the person receiving the property under the arrangement had always resided in him or her so far as the property falling to his or her share is concerned and therefore no conveyance is (1) A.I.R. 1919 P.C. 27.
(2) [1874] 1 I.A. 157, 166.
(3) [1911] 38 I A. 87, 102.
(4) [1922] 19 I. A. 342, 348.
43 necessary But, in our opinion, the principle can be carried further and so strongly do the Courts lean in favour of family arrangements that bring about harmony in a family and do justice to its various members and avoid, in anticipation, future disputes which might ruin them all, that we have no hesitation in taking the next step (fraud apart) and upholding an arrangement under which one set of members abandons all claim to all title and interest in all the properties in dispute and acknowledges that the sole and absolute title to all the properties resides in only one of their number (provided he or she had claimed the whole and made such an assertion of title) and are content to take such properties as are assigned to their shares as gifts pure and simple from him or her, or as a conveyance for consideration when consideration is present.
The regal position in such a case would be this.
The arrangement or compromise would set out and define that the title claimed by A to all the properties in dispute was his absolute title as claimed and asserted by him and that it had always resided in him.
Next, it would effect a transfer by A to B, C and D (the other members to the arrangement) of properties X, Y and Z; and thereafter B, C and D would hold their respective titles under the title derived from A. But in that event, the formalities of law about the passing of title by transfer would have to be observed, and now either registration or twelve years adverse possession would be necessary.
But in the present case, we are dealing with an arrangement made in 1875 at a time when the Transfer of Property Act was not in force and no writing was required; an d, as there is no writing, the Registration Act does not apply either.
Therefore, the oral arrangement of 1875 would be sufficient to pass title in this way and that, in our opinion, is what happened.
But these rules only apply to the parties to the settlement and to those who claim through or under them.
They cannot be applied to the minor sons who were not parties either personally or through their guardians and who do not claim title ' either through 44 Pato or her daughters.
So far as they are concerned, what they received were gifts pure and simple and the only assent that could be inferred from mere acceptance of the gift and nothing more would be assent to that particular gift and not assent to the gifts similarly made to others; and for this reason.
When Mukand Ram attained majority he had two titles to choose from.
One from Pato as a limited owner coupled with the assent of the daughters to her gift to him.
In that case, he would hold a limited estate till the reversion opened out.
The gift would be good during Pato 's life time because she had that title to convey, and thereafter, till the three daughters died, because they assented to it and obtained considerable benefit for themselves from the transaction out of which it arose.
The other title would be an absolute one on the basis that Pato was the absolute owner of the properties.
That title could only be referable to the family arrangement, and if Mukand Ram, knowing the facts, assented to the arrangement ex post facto, he will be precluded from challenging it for reasons which we shall now explain.
If the properties were Nanak Chand 's, which is the assumption on which we are deciding this case, then Pato was a limited owner under the Hindu law, but as such she represented the estate and any title she conveyed, whether by gift or otherwise, would not be void; it would only be voidable.
It would be good as against all the world except the reversioner who succeeded when the reversion opened out and he is the only person who would have the right to avoid it; and it would continue to be good until he chose to avoid it.
Therefore, if he does not avoid it, or is precluded from doing so, either because of the law of limitation or by his own conduct, or for any other reason, then no one else can challenge it; and the law is that once a reversioner has given his assent to an alienation, whether at the time, or as a part of the transaction, or later as a distinct and separate act, he is bound though others may not be, and having given his assent he cannot go back on it to the detriment of other persons; all the more so when he himself receives 45 benefit:see Raja Modhu Sudan Singh vs Rooke(1); Bijoy Gopal vs Krishna(1), and Ramgouda Annagouda vs Bhausaheb(3).
Lord Sinha, delivering the judgment of the Privy Council in the last of these three cases, said at page 402: "It is settled law that an alienation by a widow in excess of her powers is not altogether void but only voidable by the reversioners, who may either singly or as a body be precluded from exercising their right to avoid it either by express ratification or by acts which treat it as valid or binding".
This was followed in Dhiyan Singh vs Jugal Kishore(4) though the ground of that decision was estoppel.
We are now founding on another principle which is not grounded on estoppel and which, indeed, is not peculiar to Hindu law.
Estoppel is rule of evidence which prevents a party from alleging and proving the truth.
Here the plaintiff is not shut out from asserting anything.
We are assuming in his favour that Pato had only a life estate and we are examining at length his assertion that he did not assent to the family arrangement.
The principle we are applying is therefore not estoppel.
It is a rule underlying many branches of the law which precludes a person who ' with full knowledge of his rights, has once elected to assent to a transaction voidable at his instance and has thus elected not to exercise his right to avoid it, from going back on that and avoiding it at a later stage.
Having made his election he is bound by it.
So far as the Hindu law is concerned, Lord Dunedin explained in Rangaswami Gounden vs Nachiappa Gounden(5), a case in which a widow gifted properties to her nephew, that though the reversioner is not called upon to exercise his right to avoid until the reversion falls in and so no assent can be inferred from mere inaction prior to the death or deaths of the limited owner or owners, he is not bound to wait and "of course something might be done even before (1) [1897] 24 I.A. 164, 169.
(2) [1906] 34 I.A. 87.
(3) [1927] 54 I.A. 396.
(4) 1952 S.C.R. 478, 488.
(5) [1918] 46 I.A. 72, 86,87. 46 that time which amounted to an actual election to hold the deed good".
Ramgouda case(1) is an illustration of what that something can be, for there the assent was given by the ultimate reversioner before he became in titulo to alienations by a widow, one of which was a gift.
The present case is another illustration.
For the reasons we have given and which we shall now further examine, we hold that the plaintiff, who is in titulo now that the succession has opened out, unequivocally assented to the arrangement with full knowledge of the facts and accepted benefit under it, therefore, be is now precluded from avoiding it, and any attempts he made to go behind that assent when it suited his purpose cannot render the assent once given nugatory even though it was given when he was not in titulo and even though the assent was to a series of gifts.
The real question is whether the plaintiff assented to the family arrangement, and as the plaintiff was not a party to the arrangement his assent to the arrangement itself, and not to something else, must be clearly established, and also his knowledge of the facts.
But we think they have been.
In the first place, there was the express assent in 1890 to the gifts made to the other grandsons on the basis that each grandson got an absolute estate.
Next, there was the long course of dealings by Kanhaiya Lal and Mukand Ram in which they asserted absolute titles.
Mukand Ram tells us in the witness box as P.W. 11 (C.A. 91) that Kanhaiya Lal was the karta of the joint family to which Mukand Ram belonged, therefore Kanhaiya Lal 's dealings with the properties which he and his brother held under a joint and undivided title are also relevant as they will bind Mukand Ram.
And lastly, there is Mukand Ram 's representation to Shyam Lal (D.W. I in C.A. 94) which leaves us in no doubt about his knowledge.
The cumulative effect of this course of conduct leads to a reasonable inference that Kanhaiya Lal and Mukand Ram were holding, not on the basis of a separate and individual gift made by a life owner with the assent of the next set of life 1) [1927] 51 I.A. 396, 402.
47 owners, but on the basis of the family arrangement which was one composite whole in which the several dispositions formed parts of the same transaction under which Mukand Ram himself acquired a part of the estate: see Ramgouda vs Bhausaheb(1).
We are therefore satisfied that the plaintiff 's assent was to this very arrangement.
and that concludes both cases.
In C. A. 94/50 there is, in addition, a direct personal estoppel against the plaintiff.
The transfers that are challenged there are sales of 23 9 18 and 25 11 19 made by two of the grandsons, one personally and the other by the guardian, but the relevant dates for the purposes of the estoppel are later because the representation in this case was not made to the immediate transferees but to the first defendant who obtained title to the properties at a later date, in one case by a sale from the immediate transferee, in the other by pre emption.
But the exact dates do not matter because the representation to the first defendant was made in 1910 before the first defendant 's purchases.
It was made by Kanhaiya Lal and Mukand Ram as as well as by other members of the family.
We have already referred to the first defendant 's evidence.
This case would therefore be governed by Dhiyan Singh vs Jugal Kishore(2) in any event.
But we need not elaborate this further because of the other principle which, in our opinion, is sufficient to dispose of both the present cases.
The result is that both appeals are allowed.
The decrees of the High Court are set aside and those of the first Court dismissing the plaintiff 's claims in those suits out of which Civil Appeals 92 and 94 of 1950 arise are restored.
Costs here and in the High.
Court will be paid by the plaintiff respondent but there will be only one set of costs and they will be divided half and half between the two sets of appellants.
Appeals allowed.
(1) [1927] 54 I.A. 396, 402.
(2) 1952 S.C.R. 478.
| The 118 respondents are workmen of the appellant company`working in different departments of the company 's works.
Respondents 1 to 14 are Syphon Pumpers.
They filed 14 applications before the Additional Authority under s 15 of the Payment of Wages Act claiming overtime wages for the period February 1957 to January 1958.
Respondents 15 8 are Mains workers.
They filed 66 applications before the same authority claiming overtime wages for tho period December 1956 to November 1957.
Respondents 81 to 118 filed 38 applications before the Third Additional Authority claiming wages for weekly of days.
They belonged to the Mains, Heating Appliances and Fitting Department 'they had joined the appellant company after 1948.
Before the Authority under Payment of Wages Act the company contended that all the claims were barred under an award of the Industrial Tribunal in Ref.
No. 54 of 1949, which was made on 30 3 1950 and published on 11 5 1950.
The Tribunal held that workers of Services and District fittings departments and lamp repairers who used to work till 1948 on all the seven days of the week, would be entitled to be paid weekly day off.
The Authority held that (1) the claims of the Booster Attendants for wages for overtime work and weekly off days were covered by the award, (2) the claims of Applicants other than Booster Attendants were not covered by the award, and (3) the Bombay Shops and Establishments Act was not applicable to them, and dismissed the applications of respondents I to 80.
The applications made by respondents 81 to 113 were allowed by the Third Additional Authority holding that the award was no bar to those applications, and that the provisions of the Bombay Shops and Establishments Act were applicable.
The Court of Small Causes, Bombay, which dealt with the appeals filed by the workmen and the company held that the claims of workers for overtime.
wages and wages for weekly off days were barred by the award.
It also held that the appellant company was a commercial establishment within The meaning of that terms under the Bombay Shops and Establishments Act.
All the workmen filed a writ petition challenging the judgment of the Court of Small Causes.
The High Court held that the claims of the respondents were not barred by the award and remanded the applications of respondents I to 80 to the Authority under the Payment of Wages Act for ascertaining and decreeing the amount.
As regards respondents 81 to 118 the judgment of the Third Additional Authority under the Payment of Wages Act was restored.
This appeal is preferred on the basis of the special leave granted by the Supreme Court.
Dismissing the appeal, ^ HELD: (1) An award of an Industrial Tribunal in a reference under section is of the binds not only persons who were the workmen of the employer at the time the award was made but also workmen who came tc.
work under the employer after the award.
It would not be correct.
therefore, to hold that they would be entitled to be paid separately for the weekly day off.
It must be presumed that their scales of pay were the same as for the workmen who were working before 1948 also.
There was no averment to the contrary.
They cannot, therefore, be allowed an extra benefit which would not be available to the same category of workmen who were working under the employer since before 194&.
[295B C].
(ii) The reasoning of the High Court that the workmen are entitled to be paid for the days off either under the award or under section 18(3) of the Bom 292 bay Shops and Establishments Act, is not correct.
The High Court seems to A have assumed wrongly that there was a scale of wages for weekly off days under the award [295C D] (iii) The specific case of workers in the Mains Department has been dealt with and rejected; so also in the case of coke supply coolies and motor drivers The Workmen concerned here being all workman of the Mains department, the question of their being paid overtime wages under the provisions of the award does not arise.
[297A B] (iv) The doctrine of res judicata is a wholesome one which is applicable not merely to matters governed by the provisions of the Code of Civil Procedure but to all litigations.
lt proceeds on the principle that there should be no unnecessary litigation and whatever claims and defences are open to parties should all be put forward at the same time provided no confusion is likely to arise by so putting forward all such claims.
[298D] Devilal Modi vs Sales Tax officer ; relied on Bombay Gas Co. vs Shridhar Bhau A.I.R. 1961 SC 1196 referred to.
(v) The workmen could and ought to have raised the question that even if they were not entitled to claim overtime wages at the same rate as payable to workers governed by the Factories Act, they should at least be paid the same rates as the payable to persons governed by the Bombay Shops and Establishments Act.
The workers neither put forward the contention that they were entitled to the benefit of the Bombay Shops and Establishments Act nor even that on considerations similar to those applicable to the persons governed by the Bombay Shops and Establishments Act they should also be paid overtime wages under the provisions of that Act.
[298A C]
|
Appeal No. 263 of 1956.
Appeal from the judgment and decree dated January 6, 1953, of the Madras High Court in A. section Appeal No. 7 of 1949.
M. C. Setalvad, Attorney General of India and Naunit Lal, for the appellants.
100 780 A. V. Vimanatha Sastri and B. K. B.Naidu, for respondent No. 1.
M. B. K. Pillai, for respondent No. 2. 1961.
February 9.
The Judgment of the Court was delivered by GAJENDRAGADKAR,J.
This appeal has been brought to this Court with a certificate granted by the Madras High Court and it arises from a suit filed by the appellants Mallesappa and Chenna Basappa against their uncle Mallappa, respondent 1 and granduncle Honnappa, respondent 2, for partition.
According to the plaint, the family of the appellants and respondent 1 was an undivided Hindu family until the date of the suit, and respondent 1 was its manager.
The ancestor of the family was Desai Mallappa.
He had three sons, Kari Ramappa who died in 1933, Virupakshappa who died long ago and Honnappa, respondent 2.
Kari Ramappa had four sons Guru shantappa (died 1913), Bandappa (died 1931), Mallappa (respondent 1) and Veerabhadrappa (died 1927).
Gurushantappa married Parvathamma; the two appellants are the sons of Bandappa, their mother being Neelamma.
They were born in 1926 and 1929 respectively.
Their case was that respondent 1 who has been the manager of the family for many years has been trying to deprive them of their legitimate share in the property and refused their request for partition, and so they had to file the present suit.
According to them, in the property of the family they and respondent 1 were entitled to half share each.
To the plaint were attached the schedules describing the several items of property.
Schedule A consisted of items 1 to 163 which included houses and lands at Jonnagiri.
Schedule B described the movables while Schedule C included items 1 to 35 all of which had been acquired by the family under a document exhibit B 32.
It is in respect of all these properties that the appellants claimed their half share and asked for a partition in that behalf.
This claim was resisted by respondent 1 principally on the ground that in 1929 Ramappa, the father of 781 respondent 1 and the grandfather of the appellants had effected a partition of the joint family properties between respondent 1 and his elder brother Bandappa who is the appellants ' father.
That is how, according to respondent 1, the appellants ' claim for partition was untenable.
In this way he pleaded separate title to all the properties in suit.
On these pleadings the learned District Judge, who tried the suit, framed eight issues; two of these related to the question regarding the status of the family.
He found that the plea of partition made by respondent 1 was not proved, and accordingly he declared that the appellants were entitled to half share in the properties of the family and passed a preliminary decree for partition.
According to the learned judge, the appellants were entitled to their half share in the items of property described in Schedule A excluding items 63, 64, 65, 86 and 151 and items in paragraph 14(d) of the written statement of respondent 1 as well as items of property described in Schedules B and C.
This decree was passed on November 22, 1948.
The said decree was challenged by respondent 1 by his appeal before the Madras High Court.
He urged that the trial court 's finding as to the status of the family was erroneous, and he pleaded that in any case the appellants were not entitled to any share in the properties at Jonnagiri, items 4 to 61, as well as the properties acquired under exhibit B 32.
The first argument was rejected by the High Court, but the second was upheld.
In the result the decree passed by the trial court was confirmed except in regard to the said two categories of properties.
It is this appellate decree which is challenged before us by the learned Attorney General on behalf of the appellants.
In order to appreciate the contentions raised before us it would be necessary to recapitulate briefly the findings concurrently recorded by the courts below in respect of the plea of partition set up by respondent 1.
These findings afford a background in the light of which the pleas raised before us would have to be considered.
It appears that respondent 1 relied on several documents in support of his plea that there 782 was a partition effected by Ramappa in 1929.
The trial court repelled this argument and observed that from 1937 respondent began to do mischief.
The transfer of patta in 1937 on which respondent 1 relied was entirely his work and the appellants ' mother Neelamma had not been consulted and had given no consent to it.
In the opinion of the trial court respondent 1 through his agents whom he examined as witnesses in the suit (D. Ws. 2 and 14) managed the family lands, arranged to pay cist for them and manipulated entries in the revenue record purporting to show that Neelamma had paid the said cist as pattadar.
Neelamma was an illiterate and Gosha woman and it appeared that a certain amount of coercion had been practised on her as well as deception in persuading her to execute the original of exhibit B 10 which contained the recital that the house there described had fallen to the share of Neelamma 's husband at a prior partition.
The trial court was satisfied that the said recital had been fraudulently made and the 'document had not been read to Neelamma at all.
The demeanour of respondent 1 in the witness box was also criticised by the trial judge when he observed that he did not impress the trial judge as a truthful witness, and in his opinion he was a powerful and influential man in the village who was able to do a number of things as he wished and so it was not surprising that he was able to get a number of witnesses to speak to separate enjoyment of a few items of land by the appellants ' mother.
When the question of status of the family was reagitated before the High Court it felt no hesitation in confirming the conclusions of the trial court in regard to the general conduct of respondent 1, the documents brought into existence by him, and the unfair manner in which he had dealt with the appellants ' mother.
For the reasons set out by the High Court in its judgment " and also for the various reasons put forward by the learned District Judge in his exhaustive judgment " the High Court agreed with the learned judge that the alleged partition of 1929 had not been proved.
Thus the dispute between the parties has to be considered 783 on the basis that until the date of the institution of the suit the family was an undivided Hindu family with respondent I as its manager.
The first point which has been raised before us by the learned Attorney General relates to items 4 to 61 at Jonnagiri.
These properties originally belonged to Karnam Channappa.
He died in 1904, and in due ' course the said property devolved upon his widow Bassamma who died in 1920.
Bassamma left behind her three daughters Channamma, Nagamma and Veeramma.
Channamma married Ramappa, and as we have already indicated the couple had four sons including the appellants father Bandappa and the first respondent Mallappa.
It is common ground that the properties at Jonnagiri had been obtained by Channamma by succession from her father and were held by her as a limited owner.
The appellants ' case was that after Channamma obtained these properties by ,succession she allowed the said properties to be thrown into the common stock of other properties belonging to her husband 's family, and so by virtue of blending her properties acquired the character of the properties belonging to her husband 's family; in other words, the appellants ' claim in respect of this property is based on the principle of blending or throwing into the com mon stock which is recognised by Hindu law.
The trial court relied on some transactions adduced by the appellants and upheld the plea that Channamma 's properties had become joint family properties in which the appellants had a half share.
The High Court has reversed this finding, and it has held that the transactions on which the appellants relied do not prove blending as known to Hindu law.
That is why the appellants ' claim to these properties has been rejected by the High Court.
Before considering the appellants ' case in regard to ,/these properties it is necessary to enquire whether the doctrine of blending can be invoked in such a case.
Is this doctrine based on any Sanskrit Text of Hindu Law? According to the decision of the Privy Council in Shiba Prasad Singh vs Rani Prayag Kumari Debi (1).
(1) (1932) L.R. 59 I.A. 331. 784 this doctrine is based on the text of Yagnavalkya and the commentary of Mitakshara; the text of Yagnavalkya reads thus: " In cases where the common stock undergoes an increase, an equal division is obtained " (1).
In his commentary on this text Vijnyaneshwara has observed as follows: " Among unseparated brothers, if the common stock be improved or augmented by any one of them through agriculture, commerce or similar means, an equal distribution nevertheless takes place; and a double share is not allotted to the acquirer " (2).
Sir Dinshah Mulla, who delivered the judgment of the Privy Council in the case of Shiba Prasad Singh (3) has observed that the words of Yagnavalkya mean that " if a member of a joint family augments joint property, whatever may be the mode of augmentation, the property which goes to augment the joint family property becomes part of the joint family property, and he is entitled on a partition to an equal share with the other members of the family, and not to a double share, as in some other cases dealt with in the preceding verses.
This is the placitum on which the whole doctrine of merger of estates by the blending of income is founded " (p. 349).
It would thus be seen that according to this decision the doctrine of blending or throwing into the common stock is based on the text just quoted.
With very great respect, however, the text of Yagnavalkya and the comments made by Vijnyaneshwara on it do not appear to have any relation to the doctrine of blending as it has been judicially evolved.
The context of the discussion both in the text of Yagnavalkya and in the commentary clearly shows that what is being discussed is the acquisition of property by a coparcener with the use of the family stock; in other words, taking the benefit of the family stock and making its use if a coparcener through trade, agriculture or any other means augments the initial or original family stock, the augmentation thus made is treated as forming part of the original stock and an accretion to it, and in this augmentation the acquirer is not given any extra share for his special exertions.
(1) Ch. 1, sect.
4, 30.
(2) Mitakshara, ch.
1. sect.
(3) (1932) L.R. 59 I.A. 331.
785 This position is clarified by the comments made by Sulapani.
Says Sulapani: " that an equal division is here specifically ordained; for in a partnership with a common stock, the difference in the gains of each individual member is not to be taken into account at the time of partition.
" Vijnyaneshwara observes that this text is intended to be an exception to the text of Vasishtha which allows two shares to the acquirer and which is cited in the Mayukha (1).
It would thus be clear that the relevant text and the commentary are not dealing with a case where the separate property of a coparcener independently acquired by him is thrown into the common stock with the deliberate intention of extinguishing its separate character and impressing upon it the character of the joint family property.
The subject matter of the discussion is addition to the common stock made by the efforts of a coparcener with the assistance of the common stock itself.
Therefore, in our opinion, the said text cannot be treated as the basis for the doctrine of blending as it has been judicially evolved.
It is, we think, unnecessary to investigate whether any other text can be treated as the foundation of the said doctrine since the said doctrine has been recognised in several decisions and has now become a part of Hindu law.
In Rajani Kanta Pal vs Jaga Mohan Pal (2) the Privy Council held that " Where a member of a joint Hindu family blends his self acquired property with property of the joint family, either by bringing his self acquired property into a joint family account, or by bringing joint family property into his separate account, the effect is that all the property so blended becomes a joint family property." The question which falls for our decision is: Does this principle apply in regard to a property held by a Hindu female as a limited owner? In our opinion, it, is difficult to answer this question in favour of the; appellants.
The rule of blending postulates that a;, coparcener who is interested in the coparcenary property and who owns separate property of his own may, (1) The Vyavahara Mayukha, Pt. 1, by Vishvanath Narayan Mandlik, 215.
(2)(1923) L.R. 50 I.A. 173.
786 by deliberate and intentional conduct treat his separate property as forming part of the coparcenary property.
If it appears that property which is separately acquired has been deliberately and voluntarily thrown by the owner into the joint stock with the clear intention of abandoning his claim on the said property and with the object of assimilating it to the joint family property, then the said property becomes a part of the joint family estate ; in other words, the separate property of a coparcener loses its separate character by reason of the owner 's conduct and get thrown into the common stock of which it becomes a part.
This doctrine therefore inevitably postulates that the owner of the separate property is a coparcener who has an interest in the coparcenary property and desires to blend his separate property with the coparcenary property.
There can be no doubt that the conduct on which a plea of blending is based must clearly and unequivocally show the intention of the owner of the separate property to convert his property into an item of joint family property.
A mere intention to benefit the members of the family by allowing them the use of the income coming from the said property may not necessarily be enough to justify an inference of blending; but the basis of the doctrine is the existence of coparcenary and coparcenary property as well as the existence of the separate property of a coparcener.
How this doctrine can be applied to the case of a Hindu female who has acquired immovable property from her father as a limited owner it is difficult to understand.
Such a Hindu female is not a coparcener and as such has no interest in coparcenary property.
She holds the property as a limited owner, and on her death the property has to devolve on the next reversioner.
Under Hindu law it is open to a limited owner like a Hindu female succeeding to her mother 's estate as in Madras, or a Hindu widow succeeding to her husband 's estate, to efface herself and accelerate the reversion by surrender; but, as is well known, surrender has to be effected according to the rules recognised in that behalf.
A Hindu female owning a limited estate cannot circumvent the rules of surrender 787 and allow the members of her husband 's family to treat her limited estate as part of the joint property belonging to the said family.
On first principles such a result would be inconsistent with the basic notion of blending and the basic character of a limited owners ' title to the property held, by her.
This aspect of the matter has apparently not been argued before the courts below and has not been considered by them.
Thus, if the doctrine of blending cannot be invoked in regard to the property held by Channamma, the appellants ' claim in respect of the said property can and must be rejected on this preliminary ground alone.
However, we will briefly indicate the nature of the evidence on which the plea of blending was sought to be supported.
It appears that in 1921 a deed of maintenance was executed in favour of Gurushantappa 's widow Parvathamma by the three surviving brothers of Gurushantappa.
This deed was attested by their father Kari Ramappa.
It is clear that this deed includes some of the lands which Channamma had acquired by succession to her father (exhibit A 10).
Subsequently, on July 5, 1923, some additional properties belonging to Channamma were charged to the said maintenance (exhibit A 11).
It also appears that pattas in respect of the same lands belonging to Channamma were obtained in the names of the members of the family; and consequently, the said pattas were shown in the relevant revenue papers.
Broadly stated, that is the nature of the evidence on which the plea of blending rests.
It is obvious that even if the doctrine of blending were applicable it would be impossible to hold that the transactions on which it is sought to be supported can lead to the inference that Channamma did any act from which her deliberate intention to give up her title over the properties in favour of the members of her husband 's family can be inferred.
It is not difficult to imagine Channamma 's position in the family.
If her husband and her sons dealt with her property as they thought fit to do Channamma may not know about it, and even if she knew about it, may not think it necessary to object 788 because she would not be averse to giving some income from her property to her sons or to her widowed daughter in law.
As we have already pointed out, the conduct of the owner on which the plea of merger can be invoked must be clear and unequivocal, and the evidence about it must be of such a strong character as to justify an inference that the owner wanted to extinguish his title over the property and impress upon it the character of the joint family property.
Besides, as we will later point out, Channamma executed a deed of surrender in 1938 and the said document is wholly inconsistent with the plea that she intended to give up her title to the property in favour of her husband 's joint family.
However, this discussion is purely academic since we have already held that the principle of blending cannot be invoked in respect of the limited estate held by Channamma.
Therefore, we must hold that the High Court was right in rejecting the appellants ' claim in respect of the properties in Jonnagiri.
That takes us to the properties in Schedule C in respect of which the trial court had decreed the appellants ' claim and the High Court has rejected it.
This property has been obtained by respondent 1 as a result of the decree passed in O. section No. 5 of 1940.
The property originally belonged to Virupakshappa, and in O. section No. 5 of 1940 respondents 2 and 1 claimed a declaration against the two widows of Virupakshappa, their daughter and certain alienees.
The declaration claimed was that the wills of Virupakshappa therein specified were invalid and inoperative and that the respondents had reversionery right to Virupakshappa 's estate after the lifetime of his widows and daughter.
A further declaration was also claimed that alienations and gifts specified in the plaint were invalid beyond the lifetime of the widows and the daughter of Virupakshapna.
This suit ended in a compromise decree, and it is common ground that the properties in Schedule C came to the share of respondent 1 by this compromise decree.
The question which has been argued before us in respect of these properties is whether or not the appellants 789 are entitled to a share in these properties.
The appellants contend that respondent 1 had joined respondent 2 in the said suit as representing their undivided family and the properties acquired by him under the compromise decree passed in the said suit has been allotted to him as representing the whole of the family.
On the other hand, respondent 1 contends that he joined respondent 2 in his individual character and the decree must inure for his individual benefit.
It is clear that at the time when the said suit was filed respondent 2 was a presumptive reversioner and not respondent 1 ; but it appears that respondent 2 wanted the help of respondent 1 to fight the litigation, and both of them joined in bringing the said suit.
It is common ground that respondent 2 asked Neelamma whether she would like to join the litigation.
Respondent 2 has stated in his evidence that Neelamma was not willing to join the said litigation and respondent 1 has supported this version.
The High Court thought that the evidence of Neelamma was also consistent with the story set up by respondent 1.
That is one of the main reasons why the High Court held that the decree passed in the said suit did not enure for the benefit of the family.
In assuming that Neelamma supported the version of respondent 1 the High Court has obviously misread her evidence.
This is what Neelamma has stated in her evidence: " Defendants 1 and 2 came to me at the time of filing their suit and said that the expenses are likely to be heavy and that minors ' properties would not be wasted.
1 said 1 had no objection and gave my consent." The High Court has read her evidence to mean that she was not prepared to waste the properties of her minor sons and so she refused to join the adventure, and in doing so it thought that the statement of respondent 2 was that the minors ' properties should not be wasted, whereas according to the witness the said statement was that the minors ' properties "would" not be wasted.
It would be noticed that it makes substantial difference whether the words used were " would not " or " should not.
" 790 We have no doubt that on the evidence as it stands the inference is wholly unjustified that Neelamma refused to join respondents 1 and 2.
Besides, as we have already pointed out, the evidence of respondents 1 and 2 have been disbelieved by both the courts, and in fact the conduct of respondent 1 whereby he wanted to defeat the claims of his nephews has been very strongly criticized by both the courts.
Therefore, we feel no hesitation in holding that the trial court was right in coming to the conclusion that respondents 1 and 2 consulted Neelamma and with her consent the suit was filed and was intended to be fought by the two respondents not for themselves individually but with the knowledge that respondent 1 represented the undivided family of which he was the manager.
If that be so, then it must follow that the decree which was passed in favour of respondent 1 was not for his personal benefit but for the benefit of the whole family.
In this connection it is necessary to bear in mind that respondent 1 has not shown by any reliable evidence that the expenses for the said litigation were borne by him out of his pocket.
It is true that both the courts have found that respondent 1 purchased certain properties for Rs. 600/ in 1925 (exhibit B 4).
We do not know what the income of the said properties was; obviously it could not be of any significant order; but, in our opinion, there is no doubt that where a manager claims that any immovable property has been acquired by him with his own separate funds and not with the help of the joint family funds of which he was in possession and charge, it is for him to prove by clear and satisfactory evidence his plea that the purchase money proceeded from his separate fund.
The onus of proof must in such a case be placed on the manager and not on his coparceners.
But,, apart from the question of onus, the evidence given by respondent 1 in this case has been disbelieved, and in the absence of any satisfactory material to show that respondent 1 had any means of his own it would be idle to contend that the expenses incurred for the litigation in question were not borne by the joint 791 family income.
Therefore, apart from the fact that Neelamma was consulted and agreed to join the adventure on behalf of her sons, it is clear that the expenses for the litigation were borne by the whole family from its own joint funds.
This fact also shows that the property acquired by respondent 1 under the compromise decree was acquired by him as representing the family of which be was the manager.
The result is that the view taken by the High Court in respect of the properties in Schedule C must be reversed and that of the trial court restored.
That leaves a minor point about three items of property, Serial Nos. 63, 64 and 65, in Schedule A.
These items of property form part of Jonnagiri property, and we have already held that the appellants cannot make any claim to the whole of this property.
It appears that though the trial judge passed a decree in favour of the appellants in respect of Serial Nos. 4 to 61 in Schedule A, he did not recognise the appellants ' share in the three serial numbers in question because he held that they were not part of the joint family property but belonged exclusively to respondent 1.
It also appears that these properties originally belonged to the joint family of the parties but they were sold by Kari Ramappa and his two brothers to Channappa as long ago as 1898.
That is how they formed part of Channappa 's estate.
Both the courts have found that the sale deed in question was a real and genuine transaction, and they have rejected the appellants ' case to the contrary.
Respondent 1 claims these items under a deed of surrender executed in his favour by Channamma (exhibit B. 3) on December 5, 1938.
This document is accepted as genuine by both the courts and it is not disputed that the surrender effected by it is valid under Hindu law.
Indeed this document is wholly inconsistent with the appellants ' case that Channamma wanted to convert her separate properties into properties of the joint family of her husband.
Therefore, there is no substance in the appellants ' argument that they should be given a share in these three items of property.
792 The result is the appeal is partly allowed and the decree passed by the High Court is modified by giving the appellants their half share in the properties described in Schedule C.
The rest of the decree passed by the High Court is confirmed.
In the circumstances of this case the parties should bear their own costs. ' Appeal allowed in part.
| A decree dated September 2, 1938, in a suit for partition of joint Hindu family property awarded a house to the share of one J and his four minor sons.
J failed to execute the decree.
On November 23, 1949, an application was made by the appellants, the four sons of J, for execution of the decree stating that three of them had been minors till then and one of them was still a minor and so no question of limitation arose.
The respondent objected that the application was barred under section 7 of the Indian Limitation Act.
The appellants contended that section 7 did not apply to a partition decree and that section 7 was no bar as j could not have given a valid discharge of the liability under the decree in view of the provisions of 0. 32 of the Code of Civil Procedure.
Held, that the application for execution was barred by limitation.
J, the managing member of the family could have given a discharge of the liability under the partition decree by accepting possession on behalf of his minor sons without their consent and so time ran against them under section 7 from the date of the decree.
Order 32, rr.
6 and 7 were no bar to j giving a discharge of the liability under the decree as it was neither a case of receipt of any money or movable property nor was there any question of entering into an agreement or compromise on behalf of the minors.
Ganesha Row vs Tuljaram Row (1913) L.R. 40 1.A. 132, Parmeshwari Singh vs Ranjit Singh, A.I.R. 1939 Pat.
33 and Letchmatsa Chetty vs Subbiah Chotty, Mad. 920, referred to. 876
|
Appeal No. 395 of 1959.
Appeal by special leave from the Award dated November 25, 1957 of the Industrial Tribunal, Bombay, in Reference (I. T.) No. 24 of 1956.
N. C. Chatterjee, D. H. Buch and K. L. Hathi, for the appellants.
M. C. Setalvad, Attorney General for India, J. B. Dadachanji and section N. Andley, for the respondent Nos. 1 and 2.
M. C. Setalvad, Attorney General for India, Dewan Chaman Lal Pandhi and I. N. Shroff, for the respondent No. 3. 1960.
November 30.
The Judgment of the Court was delivered by WANCHOO, J.
This is an appeal by special leave in an industrial matter.
It appears that the appellants were originally in the service of the Scindia Steam Navigation Co. Ltd. (hereinafter called the Scindias).
Their services were transferred by way of loan to the Air Services of India Limited (hereinafter referred to as the ASI).
The ASI was formed in 1937 and was 813 purchased by the Scindias in 1943 and by 1946 was a full subsidiary of the Scindias.
Therefore from 1946 to about 1951, a large number of employees of the, Scindias were transferred to the ASI for indefinite periods.
The Scindias had a number of subsidiaries and it was usual for the Scindias to transfer their employees to their subsidiary companies and take them back whenever they found necessary to do so.
The ' appellants who were thus transferred to the ASI were to get the same scale of pay as the employees of the Scindias and the same terms and conditions of service (including bonus whenever the Scindias paid it) were to apply.
The Scindias retained the right to recall these loaned employees and it is the case of the appellants that they were entitled to go back to the Scindias if they so desired.
Thus the terms and conditions of service of these loaned employees of the ASI were different from those employees of the ASI who were recruited by the ASI itself.
This state of affairs continued till 1952 when the Government of India contemplated nationalisation of the existing air lines operating in India with effect from June 1953 or thereabouts.
When legislation for this purpose was on the anvil the appellants felt perturbed about their status in the ASI which was going to be taken over by the Indian Air Lines Corporation (hereinafter called the Corporation), which was expected to be established after the , No. XXVII of 1953, (hereinafter called the Act) came into force.
They therefore addressed a letter to the Scindias on April 6, 1953, requesting that as the Government of India intended to nationalise all the air lines in India with effect from 1 June, 1953, or subsequent thereto, they wanted to be taken back by the Scindias.
On April 24, the Scindias sent a reply to this letter in which they pointed out that all persons working in the ASI would be governed by cl. 20 of the Air Corporation Bill of 1953, when the Bill was enacted into law.
It was also pointed out that this clause would apply to all those actually working with the ASI on 103 814 the appointed day irrespective of whether they were recruited by the ASI directly or transferred to the ASI from the Scindias or other associated concerns.
It was further pointed out that if the loaned employees or others, employed under the 'ASI, did not want to join ,the proposed Corporation they would have the option not to do so under the proviso to cl.
20(1) of the 'Bill; but in case any employee of the ASI whether loaned or otherwise made the option not to join the proposed Corporation, the Scindias would treat them as having resigned from service, as the Scindias could not absorb them.
In that case such employees would be entitled only to the usual retirement benefits and would not be entitled to retrenchment compensation.
Finally, it was hoped that all those in the employ of the ASI, whether loaned or otherwise, having been guaranteed continuity of employment in the new set up would see that the Scindias would not be burdened with surplus staff, requiring consequential retrenchment of the same or more junior personnel by the Scindias.
On April 29, 1953, a reply was sent by the union on behalf of the appellants to the Scindias.
It was pointed out that the loaned staff should not be forced to go to the proposed Corporation without any consideration of their claim for re absorption into the Scindias.
It was suggested that the matter might be taken up with the Government of India and the persons directly recruited by the ASI who were with other subsidiary companies might be taken by the proposed Corporation in place of the appellants.
It seems that this suggestion was taken up with the Government of India but nothing came out of it, particularly because the persons directly recruited by the ASI.
who were employed in other subsidiary companies did not want to go back to the ASI.
In the meantime, the Scindias issued a circular on May 6,1953, to all the employees under the ASI including the loaned employees, in which they pointed out that all the persons working with the ASI would be governed by cl.
20(1) when the Bill became law and would be absorbed in the proposed Corporation, unless 815 they took advantage of the proviso to cl.
20(1).
It was also pointed out that such employees as took advantage of the proviso to el.
20(1) would be treated as having resigned from service and would be entitled to usual retirement benefits as on voluntary retirement, and to nothing more.
It was also said that their conditions of service would be the same until duly altered or amended by the proposed Corporation.
The circular then dealt with certain matters relating to provident fund with which we are however not concerned.
It appears that the Act was passed on May 28, 1953.
20(1) of the Act, with which we are concerned, is in these terms: "(1) Every officer or other employee of an existing air company (except a director, managing agent, manager or any other person entitled to manage the whole or a substantial part of the business and affairs of the company under a special agreement) employed by that company prior to the first day of July, 1952, and still in its employment immediately before the appointed day shall, in so far as such officer or other employee is employed in connection with the undertaking which has vested in either of the Corporations by virtue of this Act, become as from the appointed date an officer or other employee, as the case may be, of the Corporation in which the undertaking has vested and shall hold his office or service therein by the same tenure, at the same remuneration and upon the same terms and conditions and with the same rights and privileges as to pension and gratuity and other matters as he would have held the same under the existing air company if its undertaking had not vested in the Corporation and shall continue to do so unless and until his employment in the Corporation is terminated or until his remuneration, terms or conditions are duly altered by the Corporation : Provided nothing contained in this section shall apply to any officer or other employee who has, by notice in writing given to the Corporation concerned prior to such date as may be fixed by the Central Government by notification in the official gazette 816 intimated his intention of not becoming an officer or other employee of the Corporation." After the Act was passed, notice was sent on June 17, 1953, to each employee of all the air companies which were being taken over by the proposed Corporation m and he was asked to inform the officer on special duty by July 10, 1953, if he desired to give the notice contemplated by the proviso to section 20(1).
A form was sent in which the notice was to be given and it was ordered that it should reach the Chairman of the Corporation by registered post by July 10.
The appellants admittedly did not give this notice as required by the proviso to section 20(1).
In the meantime on June 8, 1953, a demand was made on behalf of the appellants in which the Scindias were asked to give an assurance to them that in the event of retrenchment of any loaned staff by the proposed Corporation within the first five years without any fault, the said staff would be taken back by the Scindias.
Certain other demands were also made.
The Scindias replied to this letter on July 3 and pointed out that they could not agree to give an assurance to take back the loaned staff in case it was retrenched by the proposed Corporation within the next five years.
We are not concerned with the other demands and the replies thereto.
On July 8, a letter was written on behalf of the appellants to the Scindias in which it was said that the appellants could not accept the contention contained in the circular of May 6, 1953.
Though the appellants were carrying on this correspondence with the Scindias, they did not exercise the option which was given to them under the proviso to section 20(1) of the Act,.
by July 10, 1953.
First of August, 1953, was notified the appointed day under section 16 of the Act and from that date the undertakings of the "existing air companies" vested in the Corporation established under the Act (except the Air India International).
So on August:1, 1953, the ASI vested in the Corporation and section 20(1) of the Act came into force.
Hence as none of the appellants had exercised the option given to them under the proviso, they would also be governed by the said provision, 817 unless the contention.
raised on their behalf that they could in no case be governed by section 20(1), is accepted.
The tribunal came to the conclusion that, whatever the position of the appellants as loaned staff from the Scindias to the ASI, as they were informed on May 6, 1953, of the exact position by the Scindias and they did not ask for a reference of an industrial dispute immediately thereafter with the Scindias and as they" ' did not exercise the option given to them by the proviso to section 20(1) before July 10, 1953, they would be governed by section 20(1) of the Act.
In consequence, they became the employees.
of the Corporation as from August 1, 1953 and would thus have no right there after to claim that they were still the employees of the Scindias and had a right to revert to them.
The consequence of all this was that they were held not to be entitled to any of the benefits which they claimed in the alternative according to the order of reference.
It is this order of the tribunal rejecting the reference which has been impugned before us in the present appeal.
The main contention of Mr. Chatterjee on behalf of the appellants is that they are not governed by section 20 (1) of the Act and in any case the contract of service between the appellants and the Scindias was not assignable and transferable even by law and finally that even if section 20(1) applied, the Scindias were bound to take back the appellants.
We are of opinion that there is no force in any of these contentions.
20(1) lays down that every officer or employee of the "existing air companies" employed by them prior to the first day of July, 1952, and still in their employment immediately before the appointed day shall become as I from the appointed day an officer or employee, as the case may be, of the Corporation in which the undertakings are vested.
The object of this provision was to ensure continuity of service to the employees of the "existing air companies" which were being taken over by the Corporation and was thus for the benefit of the officers and employees concerned.
It is further provided in section 20(1) that the terms of service etc. would be the same until they are duly altered by the Corporation.
One should have thought that the employees of the air 818 companies would welcome this provision as it ensured them continuity of service on the same terms till they were duly altered.
Further there was no compulsion on the employees or the officers of the "existing air companies" to serve the Corporation if they did not want to do so.
The proviso laid down that any officer or other employee who did not want to go into the service of the Corporation could get out of service by notice in writing given to the Corporation before the date fixed, which was in this case July 10, 1953.
Therefore, even if the argument of Mr. Chatterjee that the contract of service between the appellants and their employers had been transferred or assigned by this section and that this could not be done,, be correct, it loses all its force, for the proviso made it clear that any one who did not want to join the Corporation, was free not to do so, after giving notice upto a certain date.
Mr. Chatterjee in this connection relied on Nokes vs Doncaster Amalgamated Collieries Ltd. where it was observed at p. 1018 "It is, of course, indisputable that (apart from statutory provision to the contrary) the benefit of a contract entered into by A to render personal service to X cannot be transferred by X to Y without A 's consent, which is the same thing as saying that, in order to produce the desired result,, the old contract between A and X would have to be terminated by notice or by mutual consent and a new contract of service entered into by agreement between A and Y." This observation itself shows that a contract of service may be transferred by a statutory provision; but in the present case, as we have already said, there was no compulsory transfer of the contract of service between the "existing air companies", and their officers and employees to the Corporation for each of them was given the option not to join the Corporation, if he gave notice to that effect.
The provision of section 20(1) read with the proviso is a perfectly reasonable provision and, as a matter of fact, in the interest of employees themselves.
But, Mr. Chatterjee argues that section 20(1) will only apply to those who were in the employ of the "existing air companies"; it would not (1) , 819 apply to those who might be working for the "existing air companies" on being loaned from some other company.
In other words, the argument is that the, appellants were in the employ not of the ASI but of the Scinaias and therefore section 20(1) would not apply to them and they would not become the employees of the Corporation by virtue of that provision when they failed to exercise the option given to them by the proviso.
According to him, only those employees of the ASI who were directly recruited by it, would be covered by section 20(1).
We are of opinion that this argument is fallacious.
It is true that the appellants were not originally recruited by the ASI.
They were recruited by the Scindias and were transferred on loan to the ASI on various dates from 1946 to 1951.
But for the purposes of section 20(1) we have to see two things: namely, (i) whether the officer or employee was employed by the existing air company on July 1, 1952, and (ii) whether he was still in its employment on the appointed day, (namely, August 1,1953).
Now it is not disputed that the appellants were working in fact for the ASI on July 1, 1952, and were also working for it on August 1, 1953.
But it is contended that though they were working for the ASI they were still not in its employment in law and were in the employment of the Scindias because at one time they had been loaned by the Scindias to the ASI.
Let us examine the exact position of the appellants in order to determine whether they were in the employ of the ASI or not.
It is not disputed that they were working for the ASI and were being paid by it; their hours of work as well as control over their work was all by the ASI.
From this it would naturally follow that they were the employees of the ASI, even though they might not have been directly recruited by it.
It is true that there were certain special features of their employment with the ASI.
These special features were that they were on the same terms and conditions of service as were enjoyed by the employees of the Scindias in the matter of remuneration, leave, bonus, etc.
It may also be that they could not be, dismissed by the ASI and the Scindias may have had to take action in case it was 820 desired to dismiss them.
Further it may be that they could be recalled by the Scindias and it may even be that they might have the option to go back to the Scindias.
But these are only three special terms of their employment with the ASI.
Subject to these special terms, they would for all purposes be the employees of the ASI and thus would in law be in the employment of the ASI both on July 1, 1952 and on August 1, 1953.
The existence of these special terms in the case of these appellants would not in law make them any the less employees of the ASI, for whom they were working and who were paying them, who had power of control and direction over them; who would grant them leave, fix their hours of work and so on.
There can in our opinion be no doubt that subject to these special terms the appellants were in the employ of the ASI in law.
They would therefore be in the employ of the ASI prior to July 1, 1952 and would still be in its employ immediately before August 1, 1953.
Consequently, they would clearly be governed by section 20(1).
As they did not exercise the option given to them by the proviso to section 20(1), they became the employees of the Corporation from August 1, 1953, by the terms of the statute.
The last point that has been urged is that even if section 20(1) applies, the Scindias are bound to take back the appellants.
Suffice it to say that there is no force in this contention either.
As soon as the appellants became by force of law the employees of the Corporation, as they did so become on August 1, 1953, in the circumstances of this case, they had no further right against the Scindias and could not; claim to be taken back in their employment on the ground that they were still their employees, in spite of the operation of section 20(1) of the Act.
Nor could they claim any of the alternative benefits specified in the order of reference, as from August 1, 1953, they are by operation of law only the employees of the Corporation and can have no rights whatsoever against the Scindias.
We are therefore of opinion that the tribunal 's decision is correct.
The appeal fails and is thereby dismissed.
There will be no order as to costs.
Appeal dismissed.
| The appellants were partners in a registered firm which was dissolved on March 24, 1945.
A private limited company succeeded to the business of the firm from March 25, 1945.
For the accounting period April 1, 1944, to March 24, 1945, the firm was assessed to excess profits tax under the Excess Profits Tax Act, 1940.
It had deposited certain sums of money as required under section 10 of the Indian Finance Act, 1942, read with section 2 Of the Excess Profits Tax Ordinance, 1943, and in accordance with those provisions became entitled to repayment of a portion of the excess profits tax.
The appellant 's claim before the Income.
tax Officer under section 25(4) of the 'Indian Income tax Act, 1922, that no tax was payable on the profits of the firm for the period between April 1, 1944, to March 24, 1945, was allowed, but their plea that the amount of refund of the excess profits tax was business profit and therefore similarly exempt from tax, was rejected.
The High Court, on a reference, took the view that the amount refunded was income from other sources taxable under section 12 Of the Indian Income tax Act, 1922, and that, therefore, the appellants were not entitled to the benefit of section 25(4) Of that Act.
Held, that in view of section 12(1) of the Excess Profits Tax Act, 1940, and section II(II) of the Indian Finance Act, 1946, the amount refunded was income from business for the purposes of the Indian Income tax Act, 1922, and did not lose its character which it had before the deposit.
It fell under section 10 of the Indian Income tax Act and was, therefore, exempt under section 25(4) of that Act.
Mc Gregor and Baljbur Ltd. vs Commissioner of Income tax, Bengal, and A. & W. Nesbitt Ltd. vs Mitchell, [1926] II T.C. 2II, relied on.
|
Criminal Appeal No. 152/59.
, xi Appeal by Special leave from the judgment and Order dated May 12, 1959 of the Allahabad High Court in Criminal Revision No. 1182 of 1957.
Nur ud din Ahmed, J.,B. Dadachanji, O. C. Mathur, and Ravindar Narain for the Appellants.
852 G. C. Mathur and C.A. Lal for the Respondent.
May 3.
The Judgment of the Court was delivered by KAPUR, J.
The appellants are father and son carring on business in vegetable ghee at Aligarh.
They along with Romesh, the second son of appellant Jagannath Prasad were prosecuted under section 14 (d) of the U. P. Sales Tax Act, 1948 (U.P. 15 of 1948) hereinafter called the 'Act ' and under section 471 read with section 468 and section 417 of the Indian Penal Code.
They were all acquitted of the charge under section 468.
Jagannath Prasad was convicted under section 471 and 417 of the Indian Penal Code and a. 14 (d) of the Act and was sentenced to two years ' rigorous imprisonment under a. 471, to one years ' rigorous imprisonment and a fine of Rs. 1,000/ under section 417 and to a fine of Rs. 1,000 under section 14 (d) of the Act.
Bhagwan Das was convicted under section 14 (d) of the Act and sentenced to a fine of Rs. 1, 000/ .
Romesh was acquitted.
The sentences passed on Jagannath Prasad were.
concurrent.
Their 'appeal to the Sessions Judge was dismissed and in revision to the High Court Jagannath Prasad was acquitted of the offence under a. 417 of the Indian Penal Code but the other convictions and sentences were upheld.
Against this judgment and order of the High Court of Allahabad the appellants have come to this court by special leave.
The facts leading to the appeal are these: In 1950 51, the firm of the appellants purchased vegetable ghee valued at about Rs. 3 lacs from places outside the State of U. P. in the name of four fictitious firm.
The firm made its return for that year to the Sales Tax Officer Aligarh and did not include the sale proceeds of these transactions on the ground that they had purchased them from these four firms who were supposed to be carrying 853 on business in Hathras, Aligarh, and other places in U. P. By thus not including the proceeds of the sales of these transactions the firm evaded payment of sales tax for that year on those transactions.
The return of sales tax made by the firm was accepted by the Sales Tax Officer with the consequence that the sale of goods covered by those transactions was not taxed.
A complaint was made against the Sales Tax Officer in regard to these transactions; an enquiry was held with the result that the appellants and Romesh were prosecuted and convicted as above stated.
In the High Court there was no controversy about the facts i. e. the finding of the courts below that the appellants ' firm purchased vegetable ghee from outside U. P. and did not show the sale proceeds of the sale of those goods on the ground that they had been purchased from inside the State of ' (J. P. when in reality they had been purchased from outside the State, that the statements made by the appellant Jagannath Prasad before the Sales Tax Officer were false and that the bills produced by him before the Sales Tax officer were forged.
The conviction was challenged on grounds of law alone.
Before us five points were raised: (1) that no sales tax was exigible on these transactions under a. 3A of the Act in 1950 51 and liability arose by the amendment of the Act in 1952 which gave retroactive operation to the section and became applicable to sales in dispute and therefore there could be no prosecution under an ex post facto amendment; (2) the trial of the appellants was illegal because of ' want of complaint by the Sales Tax Officer under a. 195 of the Criminal Procedure Code; (3) there was no offence under section 14 (d) of the Act; (4) forged invoices were produced by appellant Jagannath Prasad because they were called for by the Sales Tax Officer and therefore it cannot be said.
that they were used by the appellant and (5) the Sales Tax Officer having accepted 854 he invoices as genuine no prosecution could be Entertained in regard to those invoices.
Now the appellants cannot be prosecuted on the basis of any amendment subsequent to the date of the alleged offence committed by them.
Both parties are agreed on that and therefore we have to see the Act as it stood on the date when the offence is alleged to have been committed.
According to the charge the offence was committed on or about July 16, 1951, when forged invoices produced by the appellants before the Sales Tax Officer.
So what we have to see is the law as it stood on that day.
Section 3 of the Act deals with liability to tax under the Act and section 3A with single point taxation.
Under section 3 every dealer was required to pay on his turnover of each assessment year a tax at the rate of three pies a rupee.
Thus the tax was payable in regard to all sales but under section 3A (1) the tax was leviable only at a single point.
That section provided.
section 3A (1) "Notwithstanding anything contained in section 3, the State Government may, by notification in the official Gazette, declare that the turnover in respect of any goods or class of goods shall not be liable to tax except at such single point in the series of sales by successive dealers as may be prescribed".
The Government could declare the tax to be payable at a single point but there were two requirements; there had to be a notification in the Official Gazette declaring the point at which the tax was payable and in the series of sales by successive dealers it had to be "as may be prescribed" i. e. as may be prescribed by rules.
Section 3A was amended in 1952 with retrospective effect but retroactive provision is not applicable to the present proceedings.
Under section 3A a notification No. 1 (3) was issued on 855 June 8, 1948, declaring that the proceeds of sales of vegetable ghee imported from outside shall not be included in the turnover of the dealer other than the importer himself.
The effect of the notification thus was that if a dealer imported vegetable ghee from outside U. P. and sold it he was required to include the sale proceeds in his turnover but the other dealers who bought vegetable ghee from the importer in U. P. and sold it were not so required.
The appellants having thus imported the vegetable ghee from outside U. P. were required by the notification to include the proceeds in their turnover and it was to avoid this that they falsely produced forged invoices that they had purchased the vegetable ghee from those fictitious dealers within the State of U. P. and thus if the notification was an effective notification the appellants successfully evaded the payment of sales tax which under the law they were required to pay.
But it was agreed that the notification was ineffective in view of the words "as may be prescribed" because that could only be done by rules and no rules bad been made under section 3A which made every dealer liable to sales tax if he was an importer from outside U. P.
To this, extent the contention of the appellants is well founded and therefore under a. 3A merely by notification the Government could not prescribe a single point taxation as was done by the notification but that does not help the appellants very much.
Under section 3 every dealer was liable to pay sales tax on every transaction and section 3A only gave relief in regard to sales at every point and thus prevented multi point taxation.
If the notification under section 3A was ineffective, as indeed it was, the appellants were required to pay tax on all their sales and in order to escape multi point taxation they took advantage of an ineffective notification and tried the false plea of the goods having been imported by fictitious persons and their having purchased those goods from those 856 fictitious dealers and in this manner the appellants escapes payment of sales tax under section 3.
In other words they tried to take advantage of section 3A by producing false documents and thereby evaded payment of tax under section 3 which every dealer was required to pay on his turnover.
In trying to get the benefit under the ineffective notification issued under section 3A the appellants evaded payment of tax under section 3 which they were in any case liable to pay.
It cannot be said therefore that no offence was committed under section 14 (d) of the Act which provides: Section 14. ,Offences and penalties.
Any person who (a). . . (b). . . (c). . . (d) fraudulently evades the payment of any tax due under this Act, shall, without prejudice to this liability under any other law for the time being in force, on conviction by a Magistrate of the first class, be liable to a fine which may extend to one thousand rupees, and where the breach is a continuing breach, to a further fine which may extend to fifty rupees for every day after the first during which the breach continues".
It is no defence to say that the appellants were asked by the Sale,% Tax Officer to produce invoices.
The appellants were trying to get exclusion from their turnover of the sale of goods worth about 3 lacs and had made statements before the Sales Tax Officer in regard to it on July 9, 1951, and in order to prove that the goods 857 were not required to be included .,in the turnover the invoices were produced by appellant Jagannath Prasad.
When a fact has to be proved before a court or a tribunal and the court or the tribunal calls upon the person who is relying upon a fact to prove it by best evidence it can not be a defence as to the offence of forgery if that best evidence which, in this case, was the invoices turn out to be forged documents.
A person who produced those documents cannot be heard to say that he was required to prove his case by the best evidence and because be was so required be produced forged documents.
It was then submitted that the Sales Tax Officer was a court within a. 195 of the Criminal Procedure Code and in the absence of a complaint in writing by such an officer no cognizance could be taken of any offence punishable under section 471 of the Indian Penal Code.
This, in our opinion, is an equally erroneous submission.
The Sales Tax Officers are the instrumentalities of the State for collection of certain taxes.
Under the Act and the Rules made thereunder certain officers are appointed as Sales Tax Officers who have certain duties assigned to them for the imposition and collection of taxes land ID the process they have to perform many duties which are of a quasijudicial nature and certain other duties, which are administrative duties.
Merely because certain instrumentalities of state employed for the purpose of taxation have, in the discharge of their duties, to perform certain quasi judicial functions they are not converted into courts thereby.
In a recent judgment of this Court in Shrimati Ujjam Bai vs The State of U.P. (1), all the opinions were unanimous on this point that taxing authorities are not courts even though they perform quasi judicial functions.
The following observation of Lord (1) (1963) 1 S.C.R. 778. 858 Sankey L. C. in Shell Co. of Australia Ltd. vs Federal Commissioner of Taxation (1)was quoted with approval : The authorities are clear to show that there "The authorities are clear to show that there are tribunals with many of the trappings of a court which, nevertheless are not courts in the strict sense of exercising judicial power".
Lord Sankey also enumerated some negative propositions as to when a tribunal is not a court.
At p. 297 his lordship said : "In that connection it may be useful to enumerate some negative propositions on this subject : 1.
A tribunal is not necessarily a Court in this strict sense because it gives a final decision.
Nor because it hears witnesses on oath.
Nor because two or more contending parties appear before it between whom it has to decide.
Nor because it gives decisions which affect the rights of subjects.
Nor because there is an appeal to a Court.
Nor because it is a body to which a matter is referred by another body.
See Rex vs Electricity Commissioners Hidayatullah J., 'in Shrimati Ujjam Bhai(2) case described Sales tax authorities thus : "The taxing authorities are instrumentalities of the State.
They are not a part of the legislature, nor are they a part of the judiciary.
Their functions are the assessment and collection of taxes and in the process of assessing taxes, they follow a pattern of action which is considered Judicial.
They are not thereby converted into Courts of Civil judicature.
They still (1) , 283.
(2) (1963) 1 S.C R. 778. 859 remain the instrumentalities of the State and are within, the definition of State" in article 12".
No doubt the Sales Tax officers have certain powers which, are similar to the powers exercised by courts. but still they are not courts as understood 'in section 195 of the Criminal Procedure Code.
In sub section 2 of B. 195 it is provided: section 195(2) "In clauses (b) and (e) of sub section.
(1) the term "Court" includes a Civil Revenue or Criminal Court, but does not include a Registrar or Sub Registrar under the Indian Registration Act, 1877".
It cannot be, mid that a Sales Tax Officer, is a I Revenue Court.
Under section 2(a) of the Act an assessing authority is defined to mean any person authorised by the State Government to make assessment under the Act and under R. 2(h) 'a Sales, Tax Officer means : "Sales Tax Officer" means a Sales Tax Officer of a circle appointed by the State Government to perform the duties and exercise the powers of an assessing authority in such circle".
Thus under the Act a Sales Tax Officer is only an amassing authority.
Under section 7 of the Act, if the Sale*. Tax Officer, after making such enquiries,as he thinks necessary is, satisfied that a return made is correct and, complete, he shall assess the tax on the basis thereof ' and it no return is submitted he, can make such enquiries as he considers necessary and then determine the turnover of a dealer, Thus his determination depends upon enquiries he may make and which he may, consider necessary.
Sections 9, 10 and 11 of the Act deal with Appeals, Revisions and Statement of the Case to the High court.
Under a. 13 power.
is given 860 to a Sales Tax Officer to require the production of all accounts, documents and other information relating to business and accounts and registers ,shall be open to inspection of the Sales Tax Officer at all reasonable times.
He has the power to enter any office, shop, godown, vehicle or any other place in which business is done which is a power destructive of the Sales Tax Officer being a Court which is a place where justice is administered as between the parties whether the parties are private persons or one of the parties is the State.
Under section 23 certain secrecy is attached to documents filed before the Sales Tax officer and information received by him.
Similarly under R. 43 certain power is given to the Sales Tax Officer to calculate turnover when goods are sold for consideration other than money and this is after such enquiry as he considers necessary.
All these provisions show that the Sales Tax Officer cannot be equated with a Court.
In our opinion therefore the Sales Tax Officer is not a Court.
In Krishna vs Goverdhansiah(1), it was held that the Income Tax Officer is not law court within the meaning of section 195 of the Criminal 's Procedure Code and this view was accepted by this court in Shrimati Ujjam Bai 's(2) case.
In Brajnandan Sinha vs Jyoti Narain(3), a Commissioner appointed under the Public Enquiries Act 1950 was held not to be a court.
Shell Co. of Australia vs Federal Commissioner of Taxation (4) was referred to in that case.
At p. 967 the following passage from Halsbury 's Laws of England, Hailisham Edition, Vol. 8, p. 526 was approved: "Many bodies are not courts, although they have to decide questions, and in so doing have to act judicially, in the sense that the proceedings must be conducted with fairness (1) A.I.R. (1954) Mad.
(2) (1963) 1 S.C.R. 778.
(3) ; (4) (1931) A.C. 275,2B3. 861 and impartiality, such as assessment committees, guardian committees, the Court of referee constituted under the Unemployment Insurance Acts to decide claims made on the Insurance funds the benchers of the Inns of Courts when considering the conduct of one of their members, the General Medical Council when considering questions affecting the position of a medical man" That passage is now contained in Vol. 9 of the 3rd Edition at p. 343.
But it was submitted that the Sales Tax officer while acting as an assessing authority is a court within the meaning of section 195 (2) of the Procedure Code because by the amendment of 1923 the definition of the word "court" was enlarged substituting the word "includes" in place of the word "means" and the section now reads as has been set out above.
Undoubtedly by this change the legislature did mean to make the definition of the word "court" wider but that does not enlarge the definition of the words "Revenue Court".
The track of decision which was pressed on our attention is based primarily on a full bench judgment of the Bombay High Court in In re Punemchand Maneklal(1).
In that case an Income tax Collector was held to be a Revenue Court within the meaning of the word as used in section 195.
The learned Chief Justice who gave the judgment of the court proceeded on the basis that inquiries conducted according to the Forms of judicial procedure under Chapter IV of the Incometax Act were proceedings in a Revenue Court.
This was on the ground that under the law as it then stood revenue questions were generally removed from the cognizance of civil courts and the officers charged with the duty of deciding disputed question relating to revenue between an individual and the (1) , Bom.
862 Government would be invested with the functions of &,,Revenue Court".
This view was followed by the Bombay High Court in State vs Nemchand Pashvir Patel After referring to the various powers which were given to the Sales Tax Officers under the B " bay Sales Tax Act that Court proceeded to say that the Sales Tax Officers under the Bombay Sales Tax Act were Revenue Courts because ' they had jurisdiction to decide Questions relating to revenue, are exclusively empowered with the powers which are normally attributes of a court or a tribunal land are authorised to adjudicate upon a disputed question of law or fact relating to the rights of the citizens.
The Madras High Court in In re B. Nataraja Iyer held that a Divisional Officer hearing appeals; under the Income tax Act was a court within the meaning of a. 476 of the Criminal Procedure Code but a Tehsildar who was the original assessing authority was not because there was no lis before him.
There is one passage in the judgment of Sundara Ayyar J., which is of significance.
It was said: "I may observe that I am prepared agree with Dr. Swaminathan that more.
authority to receive evidence would not make the officer recording it a Court".
At page 84, it was said that the determination of the assessment in the first instance may not be of a court although the assessing officer may have the power to record statements.
But an appeal against the assessment is dealt with by the Collector in the manner in which an appeal is ' disposed of by ' a Civil Court.
In this connection reference may be; made to the statement of the law contained in the judgment of Venkatarama Ayyar J., in Shri Virinder Kumar Satyawadi vs The State of Punjab (2).
There, (1) (1956)7 S.C.R. 404.
(2) , 1018.
863 the, distinction between a quasi judicial tribunal and a court,was given as follows "It may be stated broadly that what disti nguished a Court from a quasi judicial tribu nal is that it is charged with a duty to decide disputes in a judicial manner and declare, the rights of parties in a definitive judgment.
,To decide in a judicial manner involves that the parties are entitled as a matter of right to be heard in support of their claim and to adduce evidence in proof of it.
And it also imports an obligation on the part of the authority to decide the matter on a consideration of the evidence adduced and in accordance with law.
When a question therefore arisen as to whether an authority created by an Act is a Court as, distinguished from a quasi judicial tribunal, what has to: be decided.is whether having regard to the provisions of the Act it possesses all the attributes of a Court".
Dealing with quasi judicial tribunals it was observed in Gullapelli Negeswara Rao vs The State of Andhra Pradesh(1) : ",The concept of a quasi judicial act, implies that the act is not wholly judicial, it describes only a duty cast on the executive body or authority to,conform to the norms.
of judicial procedure in performing some act in the, 'exercise of its executive power".
It is not necessary to refer to other cases because they were decided on their own facts and related to different tribunals.
In our opinion a Sales Tax Officer is not a Court within the meaning of.s.
195 of,the criminal Procedure Code and there.
fore it was not necessary for a Sales Tax Officer to (1) (1959) Supp.
1 S.C.R. 319, 353 4. 864 make a complaint and the proceedings without such a complaint are not without jurisdiction.
In our opinion the appellants were rightly convicted and we therefore dismiss this appeal.
The appellant Jagannath Prasad must surrender to his bail bonds.
Appeal dismissed.
| The appellants who carry on the business in vegetable ghee purchased vegetable ghee from outside U. P. in the name of four fictitious firms.
In their return of sales tax they did not include the sale proceeds of these transactions on the ground that they had purchased from the four firms and that under a notification made under section 3A of the U. P. Sales Tax Act, tax was leviable only at a single point on the sale by the outside suppliers to these four firms.
In support of this the appellant No. 1 made a false statement before the Sales tax Officer and also filed forged bill,.
before him.
The return was accepted by the Sales Tax Officer with the result that the sales covered by these transactions were not taxed.
The appellants were tried and convicted for offence under section 471 Indian Penal Code for using forged documents and under section 14(d) of the Act for fraudulently evading payment of tax due under the Act.
The appellants contended that the trial for the offence under section 471 was illegal as no complaint had been made by the Sales Fax Officer as required by section 14 (d) of the Act was not made out as no tax was payable under 'section 3A because the notification issued thereunder was invalid.
Held, that the Sales Tax Officer was not a Court within the meaning of section 195 Code of Criminal Procedure and it was not necessary for him to make a complaint for the prosecution of the Appellants under section 471 Indian Penal Code.
A Sales Tax Officer was merely an instrumentality of the State for purposes of assessment and collection of tax and even if he was required to perform certain quasi judicial functions, he was not a part of the judiciary.
The nature of the functions, of a Sales Tax Officer and the manner prescribed for their 851 performance showed that he could not be equated with a Court.
Nor could he be said to be a Revenue Court.
Though the definition of Court in section 195 of the Code Was enlarged by the substitution of the word "include" for the word "means" by the amendment of 1923, it did not change the definition of "Revenue Court.
" Smt.
Ujjam Bai vs The State of U. P. (1963) 1 S.C.R. 778), Shell Co. of Australia Ltd. vs Federal Commissioner of Taxation and Brajnandan Sinha vs Jyoti Narain ' ; , applied.
Krishna vs Gocerdhanaiah, A. I. R. , approved.
In re: Punamchand Maneklal (1914) 1. L. R. and State vs Nemchand Pashvir Patel, (1956) 7 section T. C. 404 not approved.
In re : R. Nataraja Iyer (1914) 1. L. R. and Shri Virender, Kumar Satyawadi vs The Sate of Punjab,[1955] 2 section C. R. 1013 referred to.
Held, further that the appellants were rightly convicted under section 14 (d) of the Act.
Sales tax was payable under s.3 of the Act in respect of all sales.
But under s.3A it was leviable only at a single point if the Government issued a notification declaring the point at which tax was payable and it was so prescribed by the rules.
Under the notification issued by the Government tax was payable only by the dealer who imported the goods and sold them.
The appellants having imported the ghee were liable to pay the tax on the sales of this ghee which they fraudulently evaded.
Though the notification was ineffective as no rules were made under the Act prescribing the single point, it did not help the appellants, as the only effect of this was that section 3A did not come into play.
In trying to get the benefit of the ineffective notification under section 3 A the appellants evaded payment of tax under section 3 which they were liable to pay.
|
ivil Appeal No. 2581 of 1986.
Appeal by Certificate from the Judgment and Order dated 15.10.1985 of the Bombay High Court in Appeal No. 547 of 1984.
WITH Civil Appeal No. 855 of 1987.
220 From the Judgment and Order dated 8.12.1986 of the Industrial Court, Maharashtra, Bombay in Complaint (ULP) No. 1202 of 1984.
Ashok Desai, Attorney General, G.B. Pai, J. Ramamurthy, Jitendra Sharma, B.N. Dutt, H.S. Parihar, Vipin Chandra, R.F. Nariman, P.H. Parekh, N.K. Sahu, Mrs. Urmila Sirur and Raj Birbal for the appearing parties.
The Judgment of the Court was delivered by SAWANT, J.
These are two appeals involving a common question of law, viz., whether an employer has a right to deduct wages unilaterally and without holding an enquiry for the period the employees go on strike or resort to go slow.
In CA No. 2581 of 1986 we are concerned with the case of a strike while in the other appeal, it is a,case of a go slow.
By their very nature, the facts in the two appeals differ, though the principles of law involved and many of the au thorities to be considered in both cases may be the same.
For the sake of convenience, however, we propose to deal with each case separately to the extent of the distinction.
Civil Appeal No. 2581 of 1986 2.
The appellant in this case is a nationalised bank, and respondents 1 and 2 are its employees whereas respond ents 3 and 4 are the Unions representing the employees of the Bank.
It appears that some demands for wage revision made by the employees of all the banks were pending at the relevant time, and in support of the said demands the All India Bank Employees ' Association had given a call for a countrywide strike.
The appellant Bank issued a circular on September 23, 1977 to all its managers and agents to deduct wages of the employees who would participate in the strike for the days they go on strike.
Respondents 3 and 4, i.e., the employees ' Unions gave a call for a four hours strike on December 29, 1977.
Hence, the Bank on December 27, 1977 issued an Administrative Circular warning the employees that they would be committing a breach of their contract of service if they participated in the strike and that they would not be entitled to draw the salary for the full day if they did so, and consequently, they need not report for work for the rest of the working hours on that day.
Notwithstand ing it, the employees went on a four hours strike from the beginning of the working hours on 29th December 1977.
There is no dispute that the banking hours for the public covered the said four hours.
The employees, however, resumed 221 work on that day after the strike hours, and the Bank did not prevent them from doing so.
On January 16, 1978, the Bank issued a Circular directing its managers and agents to deduct the full day 's salary of those of the employees who had participated in the strike.
The respondents filed a writ petition in the High Court for quashing the circular.
The petition was allowed.
The Bank preferred a Letters Patent Appeal in the High Court which also came to be dismissed.
Hence, the present appeal.
The High Court has taken the view, firstly, that neither regulations nor awards nor settlements empowered the Bank to make the deductions, and secondly, in justice, equity and good conscience the Bank could not by the dictate of the impugned circular attempt to stifle the legitimate weapon given by the law to the workers to ventilate their griev ances by resorting to strike.
The High Court further took the view that since strikes and demonstrations were not banned in the country and despite the inconvenience that they may cause, they were recognised as a legitimate form of protest for the workers, the circular acted as a deterrent to the employees from resorting to a legally recognised mode of protest.
According to the High Court, the circular even acted as an expedient to stifle the legitimate mode of protest allowed and recognised by law.
The deduction of the wages for the day according to the Court amounted to unilat erally changing the service conditions depriving the workers of their fixed monthly wages under the contract of service.
The Court also reasoned that under the conditions of serv ice, wages were paid not from day to day or hour to hour but as a fixed sum on a monthly basis.
The contract between the Bank and the workers being not a divisible one, in the absence of a specific term in the regulations, awards and settlements, the Bank could not unilaterally reduce the monthly wage and thus give the employees lesser monthly wages than the one contracted.
The non observance by the employees of the terms of the contract may give the employer a cause of action and a right to take appropriate remedy for the breach, but the employer was not entitled to deduct any part of the wages either on a pro rata basis or otherwise.
The High Court further opined that the Bank was not without a remedy and the employees cannot hold the bank to ransom.
The Bank could get the four hours strike declared illegal by recourse to the machinery provided by law or put the erring workers under suspension for minor misconduct under Regula tion 19.7, hold an enquiry and if found guilty, impose punishment of warning, censure, adverse remarks or stoppage of increment for not more than six months as prescribed by Regulation 19.8.
The High Court also rejected the contention of the Bank that the Bank was entitled to make 222 deductions under Section 7(2) of the by holding that the provision enabled the employer to deduct wages only if the Bank had power under the contract of employment.
The principal question involved in the case, accord ing to us, is, notwithstanding the absence of a term in the contract of employment or of a provision in the service rules or regulations, whether an employer is entitled to deduct wages for the period that the employees refuse to work although the work is offered to them.
The deliberate refusal to work may be the result of various actions on their part such as a sit in or stay in strike at the work place or a strike whether legal or illegal, or a go slow tactics.
The deliberate refusal to work further may be legal or illegal as when the employees go on a legal or illegal strike.
The legality of strike does not always exempt the employees from the deduction of their salaries for the period of strike.
It only saves them from a disciplinary action since a legal strike is recognised as a legitimate weapon in the hands of the workers to redress their griev ances.
It appears to us that this confusion between the strike as a legitimate weapon in the hands of the workmen and the liability of deduction of wages incurred on account of it, whether the strike is legal or illegal, has been responsible for the approach the High Court has taken in the matter.
It is necessary to clear yet another misconception.
There is no doubt that whenever a worker indulges in a misconduct such as a deliberate refusal to work, the employ er can take a disciplinary action against him and impose on him the penalty prescribed for it which may include some deduction from his wages.
However, when misconduct is not disputed but is, on the other hand, admitted and is resorted to on a mass scale such as when the employees go on strike, legal or illegal, there is no need to hold an inquiry.
To insist on an inquiry even in such cases is to pervert the very object of the inquiry.
In a mass action such as a strike it is not possible to hold an inquiry against every employee nor is it necessary to do so unless, of course, an employee contends that although he did not want to go on strike and wanted to resume his duty, he was prevented from doing so by the other employees or that the employer did not give him proper assistance to resume his duty though he had asked for it.
That was certainly not the situation in the present case in respect of any of the employees and that is not the contention of the employees either.
Hence, in cases such as the present one, the only question that has to be considered is whether, when admittedly the employees refuse to work by going on strike, the employer is entitled to deduct wages for the relevant period or not.
We 223 thought that the answer to this question was apparent enough and did not require much discussion.
However, the question has assumed a different dimension in the present case be cause on the facts, it is contended that although the em ployees went on strike only for four hours and thereafter resumed their duties, the Bank has deducted wages for the whole day.
It is contended that in any case this was imper missible and the Bank could at the most deduct only pro rata wages.
Normally, this contention on the part of the workers would be valid.
But in a case such as the present one, where the employees go on strike during the crucial working hours which generate work for the rest of the day, to accept this argument is in effect to negate the purpose and efficacy of the remedy, and to permit its circumvention effectively.
It is true that in the present case when the employees came back to work after their four hours strike, they were not prevented from entering the Bank premises.
But admittedly, their attendance after the four hours strike was useless because there was no work to do during the rest of the hours.
It is for this reason that the Bank had made it clear, in advance, that if they went on strike for the four hours as threatended, they would not be entitled to the wages for the whole day and hence they need not report for work thereafter.
Short of physically preventing the employ ees from resuming the work which it was unnecessary to do, the Bank had done all in its power to warn the employees of the consequences of their action and if the employees, in spite of it, chose to enter the Bank 's premises where they had no work to do, and in fact did not do any, they did so of their own choice and not according to the requirement of the service or at the direction of the Bank.
In fact, the direction was to the contrary.
Hence, the later resumption of work by the employees was not in fulfilment of the con tract of service or any obligation under it.
The Bank was therefore not liable to pay either full day 's salary or even the pro rata salary for the hours of work that the employees remained in the Bank premises without doing any work.
It is not a mere presence of the workmen at the place of work but the work that they do according to the terms of the contract which constitutes the fulfilment of the contract of employ ment and for which they are entitled to be paid.
It is also necessary to state that though, before the High Court, reliance was placed by the Bank on the provi sions of Section 7(2)(b) read with Section 9 of the for a right to deduct the wages for absence from duty, there is nothing on record to show that the provisions of the said Act have been made applicable to the Bank.
However, assuming that Act was applicable to the Bank, we are of the opinion that the relevant discussion of the 224 High Court has missed the contentions urged by the Bank on the basis of the said provisions.
What was urged by the Bank was that the said provisions enabled it to deduct wages for absence from duty.
Hence, even if the Service rules/regula tions were silent on the point, the Bank could legally deduct the wages under the said provisions.
The High Court has reasoned that the power given by the said provisions come into play only when the employer has power to do so, probably meaning thereby, the power under the Service rules/regulations.
We are unable to appreciate this reason ing, which to say the least, begs the question.
It is, therefore, necessary to point out that if the Act was ap plicable, the Bank would certainly have had the power to deduct the wages under the said provisions in the absence of any service rule regulation to govern the situation.
Since the admitted position is that the service rules do not provide for such a situation, the question as stated earlier which requires to be answered in the present case, is whether there exists an implied right in the employer Bank to take action as it has done.
There is no dispute that although the service regulations do not provide for a situa tion where employees on a mass scale resort to absence from duty for whole day or a part of the day whether during crucial hours or otherwise, they do provide for treating an absence from duty of an individual employee as a misconduct and for taking appropriate action against him for such absence.
Since the High Court has indicated a disciplinary action under the said provision even in the present circum stances, we will also have to deal with that aspect.
But before we do so, we may examine the relevant authorities cited at the Bar. 8.
In Buckingham and Carnatic Co. Ltd. vs Workers of the Buckingham and Carnatic Co. Ltd., ; the facts were that on 1st November, 1948 the night shift operatives of the carding and spinning department of the appellant Mills stopped work, some at 4 p.m., some at 4.30 p.m. and some at 5 p.m. and the stoppage ended at 8 p.m. in both the departments, and at 10 p.m. the strike ended completely.
The apparent cause for the strike was that the management of the Mills had expressed its inability to comply with the request of the workers to declare the forenoon of the 1st November, 1948 as a holiday for solar eclipse.
On 3rd November, 1948, the management put up a notice that the stoppage of work on the 1st November amounted to an illegal strike and a break in service within the meaning of the Factories Act and that the management had decided that the workers who had partici pated in the said strike would not be entitled to holidays with pay as provided by the Act.
The disputes having thus arisen, 225 the State Government referred the matter to Industrial Tribunal.
The Tribunal held that the workers had resorted to an illegal strike and upheld the view of the management that the continuity of service of the workers was broken by the interruption caused by the illegal strike and as a result the ' workers were not entitled to annual holidays with pay under Section 49 B(1) of the Factories Act.
The Tribunal, however, held that the total deprivation of leave with pay was a severe punishment and reduced the punishment by 50 per cent and held that the workers would be deprived of only half their holidays with pay.
In the appeal before the then Labour Appellate Tribunal, the Tribunal held, among other things, that what happened on the night of the 1st November did not amount to a strike and did not cause any interrup tion in the workers ' service.
The Tribunal observed that "It would be absurd to hold that non permitted absence from work even for half an hour or less in the course of a working day would be regarded as interruption of service of a workman for the purpose of the said section (i.e., Section 49 B(1) of the Factories Act).
We are inclined to hold that the stoppage of work for the period for about 2 to 4 hours in the circumstances of the ease is not to be regarded as a strike so as to amount to a break in the continuity of service of the workman concerned".
In the result, the Tribu nal allowed the Union 's appeal and ordered that holidays at full rates as provided for in Section 49 A of the Factories Act will have to be calculated on the footing that there was no break in the continuity of service.
This Court set aside the finding of the Appellate Tribunal by holding that it could not be disputed that there was a cessation of work by a body of persons employed in the Mills and that they were acting in combination and their refusal to go back to work was concerted, and the necessary ingredients of the defini tion of "strike" in Section 2 (q) of the Industrial Disputes Act existed and it was not a ease of an individual worker 's failure to turn up for work.
Hence, it was an illegal strike because no notice had been given to the management, the Mills being a public utility industry.
In Secretary of State for Employment vs Associated Society of Locomotive Engineers and Firemen and Ors.
(No. 2), , Lord Denning MR observed: ".
It is equally the case when he is employed as one of many 's to work in an undertaking which needs the service of all.
If he, with the others, takes steps wilfully to disrupt the undertaking to produce chaos so that it will not run as it should.
then each one who is a party to those steps is guilty 226 of a breach of his contract.
It is no answer for any one of them to say 'I am only obeying the rule book ', or 'I am not bound to do more than a 40 hour week '.
That would be all very well if done in good faith without any wilful disrup tion of services; but what makes it wrong is the object with which it is done.
There are many branches of our law when an act which would otherwise be lawful is rendered unlawful by the motive or object with which it is done.
So here it is the wilful disruption which is the breach.
It means that the work of each man goes for naught.
It is made of no effect.
I ask: is a man to be entitled to wages for his work when he, with others, is doing his best to make it useless? Surely not.
Wages are to be paid for services rendered, not for producing deliberate chaos.
The breach goes to the whole of the consideration, as was put by Lord Campbell CJ in Cuckson vs Stones, [1858] 1 E & E 248 at 255, (1983 60) All ER Rep 390 at 392 and with other cases quoted in Smith 's Leading Cases (13th Edn., Vol. 2, p. 48), the notes to Cutter vs Power, [1795] 6 Term Rep 320, (1775 1802)All ER Rep 159)".
In Miles vs Wakefield Metropolitan District Council, [ 1989] I LLJ 335 the facts were that the plaintiff, Miles was the Superintendent Registrar in the Wakefield Metropolitan District Council.
His duties included performing marriages.
As part of trade union action, he declined to perform mar riages on Saturdays which day was very popular with marrying couples.
However, on that day he performed his other duties.
The Council, not wanting to terminate his services, imposed a cut in his remuneration.
He sued the Council for payment but failed.
He appealed to the Court of Appeal and was successful.
The appellate court held that he was a statutory official and there was no contractual relation and the only action against him was dismissal.
Aggrieved by this appel late decision, the Council went before the House of Lords in appeal.
The House of Lords held that the salary payable to the plaintiff was not an honorarium for the mere tenure of office but had the character of remuneration for work done.
If an employee refused to perform the full duties which could be required of him under his contract of service, the employer is entitled to refuse to accept any partial per formance.
In an action by an employee to recover his pay, it must be proved or admitted that the employee worked or was willing to work in accordance with the contract of employ ment or that such service as was given by the employee, if falling short of.
his contractual obligations was accepted by the 227 employer as sufficient performance of the contract.
In a contract of employment wages and work go together.
The employer pays for the work and the worker works for his wages.
If the employer declines to pay, the worker need not work.
If the worker declines to work, the employer need not pay In an action by a worker to recover his pay, he must allege and prove that he worked or was willing to work.
In the instant case, the plaintiff disentitled himself to salary for Saturday morning because he declined to work on Saturday morning in accordance with his duty.
Since the employee had offered only partial performance of his con tract, the employer was entitled, without terminating the contract of employment, to decline partial performance, and in that case the employee would not be entitled to sue for his unwanted service.
In this connection, Lord Templeman stated as follows: "The consequences of counsel 's submissions demonstrate that his analysis of a contract of employment is deficient.
It cannot be right that an employer should be compelled to pay something for nothing whether he dismisses or retains a worker.
In a contract of employment wages and work go together.
The employer pays for work and the worker works for his wages.
If the employer declines to pay, the worker need not work.
If the worker declines to work, the employer need not pay.
In an action by a worker to recover his pay he must allege and be ready to prove that he worked or was willing to work . . " It may be mentioned here that on the question whether the employee engaged in some kind of industrial action can claim wages on the basis of quantum meruit, only two of the Law Lords expressed themselves in favour, while the other three did not want to express any definite opinion on the question.
Among the decisions of the various High Courts relied upon by the parties in support of the respective cass, we find that except for the decision in V. Ganesan vs The State Bank of India & Ors., given by the learned Single Judge of the Madras High Court and the deci sion of the Division Bench of the same Court in that matter and other matters decided together in State Bank of India, Canara Bank, Central Bank etc.
& Ors.
vs Ganesan, Jambuna than, Venkataraman, B.V. Kamath, V.K. Krishnamurthy, etc.
& Ors., , all other decisions, namely, (i) Sukumar Bandyo 228 padhyyay & Ors.
vs State of West Bengal & Ors., [1976] IXLIC 1689; (ii) Algemene Bank Nederland, N.V. vs Central Govern ment Labour Court, Calcutta & Ors., [1978] II LLJ, 117; (iii) V. Ramachandran vs Indian Bank, ; (iv) Dharam Singh Rajput & Ors.
vs Bank of India, Bombay & Ors., [1979]12 LIC 1079; (v) R. Rajamanickam, for himself and on behalf of other Award Staff vs Indian Bank, [1981] II LLJ 367; (vi) R.N. Shenoy & Anr. etc.
vs Central Bank of India & Ors.
, [1984] XVII LIC 1493 and (vii) Prakash Chandra Johari vs Indian Overseas Bank & Anr.
[1986] II LI J 496, have variously taken the view that it is not only permissi ble for the employer to deduct wages for the hours or the days for which the employees are absent from duty but in cases such as the present, it is permissible to deduct wages for the whole day even if the absence is for a few hours.
It is also held that the contract is not indivisible.
Some of the decisions have also held that the deduction of wages can also be made under the provisions of the and similar statutes where they are applicable.
It is further held that deduction of wages in such cases is not a penalty but is in enforcement of the contract of employment and hence no disciplinary proceedings need precede it.
Even in V. Ganesan vs The State Bank of India & Ors., (supra), it was not disputed on behalf of the employees that the employer, namely, the Bank had no fight to deduct pro rata the salary of the officers for the period of absence from duty.
What was contended there was that the Bank was not entitled to deduct the salary for the whole three days on which the employees had staged a demonstration for a duration of 30 minutes during working hours on two days and for an hour, on the third day.
The learned Judge held that by permitting the employees to perform their work during the rest of the day and by accepting such performance the bank must be deemed to have acquiesced in the breach of contract by the employees.
It is on this fact that the learned Judge held that the right to deduct salary (obviously for the whole day) on the principle of "no work no pay" could be exercised only when there was a term in the contract or when there was a statutory provision to that effect.
The Division Bench of the said Court in appeal against the said decision and similar other matters (supra) confirmed the reasoning of the learned Judge and held that in the absence of either a term in the contract of service stipulating that if an employee abstains from doing a particular work on a particu lar day, he would not be entitled to emoluments for the whole day or in the absence of a statutory provision laying down such a rule, it was impermissible for the employer to deduct or withhold the emoluments 229 of the employees even for the hours during which they worked.
Having accepted the performance of work from the employees for the rest of the day, the Banks are bound to compensate the employees for the work performed by them.
In that very case, the Court also held, on the facts arising from the other matters before it, that the refusal to per form the clearing house work can only be the subject matter of a disciplinary action and it cannot straightaway result in the withholding of the wages for the whole day.
Non signing of the attendance register and doing work is also work for which the employees should be compensated by pay ment of remuneration.
On the specific question whether the management can take action in situations, where either the contract, Stand ing Order or rules and regulations are silent, both parties relied on further authorities.
In Workmen of M/s. Firestone Tyre & Rubber Co. of India (P) Limited vs Firestone Tyre & Rubber Co., ; on which reliance was placed on behalf of the workmen it was held that under the general law of master and servant, an employer may discharge an employee either temporarily or permanently but that cannot be without adequate notice.
Mere refusal or inability to give employment to the workmen when he reports for duty, on one or more grounds mentioned in clause (kkk) of Section 2 of the Industrial Disputes Act is not a temporary discharge of the workmen.
Such a power, therefore, must be found out from the terms of the contract of service or the Standing Orders governing the establish ment Hence, even for lay off of the workmen there must be a power in the management either in the contract of service or the standing orders governing the establishment.
Ordinarily, the workmen, therefore, would be entitled to their full wages when the workmen are laid off without there being any such power.
There was no common law right to lay off the workmen, and, therefore, no right to deny the workmen their full wages.
In Krishnatosh Das Gupta vs Union of India & Ors., , it was a case of the employees of the National Test House, Calcutta who had staged demonstration after signing the attendance register to register their protest against suspension of some of their colleagues.
Though the employees signed the attendance register and attended the office, they did no work on the relevant day.
As such, a circular was issued by the Joint Director inform ing the employees that they would be considered as "not on duty".
By a subsequent circular the same Joint Director notified to all departments concerned the decision of the Cabinet that there shall not be pay for no work.
Relying on the said 230 circular the Management of the National Test House effected on a mass scale pay cut from the pay and allowances of the concerned employees.
The circular was challenged by the employees by a writ petition before the High Court.
The High Court held that in order to deduct any amount from salary, there must be specific rules relating to the contract of service of the person concerned.
On behalf of the employers, reliance was placed on a decision of this Court in Sant Ram Sharma vs State of Rajas than & Anr.; , for the proposition laid down there.that in the absence of any statutory rules or a spe cific provision in the rules, the Government can act by administrative instructions.
The Court has held there that though it is true that the Government cannot amend or super sede statutory rules by administrative instructions, if the rules are silent on any particular point, Government can fill up the gaps and supplement the rules and issue instruc tions not inconsistent with the rules already framed.
In Roshan Lal Tandon vs Union of India, ; , this Court has stated that although the origin of Government service is contractual in the sense that there is an offer and acceptance in every case, once appointed to his post or office, the Government servant acquires a status, and his rights and obligations are no longer determined by consent of both parties but by statute or statutory rules which may be flamed or altered unilaterally by the Govern ment.
In other words, the legal position of the Government servant is more of status than of contract.
The hallmark of status is the attachment to legal relationship of rights and duties imposed by the public law and not by mere agreement of the parties.
The relationship between the Government and the servant is not like an ordinary contract of service between a master and servant.
The legal relationship is something entirely different, something in the nature of status.
In V.T. Khanzode & Ors.
vs Reserve Bank of India & Anr.
, ; , this Court has reiterated that so long as Staff Regulations are not flamed, it is open to issue admin istrative circulars regulating the service conditions in the exercise of power conferred by Section 7(2) of the so long as they do not impinge on any regulations made under Section 58 of the Act.
The same view with regard to power to issue administra tive instructions when rules are silent on a subject has been reiterated by the Court in Paluru Ramkrishnaiah & Ors.
vs Union of India & 231 Anr.
; , and in Senior Superintendent of Post Office & Ors.
vs Izhar Hussain, ; 11.
The principles which emerge from the aforesaid authorities may now by stated.
Where the contract, Standing Orders or the service rules/regulations are silent on the subject, the management has the power to deduct wages for absence from duty when the absence is a concerted action on the part of the employees and the absence is not disputed.
Whether the deduction from wages will be pro rata for the period of absence only or will be for a longer period will depend upon the facts of each case such as whether where was any work to be done in the said period, whether the work was in fact done and whether it was accepted and acquiesced in, etc.
It is not enough that the employees attend the place of work.
They must put in the work allotted to them.
It is for the work and not for their mere attendance that the wages/salaries are paid.
For the same reason, if the employ ees put in the allotted work but do not, for some reason may be even as a protest comply with the formali ties such as signing the attendance register, no deduction can be effected from their wages When there is a dispute as to whether the employees attended the place of work or put in the allotted work or not, and if they have not, the reasons therefore etc., the dispute has to be investigated by holding an inquiry into the matter.
In such cases, no deduction from the wages can be made without establishing the omission and/or commission on the part of the employees concerned.
When the contract, Standing Orders, or the service rules/regulations are silent, but enactment such as the providing for wage cuts for the absence from duty is applicable to the establishment concerned, the wages can be deducted even under the provisions of such enactment.
Apart from the aforesaid ratio of the decisions and the provisions of the and similar statutes on the subject, according to us, the relevant provisions of the major legislation governing the industrial disputes, viz., the also lend their support to the view that the wages are payable pro rata for the work done and hence deductible for the work not done.
Section 2 (rr) of the said Act defines "wages" to mean "all remuneration . which would, if terms of employ ment, expressed or implied, were fulfilled, be payable to workman in respect of his employment or work done in such employment . " while Section 232 2(q) defines "strike" to mean "cessation of work" or "refus al to continue to work or accept employment by workman".
Reading the two definitions together, it is clear that wages are payable only if the contract of employment is fulfilled and not otherwise.
Hence, when the workers do not put in the allotted work or refuse to do it, they would not be entitled to the wages proportionately.
The decisions including the one impugned in this appeal which have taken the view which is either contrary to or inconsistent with the above conclusions, have done so because they have proceeded on certain wrong presumptions.
The first error, as we have pointed out at the outset, is to confuse the question of the legitimacy of the strike as a weapon in the workers ' hands with that of the liability to lose wages for the period of strike.
The working class has indisputably earned the right to strike as an industrial action after a long struggle, so much so that the relevant industrial legislation recognises it as their implied right.
However, the legislation also circumscribes this right by prescribing conditions under which alone its exercise may become legal.
Whereas, therefore, a legal strike may not invite disciplinary proceedings, an illegal strike may do so, it being a misconduct.
However, whether the strike is legal or illegal, the workers are liable to lose wages for the period of strike.
The liability to lose wages does not either make the strike illegal as a weapon or deprive the workers of it.
When workers resort to it, they do so knowing full well its consequences.
During the period of strike the contract of employment continues but the workers withhold their labour.
Consequently, they cannot expect to be paid.
The second fallacy from which the said decisions suffer is to view the contract of employment as an indivisible one in terms of the wageperiod.
When it is argued that the wages cannot be deducted pro rata for the hours or for the day or days for which the workers are on strike because the con tract, which in this case is monthly, cannot be subdivided into days and hours, what is forgotten is that, in that case if the contract comes to an end amidst a month by death, resignation or retirement of the employee, he would not be entitled to the proportionate payment for the part of the month he served.
This was the iniquitous and harsh conse quence of the rule of indivisibility of contract laid down in an English case, Cutter vs Powell, [1795] 6 TR 320 which was rightly vehemently criticised and later, fortunately not followed.
If the employment contract is held indivisible, it will be so for both the parties.
We are also unable to see any difficulty, inequity or impracticability in construing the contract as divisible into different 233 periods such as days and hours for proportionate reimburse ment or deduction of wages, which is normally done in prac tice.
The third fallacy was to equate disputed individual conduct with admitted mass conduct.
A disciplinary proceed ing is neither necessary nor feasible in the latter case.
The contract of employment, Standing Orders or the service rules provide for disciplinary proceedings for the lapse on the part of a particular individual or individuals when the misconduct is disputed.
As things stand today; they do not provide a remedy for mass misconduct which is admitted or cannot be disputed.
Hence, to drive the management to hold disciplinary proceedings even in such cases is neither necessary nor proper.
The service conditions are not expect ed to visualise and provide for all situations.
Hence, when they are silent on unexpected eventualities, the management should be deemed to have the requisite power to deal with them consistent with law and the other service conditions and to the extent it is reasonably necessary to do so.
The pro rata deduction of wages is not an unreasonable exercise of power on such occasions.
Whether on such occasions the wages are deductible at all and to what extent will, howev er, depend on the facts of each case.
Although the employees may strike only for some hours but there is no work for the rest of the day as in the present case, the employer may be justified in deducting salary for tile whole day.
On the other hand, the employees may put in work after the strike hours and the employer may accept it or acquiesce in it.
In that case the employer may not be entitled to deduct wages at all or be entitled to deduct them only for the hours of strike.
If further statutes such as the or the State enactments like the Shops and Establishments Act apply, the employer may be justified in deducting wages under their provisions.
Even if they do not apply, nothing prevents the employer from taking guidance from the legisla tive wisdom contained in it to adopt measures on the lines outlined therein, when the contract of employment is relent on the subject.
It is, however, necessary to reiterate that even in cases such as the present one where action is resorted to on a mass scale, some employees may not be a party to the action and may have genuinely desired to discharge their duties but could not do so for failure of the management to give the necessary assistance or protection or on account of other circumstances.
The management will not be justified in deducting wages of such employees without holding an in quiry.
That, however, was not the grievance of any of the employees in the present case, as pointed out earlier.
234 15.
Hence, we are unable to sustain the impugned deci sion which is untenable in law.
The decision is accordingly set aside with no order as to costs.
Civil Appeal No. 855 of 1987 16.
The facts in this case are different from those in the earlier appeal.
In this case, the allegation of the employer Company is that the workers had indulged in "go slow" and as a result there was negligible production in the month of July 1984.
The workers did not attend to their duty and only loitered in the premises and indulged in go slow tactics only with a view to pressurise the Company to con cede demands.
The Company was, therefore, compelled to suspend its operation by giving a notice of lock out.
Ac cording to the Company, therefore, since the workers had not worked during all the working hours, they had not earned their wages.
Hence, the Company did not pay the workers their wages for the entire month of July 1984.
The workers ' Union, therefore, filed a complaint before the Industrial Court under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (MRTU & PULP Act, for short) complaining that the Company had indulged in unfair labour practice mentioned in Item 9 of Schedule 4, from 7th August, 1984 which was the date for payment of salary for the month of July 1984, and under Item 6 of Schedule 2 of the Act with effect from 14th August, 1984 since the Company had declared a lock out from that day.
It was also alleged that since no specific date of the com mencement of the alleged lock out had been specified, it was an illegal one.
It appears that the Company had declared the lock out by notice dated July 30, 1984 and the lock out was effected from August 14, 1984.
Subsequently, there were negotiations between the Union and the Company, and a set tlement was reached on October 15, 1984 as a result of which the lock out was lifted with effect from October 16, 1984.
The terms of the settlement were formally reduced to writing on November 30, 1984.
In this appeal, we are not concerned with the lock out and the subsequent settlement.
The question that falls for consideration before us is whether the Company was justified in denying to the workers the full monthly wages for the month of July 1984.
On this question, the Industrial Court accepted the oral testimony of the Company 's witnesses that the workmen had not at all worked for full eight hours on any day in July 1984 and that they were working intermit 235 tently only for some time and sitting idle during the rest of the day.
On an average the workers had not worked for more than one hour and 15 to 20 minutes per day, during that month.
The Industrial Court did not accept the evidence of the Union 's witness that the witness and the other workmen had worked on all the days during the entire month of July 1984 because he admitted that after the Company told the workers that it could not concede to the demands, the work ers had started staging demonstration.
Although the witness denied that from July 3, 1984, the workers started indulging in go slow, he admitted that the Company was displaying notices from time to time with effect from July 4, 1984 alleging that the workers were not giving production and that they were loitering here and there.
According to the Industrial Court in the circumstances, it did not see any good reason to disbelieve the Company 's witnesses.
The Court further held that normally in view of this evidence on record, it would have held that the pro rata deduction of wages made by the Company for the month of July 1984 would not amount to an act of unfair labour practice falling under Item 9 of Schedule IV of the MRTU and PULP Act.
However, in view of the two judgments of the Bombay High Court in T.S. Kelwala & Ors.
vs Bank of India & Ors., i.e. the one impugned in the earlier appeal and Apar (Pvt) Limited vs
S.R. Samant & Ors., [1980] II LLJ 344, the Court had to hold that the non payment of full wages to the work men for the month of July 1984 was an act of unfair labour practice falling under the said provision of the Act.
The Court further held that admittedly the workers were not piece rated and there was no agreement or settlement allow ing the Company to deduct wages on the ground that they were indulging in "go slow" or that they had not given normal production.
According to the Court, the remedy of the Compa ny against the workmen may lie elsewhere.
Thus, the Court taking sustenance from the Bombay High Court Judgments referred to above held that the deduction of wages during the month of July, 1984 on account of the go slow was not justified, and declared that the Company had committed an unfair labour practice by not paying full monthly wages to the workmen, and directed the Company to pay the said wages for the month of July 1984.
It is this order of the Indus trial Court which is challenged directly in this Court by the present appeal.
Since one of the two decisions of the Bombay High Court on which the Industrial Court relied was rendered in another context and it has already been discussed in the other appeal, we may refer here only to the other decision, viz., Apar (Pvt) Ltd. vs S.R. Samant & Ors.
, (supra) which is pressed in service before us on behalf of the workmen.
The facts in that case were that by a settlement dated Au 236 gust 3, 1974 the workmen were allowed increase in the basis wages, dearness allowance, house rent, etc.
in addition to the production bonus in terms of a scheme.
That settlement was binding on the parties upto the end of April 1977.
The matters ran a smooth course till August 1975.
However, from September 1975, the Company refused to pay the production bonus and with effect from 15th October, 1975 it refused to pay the wages, dearness allowances etc.
as per the settle ment.
On August 21, 1975, a notice was put up by the Company starting that because of the attitude of indiscipline on the part of the workers and deliberate go slow tactics resulting in low production, the management was relieved of its com mitments and obligation imposed upon it by the settlement.
A notice in terms of Section 9A of the was also put up indicating a certain scale of wages to which only the workers would be entitled.
These wages were not more than the wages under the Minimum Wages Act and were even less than what was agreed to in the earli er agreement of January 23, 1971.
A complaint was, there fore, filed under the MRTU & PULP Act before the Industrial Court, and the Industrial Court recorded a finding that the figures of production produced by the Company before it related only to few departments.
Out of total of 700 employ ees who were working earlier, 116 were retrenched at the relevant time.
The Company 's allotment of material, viz., aluminium was also reduced from 7390 metric tones to 2038 and there was no supply of even that allotted quantity.
The Court further referred to certain inconsistent statements made by the factory manager and held that the management had failed to discharge the burden of proof of justifying the drastic reduction of the wages and other emoluments.
The Court therefore recorded a finding that the Company had engaged in an unfair labour practice.
Against the said decision, the Company preferred a writ petition before the High Court.
The High Court on these facts held that the wages could be deducted only in terms of a statutory provi sion or of a settlement.
A reduction of wages on the allega tion that the workers in general had resorted to go slow was wholly impermissible in law specially when the workmen were not piece rated employees.
The High Court referred to the cases where reduction of wages for absence from duty for striking work was held as valid such as Major Kanti Bose & Ors.
vs Bank of India & Ors., (supra); V. Ramachandran vs Indian Bank, (supra) and Algemene Bank, Nederland vs Central Government Labour Court, Calcutta, (supra) and held that those cases were distinguishable because they related to absence from duty and not go slow.
In M/s. Bharat Sugar Mills Ltd. vs Shri Jai Singh & Ors., [1962] 3 237 SCR 684 the facts were that certain workmen of the appel lant Mills resorted to "go slow".
The appellant Mills held a domestic inquiry and as a result thereof decided to dismiss 21 workmen, and apply to the Industrial Tribunal under Section 33 of the for permission to dismiss the workmen.
Evidence was laid before the Tribunal to prove the charge against the workmen.
The Tribunal held that the domestic enquiry was not proper, that the appellant was guilty of mala fide conduct and victimisation, that except in the case of one workman, the others were guilty of deliberate go slow and accordingly granted permission in respect of the one workman only.
It is against the said decision that the appellant Mills had approached this Court.
This Court held that the evidence produced before the Tribu nal clearly established that 13 out of the 20 workmen were guilty of deliberate go slow and in that connection observed as follows: "Go slow which a picturesque description of deliberate delaying of production by workmen pretending to be engaged in the factory is one of the most pernicious practices that discontended or disgruntled workmen sometime resort to.
It would not be far wrong to call this dishonest.
For, while thus delaying production and thereby reducing the output the workmen claim to have remained employed and thus to be entitled to full wages.
Apart from this also, "go slow" is likely to be much more harmful than total cessation of work by strike.
For, while during a strike much of the machinery can be fully turned off, during the "go slow" the machinery is kept going on a reduced speed which is often extremely damaging to machinery parts.
For all these reasons "go slow" has always been considered a serious type of misconduct." This Court, therefore, set aside the order of the Tribunal refusing permission to dismiss 13 of the workmen.
There cannot be two opinions that go slow is a serious misconduct being a covert and a more damaging breach of the contract of employment.
It is an insidious method of undermining discipline and at the same time a crude device to defy the norms of work.
It has been roundly condemned as an industrial action and has not been recognised as a legit imate weapon of the workmen to redress their grievances.
In fact the model standing orders as well as the certified standing orders of most of the industrial establishments define it as a misconduct and provide for a disciplinary action for it.
Hence, once it is 238 proved, those guilty of it have to face the consequences which may include deduction of wages and even dismissal from service.
But by its very nature, the proof of go slow, particu larly when it is disputed, involves investigation into various aspects such as the nature of the process of produc tion, the stages of production and their relative impor tance, the role of the workers engaged at each stage of production, the pre production activities and the facilities for production and the activities of the workmen connected therewith and their effect on production, the factors bear ing on the average production etc.
The go slow further may be indulged in by an individual workman or only some workmen either in one section or different sections or in one shift or both shifts affecting the output in varying degrees and to different extent depending upon the nature of product and the productive process.
Even where it is admitted, go slow may in some case present difficulties in determining the actual or approximate loss, for it may have repercussions on production after the go slow ceases which may be difficult to estimate.
The deduction of wages for go slow may, there fore, present difficulties which may not be easily resolu ble.
When, therefore, wages are sought to be deducted for breach of con tract on account of go slow, the quantum of deduction may become a bone of contention in most of the cases inevitably leading to an industrial dispute to be adjudicated by an independent machinery statutory or other wise as the parties may resort to.
It is necessary to empha size this because unlike in this case of a strike where a simple measure of a pro rata deduction from wages may pro vide a just and fair remedy, the extent of deduction of wages on account of a go slow action may in some case raise a complex question.
The simplistic method of deducting uniform percentage of wages from the wages of all workmen calculated on the basis of the percentage fail in production compared to the normal or average production may not always be equitable.
It is, therefore, necessary that in all cases where the factum of go slow and/or the extent of the loss of production on account of it, is disputed, there should be a proper inquiry on charges which furnish particulars of the go slow and the loss of production on that account.
The rules of natural justice require it, and whether they have been followed or not will depend on the facts of each case.
In the present case, the Industrial Court, as point ed out earlier, has accepted the evidence of the witness of the Company that the workmen had not worked for full eight hours on any day in the month concerned, namely, July 1984, and that they were working intermittently only for sometime and were sitting idle during the rest 239 Of the time.
According to him, the workers had worked hardly for an hour and 15 to 20 minutes on an average during the said month.
The witness had also produced notices put up by the Company from time to time showing the daily fall in the production and calling upon the workmen to resume normalcy.
There is further no dispute that the copies of these notices were sent to the Union of the workmen as well as to the Government Labour Officer.
The Industrial Court did not accept the evidence of the workmen that there was no go slow as alleged by the Company.
Accordingly, the Industrial Court has recorded a finding that the pro rata deduction of wages made by the Company for the month of July 1984 did not amount to an act of unfair labour practice within the mean ing of the said Act.
It does not further appear from the record of the proceedings before the Industrial Court that any attempt was made on behalf of the workmen to challenge the figures of production produced by the Company.
These figures show that during the entire month of July 1984, the production varied from 7.06 per cent of 13.9 per cent of the normal production.
The Company has deducted wages on the basis of each day 's production.
In view of the fact that there is a finding recorded by the Industrial Court that there was a go slow resorted to by the workmen and the production was as alleged by the Company during the said period, which finding is not challenged before us, it is not possible for us to interfere with it in this appeal.
As stated above, all that was challenged was the right of the employer to deduct wages even when admittedly there is a go slow which question we have answered in favour of the employer earlier.
The question with regard to the quantum of deduction from the wages, therefore, does not arise before us for consideration.
It is, however, likely that the work men did not question the figures of production before the Industrial Court because they were armed with the two deci sions of the High Curt (supra) which according to them, had negatived the right of the employer to deduct wages even in such circumstances.
While, therefore, allowing the appeal, we direct that the appellant will not deduct more than 5 per cent of the wages of the workmen for the month of July 1984.
The appeal is allowed accordingly with no order as to costs.
G.N. Appeals allowed.
| In the former appeal, the appellant is a nationalised Bank.
In 1977, some demands for wage revision made by the employees of all Banks were pending and in support of their demands, a call for a country wide strike was given.
The appellant Bank issued a Circular on September 23, 1977 to its managers and agents directing them to deduct wages of the employees for the days they go on strike.
The respondent Unions gave a car for a four hour strike on December 29, 1977.
Two days before the strike, the appellant Bank issued an Administrative Circular warning the employees that if they participate in the strike, they would be committing a breach of their contract of service and they would not be entitled to salary for the full day and they need not report for work for the rest of the working hours on that day.
However, the employees went on strike as scheduled, for four hours which included banking hours of the public, and re sumed duty thereafter.
The appellant Bank did not prevent them from doing so.
The appellant Bank by its circular di rected the managers and agents to deduct the full day 's salary of those employees who participated in the strike.
On a writ petition filed by the respondents, the High Court quashed the said Circular.
The Letters Patent Appeal filed by the appellant was dismissed.
Hence, the appeal by the Bank.
In the latter appeal, the appellant is a company whose workers had indulged in "go slow" in July 1984, thereby bringing down production.
The workers did not attend to their work and were loitering in the premises and were indulging in go slow tactics to pressurise the 215 company to concede their demands.
The company suspended its operation by giving a notice of lock out.
It did not pay wages to the workers for July , 1984 on the ground that they did not work during all the working hours and had not their wags.
The workers ' union filed a complaint before the Indus trial Court complaining that the appellant company had indulged in unfair labour practice and that the lock out declared was illegal The Industrial Court held that the deduction of wages for July, 1984 on account of the go slow was not justified It also declared that the company had committed an unfair labour practice by not paying full monthly wages to the workers and directed the company to pay the said wages for the month of July, 1984.
Aggrieved, the appellant company has preferred the appeal.
Allowing the appeals, this Court, HELD: 1.1 There is no doubt that whenever a worker indulges in a misconduct such as a deliberate refusal to work, the employer can take disciplinary action against him and impose on him the penalty prescribed for it which may include some deduction from his wages.
However, when miscon duct is not disputed but is, on the other band, ' admitted and is resorted to on a mass scale such as when the employ ees go on strike, legal or illegal, there is no need to hold an inquiry.
To insist on an inquiry even in such cases is to pervert the very object of the inquiry.
In a mass action such as strike it is not possible to hold an inquiry against every employee nor is it necessary to do so unless, of course, an employee contends that although he did not want to go on strike and wanted to resume his duty, he was pre vented from doing so by the other employees or that the employer did not give him proper assistance to resume his duty though he had asked for it.
That was certainly not the situation in the present case in respect of any of the employees and that is not the contention of the employees either.
It is true that in the present case when the employ ees came back to work after their four hours strike, they were not prevented from entering the Bank premises.
But admittedly, their attendance after the four hours strike was useless because there was no work to do during the rest of the hours.
It is for this reason that the Bank had made it clear, in advance, that if they went on strike for the four hours as threatened, they would not be entitled to the wages for the whole day and hence they need not report for work thereafter Short of physically preventing the employ ees from resuming the work which it was unnecessary to do, the Bank had done all hi its power to warn the employees of the consequences of their action and if the employees, in spite of it, chose to enter the Bank 's premises where they had no work to do, and in fact did not 216 do any, they did so of their own choice and not according to the requirement of the service or at the direction of the Bank.
In fact, the direction was to the contrary.
Hence, the later resumption of work by the employees was not in fulfil ment of the contract of service or any obligation under it.
The Bank was therefore not liable to pay either full day 's salary or even the pro rata salary for the hours or work that the employees remained in the Bank premises without doing any work.
It is not a mere presence of the workmen at the place of work but the work that they do according to the terms of the contract which constitutes the fulfilment of the contract of employment and for which they were entitled to be paid.
[222E H; 223A F] 1.2 Although the service regulations do not provide for a situation where employees on a mass scale resort to ab sence from duty for whole day or a part of the day whether during crucial hours or otherwise they do provide for treat ing an absence from duty of an individual employee as a misconduct and for taking appropriate action against him for such absence.
[224D E] 2.1.
When the contract, Standing Orders, or the service rules/ regulations are silent, but enactment such as the payment of Wages Act providing for wage cuts for the absence from duty is applicable to the establishment concerned, the wages can be deducted even under the provisions of such enactment.
[231F] 2.2.
The working class has indisputably earned the right to strike as an industrial action after a long struggle, so much so that the relevant industrial legislation recognises it as their implied right.
However, the legislation also circumscribes this right by prescribing conditions under which alone its exercise may become legal.
Whereas, there fore, a legal strike may not invite disciplinary proceed ings, an illegal strike may do so, it being a misconduct.
However, whether the strike is legal or illegal, the workers are liable to lose wages for the period of strike.
The liability to lose wages does not either make the strike illegal as a weapon or deprive the workers of it.
When workers resort to it, they do so knowing full well its consequences.
During the period of strike the contract of employment continues but the workers withhold their labour.
Consequently, they cannot expect to be paid.
[232C E] 2.3.
The contract, which is this case is monthly, cannot be subdivided into days and hours.
If the contract comes to an end amidst a month by death, resignation or retirement of the employee, he would not be entitled to the proportionate payment for the part of the month 217 he served.
If the employment contract is held indivisible, it will be so for both the parties.
There is no difficulty, inequity or impracticability in construing the contract as divisible into different periods such as days and hours for proportionate reimbursement or deduction of wages, which is normally done in practice.
[232G H; 233A] 2.4.
The contract of employment, Standing Orders or the service rules provide for disciplinary proceedings for the lapse on the part of a particular individual or individuals when the misconduct is disputed.
As things stand today, they do not provide a remedy for mass misconduct which is admit ted or cannot be disputed.
Hence, to drive the management to hold disciplinary proceedings even in such cases is neither necessary nor proper.
The service conditions are not expect ed to visualise and provide for all situations.
When they are silent on unexpected eventualities, the management should be deemed to have the requisite power to deal with them consistent with law and the other service conditions and to the extent it is reasonably necessary to do so.
The pro rata deduction of wages is not an unreasonable exercise of power on such occasions.
Whether on such occasions, the wages are deductable at all and to what extent will, howev er, depend on the facts of each case.
Although the employees may strike only for some hours but there is no work for the rest of the day as in the present case, the employer may be justified in deducting salary for the whole day.
On the other hand, the employees may put in work after the strike hours and the employer may accept it or acquiense in it.
In that case the employer may not be entitled to deduct wages at all or be entitled to deduct only for the hours of strike.
If statutes such as the or the State enactments like the Shops and Establishments Act apply, the employer ,may be justified in deducting wages under their provisions.
Even if they do not apply, nothing prevents the employer from taking guidance from the legisla tive wisdom contained in it to adopt measures on the lines outlined therein, when the contract of employment is silent on the subject.
[233B F] V.T. Khanzode & Ors.
vs Reserve Bank of India & Anr., ; ; Paluru Ramkrishnaiah & Ors. etc.
vs Union of India & Anr.
; , and Senior Superin tendent of Post Office & Ors.
vs lzhar Hussain; , , relied on.
Buckingham and Carnatic Co. Ltd. vs Workers of the Buckingham and Carnatic Co. Ltd., ; ; V. Ganesan vs The State Bank of India & Ors., ; State Bank of India, Canara Bank, Central Bank etc.
& Ors.
vs Ganesan, Jambunathan, Venkatara 218 man, B.V. Kamath, V.K. Krishnamurthy, etc.
& Ors.
, ; Sukumar Bandyopadhyyay & Ors.
vs State of West Bengal & Ors., [1976] IX LIC 1689; Algemene Bank Nederland, N.V. vs Central Government Labour Court, Calcutta & Ors., [1978] II LLJ, 117; V. Ramachandran vs Indian Bank, [1979] I LLJ 122; Dharam Singh Rajput & Ors.
vs Bank of India, Bombay & Ors.
, ; R. Rajamanickam, for himself and on behalf of other Award Staff vs Indian Bank, [1981] II LLJ 367; R.N. Shenoy & Anr. etc.
vs Central Bank of India & Ors.
, [1984] XVII LIC 1493; Prakash Chandra Johari vs Indian Overseas Bank & Anr., [1986] II LLJ 496; Workmen of M/s. Firestone Tyre & Rubber Co. of India (P) Ltd. vs Firestone Tyre & Rubber Co., ; ; Krishnatosh Das Gupta vs Union of India & Ors., ; Sant Ram Sharma vs State of Rajasthan & Anr., ; ; Roshan Lal Tandon vs Union of India, ; ; Secretary of State for Employment vs Associated Society of Locomotive Engineers and Firemen and Ors.
(No. 2), ; Miles vs Wakefield Metropolitan District Council, [1989] I LLJ 335 and Cutter vs Pwell, [1795] 6 TR 320, referred to.
There cannot be two opinions that go slow is a serious misconduct being a covert and a more damaging breach of the contract of employment.
It is an insidious method of undermining discipline and at the same time a crude device to defy the norms of work.
It has been roundly condemned as an industrial action and has not been recognised as a legit imate weapon of the workmen to redress their grievances.
In fact the model standing orders as well as the certified standing orders of most of the industrial establishments define it as a misconduct and provide for disciplinary action for it.
Hence, once it is proved.
those guilty of it have to face the consequences which may include deduction of wages and even dismissal from service.
[237G H; 238A] 3.2.
The proof of go slow, particularly when it is disputed, involves investigation into various aspects such as the nature of the process of production, the stages of production and their relative importance, the role of the workers engaged at each stage of production, the pre produc tion activities and the facilities for production and the activities of the workmen connected therewith and their effect on production, the factors hearing on the average production etc.
The go slow further may be indulged in by an individual workman or only some workmen either in one sec tion or different sections or in one shift or both shifts affecting the output in varying degrees and to different extent depending upon the nature of product and the produc tive process.
Even where it is admitted, go slow may in some case present 219 difficulties in determining the actual or approximate loss, for it may have repercussions on production after the go slow ceases which may be difficult to estimate.
The deduc tion of wages for go slow may, therefore, present difficul ties which may not be easily resoluble.
When, therefore, wages are sought to be deducted for breach of contract on account of go slow, the quantum of deduction may become a bone of contention in most of the cases inevitably leading to an industrial dispute to he adjudicated by an independent machinery statutory or otherwise as the parties may resort to.
The simplistic method of deducting uniform percentage of wages from the wages of all workmen calculated on the basis of the percentage fail in production compared to the normal or average production may not always be equitable.
It is, therefore, necessary that in all cases where the factum of go slow and/or the extent of the loss of production on account of it, is disputed, there should he a proper inquiry on charges which furnish particulars of the go slow and the loss of production on that account.
The rules of natural justice require it, and whether they have been followed or not will depend on the facts of each case.
[238B G] 3.3.
In the instant case, there is a finding recorded by the Industrial Court that there was a go slow resorted to by the workmen resulting in loss of production during the said period.
Since the said finding is not challenged, it is not possible to interfere with it in this appeal.
Though the appellant is justified in deducting wages for the said period, in the facts and circumstances of the case it is directed that it will not deduct more than 5 per cent of the wages of the workmen for the month of July, 1984 when they indulged in go slow tactics.
[239D F] M/s. Bharat Sugar Mills Ltd. vs Shri Jai Singh & Ors., ; T.S. Kelwala & Ors.
vs Bank of India & Ors., and Apar (Pvt) Ltd. vs
S.R. Samant & Ors., [1980] II LLJ 344, referred to.
|
Civil Appeal Nos.
1841 1846 of 1978.
From the Judgment and Order dated 21 9 1978 of the Allahabad High Court in W.P. Nos.
4846, 4436, 3815, 5040, 475 and 4587/78.
AND CIVIL APPEAL No. 871 of 1978.
From the Judgment and Order dated 29 4 1977 of the Allahabad High Court in W.P. No. 1749 of 1974.
AND CIVIL APPEAL No. 1921 OF 1978.
From the Judgment and Order dated 21 9 1978 of the Allahabad High Court in W.P. No. 4566 of 1978.
AND CIVIL APPEAL No. 1960 OF 1978.
From the Judgment and Order dated 21 9 1979 of the Allahabad High Court in W.P. No.4568/78.
AND CIVIL APPEAL Nos.
2169 2173 OF 1978.
From the Judgment and Order dated 21 9 1978 of the Allahabad High Court in W.P. Nos.
4542, 5589, 5592 to 5594/78.
AND CIVIL APPEAL Nos.
2178 2187 of 1978.
From the Judgment and Order dated 21 9 1978 of the Allahabad High Court in W.P. Nos.
4921, 4625, 4449, 5002, 5003, 5007, 5068, 5069, 5284 and 4568 of 1978.
113 AND CIVIL APPEAL Nos.
2219 2226 OF 1978.
From the Judgment and Order dated 21 9 1978 of the Allahabad High Court in W.P. Nos. 5185 and 5059 of 1978.
AND CIVIL APPEAL Nos.
2269, 2302, 2373 2375 OF 1978.
From the Judgment and Order dated 21 9 1979 of the Allahabad High Court in W.P. Nos.
5193/78, 5192, 5010, 4584 and 4583 of 1978.
AND CIVIL APPEAL Nos.
2321,2322,2356,2359,2386,2406 2408,2426 2428,2430 & 2431, 2457,2504,2507/1978 and 142,144,174,230,385,388,429,438,599,635,745,821,929 & 1007,1009/79,1149,1149A,1346,1630,1636,1638,1863,1865,1866,1 867 & 1869/79 and 2270,2272/78.
From the Judgment and Order dated 21 9 1978 of the Allahabad High Court in W.P. Nos.5521, 4982, 5001,4447/78, 4454, 2311, 5134, 3826, 4409, 4020, 5144, 5728, 5002, 4455/78, 6948, 4665, 4560, 4666, 4985, 4449, 5540, 4823, 4619, 5150, 4588, 4593, 4926, 4947, 4948, 5012, 5062, 5088, 5089, 5191, 5539, 5106, 5097, 4833, 4911, 1398, 2114, 2515, 898/78, 5071, 5454, 5592, 5072, 5034, 4149, 5153, 5169, 5734/78, 4947/76, 5533/78, 3299/77, 4943, 4629/78 & 5194, 5195, 5196/79.
AND CIVIL APPEAL No. 487 of 1979.
From the Judgment and Order dated 21 9 1978 of the Allahabad High Court in W.P. No. 4445 of 1978.
AND WRIT PETITION Nos. 257 & 600 of 1979.
(Under Article 32 of the Constitution).
F.S. Nariman, R. F. Nariman and P. C. Bhartari for the Appellants in CA Nos.
2260 & 2261.
section P. Gupta, H. K.Puri, V. K Bahl and Miss Madhu Moolchandani for the Appellants in CAs 1841 to 1846, 2426 to 2428, 929, 1007 to 1009, 1630, 2169 to 2172 and 1635.
V.M. Tarkunde, G. B. Pai, Mrs. Saran Mahajan, Mr. Arvind Kumar, Mrs. Lakshmi Arvind and R. K. Sinha for the Appellants in CA Nos.
2507, 2322, 2457 and 871. 114 Shanti Bhushan, section P. Gupta, H. K Puri and Miss Madhu Moolchandani for the Appellants in CA 174.
L. N. Sinha, section section Ray, Ghayyas Alam and R. K Jain for the Appellants in CA 2269, 2270 to 2272.
Shanti Bhushan, Subhash Chandra Birla and Shreepal Singh for the Appellants in 2373, 2302, 2374 and 2375.
Yogeshwar Prasad and Mrs. Rani Chabra for the Appellants in CA 599, 142 to 144, 385, 1638, 2219 to 2226, 1921, 1960, 2173, 2178, 2180 to 2187, 2179, 386 to 388, 429 to 438 and W.P. 257.
Pramod Swarup for the Appellants in CAs Nos. 230, 2359, and 2386.
P. R. Mridul and Ashok Grover for the Appellants in CAs 2406 to 2408.
Veda Vyasa, N. C. Sikri, A. K Sikri and Vijay Jaiswal for the Appellants in CA 821 & 487 and W.P. 600. O.P.Verma for the appellants in CAs 1867 and 1869.
Y.S.Chitale, Mrs. Shandhana Ramachandran and P. K Pillai for Appellant No. 1 in CA 1846, 745 and Appellant No. 2 in CA 1633 and 1634.
S.K.Jain for the Appellants in CA 187/79.
T.S.Arora for the Appellants in CA 2356/78 & 1346/79.
Y.S.Chitale, O. P. Rana and Mrs. section Ramachandran for the Appellants in CA 1866 and Appellants in CA 1865 and R.1 in CAs 142 & 143 and 144 and for the Appellants in CAs.
1631, 1632 and for appellant No. 1 in CA 1633, 1634 and Appellants in CA 1863.
S.K Dhingra for the Appellants in CA 2321/78.
J M.Khanna for the Appellants in CA 2430 & 2431.
K B.Rohtagi and Praveen Jain for the Appellants in CA 2504/78.
M.M.L.Srivastava for the Appellants in CA 1149 & 1149A. K C.Dua for the Appellants in CA 1635 & 1636.
L M.Singhvi, B.D. Madhyan, R.N. Dikshit and L.K.Pandey for the Respondents (Mandi Samiti) CA 1841 to 1846,1921,2169 to 2173,2178 to 2187,2219 to 2226, 2260,2261,2269,2302,2373 to 2375,2322,2356,2406 to 2408,2420 to 2423,2431, 2426 to 2428,2507,142 to 144,174,385 to 388,429 to 439,599,230,635,1007 & 1008, 1149, 1149A, 1630 & 1631, 1638, 5135, 1346 and 2212.
115 E.C.Aggarwala and R. Satish for RR 2 in CA 2179,2180,2222 2271,2431,2433, 2504/78 and 1869 and 143/79 and in other matters for Mandi Samiti for Muzaffarnagar and Meerut.
Ravinder Bana for RR 2 in 2457,2270 and 2272 and RR 2 and RR 3 in CA 2269 and WP No. 257/79.
M.V.Goswami for RR 1 in CA 2356.
The Judgment of the Court was delivered by UNTWALIA J.
, The Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 being U.P. Act XXV of 1964, hereinafter called the Act, was passed in that year.
It led to the establishment of Market Areas, Principal Market Yards and Sub Market Yards etc.
and the levying of the fee in relation to transactions of certain commodities in the State of Uttar Pradesh.
Various Market Committees were formed known as Mandi Samitis.
In order to give effect to the working of the Act The Uttar Pradesh Krishi Utpadan Mandi Niyamavali, 1965, hereinafter called the Rules, were made by the Governor of Uttar Pradesh.
The Act has been amended several times.
But we were distressed to find that the Rules were not accordingly amended as and when required to make them uptodate in accordance with the amended Act.
Various traders carrying on business in the State of Uttar Pradesh within the jurisdiction of several Market Committees challenged the levy of fee in the High Court of Allahabad from time to time.
There were several rounds of litigation in which they by and large, failed.
Finally many Writ Petitions were dismissed by the High Court by its judgment dated September 21, 1978 on which date many writ petitions were also dismissed in limine.
Civil Appeal 1841 of 1978 and about 103 more appeals are from the said judgment and order of the High Court.
Immediately preceding the said judgment a longer and more elaborate judgment had been delivered by the High Court on April 29, 1977.
Civil Appeal 871 of 1978 and Civil Appeal 1636 of 1979 are from the said judgment.
Along with these 106 appeals, two Writ Petitions were also heard being Writ Petition No. 257 of 1979 and Writ Petition No. 600 of 1979.
Thus in all 108 matters have been heard together and are being disposed of by this judgment.
At the outset it may be mentioned that because of the litigations cropping up from time to time between the traders and the Market Committees the working of the Committees had not successfully proceeded so far, as, fees levied from time to time could not be realised in.
Sometimes illegal or unauthorised collections seem to have been 116 made.
Money justifiably realised also does not seem to have been fully utilised as it ought to have been done.
In order to enable the Market Committees in their attempt to implement the law as far as possible and to save their attempt from being thwarted by any unnecessary litigation we allowed the parties to advance a full throated argument in this Court including some of the points which were not argued in the High Court or in support of which foundations of fact were lacking.
In this judgment our endeavour will be to formulate the points of law and decide them as far as practicable so that in future the business of the Market Committees may be conducted in the light of this judgment leaving no scope for unnecessary litigation.
Of course even in our judgment at places it would be indicated, and even apart from that, some genuine and factual disputes may crop up which in the first instance may be decided by the Market Committees, preferably a Board constituted by a particular Committee for deciding such disputes and then, if necessary, by the High Court.
We do hope that no further time will be lost by the State Government in amending the Rules and making them up to date to fit in with the latest amendments in the Act.
The long title of the Act indicates that it is an Act "to provide for the regulation of sale and purchase of agricultural produce and for the establishment, superintendence, and control of markets therefor in Uttar Pradesh." From the Objects and Reasons of the enactment it would appear that this Act was passed for the development of new market areas and for efficient data, collection and processing of arrivals in the Mandis to enable the World Bank to give a substantial help for the establishment of various markets in the States of Uttar Pradesh.
In other States the Act is mainly meant to protect an agriculturist producer from being exploited when he comes to the Mandis for selling his agricultural produce.
As pointed out by the High Court certain other transactions also have been roped in the levy of the fee, in which both sides are traders and neither side is an agriculturist.
This has been done for the effective implementation of the scheme of establishment of markets mainly for the benefit of the producers.
But as pointed out recently by a Constitution Bench of this Court in the case of Kewal Krishan Puri vs State of Punjab the fee realised from the payer of the fee has, by and large, to be spent for his special benefit and for the benefit of other persons connected with the transactions of purchase and sale in the various Mandis.
The earlier cases on the point of fee have been elaborately reviewed in that judgment and certain principles have been called out which will be adverted to hereinafter.
While deciding the question of quid pro quo in 117 relation to the impugned fees the High Court had not the advantage of the judgment of this Court.
In that regard this judgment is a settler on the point and we hope that the authorities and all other concerned in the matter will be guided by and follow the said decision in the matter of levy and utilisation of the market fee collected.
We shall now at the outset refer to the relevant provisions of the Act as they stood in the year 1978 and some of the rules framed thereunder.
Wherever necessary reference will be made to the unamended provisions of the Act.
In clause (s) of s.2 of the Act "Agricultural produce" has been defined to mean: "Such items of produce of agriculture, horticulture, viticulture, apiculture, sericulture, pisci culture, animal husbandry or forest as are specified in the Schedule, and includes admixture of two or more of such items, and also includes any such item in processed form, and further includes gur, rab, shakkar, khandsari and jaggery.
" The 'Board ' means the State Agricultural Produce Markets Board constituted under Section 26 A. Clause (e) defines "commission agent" or "Arhatiya" to mean: "person who, in the ordinary course of business, makes or offers to make, a purchase or sale of agricultural produce, on behalf of the owner or seller or purchaser of agricultural produce, for Arhat or commission.
" Under clause (k) "Market Area" means an area notified as such under Section 6, or as modified under Section 9.
Clause (o) defines "Principal Market Yard" to mean the portion of a Market Area, declared as such under Section 7.
Clause (p) must be read in full: "Producer ' means a person who, whether by himself or through hired labour, produces, rears or catches, any agricultural produce, not being a producer who also works as a trader, broker or Dalal, commission agent or Arhatiya or who is otherwise ordinarily engaged in the business of storage of agricultural produce.
Provided that if a question arises as to whether any person is a producer or not for the purposes of this Act, the decision of the Director, made after an enquiry, conducted in such manner as may be prescribed, shall be final.
" 118 Under clause (w) "Sub Market Yard" means a portion of a Market Area, declared as such under Section 7.
Clause (y) defines a "trader" to mean: "a person who in the ordinary course of business is engaged in buying or selling agricultural produce as a principal or as a duly authorised agent of one or more principals and includes a person, engaged in processing of agricultural produce.
" Action under s.5 was taken by the State Government declaring its intention to regulate and control sale and purchase of agricultural produce in any area and thereafter declaration of Market Area was made under s.6.
Under the present impugned notification, which was issued on April 11, 1978 making it effective from May 1, 1978, almost the whole of Uttar Pradesh has been declared to be Market Area dividing it into 250 areas and indicating in Schedule B of the notification 115 commodities in respect of which the fee could be levied by the Market Committees.
Under s.7 declarations of Principal Market Yards and Sub Market Yards have been made.
Most of such areas declared so far are the markets or the Mandis where the traders are carrying on their businesses.
It is proposed to establish Principal Market Yard and Sub Market Yards separately in every market area and a question of asking the traders to carry on their business only in such Market Yards is under consideration of the Government.
The State Government under s.8 has got the power to alter any market area and modify the list of agricultural produce.
Section 9 provides for the effects of declaration of Market Area.
Chapter III of the Act deals with the establishment, incorporation and constitution of the Market Committees.
The most important section is section 17 which provides for the powers of the Committee.
Clause (i) authorises a Committee to issue or renew licences under the Act on such terms and conditions and subject to such restrictions as may be prescribed.
Clause (iii) authorises a Committee to levy and collect (a) such fees as may be prescribed for the issue or renewal of licences, and (b) market fee at the rate and in the manner provided therein.
Clause (b) of section 17(iii) has undergone drastic changes from time to time and that enabled the appellants to advance certain serious arguments to challenge the levy of the fees especially when the Rules were not correspondingly amended.
We shall advert to this aspect of the matter later in this judgment at the appropriate place.
Section 19 provides for the Market Committee Fund and its utilisation.
Section 19 B was introduced in the Act by U.P. Act 7 of 1978 w.e.f.
29 12 1977 providing for the establishment of 'Market Development 119 Fund ' for each committee.
The rule making power of the State Government is to be found in Section 40.
From the Rules no provision is necessary to be specifically referred here except to point out that the State Government will be well advised to provide a machinery in the Rules for the adjudication of disputes which may be raised by the persons liable to pay the market fee in relation to their factum or quantum of liability.
We are not impressed with the argument advanced on behalf of the Market Committees that no such disputes actually exist or are likely to exist which require any machinery of the Market Committee for its adjudication.
At places hereinafter in this judgment we shall point out the nature of disputes which are likely to arise and which have got to be decided in the first instance by a machinery of the Market Committee such as a Board or the like.
It would be just and proper and also convenient for all concerned if the disputes are thereafter taken to any court of law.
Chapter VI of the Rules deals with levy and collection of fees.
Rule 66 dealing with the levy of market fee and Rule 68 providing for its recovery on reference to the provisions of s.17(iii) will be alluded to hereinafter to point out the chaotic conditions in which the Rules have been left inspite of the amendment in s.17(iii)(b) of the Act.
Rule 67 provides for licence fee and in none of these appeals we are concerned with the question of levy or quantum of the licence fee.
Chapter VII deals with the transaction of business in market Yards.
Several sets of arguments were advanced on behalf of the trader appellants in the various appeals by their respective learned counsel.
Three sets of arguments were advanced on behalf of the various Market Committees and a separate argument was addressed to us on behalf of the State.
In some of the appeals the State and/or the Market Committees are the appellants.
The points urged on behalf of the trader appellants, although too numerous, broadly speaking are the following: (1) Big areas consisting of towns and villages have been notified as Market Areas without rendering any service.
This is contrary to the whole object of the Act and the concept of fee.
(2) No market area or market yard has been validly created.
(3) No Mandi Samiti (Market Committee) has been validly appointed.
120 (4) No machinery has been provided in the Rules for adjudication of disputes.
(5) Fixation of minimum of 1% to be charged as market fee by all the Market Committees under s.17(iii)(b) of the Act was illegal as the requirement of and the services to be rendered by the various Market Committees could not be on the same footing.
(6) There was no application of mind in issuing the notification dated 11 4 1978 whereby 250 market areas were notified and 115 items of agricultural produce were specified.
(7) There could not be any multi point levy of any market fee either in the same market area or in different market areas.
(8) The retrospective operation of the law brought about in s.17(iii)(b) by U.P. Act 7 of 1978 w.e.f. 12.6.1973 is bad.
(9) No market fee could be levied on goods not produced within the limits of a particular market area and if produced outside and brought in such area.
(10) No market fee could be levied both on paddy and rice.
The rice millers have been illegally asked to pay market fee on their sale of rice.
Similarly no market fee was payable on Ghee either by the producer trader of Ghee or by its purchaser.
(11) Fee could be charged on sale of animals but could not be charged on hides and skins as was being illegally done.
(12) Fee could be charged on wood or timber but could not be charged either on furniture manufactured from such wood or timber or on Catechu (Katha).
(13) Wood cut and brought from the jungle by a manufacturer of paper such as Star Paper Mills, Saharanpur could not be subjected to levy of fee.
(14) Some of the items mentioned in the notification are Kirana goods brought from outside the market area or even from other States for sale in different Mandi.
They cannot be subjected to the levy of market fee.
(15) No market fee could be charged on tobacco or Tendu leaves nor on bidis.
121 (16) No fee could be charged in a municipal area as no market committee can be constituted there nor in a Nyaya Panchayat.
(17) No market fee could be charged on rab salawat and rab galawat.
(18) No market fee can be charged if only goods are brought in a market area and despatched outside it without there taking place any transactions of purchase and sale in respect of these goods.
(19) Any goods sold under any controlled legislation such as rice etc.
cannot attract the levy of fee as there is no freedom to make any sale in respect of such commodity.
(20) If no licence is issued or taken under s.9(1) of the Act then there is no liability to pay a market fee.
(21) No market fee can be levied on transactions of matchboxes, soyabin products, articles sold by Kisan Products Ltd. and Pan (betel leaves).
(22) No market fee can be charged from vendors of fruits and vegetables through their Commission Agents.
(23) Fee can be charged only on those transactions in which the seller is producer and not on any other transaction.
(24) Market fee can be charged only on those transactions in which the seller is the purchaser of agricultural produce and not on any other transaction.
Points 1 to 4 These four points are taken up together as there is no substance in any of them.
Declaration of big areas as Market Areas does not offend any provision of law.
Any area big or small including towns and villages can be declared as Market Area under s.6 of the Act.
As explained in the case of Kewal Krishan Puri (supra) the whole of the market area is not meant where the traders or the licensees can be allowed to set up and carry on their business.
The traders are required to take out licences under s.9(2) read with s.11 of the Act, for such place which is either a Principal Market Yard or a Sub Market Yard or at any specified place in the Market Area.
No body can be permitted to carry on his business anywhere in the Market Area as the Market Committee will not be able to control and levy fee throughout the Market Area.
The question of rendering service and its co 122 relation to the charging of fee has been elaborately discussed in the said decision and the following principles have been culled out: "(1) That the amount of fee realised must be earmarked for rendering services to the licensees in the notified market area and a good and substantial portion of it must be shown to be expended for this purpose.
(2) That the services rendered to the licensees must be in relation to the transaction of purchase or sale of the agricultural produce.
(3) That while rendering services in the market area for the purpose of facilitating the transactions of purchase and sale with a view to achieve the objects of the marketing legislation it is not necessary to confer the whole of the benefit on the licensees but some special benefit must be conferred on them which have a direct, close and reasonable co relation between the licensees and the transactions.
(4) That while conferring some special benefits on the licensee it is permissible to render such service in the market which may be in the general interest of all concerned with the transactions taking place in the market.
(5) That spending the amount of market fees for the purpose of augmenting the agricultural produce, its facility of transport in villages and to provide other facilities meant mainly or exclusively for the benefit of the agriculturists is not permissible on the ground that such services in the long run go to increase the volume of transactions in the market ultimately benefitting the traders also.
Such an indirect and remote benefit to the traders is in no sense a special benefit to them.
(6) That the element of quid pro quo may not be possible or even necessary, to be established with arithmetical exactitude but even broadly and reasonably it must be established by the authorities who charge the fees that the amount is being spent for rendering services to those on whom falls the burden of the fee.
(7) At least a good and substantial portion of the amount collected on account of fees, may be in the neighbourhood of two thirds or three fourths, must be shown 123 with reasonable certainty as being spent for rendering services of the kind mentioned above.
" As already stated, Market Yards also have been established while issuing notifications under s.7.
By and large, the Mandis where the traders are carrying on their business for the time being have been declared as Market Yards.
When the Market Committees are able to construct their own Market Yards, as in some places they have been able to do, then a question will arise whether a trader can be forced to go to that place only for carrying on his business in agricultural produce or he can be permitted to carry on his business in his old place.
For the time being this question is left open.
Market Committees have not been constituted yet in accordance with the provisions contained in s.13 of the Act.
They have been constituted temporarily under Uttar Pradesh Krishi Utpadan Mandi Samitis (Alpakalik Vyawastha) Adhiniyam, 1972 which Act was a temporary Act and has been extended from year to year.
But it is high time that Market Committees should be constituted in a regular manner on a permanent basis in accordance with the provisions contained in Chapter III of the Act.
But the levy and collection of fee by the temporary Market Committees is not illegal as argued on behalf of the appellants.
A machinery for adjudication of disputes is necessary to be provided under the Rules for the proper functioning of the Market Committees.
We have already observed and expressed our hope for bringing into existence such machinery in one form or the other.
But it is not correct to say that in absence of such a machinery no market fee can be levied or collected.
If a dispute arises then in the first instance the Market Committee itself or any Sub Committee appointed by it can give its finding which will be subject to challenge in any court of law when steps are taken for enforcement of the provisions for realisation of the market fee.
Point No. 5 Under clause (b) of s.17(iii) of the Act a minimum and maximum limit of market fee chargeable has been fixed by the legislature.
The minimum is 1% and the maximum is 1 1/2 of the price of the agricultural produce sold.
The fixing of the minimum of 1% fee by itself is not illegal but it would be subject to the rendering of adequate services as explained by this Court in Kewal Krishan Puri 's case.
The facts placed before the High Court as also before us were too meagre to indicate that services to the extent of the fee levied at 1% are not being rendered.
In Puri 's case we upheld the levy of market fee at 2% on the value of the goods sold.
But there we found that the 124 Market Committees were rendering greater services than are being rendered by the Market Committees of Uttar Pradesh.
Yet charging of 1% fee as is being charged throughout the State of Uttar Pradesh by all the Market Committees is not illegal and does not go beyond the quid pro quo theory discussed in Puri 's case.
Point No. 6 It is difficult to understand the significance of this point.
The notification dated 11 4 1978 indicates that in the various Districts, the number of which is about 55, 250 Market Committees have been constituted and about 115 items have been selected in respect of which market fee has been directed to be levied.
None of the items so specified is such that it cannot be covered by the Schedule which is a part of the Act.
The definition of agricultural produce is very wide.
It is not confined to items of agricultural produce only but includes items of produce of horticulture, viticulture, apiculture, sericulture, pisci culture, animal husbandry or forest.
Such items are specified in the Act which is undoubtedly a part of the Act.
That being so challenge to the notification dated 11 4 1978 on the ground that it was issued without any application of mind is devoid of any substance and must be rejected.
Point No. 7 It is clear and it was expressly conceded to on behalf of the Market Committees and the State that there cannot be any multi point levy of market fee in the same market area.
The reason is obvious.
Section 17(iii)(b), as amended by U.P. Act 7 of 1978 reads as follows: "market fee, which shall be payable on transactions of sale specified agricultural produce in the market area at such rates, being not less than one percentum and not more than one and half percentum of the price of the agricultural produce so sold, as the State Government may specify by notification, and such fee shall be realised in the following manner (1) if the produce is sold through a commission agent, the commission agent may realise the market fee from the purchaser and shall be liable to pay the same to the Committee; (2) if the produce is purchased directly by a trader from a producer the trader shall be liable to pay the market fee to the Committee; 125 (3) if the produce is purchased by a trader from another trader, the trader selling the produce may realise it from the purchaser and shall be liable to pay the market fee to the Committee; and (4) in any other case of sale of such produce, the purchaser shall be liable to pay the market fee to the Committee.
" All the four clauses of clause (b) are mutually exclusive.
If the produce is purchased from a producer directly the trader shall be liable to pay the market fee to the Committee in accordance with sub clause (2).
But if the trader sells the same produce or any product of the same produce to another trader neither the seller trader nor the purchaser trader can be made to pay the market fee under sub clause (3).
So far the position was not disputed by the Market Committees, rather it was conceded, and in our opinion, rightly.
But some difficulty arises in regard to the products of the agricultural produce which has been subjected to the levy of market fee.
This will be relevant when we come to consider the various agricultural produce in respect of which challenge was made on the ground that it amounts to multi point levy.
At this stage we may explain our view point by taking a few examples from the Schedule appended to the Act.
Wheat, an agricultural produce, is mentioned under the heading 'Cereals '.
Suppose the transaction of wheat, namely, wheat purchased from a producer by a trader has been subjected to levy of market fee under s.17(iii) (b)(2) no further levy of market fee in the same market area could be made, not even on wheat flour if flour were to be included in the Schedule.
The better example can be found in the items under the heading 'Animal Husbandry Products ' wherein in the Schedule milk and Ghee both are mentioned.
Milk, of course, is not mentioned in the notification dated 11 4 1978.
But if it would have been mentioned then only the transaction of milk in a particular market area could be subjected to levy of fee and Ghee manufactured from milk could not be so subjected.
But since milk is not mentioned in the notification the transaction of Ghee can be subjected to the levy of fee in accordance with the principle to be discussed hereinafter.
The greater difficulty arises with respect to paddy and rice as both of them are mentioned in the Schedule as well as in the notification.
We shall show hereinafter that in a particular market area market fee can not be levied both in relation to the transaction of purchase and sale of paddy and the rice produced from the same paddy.
Fee can be charged only on one transaction.
This finds support from the unamended Rules as they are, wherein is to be found sub r.(2) of Rule 66.
But we find nothing in the provisions of the Act or the Rules to 126 warrant the taking of the view that in another market area the Market Committee of that area cannot levy fee on a fresh transaction of sale and purchase taking place in that area.
Supposing the Wheat is purchased in market area X by a trader from a producer, fee will be chargeable under s.17(iii)(b)(2).
If the same Wheat is taken to another market area say Y and another transaction of sale and purchase takes place there between a trader and a trader the market fee will be leviable under sub clause (3).
It is also not correct to say that the agricultural produce must have been produced in the market area in which the first levy is made.
It might have been produced in another market area or even outside the State of Uttar Pradesh but if a transaction of sale and purchase takes place of an agricultural produce as defined in the Act and covered by the notification within a particular market area then fee can be charged in relation to the said transaction.
Point No. 8 In order to appreciate the implication of this point we have first to read and compare the provisions of s.17(iii)(b) of the Act as they stood before 1973, between 1973 and 1978 and after the amendment by Act 7 of 1978.
The provision as enacted in U.P. Act XXV of 1964 read as follows: "17.
A Committee shall, for the purposes of this Act, have the power to: (iii) levy and collect: (b) market fees on transactions of sale or purchase of specified agricultural produce in the Principal Market Yard and Sub Market Yards from such persons and at such rates as may be prescribed, but not exceeding one half percentum of the price of the specified agricultural produce sold or purchased therein;" The Rules which were framed in 1965 prescribed the rates of and the liability of the persons to pay the market fee.
The relevant provision of Rules 66 and 68 are quoted below: "66.
Market fee Section 17(iii) (1) The Market Committee shall have the power to levy and collect fees on the specified agricultural produce brought and sold in the Market Yards at such rates as may be specified in the byelaws but not exceeding one half of one percentum of the price of the specified agricultural produce: Provided that the market fee shall be payable by the seller.
127 68.
"Recovery of fees Section 17(iii) (1) The market fee on specified agricultural produce shall be payable as soon as such produce is sold in the Principal Market Yard or Sub Market Yards in accordance with the terms of and conditions specified in the bye laws.
(2) The market fee shall be realized from the seller in the following manner: (i) If the specified agricultural produce is sold through the Commission agent or directly to the trader, the Commission agent or the trader, as the case may be, shall charge market fee from the seller in sale voucher in Form No. VI and deposit the amount of market fee so realised with the Market Committee in accordance with the directions of the Committee issued in this behalf.
(ii) If the specified agricultural produce is sold directly by the seller to the consumer, the market fee shall be realised by the servant of the Market Committee authorized by it in this behalf.
(3) The licence fee shall be paid along with the application for licence: Provided that in case the Market Committee refuses to issue a licence, the fee deposited by the applicant shall be refunded to him.
(4) The payment of market fee and licence fee shall be made to the Committee in cash.
" It would thus be seen that before 1973, reading the provisions of the Act and the Rules, market fee was to be charged at such rates as specified in the bye laws of a particular Market Committee.
But it could not exceed 1/2 percentum of the price of the agricultural produce.
We were informed at the Bar that almost every Market Committee had levied fees @ 1/2%.
The liability to pay the fee was of the seller of the agricultural produce.
Market fee was liable to be paid under Rule 68(2)(ii) even if the specified agricultural produce was sold directly by the seller to the consumer.
This provision has been superseded now by an amendment in the Act brought about by U.P. Act 19 of 1979, whereby a proviso to the following effect has been added to section 17(iii)(b): "Provided that no market fee shall be levied or collected on the retail sale of any specified agricultural produce where such sale is made to the consumer.
" 128 Clause (b) of section 17(iii) was amended by U.P. Act 13 of 1973 as re enacted by U.P. Act 20 of 1974.
The said clause stood as follows after the said amendment: "(b) market fees, which shall be payable by purchasers, on transactions of sale of specified agricultural produce in the Principal Market Yard or a Sub Market Yard at such rates, being not less than one percentum and not more than one and a half percentum of the price of the agricultural produce so sold, as the State Government may specify by notification in the Gazette;" It would be noticed that by the said amendment in clause (b) the minimum rate fixed was 1 percentum and the maximum 1 1/2 percentum and the liability to pay the fee became that of the purchaser instead of the seller as prescribed earlier by the Rules.
Yet the Rules continued as they were.
Nonetheless it is plain that after the amendment in the Statute, Rules could apply only mutatis mutandis and wherever there was a conflict between the Rules and the Statute the latter had to prevail.
In passing, reference may be made to the substitution of the words market area in place of the words "Principal Market Yard or the Sub Market Yards" occurring in clause (b) by U.P. Act 6 of 1977 w.e.f. 20 12 1976.
We have already adverted to this aspect of the matter and pointed out that transactions cannot take place in whole of the market area and although theortically fee is chargeable in the whole of the area now but actually the Rules and especially the Explanation to Rule 66 indicate that the transactions do take place in the Principal Market Yard or Market Yards or some specified place or places in a particular market area.
Then came the amended section 17(iii)(b) of U.P. Act 7 of 1978, which had already been extracted above and it was made retrospective w.e.f. 12 6 1973.
Under the present provision a liability to pay the fee is under four mutually exclusive clauses.
The Rules which were framed in 1965 namely Rules 66 and 68 are so very different from the present provision of law that we had to express our distress in the beginning of this judgment for the failure of the Government to amend the Rules and bring it in conformity with the amended provisions of the Statute from time to time.
Any way, the Rules will apply as far as possible so long they do not come in conflict with the Statute and even without the aid of the Rules the provision in section 17(iii)(b) as it stands after the amendment brought about by U.P. Act 7 of 1978 is workable and can be given effect to.
The 129 State legislature was competent to make retrospective amendment vide B. Banerjee vs Anita Pan and M/s. section K.G. Sugar Ltd. vs State of Bihar and Ors.
It has also been pointed out in H. H. Sudhundra Thirtha Swamiar vs Commissioner for Hindu Religious & Charitable Endowments, Mysore at pages 324 25 that retrospective imposition of a fee is valid.
Of course, this cannot be a rule of universal application.
In a given case and in a given situation the retrospective operation may be hit by Article 19.
But in the present case we are inclined to take the view that the retrospectivity of the law as such is not bad and the only safeguard which we want to point out is this.
If market fee has been realised by any Market Committee in respect of transactions of sale of agricultural produce taking place between 12 6 1973 and coming into force of U.P. Act 7 of 1978, in accordance with the law as it prevailed then, no market fee under the amended law can be realised again.
But if in respect of any transactions aforesaid market fee has not yet been realised then it can be realised in accordance with the amended provision of the law.
The only hardship will be to persons covered by sub clauses (1) and (3) wherein a provision has been made to pass on the burden of fee to others.
In the case of sub clause (1) the commission agent can realise the market fee from the purchaser and the seller trader under sub clause (3) can realise it from the purchaser.
If market fees are realised from such persons in accordance with the amended provision of the law then in turn they may be able to realise it from persons on whom they could pass on the burden.
We are not disposed to hold the law bad only on that account.
Point No. 9 We have already alluded to this aspect of the matter earlier in our judgment and taken the view that market fee could be levied on transactions of goods not produced within the limits of a particular market area by the Market Committee of that area even though the goods are produced outside the State of Uttar Pradesh or outside the market area of that particular Market Committee provided the transactions take place within the limits of that Market area.
On the other hand we find no provision in the Act or the Rules to limit the operation of the law in a particular market area only in respect of the agricultural produce produced in that area.
Point No. 10 Apropos this point attention is first to be focussed on the definition of the word 'producer ' in clause (p) and 'trader ' in clause (y) of 130 section 2 of the Act which have already been quoted.
A producer who produces agricultural produce generally does not indulge in trading activities so as to become a trader within the meaning of clause (y).
He is covered by clause (p) only.
If a person is simply a trader indulging in trading activities he is covered by the definition in clause (y).
We have coined the expression producer trader for a person who is both a producer of agricultural produce and himself trades in it.
For the purposes of the Act he ceases to be a producer and becomes a trader only as the definition indicates.
While discussing the question of levy of market fee on paddy and rice this aspect of the matter is important and therefore we thought it appropriate to highlight it at this stage.
By and large in the notification dated April 11,1978 there is hardly any duplication of any item of agricultural produce.
As for example, under Group D Animal Husbandry Products, milk has been omitted although it is to be found in the Schedule appended to the Act.
From milk can be prepared Ghee or Khoya and items 1 and 2 in Group D are the said articles.
Hides and Skins can be had from the animals, so wool is obtained from the sheep.
But in case of paddy and rice mentioned as items 3 and 4 in Group A I "Cereals", there is a duplication as rice is obtained from paddy.
We would, therefore, like to clarify the position of law in this regard.
If paddy is purchased in a particular market area by a rice miller and the same paddy is converted into rice and sold then the rice miller will be liable to pay market fee on his purchase of paddy from the agriculturist producer under subclause (2) of section 17(iii)(b).
He cannot be asked to pay market fee over again under sub clause (3) in relation to the transaction of rice.
Nor will it be open to the Market Committee to choose between either of the two in the example just given.
Market fee has to be levied and collected in relation to the transaction of paddy alone.
Otherwise, there will be a risk of violation of Article 14 if it is left to the sweet will of the Market Committee in the case of some rice millers to charge market fee on the transaction of paddy and in case of others to charge it when the sale of rice takes place.
If, however, paddy is brought by the rice miller from another market area, then the Market Committee of the area where paddy is converted into rice and sold will be entitled to charge market fee on the transaction of sale in accordance with sub clause (3).
We now take the example of a producer trader who is an agriculturist and produces paddy in his own field but owns a rice mill also in the same market area.
He mills the paddy grown by him into rice and sells it as such.
It is plain that in his case no market fee can be charged on paddy because there is no transaction of sale and purchase of paddy and market fee can be charged only on the sale of rice by him in accordance with sub clause (3) and he will be entitled to 131 pass on the burden to his purchaser.
Disputes of facts were raised before us as to whether paddy had been subjected to the charge of market fee or not and whether the same paddy has been milled into rice.
We did not enter into this disputed question of fact, and as observed above, after clarifying the law we direct the Market Committees to levy market fee in the light of this Judgment.
It will be open to any trader to go to the High Court again, if necessary, for the redress of his grievance in connection with a disputed question which may arise even after our Judgment.
In relation to the transactions of Ghee we had two types of dealers before us (1) a dealer who purchases milk or cream from the villagers and others and manufactures Ghee in his plant and (2) a dealer who purchases such Ghee from the manufacturer of Ghee and sells it to another trader in the same market area.
The first dealer will be liable to pay market fee because he is the producer of Ghee within the meaning of the Act and at the same time a trader in Ghee also.
When he sells Ghee to another dealer in Ghee who is simply a dealer then under sub clause (3) of section 17(iii)(b) the manufacturing dealer will be liable to pay market fee to the Market Committee on the transaction of Ghee.
But he will be entitled to pass on the burden to his purchaser.
Apropos the Market Committee, however, the liability will be of the manufacturing dealer.
If milk, butter or cream would have been included in the notification then the charging of fee in relation to the first transaction of sale and purchase of such commodities would have been attracted in the light of the principle of law we have enunciated above with reference to paddy and rice.
But in the case of Group D such commodities are not mentioned in the notification.
Point No. 11 An attempt was made on behalf of the Hides and Skins dealers to show that hides and skins cannot be an agricultural produce within the meaning of the Act.
They are obtained from the carcass of an animal and not from a living animal.
Argument stressed was that under group G in the Schedule appended to the Act Animal Husbandry Products only can come.
Item 11 Hides and Skins, item 12 bones, item 13 meat etc.
are not products of Animal Husbandry.
Some authoritative books were cited before us on "Words and Phrases" to show the meaning of 'Animal ', 'Husbandry ' and 'Animal Husbandry '.
Animal Husbandry means that branch of agriculture which is concerned with farm animals especially as regards breeding, care and production.
We are not impressed by this argument.
The definition clause (a) of section 2 uses the expression 'animal husbandry ' by way of a descriptive one without strictly confining to the products of animal husbandry 132 as the addition of the words "specified in the schedule" indicates.
In the schedule under the group 'husbandry products ' are mentioned all these items.
We may also add that one may breed and rear animals in a farm for the purpose of obtaining hides and skins after they are butchered.
Market fee is, therefore, leviable on the transactions of hides and skins as no market fee can be charged on transactions of sale and purchase of animals in a market area in the State of Uttar Pradesh, the same having not been included in the notification.
Had it been included in the notification, then no market fee could be charged in the same market area on hides and skins.
It could only be charged in relation to the transaction of purchase and sale of animals.
Point No. 12 For discussing this point we have to refer to group E of the notification dated 11 4 1978 which deals with forest products.
The items mentioned in the said group are (1) Gum, (2) Wood, (3) Tendu leaves, (4) Catechu and (5) Lac.
Market fee can be charged on purchase of wood by a trader from a producer.
No fee can be charged on the sale of furniture manufactured by the purchaser of wood.
It was also conceded on behalf of the Market Committees that market fee was not being charged on the sale of furniture.
If it has been so charged it will be refunded.
Furniture is not an item mentioned in the group of forest products.
Therefore, this question does not present any difficulty at all.
Difficulty cropped up in relation to the charging of market fee apropos the transaction of Catechu.
According to the Market Committees Catechu is a product from timber or trees like Gum or Lac.
It trickles down from the trees.
On the other hand, according to the Catechu dealers by processing of Khar trees Catechu is produced.
We leave this question of fact to be decided by the Market Committees concerned in the first instance and then by a court of law.
If Catechu is a product of Khar trees by some processing as prima facie it appears to us to be so, then it is plain that market fee can be charged only on the purchase of Khar wood and not on the sale of Catechu.
Point No. 13 This item presented some difficulty in solution.
A licence is granted to a Paper Mill and to other kinds of dealers for cutting wood from the jungle and bringing it to their factories for manufacture of various articles such as paper etc.
It was argued that there was no transaction of sale and purchase involved in the above operation.
Moreover the wood is cut from the jungle area which although has been roped in the market area but no service is rendered in that jungle area by any Market 133 Committee.
In our opinion in the licence is involved sale of wood and a right to go to that land to cut that wood.
The wood may be used by the manufacturer for manufacturing furniture or may be used in the manufacture of paper or any other commodity.
That is immaterial.
The owner of the jungle wherefrom the wood is cut and brought will be a producer within the meaning of the Act and the licensee producer of that wood would be a purchaser of an agricultural produce within the meaning of sub clause (2) of section 17(iii)(b) of the Act liable to pay market fee.
It matters little what use is made of the wood by him.
The question of quid pro quo and service cannot be decided by a dichotomy of service to every payer of fee as held by this Court in Kewal Krishan Puri 's case.
The matter has to be judged in a broad sense and not in the sense of rendering service to every individual payer of the fee.
Point No. 14 This point also presented some difficulty.
But on a parity of reasoning mentioned so far in connection with the other items, we have got to hold that such Kirana goods as are included in the notification brought from outside a particular market area or even from outside the State of Uttar Pradesh are chargeable to market fee when their sale takes place in a particular market area.
In group A VI Spices are mentioned including certain Kirana items such as Ripe Chillies, Sonf, turmeric etc.
They are sold by the Kirana dealers.
Sometimes they purchase them from the agriculturists in the same market area.
In relation to those transactions they will be liable to pay market fee under sub clause (2) of section 17(iii)(b).
More often than not such articles are brought from outside and sold by the Kirana merchants.
If they are sold to consumers, no market fee can be levied in view of the proviso added in the year 1979.
If they are sold in wholesale, then the transaction can be subjected to the levy of market fee because in a particular market area they enter into the first transaction of sale in respect of the specified agricultural produce.
Point No. 15 Market fee can be charged on transaction of tobacco as it is included in group A V of the notification.
As in the case of other items so in this case also the fee will be leviable if tobacco is purchased in the same market area from an agriculturist in accordance with sub clause (2).
Otherwise it would be leviable under sub clause (3).
Similar is the position in regard to tendu leaves which is mentioned in group E. Bidi cannot be treated as an agricultural produce as it is not an admixture of tobacco and tendu leaves within the meaning of section 2(a) of the Act.
It was conceded on behalf of the Market Committees that no market fee was being charged on the transactions of Bidi.
But 134 if a Bidi manufacturer purchases tobacco and tendu leaves in the market area and uses them in the manufacture of Bidi, he will be liable to pay market fee in relation to the transaction of tobacco and tendu leaves.
Point No. 16 This point has been stated merely to be rejected.
There is no substance in this point.
Our attention was drawn to some provisions in the municipal Acts and the Zila Parishad Acts to show that no market committee could be constituted in a municipal area or a Nyaya Panchayat.
We do not consider it necessary to deal with this point in any detail.
We merely reject it as being devoid of any substance.
Point No. 17 Gur, rab, shakkar, khandsari and jaggery are expressly included in the definition of agricultural produce given in clause (a) of section 2 of the Act.
We are here concerned with the question as to whether rab galawat and rab salawat are rab within the meaning of section 2(a) or are bye products of molasses received at the time of manufacture of khandsari.
According to the case of some of the appellants who deal in these commodities they are the bye products and market fee has already been charged on rab and therefore the fee cannot be charged again on rab galawat and rab salawat.
Disputes of facts were raised in this connection before us on behalf of the Market Committees.
On the materials placed before us it was clear to us that rab galawat and rab salawat cannot be subjected to a separate charge of market fee apart from the transaction of rab.
Market fee can be levied on the first transaction of rab taking place in any market area in accordance with any of the sub clauses of section 17 (iii) (b), as it may be applicable.
It cannot be again charged on the second transaction of rab galawat or rab salawat even assuming that it is rab.
But on the materials placed before us it appeared to us that rab galawat and rab salawat are not rab in the original form but they are obtained at one stage or the other in the process of manufacture of khandsari.
Any way the question of fact may be decided as we have indicated in respect of the other items in the first instance by the Market Committee and thereafter by the High Court, if necessary, in a fresh writ petition.
It will bear repetition to say that the only transaction which can be subjected to levy of market fee in a particular market area is the first transaction of rab and no other transaction of rab galawat and rab salawat.
Point No. 18 This point urged on behalf of the appellants is well founded and must be accepted as correct.
On the very wordings of clause (b) of 135 section 17(iii) market fee is payable on transactions of sale of specified agricultural produce in the market area and if no transaction of sale takes place in a particular market area no fee can be charged by the Market Committee of that area.
If goods are merely brought in any market area and are despatched outside it without any transaction of sale taking place therein, then no market fee can be charged.
If the bringing of the goods in a particular market area and their despatch therefrom are as a result of transactions of purchase and sale taking place outside the market area, it is plain that no fee can be levied.
Point No. 19 This point has no substance and has got to be rejected.
As held in Vishnu Agencies (Pvt.) Ltd. etc.
vs Commercial Tax Officer & Ors. etc.
on a review of earlier decisions even if a commodity is sold pursuant to the controlled regulations still some small area is left to make it a transaction of sale.
It may well be that no freedom is left to the parties in a large area of the transaction yet it is a transaction of sale.
Point No.20 This point also must be rejected.
A pure and simple producer as defined in clause (p) of section 2 is not required to take any licence for selling his agricultural produce nor is he required to pay market fee under any of the sub clauses of section 17(iii)(b).
But if he is a producer trader in the sense we have explained above, then he will be required to take out a licence in accordance with section 9(2) of the Act and no body can be permitted to carry on any trade in agricultural produce in the market area without a valid licence.
Merely for his lapse of not taking out a licence he cannot escape the liability to pay the market fee.
Market fee will still be chargeable from the trader, as, in section 17(iii)(b) it is not stated that market fee can be charged only from the licensees.
The proviso to clause (p) of section 2 will be attracted only if a question arises as to whether any person is a producer or not for the purposes of the Act and in that event the decision of the Director made after an inquiry conducted in the manner prescribed by the rules shall be final.
The proviso has nothing to do with a case of a producer trader.
If a question arises whether a person is merely a producer or producer trader the Director will have no power to decide this question.
Such a question will have to be decided by the Market Committee itself which will be subject to the final decision of a court of law.
136 In support of the argument reliance was placed upon the decision of this Court in Raunaq Ram Tara Chand & Ors. etc.
vs The State of Punjab & Ors.
But that case is distinguishable because of the language of rules 29 and 31 of the Punjab Agricultural Produce Market Rules framed in accordance with the Punjab Agricultural Produce Markets Act, 1961.
Both the rules aforesaid clearly stated that the fee could be charged from the licensees only.
Not only that even the charging section 23 of the Act itself stated: "a Committee may, subject to such rules as may be made by the State Government in this behalf, levy on ad valorem basis fees on the agricultural produce brought or sold by licensees in the notified market area at a rate not exceeding rupee one fifty paise for every one hundred rupees, provided. "On the other hand in section 17 (iii) (b) of the U.P. Act and Rules 66 and 68 of the Rules charging of market fee in terms is not found to be chargeable from the licensees only.
The traders cannot escape their liability to pay the fee on account of their default of taking out licences.
Point No. 21 This point is also well founded and must be accepted as correct.
Market fee can be charged only on the transactions of purchase of wood and if a manufacturer of match sticks purchases wood from the producer for the purposes of manufacturing the sticks he will be required to pay market fee on such purchase of wood only and not on the sale of match sticks or match boxes.
Similarly market fee will be leviable on the transaction of purchase of soyabin and not on transaction of sale of soyabin products.
Exactly the same will be the position with regard to the articles sold by Kisan Products Ltd. and the sale of Pan. Agricultural produce purchased by the dealers will be chargeable to market fee and not the sale of the products after one kind of processing or the other.
Point No. 22 Under this head the submission on behalf of the fruit and vegetable merchants was that they bring their products to the market and sell them in wholesale through their commission agents.
No market fee, therefore, should be charged from them.
In our opinion the argument so placed on behalf of the merchants is misconceived.
Under sub clause (1) of section 17(iii)(b) of the Act when fruits and vegetables are sold through a commission agent by the producer then the Commission agent is liable to pay the market fee and he can realise it from the purchaser of fruits and vegetables.
The burden does not fall on the producer.
The liability in the first instance is of the commission, agent and finally of the purchaser of the articles.
137 Point No. 23 Point No. 24 Reliance was placed upon a decision of the Mysore High Court (now Karnataka) in the case of K. N. Marudaradhya vs The Mysore State but the view taken by the Mysore High Court was dissented from by the Patna High Court in the case of Mangalchand Ramchandra and others etc.
vs State of Bihar.
One of us (Untwalia J,) delivering the judgment of the Patna High Court stated at page 1053 thus: "At this stage I would discuss a Bench decision of the Mysore High Court on which great reliance was placed on behalf of the petitioners in support of their contention that no fee can be levied on transaction of buying and selling between a dealer and a dealer even though such transactions take place within the market area or the market proper.
The decision of the Mysore High Court is in the case of K. N. Marudaradhya vs The Mysore State A.I.R. At page 126 (column 2) from paragraph 33 starts the discussion on the point at issue.
To the extent the decision goes to hold that the purchase in respect of which the fee could be levied or collected is the earliest purchase, that is to say, the fee can be levied only on one purchase and not on subsequent purchases, with respect I am inclined to agree with that view expressed in paragraphs 33 to 38.
But while discussing the point, Iyer J., has confined this earliest purchase of the agricultural produce belonging to the producer only.
There does not seem to be a pointed discussion of the question whether the first purchase from a dealer could be subjected to levy or not.
But by necessary implication, as I read the judgment, it seems, their Lordships of the Mysore High Court took the view that such a deal cannot be subjected to the levy of fee.
With great respect, in that regard, I strike my note of dissent from the view expressed by the Mysore High Court.
Firstly, merely because the object of the legislation is the protection of the agriculturist, the plain meaning of the section cannot be cut down.
Secondly, they have relied upon the practice prevailing around the area under different State statutes as mentioned in paragraph 36.
If I may say with respect, law could not be so 138 decided on the basis of any practice.
Of course, the interpretation given to the Statute can be supported by reference to practice.
Thirdly, I am inclined to think that the Supreme Court decision in the case of Krishna Coconut Company does not lend support to the limited view expressed by the Mysore High Court.
We approve of the Patna view and in the set up of the U.P. Act after an elaborate discussion we have pointed out as to in what kind of transaction who is liable to pay the market fee.
In the U.P. Act even traders under certain circumstances have been made liable to pay such fees.
Similarly the argument that market fee can be charged only on those transactions in which the seller is the producer of agricultural produce and not on any other transaction is also devoid of any substance.
Conclusions For the reasons stated above, we hold that market fee should be regularised and be charged in the light of this Judgment.
If anything has been realised from the traders or any other person which goes contrary to this Judgment the same should be refunded by the Market Committee concerned within six months from today.
This may not be treated as a precedent for all cases of this type.
The form of the order in relation to the refund of the market fee may vary from case to case depending upon the facts and circumstances of each case.
Market fee due from the traders in the light of this judgement should also be charged and paid within a period of six months from today.
If there is any disputed question of fact to be decided by the Market Committee then it should be decided as quickly as possible leaving the person concerned to agitate the matter in a court of law, preferably in the High Court, within a short time thereafter.
The High Court will proceed to decide the matter in the light of our Judgment.
We do hope that services are being rendered and will continue to be rendered by the various Market Committees in the light of the Judgment of this Court in Kewal Krishan Puri 's case.
If in regard to any particular Market Committee it is found that services are not being rendered or in future lapses are made then it will be open to the payers of fees to re agitate the matter in the High Court in the light of that judgment.
For the reasons stated above the appeals and writ petitions are partly allowed and partly dismissed in the manner indicated above.
There will be no order as to costs in any of them.
N.V.K. Appeals and petitions partly allowed.
| Himachal Pradesh was a Union Territory till January 25, 1971, when at the apex of the Judicial hierarchy there was a court of Judicial Commissioner.
On the introduction of the Punjab Reorganization Act, 1966 effective from November 1, 1966, certain territories were transferred and added to the Union Territory of Himachal Pradesh simultaneously extending the jurisdiction of the Court of Judicial Commissioner of Himachal Pradesh to the transferred territories.
Consequently provision was made for allocation of persons belonging to different services in pre reorganized State of Punjab (Respondent 4 to 7 being such officers) to Union Territory of Himachal Pradesh.
On May 2, 1967, the judiciary of Union Territory of Himachal Pradesh was placed under the jurisdiction of Delhi High Court which continued till January 25, 1971, when state hood was conferred on the Union Territory and a full fledged High Court of Himachal Pradesh was set up.
Promotional avenues in Himachal Pradesh Subordinate Judicial service moved vertically from the grass root entry as subordinate judge promoted as senior sub Judge cum Assistant Sessions Judge and when the further promotional avenue is DSJ/ADSJ.
They were initially governed by the Himachal Pradesh (Courts) Order, 1948 issued by the Union Government in exercise of the power conferred by sections 3 and 4 of the Extra Provincial Jurisdiction Act, 1947.
This order remained in force till it was replaced by the Himachal Pradesh Subordinate Judicial Service Rules, 1962.
Rule 16(2) of the 1948 Order provided for the appointment of District and Sessions Judges.
The Chief Commissioner had power to appoint as many persons as he considered necessary to be District Judges.
In the 1962 Rules, there was no change in this regard.
Effective from January 25, 1971 when statehood was conferred on the Union Territory of Himachal Pradesh, the Chief Commissioner was replaced by the Governor and the Judicial Commissioner by High Court.
Both the appellants were working as Senior Sub Judge cum Assistant Sessions Judge and they questioned the validity and legality of promotion of respondents 3, 4 and 5 given on May 18, 1971 as DSJ/ADSJ on the ground that the 365 post of DSJ/ADSJ is a selection post and the criterion for selection must be merit alone, seniority being treated as thoroughly irrelevant and therefore, all those who were within the zone of eligibility should have been considered before selecting respondents 3, 4 and 5 and this having not been done the promotion having been purely as the basis of seniority, their promotion is invalid.
Simultaneously they contended that same criterion would mutatis mutandis apply while giving promotion to senior sub Judge cum Assistant Sessions Judge to selection grade post and that having not been done and the promotion having been given only on the basis of seniority, the same is invalid, as per the memorandum dated June 15, 1957 issued by the Himachal Administration.
The High Court through its Registrar did not appear and participate in the proceedings, though made a party.
Nor did the Bench hearing the matter call for the relevant files from the office of the High Court though a prayer was made to that effect in the writ petition.
The State of Himachal Pradesh, Respondent No. 1 contended that appointment to the post of D.S.J. was governed by article 233 of the Constitution under which appointments were to be made by the Governor in consultation with the High Court and since respondents 3, 4 and 5 were promoted and appointed as DSJ/ADSJ on the recommendation of the High Court, the appointments were not open to challenge.
The High Court accepted this plea of the State Government and dismissed the writ petitions.
Hence the appeal by special leave.
Dismissing the appeal the Court, ^ HELD: (1) Article 309 of the Constitution confers power on the legislature by appropriate legislation to regulate the recruitment and conditions of service of persons appointed to public services and posts in connection with the affairs of the Union or of a State and till such legislation is enacted the power is conferred by the proviso to Article 309 of the President and the Governor, as the case may be, to make rules in that behalf.
Undoubtedly such rules will have to be in conformity with other provisions of the Constitution such as Article 16 and the provisions included in Chapter VI of Part VI of the Constitution.
No rules have been enacted under Article 309 proviso regulating the recruitment and conditions of service of DSJ/ADSJ till such rules are framed appointment to the post of DSJ/ADSJ will have to be made in accordance with the provisions of Articles 233 and 235 of the Constitution.
[371 F H, 372 A] Article 233 confers power on the Governor of the State to appoint persons either by direct recruitment or by promotion from amongst those in the judicial service as District Judges but this power is hedged in with the condition that it can be exercised by the Governor in consultation with the High Court.
In order to make this consultation meaningful and purposive the Governor has to consult High Court in respect of appointment of each person as District Judge which includes an Additional District Judge and the opinion expressed by the High Court must be given full weight.
Article 235 invests control over subordinate courts including the officers manning subordinate courts as well as the ministerial staff attached to such courts in the High Court.
Therefore, when promotion is to be given to the post of District Judge from amongst these 366 belonging to subordinate judicial service, the High Court unquestionably will be competent to decide whether a person is fit for promotion and consistent with its decision to recommend or not to recommend such person.
The Governor who would be acting on the advice of the Minister would hardly be in a position to have intimate knowledge about the quality and qualification of such person for promotion.
Similarly, when a person is to be directly recruited as District Judge from the Bar the reasons for attaching full weight to the opinion of the High Court for its recommendation in the case of subordinate judicial service would mutatis mutandis apply because the performance of a member of the Bar is better known to the High Court than the Minister or the Governor.
[372 A F] Chandra Mohan vs State of Uttar Pradesh at 83, Chandramouleshwar Prasad vs Patna High Court & Ors. ; and A. Panduranga Rao vs State of Andhra Pradesh ; ; followed.
Right to be considered for selection is distinct from an assertion that if considered the person so considered would of necessity be selected and then alone his grievance that he was not considered even though eligible could be examined by the court.
And it is impossible to expect a person to aver that if along with others eligible he was considered he would have been selected.
[376 B C] In the instant case, as the situation stood at the time of the impugned recommendations for promotion and the consequent appointment made by Governor there was no such rule providing merit alone as the criterion for promotion and the High Court, though it does not reveal its mind, appears to have proceeded on the criterion of seniority cum merit which is a valid criterion under Article 16 and not violative of article 233 and the appellants, therefore, who were juniors to respondents 3, 4 and 5 cannot be heard to make a grievance about the promotion of respondents 3, 4 and 5 who as and when their turn came were considered and on being found fit were recommended for promotion and the Governor appointed them.
[376 C E] 3.
It is true that the Office Memorandum No. F.1/4/55/RPS dated May 16, 1957, issued by the Government of India Ministry of Home Affairs did contain certain guidelines laying down criterion in giving promotions to selection posts.
In the absence of any material as to whether the Memorandum was endorsed to the High Court or whether the High Court adopted or acted upon the same or not it is difficult to accept that it was binding on the High Court and any recommendation for promotion made in breach of contravention thereof would render the promotion invalid.
Even apart from this, the impugned promotions were made on May 18, 1971, after Himachal Pradesh became a full fledged State with a High Court at the apex of judiciary and the memorandum would cease to have any force or binding effect.
[377 G, 378 C E] 4.
Promotion from the post of subordinate Judge to the selection grade post of subordinate Judge is a promotion from one post in subordinate judicial service to another post in the same service.
This promotion would definitely be under the control of the High Court as provided in article 235 of the Constitution.
In the absence of a statutory rule, the High Court would be the sole authority to decide the question of promotion in exercise of its control under article 235.
By article 235 the High Court has been vested with complete 367 control over the subordinates courts and this exercise of control comprehends the power to decide eligibility for promotion from one post in the subordinate judicial service to higher post in the same service except where one reaches the stage of giving promotion as DSJ/ADSJ when article 233 would be attracted and the power to give promotion would be in Governor hedged in with the condition that the Governor can act after consultation with the High Court which has been understood to mean on the recommendation of the High Court.
But when it comes to promotion in the judicial service under the Distt.
Judge the High Court would be the sole authority to decide the question of promotion.
[378 F H, 379 A B] While promotion to the post of Distt.
Judge which includes various posts as set out in Art 236, is with the Governor, the High Court would be competent to decide the promotion from one post in subordinate judicial service to any higher post in subordinate judicial service under the District Judge.
In the present case promotions of respondents 6 and 7 from the rank of subordinate Judge to the selection grade post of subordinate Judge is also valid.
[379 G H, 380 A] High Court of Calcutta vs Amal Kumar Roy ; at 454; State of Assam & Anr.
vs Kuseswar Saikia 5.
The power to confirm any one in the subordinate judicial service vests in the High Court in exercise of the control vested in the High Court under article 235; in fact the power to promote to various posts in the subordinate judicial service under the District Judge comprehends also the power to confirm and that vests in the High Court.
[380 D E] The impugned appointments were made by promotion as DSJ/ADSJ of those belonging to subordinate judicial service by the Governor on the recommendation of the High Court as envisaged by article 233 and in the absence of any other valid rule promotion made on the generally well accepted principle of seniority cum merit is valid.
Therefore the promotion of respondents 3, 4 and 5 to the post of DSJ/ADSJ and promotions of respondents 6 and 7 to the selection grade post are valid.
[381 A C] State of Assam & Anr.
vs section N. Sen & Anr. ; ; State of Bihar vs Madan Mohan Prasad & Ors. ; ; followed.
|
Special Leave Petition (Civil) No. 10326 of 1989.
From the Judgment and Order dated 1.8.1989 of the Patna High Court in C.W.J.C. No. 5768 of 1989.
R.K. Jain, R. Sharma, R.P. Sharma and Ms. Sangeeta Tripathi for the Petitioners.
The Judgment of the Court was delivered by KANIA, J.
This is one more case of an educational insti tution started in the State of Bihar without recognition applying for permission to allow the students, whom it has admitted and, from whom it has presumably recovered substan tial fees, to be allowed to appear at the ensuing examina tion on the ground that the question of its recognition has not been decided by the Government.
It appears from the judgment of the High Court that a number of similar mushroom institutions have sprung up in the State of Bihar without prior recognition, have admitted students, received fees from them and allowed them to undergo training for a sub stantial period of time without getting any recognition and thereafter tried to get permission from the Court for their students to be allowed to appear at the examination on grounds of sympathy.
This impression has been gathered from a 25 number of similar applications made to this Court in the last few months.
It is not possible to grant any such permission as prayed for because the granting of such permission would be clearly violating the provisions of the Education Act (See the judgments in S.L.P. No. 120 14 of 1987 decided on Novem ber 25, 1987 and the A.P. Christians Medical Educational Society vs Government of A.P. & Anr., ; ; What is however, unfortunate is that applications made by various educational institutions to the Government for recognition are not promptly disposed of.
In fact, we are of the view that the concerned department of the Government of Bihar should see to it that applications for recognition of educational institutions are decided promptly and where such an application is without merit, the Government should promptly reject the same and take steps to see to it that the rejection is brought to the attention of the students of the institution concerned so that they may not waste further time and money by undergoing training in that institution.
The failure of the Government to take such action would only reflect callous indifference to the inter ests of the young students to whom the Government certainly owes certain responsibilities.
We also feel that the State Government should issue advertisement through newspapers and other possible channels, if any, to ensure that students do not get misled by such unrecognised institutions into wast ing their precious time and money in undergoing training which will be of no avail to them.
We find that there ap pears to be a large number of students in the State who are misled by such institutions.
In fact, the State should consider taking such steps, criminal or civil, as open to it in law to stop such institutions and those who run them from misleading students and deceiving them.
We are informed that in the present case, the applica tion for recognition was made by the petitioners and as early as 1986 that application has not still been disposed of.
We direct that, if this so, the application should be disposed of within 4 weeks from today.
In these circumstances, we direct the State Government of Bihar to get published advertisements in at least three newspapers in that State with wide circulation warning students not to take admission in any educational institu tion which has not got recognition and making it clear that if they do so, they would be doing so at their own risk.
The advertisements to be issued within three weeks from the date of receipt of this order by the department concerned.
We direct that the 26 copies of this order be sent forthwith to the Chief Minister of Bihar, the Minister in charge of the Education Department and the Secretary of that department.
Special leave petition is dismissed with these observa tions.
In case the application of the petitioners for recog nition is granted, the Government will consider the granting of appropriate relief to the students in respect of the years for which the recognition is concerned.
R.S.S. Petition dismissed.
| Under Rule 8(1)(a) of the Defence Research & Development Service Rules, 1970, Junior Scientific Officers in the Defence Research & Development Organisation were eligible for promotion to the posts of Scientists 'B ' upto 50 per cent of the vacancies in the grade.
The respondents who were holding the posts of Junior Scientific Officers, and were promoted to the posts of Scientists 'B ' with effect from October 16, 1985 or from the date they actually assumed charge of the posts filed an application before the Central Administrative Tribunal, contending that since the posts to which they had been promoted were created between 1984 and 1985, they should have been promoted with effect from July 1984, as was done on previous occasions upto 1983, when promotions were ef fected from 1st July of the year in which promotions took place.
The Tribunal rejected the prayer of the respondents and directed that the promotions should be effective from the date on which the promotional posts were created.
The Union of India being aggrieved appealed to the Court.
On the question whether the Tribunal was justified in directing the promotions to be effective from the date the promotional posts were created.
Allowing the appeal, this Court, HELD: After a post fails vacant for any reason whatsoev er, a promotion to that post should be from the date the promotion is granted and not from the date on which such post falls vacant.
Similarly, when additional posts are created, promotions to those posts can be granted 752 only after the Assessment Board has met and made its recom mendations for promotions being granted.
If, however, promo tions are directed to become effective from the date of creation of additional posts, then it would have the effect of giving promotions even before the Assessment Board has met and assessed the suitability of the candidates for promotion.
[754C E] In the instant case, there is no statutory provision that the promotion to the post of Scientist 'B ' should take effect from 1st July of the year in which the promotion is granted.
There is also no law or rule under which a promo tion is effective from the date of creation of the promo tional posts.
The Tribunal was, therefore, in error in holding that the promotions should be effective from the date the promotional posts were created.
The orders of the appellants promoting respondents from October 16, 1985 will stand.
[754B C & F]
|
il Appeal No. 724 of 1976.
Appeal by Special Leave from the, Judgment and Order dated 13th Dec. 1974 of the Calcutta High Court in Appeal from Original Order No. 240 of 1973.
AND Civil Appeals.
2488 2497 (NT) 1972 (From the Judgment and Order dated the 31st March, 1970 of the Andhra Pradesh High Court in Writ Petitions Nos.3005, 3006, 3085, 3086, 3088, 3090, 4232, 4243 and 4244 of 1969.
Sachin Chowdhary, B. Sen, section section Bose, K. K. Chakraborty, A. G. Manzes, J. B. Dadachanji and k. J. John for the Appellant in C.A. 724/76.
L. N. Sinha, D. N. Mukherjee, G. section Chatterjee and A. K. Ganguli for respondents 1 to 4 in C.A. 724/76.
B. Kanta Rao for the Appellants in C.As 2488 97 of 1972.
Soli J. Sorabjee, Addl.(In 2488 97) 72, P. Parameshwara Rao A. K. Ganguli and T. V. section Narasimhachari for the Respondents in CAs.2488 97/72.
A. Subba Rao for the Intervener.
The following Judgment were delivered BEG, C.J.
I am in general agreement with my learned brother Chandrachud who has discussed all the authorities so admirably and comprehensively.
I, however, would like to add a few observations stating the general conclusion, as I see it, emerging from an application of general principles and accumulation of case law on the subject of what may be called "statutory" or "compulsory" sales.
Are they sales at all so as to be exigible to sales tax or purchase tax under the relevant statutory provisions ?
The term 'sale? is defined as follows in Eenjamin on Sale (Eighth Edn.) : "To constitute a valid sale there must be a concurrences of the following elements, namely : (1) parties competent to contract; (2) mutual assent; (3) a thing, the absolute or general property in which is transferred from the seller to the buyer; and (4) a price in money paid or promised.
" It is true that a considerable part of the field over which what are called 'sales ' take place under either 'regulatory orders or levy orders passed or directions given under statutory provisions is restricted and controlled by these orders and directions.
If, what is called a "sale" 438 is, in substance, mere obedience to a specific order, in which the so called "price" is only a compensation for the compulsory passing of property in goods to which an order relates, at an amount fixed by the authority making the order, the individual transaction may not be a ,,sale" although the compensation is determined on some generally fixed principle and called "price".
This was, for example, the position in New India Sugar Mills vs Commissioner of Sales Tax, Bihar(1).
That was a case of a delivery according to an order given by the Govt. which could amount to a compulsory levy by an executive order although there was no legislative "levy order" involved in that case.
On the other hand,, in Commissioner, Sales Tax, U.P. vs Ram Bilas Ram Gopal,(2) the order under consideration was actually called a levy order, but the case was distinguishable from New India Sugar Mills vs Commissioner of Sales Tax, Bihar (supra) on facts.
It was held in the case of Ram Bilas (supra) that the core of what is required for a "sale" was not destroyed by the so called "levy" order which was legislative.
It is true that passages from the judgement of Pathak, J., in the case of Ram Bilas Ram Gopal (supra) were cited and specifically disapproved by a Bench of this Court in Chittar Mal Narain vs Commissioner of Sales Tax(3).
But, perhaps the view of this Court in Chittar Mal Narain, Das (supra) goes too far in this respect.
It is not really the nomenclature of the order involved, but the substance of the transaction under consideration which matters in such cases.
In the first typo of case mentioned above the substance of the concept of a sale, as found under our Law, itself disappears because the transaction is nothing more than the execution of an order.
Deprivation of property for a compensation, which may even be described as "price", does not amount to, a sale when all that is done is to, carry out an order so that the transaction is substantially a compulsory acquisition.
On the other hand, a merely regulatory law, even if it circumscribes the area of free choice, does not take away the basic character or core of sale from the transaction.
Such a law, which governs a class, may oblige sellers to deal only with parties holding licences who may buy particular or allotted quantities of goods at specified prices, but an essential element of choice is still left to the parties between whom agreements take place.
The agreement, despite considerable compulsive elements regulating or restricting the area of free choice, may still retain the basic character of a transaction of sale.
This was the position in Indian Steel and Wire Products Ltd. vs State of Madras(4).Andhra Sugar Ltd. vs State of Andhra Pradesh(5) and State of Rajasthan vs Karam Chand Thapar(6): There might be borderline cases in which it may be difficult to draw the line.
(1) ; : [1963] (Supp) 2 SCR 459.
(2) AIR 1970 All 518.
(3) [1971] 1 S.C.R. 671.
(4) ; (5) ; (6) A.I.R. 1969 S.C. 343.
439 In the former type of case, the binding character of the, transaction arises from the order directed to particular parties asking them to deliver specified goods and not from a general order or law applicable to a class.
In the latter type of cases, the legal tie (vinculum juris) which binds the parties to perform their obligations remains contractual.
The regulatory law merely adds other obligations, such as the one to enter into such a tie between the parties indicated there.
Although the regulatory law might specify the terms, such as price, or parties, the regulation is subsidiary to the essential character of the transaction which is consensual and contractual.
The basis of a contract is : "consensus adem".
The parties to the contract must agree upon the same thing in the 'same sense.
Agreement on mutuality of consideration, ordinarily arising from an offer and acceptance, imparts to it enforceability in Courts of law.
Mere regulation or restriction of the field of choice does not take away the contractual or essentially consensual binding core or character of the transaction.
I may be forgiven for citing a passage from my judgment in Commissioner of State Tax vs Ram Bilas Ram Gopal,(supra) to indicate the setting of such transactions "It appears to me to be necessary to distinguish between a restriction in the area of choice of parties and the transaction itself in order to, determine the true character of the transaction.
Limitation of the field of choice is a necessary concomitant of a controlled or mixed economy which ours is.
Absolute freedom of contract or unregulated operation of the laws of supply and demand, which an apotheosis of the lais sez faire doctrine demanded, led really to a shrinking of the area of freedom in the economic sphere, producing gross inequalities in bargaining powers and recurrent crises.
Therefore, a regulated or a socialistic economy seeks to regulate the play of forces operating on the economic arena so that economic freedom of all concerned, including employers and employees, is preserved and so that the interests of consumers are also not sacrificed by any exploitation of conditions in which there is scarcity of goods,.
I think that the regulation or restriction of the area of choice, cannot be held to take away the legal character of the transactions which take place within the legally restricted field.
It is too late in the day, when so much of the nation 's social and economic activities are guided and governed by control orders, allotment orders, and statutory contracts, to contend that mere State regulation of the economic sphere of life results in the destruction of the nature of the transactions which take place within that sphere." (P. 524) In Roman Law the contract of sale was classed as a "consensual" contract.
The consent could, no doubt, be express or implied.
I find that Hidayatullah J., in his very learned dissenting judgment in New India Sugar Mills Case (supra), where some Roman Law is referred to, thought that even in a case of a 'specific order directing delivery of 440 goods there could be an implied consent so as to constitute a safe.
I find it, with great respect, difficult to go so far as that.
What could be implied, upon the facts of a particular case, must still be a consent to a proposal if the transaction is to be construed as a "sale".
Mere compliance with an order may imply an acceptance of an order but acceptance of a proposal to purchase or sell are of a juristically different genus.
It is, however, not necessary for us, in this case, to accept the correctness of the minority view of Hidayatullah, J. in New India Sugar Mills case (supra).
The transactions before us are sales on an application of the ratio decidendi of Indian Steel and Wire Products Ltd 's case (supra) and other cases decided on similar grounds.
The difficulty arises from the fact that, although the ingredients of a "sale," as defined in Benjamin 's treatise on "Sale? ', may seem to be satisfied even if delivery of goods is in obedience to "an order to deliver them for a consideration, fixed or to be fixed if we stretch mutual assent to cover assent resulting from orders given, yet, it is difficult to see how such a transaction would be based on a contractual tie.
According to Sec.4(3) of our , a sale results only from a contract which presupposes a minimal area of freedom of choice where the ordinary mechanism of proposal and acceptance operates.
For the reasons indicated above, while I agree with the answer given by my learned brother Chandrachud to the question before us and also practically with all the views expressed by my learned brother, yet, I hesitate to hold that the majority opinion expressed by Shah J., in New India Sugar Mills case (supra), is erroneous.
I think the case is distinguishable.
Ibis, however, makes no difference to the common conclusion reached by us on the facts of the cases before us.
These appeals have been placed for hearing before a seven Judge Bench in order to set at rest, to the extent foreseeable, the controversy whether what is conveniently, though somewhat loosely, called a 'compulsory sale? is exigible to sales tax.
When essential goods are in short supply, various types of Orders are issued under the with a view to making the goods available to the consumer at a fair price.
Such Orders sometimes provide that a person in need of an essential commodity like cement, cotton, coal or iron and steel must apply to the prescribed authority for a permit for obtaining the commodity.
Those wanting to engage in the business of supplying the commodity are also required to possess a dealer 's licence.
The permit holder can obtain the supply of goods, to the extent of the quantity specified in the permit, from the named dealer only and at a controlled price.
The dealer who is asked to supply the stated quantity of goods at the particular permit holder has no option but to supply the stated quantity of goods at the controlled price.
The question for our consideration not easy to decide, is whether such a transaction amounts to a sale in the language of the law.
We will refer to the facts of civil appeal 724 of 1976, in which a company called M/s Vishnu Agencies (Pvt.) Ltd., is the appellant.
It carries on business as an agent and distributor of cement in the 441 State of West Bengal and is a registered dealer under the Bengal Finance (Sales Tax) Act, 1941, referred to hereinafter as the Bengal Sales Tax Act.
Cement being a controlled commodity, its distribution is regulated by the West Bengal Cement Control Act, 26 of 1948, referred to hereinafter as the Cement Control Act, and by the Orders made under section 3 (2) of that Act.
Section (3) (1) of the Cement Control Act provides, inter alia, for regulation of production, supply and distribution of cement for ensuring equitable supply and distribution thereof at a fair price.
By the Cement Control Order, 1948 framed under the Cement Control Act, no sale, or purchase of cement can be made, except in accordance with the conditions contained in the written order issued by the Director of Consumer Goods, West Bengal or the Regional Honorary Adviser to the Government of India at Calcutta or by officers authorised by them, at prices not exceeding the notified price.
The appellant is a licensed stockist of cement and is permitted to stock cement in its godown, to be supplied to persons in whose favour allotment orders are issued, at the price stipulated and in accordance with the conditions of permit issued by the authorities concerned.
The authorities designated under the Cement Control Order issue permits under which a specified quantity of cement is allotted to a named permit holder, to be delivered by a named dealer at the price mentioned in the permit.
A permit is generally valid for 15 days and as soon as the price of cement allotted in favour of an allottee is deposited with the dealer, he is bound to deliver to the former the specified quantity of cement at the specified price.
A specimen order issued in favour of an allottee, under which the appellant had to supply 10 metric tons of cement at Rs. 144.58 per M.T., exclusive of sales tax, reads thus "LICENCE FOR CEMENT The quantities of cement detailed below are hereby allotted to M/s. Marble & Cement products Co. Pvt. Ltd., 2, Braboume Road, Calcutta 1 to be supplied by M/s. Vishnu Agencies Pvt. Ltd., 3, Chittaranjan Avenue, Calcutta 13, on conditions detailed below.
The price of material involved must be deposited with the Stockist within 15 days and the actual delivery must be taken within 15 days from the date of issue of the permit.
The licence is issued only for the purpose of Mfg. of Mosaic Tiles at 188, Netaji Subhas Road, Calcutta 40.
Under no circumstances will the validity of the permit be extended beyond the period of 15 days from the date of its issue.
Cement Total Tonnge Country Cement at Rs. 144.58 Ton Cwt.per M.T. exclusive of section T. 10 M/T (Ten M/T only)" 442 The appellant supplied cement to various allottees from time to time in pursuance of the allotment orders issued by appropriate authorities and in accordance with the terms of the licence obtained by it for dealing in cement.
The appellant was assessed to sales tax by the first respondent, the Commercial Tax Officer,, Sealdah Charge, in respect of these transactions.
It paid the tax but discovered on perusal of the decision of this Court in New India Sugar Mills Ltd. vs Commissioner of Sales Tax(1) that the transactions were not exigible to sales tax.
Pleading that the payment was made under a mistake of law, it filed appeals against the orders of assessment passed by respondent 1.
It contended in appeals before the Assistant Commissioner of Commercial Taxes that by virtue of the provisions of the Cement Control Act and the Cement Control Order, no volition or bargaining power was left to it and since there was no element of mutual consent aggreement between it and the allottees, the transactions were not sales within the meaning of the Sales Tax Act.
The appellant further contended that if the transactions were treated as sales, the definition of "sale" in the Sales Tax Act was ultra vires the legislative competency of the Provincial Legislature under the Government of India Act, 1935 and of the State Legislature under the Constitution.
The appellate authority rejected the first contention and upheld the assessments.
It did not, as it could not, go into the second contention regarding legislative competence.
The appellant adopted the statutory remedies open to it but since the arrears, of tax were mounting up and had already exceeded a sum of rupees eight lacs, it filed a writ petition in the Calcutta High Court praying that the various assessment orders referred to in the petition be quashed and a writ of prohibition be issued directing the sales tax authorities to refrain from making any further assessments for the purpose of sales tax on the transactions between the appellant and the allottees.
A learned single Judge of the High Court allowed the writ petition and issued a writ of mandamus restraining the respondents from imposing sales tax on the transactions.
between the appellant and the allottees.
That judgment having been set aside in appeal by a Division Bench of the High Court by its judgment dated December 13, 1974, the appellant has filed appeal No. 724 of 1976 by special leave.
Civil appeals No. 2488 to 2497 of 1972 raise a similar question under the Andhra Pradesh Paddy Procurement (Levy) Orders, under which paddy growers in the State are under an obligation to sell the paddy to licensed agents appointed by the State Government at the prices fixed by it.
The High Court of Andhra Pradesh by its judgment dated March 31, 1970 has taken the, same view as the Calcutta High Court, namely, that the transactions amount to sales and are taxable under the Sales Tax Act.
Counsel appearing in the Andhra Pradesh appeals agree that the decision in the Calcutta case will govern those appeals also.
(1) [1963] Supp. 2 S.C.R. 459.
443 Since the crux of the appellant 's contention is that the measures adopted to control the supply of cement leave no consensual option to the parties to bargain, it is necessary first to notice the relevant provisions of law bearing on the matter.
The West Bengal Cement Control Act, 26 of 1948, was enacted in order to "confer powers to control the production, supply and distribution of, and trade and com merce in, cement in West Bengal."
Section 3(1) of the Act empowers the Provincial Government to provide, by order in the Official Gazette, for regulating the supply and distribution of cement and trade and commerce therein.
Section 3(2) provides by clauses (b) to (o) that an order made under sub section (1) may provide for regulating or controlling the prices at which cement may be purchased or sold and for prescribing the conditions of sale thereof, regulating by licences, permits or otherwise, the storage, transport, movement, possession, distribution, disposal, acquisition, use of consumption of cement; prohibiting the withholding from sale of cement ordinarily kept for sale; and for requiring any person holding stock of cement to sell the whole or specified part of the stock at such prices and to such persons or classes of persons or in such circumstances, as may be specified in the order.
If any person contravenes an order made under section 3, he is punishable under section 6 with imprisonment for a term which may extend to three years or with fine or with both, and, if the order so provides, any Court, trying such con tranvention, may direct that a property in respect of which the Court is satisfied that the order been contravened shall be forfeited to the Government.
In exercise of the powers erred by section 3(1) read with clauses (b) to (h) of section (2) of the Act, an Order which may conveniently be called the Cement Control Order was promulgated by the Governor on August 18, 1948.
The relevant clauses of that Order contain the following provisions.
By paragraph 1, no person shall after the commencement of the order sell or store for sale any cement unless he holds a licence and except in accordance with the conditions specified in such licence obtained from the Director of Consumer Goods, West Bengal, or any officer authorised by him in writing in this behalf.
By paragraph 2, no person shall dispose of or agree to dispose of any cement except in accordance with the conditions contained in a written order of the Director of Consumer Goods, West Bengal or the authorities specified in the paragraph.
By paragraph 3, no person shall acquire or agree to acquire any cement from any person except in accordance with the conditions contained in a written order of the Director of Consumer Goods, West Bengal, or the authorities specified in the paragraph.
By paragraph 4, no person shall sell cement at a "higher than notified price".
By Paragraph 8, no person or stockist who has any stock of cement in his possession and to whom a written order has been issued under paragraph 2 shall refuse to sell the same, "at a price not exceeding the notified price", 'and the seller shall deliver the cement to the buyer "within a reasonable time after the payment of price".
By paragraph 8A, every stockist or every person employed by him shall, if so re 3 1146 SCI/77 444 quested by the person acquiring cement from him under a written order issued under paragraph 3, weigh the cement in his presence or in the presence of his authorised representative at the time of delivery.
We are not concerned with the amendments made by the Govern ment of West Bengal to the, Cement Control Order on December 30, 1965 by which, inter alia paragraphs 2, 3, 4, 8 and 8A of that Order were deleted.
The,appeal from the decision of the Calcutta High Court is limited to the transactions between the appellant and the allottees from the years 1957 to 1960.
As regards the batch of appeals from Andhra Pradesh, the levy of tax was challenged by three sets of persons, the procuring agents, the rice millers and the retailers with the difference that the procuring agents were assessed to purchase tax, while the others to sales tax under the Andhra Pradesh General Sales Tax Act, 1957.
By virtue of the provisions of the, Andhra Pradesh Paddy Procurement (Levy) Orders, the paddy growers can sell their paddy to licensed procuring age nts appointed by the State Government only and at the prices fixed by the Government.
The agriculturist has the choice to select his own procuring agent but he cannot sell paddy to a private purchaser.
The procuring agents in their turn have to supply paddy to the rice millers at controlled prices.
The millers, after converting paddy into rice, have to declare their stocks to the Civil Supplies Department.
Pursuant to the Orders issued by the Department, the rice millers have to supply a requisite quantity of rice to the wholesale or retail dealers at prices fixed by the Department.
Orders for such supply by the millers are passed by the authorities under the A.P. Procurement (Levy) and Restriction on Sale Order, 1967.
Under this Order, every miller carrying on rice milling operations is required to sell to the agent or officer duly authorised by, the Government the minimum quantities fixed by the Government at the notified price; and no miller or other person who gets his paddy milled in any price mill can move or otherwise dispose of the, rice recovered by milling at such rice mill except in accordance with the, directions of the Collector.
A breach of these provisions is liable to be punished under section 7 of the and the goods are liable to be forfeited under section 6A of that Act.
The A.P. sales tax authorities levied purchase tax on the purchase of paddy made by the procuring agents from the agriculturists and they levied sales tax on the transactions relating to the sup of rice by the millers to the wholesale and retail dealers and on the supply made, by the retailers to their customers.
The case as regards the sales tax imposed on the transactions between the retail dealers and the consumers stood on an altogether different footing, but the writ petitions filed by the procuring agents and rice millers raised questions similar to those involved in the writ petition filed in the Calcutta High Court.
These then are the provisions of the respective Orders passed by the Governments of West Bengal and Andhra Pradesh.
445 We may now notice the provisions of the Sales Tax Acts.
Section 2(g) of the Bengal Finance (Sales Tax) Act, 6 of 1941, defines a sale" to mean "any transfer of property in goods for cash or deferred payment or other valuable consideration, including a transfer of ,property in goods involved in the execution of a contract, but does not include a mortgage, hypothecation, charge or pledge.
" Section 2 (1) provides that the word "turnover" used in relation to any period means "the aggregate of the sale prices or parts of sale prices receivable, or if a dealer so elects, actually received by the dealer. .
By clause (h) of section 2, "sale price" is defined to mean the amount payable to a dealer as valuable consideration for "the sale of any goods".
By section 4(1), every dealer whose gross turnover during the year immediately preceding the commencement of the Act exceeded the taxable quantum is liable to pay tax under the Act on all "sales" effected after the date notified by the State Government.
Section 2(n) of the Andhra Pradesh General Sales Tax Act 1957 defines a "sale" as "every transfer of the property in goods by one person to another in the course of trade or commerce, for cash, or for deferred payment or for any other valuable consideration.
Section 5 of that Act is the charging section.
According to these definitions of 'sale ' in the West Bengal and Andhra Pradesh Sales Tax Act, transactions between the appellants on one hand and the allottees or nominees on the other are patently ,sales because indisputably, in one case the property in cement and in the other, property in paddy and rice was transferred for cash consideration by the appellants; and in so far as the West Bengal case is concerned, property in the goods did not pass to the transferees by way of mortgage, hypothecation, charge or pledge.
But that is over simplification.
To counteract what appears on the surface plain enough, learned counsel for the appellants have advanced a two fold contention.
They contend, in the first place, ' that the word 'sale ' in the Sales Tax Acts passed by the Provincial or State legislatures must receive the same meaning as in the ; or else, the definition of sale in these Sales 'Tax Acts will be beyond the legislative competence of the Provincial and ' State legislatures.
Secondly, the appellants contend that since under the , there can be no sale without a contract of sale and since the parties in these matters had no volition of their own but were compelled by law to supply and receive the goods at prices fixed under the Control Orders by the prescribed authorities, the transactions between them are not sales properly so palled and therefore are not exigible to sales tax.
For examining the validity of the first contention, it is necessary to turn to the appropriate entries in the legislative lists of the Constitution Acts, for the contention is founded on the premise that the word sale ' which occurs in those entries must receive the same meaning as in the since the expression "sale of goods" was, at the time when the Government of India Act was enacted, a term of well recognised legal import in the general law relating to sale 446 of goods and in the legislative practice relating to that topic both in England and in India.
Entry 48 in the Provincial List, List II of Schedule VII to the Government of India Act, 1935 relates to; "Taxes on the sale of goods.
" Entry 54 of List II, of the Seventh Schedule to the Constitution reads to say: "Taxes on the sale or purchase of goods other than newspapers, subject to the provisions of entry 92A of the Union List but we may refer to it in order to complete the picture.
It refers to: "Taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course, of inter State trade or commerce."
The contention of the appellants that the expression 'sale of goods ' in entry 48 in the Provincial List of the, Act of 1935 and in entry 54 in the State List of the constitution must receive the same meaning as in the is repelled on behalf of the State Governments with the argument that constitutional provisions which confer legislative powers must receive a broad and liberal construction and therefore the expression 'sale of goods ' in entry 48 and its successor, entry 54, should not be construed in the narrow sense in which that expression is used in the but in a broad sense.
The principle that in interpreting a constituent or organic statute, that construction most beneficial to the widest possible amplitude of its powers must be adopted has been examined over the years by various courts, including this Court, and is too firmly established to merit reconsideration.
Some of the leading cases on this point are the Privy Council decisions in British Coal Corporation vs king(1), Edwards vs A. G. for Canada(2) and James vs Commonwealth of Australia("); the Australian decisions in Morgan vs Deputy Federal Commissioner of Land Tax, N.S.W.(4) and Broken Hill South Ltd. vs Commissioner of Taxation (N.S.W.) (5) ; the Federal Court decisions in In re the Central Provinces and Berar Act No. XIV of 1938(6) and United Provinces vs Atiqa Begum;(7) and the decisions of this Court in Navinchandra Mafatlal vs The Commissioner of Income tax, Bombay City(8) and The State of Madras vs Gannon Dunkerley & Co. (Madras), Ltd. (9)
These decisions have taken the view that a constitution must not be construed in a narrow and pedantic sense, that a board and liberal spirit should inspire those whose duty it is to interpret it, that a Constitution of a Government is a living and organic thing which of all instruments has the greatest claim to be construed ut res magis valeat quam pereat, that the legislature in selecting subjects of taxation is entitled to take things as it finds them in remum natura and that it is not proper that a Court should deny to such a legislature the right of solving taxation problems unfettered by a priori legal categories which often derive from the exercise of legislative power in the same constitutional unit.
(1) (6) (2) ; (7) (3) (8) (4) [1912] 15 C.L.R.661.
(9) [1959].S.C.R. 379.
(5) 447 On a careful examination of various decisions bearing on the point this Court speaking through Venkatarama Aiyar J. in Gannon Dunkerley (supra) upheld the contention of the State of Madras that the words "sale of goods" in Entry 48 which occur in the Constitution Act and confer legislative powers on the State Legislature in respect of a topic relating to taxation must be interpreted not in a restricted but broad sense.
But as observed by the learned Judge in that case, this conclusion opens up questions as to what that sense is, whether popular or legal, and what its connotation is, either in the one sense or ' the other.
After considering text book definitions contained in Blackstone, Benjamin on Sale, Halsbury 's Laws of England, Chalmer 's , Corpus Juris, Williston on Sales and the Concise Oxford Dictionary, the Court held that the expression 'sale of goods ' in Entry 48 cannot be construed in its popular sense and that it must be interpreted in its legal sense.
Whereas in popular parlance a sale is said to take place when the bargain is settled between the parties though property in the goods may not pass at that stage, as where the contract relates to future or unascertained goods, the essense of 'sale ' in the legal sense is the transfer of the property in a thing from one person to another for a price.
The Court then proceeded to determine, the connotation of the expression 'sale of goods ' in the legal sense and held, having regard lo the evolution of the law relating to sale of goods, the scheme of the Indian Contract Act and the provisions of the , which repealed Chapter VII of the Indian Contract Act relating to sale of goods, that according to the law both of England and of India, in order to constitute a sale it is necessary that there should be an agreement between the parties for the purpose of transferring title to the goods, which pre supposes capacity to contract, that the contract must be supported by valuable consideration and that as a result of the transaction property must actually pass in the goods.
"Unless all these elements are present, there can be no sale," Basing itself on this position, the Court finally concluded in Gannon Dunkerley (supra) that the expression 'sale of goods ' was, at the, time when the Government of India Act was enacted, a term of wellrecognised legal import in the general law relating to sale of goods and in the legislative practice relating to that topic both in England and in India and therefore that expression, occurring in entry 48, must be interpreted in the sense which it bears in the .
In coming to this conclusion, the Court relied upon the, American decisions in United States vs Wong Kim Ark, South Carolina vs United States(2 ) and Ex Parte Grossman(3); the Privy Council decisions in L 'Union St. Jacques De Montreal vs Be Lisle (4) , Royal Bank of Canada vs Larue,(5) The Labour Relations Board of (1) ; (2) ; (3) ; (4) [1874] L.R. 6 P.C.31.(5) 448 Saskatochewan vs John East Iron Works Ltd.(1); Croft vs Dunphy(2), and Wallace Brothers and Co. Ltd. vs Commissioner of Income tax, Bombay City and Bombay Suburban District;(3) the decision of the Federal Court in In re The Central Provinces and Berar Act No. XIV of 1938; (supra); and the decisions of this Court in The State of Bombay vs F. N. Balsara(4) and The Sales Tax Officer, Pilibhit vs Messrs Budh Prakash Jai Prakash(5).
In a nutshell, these decisions have taken the view that the Constitution must be interpreted in the light of the common law, the principles and history of which were familiarly known to the framers of the Constitution, that the language of the Constitution cannot be understood without reference to the common law, that to determine the extent of the grants of power, the Court must place itself in the position of the men who framed and ' adopted the Constitution and inquire what they must have understood to be the meaning and scope of those grants, that when a power is conferred to legislate on a particular topic it is important, in determining the scope of the power, to have regard to what is ordinarily treated as embarced within that topic in legislative practice and particularly in the legislative practice of the State which has conferred that power, that the object of doing so is emphatically not to seek a pattern to which a due exercise of the power must conform, but to ascertain the general conception involved in the words of the Act, and finally, that Parliament must be presumed to have had Indian legislative practice in mind and unless the context otherwise clearly requires, not to have conferred a legislative power intended to be interpreted in a sense not understood by those to whom the Act was to apply.
The view expressed in Gannon Dunkerley (supra) that the, words "sale of goods" in entry 48 must be interpreted in the sense which they bear in the an$ that the, meaning of those words should not be left to fluctuate with the definition of 'sale in laws relating to sales of goods which might be in force for the, time being may, with respect, bear further consideration but that may have to await a more suitable occasion.
It will then be necessary to examine whether the words "sale of goods" which occur in entry 48 should not be construed so as to extend the competence of the legislature to enacting laws in respect of matters which might be unknown in 19 3 5 when the Government of India Act was passed but which may have come into existence later, as a result of a social and economic evolution.
In Attorney General vs Edison Telephone, Company of London(,,) a question arose whether the Edison Telephone Company London, infringed by installation of telephones, the, exclusive privilege, of transmitting telegrams which was conferred; upon the Postmaster General under an Act of 1869.
The decision depended on the meaning of the (1) (2) (3) [1948] L.R. 75 I.A. 86.(4) ; (5) ; (6) 449 word "telegraph" in the Acts of 1863 and 1869.
The company contended that since telephones were unknown at the time when these Acts were passed, the definition of 'telegraph ' could not comprehend 'telephones.
That contention was negatived by an English Court.
In the Regulation and Control of Radio Communication in Canada, In re(1) a similar question arose as to whether 'broadcasting" was covered by the expression "telegraph and other works and undertakings" in section 92(10) (a) of the Constitution Act of 1867.
The Privy Council answered the question in the affirmative and was apparently not impressed by the contention that broadcasting was not known as a means of communication at the time when the Constitution Act was passed.
These decisions proceed on the principle that if after the enactment of a legislation, new facts and situations arise which could not have been in the contemplation of the legislature, statutory provisions can justifiably be applied to those facts and situations so long as the words of the statute are in a broad sense capable of containing them.
This principle, according to the view expressed in Gannon Dunkerley, (supra) did not apply to the interpretation of Entry 48, a view which in our opinion is capable of further scrutiny.
It is, however, unnecessary in these appeals to investigate the matter any further because, the position which emerges after putting on the words of Entry 48 the same meaning which those words ' bear in the is that in order to constitute a sale, it is necessary that there should be an agreement between the parties.
In other words, the effect of the construction which the Court put on the words of Entry 48 in Gannon Dunkerley (supra) is that a sale is necessarily a consensual transaction and if the parties have no volition or option to bargain, there can be no sale.
For the present purposes, this view may be assumed to reflect the correct legal position but even so, the transactions which are the subject matter of these appeals will amount to sales.
Applying the ratio of Gannon Dunkerley, (supra) the true question for decision, therefore, is whether in the context of the Control Orders issued by the Government of West Bengal for regulating the supply and distribution of cement, the transactions under which the, appellant supplied cement to persons who were issued permits by the authorities to obtain the commodity from the appellant, involved an element of volition or consensuality.
If they did, the transactions would amount to sales, but not otherwise.
It is undeniable that under paragraph 2 of the West Bengal Order of 1948, which we have for convenience designated as the Cement Control Order, no person can dispose of or agree to dispose of any cement except in accordance with the conditions contained in a written order of the Director of Consumer Goods or the authorities specified in that paragraph.
That is a limitation on the dealer 's right to supply cement.
Correspondingly by paragraph 3, no person can acquire or agree to acquire cement from any person except in accordance with the conditions contained in a written order of the Director of Consumer Goods or the authorities specified in that paragraph.
That is a limitation on the consumer 's right to obtain cement.
Paragraph 4 puts a restriction on the price which a dealer (1) 45 0 may charge for the commodity by providing that no person shall sell cement at a price higher than the notified price.
Paragraph 8 imposes on the dealer the obligation to supply cement by providing that no person or stockist who has any stock of cement in his possession and to whom a written order has been issued under paragraph 2 shall refuse to sell the same at a price not exceeding the notified price person who contravenes the provisions of the Cement Control Order is punishable under section 6 of the West Bengal Cement Control Act, 1948 with imprisonment for a term which may extend to three years These limitations on the normal right of dealers and consumers to supply and obtain the goods, the obligations imposed on the parties and the penalties prescribed by the Control Order do not, in our opinion, militate against the position that eventually, the parties must be deemed to have completed the transactions under an agreement by which one party bound itself to supply the stated quantity of goods to the other at a price not higher than the notified price and the other party consented to accept the goods on the terms and conditions mentioned in the permit or the order of allotment issued in its favour by the concerned authority.
Offer and acceptance need not always be in an elementary form, nor indeed does the Law of Contract or of Sale of Goods require that consent to a contract must be express.
It is commonplace that offer and acceptance can be spelt out from the conduct of the parties which covers not only their acts but omissions as well.
Indeed, on occasions, silence can be more eloquent than eloquence itself.
Just as correspondence between the parties can constitute or disclose an offer and acceptance, so can their conduct.
This is because, law does not require offer and acceptance to conform to any set pattern formula.
In order, therefore, to determine whether there was any agreement or consensuality between the parties, we must have regard to their conduct at or about the time when the goods changed hands.
In the first place, it is not obligatory on a trader to deal in cement nor on any one to acquire it.
The primary fact, therefore, is that the decision of the trader to deal in an essential commodity is volitional.
Such volition carries with it the willingness to trade in the, commodity strictly on the terms of Control Orders.
The consumer too, who is under no legal compulsion to acquire or possess cement, decides as a matter of ' his volition to obtain it on the terms of the permit or the order of allotment issued in his favour.
That brings the two parties together, one of whom is willing to supply the essential commodity and the other to receive it.
When the allottee presents his permit to the dealer, he signifies his willingness to obtain the commodity from the dealer on the terms stated in the permit.
His conduct reflects his consent.
And when, upon the presentation of the permit, the dealer acts upon it, he impliedly agrees to supply the commodity to the allottee on the terms by which he has voluntarily bound himself to trade in the commodity his conduct too reflects his consent.
Thus, though both parties are bound to comply with the legal requirements governing the transaction, they agree as between themselves to enter into the transaction on statutory terms, 451 one agreeing to supply the commodity to the other on those terms and the other agreeing to accept it from him on the very terms.
It is therefore not correct to say that the transactions between the appellant and the allottees are not consensual.
They, with their free consent, agreed to enter into the transactions.
We are also of the opinion that though the terms of the transaction are mostly predetermined by law, it cannot be said that there is no area at all in which there is no scope, for the parties to bargain.
The West Bengal Cement Control Act, 1948 empowers the Government by section 3 to regulate or control the prices at which cement may be purchased or sold.
The Cement Control Order, 1948 provides by paragraph 4 that no person shall sell cement at a "higher than notified price", leaving it open to the parties to charge and pay a price which is less than the notified price, the notified price being the maximum price which may lawfully be charged.
Paragraph 8 of the Order points in the same direction by providing that no dealer Who has a stock of cement in his possession shall refuse to sell the same "at a price not exceeding the notified price", leaving it open to him to charge a lesser price, which the allottee would be only too agreeable to pay.
Paragraph 8 further provides that the dealer shall deliver the cement "within a reasonable time" after the payment of price.
Evidently, within the bounds of reasonableness, it would be open to the parties to fix the time of delivery.
Paragraph 8A which confers on the allottee the right to ask for weighment of goods also shows that he may reject the goods on the ground that they are short in weight just as indeed, he would have the undoubted right to reject them on the ground that they are not of the requisite quality.
The circumstance that in these areas, though minimal, the parties to the transactions have the freedom to bargain militates against the view that the transactions are not consensual.
While on this aspect, we may usefully draw attention to two important decisions of this Court, the first of which is Indian Steel & Wire Products Ltd. vs State of Madras(1).
The appellant therein supplies certain steel products to various persons in Madras at the instance of the Steel Controller exercising powers under the Iron and Steel '(Control of Production and Distribution) Order, 1941.
The State of Madras assessed the turnover of the appellant to sales tax upon which, the appellant contended that the deliveries of steel products were made under compulsion of law since it was the controller who determined the persons to whom the goods were to be supplied, the price at which they were to be supplied, the manner in which they were to be transported and the mode in which the payment of the price was to be made.
Since every facet of the transaction was prescribed by the controller, so it was argued, there was no agreement between the parties and therefore the transaction could not be considered as a sale.
Rejecting this contention, it was observed by Hegde J., who spoke for the Constitution Bench, that though the controller fixed the base price of the steel products and determined the (1) ; 452 buyers, the parties were stiff 'free to decide the other terms of the bargain, as for example, the time and date of delivery and the time and mode of payment and therefore it could not be said that there was no agreement between the parties to sell and buy the goods.
It was held that though the area within which it was possible for the parties to bargain was greatly relieved on account of the Iron and Steel Control Order, it was not correct to contend that because law imposes restrictions on freedom of contract, there could be no contract at all.
"So long as mutual assent is not completely excluded in any dealing, in law it is a contract.
" The second decision is reported in Andhra Sugar Ltd. vs State of Andhra Pradesh(1).
In that case, the occupier of a sugar factory had to buy sugarcane from cane growers in conformity with the directions.
of the Cane Commissioner issued under the Andhra Pradesh (Regulation of Supply and Purchase) Act, 1961.
Under section 21 of that Act, sales and purchase of sugarcane were exempt from tax under the Andhra Pradesh General Sales Tax Act, 1957, but under section 2(1), of the Act of 1961, the State Government had power by notification, to levy a tax "on the purchase of cane required for use, consumption or sale in a sugar factory".
Various sugar factories in the State filed writ petitions under Article 32 of the Constitution challenging the validity of section 21 mainly on the ground that since they were compelled by law to buy cane from the cane growers, their purchases were not made under agreements and were not taxable under entry 54, List 11 of the Seventh Schedule to the Constitution having regard to the decision in Gannon Dunkerley (supra).
The writ petitions were decided by a Constitution Bench of this Court which delivered its un animous judgment through Bachawat J.
It is necessary in the first place to state that though it was argued on behalf of the State Government in that case that the occupier of the factory had some option of not buying the sugarcane from the grower and had some freedom of bargaining about the terms and conditions of the agreement, that point was not pursued any further and the writ petitions proceeded on the basis that there was no option left for any bargain in the transaction.
After referring to the definition of "contract of sale of goods" in section 4(1) of the Indian , and the relevant provisions of the Contract Act relating to offer and acceptance, the Court observed that under section 10 of the Contract Act, an agreements are contracts if they are made by the free consent of the parties competent to contract, for a lawful consideration and with a lawful object, and are not by the Act expressly declared to be void.
Section 13 of the Contract Act defines "consent" and section 14 says that consent is said to be free when it is not caused by coercion, undue influence, fraud, misrepresentation or mistake as defined in sections 15 to 22.
In the background of those provisions, the Court observed that the cane grower in the factory zone was free to make or, not to make an offer of sale of cane 'to the occupier of the factory.
But if be made an offer, the occupier of the factory was bound to accept it and the consent of the occupier not being caused by coercion, undue influence, fraud, misrepresentation or mistake was "free (1) ; 453 consent as defined in section 14 of the Contract Act, even though he was obliged by law to enter into the agreement.
"The compulsion of law is not coercion as defined in section 15 of the Act" and "in the eye of the law, the agreement is freely made.
" Since the, parties were competent to contract, the agreement was made for a lawful consideration and with a lawful object, the agreement was not void under any provision of law and it was enforceable at law, the Court held that the purchases of sugarcane were taxable by the State legislature under Entry 54, List 11 of the Seventh Schedule of the Constitution.
Strong reliance was placed by the factory owners in Andhra Sugars (supra) on the majority ' judgment of Kapur and Shah JJ in New India Sugar Mills Ltd. vs Commissioner of Sales Tax (supra) to which we must refer here.
The "admitted course of dealing" between the parties in that case was that the Governments of various consuming States used to intimate to the Sugar Controller of India, from time to time, their requirements of sugar and similarly, the factory owners used to send to the Sugar Controller of India statements of stocks of sugar held by them.
On a consideration of the requests received from the State Governments and the statements of stock received from the factories, the Sugar Controller used to make allotment of sugar allotment order was addressed by the Sugar Controller to the factory owner directing him to supply sugar to the State Government in question in accordance with the despatch instructions received from the competent officer of the State Government.
A copy of the allotment order was simultaneously sent to the State Government concerned on receipt of which the competent authority of the State Government sent to the factory concerned detailed instructions about the destinations to which the sugar was to be despatched as also the quantities of sugar to be despatched to each place.
The Madras Government which, under this arrangement, received its quota of sugar from the New India Sugar Mills, also laid down the ' procedure of payment.
The Patna High Court having held that the supply of sugar by the mills to the Province of Madras was liable to be taxed under the Bihar Sales Tax Act, 1947, the mills filed an, appeal to this Court which was decided by a Bench of three learned Judges.
Kapur and Shah J. held that since the mills were compelled to carry out the directions of the Controller and since they had no volition in the matter of supply of sugar to the State of Madras, there was no offer by them to the State Government and no acceptance by the latter.
Shah J., speaking for the majority observed that a contract of sale between the seller and the buyer is a prerequisite to a sale and since there was no such contract, the transaction in question which the Bihar Sales Tax authorities sought to tax was not exigible to sales tax.
Hidayatullah J. who 'delivered a dissenting opinion observed after reviewing the position both under the English and the Indian Law, that though it was true that consent makes a contract of sale, such consent "may be express or implied and it cannot be said that unless the offer and acceptance are there in an elementary form, there can be no taxable sale.
" Taking the view that on obtaining the necessary permit, the sugar mills on the one hand and the Government of 454 Madras on the other agreed to "sell" and "purchase" sugar could admit of no doubt, the learned Judge said that when the Province of Madras after receiving the permit, telegraphed instructions to despatch sugar and the mills despatched it, "a contract emerged and consent must be implied on both sides though not expressed antecedently to the permit.
" The Controller brought the seller and the purchaser together, gave them permission to supply and receive sugar leading thereby to an implied contract of sale between the parties.
The learned Judge accepted that there was an element of compulsion in both selling and buying, perhaps more for the supplier than for the receiver, but, according to him, "a compelled sale is nevertheless a sale" and "sales often take place without volition of party.
" The learned Judge summed up the matter pithily thus : "So long as the parties trade under controls at fixed price and accept these as any other law of the realm because they must, the contract is at the fixed price both sides having or deemed to have agreed to ' such a price.
Consent under the law of contract need not be express, it can be im plied. .
The present is just another example of an implied contract with an implied offer and implied acceptance by the parties.
" Adverting to the construction of the legislat ive entry 48 of List 11, VII Schedule to the Government of India Act, 1935, the learned Judge observed that the entry had to be interpreted in a liberal spirit and not cut down by narrow technical consideration.
"The entry in other words should not be shorn of all its content to leave a mere husk of legislative power.
For the purposes of legislation such as on sales tax it is only necessary to see whether there is a sale, express or implied. .
The entry has its meaning and within its meaning there is a plenary power.
If a sale express or implied is found to exist then the tax must follow."
We are of the opinion that the true position in law is as is set out in the dissenting judgment of Hidayatullah J., and that, the view expressed by Kapur and Shah JJ in the majority judgment, with deference, cannot be considered as good law.
Bachawat J. in Andhra Sugar (supra) was, with respect, right in cautioning that the majority judgment of Kapur and Shah JJ in New India Sugar Mills (supra) "should not be treated as an authority for the proposition that there can be no contract of sale under compulsion of a statute.
" (pages 715 716).
Rather than saying what, in view of the growing uncertainty of the true legal position on the question, we: are constrained to say, namely, that the majority judgment in New India Sugar Mills (supra) is not good law, Bachawat J. preferred to adopt the not unfamiliar manner of confining the majority decision to "the special facts of that case."
The majority judgment in New India Sugar Mills (supra) is based predominantly on the decision of this Court in Gannon Dunkerley (supra) to which we have referred at length in another context.
In fact, Shah J. observes at page 459 of the report after discussing the judgment in Gannon Dunkerley (supra) that "the ratio decidendi of that decision must govern this case.
" The decision in Gannon Dunkerley (supra) really turned on a different point, the question for consideration therein being whether the value of the materials used in the execution 455 of building contracts could be included within the taxable turnover of the company.
It was contended on behalf of the company that the power of the Madras Legislature to impose a tax on sales under entry 48, List 11 of Schedule VII of the government of India Act, 1935 did not extend to unposing a tax on the value of materials used in construction works, as there was no transaction of sale in respect of those goods, and that the provisions introduced in the Madras General Sales Tax Act, 1939, by the Madras General Sales Fax (Amendment) Act, 1947, authorising the imposition of such tax were ultra vires.
Venkatarama Aiyar J. posed the question thus : "The sole question for determination in this appeal is whether the provisions of the Madras General Sales Tax Act are ultra vires, in so far as they seek to impose a tax on the supply of materials in execution of works contract treating it as a sale of goods by the contractor. ".
The Court accepted that building materials were 'goods ' and limited the inquiry to whether there was "a sale of those materials within the meaning of that word in entry 48".
Reference was then made to Benjamin on Sale in which it is said that in order to constitute a 'sale, four elements must concur "(1) Parties competent to contract; (2) mutual assent, (3) a thing, the absolute or general property in which is transferred from the seller to the buyer; and (c) a price in money paid or promised." (Vide 8th Edn., p. 3).
On the strength of this statement and on a consideration of the provisions of the Contract Act and the it was concluded that "according to the law both of England and of India, in order to constitute a sale it is necessary that there should be an agreement between the parties for the purpose of transferring title to goods".
The Court then proceeded to examine the true nature of a building contract and held "It has been already stated that, both tinder the common law and the statute law relating to sale of goods in England and in India, to constitute A transaction of sale there should be an agreement, express or implied, relating to goods to be completed by passing of title in those goods.
It is of the essence of this concept that both the agreement and the sale, should relate to the same subject matter.
Where the goods delivered under the contract are not the goods contracted for,, the purchaser has got a right to reject them, or to accept them and claim damages for breach of warranty.
Under the law, therefore, there cannot be an agreement relating to one kind of property and a sale as regards another.
We are accordingly of opinion that on the true interpretation of the expression`sale of goods ' there must be an agreement between the parties for the sale of the very goods in which eventually property passes.
In a building contract, the agreement between the parties is that the contractor should construct a building according to the specifications contained in the agreement, and in consideration therefor receive payment as provided therein, and as will presently be shown there is in such An agreement neither a contract to sell the materials used in the construction, nor does property pass therein as movables.
It is therefore impossible to maintain that there 456 is implicit in a building contract a sale of materials as understood in law." (pages 413 414)
The final conclusion on the point involved in the appeal was expressed thus "To sum up, the expression 'sale of goods ' in Entry 48 is a nomen juris, its essential ingredients being an agreement to sell movables for a price and property passing therein pursuant to that agreement.
In a building contract which is, as in the present case, one entire and indivisible and that is its norm, there is no sale of goods, and it is not within the competence of the Provincial Legislature under Entry 48 to impose a tax on the supply of the materials used in such a contract treating it as a sale." (pages 425 426) Thus, the, two reasons given by the Court in support of its conclusion were, firstly, that in a building contract there was no agreement, express or implied, to sell 'goods ' and secondly, that property in the building materials does not pass in the materials regarded a; 'goods ' but it passes as part of immovable property.
In New India Sugar Mills (supra) the commodity with which Court was concerned was sugar and was delivered as sugar just as in the instant case the commodity with which we are concerned is cement which was delivered as cement.
That meets the first reason in Gannon Dunkerley (supra).
As regards the second, it is quite clear that the tax was demanded after the commodity had changed hands or putting it in the words of the Sale of Goods law, after property in it had passed.
With great respect therefore, the majority in New India Sugar Mills (supra) was in error in saying that "the ratio decidendi of that decision (Gannon Dunkerley) must govern this case '.
The question before us which was the very question involved in New India Sugar Mills (supra) viz., whether a transaction effected in accordance with the obligatory terms of a statute can amount to a 'sale did not arise in Gannon Dunkerley.
Just as the, majority Judges in New India Sugar Mills (supra) applied to the case before them the ratio of Gannon Dunkerley, (supra) the Court in the latter case applied the ratio of the House of Lords decision in Kirkness vs John Hudson and Co. Ltd.(1) observing categorically that "the derision in Kirkness must be hold to conclude the matter" (P. 412).
We think it necessary to lay particular emphasis on this aspect because it shows how the question for decision in Gannon Dunkerley (supra) was basically different from the question in New India Sugar Mills (supra) or in, the appeals before us.
In Kirkness (supra), railway wagons belonging to the respondent company were taken over by the Transport Commission compulsorily it) exercise of the powers conferred by section 29 of the Transport Act, 1947, and compensation was paid therefor.
The question was whether this amount was liable to income tax on the footing of sale of the wagons by the company.
The contention on behalf of the revenue if was that compulsory acquisition being treated as sale under the English law, the taking over of the wagons and payment of compensation (1) 457 therefor must also be regarded as sale for purpose of income tax and therefore, the company was liable to a balancing charge under section 17 of the Income tax Act, 1945.
The case turned on the meaning of the word sale ' for the purposes of the Excess Profits Tax legislation and the income tax Act, 1945 (8 & 9 Geo. 6, c. 3).
Lord Morton in his dissenting speech found it "impossible to say that the only construction which can fairly be given to the word 'sold ' in section 17(1) (a) of the Income Tax Act, 1945, is to limit it to a transaction in which the element of mutual assent is present." But the majority of the House came to A different conclusion, and held that the element of bargain was essential to constitute a sale ' and to describe compulsory taking over of property as a sale was a misuse of that word.
We are not concerned in these appeals with 'Compulsory acquisition ' of goods nor indeed, was the Court concerned with it in Gannon Dunkerley (supra).
The majority in New India Sugar Mills (supra) was right in saying that the decision in Kirkness (supra) and the "observations made therein have little relevance in determining the limits of the, legislative power of the Provincial legislature under the Government of, India Act, 1935, and the interpretation of statutes enacted in exercise of that power.
" In fact, if we may say so with great respect ', the observation in Gannon Dunkerley (supra) that the decision in Kirkness (supra) concluded the question before the Court seems to us somewhat wide of the mark.
Since Kirkness (supra) involved an altogether different point, we would have avoided referring to it put the reliance upon it 'in Gannon Dunkerley (supra) may lead to a misunderstanding regarding its true ratio which needs to be clarified.
Besides Kirkness (supra) has been referred to in various decisions and has been considered as an authority for apparently conflicting propositions, which too made it necessary to understand the decision in a proper perspective.
It is not the decision in Kirkness (supra) but another English decision which may with advantage be noticed.
That is the decision of the Court of Appeal in Ridge Nominees Ltd. vs Inland Revenue Commissioners.(1) The question in that case was whether a transfer of shares executed under section 209 of the Companies Act, 1948 on behalf of a stockholder who declined to accept the offer of purchase was required to be stamped as a transfer on sale.
Under section 209, the transferee company was entitled in certain circumstances to give a notice to a dissenting shareholder that it desired to acquire his shares.
Upon such notice being given, the transferee company became entitled to acquire the shares of the dissenting shareholder at a particular price.
If the dissenting shareholder did not transfer the shares, then subsection (3) provided for the execution of a transfer on behalf of the shareholder by a person appointed by the transferee company.
In the First Schedule to the Stamp Act, 1891 was included the item "Conveyance or transfer on sale of any property. .
In the light of this entry under which stamp duty was payable, the question which the Court had to consider was whether a transfer executed on behalf of a dissenting shareholderwasa"transferonsale".
Theanswerdepended upon whether there could be a sale even though the essential element (1) 45 8 of mutual assent was totally absent.
Lord Evershed M.R. observed in his judgnient that what the Companies Act had done, by file machinery it had created, was that in truth it brought into being a transaction which ex facie in all its essential characteristics and effect was a transfer on sale.
Donovan L.J. in his concurring judgment said that when the legislature by section 209 of the C Act empowered the trans feree company to appoint an agent on behalf of a dissenting shareholder 3 for thempurpose of executing a transfer of his shares against a price to be paid to the transferor company and held in trust for the dis senting shareholder, it was clearly shring his dissent and putting him in the same position as if he had.
For the purpose of considering whether the transaction amounted to a sale, one must, according to the learned Judge, regard the dissent of the shareholder as overriden by an assent which the statute imposed upon him, fictional though it may be.
Danckwerts L.J., also by a concurring judgment, said that a sale may not always require the consensual element and that there may, in truth, be a compulsory sale of property in which the owner is compelled to part with Ws property for a price, against his will.
We will proceed to refer to the Other decisions of this Court bearing on the point under discussion.
In State of Rajasthan vs M/s Karam Chand Thapper & Bros. Ltd.(1) the respondent assessee which was registered as a dealer under the Rajasthan Sales Tax Act, 1954, entered into a contract with the Equitable Cod Company under which it acquired monopoly rights to supply coal in_Rajasthan as an agent of the Coal Company.
The respondent supplied coal to the State of Rajasthan under an agreement with it and that transaction was included in the respondent 's turnover by the Sales Tax Officer, Jaipur.
The High Court of Rajasthan allowed the respondents writ petition against the order of assessment on the,, ground, inter alia, that the supply of coal by the respondent to the State of Rajasthan did not constitute salt as the, supply was controlled by a statutory order, namely, the Colliery Control Order, 1945.
In appeal to this Court by the State of Rajasthan, it was held that under the Colliery Control Order, coal could be supplied under a contract and the effect of the Control Order was only to superimpose upon the agreement between the parties the rate fixed by the Control Order.
The four elements required to constitute a sale, namely, competency of parties, mutual assent of the parties, passing of property in the goods supplied to the purchaser, and lastly, payment or promise of payment of price were all present to render the turnover liable to sales tax" Shah J. who spoke for the Court relied upon the judgments in Indian Steel and Wire Products, (supra) and Andhra Sugar (supra) observing that in these two cases the Court had held that "when goods, supply of which is controlled by statutory orders, are delivered pursuant to a contract of & The, the principle of the case in M/s New India Suqar Mills Ltd. case (supra) has no application. "
The Court distinguished the decision in New India Sugar Mills (supra) on the ground that it was founded on a different principle since the condition requiring mutual assent of the parties was lacking in that case.
(1) [1969].
1 S.C.R. 861.
459 In Chhitter Mal Narain Das vs Commissioner of Sales Tax(1) the appellants who were dealers in food grains supplied to the Regional Food Controller diverse quantities of wheat in compliance with the provisions of the U.P. Wheat Procurement (Levy) Order, 1959.
The High Court held in a reference made to it under the Sales Tax Act that the transaction amounted to a sale And was exigible to sales tax.
In appeal to this Court it was held by a Bench consisting of Shah and Hegde JJ that clause 3 of the U.P. Procurement (Levy) Order, 1959 sets up a machinery for compulsory acquisition by the State Government of stocks of wheat belonging to the licensed dealers, that the Order contains a bald injunction to supply wheat of the specified quantity day after day, that it did not envisage any consensual arrangement and that the Order did not even require the State Government to enter into an informal contract with the supplier.
Delivering the judgment of the Bench, Shah J. observed that the transaction in which an obligation to supply goods is imposed, and which does not involve an obligation to enter into a contract, cannot be called a 'sale ', even if the person supplying goods is declared entitled to the value of goods which is determined in the prescribed manner.
It was observed that the decision in Indian Steel and Wire Products (supra) does not justify the view that even if the liberty of contract in relation to the fundamentals of the transaction is completely excluded, a transaction of supply of goods pursuant to directions issued under a Control Order may be regarded as a sale.
This decision is clearly distinguishable since the provisions of the Wheat Procurement Order were construed by the Court as being in the nature of compulsory acquisition of property obliging the dealer to supply wheat from day to day.
Cases of compulsory acquisition of property by the State stand on a different footing since there is no question in such cases of offer and acceptance nor of consent, either express or implied.
We would, however, like to clarify that though compulsory acquisition of property would exclude the element of mutual assent which is vital to a sale, the learned Judges were, with respect, not right in holding in Chitter Mal(1) that even if in respect of the place of delivery and the place of payment of price, there could be a consensual arrangement the transaction will not amount to a sale (p. 677).
The true position in law is as stated above, namely, that so long as mutual assent, express or implied, is not totally excluded the transaction will amount to a sale.
The ultimate decision in Chitter Mal (supra) can be justified only on the view that clause 3 of the Wheat Procurement Order envisages compulsory acquisition of wheat by the State Government from the licensed dealer.
Viewed from this angle, we cannot endorse the Court 's criticism of the Full Bench decision of the Allahabad High Court in Commissioner, Sales Tax U.P. vs Ram Bilas Ram Gopal(2) which held while construing clause 3 that so long as there was freedom to bargain in some areas the transaction could amount to a sale though effected under compulsion of a statute.
Looking at the scheme of the U.P. Wheat Procurement Order, particularly clause 3 thereof this Court in Chitter Mal (supra) seems to have concluded that the transaction was, in truth and substance, in the nature of compulsory acquisition, with no real freedom to bargain in any area.
Shall J. expressed the Court 's interpretation of clause 3 in no uncertain terms by saying that "it did not envisage, any consensual arrangement." In Salar Jung Sugar Mills Ltd. vs State of Mysore, (supra) which was decided by a Bench of seven learned Judges, the appellants were subjected to levy of tax on purchase of sugarcane after the inclusion of sugarcane in the Third Schedule to the; Mysore Sales Tax Act, 1957.
They challenged the levy on the ground that on account of the Central and State Control Orders applicable to the transactions, there was no mutual assent between them and the growers of sugarcane in regard to supply of sugarcane by the latter and since there was no purchase and sale of sugarcane, they were not dealers within the meaning of section 2(k) of the Mysore Sales Tax Act.
After referring to the cases which we have considered above, it was held by the Court that the decisions relating to 'compulsory sales? establish that statutory orders regulating.
the supply and distribution of goods do not absolutely impinge on the freedom of contact.
In spite of the fact that under the relevant Control Orders the parties, the minimum price and the minimum quantity of supply were, determined or regulated, the Court held that the Control Orders left to the parties the option in regard to a higher quantity then was stipulated in the Orders, It higher price than the minimum as also the form and manner of payment.
A factory could reject goods after inspection which indicated not only freedom in the formation but also in the performance of the contract.
A combination of all these factors, according to Ray J. who spoke for a unanimous Court, indicated with unerring accuracy that the parties entered into agreement with mutual assent and with volition for transfer of ' goods in consideration of price.
The transactions were accordingly held as amounting to sales within the meaning of section 2(t) of the, Mysore Sales Tax Act.
In coming to this conclusion the Court relied on the statement in Benjamin on Sale, 8th ed.
page 68 that though a contract of sale requires mutual assent, "The assent need not as a general rule be express" and that, it may be implied from the language of or conduct of parties and indeed it may even be inferred from the silence on the part of parties in certain cases.
As an instance, the Court referred to the common case of a person buying rationed articles from a ration shop. "The parties, the price, the shop, the supply and the acceptance of goods in accordance with the provisions of the Ration Order ,ire all regulated.
" All the same, said the Court, when the customer presents the ration card to the shopkeeper, the shopkeeper delivers the rationed articles, the customer accepts the articles and pays their price "there is indisputably a sale".
In State of Tamil Nadu vs Cement Distributors Private Ltd.() the principal question which arose for decision was whether producers who supplied cement to the State Trading Corporation or its agents in gunny bass in pursuance of the directions given by the Government were liable to pay sales tax on the turnover relating to the price of gunny bags.
In some of the connected appeals the question also arose whether the (1) ; 461 selling agents of the, State Trading Corporation were liable to, pay sales lax in respect of the price of the gunny bags in which, they sold cement to, the consumers.
As regards the question whether the transactions between producers and the State Trading Corporation in so far as the supply of cement was concerned amounted Lo sales within the meaning of the Madras General Sales Tax Act, 1959, Hegde, J. who spoke for the three Judge Bench observed that there was "no dispute" that those transactions could not amount to sales in view of the Cement Control Order, 1958.
On the question whether the gunny bags, in which the cement was supplied, can be considered to have been sold it was observed that there was "no dispute ' that if the price of gunny bags was held to have been wholly controlled, then the supply of gunny bags also could not be considered as sales.
This position was held to have been concluded by the decisions in New India Sugar Mills Ltd. (supra) and Chittar Mal Narain Das (supra).
The only question which the Court considered was whether, in fact, the price of the gunny bags in which cement was supplied to the State Trading Corporation was controlled by the Cement Control Order of 1958.
On that question it was held that since the Central Government had fixed the actual price of the gunny bags also, the supply of gunny bags did not amount to sales.
In the first place, the, decision proceeds on a concession in so far as the supply of cement is concerned as is shown by the statement that there was "no dispute ' that "the same cannot be considered as sales".
As regards the other question concerning gunny bags, the Court did not allow the Advocate General of Tamil Nadu to contend that since tinder clause 6(4) of the Cement Control Order the Central Government could have fixed the maximum and not the actual price of gunny bags, was scope for bargaining between the parties.
That question not having been raised in the High Court or in the appeal memo filed in this Court and the Central Government not having put in its appearance in this Court, permission was declined to raise the questions Thus the decision is not an authority for the, proposition for which the appellant contends.
Besides the judgment rests partly on the decision in New India Sugar Mills (Supra) which we have dissented from and partly on Chitter Mal (supra) which, by reason of the 'compulsory acquisition ' inferred therein, was distinguishable.
In oil and Natural Gas Commission vs State of Bihar(1) a three Judge Bench speaking through Ray CJ.held, following the judgment in Salar Jung Sugar Mills Ltd., (supra) that the supplies of crude oil by the Oil and Natural Gas Commission to a refinery of the Indian Oil Corporation amounted to sales, even though the supplies were made pursuant to the directions and orders of the Central Government and the Commission had no volition in the matter.
Law presumes assent of parties, it was observed, when there is transfer of goods from one party to the other.
This resume of cases, long as it is, may yet bear highlighting the true principle underlying the decisions of this Court which have (1) ; 462 taken the view that a transaction which is effected in compliance with the obligatory terms of a statute may nevertheless be a safe in the eye of law.
The Indian Contract Act which was passed in 1872 contained provisions in its seventh chapter comprising sections 76 to 123 relating to sale of goods which were repealed on the enactment of a comprehensive law of sale of goods in 1930.
The Contract Act drew inspiration from the English law of contract which is almost entirely the creation of English courts and whose growth is marked by features which are peculiar to the social and economic history of England.
Historically the English law of contract is largely founded upon the action on the case for assumpsit, where the essence of the matter was the undertaking.
The necessity for acceptance of the undertaking or the promise led the earlier writers on legal theories to lay particular emphasis on the consensual nature of contractual obligations.
It was out of the importance, which political philosophers of the eighteenth century gave to human liberty that the doctrine was evolved that every person should be free to pursue his own interest in the way he thinks best and therefore law ought to give effect to the will of the parties as expressed in their agreement.
Adam Smith in his famous work on "The Wealth of Nations" propounded in 1776 the view that the freedom of contract must as far as possible be left unimpaired.
Gradually, as would appear from Friedman 's statement in Law in a Changing Society (1959), ch.4 freedom of contract the freedom to contract on whatever terms might seem most advantageous to the individuals become a cornerstone of nineteenth centuary laissez faire economics.
Champions of individualist social philosophy who protested against legal and social restrictions in order to advance the policies of expansion and exploitation pursued by I industry and commerce won their battle and "freedom of contract was one of the trophies of victory" (see Anson 's Law of Contract, 23rd Ed. page 3).
The freedom and sanctity of contract thus became "the necessary instruments of laissez faire, and it was the function of the courts to foster the one and to vindicate the other.
Where a man sowed, there he should be able to reap".
is Cheshire and Fifoot 's Law of Contract, 8th Ed. page 19).
it is significant that the maxim itself laissez faire, laissez passer which derived from eightenth century France has been commonly attributed to Gournay, at first a merchant and later one of the intendants of commerce and a friend of Turgot.
Turgot attributes the phrase laissez nous faire to another merchant, Legendre, who is said to have used it in impressing upon Colbert the desire on the part of the mercantile community for non interference by the state .
When Colbert asked a meeting of French businessmen what the state might do to assist them, Legendre pointedly replied, "laissez nous faire" The underlying assumption of the laissez faire doctrine turns on an optimistic view of the nature of the universe and on the conception of a "natural order ' or system of economic harmonies which will prevail and work out to mankind 's advantag e in the absence of positive regulation.
(see International Encyclo paedia of the Social Sciences, 1968 Ed.
edited by David L. Sills, Vol. 8, page 546 and Encyclopaedia of the Social Sciences edited by Edwin R. A. Seligman, Vol.
IX, pages 15 16).
463 Towards the close of the nineteenth century it came to be realised that private enterprises, in order to be socially just, had to ensure economic equality.
"The very freedom on contract with its corollary, the freedom to complete, was merging into the freedom to combine; and in the last resort competition and combination were, incompatible.
Individualism was yield ing to monopoly, where strange things might well be done in the name of liberty.
The twentieth century has seen its progressive erosion on the one hand by opposed theory and on the other by conflicting practice.
The background of the law, social, political and economic, has changed Laissez fare as an ideal has been supplanted by, 'social security '; and social security suggests status rather than contract.
The State may thus compel persons to make contracts, as where, by a series of Road Traffic Acts from 1930 to 1960, a motorist must insure against third party risks; it may, as by the Rent Restriction Acts, prevent one party to a contract from enforcing his right under it; or it may empower a tribunal either to reduce or to in crease the rent payable under a lease.
In many instances a statute prescribes the contents of the contract.
The Moneylenders Act 1927 dictates the terms of any loan caught by its provisions; the Carriage of Goods by Sea Act 1924, contains six pages of rules to be incorporated in every contract for 'the carriage of goods by sea from any port in Great Britain or Northern Ireland to any other port; ' the Hire Purchase Act 1965, inserts into hire purchase contracts a number of terms which the parties are forbidden to exclude; successive Landlord and Tenant Acts from 1927 to 1954 contain provisions expressed to apply ,notwithstanding any agreement to the contrary '.
The erosion of contract by statute continues briskly; and there are no immediate signs of a reaction." (Cheshire and Fifoot 's Law of Contract, 8th Ed.
pages 21 22).
In the words of Anson, "Freedom of contract is a reasonable social ideal only to the extent that equality of bargaining power between contracting parties can be assumed, and no injury is done to the economic interests of the community at large.
In the more complicated social and industrial conditions of a collectivist society it has ceased to have much idealistic attraction.
It is now realised that economic equality Often does not exist in any real sense, and that individual interests have to be made to subserve those of the cornmunity.
Hence there has been a fundamental change both in our social outlook and in the policy of the legislature towards contract, and the law today interferes at numerous points with the freedom of the parties to make what contract they like . . 464 " This intervention is especially necessary today when most contracts entered into by ordinary people are not the result of individual negotiation.
It is not possible for a private person to settle the terms of his agreement with the British Railways Board or with the local electricity authority.
The 'standard form contract is the rule.
He must either accept the terms of this contract in toto, or go without.
Since, however, it is not feasible to deprive oneself of such necessary services, the individual is compelled to accept on those terms.
In view of this fact, it is quite clear that freedom of contract is now largely an illusion." (Anson 's Law of Contract, 23rd Ed. pages 3 4).
Anson is perhaps over optimistic in saying that there has been a fundamental change in social outlook and in the legislative policy towards contract.
Anyway, with the high ideals of the Preamble and the directive principles of our Constitution there has to be such a fundamental change, in judicial outlook.
Instances given in Cheshire and Anson have their parallels in India too, wherein freedom of contract has largely become an illusion.
The policy of our Parliament in regard to contracts, including those involved in sale of goods, has still to reflect recognition of the necessity for a change, which could be done by a suitable modification of the definition of 'sale of goods.
It all began with the reliance in Gannon Dunkerley (supra) (pages 396 398) on the statement in the 8th Edition (1950) of Benjamin on Sale that to constitute a valid tale there must be a concurrence of four elements, one of which is "mutual assent".
That statement is a reproduction of what the celebrated author had said in the 2nd and last edition prepared by himself in 1873.
The majority judgment in New India Sugar Mills (supra) (page 467) also derives, sustenance from the same passage in Benjamin 's 8th edition.
But as observed by Hidayatullah J. in his dissenting judgment in that case, consent may be express or implied and offer and acceptance need not be in an elementary form (page 510).
It is interesting that the General Editor of the 1974 edition of 'Benjarnin 's Sale of Goods" says in the preface that the editors decided to produce an entirely new work partly because commercial institutions, modes of transport and of payment, forms of contract, types, of goods, market areas and marketing methods, and the extent of legislative and governmental regulation and intervention, had changed considerably since 1868, when the 1st edition of the book was published.
The formulations in Benjamin 's 2nd edition, relating to the conditions of a valid 'sale ' of goods, which are reproduced in the 8th edition evidently require modi fication in the light of regulatory measures of social control.
Hidayatullah J., in his minority judgment referred to above struck the new path; and Bachawat J.Who spoke for the Court in Andhra Sugars (supra) went a step ahead by declaring that "the contract is a contract of sales and purchase of cane, though the buyer is obliged to give his assent under compulsion of a statute".
The concept of freedom of contract, as observed by Hedge J. in Indian Steel and 4 6 5 Wire Products, (supra) has undergone a great deal of change even in those countries where it was considered as one of the basic economic requirements of a democratic life.
Thus, in Ridge Nominees Ltd., (supra) the Court of Appeal, while rejecting the argument that there was no sale because the essential element of mutual assent was lacking, held that the dissent of the shareholder was overridden by an assent which the statute imposed on him, fictional though it may be, that a sale may not always require the consensual element mentioned in Benjamin on Sale, 8th Edition, page 2, and that there may in truth be a compulsory sale of property with which the owner is compelled to part for a price against his will.
(pages 405 406).
Decisions in case of 'compulsory acquisition, where such acquisition is patent as in Kirkness (supra) or is inferred as in Chitter Mal (supra) fall in a separate and distinct class.
The observations of Lord Reid in Kirkness (supra) that 'sale ' is a women juris the name of a particular consensual contract have therefore to be under stood in the context in which they were made, namely, that compulsory acquisition cannot amount to sale.
In Gannon Dunkerley, (supra) Venkatarama Aiyar J. was influenced largely by these observations (see pages 411, 412 and 425) and by the definition of 'sale ' in Benjamin 's 8th edition ' Gannon Dunkerley _(supra) involved an altogether different point and is not an authority for the proposition that there cannot at all be a contract of sale, if the parties to a transaction are obliged to comply with the terms of a statute.
Since we are putting in a nutshell what we have discussed earlier, we would like to reiterate in the interest of uniformity and certainty of law that, with great deference the majority decision in New India Sugar Mills (supra) is not good law.
The true legal position is as is stated in the minority judgment in that case and in Indian Steel and Wire Products, (supra) Andhra Sugars, (supra) Salar Jung Sugar Mills (supra) and Oil and Natural Gas Commission.
To the extent to which Cement Distributors Pvt.Ltd. (supra) is inconsistent with these judgments, it is also, with respect, not good law.
The conclusion which therefore emerges is that the transactions between the appellant, M/s. Vishnu Agencies (Pvt.) Ltd., and the allottees are sales within the meaning of section 2(g) of the Bengal Finance (Sales Tax) Act, 1941.
For the same reasons, transactions between the growers and procuring agents as also those between the rice millers on one hand and the wholesalers or retailers on the other are sales within the meaning of section 2(n) of the Andhra Pradesh General Sales Tax Act, 1957.
The turnover is accordingly 'exigible to sale tax or purchase tax as the case may be.
The appeals are accordingly dismissed with costs, with one hearing fee.
P.B.R. Appeals dismissed.
| A criminal case arising out of a complaint made against the accused including the respondents who happened to be public servants at the material time, for the alleged offences section 120 B/379/466/468/471 I.P.C. was allotted by the State Government through a notification &o. 3165 J dt. 8 4 70 to the Third Additional Special Court, Calcutta constituted under the provisions of the West Bengal Criminal Law Amendment (Special Courts) Act.
Following the notification, the appellant State through Ranjit Roy, Sub Inspector of Police filed a complaint before the Special Court on 11 9 70 detailing all the allegations against the accused and including the material facts that transpired in the course of the investigation of the case.
The Special Court Judge after perusal of the complaint and hearing the Public Prosecutor, took cognizance of the case section 409/109 and 409/34 I.P.C. which are offences mentioned in the Schedule of the Act, and issued processes to the accused.
In the trial after examining 70 witnesses, the prosecution closed its case on May 2, 1974.
The court framed charges against four accused including the respondents and discharged the remaining two accused by its order dated 26 2 1975.
Charges were framed under various sections including SS. 409 and 420 read with section 120 B I.P.C. The revision petitions moved by the respondents for quashing the trial on March 25, 1975, were accepted by the Calcutta High Court following its earlier decisions dated 29 3 1967 and 11 4 1975.
The High Court held that no legal and valid cognizance of the offence was taken by the learned Judge, Special Court and, therefore.
the entire proceedings became vitiated.
Allowing the appeal by certificate the Court.
HELD : (1) It is not obligatory for the Special Judge to examine complainant under section 200 Cr. P. C.
Under section 4(2) of the West Bengal Criminal Law Amendment (Special Courts) Act, the allotment by the State Government to the Special Judge of a case involving of scheduled offences vests the neces sary jurisdiction in the Special Judge to proceed to trial and is, therefore, equivalent to that courts ' taking cognizance of the offence.
[385 G, 386 A B] Ajit Kumar Palit vs State of West Bengal [1963] Supp.
(1) SCR 953 @ 965 966, followed.
(2)Section 200 of the Criminal Procedure Code in terms, comes into play after taking cognizance of an offence by a Magistrate.
[386 D] Gopal Das Sindhi & Ors.
vs State of Assam & Anr.
AIR 1961 SC 986, 988 and 989, referred to.
(3)There is nothing in section 5(1) of the Act even after the amendment in 1960 to compel the Special Judge to comply with the provisions of section 200 Cr.
The words "in the manner laid down in clauses (a) and (b) of sub section
(1) of section 190 of the Criminal Procedure Code 1898" do not automatically introduce the provisions of section 200 Cr. P. C. of Chapter XVI, nor do the above words in section 5(2) of the Act, mandatorily compel the Special Judge to resort to the provisions of Chapter XVI.
The legislature in the above amendment has advisedly omitted to include section 200 Cr. P. C. and the other provisions in Chapter XVI of the Criminal Procedure Code.
[385 H, 386 A, E, F] (4)Because of the amendment of section 5(2) in 1960, it may now be open to the Special Judge to apply his judicial mind to the complaint apart from 383 allotment of the case in order to come to a decision as to whether he is satisfied on the materials laid before him at that stage to take cognizance of the offence and proceed to trial.
If he chooses to examine the complainant or any witness before issuing process against any accused, there is nothing in law to prevent him from doing so.
If he does not do so and is satisfied on perusal of the complaint after allotment of the case by the Government that an offence has been disclosed against definite persons, no valid objection could be taken against his taking cognizance on the written complaint without complying with the provisions of section 200 Criminal Procedure Code.
No grievance can be made then that the Special Judge has not examined the complainant under section 200, Cr. P. C. period to issuing of process.
[386 B D] Sudhir Chandra Bhattacharjee vs The State Crl.
Appeals Nos. 23 26 of 1961 (decided on 29th March 1967, Calcutta) and Shyama Saran Das Gupta vs The State (decided on 11th April 1975, Calcutta) over ruled.
|
Appeals by special leave against an Award dated 31st July, 1950, 383 of the All India Industrial Tribunal (Bank Disputes): Civil Appeals Nos.
35 to 50 of 1951.
The facts of the case and the arguments of Counsel appear in the judgment.
C.K. Daphtary (R. J. Kolah, with him)for the appellants in Civil Appeals Nos. 35, 36 and 37.
Jamshedji Kanga (R. J. Kolah with him) for the appel lant in Civil Appeal No. 38.
section Chaudhuri (G. C. Mathur, with him) for the appellants in Civil Appeals Nos. 41, 43, 44, 45, 46 and 49.
section Chaudhuri (S.N. Mukherjee, with him) for the appel lants in Civil Appeals Nos. 48 and 50.
R.J. Kolah, for the appellants in Civil Appeals Nos. 39, 40 and 42.
Ram Lal Anand (Charan Das Puri, with him) for the appel lant in Civil Appeal No. 47.
A.C. Gupta (M.M. Sen and R.K. Banerji, with him) for the respondents in Civil Appeals Nos. 35, 36, 40, 41, 42, 43 and 44, M.M. Sen for the respondents in Civil Appeals Nos. 37, 39, 45 and 46.
Niren De (B.K. Chaudhary with him) for the respondents in Civil Appeals Nos. 38 and 50.
T.R. Bhasin for the respondents in Civil Appeals Nos. 48 and 49.
M.C. Setalvad, Attorney General for India.
Sikri, with him) for the Intervener (Union of India) in Civil Appeal No. as.
April 9.
The judgment of Kania C.J, Mehr Chand Mahajan, S.R. Das and Vivian Bose JJ.
was delivered by Kania C.J., Fazl Ali, Patanjali Sastri and Mukherjea JJ.
delivered separate judgment s, KANIA C.J.
In these appeals the question whether the Industrial Tribunal (Bank Disputes) had jurisdiction to make the awards has been directed by the Court to be tried as a preliminary issue. 'the decision depends on the true con struction of sections 7, 8, 15 and 16 of the .
On 384 this question, the agreed statement of facts shows that by a notification of the Government of India dated the 13th June, 1949, the Central Government constituted an Industrial Tribunal 'for the adjudication of industrial disputes in banking companies consisting of Mr. K.C. Sen, chairman, Mr. S.P. Varma and Mr. J.N. Mazumdar.
A second notification dated the 24th August, 1949, was thereafter issued as follows :"In exercise of the powers conferred by sub section (1) of section 8 of the , the Central Government was pleased to appoint Mr. N. Chandrasekhara Aiyar as a member of the Industrial Tribunal constituted by the notifications of the Government of India in the Ministry of Labour dated the lath June, 1949, in the place of Mr. S.P. Varma whose services have ceased to be available.
" The Tribunal commenced its regular sittings at Bombay from the 12th to the 16th of September, 1949.
It thereafter sat at Delhi and Patna between the 19th September, 1949, and 3rd April, 1950.
Further sittings were held, at some of which Mr. Mazumdar was absent on various dates and Mr. Chandrasek hara Aiyar was absent from the 23rd November, 1949, to the 20th of February, 1950, as his services were placed at the disposal of the Ministry of External Affairs as a member of the Indo Pakistan Boundary Disputes Tribunal.
Between the 23rd November, 1949, and 20th February 1950, Mr. Sen and Mr. Mazumdar together sat at several places and made certain awards.
Those awards have been accepted by the Government under section 15 of the Act and published in the Gazette as the awards of the Tribunal.
The Tribunal held its sittings in Bombay to hear general issues from the 16th January, 1950, and concluded them on the 3rd April, 1950.
In the agreed statement of facts, it is stated that the services of Mr. Chandrasekhara Aiyar were not available to the Tribunal from the afternoon of 23rd November, 1949, to the forenoon of 20th February, 1950.
From the 16th January, 1950, up to 20th February, 1950, several matters, particularly including 15 items covering, inter alia, Issues 1, 2, 3, 4, 15, 23, 27, 28, 33, 34, 37 385 and dealing with the question of the jurisdiction of the Tribunal in respect of officers regarding banks having branches in more than one Province and banks in liquidation, question of retrospective effect to be given to the award, question relating to provident and guarantee fund and allow ances to special categories of workmen, were dealt with by the Tribunal.
From the notes of the proceedings of the Tribunal it appears that as numerous banks and workmen were parties to the proceedings, some workmen who had not found it convenient to attend throughout appeared and put forth their views in respect of the aforesaid issues and questions after Mr. Chandrasekhara Aiyar started his work from the afternoon of the 20th February, 1950, again by sitting with Mr. Sen and Mr. Mazumdar.
The jurisdiction of the Tribunal of the aforesaid three persons to make the award is disputed on two grounds: (1) That when Mr. Chandrasekhara Aiyar 's services ceased to be available, as mentioned in the agreed statement of facts, the remaining two members had to be re appointed to consti tute a Tribunal.
(2) That when Mr. Chandrasekhara Aiyar began to sit again with Mr. Sen and Mr. Mazumdar from the forenoon of 20th February, 1950, it was imperative to issue a notification constituting a Tribunal under section 7 of the .
The argument is that in the absence of Mr. Chandrasekhara Aiyar the two members had no jurisdiction to hear anything at all without the appropriate notification and that Mr. Chandrasekhara Aiyar 's services having ceased to be available on the 23rd of November, 1949.
he cannot sit again with the other two members to form the Tribunal in the absence of a notification under section 7.
In order to appreciate the correct position, it is necessary to consider the scheme of the .
It envisages the establishment of a Conciliation Board, a Court of Inquiry and a Tribunal for adjudication.
Rele vant portions of sections 5, 6, 7, 8, 15 and 16 of the Act which only are material for the present discussion run as follows: 50 386 5.
(1) "The appropriate Government may as occasion arises by notification in the official Gazette constitute a Board of Conciliation for promoting the settlement of an industrial dispute.
(2) A Board shall consist of a chairman and two or four other members, as the appropriate Government thinks fit.
(3) The chairman shall be an independent person and the other members shall be persons appointed in equal numbers to represent the parties to the dispute and any person appoint ed to represent a party shall be appointed on the recommen dation of that party: * * * (4) A Board, having the prescribed quorum, may act notwithstanding the absence of the chairman or any of its members or any vacancy in ifs number.
Provided that if the appropriate Government notifies the Board that the services of the chairman or any other member have ceased to be available, the Board shall not act until a new chairman or member, as the case may be, has been ap pointed.
(1) "The appropriate Government may as occasion arises by notification in the official Gazette constitute a Court of Inquiry for inquiring into any matter appearing to be connected with or relevant to an industrial dispute.
(2) A Court may consist of one independent person or of such number of independent persons as the appropriate Government may think fit and where a Court consists of two or more members, one of them shall be appointed as the chairman.
(3) A Court, having the prescribed quorum, may act notwithstanding the absence of the chairman or any of its members or any vacancy in its number.
Provided that, if the appropriate Government noti fies the Court that the services of the chairman have ceased to be available, the Court shall not act until a new chair man has been appointed.
(1) "The appropriate Government may constitute one or more Industrial Tribunals for the 387 adjudication of industrial disputes in accordance with the provisions of this Act.
(2) A Tribunal shall consist of such number of members as the appropriate Government thinks fit.
Where the Tribunal consists of two or more members, one of them shall be ap pointed as the chairman.
(3) Every member of the Tribunal shall be an independent person, (a) who is or has been a Judge of a High Court or a District Judge, or (b) is qualified for appointment as a Judge of a High Court: Provided that the appointment to a Tribunal of any person not qualified under part (a) shall be made in consul tation with the High Court of the Province in which the Tribunal has, or is intended to have, its usual place of sitting.
(1) "If the services of the chairman of a Board or the chairman or other member of a Court or Tribunal cease to be available at any time, the appropriate Government shall in the case of a chairman, and may in the case of any other member, appoint another independent person to fill the vacancy, and the proceedings shall be continued before the Board, Court or Tribunal so reconstituted.
(2) Where a Court or Tribunal consists of one person only and his services cease to be available the appropriate Government shall appoint another independent person in his place, and the proceedings shall be continued before the person so appointed.
(3) Where the services of any member of a Board other than the chairman have ceased to be available, the appropri ate Government shall appoint in the manner specified in sub section (3) of section 5 another person to take his place, and the proceedings shall be continued before the Board so reconstituted.
(1) "Where an industrial dispute has been referred to a Tribunal for adjudication, it shall hold its proceed ings expeditiously and shall, as soon as 388 practicable on the conclusion thereof, submit its award to the appropriate Government.
(2) On receipt of such award, the appropriate Government shall by order in writing declare the award to be binding: * * * (4) Save as provided in the proviso to sub section (3) of section 19, an award declared to be binding under this section shah not be called in question in any manner.
"The report of a Board or Court and the award of a Tribunal shall be in writing and shall be signed by all the members of the Board, Court or Tribunal, as the case may be: Provided that nothing in this section shall be deemed to prevent any member of the Board, Court or Tribunal from recording a minute of dissent from a report or award from any recommendation made therein.
" Confining our attention to the aspect of absence of members at the sittings of the different bodies and what results follow therefrom, it is clear that under section 5 (4) when a member of a Board of Conciliation is absent or there is a vacancy, the Board is permitted to act, notwith standing such absence, provided there is the prescribed quorum.
Such quorum is fixed by the rules framed under the Act.
According to the proviso to this sub section however, if the appropriate Government notifies the Board that the services of the chairman or any other member have ceased to be available, the Board shall not act until a new chairman or a member, as the case may be, has been appointed.
Read ing these two parts together, it is therefore clear that a distinction is drawn between the situation arising from the absence of the chairman or any of its members and a vacancy in the Board, and the position when the Government has intimated that the services of a chairman or member have ceased to be available.
The words "having the prescribed quorum" put a further limitation on the right of the 389 remaining members of the Board to act, when all of them are not acting together.
The proviso thus makes it clear that when the services of a chairman or member have ceased to be available and that fact has been notified to the Board by the appropriate Government, the remaining members have no jurisdiction to act in the name of the Board.
Thus all the contingencies of temporary or casual absence, as well as permanent vacancy, and the contingency of the chairman or a member 's services having ceased to be available are con templated and provided for.
In the same way and in the same terms, provision is made in respect of the Court of In quiry in section 6 (3).
The provisions as regards the Tribunal are found in section 7.
No other section deals with the establishment of the Tribunal.
The first clause empowers the appropriate Government to constitute one or more industrial tribunals having the functions allotted to it under the Act.
Sub clause (2) provides that a Tribunal shall consist of such number of members as the appropriate Government thinks fit.
This clause therefore authorizes the appropriate Government to fix the number of members which will constitute the Tribunal.
Sub clause (3) and the proviso deal with the qualifications of individuals to be members with which we are not concerned.
Although in this section there is no provision like sections 5 (1) and 6 (1) requiring a notification of the constitution of the Tribunal in the official Gazette, the deficiency is made up by rule 5 of the Industrial Disputes Rules; 1949, framed by the Gov ernment under section 38 of the Act.
The rule provides that the appointment of a Board, Court or Tribunal "together with the names of the persons constituting the Board, Court or Tribunal ' shall be notified in the official Gazette.
It is therefore obligatory on the appropriate Government to notify the composition of the Tribunal and also the names of the persons constituting the same.
In respect of a Tribunal which is entrusted with the work of adjudicating upon dis putes between employers and employees which have not been settled otherwise, this provision 390 s absolutely essential.
It cannot be left in doubt to the employers or the employees as to who are the persons authorized to adjudicate upon their disputes.
This is also in accordance with notifications of appointments of public servants discharging judicial or quasijudicial functions.
The important thing therefore to note is that the number forming the Tribunal and the hames of the members have both to be notified in the official Gazette for the proper and valid constitution of the Tribunal.
It is significant that there is no provision correspond ing to section 5 (4) or 6 (3) in section 7.
Section 15 of the Act provides that when an industrial dispute has been referred to a Tribunal for adjudication, it shall hold its proceedings expeditiously and as soon as practicable and at the conclusion thereof submit its award to the appropriate Government.
It is thus clear and indeed it is not disputed that the tribunal as body should sit together and the award has to be he result of the joint deliberations of all mem bers of he Tribunal acting in a joint capacity.
Section 16 requires that all members of the Tribunal shall sign he award.
This again emphasizes that the function of the Tribunal is joint and it is not open to any member to re frain from signing the award.
If the award is not signed by all members it will be invalid is it will not be the award of the Tribunal.
In the light of the provisions of section 7 the question arising for consideration is, what was the duty of the Government when the services of Mr. Chandrashekhara Aiyar ceased to be available.
The two telegrams exchanged between Mr. Sen and the Government show that the Government took the view that a vacancy had occurred and they did not think of filling it up at the time.
In the first place, on the true construction of the Act, was it not obligatory on the Gov ernment to notify to the contesting parties that it had decided not to fill up the vacancy ? Is it open to them to leave the parties in doubt in respect of a Tribunal entrust ed with the work of adjudicating upon very important dis putes between parties ? In our opinion, the whole 391 scheme of the Act leads to the conclusion that the Govern ment must notify its decision as to what it desired to do, i.e., whether it intended to fill up the vacancy or not and thereupon notify what members were going to constitute the Tribunal.
We are led to that conclusion because a Tribunal of three consisting of Mr. Sen, Mr. Mazumdar and Mr. Chan drasekhara Aiyar is a different tribunal from one consisting of two, viz., of Mr. Sen and Mr. Mazumdar only.
In this setting, it is next necessary to consider the words of section 8 on which strong reliance is placed on behalf of the respondents.
The marginal note of that sec tion is "filling of vacancies ".
The section deals with the Board, the Court and the Tribunal in its clauses.
Under sub section (1), the Legislature clearly contemplates that when the services of a member cease to be available at any time there will arise a vacancy.
This sub section deals with the situation in three stages.
The first question is, have the services of a member (and this includes, for the present discussion,.
a chairman)ceased to be available ? If so, the vacancy having thus arisen, the next question is, what can be done by the appropriate Government ? If the vacancy is filled up by making the appointment, the final question is, how the proceedings shall go on before the Board, Court or Tribunal so reconstituted ? It was argued on behalf of the respondents that it was for the appropriate Government alone to pronounce whether the services of a member had ceased to be available at any time and that was not a matter for the decision of the Court.
In our opinion, what is left to the option of the Government is, in case of the services of a member ceasing to be available, to appoint or not to appoint.
Those stages having passed, the appro priate Government, under the section, is obliged to appoint another person to fill the vacancy, if the vacancy is creat ed in respect of a chairman.
In respect of the vacancy of a member 's post, the Government is given the option to appoint or not to appoint another person.
The concluding words of the sub section "so reconstituted" clearly relate only to the contingency of 392 the Government making the appointment of another independent person in the vacancy.
The concluding part of that sub section provides for the continuance of the proceedings before the body so reconstituted.
Subsection (2) also pro vides that where a court or tribunal consists only of one person and his services have ceased to be available, on the appointment of another independent person the proceedings shall be continued before the person so appointed and it will not be necessary to start the proceedings from the beginning before that person.
Section 8 (3) provides for the contingency of the services of a member of a Board not being available.
It requires the appropriate Government to make the appointment as provided in section 5 (3) and fur ther provides that notwithstanding the inclusion of a total ly new man in that vacancy, the proceedings shall be contin ued before the Board so reconstituted.
Reading the three clauses together, therefore, it is quite clear that the object of section 8 is to make specific provisions in re spect of situations when the Government must or does fill up vacancies in the event of the services of a member or chair man not being available and the consequences of a totally new man filling up the vacancy.
As we read the Act, that is the total object and intention of this section.
It does not contemplate the consequences of the Government not making an appointment where it has the option not to do so.
The emphasis on the words "so reconstituted ' ' in sub sections (1) and (3) and the concluding words of each of those clauses clearly bear out this intention of the legislature.
It was argued that although no provision is made in section 8 (1) about what is to happen if the Government did not fill up the vacancy, it is implied that in that event the remaining members can continue the work.
We are unable to accept that argument.
In the first place, as pointed out above, the object of section 8 is to provide in what cases vacancies must be filled up and how the proceedings should continue on the vacancy being filled up.
It does not deal at all with the situation arising from the not filling up of the 393 vacancy by the Government.
In this connection the provi sions of sections 5 (4) and 6 (a) have been already noted.
When the legislature wanted to provide that in spite of the temporary absence or permanent vacancy the remaining members should be authorised to proceed with the work they have made express provision to that effect.
If in the case of a Board or Court of Inquiry, neither of which is adjudicating any disputes, such a provision was considered necessary to enable the remaining members to act as a body, we think that the absence of such provision in respect of the Tribunal, which adjudicates on the disputes and whose quasi judicial work is admittedly of a joint character and responsibility leads to the irresistible conclusion that in the absence of one or more members the rest are not competent to act as a Tribunal at all.
Again the provisos to sections 5 (4) and 6 (3) are important.
Under those provisos when the Government intimates to the remaining members that the services of one "have ceased to be available" the rest have no right to act as the Board or Court.
It appears under the circumstances proper to hold that in respect of a Tribunal when the serv ices of a member have ceased to be available, the rest by themselves have no right to act as the Tribunal.
The question which we have got to consider can be divid ed in two stages.
On the appointment of Mr. Chandrasekhara Aiyar as a member of the Boundary Tribunal, did his services cease to be available within the meaning of section 8, and thereby was a vacancy created? The parties have put before us only two telegrams exchanged between the chairman and Mr. Mazumdar on the one hand and the Central Government on the other, to reach our conclusion about the situation arising from Mr. Chandrasekhara Aiyar joining the Boundary Tribunal.
Certain Government notifications published 'in May and June, 1950, i.e., over three or four months after Mr. Chandrasek hara Aiyar finished his work on the Boundary Tribunal, have been put before us, but in our opinion these 394 ex post facto notifications cannot help us in deciding the important question under section 8.
It is obvious that, on the date the appointment of Mr. Chandrasekhara Aiyar as a member of the Boundary Tribunal was made, it could not have been known how long that Tribunal would take to complete its work.
In any event, the evidence put before us as of that date does not show that the appointment was for a short time.
The Boundary Tribunal 's work may have lasted for a month or a year.
Having regard to the urgency and the necessity of quick disposal of industrial disputes recog nised in section 15, the deputation of a member of such a Tribunal to another Tribunal, whose work may be of an indef inite duration, obviously makes the services of the member cease to be available to the Industrial Tribunal within the meaning of section 8 so as to bring about a vacancy.
The later statement in the Government notification of May, 1950, that Mr. Chandrasekhara Aiyar 's services were lent to the External Affairs Ministry "from the 23rd of November, 1949, to the 20th of February, 1950, " appears to be more a noti fication for the purpose of the Accountant General and the Audit departments of the Government than a disclosure of the mind of the Government when the appointment was made on the 23rd of November.
When Mr. Sen, as chairman, and Mr. Mazum dar held their first sitting in the absence of Mr. Chandra sekhara Aiyar, an objection was raised about the constitu tion of the Tribunal.
Thereupon Mr. Sen and Mr. Mazumdar conveyed to the Government what had happened at the meeting.
The Government was therefore clearly faced with the problem as to what it wanted to do.
The reply telegram from the Government asked Mr. Sen and Mr. Mazumdar to go on with the proceedings.
It further stated that the Government might fill up the vacancy later on.
The question for considera tion is, what is the effect of this telegram of the Govern ment ? In the light of the provisions of section 8 that telegram can only mean that the Government had decided not to fill up the vacancy.
If a vacancy had occurred they had to make the appointment or state that they will 395 not do so.
They cannot defer their decision on the question of filling up the vacancy and in the interval direct the remaining members to go on with the reference.
That seems to us to be the correct position because the fundamental basis on which the Tribunal has to do its work is that all members must sit and take part in its proceedings jointly.
If a member was casually or temporarily absent owing to illness, the remaining members cannot have the power to proceed with the reference in the name of the Tribunal, having regard to the absence of any provision like section 5 (4) or 6 (3) in respect of the tribunal.
The Government had notified the constitution of this Tribunal by the two notifications summarized in the earlier part of the judg ment and thereby had constituted the Tribunal to consist of three members and those three were Mr. Sen, Chairman, Mr. Mazumdar and Mr. Chandrasekhara Aiyar.
Proceeding with the adjudication in the absence of one, undermines the basic principle of the joint work and responsibility of the Tribu nal and of all its members to make the award.
Moreover, in their telegram the Government had not suggested that no vacancy had occurred.
Indeed, they recognised the fact of a vacancy having occurred but stated that they might make the appointment later on.
If those words are properly construed, without any outside considerations, it is clear that the Government intended that the remaining two members of the Tribunal should proceed with the adjudication as a Tribunal.
This direction in fact was accepted and the two members proceeded with the reference and made certain awards.
Those awards were sent to the Government under section 15 (2) and the Government by its order declared the awards to be bind ing, and published them in the official Gazette.
Those awards are signed only by Mr. Sen and Mr. Mazumdar.
Reading those awards with the notifications and the provisions of sections 15 and 16 it is therefore clear that between 23rd November, 1949, and 20th February, 1950, the Government ' 'intended" the tribunal to consist only of Mr. Sen and Mr. Mazumdar.
It was not and 396 cannot be seriously disputed that in the event of the Gov ernment deciding to fill up the vacancy, a notification had to be issued.
The question is, why and under what rule ? The answer clearly is that they had to do it because of rule 5.
The reason why intimation of a new man forming a member of the Tribunal has to be publicly given, in our opinion, applies with equal force when a tribunal initially consti tuted of three persons, viz., Mr. Sen, Mr. Mazumdar and Mr. Chandrasekhara Aiyar, is, by the Government decision, as from a certain date, to be a tribunal of Mr. Sen and Mr. Mazumdar only.
The word "reconstituted" is properly used in section 8 because when a new member is introduced in the panel so far performing its duties, it is a reconstitution, but the words of section 8 do not exclude the obligation on the Government to issue a notification under rule 5 when there is not a reconstitution, but a new constitution of the Tribunal.
The Government, however, did not give effect to its intention by issuing a fresh notification under section 7.
Therefore, when the services of Mr. Chandrasekhara Aiyar ceased to be available and they decided that another inde pendent person was not to be appointed to fill the vacancy, there arose the situation when only two members constituted the Tribunal and for the constitution of such Tribunal no notification under section 7 of the Act was issued.
To enable such a Tribunal of two persons to function, under the provisions of the Act, a notification under section 7 of the Act, in our opinion, was absolutely essential.
The work of the two members in the absence of such a notification cannot be treated as the work of a Tribunal established under the Act and all their actions are without jurisdiction.
It was argued on behalf of the respondents that when Mr. Chandrasekhara Aiyar left for the Boundary Tribunal, there arose a temporary absence which it w, as not necessary to fill up and the remaining two members had jurisdiction under the Act to proceed with the adjudication.
In our opinion, this contention cannot be accepted.
In the first place, in the agreed statement of facts, it is not stated that there was any temporary 397 absence.
Again, as we have pointed out the Government by its telegram of the 29th of November accepted the position that a vacancy had occurred and no question of temporary absence therefore arises for our consideration.
An analogy sought to be drawn between the temporary absence on leave or on depu tation of a Judge is misleading having regard to the fact that under section 7 the Government has to decide at the initial stage how many members and who will constitute the Tribunal and have to notify the same.
That step having been taken, it is not within the power or competence of the Government to direct a few members only of such Tribunal to proceed with the adjudication for however short or long time it be.
In our opinion, section 8 has no application to that situation.
In this connection, it may be useful to notice that under rule 12 it was provided that "when a Tribunal consists of two or more members, the tribunal may, with the consent of the parties, act notwithstanding any casual vacancy in its number . "This rule clearly shows that even when there was a casual vacancy and the remaining members desired to proceed with the work they could do so only with the consent of the parties.
This rule framed under section 38 of the Act strongly supports the contention that if the Act impliedly gave power under section 8 to the remaining two members of the Tribunal to act, as contended on behalf of the respondents, there was no necessity at all for making this rule.
Although this rule was repealed on the 3rd of December, it was in operation when the services of Mr. Chandrasekhara Aiyar ceased to be available to the Tribunal as from the 23rd of November.
If in the case of temporary absence, the consent of the parties was essential to enable the remaining members to act, it certainly follows that the objection to their working as a 'tribunal when there is no consent and the absence is not casual, but is due to the services of one of the members having ceased to be available, is fatal.
It follows therefore that all awards made by Mr. Sen and Mr. Mazumdar, after the services of Mr. Chandrasekhara Aiyar ceased to be available, were 398 not made by a tribunal duly constituted under section 7 and those awards are therefore void.
It was contended that by directing Mr. Chandrasekhara Aiyar to work again as a member of the Banks Tribunal in February, 1950, the Government had filled up the vacancy under section 8.
In our opinion this position cannot be supported on the admitted facts.
As regards filling up of a vacancy under section 8, we have already noticed that by directing the remaining two members to proceed with the work and by notifying their awards as the awards of the Tribunal the Government must be considered to have intended not to fill up the vacancy.
Again, the later notification pub lished in June, 1950, does not even state that Mr. Chandra sekhara Aiyar was appointed a member of the Tribunal "in any vacancy.
" The word used there is "resumed" suggesting there by that he had gone out for the time being but had started the work again.
Under the circumstances and in the absence of any other evidence, we are unable to consider the fact of Mr. Chandrasekhara Aiyar sitting along with the two members from and after the 20th February, 1950, as an appointment by the Government in the vacancy created by his appointment to the Boundary Tribunal in November, 1949.
At one stage it was suggested that the members of the Tribunal could delegate their work to a few members only and the award can be supported in that way.
Apart from the question what work could be so delegated, it was ascertained that the Rule permitting delegation was first published on 3rd December, 1949, and as Mr. Chandrasekhara Aiyar had gone to his work on the Boundary Tribunal on 23rd November, no delegation in that manner was possible.
Moreover, the state ment of facts nor the award of the three persons suggests that there was any delegation of work by the Tribunal in the matter of the general issues to some members only.
Nor was any report made to or considered by the full Tribunal as required by the rule.
The next question to be considered is the effect of Mr. Chandrasekhara Aiyar sitting with the two 399 members of the Tribunal after 20th February, 1950.
The record shows that the two members considered most of the general issues raised in respect of the banks at many meet ings.
The nature and volume of the work done by them during this interval has been summarized in the earlier part of the judgment.
It is not contended that on Mr. Chandrasekhara Aiyar commencing to sit again with the other two members on and from the 20th February what had happened in his absence was re done or re heard.
Mr. Chandrasekhara Aiyar along with the other two members continued to work from the point work had proceeded up to 19th February, 1950, and the award which is put before us is signed by all the three of them, i.e., on the footing that all the three of them were members of the Tribunal.
It was suggested that Mr. Chandrasekhara Aiyar should be treated as having remained throughout a member of the Tribunal of three and that he resumed work after a temporary absence between November, 1949, and Febru ary, 1950.
In our opinion, this position is quite unsupport able.
When the services of Mr. Chandrasekhara Aiyar ceased to be available to the Tribunal in November, 1949, and the Government accepted the position that a vacancy had oc curred, Mr. Chandrasekhara Aiyar ceased to be a member of the Tribunal of three as constituted under the Government notification of June, 1949.
Thereafter Mr. Chandrasekhara Aiyar never became a member of the Tribunal as he was never appointed a member before he signed the award.
No notifica tion making such an appointment under section 7 read ' with section 8 of the Act has been even suggested to exist.
In the circumstances, the position in law was that Mr. Chandra sekhara Aiyar ceased to be a member of the Tribunal of three as originally constituted, that no new Tribunal of two was legally constituted and that, having ceased to be a member of the tribunal of three, Mr. Chandrasekhara Aiyar could not resume duties as a member of the Tribunal of three without a fresh constitution of a Tribunal of three.
The result is that all the interim awards purported to be made by Mr. Sen and Mr. Mazurndar as 400 well as the final awards made by the three must all be held to have been made without jurisdiction.
It seems to us that the only way in which the Government could have put matters right was by a notification issued in February, 1950, con stituting the tribunal as a fresh Tribunal of three members (and not by proceeding as if a vacancy had been filled up on 20th February, 1980, under section 8) and the three members proceeding with the adjudication de novo.
Even if the con tention of the respondents that Mr. Chandrasekhara Aiyar continued throughout a member of the tribunal were accepted, in our opinion, the appellants ' objection to the jurisdic tion of the three persons to sign the award must be upheld.
Section 16 which authorizes them to sign is preceded by section 15.
Unless they have complied with the provisions of section 15, i.e., unless all the three have heard the matter together, they have no jurisdiction to make the award in terms of section 18 and have therefore also no jurisdic tion to sign the award under section 16.
In any view of the matter the awards are therefore without jurisdiction.
It was suggested that his signature on the award could be treated as surplus.
In our opinion, this argument re quires only to be stated to be rejected.
It is not and cannot be disputed that Mr. Chandrasekhara Aiyar took active part in the deliberations and in the proceedings after 20th February, 1950, and naturally discussed and influenced the decision of the other two members of the Tribunal by such discussions.
This is not a case where an outsider was con sulted by the members of a Tribunal and thereafter the members came to their own independent decision.
It is obvious that for making the award all the three persons worked together and were jointly responsible for the result ant award.
The argument of surplusage therefore must fail.
In this view of the matter, the final award put before the Court is clearly without jurisdiction and the appellants ' contention must be upheld.
The final contention that the sittings in the interval constituted only an irregularity in the proceedings 401 cannot again be accepted because, in the first place, an objection was raised about the sitting of the two members as the Tribunal.
That objection, whether it was raised by the appellants or the other party, is immaterial.
The objection having been overruled, no question of acquiescence or estop pel arises, Nor can consent give a court jurisdiction if a condition which goes to the root of the jurisdiction has not been performed or fulfilled.
No acquiescence or consent can give a jurisdiction to a court of limited jurisdiction which it does not possess.
In our opinion, the position here clearly is that the responsibility to work and decide being the joint responsibility of all the three members, if pro ceedings are conducted and discussions on several general issues took place in the presence of only two, followed by an award made by three, the question goes to the root of the jurisdiction of the Tribunal and is not a matter of irregu larity in the conduct of those proceedings.
The absence of a condition necessary to found the jurisdiction to make the award or give a decision deprives the award or decision of any conclusive effect.
The distinction clearly is between the jurisdiction to decide matters and the ambit of the matters to be heard by a Tribunal having jurisdiction to deal with the same.
In the second case, the question of acquiescence or irregularity may be considered and over looked.
When however the question is of the jurisdiction of the Tribunal to make the award under the circumstances summarized above, no question of acquiescence or consent can affect the decision.
It was contended that under section 8 the contingency of the Government not filling up a vacancy is clearly visual ized.
It is also provided in the section that in the event of a vacancy the Government may fill it up by appointing a new man and in such a case the proceedings need not start afresh.
It was argued that nothing more had happened in the present case and therefore no question of invalidity of the awards arises.
We are unable to accept these contentions.
In the first place, when Government decides not to fill up 402 a vacancy its decision has to be notified.
It is not a matter of the Government 's internal administration where the officers can work under departmental orders.
Moreover it should be noticed that when the services of a member cease to be available and that fact is conveyed to the rest of the members under sections 5 (4) and 6 (3), the rest have no right to act as a Body at all.
The wording of section 7 or 8, in our opinion, does not permit the remaining members of a Tribunal to have a higher right in the absence of a proper new notification issued under section ? of the Act.
As regards the second Contention, it should be noticed that the Government is given the option to make an appointment when a vacancy occurs, and section 8 provides that if a new man is appointed in the vacancy the proceedings need not start de novo.
That however does not mean that the Government must appoint a man in every case of vacancy and the proceedings must go on without commencing the same afresh.
It appears that the option is left to Government having regard to the stage to which the proceedings may have reached.
Suppose only after some preliminary work of a data finding nature is done a vacancy occurs, the Government may well think of appointing a new man as it may not be considered necessary to start the proceedings afresh.
On the other hand, if the work has progressed considerably the Government may not think it just and proper to fill up a vacancy by bringing in a new man, as by doing so they will in effect permit the work of the Body being done in two parts, viz., the first with two men and the second with three men.
These considerations emphasize the importance of the Government making up its mind to fill up or not to fill up a vacancy when it occurs.
It cannot keep its decision in abeyance and at one stage intend to proceed on the, footing that the vacancy is not filled up and later on after considerable work is done by the remaining members change its mind and proceed to act on the footing that a vacancy has continued and fill up the same after some months.
403 On the admitted principle that the work of the Tribunal, which is of a quasi judicial nature, is one of joint respon sibility of all its members, section 8 provides exceptions.
The Legislature having thus fixed in that section the limits of the exceptions, the limits have to be strictly observed and it is not within the competence either of the Tribunal or the Government to extend the limits of those exceptions.
In our opinion, the incidents in respect of the sittings and work of this Banking Tribunal, as mentioned above, do not fall within the limits of the exceptions and therefore the awards must be considered as made without jurisdiction.
In our opinion, therefore, the awards made and signed by Messrs. Sen and Mazumdar and by all the three persons are without jurisdiction and the contention of the appellants on this issue must be accepted.
FAZL ALI J.
The questions which this Bench is called upon to decide arise upon the following facts.
By a Notification dated the 13th June, 1949, the Govern ment of India constituted a Tribunal for the adjudication of industrial disputes in Banking Companies, consisting of Mr. K.C. Sen (Chairman), Mr. S.P. Varma and Mr. Majumdar (Mem bers).
Subsequently, Mr. Chandrasekhara Aiyar was appointed a member of the Tribunal in the place of Mr. Varma, whose services had ceased to be available.
On the 13th June, 1949, the Government referred to the Tribunal the disputes between a number of Banking Companies and their employees, and the Tribunal consisting of the chairman and 2 members commenced hearing them on the 12th September, 1949.
In November, 1949, the services of Mr. Aiyar were placed at the disposal of the Department of External Affairs of the Government of India, and he was appointed a member of the Indo Pakistan Boundary Disputes Tribunal, with the result that during his absence which covered ' a period of nearly 3 months beginning from the 23rd 404 November, 1949, and ending on the 20th February, 1950, the proceedings were continued before the chairman and the remaining member, and certain interim awards were also made during this period.
Mr. Aiyar rejoined the Tribunal on the 20th February, 1950, and ultimately all the 3 members made and signed an award on the 31st July, 1950, which was pub lished in the Gazette of India on the 12th August, 1950.
The main point raised in these appeals is that this award is without jurisdiction.
In some of the appeals, it is also contended that some of the interim awards, namely those given by the chairman of the Tribunal and Mr. Majumdar on the 5th January, 25th January, 20th February and 22nd Febru ary, 1950, in the case of the Imperial Bank of India, the Lloyds Bank and the Punjab National Bank, were also without jurisdiction.
Briefly, the argument advanced on behalf of the appellants is that the , did not permit either of the following courses, firstly, that 2 members of the Tribunal, which originally consisted of 3 members, should deal with any of the controversies between the parties in connection with the disputes referred to the Tribunal, and secondly, that a member who had left the Tribunal in the midst of the hearing should rejoin and influence the decision of the other members in regard to the matters which he had not heard.
These contentions, however plausible they may appear at the first sight, especially when we consider them in the light of our notions of judicial procedure to be followed in courts of law, will, in my opinion, be found to be without much substance, on close examination, once we realize that the Industrial Tribunal, though it has all the trappings of a court of law, is not such a court and has to follow its own procedure which has to be determined by the provisions of the industrial Disputes Act and the rules framed by the Government thereunder.
The determination of the questions raised before us will depend mainly upon the proper con struction of section 8 (1)of the Act, which runs as follows : 405 "8 (1) If the services of the chairman of a Board or of the chairman or other member of a Court or Tribunal cease to be available at any time, the appropriate Government shall, in the case of a chairman, and may in the case of any other member, appoint another independent person to fill the vacancy, and the proceedings shall be continued before the Board, Court or Tribunal so reconstituted .
" One of the questions to be decided in construing this section is, as to the exact meaning of the words "services cease to be available.
" Ordinarily, the word "cease" con veys a sense of permanency, and therefore the expression would certainly cover cases where the services of a person have ceased to be available permanently or for all time.
But that word is also sometimes applied to "intermission of a state or condition of being, doing or suffering" (see Oxford Dictionary), and, among several instances of its being used in this narrower sense, we were referred to The Queen vs Evans(1) which is a case dealing with an English statute in which the expression "cease to reside" was used so as to include a case where the person concerned was away from England for a period and then returned there.
It seems to me that the words "services cease to be available" include cases where the services are not available for a defined or undefined period, provided that during that period they are completely unavailable.
These words should, I think, be read with the marginal note of section 8, which indicates that they were intended to cover every situation necessitat ing the filling of a vacancy.
As we are aware, a vacancy may be permanent or temporary, and therefore if the services of a member of a Tribunal are temporarily placed at the disposal of another department of the Government for performing special work, such a case will be covered by the section.
This must necessarily be so, if the nature of the duties which the member is called upon to discharge is such as to necessitate that particular member severing himself completely from the Tribunal during the (1) 406 period in which he holds his new office.
I find it diffi cult to hold that the section was meant to apply only to a permanent vacancy, and that no provision whatsoever was made for a temporary vacancy, which is by no means a matter of uncommon occurrence.
It should be noted that in sections 5 and 6 of the Act, the Legislature has been careful to use the words "vacancy in number" which are wide enough to include cases where, though there is a vacancy, the member ship does not cease.
It is common ground that in the present case, the services of Mr. Aiyar were not available to the Tribunal, while he was employed as a member of the Indo Pakistan Boundary Disputes Tribunal.
It is also not disputed that at the time his services were transferred, it was not known for what period his new duties would keep him away from the work of the Industrial Tribunal.
There can be no doubt therefore that there was a vacancy, which provided an occasion for the Government to exercise the discretion vested in it under section 8 of the Act.
At this stage it will be relevant to quote certain correspondence which passed between the chairman of the Tribunal and the Government soon after Mr. Aiyar ' left the Tribunal.
We find that on the 28th November, 1949, the chairman sent an express telegram to the Labour Ministry stating that in the absence of Mr. Aiyar objections had been raised to the remaining two members of the Tribunal continu ing the proceedings and urging the Ministry either to ap point a substitute or to intimate that the Tribunal could proceed with two members during Mr. Aiyar 's absence.
To this, the Government sent the following reply: "Reference your telegram twenty eighth stop Govern ment advised that rule twelve is inconsistent with section eight stop rule twelve being deleted through notification stop Government advised Tribunal can continue proceedings with remaining two members stop no formal order or notifica tion necessary stop Government may fill vacancy later date.
" 407 These two telegrams indicate that both the chairman of the Tribunal and the Government took the view that in the circumstances of the case, there was a vacancy within the terms of section 8, that under that section it was open to the Government either to make an appointment to fill the vacancy or not to make an appointment, and that the proceed ings before the Tribunal could continue even if the vacancy was not filled.
This is quite clear from the concluding words (which I have underlined) of the telegram sent by the Government to the chairman of the Tribunal.
In my judgment, the view taken by the chairman of the Tribunal and the Government was perfectly correct.
The question involved here is twofold, namely, (1) whether section 8 applies to a temporary vacancy; and (2) whether, in case the Government decides not to fill such a vacancy, the proceedings can continue before the chairman and the remaining member.
I have already dealt with the first point, and the second point may also be now dealt with briefly.
In substance, what section 8 provides is that if the chairman goes out, the vacancy must be filled, but, if a member goes out, the Government may or may not fill the vacancy.
It seems to me to follow from this by necessary implication, that if there is a member 's vacancy and the Government decide not to fill it, the Tribunal will not become an imperfectly constituted Tribunal.
In other words, the proceedings can be continued before the Tribunal in spite of the vacancy.
The argument put forward before us on behalf on the appellants was that in the event of a member 's vacancy, either the Government should make an appointment at once or the work of the Tribu nal should be suspended until an appointment is made.
These inferences however do not appear to me to be war ranted by the words of the section, firstly because 'if the section says that the Government may or may not appoint a new member, how can we say that the Government must appoint him, and secondly because there is nothing in the section to show that the work of the Tribunal should remain suspended indefinitely in the situation with 408 which we have to deal.
A reference to the corresponding Acts in England and America will show that suspension of work is generally ruled out in cases of industrial disputes since they need expeditious settlement.
(See section 3 (b) of the National Labour Relations Act of America and section 3 of the Industrial Courts Act, 1919, of England).
The scheme of our appears to me to be the same, and I think that it will be entirely foreign to that scheme to suggest that the proceedings of the Tribunal should remain suspended indefinitely.
The principle that the pro ceedings may continue in spite of there being a vacancy in number, is expressly laid down in sections 5 and 6 of the Act which govern Boards of Conciliation and Courts of En quiry, and is in my opinion recognized by necessary implica tion in section 8 with reference to proceedings before an Industrial Tribunal.
It was strenuously argued before us that if the intention of the Legislature had been that the proceedings before the Tribunal should continue in spite of a vacancy, an express provision would have been made in section 8 in the same terms as it has been made in sections 5 and 6.
This argument however will not bear close examina tion.
Sections 5 and 6 have been reproduced from the Trade Disputes Act, 1929, without any verbal change whatsoever, and it is quite understandable that a provision dealing with the subject of a prescribed quorum should expressly state what would be the effect of the absence of the chairman or a member when the quorum is complete.
Section 8, on the other hand, has not been borrowed from the old Act, but is a completely new section in which its draftsman has used his own language and proceeded on the footing that if it was possible to convey the meaning intended to be conveyed in fewer words, there was no necessity for reproducing the entire phraseology used in sections 5 and 6.
Besides, in the context in which the provision occurs, there is no room for surmising that the intention of the framer of the section might have been to suspend the work of the Tribunal.
The words "the proceedings shall be continued 409 before the Board, Court or Tribunal so reconstituted", obviously refer to a situation which arises when anew chair man or a new member is appointed, but they also show that the framer of the section must have assumed that the pro ceedings before the Tribunal shall continue when there is a vacancy in number and the Government decides not to fill it.
The position we have now arrived at is this.
There was a vacancy of an indefinite duration and the Government decid ed, as it was competent for it to decide, not to fill it for the time being but to let the Tribunal continue the work.
In my judgment, in such circumstances, the proceedings before the chairman and the remaining member cannot be said to have been without jurisdiction.
The further question which now arises is, "what would be the legal effect of Mr. Aiyar rejoining the Tribunal on the 20th February, 1950?" It is contended on behalf of the appellants that the whole award is vitiated by Mr. Aiyar being brought into the Tribunal at a late stage, and the argument is put in the following way.
" The Government had originally appointed a Tribunal consisting of a members.
Granting that a Tribunal of a members can, under section 8 of the Act, become a Tribunal of 2, how can it again become a Tribunal of 3, without the Government acting in strict compliance with the procedure laid down in the section and without making a fresh appointment.
" The same argument was put a little more rhetorically by likening the proceedings before the Tribunal to a running train and enquiring whether it was permissible for one to "jump into and jump off" the train as one chose.
I must confess that though I have very carefully considered this argument I have not been able to appreciate its force.
In answering the argument, we have to bear in mind that the Legislature has conferred very large powers on the Government, and the entire constitution of the Tribunal as well as the appointment of its members have been left to its discretion.
Section 7 (2) provides that the Tribunal shall consist of such 410 number of members as the appropriate Government thinks fit.
Again, section 8 (1) provides that the Government may or may not appoint a member to fill a vacancy.
Under section 9, no order of the appropriate Government appointing any person as a member of a Tribunal shall be called in question in any manner.
Under section 38, for the purpose of giving effect to the provisions of the Act, the Government may make rules, and, as far as I can see, there is nothing to prevent the Government from making a rule fixing the minimum strength of the Tribunal for hearing any of the matters before it.
Thus, in a way, the Government is empowered to constitute as well as reconstitute the Tribunal, and though it is not expected to use the power arbitrarily, or unfairly the power is there.
Therefore looking at the substance of the matter, as opposed to mere technicalities and legal refinements, it appears to me to be a sufficient answer to the question posed on behalf of the appellants to say that, if the going out and coming in of Mr. Aiyar was under the orders of the Government, the proceedings cannot be held to be invalid.
Apart from this general answer, I shall now try to deal with the question a little more closely.
As I have already pointed out, under section 8, the Government is empowered not to fill a member 's vacancy at all.
Now, there appear to me at least two obvious reasons, which may induce the Gov ernment not to fill the vacancy, namely, (1) because it considers that the chairman and the remaining member or members are sufficient to carry on the work of the Tribunal, and (2) because the vacancy being a temporary one, it con siders it unnecessary to introduce a new member and prefers to await the return of the old member.
It seems to me that it was the latter alternative that commended itself to the Government in the present case.
Here, the vacancy being a temporary one, Mr. Aiyar had not ceased to be a member of the Tribunal, and could therefore rejoin it as soon as he was free from the duties of his new office.
In such an event, it was not necessary for the Government to 411 make any order reappointing him to the Tribunal.
He was still a member of the Tribunal and resumed his duties as such under the orders of the Government.
It will, therefore, be entirely wrong to describe him as an intermeddler and to argue that the proceeding was vitiated by his return to the Tribunal.
There is indeed no difficulty in the present case in holding that Mr. Aiyar joined the Tribunal under the orders of the Government, and we find that the Government ultimately declared the award, to which he was a party, to be binding under section 15 of the Act.
He was allowed to resume his duties as member of the Tribunal, and drew his salary as such from the 20th February, 1950, till the termination of the proceedings.
Such being the facts, it would be far too abrupt a conclusion to hold that the entire proceedings are void and the award is bad.
One of the arguments which has been advanced before us against the validity of the award is that Mr. Aiyar, though he did not participate in the proceedings which took place in his absence, was at least theoretically able to influence the decision of the remaining members who had participated in them.
But I do not see any basis for this argument in law, unless we allow our minds to be influenced by any precon ceived notions of strict judicial procedure followed in a regular court of law.
A perusal of section 8 (2) will show that the Act does not contemplate a ale novo hearing in those cases where a new member is appointed by the Govern ment in the place of a member whose services had ceased to be available.
The new member may join at any stage of the proceedings, and no party will be heard to say that a member who has not taken part in the earlier proceedings is able to influence the views of those who had participated in them.
How then can such an objection be raised in the case of Mr. Aiyar, who was familiar with the proceedings and had taken part in them in the earlier stages.
When we therefore examine the facts closely, we find that in substance nothing has happened in this case which could not have legitimately happened 412 under section 8 of the Act.
Even if we assume that it was necessary for the Government to make an appointment under sub section (1) of section 8, the requirements of the provi sion appear to me to have been substantially fulfilled in this case, because Mr. Aiyar could not have joined the Tribunal without giving notice to the Government and without obtaining its orders.
There can be no doubt that the Gov ernment permitted Mr. Aiyar to join the Tribunal, and I do not find any substantial difference between its directing a person to participate in the work of ?the Tribunal and appointing him as a member of that Tribunal.
Once therefore it is clearly understood that under the Act, the Government has been empowered not only to consti tute the Tribunal but also to reconstitute it under certain circumstances, the problem which is supposed to arise from the numerical changes in the composition of the Tribunal in question should not present any difficulty.
I think that the answer to that problem is to be found within the four corners of section 8.
If there is a vacancy within the terms of that section and the Government does not fill it the Tribunal of 3 members will evidently become a Tribunal of 2 members.
But the power of filling the vacancy being vested in the Government, the Tribunal may again become a Tribunal of a members, as soon as the vacancy is filled.
I think that the Government can take its own time in filling the vacancy and may allow the work of the Tribunal to go on in the meantime.
Sometimes, the filling of the vacancy may be delayed, because a suitable person is not at once available, and it may also be delayed for other conceivable reasons.
I do not see anything in the Act or in section 8 to restrict the powers of the Government in such a manner as to compel it either to fill the vacancy, at once or to let the vacancy remain unfilled for ever.
To import such a condition would be placing an undue restriction on the power of the Govern ment, which neither the provisions nor the scheme of the Act justify.
The section, as it stands, will also in my opinion cover 413 a case where the vacancy being a temporary one, the Govern ment chooses not to fill it but awaits the return of the old incumbent.
It was contended that there was no formal notification made at the proper time to furnish evidence of the decision arrived at by the Government.
In fact, however, a Notifica tion was issued by the Government on the 20th May, 1950, to the following effect: "After relinquishing charge of membership of the Indo Pakistan Boundary Dispute Tribunal, Sri N. Chandrasekhara Aiyar resumed charge of his duties as Member of the All India Industrial Tribunal (Bank Disputes) on the 20th Febru ary 1950 (forenoon).
" It is argued that this ex post facto notification cannot legalize an illegality which had already been committed.
I do not however appreciate this argument.
In the first place, there was no illegality committed; secondly, the section does not require any notification; and thirdly, it is not correct to say that the Notification was issued ex post facto, as the proceedings had not terminated but were still going on.
The Government can take its own time for issuing a Notification, and I am unable to hold that the Government did not act bona fide in making the Notification to which I have referred.
As I have already stated, the fact that Mr. Aiyar joined the Tribunal with the concurrence of the Government and the Government wanted him to continue to participate in the work of the Tribunal and paid him his salary on that basis, is sufficient compliance with the requirements of the Act.
How the absence of a formal order or delay in the Notification can have such a far reaching effect on the proceedings before the Tribunal as to make the whole award void as having been made without jurisdiction, is a matter which I find considerable difficulty in appreci ating.
It seems to me that the objections raised on behalf of the appellants are of the most unsubstantial character, and in the absence of any cogent if not compelling reason to do so, I cannot pursuade myself to hold that the work which has been 414 accomplished by the Tribunal after nearly a year 's delibera tions and peregrinations all over the country at considera ble cost to the public exchequer is so much money and labour thrown away.
In the course of the arguments, we were asked to read section 8 with sections 7 and 16.
I do not find anything in either of these sections which militates against the view which I have ventured to express, and I do not think that the provision contained in section 16 that the report of the Tribunal shall be signed by all the members of the Tribunal, means that it should be signed even by those members who had not taken part in the proceedings.
It really means that the award shall be signed by such members as have taken part in the proceedings and could have taken part in them under the Act.
It should be remembered that the provision is general and applies to the awards made by the Tribunals as well as the Boards and Courts, and it should be read with the provi sions contained in sections 5 and 6 which state that a Board or Court having the prescribed quorum may act notwithstand ing the absence of the chairman or any of its members or any vacancy in its number.
It may be that the Tribunal and the Government could have acted in this case with more care so as to avoid the criticisms directed against the proceedings of the Tribunal, but I find no sufficient ground for holding that the proceedings were without jurisdiction.
Reference was made in the course of the arguments to rules Nos. 5 and 12 framed by the Government under section 38 of the Act, which run as follows : "5.
The appointment of a Board, Court or Tribunal together with the names of persons constituting the Board, Court or Tribunal shall be notified in the official Gazette.
Where a Tribunal consists of two or more members, the Tribunal may, with the consent of the parties, act notwithstanding any casual vacancy in its number and no act, proceeding or determination of the Tribunal shall be called in question or invalidated by reason of any such vacancy.
" 415 These rules however have in my opinion no bearing on the point in dispute.
Rule 5, dealing as it does with the appointment of a Board, Court or Tribunal together with the names of persons constituting them, refers to a Notification which the Government has to make when a Board, Court or Tribunal is initially constituted under the Act.
This was done in this case, as will appear from the award itself.
The rule has no reference to the appointments made under section 8 of the Act to fill vacancies.
I take it that the Government will, as a matter of practice, issue a notifica tion in regard to the appointments made under section 8, but the notification will not be under rule 5, and section 8 itself does not expressly provide for issuing any notifica tion.
Nor is a notification necessary under section8 in cases where the Government decides not to fill a vacancy.
The mere fact that the word 'reconstituted ' occurs in sec tion 8, is not in my opinion enough to attract rule 5.
Rule 12 which was in force till the 5th December, 1950, dealt with a casual vacancy, and provided that on the occurrence of such a vacancy, the Tribunal may act with the consent of the parties.
This rule had nothing to do with the vacancy caused by the services of a chairman or a member ceasing to be available, which is dealt with in section 8.
At the first sight, it may appear that if the consent of parties was necessary in the case of a casual vacancy for continu ing the proceedings, it may also be necessary for continuing the proceedings under section 8 of the Act when no appoint ment is made.
In my opinion, however, no such inference can be drawn from rule 12.
Under that rule, the proceedings could go on without the Government being informed, but as to vacancies which occur under section 8, the matter passes into the hands of the Government and its action alone, one way or the other, legalizes the proceedings, and no question of consent of parties arises.
On the other hand, rule 12 lends support to the respondents ' contentions in two ways.
Firstly, it shows that a "vacancy" for the purposes of the proceedings before the Tribunal can be casual and 416 need not always be a permanent one, as suggested on behalf of the appellants; and secondly, what is more important, that a "vacancy" does not affect the jurisdiction of the remaining members to continue the proceedings, for it is settled law that consent cannot give jurisdiction in respect of a subject matter though it might cure a mere irregulari ty.
It was said that rule 12 was ultra vires, but it appears to me to be unnecessary to inquire into this side issue.
For the reasons I have set out, I respectfully differ from the conclusion arrived at by my Lord the Chief Justice and the majority of my colleagues, and hold that the objec tions raised on behalf of the appellants should be over ruled.
PATANJALI SASTRI J.
I agree with the reasoning and conclusion of my learned brother Fazl Ali whose judgment I have had the advantage of reading.
He has said all I wished to say and has said it so well that I have nothing to add.
MUKHERJEA, J. I concur in the decision of my learned brother Fazl Ali, J. that the award of the All India Indus trial Tribunal (Bank Disputes) dated the 31st July, 1950, could not be held to be illegal and inoperative by reason of any lack of jurisdiction in the Tribunal which made it.
However, as the line of reasoning by which I have reached my conclusion is not the same as that adopted by my learned brother and as I have not been able to agree with him as regards the validity of certain earlier awards which the Tribunal purported to make in the months of January and February 1950, I deem it necessary and proper to express my own views on the subject matter of controversy in these appeals as succinctly as possible in a separate judgment.
The only point that has been canvassed before us at this stage of the hearing of the appeals relates to the question of jurisdiction, and the substantial ground upon which the legality of the awards has been assailed by the learned Counsel appearing for the several 417 Banks is that the awards were not made by a Tribunal proper ly constituted and competent to adjudicate upon industrial disputes under the terms of the .
To appreciate the arguments that have been raised by the re spective parties on this point, it would be necessary to state a few facts.
By a notification dated the 13th of June, 1949, the Central Government in exercise of the powers conferred upon it by section 7 of the , con stituted an Industrial Tribunal consisting of three members to wit: (1) Mr. K.C. Sen, (who was appointed chairman of the Tribunal), (2) Mr. S.P. Verma and (3)
J.N. Mazumdar.
By a further Notification dated August 24, 1949, Mr. N. Chan drasekhara Aiyar was appointed a member of the Tribunal in place of Mr. S.P. Verma whose services ceased to be avail able and the Tribunal so reconstituted was designated "The All India Industrial Tribunal (Bank Disputes) .
" The Tribu nal consisting of the chairman and the two members mentioned aforesaid commenced their sittings at Bombay on September 12, 1949, and continued to sit as so constituted at Bombay and various other places since then.
From the afternoon of 23rd September, 1949, the services of Mr. N. Chandrasekhara Aiyar were placed temporarily at the disposal of the Minis try of External Affairs, he being appointed a member of the Indo Pakistan Boundary Tribunal.
Mr. Aiyar 's work in connec tion with the Indo Pakistan Boundary Tribunal ended on 27th or January, 1950, and a Government Notification shows that he was absent on leave from 28th January, 1950, until the 19th of February following and it is on the 20th February, 1950, that he actually resumed his duties as a member of the Industrial Tribunal.
During the entire period of his ab sence there were various sittings of the Industrial Tribunal in which the two remaining members took part and a number of awards were also made and signed by these two members adjudicating upon several items of dispute concerning cer tain Banks.
It may be mentioned here that in exercise of the powers 418 conferred by section 38 of the , certain rules were framed by the Central Government which came into force on 3rd December, 1949, and under which the Tribunal, as constituted by the Notification of 13th June, 1949, was authorised to entrust such cases or matters re ferred to it, as it deemed fit, to one or more members for enquiry and report.
In case of such entrustment, the report of the enquiring member was to be placed before the chairman of the Tribunal and the Tribunal after considering the report and making such further enquiry as it deemed proper could deliver the award.
Purporting to act in pursuance of these rules a large number of matters pending before the Tribunal were divided amongst the members for enquiry and report and the members of the Tribunal did sit separately at different places from the 3rd of December, 1949.
After Mr. Aiyar joined the Tribunal, the proceedings continued as before.
The hearing of the general issues, which began at Bombay, was concluded on 3rd April, 1950.
The Tribunal made and signed the main, award on gist July, 1950, which was published in the Gazette of India (Extraordinary) on August 12, 1950.
The point that has been pressed for our consideration on behalf of the appellants Banks is that on the services of Mr. Aiyar having ceased to be available by reason of his being appointed a member of the Indo Pakistan Boundary Tribunal, the remaining two members could not, in law, constitute an Industrial Tribunal without its being reconstituted as such in, the manner contemplated by the provisions of the .
The proceedings after the 23rd of November, 1949, became, therefore, void and inoperative and the subsequent rejoining of the Tribunal by Mr. Aiyar was of no avail, as a vacancy having once occurred, a fresh appointment of a member and a fresh con stitution of the Tribunal were imperative in law.
We have been asked to declare the award made on 31st of July, 1950, as well as the earlier awards void and inoperative on these grounds.
419 These contentions have been sought to be repelled on behalf of the respondents employees as well as by the learned Attorney General who appeared for the Central Gov ernment as intervener, on a variety of grounds and though the grounds are not quite uniform or consistent, they have all been invoked in support of the position that even in the absence of Mr. Aiyar it was quite competent to the two other members to continue to function legally as a Tribunal under the provisions and the general scheme of the Industri al Disputes Act, 1947.
There was nothing irregular, it is said, in Mr. Aiyar 's subsequently taking part in the Tribu nal and signing the award on 31st July, 1949.
I will notice these arguments in detail as I proceed with my judgment.
It will be convenient first of all to advert to such of the provisions of the , as have a bearing on the questions raised in this case.
The object of the , as set out in the preamble is "to make provisions for investigation and settlement of industrial disputes and for certain other purposes hereinafter appearing.
" There are three classes of authorities provided for by the Act ' which are entrusted with the powers and duties of investigation and settlement of industrial disputes.
First of all, there are Conciliation Officers or Boards of Conciliation, whose duties mainly are to induce the parties to come to a fair and amicable settle ment of the disputes amongst themselves.
Secondly, there are Courts of Enquiry and though they are described as courts, their duties end with investigation into the matters referred to them and submitting reports thereon to the appropriate Government.
Lastly, there are Industrial Tribu nals composed of independent persons who either are or had been Judges of the High Court or District Judges, or are qualified for appointment as High Court Judges.
Sub section (2) of section 5 provides for the constitu tion of a Board of Conciliation.
A Board of Conciliation shall consist of a chairman and two or four other members as the appropriate Government thinks 420 fit, and sub section (8) provides that the chairman shall be an independent person, while the members shall be persons appointed in equal numbers by the parties to the dispute.
Sub section (4) makes an important provision, namely, that a Board can function despite the absence of the chairman or any of the members if it has the prescribed quorum as laid down in the rules, provided however that if the Government notifies the Board that the services of the chairman or of any other member have ceased to be available, the Board shall not act unless a new chairman or member, as the case may be, has been appointed.
Section 6 of the Act relates to Courts of Enquiry and such court may consist of one independent person or such number of independent persons as the appropriate Government may think fit.
Where a Court of Enquiry consists of two or more members, one of them has got to be appointed as a chairman.
The Court like the Board of Conciliation can function in the absence of the chairman or any of its mem bers or in the case of any vacancy in its number, provided it has the prescribed quorum; but it cannot function if the appropriate Government notifies it that the services of the chairman have ceased to be available, so long as a new chairman is not appointed.
There is no provision in section 6 relating to notification by Government in case the serv ices of a member of a Court cease to be available as there is in the case of a member of the Conciliation Board under section 5.
Section 7 deals with Industrial Tribunals.
Sub section (1) lays down that the appropriate Government may constitute one or more Industrial Tribunals for the adjudication of industrial disputes in accordance with the provisions of this Act.
Sub section (2) provides that a Tribunal shall consist of such number of members as the appropriate Govern ment thinks fit.
Where the Tribunal consists of two or more members, one of them shall be appointed a chairman.
There is no provision in section 7 similar to that appearing in sections 5 and 6 empowering a Tribunal to continue its proceedings in the absence of the chairman 421 or any of its members, provided there is a requisite quorum; in fact, no quorum has been prescribed in the rules in regard to an Industrial Tribunal at all.
It is clear, there fore, from the provisions of section 7 of the referred to above and this position has not been disputed by Mr. De who appeared for the employees of some of the Barks that if a Tribunal has been constituted as consisting of three members as in the present case, then subject to any exception that may be created by any other provision of the Act all the three members of the Tribunal must act together.
On behalf of the respondents very great stress has been laid upon section 8 of the , and it is contended that in the circumstances which have happened in the present case, the provision of section 8 would fur nish a clear authority to the two remaining members to continue as a legally constituted Tribunal during the period that the services of Mr. Aiyar ceased to be available, even though there was neither a fresh appointment in his place nor a fresh constitution of the Tribunal.
Section 8 is in the following terms: "(1) If the services of the chairman of a Board or of the chairman or other member of a Court or Tribunal cease to be available at any time, the appropriate Government shall, in the case of a chairman, and may in the case of any other member, appoint another independent person to fill the vacancy, and the proceedings shall be continued before the Board, Court or Tribunal so reconstituted.
(2) Where a Court or Tribunal consists of one person only and his services cease to be available, the appropriate Government shall appoint another independent person in his place, and the proceedings shall be continued before the person so appointed.
(3) Where the services of any member of a Board other than the chairman have ceased to be available, the appropri ate Government shall appoint in the manner specified in sub section (3) of section 5 another 422 person to take his place, and the proceedings shall be continued before the Board so reconstituted.
" The section purports to provide for filling up vacan cies.
Sub section (2) is not material for our present purpose.
Taking sub sections (1) and (3) together we find that if the services of the chairman of a Board, a Court or a Tribunal cease to be available at any time, it is incum bent upon the appropriate Government in each case to fill the vacancy by the appointment of another independent person as chairman and the proceedings shall be continued before the authorities so reconstituted and they would not have to be commenced de novo.
In case the services of a member of either a Court or a Tribunal cease to be available, it is discretionary with the appropriate Government to fill the vacancy or not as it chooses.
If it chooses to appoint a new member in place of the old, the same provision will apply as in the case of appointment of a new chairman.
The section does not say, at least in express terms, as to what would happen if the Government does not think it proper to appoint a new member.
So far as a Board of Conciliation is con cerned, a different provision is made even when the services of a member cease to be available.
In such a case, re ap pointment has got to be made as provided for in subsection (a) of section 5 and the reasons are obvious; because the essential thing in a Board of Conciliation is the equal representation of both parties to the dispute and the par ties would be unequally represented if the vacancy of a member is not filled up.
In the present case one of the members of the Tribunal namely, Mr. Aiyar, was admittedly absent for a period of above three months and as he was appointed to do duties in another capacity, his services could not possibly be avail able during the period that he was engaged elsewhere.
This fact, it appears, was brought to the notice of the appropri ate Government by the other two members, but the Government decided not to make any new appointment in his place.
The question is, what exactly became the legal position of the other two members ? Could they function 423 as a Tribunal in the absence of the third member and without the Government reconstituting the Tribunal as a Tribunal of two ? The contention of the respondents is that as section 8 of the gives an option to the appropriate Government to fill the vacancy or not, as it chooses, when the services of a member cease to be available and as it provides for reconstitution only when a new member is appointed by the Government, it is implicit in the provi sion of the section itself that in case the Government does not decide to appoint a new member, the remaining members would automatically constitute the Tribunal and would proceed as such.
It is said that the Industrial Tribunals are really administrative bodies and as the very object of establishing such Tribunals is to settle industrial disputes as quickly and as expeditiously as possible with a view to secure industrial peace, certain amount of laxity in the procedure cannot but be allowed to these Tribunals as ap pears from the various provisions of the Act and it would defeat the very object of the enactment if the normal rules of law and procedure are made applicable to them.
It is suggested further that what section 7 (1) contemplates is the constitution of a Tribunal irrespective of its members for adjudication of industrial disputes.
What number of persons the Tribunal shall consist of can be determined by the Government at different times and in different manner and no question of fresh constitution of a Tribunal would arise in case the number is subsequently altered.
So far as an Industrial Tribunal is concerned, section 8 (1) of the comes into operation when the services of the chairman of the Tribunal or of any member thereof cease to be available at any time.
This non availability of services may be permanent or temporary and may be occasioned by any cause or circumstance.
When the services of a member cease to be available, the appropriate Government has got to make up its mind whether it would fill the vacancy or not; and in case it chooses to appoint a new member, the Tribunal must be deemed 424 to be reconstituted within the meaning of section 8, the primary object of which is to provide that the proceedings shall be continued before such reconstituted Tribunal from the stage at which they were left and they would not have to be started afresh.
Thus it follows from the language of section 8 that the reconstitution spoken of or contemplated by the section is reconstitution by reason of the appoint ment of a new member in place of the old.
There is no question so far as section 8 is concerned of reconstitution of the Tribunal when the Government chooses not to fill the vacancy.
The point that is stressed on behalf of the respondents is that as section 8 does not provide for reconstitution of the Tribunal when no new appointment of a member is made, the implication must necessarily be that the remaining members would continue to act as a Tribunal and no further order or notification by the Government is necessary.
The argument seems plausible at first sight but an examination of the material provisions of the Act reveals the difficul ties, and those of a formidable character, in the way of accepting this contention as sound.
As has been pointed out already, there is a marked distinction between the provisions of sections 5 and 6 of the on the one hand and those of section 7 on the other.
Sections 5 and 6 expressly empower a Board of Conciliation and a Court of Enquiry to exercise their functions in the absence of any of the members, pro vided the prescribed quorum is present; but such provision has been deliberately omitted from section 7 and nothing has been prescribed either in the Act or in the rules in regard to any quorum for the members of the Tribunal.
It cannot be argued that no quorum has been laid down in the case of a Tribunal, as it can consist of one member only.
The position of a Court of Enquiry, it seems, is precisely the same so far as this point is concerned and yet there is a rule prescribing a quorum for members of a Court.
Having regard to the language of section 7 which admittedly contemplates that the members of 425 a Tribunal must act all together, it would, in my opinion, be a perfectly legitimate view to take that if the legisla ture did intend to make an exception to this rule, it would have done so in clear terms instead of leaving it to be gathered inferentially from the provision of another section which itself is not couched ' in unambiguous lan guage.
An Industrial Tribunal can be constituted only in ac cordance with the provisions of section 7 of the and unless a Tribunal is properly constituted, it cannot be invested with jurisdiction to adjudicate on industrial disputes.
Under sub section (2) of section 7, the number of members constituting the Tribunal has got to be determined by appropriate Government and that is an integral part of the Tribunal itself.
A change in the number of members of a Tribunal could be made therefore only in pursu ance of the provision contained in sub section (2) of sec tion 7.
As section 8 does not lay down that in case the services of a member of the Tribunal cease to be available and the Government does not choose to make a new appointment in his place, the remaining members should continue to form the Tribunal, the constitution or 'reconstitution of the remaining members as a Tribunal should, in my opinion, be made only under section 7 of the Act.
I am not impressed by the argument of Mr. De that a Tribunal is to be conceived of as an entity different from the members of which it is composed and whatever changes might occur in the composition of the Tribunal, the identity of the Tribunal remains intact.
A distinction undoubtedly exists between the court and the judge who presides over it but if the constitution of the court requires that it is to be composed of a certain number of judges, obviously a lesser number could not perform the functions of the court.
Mr. De also argued that the very object of the Industri al Disputes Act is to ensure a speedy and quick determina tion of industrial disputes and section 426 15 of the Act expressly lays down that the Tribunal shall hold its proceedings expeditiously and shall, as soon as practicable, on the conclusion thereof, submit its award to the appropriate Government.
This object, it is said, would be frustrated if the strict rules of ordinary law are ex tended to the proceedings of an Industrial Tribunal.
It is quite true that a quasi judicial tribunal enjoys greater flexibility and freedom from the strict rules of law and procedure than an ordinary court of law, but however much informality and celerity might be considered to be desirable in regard to the proceedings of an Industrial Tribunal, it is absolutely necessary that the Tribunal must be properly constituted in accordance with requirements of law before it is allowed to function at all.
I fail to see further how the issuing of a formal notification under section 7 of the Act could delay the proceedings of the Tribunal or hamper expeditious settlement of the disputes.
Section 16 of the makes the impera tive provision that the award of a Tribunal shall be in writing and shall be signed by all the members.
So long as there is no change or alteration in the original notifica tion which constituted the Tribunal, the expression "all the members" must mean and refer to all the members whose names appear in this notification and, unless all of them sign the award, it would not be a valid or operative award in law.
Our attention was drawn in course of the arguments to rule 12 of the rules framed by the Central Government in exercise of its powers under section 38 of the .
This rule, it is to be noted, was deleted with effect from 6th of December 1949.
As it stood originally, it was worded as follows : "Where a Tribunal consists of two or more members the Tribunal may with the consent of the parties act notwith standing any casual vacancy in its number and no act, proceeding or determination of the Tribunal shall be called in question or invalidated by reason of any such vacancy.
" 427 It has been contended on behalf of the appellants that this rule was ultra vires of the authority which passed it.
It is not necessary for us for purposes of the present case to discuss this matter.
Assuming the rule to be valid, it certainly does not assist the respondents in any way, as there is no suggestion in this case that during the absence of Mr. Chandrasekhara Aiyar the proceedings continued before the remaining two members with the consent of both parties.
On the other hand, the provision in the rule certainly goes against the broad contention that the respondents wanted to raise upon the language of section 8.
In my opinion, as there was no notification by the appropriate Government under section 7 of the constituting the two members a Tribunal under the Act during the absence of Mr. Chandrasekhara Aiyar, the proceedings before these two members were void and inoperative and the award made and signed by them only during this period must be held to be void.
I do not think however that it should be held that the Tribunal was not a properly constituted authority or lacked jurisdiction to exercise its function when Mr. Aiyar re sumed his duties on 20th of February, 1950.
As I have said already, what is necessary for due constitution of an Indus trial Tribunal is a notification or order by the appropriate Government under section 7 of the and the number and names of the members as given in the notification form an essential or integral part of the Tribunal thus constituted.
If the services of one of the members cease to be available at any time as is contemplated by section 8 and the appropriate Government does not choose to appoint another member in his place, one or other of two consequences may follow.
The Government may, by afresh notification under section 7, constitute a Tribunal with the remaining members or in any other way it likes or it may not take any steps at all and allow the original notification to remain.
It can certainly be assumed that the Government will choose the latter alternative only 428 when it thinks that the vacancy is only for a short period and is not likely to continue long.
In such circumstances, as I have already indicated, the true position is that the remaining members cannot function as a Tribunal and all the proceedings must be held to remain in abeyance till the absent member rejoins his duties.
But I do not see any reason why there should be a fresh notification and a fresh constitution of the Tribunal when the absent member returns.
The original notification is still there unaltered and unamended and not affected in any way by any subsequent notification; and by virtue of this notification alone, the three members would be competent to sit as a Tribunal and discharge its duties.
The fact that the services of one of them were not available at a time would not make the origi nal notification null and void.
The only effect of the absence of a member would be that the remaining members would not be competent to continue the proceedings;but this disability would cease as soon as the services of the absent member become available and a Tribunal as constituted by the notification is ready and able to function.
The appellant 's contention seems to be that once a vacancy has occurred, the Tribunal becomes imperfectly constituted and a fresh constitution is necessary.
I do not think that this position is sound.
As I have said already, the non availability of the services of a member may be permanent or purely temporary and may be due to various causes.
The word "vacancy" has no technical meaning.
As will appear from a reference to the Oxford Dictionary, the word "vacancy" is ordinarily used in the sense of a "temporary freedom or cessation from a business or occupation" If the absence of a member was merely tempo rary, the vacancy would mean nothing else but an interval or period during which a particular office remained unoccu pied.
The question of a fresh appointment might arise if the vacancy was actually filled up; but, as has happened in the present case, if the vacancy is not filled up but is allowed to remain, it would automatically come to an end 429 as soon as the member whose absence caused the vacancy comes back and rejoins the office.
It may be desirable in the interests of the public to issue a notice or make some announcement in regard to the resumption of duties by the absent member, but in my opinion no reconstitution of the Tribunal with the self same members is called for or neces sary under the provisions of the .
It is pointed out that cases may be conceived of where the non availability of the services of a member is due to death, lunacy or some such circumstance; but in such cases there could be no question of the man 's coming back and joining his office, and as I have said already under section 16 of the no award would be valid unless all the members whose names appeared in the notifica tion signed it.
This would be impossible in the case of death, lunacy or some other disablement of that character.
It will be seen that in the Government Notification No. LR 60 (47) dated 20th March, 1950, it was expressly stated that the services of Shri N. Chandrasekhara Aiyar, Member of the All India Industrial Tribunal (Bank Disputes), were temporarily placed at the disposal of the Ministry of Exter nal Affairs with effect from 23rd November, 1949, (after noon).
Mr. Aiyar 's new duties continued till 27th January, 1950.
As soon as this work was over, he was regarded as coming back to his office as a member of the All India Industrial Tribunal and he was allowed leave in that capaci ty by the Ministry of Labour from 28th January, 1950.
to 19th February, 1950, (vide Notification No. LR 60 (73) dated 16th September, 1950.) By another Government notification (being Notification No. LR 60 (47) dated 29th May, 1950), it was declared that Shri Chandrasekhara Aiyar resumed charge of his duties as member of the All India Industrial Tribunal on the 20th, February, 1950, (forenoon).
It is true that these notifications were issued much after the time when Mr. Aiyar actually resumed his duties, but as they are not notifications under section 7 of the , and cannot constitute 480 a condition precedent to investing the Tribunal with juris diction under the law, the delay in the actual publication of the notices is really immaterial.
They are relevant only for the purpose of showing what the state of affairs really was.
In my opinion, therefore, the Tribunal was a properly constituted authority on and from the 20th February, 1950, and as the award dated 31st July, 1950, was signed by all the three members appointed under the notification dated 24th August, 1949, no objection is legally sustainable that the award was made without any jurisdiction.
A question may be raised that as the hearing of the general issues before the Tribunal commenced at a time when Mr. Aiyar was absent and he had not the opportunity of being present all through the proceedings when arguments of both sides were advanced, there has been an irregularity or illegality in the procedure which vitiates the whole award.
A decision on this point would require investigation of various matters which have not been placed before us at the present stage by the learned Counsel appearing for the appellants Banks; and I would refrain from expressing any opinion upon it.
My conclusion is that the award dated the 31st of July is not void by reason of any lack of jurisdic tion in the Tribunal which made it.
I am, however, of the opinion that the other awards which were made during the absence of Mr. Chandrasekhara Aiyar or which were not signed by him must be held to be without jurisdiction.
Awards declared void.
Agent for the appellants in Civil Appeals Nos, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46 & 49: Rajender Na rain.
Agent for the appellants in Civil Appeals Nos. 48 and 50; Ranbir Sawhney.
Agent for the appellant in Civil Appeal No. 47: Ganpat Rai.
Agent for the Inter vener P.A. Mehta.
| 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
|
minal Appeal No. 146 of 1954.
Appeal from the judgment and order dated the 27th November 1954 of the Court of Judicial Com 683 missioner at Ajmer in Criminal Appeal No. 15 of 1954 arising out of the judgment and order dated 25th August 1954 of the Court of Special Judge at Ajmer in Criminal Case No. 5 of 1953.
B. P. Maheshwari, for the appellant.
C. K. Daphtary, Solicitor General for India, Porus A. Mehta, H. R. Khanna and B. H. Dhebar, for the respondent.
September 21.
The Judgment of the Court was delivered by BHAGWATI J.
This Appeal with a certificate of fitness under article 134(1)(c) of the Constitution against the decision of the Judicial Commissioner at Ajmer raises an important question as to the connotation of the word "officer" contained in section 21(9), Indian Penal Code.
The appellant was a Class III servant employed as a metal examiner, also called Chaser, in the Railway Carriage Workshops at Ajmer.
I He was charged under section 161, Indian Penal Code with having accepted from one Nanak Singh currency notes of the value of Rs. 150 as illegal gratification as a motive for securing a job for one Kallu.
He was also charged under section 5(1)(d) of Act II of 1947 with abusing his position as a public servant and obtaining for himself by corrupt or illegal means pecuniary advantage in the shape of Rs. 150 from the said Nanak Singh.
He was further charged with having committed an offence under section 420, Indian Penal Code for having induced the said Nanak Singh to deliver to him currency notes of the value of Rs. 150 by dishonest representation that be could secure a job for the said Kallu.
The learned Special Judge, State of Ajmer, who tried him in the first instance for the said offences convicted him of the offence under section 161, 'Indian Penal Code as also the offence under section 5(1) (d) of Act II of 1947 and sentenced him to suffer rigorous imprisonment for six months and one year respectively in regard to the same, both the sentences to run concurrently.
In so far, 684 however, as it was not proved that the appellant did not believe when he accepted the money that he could secure or would try to secure a job for Kallu, it was held that no case under section 420, Indian Penal Code was made out and he was acquitted of that charge.
The appeal taken to the Judicial Commissioner, State of Ajmer, by the appellant failed and on the 10th December, 1954, the learned Judicial Commissioner granted to the appellant a certificate of fitness for appeal on two main grounds, viz., (1) whether the appellant was an "officer" within the meaning of clause (9) of section 21, Indian Penal Code, and (2) whether the provisions of section 137 of the Railways Act excluded all railway servants from the definition of public servants except for purposes of Chapter ' IX, Indian Penal Code.
Concurrent findings of fact were reached by both the Courts below on the question as to whether the appellant accepted Rs. 150 from Nanak Singh as and by way of illegal gratification and these findings could not be and were not challenged before us by the learned counsel for the appellant.
The only questions which were canvassed before us were the two legal points which formed the basis of the certificate of fitness for appeal granted by the learned Judicial Commissioner, State of Ajmer, to the appellant.
The second question has now become academical in the facts of the present case by virtue of a decision of this Court in Ram Krishan vs Delhi State(1), which lays down that before the amendment of section 137 of the Railways Act by Act 17 of 1955 railway servants were treated as public servants only for the purposes of Chapter IX, Indian Penal Code, but in any event they were public servants under the Prevention of Corruption Act (Act II of 1947).
In so far as the appellant has, in our opinion, been rightly convicted of the offense under section 5(1)(d) of Act If of 1947 and awarded the sentence of rigorous imprigonment for one year, the question whether he was rightly convicted of the offence under section 161, (1) ; 685.
Indian Penal Code for which he was awarded the lesser sentence of six months ' rigorous imprisonment has become merely academical and the only question which remains to be considered by us here is whether he was an "officer" within the meaning of section 21 (9), Indian Penal Code.
The provisions of law in regard to the first question may be conveniently set out at this stage: Section 2 of the Prevention of Corruption Act II of 1947 provides: "for the purposes of this Act "public servant" means a public servant as defined in section 21 of the Indian Penal Code".
Section 21, Indian Penal Code provides so far as is relevant for the purposes of the present appeal: "The words 'public servant ', denote a person falling under any of the descriptions hereinafter following, namely, Ninth. . . . and every officer in the service or pay of the Government or remunerated by fees or commission for the performance of any public duty".
There is no doubt that the appellant was.
in the service or pay of the Government and was performing the duty of a metal examiner known as Chaser in the Railway Carriage Workshops at Ajmer and was thus performing a public duty.
It was, however, contended that the appellant was not an officer within the meaning of that term as used in section 21(9), Indian Penal Code.
An Officer, it was contended, on the authority of Reg.
vs Ramajirav jivbajirav and another(1), meant one to whom was delegated by the supreme authority some portion of its regulating and coercive powers and who was appointed to represent the State in its relations to individual subjects.
According to the dictum of West, J., the word "officer" meant some person employed to exercise to some extent and in certain circumstances a delegated function of Government.
He was either himself armed with some authority or repre (1) XII Bom.
H.C.R. 1. 386 sentative character or his duties were immediately auxiliary to those of some one who was so armed.
It was, therefore, contended that the appellant being a metal examiner known as Chaser in the Railway Carriage Workshops had not delegated to him by the supreme authority some portion of its regulating and coercive powers nor was he appointed to represent the State in its relations to individual subjects.
He was neither armed with some authority or representative character nor were his duties immediately auxiliary to those of some one who was so armed.
He was not employed to exercise to some extent and in certain circumstances the delegated function of Government and, therefore, was not an "officer" within the meaning of that term as used in section 21(9), Indian Penal Code.
If he was thus not an officer of the Government, he could not be a public servant within the meaning of section 21, Indian Penal Code nor could he be a public servant for the purposes of Act 11 of 1947 and could not be convicted of the offence under section 5(1)(d) of Act II of 1947.
It has to be noted, however, that the case before the learned Judges of the High Court of Bombay in 12 Bombay High Court Reports 1, concerned an Izaphatdar, that is a lessee, of a village who bad undertaken to keep an account of its forest revenue and pay a certain proportion to the Government, keeping the remainder for himself and the question 'that arose for the consideration of the Court was whether such a person was an officer within the meaning of section 21(9), Indian Penal Code.
It was in this context that the aforesaid observations were made by West, J., and the Court came to the conclusion that Deshmukhs and Deshpandes would be sufficiently within the meaning of the clause they being appointed to perform for the State a portion of its functions or to aid those who were its active representatives but not so an Izaphatdar or the lessee such as the accused.
He was not an officer but a mere contractor bound by his engagement but not by the terms of his office or employment to pay a certain proportion to the Government.
There was no delegation to him of any 687 authority for coercion or interference nor was he an assistant appointed to help any one who was vested with such authority.
The duties which he performed were contractual duties frauduler deception in the discharge of which might subject him to punishment for cheating but not duties attached to any office conferred on him or his predecessor in title, failure to perform which with integrity could make him liable, as an officer, to the special penalties prescribed for delinquent public servants.
This decision in 12 Bombay High Court Reports 1, came to be considered by the Calcutta High Court in Nazamuddin vs Queen Empress(1).
The petitioner in that case was a peon attached to the office of the Superintendent of the Salt Department in the district of Mozafferpur and he had been convicted under section 161, Indian Penal Code.
The contention urged on behalf of the petitioner was that he did not fall within the terms of the last portion of clause (9) of section 21, Indian Penal Code which declared "every officer in the service or pay of Government" was a public servant be cause he was not an officer.
The case of Reg.
vs Ramajirav Jivbajirav(2) was cited in support of that contention and the learned Judges of the Calcutta High Court observed at page 346 as under: "The learned Judges in that case had to consider whether a lessee from Government was on the conditions of his lease a public servant and, in doing so, they considered generally the meaning of the term "officer".
It was there held that an officer means "some person employed to exercise, to some extent and in certain circumstances, a delegated function of Government.
He is either armed with some authority or representative character, or his duties are immediately auxiliary to those of some person who is so armed".
The meaning which we are asked to put on these words seems to us to be too narrow as applied to the present case.
The peon who has been convicted as a public servant is in service and pay of the Government, and he is attached to the office of the Superintendent of the Salt Department.
The exact (1) I.L.R. (2) XII Bom.
H.C.R. 1.
688 nature of his duties is not stated, because this objection was not taken at the trial.
, but we must take it that, from the nature of his appointment, it was his duty to carry out the orders of his official superior, who undoubtedly is a public servant, and in that capacity to assist the Superintendent in the performance of the public duties of his office.
In that sense he would be an officer of Government, although he might not possibly exercise "any delegated function of the Government".
Still his duties would be "immediately auxiliary to those of the Superintendent who is so armed".
We think that an "officer in the service or pay of Government" within the terms of section 21 of the Penal Code is one who is appointed to some office for the performance of some pulice duty.
In this sense the peon would come within section 21, cl. 9".
The true test, therefore, in order to determine whether a person is an officer of the Government, is: (1) whether he is in the service or pay of the Government, and (2) whether he is entrusted with the performance of any public duty.
If both these requirements are satisfied it matters not the least what is the nature of his office, whether the duties he is performing are of an exalted character or very humble indeed.
As has been stated in Bacon 's Abridgment at Vol.
6, page 2, in the article headed "Of the nature of an officer and the several kinds of officers": "The word "officium ' principally implies a duty, and in the next place, the charge of such duty; and that it is a rule that where one man 'bath to do with another 's affairs against his will, and without his leave, that this is an office, and he who is in it is an officer".
The next paragraph thereafter may also be referred to in this context: "There is, a difference between an office and an employment, every office being an employment; but there are employments which do not come under the denomination of offices; such as an agreement to, make hay, herd a flock, &c which differ widely from that of steward of a manor" &c. (Vide 12 Bombay High Court Reports at page 5).
689 This was the sense in which the decision in 12 Bombay High Court Reports 1, was understood by the learned Judges of the Lahore High Court in Ahad Shah vs Emperor(1) when they observed at page 157: "But it is not enough that a person should be in the pay or service of Government to Constitute him a public servant within the meaning of section 21 (ninthly), I.P.C. He must also be an "Officer".
That expression is not, of course, to be restricted to its colloquial meaning of a Commissioned or non Commissioned Officer; it means a functional or holder of some "officium" or office.
The office may be one of dignity or importance; it may equally be humble.
But whatever its nature, it is essential that.
the person holding the office, should have in some degree delegated to him certain functions of Government".
The question for consideration before the learned Judges of the Lahore High Court was whether a Quarter Master 's 'clerk was a public servant within the meaning of that expression in section 21, Indian Penal Code.
On the facts elicited before them the learned Judges came to the conclusion that the Quarter Master 's clerk as such was just a Babu and no more an officer than a labourer or menial employed and paid by Government to do public work (See Queen vs Nachimuttu(2).
if therefore on the facts of a particular case the Court comes to the conclusion that a person is not only in the service or pay of the 'Government but is also performing a public duty, he has delegated to him the functions of the Government or is in any event performing duties immediately ' auxiliary to those of some one who is an officer of the Government and is therefore 'an officer ' of the Government within the meaning of section 21(9), Indian Penal Code.
Applying this test to the facts of the case before us, we find that the appellant was a Class III servant and was employed as a metal examiner known as Chaser in the Railway Carriage Workshop.
He was working under the Works Manager who was certainly (1) A.I.R. 1918 Lah.
(2) I.L.R. 7 Madras 18, 690 an officer of the Government and the duties which he performed were immediately auxiliary to those of the Works Manager who, beside being an officer of the Government was also armed with some authority or representative character qua the Government.
The appellant was thus, even on a narrow interpretation of the dicta of West, J. in 12 Bombay High Court Reports 1, an officer in the service or pay of the Government performing as such a public duty entrusted to him by the Government and was therefore, a public servant within the meaning of section 21 of the Indian Penal Code.
This being the true legal position, this contention of the appellant also does not avail him and the first question must be answered against him.
The appellant was, therefore, an officer within the meaning of section 21(9) and therefore a public servant within the meaning of section 21, Indian Penal Code and being such public servant be fell within the definition of a public servant contained in section 2 of the Prevention of Corruption Act II of 1947.
He was, therefore, on the facts and circumstances of the case, rightly convicted under section 5(1) (d) of Act II of 1947.
His conviction and the sentence imposed upon him by the Courts below were therefore quite in order and this appeal must therefore stand dismissed.
| The appellant was a Class III servant employed as a metal examiner, also called chaser, in the Railway Carriage Workshop at Ajmer.
He accepted a sum of Rs. 150 as illegal gratification for securing a job for some person.
He was charged under section 5(1)(d) of the Prevention of Corruption Act, 1947 (Act II of 1947).
The appellant contended that he was not an "officer" within the meaning of the term used in section 21(9) of the Indian Penal Code and so could not be a public servant for purposes of Act II of 1947.
It was found that the appellant was working under the Works Manager who was certainly an officer of the Government and the duties which he performed were immediately auxiliary to those of the Works Manager who was also armed with some authority or representative character qua the Government.
Held, that the appellant was an officer within the meaning of section 21(9) of the Indian Penal Code and, therefore, a public servant within the meaning of section 2 of Act 11 of 1947.
The true test in order to determine whether a person is an officer of the Government, is: " .
(1) whether he is in the service or pay of the Government and (2) whether he is entrusted with the performance of any,public duty.
The public duty may be either,a function of the Government delegated to him or may be a duty immediately auxiliary to that of someone who is an officer of the Government.
vs Ramajirav Jivbajirav ([1875] XII Bom.
H.C.R. 1), explained.
Nazamuddin V. Queen Empress, ([1900] I.L.R. and Ahad Shah vs Emperor (A.I.R. 1918 Leh. 152), relied on
|
ivil Appeal No. 1953 of 1968.
Appeal by special leave from the judgment and order dated September 17, 1962 of the Allahabad High Court in Misc.
I.T. Application No. 167 of 1955.
A.K. Sen, G.L. Sanghi and B.R. Agarwal, for the appellant.
Jagdish Swarup, Solicitor General, S.K. lyer, R.N. Sachthey and B.D. Sharma, for the respondent.
In proceedings for assessment to incometax for the year 1946 47, the appellant firm was assessed to tax in respect of an amount of Rs. 3,99,587 received by it as profit on sale of shares.
The. plea of the firm that the amount was "capital gain" and was on that account not taxable was rejected.
In the view of the Income tax Officer the profit arose from "a well planned business activity in which the assessee had fully utilised its resources".
The Appellate Assistant CommiSsioner affirmed the decision of the Income tax Officer.
The Income tax Appellate Tribunal dismissed the appeal filed by the firm.
The Tribunal, amongst others, referred the following question to the High Court of Allahabad for opinion: "Whether the surplus realised by the sale of the shares of Aluminium Corporation of India Ltd., J.K. Investment Trust and Raymond Woollen Mills amounting in aggregate to Rs. 3,99,587 or any part thereof was the revenue income of the assessee liable to tax under the Income Tax Act, 1922 ?" The High Court answered the question in the affirmative.
The firm has appealed to this Court with special leave.
In 1944 the firm purchased 50,000 ordinary shares of Raymond Woollen Mills Ltd. (hereinafter called "Raymond") for Rs. 69,75,255.
The firm paid Rs. 7,00,000 on November 4,1944 and the balance on December 6, 1944.
The transaction was financed with the aid of a loan of Rs. 70 lakhs borrowed from the Hindustan Commercial Bank Ltd. The firm sold those shares through brokers between November 23, 1944 and April 2, 1946 and realised Rs. 72,42,200, the transaction resulting in a net profit of Rs. 2,66,945.
Between January 26, 1945 and April 5, 1946 the firm also purchased 67 debentures, 5,582 preference shares and 18,576 ordinary shares of the Aluminium Corporation 722 Ltd. (hereinafter called "Aluminium") for Rs. 8,57,480.Except 2118 preference shares, the entire lot of shares with the debentures was sold for Rs. 7,05,957 between February 1, 1945 and August 13, 1945.
Adjusting the cost of shares left on hand the firm realised a net profit of Rs. 60,278 in that transaction.
The firm also purchased 290 "A" Class shares of J.K. Investment.
Trust Ltd. (hereinafter called "J. K. Trust") on February 4, 1945 for Rs. 1,45,000 and sold the same on August 22, 1945 for Rs. 2,17,264, the transaction resulting in a net profit of Rs. 72,364.
Before the departmental authorities the firm claimed that it had taken over the entire share capital issued by Raymond with a view to secure its managing 'agency and had thereafter distributed the shares of Raymond to the various associates of the firm, and the transaction being one to facilitate acquisition of a capital asset being a capital investment, the profit realised by sale of the shares was not liable to be assessed to income taX.
The firm also claimed that when a part of the new issue of capital of Aluminium was not taken over by the public, the firm as financiers of the, J.K. Group of Industries took over the shares and the debentures not subscribed within the time allowed.
This transaction, it was contended, was also of the nature of capital investment.
It was explained that the shares were sold on account of "financial embarrassment" and not with the object of earning income, and the profit realised by the sale did not attract tax.
Similar contentions were also raised in respect of the shares of J.K. Trust.
The departmental authorities rejected the contentions.
The Tribunal agreed with them.
From the ,facts found by the Tribunal it is clear that for purchasing the Raymond shares, the firm paid Rs. 7,00,000 on November 4, 1944, and the balance on December 6, 1944, .and commenced selling the shares on November 23, 1944.
The contention that the shares were only distributed to the "allied concerns" is contrary to the findings of the Tribunal.
Some of the shares were sold through brokers to outsiders.
It is a significant circumstance that the firm parted with all the Raymond shares by April 2, 1946 and did not retain a single share after that date.
It is true that some of the shares were held by J.K. Industries Ltd. and other J.K. concerns.
But the transfer even to the J.K. concerns was in 'all cases for a profit.
Within a few days after purchasing the Raymond shares, the "firm started unloading them".
and the shares were never sold without making profit.
The interest paid for the loan borrowed from the Hindustan Commercial Bank Ltd. for financing the purchase of Raymond shares was debited in the accounts as a revenue expenditure, and it was claimed as a permissible allowance.
The firm used to promote Companies.
723 One of its activities was to finance "sister concerns" known as J.K. Industries.
The Case of the firm that the shares had to be sold on account of "financial embarrassment" was plainly untrue.
The Tribunal was, in our judgment, right in inferring that the "purchase 'and sale of shares was a business activity which was continuous", and since the firm "had entered upon a well planned scheme for earning profit and that in furtherance and execution of that profit making scheme they sold the shares at the opportune time" and that "the sale of the shares was not merely on account of pecuniary embarrassment" as claimed, the profit realised by the firm by the sales of shares could not be characterised as a casual receipt, nor could it be treated as accretion to a capital asset.
Strong reliance was, however, placed on a somewhat obscure statement in the order of the Appellate Assistant Commissioner ' "In the case of Raymond Woollen Mills shares it is clear beyond doubt that the purchase of the shares was a first rate business deal and that it was motivated by the desire and intention to acquire the, Managing Agency of the Mills.
If this is not an operation in the scheme of profit making, it is not known what will constitut e such a transaction.
" Apparently there is a typographical error in the second clause of the first sentence, and the word "not" has by inadvertence been omitted; otherwise in the context in which it occurs the clause has no meaning whatever.
In any event as rightly pointed out by the High Court the reasons given by the Tribunal and the conclusion recorded by it are inconsistent with the finding that the shares were purchased with the sole object of acquiring the Managing Agency of the Raymond Woollen Mills and not with a view to make profits.
Counsel for the firm invited our attention to the decision of this Court in Ramanarain Sons (P) Ltd. vs Commissioner of Income tax, Bombay(1) in support of his contention that a transaction for purchasing shares with the object of acquiring the managing agency of a Company will be regarded as capital investment and not a business in share.
In Ramnarain Sons ' case(1) the appellant Company was a dealer in shares and securities and also carried on business 'as managing agents of other companies.
With a view to acquire the managing agency of a company, the appellant Company purchased from the managing agents a large block of shares at a rate approximately 50% above the ruling market rate.
Two months later the appellant Company sold a small lot out of those shares at a loss and claimed the loss as a (1) 724 trading loss.
It was found in that case by the Tribunal that the intention of purchasing the shares was not to acquire them as part of the stock in trade of tax payer 's business in shares, but to facilitate the acquisition of the managing agency of the Company which was in fact acquired, and on that account loss incurred by the sale of a small lot could be regarded only as a loss of capital nature.
The Court observed in that case that the circumstance that the tax payer had borrowed loans at interest to purchase the shares or that it was a dealer in shares and was authorised by its memorandum of association to deal in shares was of no effect.
On a review of the evidence the Tribunal held that the shares were purchased with the object of acquiring the managing agency and with that view the High Court agreed.
Whether a transaction is or is not an adventure in the nature of trade is question of mixed law and fact: in each case the legal effect of the facts found by the Tribunal on which the tax payer could be treated as a dealer or an investor in shares, has to be determined.
In the present case the transaction since the inception appears to be impressed with the character of a commercial transaction entered with a view to earn profit.
Large block of shares was purchased at the ruling rates with borrowed money, and soon thereafter the shares were disposed of at a profit in small lots.
Some of the shares were sold through brokers to strangers.
The story of the firm that some or all the shares were merely "distributed" to its associates is not proved.
The interest which the firm had to pay for the amount borrowed for purchasing the shares was acted in the revenue account and was claimed as a revenue allowance.
It was not the case of the firm that Aluminium and J.K. Trust shares were purchased for .acquiring the managing agency.
It was claimed that the shares were taken over because the public did not accept those shares.
It was one of the objects of the firm to finance its allied concerns and in taking over shares which the public did not subscribe the firm was 'acting in the course of its business.
The firm commenced selling the shares soon after they were purchased.
Aluminium shares were purchased between January 26, 1945 and April 5, 1946 (except a few which were retained) and sold at profit.
Whereas the first lot was purchased on January 26, 1945, the first sale was made on February 1, 1945.
It could not be said that this was an investment in shares independent of the trading activity of the firm.
The story that the shares had to be sold on account of financial difficulties is plainly belied by the circumstance that the firm went on purchasing and selling the Aluminium shares.
J.K. Trust shares were purchased on February 14, 1945 and were sold on August 22, 1945.
Aluminium shares as well as J.K. Trust shares were sold at a profit 725 and through brokers.
These transactions were ,also stamped with the character of commercial transactions entered into with a profit motive and were not transactions in the nature of capital investments.
The answer recorded by the High Court is therefore correct.
The appeal fails and is dismissed with costs.
V.P.S. Appeal dismissed.
| The respondent was arrested on the 21st of April, 1950, under the , and on the 29th of 168 April.
1950, he was supplied with the ground for his deten tion which was as follows: "That you are engaged and are likely to be engaged in promoting acts of sabotage on rail way and railway property in Greater Bombay.
" The respondent filed a habeas corpus petition contending that the ground supplied was vague as it did not mention the time, place or nature of the sabotage or how the respondent promoted it and that as the ground gave no particulars, his detention was illegal.
Pending the disposal of the petition, the Commis sioner of Police sent a communication to the respondent giving these further particulars, viz., that the activities mentioned in the grounds supplied to him were being carried on by him in Greater Bombay between January, 1950, and the date of his detention and that he will in all probability continue to do so.
The High Court of Bombay held that if these particulars had been furnished at the time when the grounds were furnished on the 29th of April, 1950, very likely they would have come to the conclusion that the grounds were such as would have led the detenue to know exactly what he was charged with and to make a proper repre sentation, but released the respondent holding that the only grounds which were furnished in the purported compliance of article 22 (5) were the grounds furnished on the 29th of April, 1950, and as these grounds were not such as to enable the detenue to make a proper representation, there was a viola tion of a fundamental right and a contravention of the statutory provisions and this violation cannot be set right by the detaining authority by amplifying or improving the grounds already given: Held by the Full Court (KANIA C.J., FAZL ALI, PATANJALI SASTRI, MUKHERJEA, DAS and CHANDRASEKHARA AIYAR JJ).
Under section 3 of the , it is the satis faction of the Central Government or the State Government, as the case may be, that is necessary, and if the grounds on which it is stated that the Central Government or the State Government are satisfied have a rational connection with the objects which were to be prevented from being attained, the question of satisfaction cannot be challenged in a court of law except on the ground of mala fides.
Held also per KANIA C.J., FAZL ALI, MUKHERJEA and CHANDRASEKHARA AIYAR JJ.
, (PATANJALI SASTRI and DAS JJ.
dissenting).
Clause (5)of article 22 confers two rights on the detenue, namely, first, a right to be informed of the grounds on which the order of detention has been made, and secondly, to be afforded the earliest opportunity to make a representation against the order; and though these rights are linked together, they are two distinct rights.
If grounds which have a rational connection with the objects mentioned in section 3 are supplied, the first condition is complied with.
But the ,right to make a representation implies that the detenue should have information so as to enable him to make a representation, and if the grounds 169 supplied are not sufficient to enable the detenue to make a representation, he can rely on the second right.
He may if he likes ask for further particulars which will enable him to make a representation.
On an infringement of either of these two rights the detained person has a right to approach the court, and even if an infringement of the second right under article 22 (S) is alone, established he is entitled to be released.
Per PATANJALI SASTRI and DAS JJ.
As the power to issue a detention order depends upon the existence of a state of mind in the detaining authority, that is, its satisfaction, which is purely a subjective condition and judicial enquiry into the sufficiency of the grounds to justify the detention is thus excluded, it would be wholly inconsistent with the scheme to hold that it is open to the court to examine the sufficiency of the same grounds to enable the person de tained to make a representation, for, the grounds to be communicated to the person detained are the grounds on which the order has been made.
There is further nothing in article 22, el.
(5), to warrant the view that the grounds on which the order of detention has been made must be such, that when communicated to the person they are found by a court of law to be sufficient to enable him to make what the court con siders to be an adequate representation, or that the latter part of cl.
(5) confers a distinct right on the detenue or an independent obligation on the detaining authority to furnish the detenue with sufficient particulars and details to enable him to make an effective representation.
Held by the Full Court (KANIA C.J., FAZL ALI, PATANJALI SASTRI, MUKHERJEA, DAS and CHANDRASEKHARA AIYAR JJ.) In any view, on the facts of the case there was no infringement of any fundamental right of the respondent or contravention of any constitutional provision as he had been supplied with sufficient particulars as soon as he raised the objection that the grounds supplied were vague and the respondent was not, therefore, entitled to be released.
Per KANIA C.J., FAZL ALI, MUKHERJEA and CHANDRASEKHARA AIYAR JJ.) The "grounds" for making the order which have to be communicated to the person detained as soon as may be are conclusions of facts and not a complete recital of all the facts.
These grounds must be in existence when the order is made.
No part of the 'grounds can be held back, and after they have been once conveyed there can be no addition to the grounds.
All facts leading to the conclusion constituting the ground need not, however, be conveyed at the same time.
If a second communication contains no further conclusion of fact but only furnishes some of the facts on which the first mentioned conclusion was rounded it does not amount to a fresh ground.
The test therefore is whether what is conveyed in the second communication is a statement of facts or events, which facts or 170 events were already taken into consideration in arriving at the conclusion constituting the ground already supplied.
So long as the later communications do not make out a new ground, their contents are no infringement of the two procedural rights of the detenue mentioned in article 22, cl.
They may consist of a narration of facts or particulars relating to the grounds already supplied.
But in doing so the time factor in respect of second duty, viz., to give the detained person the earliest opportunity to make a represen tation, cannot be overlooked.
If on reading the ground furnished it is capable of being intelligently understood and is sufficiently definite to furnish materials to enable the detained person to make a representation against the order it cannot be said to be "vague.
" The question whether the vagueness or indefinite nature of the statement furnished to the detained person is such that he was not given the earliest opportunity to make a representation is a matter within the jurisdiction of the court 's inquiry and subject to the court 's decision.
|
67 of 1955.
Under Article 32 of the Constitution of India for the enforcement of Fundamental Rights.
M. C. Setalvad, Attorney General of India, C. K. Daphtary, Solicitor General of India, G. section Pathak, (J. B. Dadachanji, A. P. Sen, Rameshwar Nath and Rajinder Narain, with them), for the petitioners.
T. L. Shevde, Advocate General of Madhya Pradesh (M. Adhikari and 1, N. Shroff, with him) for the State of Madhya Pradesh. 1955.
September, 20.
The Judgment of the Court was delivered by BHAGWATI J.
The petitioners are a firm carrying on business on a very large scale of making and selling bidis having their head office in Jabalpur in the State of Madhya Pradesh.
They are registered as "dealer" for the purpose of the Central Provinces and Berar Sales Tax Act, 1947.
In the course of their said business, the petitioners import tobacco from the State of Bombay in very large quantities after it is blended in that State by the vendors with various other types of indigenous tobacco by an elaborate process.
This finished tobacco, after its import within the State of Madhya Pradesh is rolled into bidis which are exported to various other States, largely to the State of Uttar Pradesh.
The dealers in the State of Uttar Pradesh 511 and such other States who buy bidis from the petitioners sell the same to various other dealers and consumers in those States.
The Sales Tax authorities in the State of Madhya Pradesh required the petitioners under threat of criminal prosecution to file a statement of return of the total purchases of tobacco made by them out of Madhya Pradesh and delivered to them in Madhya Pradesh with a vie* to assess and levy purchase tax on the transactions of purchases made by the petitioners as above.
The petitioners filed under protest two returns dated the 11th September 1954 and 3rd December 1954 for the periods 3rd May 1954 to 29th July 1954 and 30th July 1954 to 26th October 1954 respectively but without prejudice to their right to challenge the validity of the assessment and levy of the said tax on the aforesaid transactions.
The Sales Tax authorities further called upon the petitioners to deposit the alleged purchase tax which amounts to thousands of rupees in every quarter of the year.
The petitioners thereupon filed this petition under article 32 of the Constitution for a writ of mandamus or any appropriate direction or order seeking to restrain the State of Madhya Pradesh and the Commissioner of Sales Tax, Madhya Pradesh, from enforcing the said Act and its provisions against the petitioners and for consequential reliefs.
The petitioners averred that the imposition of tax on sale or purchase of tobacco rolled into bidis exported out of Madhya Pradesh in the manner described was in contravention of article 286 (1) (a) of the Constitution, that the tobacco purchased by them for the purpose of making bidis exported outside Madhya Pradesh was never intended for use as raw material for the making of bidis for the purpose of consump tion in Madhya Pradesh and section 4, sub section (6) of the Act had no application to the tobacco so used and there was no liability to pay the alleged tax and that to the best of the petitioners ' information tobacco bad not been notified by the State Government in the Gazette for the purpose of section 12(A) of the Act 65 512 and that the Sales Tax authorities, under the Act, were, 0therefore, not entitled to levy any tax on the petitioners.
The petitioners also submitted that the transactions in question had taken place in the course of inter State commerce, that the State of Madhya Pradesh had no authority to impose or to authorise the imposition of such a tax and that the action of the State authorities contravened the provisions of article 286(2) of the Constitution .
The Respondents filed a return denying the contentions of the petitioners and submitted that the petitioners by purchasing tobacco which was entered in their registration certificate as raw material for the manufacture of bidis for sale by actual delivery in Madhya Pradesh for consumption in that State made themselves liable to pay the tax by exporting bidis to other States and thus utilising it for a different purpose under section 4(6) of the Act.
They admitted that the petitioners imported tobacco from the State of Bombay in large quantities but stated that the tobacco, after its arrival in the petitioners ' bidi fac tories, was cleaned, sieved and blended.
A few more facts relevant for the decision of this petition may be stated in this context.
Not only the petitioners but also the dealers in Bombay who sell or supply tobacco to the petitioners are registered as "dealers" for the purpose of the Central Provinces and Berar Sales Tax Act, 1947.
The petitioners are the holders of a certificate of registration, No. LDG/ 53 obtained by them under Rule 8 of the Central Provinces and Berar Sales Tax Rules, 1947.
When making purchases of the tobacco in question they also made declarations in the form required by Rule 26(II) declaring that they had purchased the said goods from Shri Shah Chhaganlal Ugarchand Nipani, a dealer holding registration certificate No. BMY/93/ MP and from Shri Maniklal Chunanlal Baroda, a dealer holding registration certificate No. BMY/341MP on different dates therein mentioned for use as raw material in the manufacture of goods for sale by actual delivery in Madhya Pradesh for the purpose of consumption in that State.
in the return which 513 was filed by the petitioners for the quarter beginning from 3rd May 1954 and ending with 29th July 1954, the petitioners mentioned Rs. 16,47,567 3 3 as the purchase price of goods purchased on declaration as being goods specified in the registration certificate as intended for use as raw material in the manufacture of goods for sale by actual delivery in Madhya Pradesh for the purpose of consumption in that State but utilised for any other purpose.
In the return which was filed by them for the quarter beginning from 27th July 1954 and ending with 26th October 1954, they did not fill in any figure but showed the above item as blank contending that the Sales Tax authorities were not entitled to levy any purchase tax against them in respect of the same.
The learned Attorney General appearing for the petitioners before us contended (1) that the transactions in question were in the course of inter State commerce and were, therefore, within the ban of article 286(2) and the State of Madhya Pradesh had no authority to impose or to authorise imposition of tax on these transactions, (2) that in any event the goods were delivered for consumption in the State of Uttar Pradesh and were not liable to a levy of tax at the instance of the State of Madhya Pradesh, (3) that section 4(6) of the Act was invalid inasmuch as it offended against the provisions of article 286(1) (a), and lastly (4) that even if the above contentions were negatived, section 4(6) of the Act had, on its true construction, no application to the facts of the present case.
He, however, urged that if the Court was with him on his first contention, viz. that the transactions in question took place in the course of interState commerce it was not necessary to go into the other contentions.
We are of the opinion that this contention of the learned Attorney General is sound.
It was in fact admitted by the Respondents in their return that the petitioners imported tobacco from the State of Bombay in large quantities.
The Bombay suppliers processed tobacco in their godowns situated within the State of Bombay and supplied the finished tobacco 514 to the petitioners in Madhya Pradesh.
The petitioners imported this finished tobacco into Madhya Pradesh from these suppliers who were carrying on business in the State of Bombay and there was of necessity, as a result of these transactions, the movement of the goods across the border.
As a result of the transactions entered into by the petitioners with these suppliers the finished tobacco which was supplied to the petitioners moved from the State of Bom bay to the State of Madhya Pradesh and these transactions were, therefore, in the course of inter State trade or commerce.
The only answer which was made by the learned Advocate General of Madhya Pradesh was that Shri Shah Chhaganial Ugarchand Nipani and Shri Maniklal Chunanlal Baroda were themselves dealers holding registration certificates Nos.
BMY/93/MP and BMY/ 341 MP being registered as such under the provisions of the Central Provinces and Berar Sales Tax Act, 1947, and that, therefore.
the transactions were between two registered dealers in the State of Madhya Pradesh and therefore constituted purely internal sales of the goods.
If they were thus internal sales there was no question of their being transactions in the course of inter State trade or commerce and therefore they were not subject to the ban imposed under article 286(2).
This answer suffers from over simplification.
No doubt, the dealers who supplied the finished tobacco to the petitioners were registered dealers under the Central Provinces and Berar Sales Tax Act, 1947, but that fact by itself would not be sufficient to invest the transactions which otherwise were in the course of inter State trade or commerce with the character of intra state transactions or internal sales or purchases.
What one has got to look at is the real nature of the transactions and not the outside form.
A person who carries on business of selling or supplying goods in Madhya Pradesh and who comes within the definition of "dealer" given in section 2(c) of the Act has, under pain of penalty visited upon him under section 24 of the Act, to register himself as a dealer 515 and possess a registration certificate under section 8 (1) of the Act.
Merely because he got himself registered as such to avoid the penalty which would otherwise be visited upon him by the State it cannot be stated that 'Whatever transactions he entered into with other dealers in the State of Madhya Pradesh were all intraState transactions or internal sales or purchases irrespective of the fact that the transactions involved movement of the goods across the border and were clearly transactions of sale of goods in the course of inter State trade or commerce.
We were taken by the learned Attorney General through the several provisions of the Act and we are confirmed in our opinion that these transactions sought to be taxed by the Sales Tax authorities of the State of Madhya Pradesh were transactions in the course of inter State trade or commerce.
The activities of selling or 'supplying goods in Madhya Pradesh if carried on habitually would amount to a carrying on of the business of selling or supplying goods in the State of Madhya Pradesh and even an outside merchant who indulged in such activities may in such event be said to be carrying on business in Madhya Pradesh and would come within the definition of "dealer" given in section 2(c) of the Act.
When we come, however, to section 8 which deals with the registration of dealers, that section requires that a dealer while being liable to pay tax under the Act shall not carry on business as a dealer unless he has been registered as such and pos sesses a registration certificate.
The liability to pay tax under the Act is thus postulated and unless and until a person is liability to pay such tax he need not get himself registered as a dealer.
All the transactions entered into by a registered dealer, however, do not necessarily import a liability to pay tax under the Act because, whenever the question arises in regard to his liability to pay any tax under the Act, such liability would have to be determined in spite of his being a registered dealer with reference, inter alia, to the provisions of section 27 A of the Act which in corporates within its terms the bans which have been imposed on the powers of the State Legislatures to 516 tax under article 286 (1)(a) and (2) of the Constitution.
If, therefore, a dealer who has got himself registered as dealer under the provisions of section 8(1) of the Act is sought to be made liable in respect of transactions of sale effected, by him he could claim exemption from such liability if the transactions of sale or purchase took place in the course of inter State trade or commerce after the 31st March, 1951, except in so far as Parliament may by law otherwise provide.
In the case before us there was no such provision made by Parliament and the transactions in question were all after the 31st March, 1951, with the result that the ban imposed by article 286(2) was in opera tion and if the transactions took place in the course of inter State trade or commerce not only were Shri Chhaganlal Ugarchand Nipani and Shri Maniklal Chunanlal Baroda exempt from the liability to pay the tax on these transactions but the petitioners also were similarly exempt.
No liability, therefore, could be imposed either for Sales Tax or for Purchase Tax within the terms of the Act on these transactions which as above stated took place in the course of interState trade or commerce.
It was, however, urged that the petitioners had made declarations at the time of making the purchases of this finished tobacco that they had purchased the said goods for use as raw materials in the manufacture of goods for sale for actual delivery in Madhya Pradesh for the purpose of consumption in that State and that by virtue of the provisions of section 4(6) of the Act they were liable to pay the purchase tax on the purchase price of goods which had been utilised for any other purpose.
Whatever steps the State of Madhya Pradesh may be able to take in regard to non compliance with the terms of the declarations by the petitioners, we are clearly of opinion that the State of Madhya Pradesh is restrained from imposing any tax on the transactions of purchase or sale which take place in the course of inter State trade or commerce and no question of liability of the petitioners by virtue of such declarations survives because even initially Shri Shah Chhaganlal Ugar 517 chand Nipani and Shri Maniklal Chunanlal Baroda were not liable to pay any tax on these transactions nor could any such liability for tax be transferred to the petitioners by virtue of such declarations.
If, therefore, there was no basis for any such liability, the declarations by themselves cannot create any ' new liability and the petitioners cannot be held liable to tax even by the operation of section 4(6) of the Act, the very basis of the liability sought to be im.
posed therein having disappeared.
The result, therefore, is that the Respondents will be restrained from enforcing the Central Provinces and Berar Sales Tax Act, 1947, and its provisions against the petitioners and from imposing a tax in respect of the transactions in question and in particular from imposing a tax on the purchase price of goods purchased on the declarations under Rule 26 being goods specified in the registration certificate as intended for use as raw material in the manufacture of goods for sale by actual delivery in Madhya Pradesh for the purpose of consumption in that State but utilised for any other purpose tinder the provisions of section 4(6) of the Act.
The Respondents will pay the peti tioners ' costs of this petition.
| The petitioners are carrying on business on a very large scale of making and selling bidis having their head office in Jabalpur in the State of Madhya Pradesh and are registered as "dealer" for the purposes of the Central Provinces and Berar Sales Tax Act, 1947.
In the course of their said business, the petitioners import tobacco from the State of Bombay in very large quantities after it is blended in that State by the vendors with various other types of indigenous tobacco by an elaborate process.
This finished tobacco, after its import within the State of Madhya Pradesh is rolled into bidis which are exported to various other States, largely to the State of Uttar Pradesh.
The dealers in the State of Uttar Pradesh and such other States who buy bidis from the petitioners sell the same to various other dealers and consumers in those States.
The Sales Tax authorities in the State of Madhya Pradesh required the petitioners under threat of criminal prosecution to file a statement of return of the total purchases of tobacco made by them out of Madhya Pradesh and delivered to them in Madhya Pradesh with a view to assess and levy purchase tax on the transactions of purchases made by the petitioners as stated above.
Held, that the State of Madhya Pradesh had no authority to impose or to authorise the imposition of such a tax and that the action of the State authorities contravened the provisions of article 286(2) of the Constitution inasmuch as the transactions in question were in the course of inter State trade or commerce as the finished tobacco which was supplied to the petitioners moved from the State of Bombay to the State of Madhya Pradesh.
510 The contention that not only the petitioners were the registered dealers under Rule 8 of the Central Provinces and Berar Sales Tax Rules, 1947 but the dealers in Bombay who sell or supply tobacco to them were registered as "dealers" for the purpose of the Central Provinces and Berar Sales Tax Act, 1947 and therefore the transactions were between two registered dealers in the State of Madhya Pradesh and thus constituted purely internal sales of the goods was without force because what one has to look at is the real nature of the transactions and not the outside form and as the trans actions in dispute involved movement of the goods across the border they were clearly transactions of sales of goods in the course of interState trade or commerce and were hit by the ban under article 286(2) of the Constitution.
|
Appeal No. 974 of 1968.
Appeal from the judgment and order dated December 22, 1967 and January 3, 1968 of the Calcutta High Court in Civil Rule No. 3369(W) of 1966.
L. M. Singhvi and section P. Nayar, for the appellant.
A. K. Dutta and K. Rajendra Chowdhary, for respondents Nos. 1 to 3.
Santosh Chatterjee and G. section Chatterjee, for respondent No.4 The Judgement of the Court was delivered by Grover, J.
This is an appeal from a judgment of a learned single judge of the Calcutta High Court who granted a certificate under article 132(1) of the Constitution.
It involves primarily the question whether the cession of a territory by India as a result of a treaty with Pakistan would be compulsory acquisition of the property comprised in that territory by the Union of India and would, therefore, attract the provisions of article 31 of our Constitution.
At the outset it may be mentioned with reference to a preli minary objection which has been raised by the respondents that the judgment under appeal was delivered by the learned single Judge in a petition under article 226 of the Constitution and it appears that on an oral prayer made to him he granted a certificate under article 132(1) even though under the Letters Patent of the High Court an appeal lay to a division bench of that court.
This Court has said on an earlier occasion in clear and unequivocal terms that the practice of a single Judge deciding the case and giving a certificate under article 132(1) for appeal to this Court, al though technically correct, was an improper practice.
The right of the parties to file an appeal in the High Court itself against the decision of the single Judge should not be short circuited.
Indeed 246 in R. D. Agarwala & Another etc.
vs Union of India & Ors.(1) the certificate was cancelled.
In Union of India vs J. P. Mitter(2) it was observed that a certificate by a single judge under article 132(1) should be given in very exceptional cases where a direct appeal was necessary.
Even though the present case may be of an exceptional kind we have been deprived of the benefit of the judgment of a larger bench of the High Court on points which are of substantial importance.
Presumably a number of matters which had no bearing on the real questions to be determined and which have been dealt with by the learned single judge would have been either satisfactorily disposed of or would not have been the subject matter of discussion by the court, being irrelevant and unnecessary, if the decision had been given by a larger Bench.
The facts may be shortly stated.
On September 10, 1958, an agreement was entered into between the Government of India and Pakistan called the Indo Pakistan Agreement.
Item No. 3 of the agreement related to Berabari Union No. 12 which was a group of, villages lying within the territory of India.
This territory was to be so divided as to give one half area to Pakistan.
The other half adjacent to India was to be retained by India.
Subsequently a doubt arose whether the implementation of the agreement relating to Berubari Union required Legislative action either by way of an Act of Parliament relatable to article 3 of the Constitution or by way, of a suitable amendment of the Constitution in accordance with the provisions of article 368 or both.
A similar doubt had also arisen in respect of another item of the agreement which related to the exchange of certain enclaves but with which we are not concerned.
The President of India made a reference to this Court under article 143(1), of the Constitution for its advisory opinion.
The opinion was deliverted on March 14, 1960.
(In Re ': The Berubari Union and Exchange of Enclaves Reference Under Article 143 (1) of the Constitution of India(3).
As mentioned in the advisory opinion Berubari Union No. 12 had an area of 8 75 Sq.
Miles and a, population of 10 to 12 thousand residents.
It was situated in the district, of Jalpaiguri.
This Court expressed the view that since the agreement between India and Pakistan a mounted to cession of a part of the territory of India in favour of Pakistan its implementation would naturally involve the alteration of the content of and the consequent amendment of Article and of the relevant part of the First Schedule to the Constitution which could be made only under Article 368.
Pursuant to the opinion delivered by this Court the Parliament enacted (1) C. As.
2634/69 & 63/70 decided on 23 2 70.
(2) ; (3) 247 the Constitution (Ninth Amendment) Act 1960 on December 28, 1960.
In order to implement the provisions of the above Act a physical division of the Berubari Union in accordance with the agreement and demarcation of the portion that was to go to Pakistan was necessary.
Some of the, inhabitants of the Berubari Union filed a petition under Article 226 of the Constitution challenging its proposed partition with the object of transferring its southern part to Pakistan.
The Writ petition was dismissed and an appeal was brought to this Court which was disposed of on August 11, 1965.
(Ram Kishore Sen & Others vs Union of India & Ors.)(1).
It was held that the Ninth Constitution Amendment Act had been passed by the Parliament in the manner indicated in the advisory opinion of this Court.
No merit was found on the other points which were agitated.
The appeal was dismissed.
On June 11, 1965, the respondents filed another petition under Article 226 of the Constitution before the High Court challenging the validity of the proposed demarcation principally on the ground right of citizenship conferred by also of their property without payment of compensation.
D. D. Basu J. called for an affidavit in opposition and after hearing lengthy arguments delivered an elaborate judgment A.I.R. 1967 Cal. 216) directing the issue of rule nisi limited to ground No. 3 of the writ petition.
This ground was: "For that no Act of the State is involved in the transfer of Berubari Union No. 12 to Pakistan and as such your petitioners are entitle to compensation in terms of article 31(2) of the Constitution inasmuch as the operation of transfer involves deprivation of their right to property for which no provision has been made in the Constitution 9th Amendment Act, 1960." According to the allegation in the writ petition respondent Dhanoswar Roy had 2 acres 64 decimals of khas land in the area in question.
It was also claimed that the respondents had their household property, ancestral homes and cultivated lands in the Berubari Union No. 12.
The constitutional question formulated by the learned judge was whether compensation under Article 31(2) of the Constitution was to be provided for the respondents before the demarcation in implementation of the Constitution (Ninth Amendment) Act took place,.
We may mention some of the material conclusions of the learned judge out of the numerous matters dealt with by (1) ; 248 him.
These are: (1) the treaty making power must be exercised subject to the fundamental rights guaranteed by the Constitution.
(2) Once it is established that a treaty making law involves a transfer which attracts article 31(2) it cannot be exempted from the requirements of that Article on the ground that it is a treaty of "cession".
(3) Although under the International Law the private rights of the inhabitants of the ceded territory are not instantly affected they shall have no legal right to assert against the new State under its own municipal law to which such inhabitants shall be subject from the moment the cession is complete.
(4) As a result of cession it would be competent for the Government of Pakistan to deal with the disputed territory as absolute owner in complete disregard of the existing rights of the respondents.
"The rights of the Government of Pakistan under its municipal law would in no way be less than what would have happened if the lands were vested in that Government by a direct Act of the Government of India.
Such vesting the Government of India could arrange for only after acquiring the disputed lands".
(5) The present case will not be covered by clause 2(A) of Article 31 of the Constitution as so far all the cases which have been held to fall within its purview have been those in which there was exercise of the regulatory power of the State.
(6) The cession of the disputed properties sought to be implemented by the impugned demarcation involved compulsory acquisition of those properties by the Union of India within the meaning of article 31(2) and unless competent legislation is enacted to provide for compensation the Union cannot announce the appointed day within the meaning of section 2(A) of the Constitution (Ninth Amendment) Act 1960 and for constructing pillars to demarcate Berubari Union No. 12 for the purpose of effecting the transfer of the specified portion to Pakistan.
According to Dr. Singhvi learned counsel for the appellant the High Court has fallen into serious errors inasmuch as it has proceeded on many assumptions, reasoned on a priori theories and has founded its judgment on certain premises which do not exist either in fact or in law.
Stress has been laid on the true import of "cession".
According to all authorities on International Law "cession" is the transfer of sovereignty over the State territory by the owner State to another State"(1).
Under the International Law two of the essential attributes of sovereignty are the power to ac quire foreign territory as well as the power to cede national territory in favour of foreign State(2) (supra at p. 281).
Hardship is certainly involved in the fact that in all cases of cession the inhabitants of the territory ceded lose their old citizenship and have to submit to a new sovereign whether they like it or not.
As the object of cession is sovereignty over the ceded territory all such (1) Oppenheim 's International Law Vol. 1, 8th Edn.
at pp.
547, 551.
(2) 249 individuals domiciled thereon as are subjects of the ceding State become ipso facto, by the cession, subjects of the acquiring .,State(1) (supra at p. 551).
Dr. Singhvi says that the first premise on which the High Court has proceeded is that as a result of cession it would be ,competent for the Government of Pakistan to deal with the disputed territory as an absolute owner in complete disregard of the .existing rights of the respondents.
In other words it has been assumed that the Government of Pakistan will not recognise owner ship or other similar rights of the respondents in the lands and properties which belong to them.
This, Dr. Singhvi claims, is contrary to the rule enunciated by Chief Justice Marshall in United States vs Juan Perchman(2) in the following words : "The modern usage of nations, which has become law, would be violated; that sense of justice and of right which is acknowledged and felt by the whole civilised world would be outraged, if private property should be generally confiscated and private rights annulled.
The people change their allegiance; their relation to their ancient sovereign is dissolved; but their relations to each other and their rights of property, remain undisturbed.
" The rule set forth in the Perchman case has been followed in over forty American cases and has been accepted as the rule of Inter,national law in English, French, German and Italian law(3).
This Court has had occasion to consider fully the Perchman 's case as also the English law apart from several other autho rities on International law and the decisions of the Permanent Court of International Justice.
In State of Gujarat vs Vora Fiddali Badruddin Mithibarwala(4) the following passage from the judgment of Mudholkar J., at pages 590, 591 gives tersely the position which obtains in our country : "Thus while according to one view there is a State succession in so far as private rights are concerned according to the other which we might say is reflected in our laws, it is not so.
Two concepts underline our law; one is that the inhabitants of acquired territories bring with them no rights enforceable against the new sovereign.
The other is that the municipal courts have (1) Oppenheim 's International Law Vol.
1,8th Edn.
at pp.
547, 551.
(2) 8 L. ed.
(3)Extracts from the Law of Nations (2nd Edn. of.
F. B. Sayre, "Change of Sovereignty and Private Ownership of Land," 12 XIXL A. J. I. L. (1918), 475, 481, 495 497.
(4) ; 250 no jurisdiction to enforce, any rights claimed by them, even by virtue of the provisions of a treaty or other transaction internationally binding on the new sovereign unless their rights have been recognised by the new sovereign.
" The above case related to rights pertaining to the exploitation of the forests which were claimed under a Tharao which was held by the 'majority to be a grant to the jagirdars by the ruler of the erstwhile Sant State which merged in the )Dominion of India as from June 10, 1948.
It wag thus held that the rights derived by the inhabitants of 'the 'ceded territory from its former rulers could not be enforced by them against the new sovereign in the courts of that sovereign unless they had been recognised by the 2,1 new sovereign.
It is altogether unnecessary to discuss the principles established by.
the decisions of this Court further because they can afford no Assistance in deciding no question arises of how the private a particular territory would be affected ceaded to India.
The session involved the present case in which rights of the inhabitants of if the same Were to be is of territory to Pakistan and no evidence was placed before the High Court from which it could be concluded that inder the Pakistan laws the private rights of the inhabitants therein would not be respected in accordance with the ordinary principles of International law.
In this situation it would be a wholly wrong approach to conclude that the respondents are bound to loge all their property rights in the territory which is being ceded by India to Pakistan.
Even on the assumption that the respondents will not be entitled to enforce their private rights in the municipal courts of Pakistan unless they are recognised by the new sovereign it is incomprehensible how such a prospect or possibility can attract the applicability of article 31(2) of our Constitution so as to entitle the respondens to compensation as provided thereby.
Nor can we understand the process of reasoning by which the High Court has reached the result that cession would be tantamount to vesting by the direct act of the Government of India of the properties of the respondents in Pakistan.
ln order to determine whether the case of the respondent,% would fill within article 3.1(2) ,it is necessary to set out that provision as also para 2A of that, Article which was added by the Constitution (4th Amendment) Act 1955: (2)"No property shall be compulsorily acquired or requisitioned save.
for a public purpose and save by authority of a law which provides for compensation for the property so aquired or requisitioned and either fixes the amount of the compensation or specifies the principles on which, and the manner in which, the compensa 251 tion is to be determined and given; and no such law shall be called in question in any court on the ground that the compensation provided by that law is not adequate." (2A) Where a law does not provide for the transfer of the ownership or right to possession of any property to the State or to a corporation owned or controlled by the State it shall not be deemed to provide for the compulsory acquisition or requisitioning of property, notwithstanding that it deprives any person of his property.
" As far back as 1950 Mukherjea J. (as he then was) gave the meaning of "acquisition ' in Charanjit Lal Chowdhury vs Union of India(1) in the following words: "Acquisition means and implies the acquiring, of the entire title of the expropriated owner, whatever the nature or extent of that title might be.
The entire bundle of rights which were vested in the original holder would pass on acquisition to the acquirer leaving nothing in the former".
But in the State of West Bengal vs Subodh Gopal Bose & others(2) the view taken in the judgment of the majority was that clauses 1 and 2 of Article 31 were not mutually exclusive in scope and content but should be read together and understood as dealing with the same subject.
Thus a wider meaning was given to acquisition, deprivation contemplated in clause being no other than the acquisition or taking possession of the property referred to in clause(2).
In Dwarkadas Shrinivasa of Bombay vs The Sholapur Spinning & Weaving Co. Ltd. & Others(3) this Court, While confirming the above principle, held that the word "acquisition" had quite a wide concept, meaning the procuring of property or taking of it permanently or temporarily and it was not confined only to the acquisition of a legal title, by the State in the property taken possession of.
This was the position relating to article 31 as it stood before the Constitution (4th Amendment) Act, Clause 2A was inserted in 1955 with the object of superseding the majority decision in Subodh Gopal 's(2) case as also in Saghir Ahmed vs The State of Uttar Pradesh(4) in which the earlier decisions were followed.
It was pointed out in Gultapalli Nageswdra Rao & other vs Andhra Pradesh State Road Transport Corporation & Another(5) "The Constitution (Fourth Amendment) Act, 1955 Amended clause (2) of article 31 and inserted clause 2A in (1) ; At p. 902.
(2) ; (3) ; (4) ; (5) [1959] Suppl.
1 section C. R. 319. 252 that article.
The amendments, in so far as they are relevant to the present purpose, substitute in place of the words 'taken possession or acquired ' the words ` compulsorily acquired or requisitioned ' and provide an explanation of the words 'acquired and requisitioned ' in clause (2A).
The result is that unless the law depriving any person of his property provides for the transfer of the ownership or right to the possession of any property to the State, the law does not relate to acquisition or requisition ' of property and therefore the limitations placed upon the legislature under cl.
(2) will not apply to such law.
" It is therefore essential that in order to constitute acquisition or requisitioning there must be, transfer of the ownership or right to possession of any property to the State or to a corporation owned or controlled by the State.
Article 12 provides that in Part III (in which Article 31 appears) unless the context otherwise requires the State "includes the Government and Parliament of India and the Government and the legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India.
The effect of the Constitution (Ninth Amendment) Act 1960 by which part of the Berubari Union No. 12 shall be ceded to Pakistan can by no stretch of reasoning be regarded as a transfer of the ownership or right to possession of any property of the respondents to the State within the meaning of article 12 of the Constitution.
The amendment of 1955 makes it clear that mere deprivation of property unless it is acquisition or requisitioning within the meaning of clause (2A) will not attract clause (2) and no obligation to pay compensation will arise thereunder.
Cession indisputably involves transference of sovereignty from one sovereign State to another.
There is no transference of ownership or right to possession in the properties of the inhabitants of the territory ceded to the ceding State itself.
The Constitution (Ninth Amendment) Act having been enacted in accordance with the Advisory opinion of this court(1) there can be no impediment in the way of ceding part of Berubari Union No. 12 pursuant to the Indo Pakistan Treaty 1958.
The view of the High Court that the cession of the said territory involves transfer of the ownership and other private property rights to Pakistan through the Union of India which was outside clause(2A) of Article 31 and was covered by clause(2) of that Article is to say the least wholly untenable and cannot be sustained.
In our judgment no question of acquisition within article 31(2) is involved in the present case and even though a good deal of hardship may result to the respondents owing to the change of sovereignty they (1) 253 cannot claim compensation for the simple reason that there has been no transfer of the ownership of their property to the State namely the Union of India which would attract the applicability of article 31(2).
The appeal, therefore, succeeds and it is hereby allowed.
In view of the nature of the points decided there will be no order as to costs.
K.B.N. Appeal allowed.
| The Bombay Tenancy & Agricultural Lands Act, 1948 was passed in furtherance of the State 's policy of social welfare and to give effect to agrarian reform.
By the Constitution First Amendment Act 1951 the said Act was included in the Ninth Schedule and came within the purview of article 31B of the Constitution.
In 1956 the State Legislature in order to implement the Directive Principles of State Policy passed the Bombay Tenancy and Agricultural Lands (Amendment) Act which came into force on 1st August 1956.
The main effect of the amendments made by the 1956 Act was that on 1st April 1957 every tenant was subject to other provisions deemed to have purchased from his landlord free of all encumbrances, the land held by him as a tenant.
The erstwhile landlord remained entitled only to recover the price fixed under the provisions of the Amendment Act in the manner provided therein i.e. by a tribunal.
The Amendment Act was challenged by a petition under article 32 but this Court held that it was protected by article 31A. Further changes in the Act were made by the impugned Act, namely, the Bombay Tenancy and Agricultural Lands (Amendment) Act, 1964.
In a petition under article 32 of the Constitution it was contended that these changes had affected the petitioner 's right to property in that he had neither the right to recover the price of the land deemed to be purchased by the tenant nor any hope of recovering it through the procedure prescribed by the impugned Act within a reasonable time.
It was urged that there was no time fixed for the tribunal to determine that it had failed in the efforts to recover the amount under the Revenue Recovery Act so that the tenant purchaser could be evicted.
The provisions of the Act were also attacked as unreasonable.
The question that fell for consideration was whether the impugned Act was protected by article 31A.
HELD: Once it has been held that Art 31A applies to an Act the petitioner cannot complain that his rights under articles 14, 19 and 31 of the Constitution have been infringed.
The protection is available not only to Acts which come within its terms but also to Acts amending such Acts to include new items of property or which change some detail of the scheme of the Act provided firstly that the change is not such as would take it out of article 31A or by itself is not such as would not be protected by it and secondly that the assent of the President has been given to the amending statute.
So long as the amendment also relates to a scheme of agrarian reform providing for the acquisition of any estate or of any right thereunder or for extinguishment or modification of such right the mere transfer of the tenure from one person to another or the payment of the price in instalment or even the postponement of payment by a further period cannot be challenged under articles 14, 19 and 31.
[666H] 662 In the present case the impugned legislation had merely amended the Provision which related to the recovery of the amounts from the tenant who had become purchaser and the postponement of the time of ineffectiveness of sale till the tribunal has tried and failed to recover the amount from the tenant purchaser.
, This had not in any way affected the main purpose of the Act or the object which it seeks to achieve nor did the amendments effected thereby take the provision out of the protection given to it under article 31A of the Constitution.
[667B C] The petition must accordingly be dismissed.
Sri Ram Ram Narain Medhi vs State of Bombay, 119591 1 Supp.
S.C.R. 489, referred to and held inapplicable.
|
minal Appeal No. 830 of 1985.
From the Judgment and Order dated 30.7.85 of the Allahabad High Court in Crl.
Revision No. 1937 of 1983.
M.S. Gujral, A.K. Srivastava and Serva Mitter for the Appellant.
R.C. Verma and A.S. Pundit.for the Respondent.
The appellant, was convicted under Sections 120 B, 419, 420, 468, and 471 of the Penal Code.
lie was sentenced to undergo rigorous imprisonments for different periods under the aforesaid Sections.
The appeal filed on behalf of the appellant was dismissed by the learned additional Sessions Judge, Ghaziabad.
The High Court, on revision application being filed on behalf of the appellant set aside his conviction under Section 120 B, but the conviction and sentence under other Sections mentioned above passed by the trial Court were affirmed.
According to the prosecution case, the appellant, established a firm by the name of Seemak Industrial Corporation at Ghaziabad.
The account in the bank was opened in the name of one Vijai Kumar and the aforesaid Industrial Corporation was registered in the Sales Tax Department.
The appellant applied for loan before the U.P. Small Industries Corporation and got a sum of Rs. 39,352.50, in the name of Seemak Industrial Corporation.
Later it was discovered that the aforesaid Seemak Industrial Corporation, was a fake concern and the appellant had cheated, even the U.P. Small Industries Corporation, in respect of the amount advanced by them.
The Trial Court, the Appellate Court as well as the High Court have gone into details of the materials on record for purpose of holding, that the charges framed against the appellant had been established and as such there was no occasion to interfere with the conviction and sentence passed against him.
So far the present appeal is concerned, leave was granted as early as in the year 1985 by this Court, but it has been listed for hearing after about 8 years.
The learned Counsel.
appearing for the appellant, after some arguments on merit confined his submissions to the question of sentence only.
lie pointed out that offences aforesaid had been committed by the appellant, as early as in the year 1973, more than 20 years from now and as such a compassionate view should be taken of the whole matter especially when the amount in respect of which the offences are alleged to have been committed is not excessive.
He pointed out that the appellant has remained in jail for some time, in pursuance of the order of conviction and sentence and as such he need not be sent to jail again.
An affidavit detailing the mitigating circumstances has also been filed by the appellant before us.
Taking all facts and circumstances into consideration, by our order dated 26th April, 1993 we directed the appellant to first deposit an amount of Rs. 40,000 (the loan amount) with the U.P. Small Industries Corporation Ltd. Pursuant to that order Rs. 40.000 has been deposited with the U.P. Small Industries Corporation Ltd., on 4 5 1993 and original receipt granted by the Manager of the said Corporation was produced before us.
The zerox copy, of the said original receipt has been kept on record and the original returned to the learned counsel for the appellant.
An affidavit has also been filed on behalf 'of the appellant stating about 902 the aforesaid deposit.
In the peculiar facts and circumstances of the case while maintaining the conviction of the appellant, we reduce the sentence of imprisonment under different Sections mentioned above to the period already undergone by him.
The appellant, shall however pay a fine of Rs. 2,000 and in default of payment thereof, he shall undergo rigorous imprisonment for a period of one month.
The appeal is allowed in part.
The deposit of Rs. 40,000 made by the appellant with the U.P. Small Industries Corporation Ltd., shall be adjusted towards the amount advanced by the said Corporation to the appellant.
The Corporation shall of course be at liberty to take steps for realisation of any further sum.
which may be due.
against the appellant.
U.R. Appeal partly allowed.
| The appellant was charged with cheating the U.P. Industrial Corporation of Rs. 39,352.50 by registering a take concern, and taking in its name.
Three courts concurrently found the charges against him established.
On the question of sentence, it was contended that more than 20 % cars had elapsed; the amount involved was not excessive and other mitigating circumstances were placed (in the record.
Partly allowing the appeal, this Court HELD:1.
The appellant had deposited Rs. 40,000/ (the loan amount) as directed.
(901 G) 2.
In the peculiar facts and circumstances of the case, conviction maintained but sentence of imprisonment reduced to the period already undergone, and a fine of Rs. 2,000/ , or one month R.I. in lieu thereof.
(902 B)
|
Civil Appeal No. 779 of 1971 Appeal by special leave.
from the judgment and order dated the 2nd December, 1969 of the Rajasthan High Court in I.T.R. No. 5 of 1966.
section T. Desai, Rameshwar Nath, for the appellant.
B. B. Ahuja and section P. Nayar, for the respondent.
The Judgment of the Court was delivered by JASWANT SINGH, J.
This appeal by special leave is directed against the judgment dated December 2,1 1969 of the High Court of Rajasthan.
Briefly stated the facts giving rise to this appeal are: Maharaja Shri Udebhan Singhji of Dholpur died issueless on October 22, 1954.
On the day following his demise all the movable valuables possessed by him were taken over and sealed by the Government of Rajasthan because of the dispute regarding succession to the gaddi.
On December 13, 1956 Maharaja Shri Hemant Singhji, the appellant herein, who was then a minor, was recognised by the Government of India as successor of the former Maharaja and t he aforesaid assets which inter alia consisted of 4,825 gold sovereign, 7,90,440 old silver rupee coins and silver bars weighing 2,54,174 totals were released by the Rajasthan Government and handed over to Rajmata in her capacity 424 as the adoptive mother and guardian of the appellant on March 24 1957.
During the financial year 1957 58, the aforesaid sovereigns, silver coins and silver bars were sold at the suggestion of the Government of India for a net consideration of Rs. 20,78"257.
Overruling the contentions raised on behalf of the appellant to the effect that as there was no voluntary sale chargeable to capital gains tax under section 12B of the Indian Income Tax Act, 1922, hereinafter referred to as 'the Act '" and the aforesaid items did not constitute 'capital assets ' as contemplated by section 2(4A) of the Act but fell within the purview of the exception carved out by clause (ii) thereof and as such were to be excluded in computing the gains because they were held for personal use by the assessee and the members of his family as was evident from the fact that they were used for the purpose of Maha Lakshmi Puja and other religious festivals and rituals in the family, and taking into account the market value of the assets as on January 1, 1954, the Income Tax officer, Bharatpur, worked out capital gains at Rs. 3,44"303.
Dissatisfied with this order, the appellant took the matter in appeal to the Appellate Assistant Commissioner but remained unsuccessful.
A further appeal to the Income Tax Appellate Tribunal was taken by the appellant but the same also proved abortive as the Tribunal was of the view that the expression "personal effects" meant such items of movable property as were necessary adjuncts to an individual 's own personality and the nature of sale being voluntary or otherwise was irrelevant for the purpose of section 12B in view of the decision of this Court in James Anderson vs Commissioner of Income Tax, Bombay City(1).
The Tribunal, however, referred the following question of law at the instance of the appellant to the High Court of Rajasthan at Jodhpur under section 66(1) of the Act.
"Whether on the facts and in the circumstances of the case the assets sold were capital assets within the meaning of section 2(4A) chargeable to capital gains tax under section 12B of the Income tax Act, 1922.
" By its order dated December 2, 1969" the High Court answered the question in the affirmative holding that in order that an article should constitute a part of personal effects, it is necessary that the article must be associated with the person of the possessor and that the aforesaid items consisting of gold sovereigns, silver rupees and silver bars could not be deemed to fall within the exception carved out by clause (ii) of section 2(4A) of the Act merely because they were placed before Goddess Lakshmi while performing Puja.
The appellant thereupon made an application to the High Court of Rajasthan for a certificate of fitness which was refused.
Thereafter, the appellant applied to this Court far special leave under Article 136 of the Constitution which was granted on May 6, 1971.
Appearing in support of the appeal, Mr. Desai has vehemently contended that the question as whether an item of movable property held for personal use is a part of personal effects of an assessee should be determined not in a commercial sense but according to the (1) , 131 425 Ordinary ideas,, habits, customs and notions of the class of society to which the assessee belongs or according to the well established habits, customs and traditions of his family.
He has in support of his contention referred us to a decision in Commissioner of Wealth tax.
Gujarat vs Arundhati Balkrishna(l).
He has further urged that in construing section 2`(4A) of the Act it must be borne in mind that the Legislature intended to lay emphasis on the nature of the use of the article rather than on the person of the assessee.
Mr. B. B. Ahuja appearing for the Revenue has, on the other hand, urged that the interpretation sought to be placed on behalf of the assessee on the expression "personal effects" is not correct and while determining whether the effects are personal it is essential to see whether they are meant for the personal use of the assessee.
We have given our earnest consideration to the submissions, of learned counsel for the parties.
For a proper decision of the point in question, it is necessary to refer to section 2(4A) of the Act, the relevant portion whereof runs thus: "2(4A). 'Capital asset ' means property of any kind held by an assessee" whether or not connected with his business, profession or vocation, but does not include (i) . . . (ii) personal effects, that is to say, movable property (including wearing apparel, jewellery, and furniture) held for personal use by the assessee or any member of his family dependent on him;" The expression "personal use" occurring in clause (ii) of the above quoted provision is very significant.
A close scrutiny of the context an; which the expression occurs shows that only those effects can legitimately be said to be personal which pertain to the assessse 's person.
In other words,, an intimate connection between the effects and the person of the assessee must be shown to exist to render them "personal effects".
The enumeration of articles like wearing apparel, Jewellery, and furniture mentioned by way of illustrations in the above quoted definition of "personal effects" also shows that the Legislature intended only those articles to be included in the definition which were intimately and commonly used by the assessee.
The meaning assigned to the expression "personal effects" 'm various dictionaries also lends support to this view.
In the Unabridged Edition of the Random House Dictionary of the English Language at page 1075, the expression is given the following meaning: "Personal effects, privately owned articles consisting chiefly of clothing, toilet items etc.
for intimate use by an individual".
(1) 426 In Black 's Law Dictionary, Fourth Edition at Page 1301, the expression is assigned the following meaning: "Personal effects.
Articles associated with person, as property having more or less intimate relation to person of possessor;" In Cyclopedic Law Dictionary, Third Edition, at page 832, the expression "personal effects ' without qualifying words is interpreted to include generally such tangible property as is worn or carried about the person.
In 'Words and Phrases ' (Permanent Edition), Volume 32 at page 277 it is stated that the words "personal effects" when used without qualification, generally include such tangible property as is worn or carried about the person, or to designate articles associated with the person.
At another place at the same page, it is stated that the words "personal effects" are used to designate articles associated with person, as property having more or less intimate relation to person of possessor or such tangible property as attends the person.
Bearing in mind the aforesaid meaning assigned to the expression in various dictionaries and cases the silver bars or bullion can by no stretch of imagination be deemed to be "effects" meant for personal use.
Even the sovereigns and the silver coins which are alleged to have been customarily brought out of the iron safes and boxes on two special occasions namely, the Ashtmi Day of 'Sharadh Pakh ' for Maha Lakshmi Puja and for worship on the occasion of Diwali festival can not also be designated as effects meant for personal use.
They may have been used for puja of the deities as a matter of pride or ornamentation but it is difficult to understand how such user can be characterised as personal use.
As rightly observed by the Income Tax authorities if sanctity of puja were considered so essential by the asses see, the aforesaid articles would not have been delivered by this guardian to the Banks for sale.
The language of section 5(1)(viii) of the Wealth Tax Act, 1957 which is pari materia with the definition of the expression "personal effects" as given in section 2(4A) (ii) of the Act is also helpful in cons truing the latter provision.
That provision runs as follows: "5.
(1) Subject to the provisions of sub section (1 A), wealth tax shall not be payable by an assessee in respect of the following assets, and such assets shall not be included in the net wealth of the assessee.
. . . . . (viii) furniture, household utensils, wearing apparel, provisions and other articles intended for the personal or household use of the assessee but not including jewellery;" In section Poddar vs The Commissioner of Wealth Tax, Bombay City II(1) where the assessee at the time of his appointment in the year (I) I.L.R. [1965] Bom.1062.
427 1945 as a Justice of the Peace was presented with two gold caskets, a gold tray,, two gold glasses, a gold cup, saucer and spoons, and photo frames as souvenirs by the dealers and brokers in cloth with whose business he was connected and he kept these articles in a glass show case for display in his drawing room and in assessment year 1959 60 claimed exemption in respect of these articles under the above quoted provision i.e. under section 5(1)(viii) of the Wealth Tax Act, 1957, it was held that merely because the gold caskets were kept in the show case did not make them part of the furniture and the rest of the articles could not be considered to be household utensils as that expression did not embrace within its sweep gold articles meant for ornamental use for special occasions but meant household articles which were normally, ordinarily, and commonly so used.
It was further held in this case that the use as a decoration in the drawing room which is only calculated to give a pride of possession is not contemplated by the exemption and that the personal use which is contemplated by the exemption is the use of like nature as the use of other items mentioned in the clause, namely, furniture, household utensils, wearing apparel and provisions.
It was further held in that case that the expression "intended for personal or household use" did not mean capable of being intended for personal or household use.
It meant normally, commonly, or ordinarily intended for personal or household use.
This in our opinion is the true concept of the expression "personal use".
It is also significant that no exemption on behalf of the assessee was claimed in respect of the aforesaid effects under the aforesaid provision of the Wealth Tax Act.
The decision of this Court in Commissioner of Wealth Tax, Gujarat vs Arundhati Balkrishna (supra) on which strong reliance has been placed by Mr. Desai is of no assistance to the appellant as the point now sought to be agitated before us was never canvassed or considered in that case.
We are, therefore" of the considered view that the aforesaid articles were capital assets and not personal effects as contended on behalf of the assessee appellant and as such could not be excluded while computing the gains.
For the foregoing reasons, we do not find any merit in this appeal which is hereby dismissed with costs.
V.P.S. Appeal dismissed.
| Section 2(4A) (ii), Income Tax 'Act, 1922, provides that 'personal effects, that is to say, movable property (including wearing apparel, jewellery, and Furniture) held for personal use by the assessee or any member of his family dependent on him, ' shall not be included in the 'capital assets ' of the assessee.
The context in which the expression 'personal effects ' occurs and the enumeration of articles like wearing apparel, jewellery and furniture, show that only those articles are to be included as personal effects which are intimately and commonly used by the assessee.
The dictionary meaning of the expression is also the same.
Therefore, 'personal effects ' mean those items which are normally, commonly or ordinarily intended for personal use and not items which are capable of being intended for personal use.
[425E 426F 427C D] Where the assessee was in possession of a large number of gold sovereigns, silver rupee coins and silver bars, which were used at the time of the puja of deities on special religious festivals or rituals, they could not be deemed to be 'effects ' meant for Personal use.
They are capital assets and not personal effects and so, when sold, could not be excluded while computing the capital gains liable to capital gains tax under section 12B, Income Tax Act, 1922.
[427F] G. section Poddar vs The Commissioner of Wealth Tax, Bombay City, II, I.L.R. , approved. ^
|
Appeals Nos. 138 and 139 of 1954.
Appeals under articles 132 and 133 of the Constitution of India from the Judgment and Order, dated the 16th February, 1953, of the Court of Judicial Commissioner, Ajmer, in Civil Miscellaneous Petitions Nos. 260 and 263 of 1952.
N.C. Chatterjee (B. D. Sharma and Naunit Lal, with him) for appellants Nos. 1 and 2 in C. A. No. 138 of 1954 (Edward Mills and Krishna Mills).
Achhru Ram (B. D. Sharma and Naunit Lal, with him) for appellant No. 3 in C. A. No. 138 of 1954 (Mahalaxmi Mills).
H.N. Seervai, J. B. Dadachanji and Rajinder Narain for the appellant in C. A. No. 139 of 1954.
C. K. Daphtary, Solicitor General of India (M. M. Kaul and P. G. Gokhale, with him) for respondent No. 2 (Union of India).
October 14.
The Judgment of the Court was delivered by MUKHERJEA J.
These two appeals are directed against a common judgment, dated the 16th of February, 1953, passed by the Judicial Commissioner of Ajmer, on two analogous petitions under article 226 of the Constitution, in one of which the appellants in Appeal No. 138 of 1954 were the petitioners, while the other was filed by the appellant in Appeal No. 139 of 1954.
The petitioners in both the cases prayed for a declaration that the notification, dated the 7th of October, 1952, issued by the State Government of 738 Ajmer, fixing the minimum rates of wages in respect of employment in the textile industry within that State, under the provisions of the (Act XI of 1948), was illegal and ultra vires and for issue of writs in the nature of mandamus directing the respondents not to enforce the same against the petitioners.
To appreciate the points that have been canvassed before us, it will be convenient to narrate briefly the material facts in chronological order.
On the 15th of March, 1948, the Central Legislature of India passed an Act called The , the object of which, as stated in the preamble, is to provide for fixing minimum rates of wages in certain employments.
The schedule attached to the Act specifies, under two parts, the employments in respect of which the minimum wages of the employees can be fixed; and section 27 authorises the "appropriate Government", after giving three months ' notice of its intention to do so, to add to either part of the schedule, any other employment, in respect of which it is of the opinion that minimum rates of wages should be fixed under the Act.
The expression "appropriate Government" as defined in section 2(b) means, in relation to a scheduled employment, other than one carried by or under the authority of the Central Government, the State Government ' Under section 3 the "appropriate Government" is to fix minimum wages payable to employees employed in any employment specified in the schedule at the commencement of the Act or added to it subseq uently in accordance with the provisions of section 27.
Sub section (1) (a) of this section provides inter alia that the "appropriate Government" may refrain from fixing the minimum rates of wages in respect of any scheduled employment in which there are in the whole State less than 1,000 employees engaged in such employment.
Section 5 lays down the procedure for fixing minimum wages.
The appropriate Government can appoint a committee to hold enquiries to advise it in the matter of fixing minimum wages; in the alternative it can, by notification in the official public gazette, publish its proposals for the information of persons likely to be affected thereby.
After 739 considering the advice of the committee or the representations on the proposals as the case may be, the 'appropriate Government ' shall fix the minimum rates of wages in respect to any scheduled employment, by notification in the official gazette, and such rates would come into force on the expiry of three months from the date of issue unless the notification directs otherwise.
Section 9 provides inter alia that an advisory committee constituted under section 5 shall consist of persons nominated by the appropriate Government.
There shall be in the committee an equal number of representatives of the employers and the employed in any scheduled employment and there shall be independent persons as well, not exceeding one third of the total number, one of whom shall be appointed Chairman.
Section 30 confers on the appropriate Government the power to make rules for carrying out the purposes of the Act.
It may be mentioned at the outset that Part I of the schedule to the Act mentioned only 12 items of employment at the time when the Act was passed and employment in the textile industry was not included in Chem.
On the 16th of March, 1949, the Central Government issued a notification, in exercise of its powers under section 94(3) of the Government of India Act, 1935, directing that the functions of the "appropriate Government" tinder the , would, in respect of every Chief Commissioner 's Province, be exercised by the Chief Commissioner.
On the 17th March, 1950, the Chief Commissioner of Ajmer, purport ing to act as the "appropriate Government" of the State, published a notification in terms of section 27 of the Act giving three months ' notice of his intention to include employment in the textile mills as an additional item in Part I of the schedule.
On the 10th of October, 1950, the final notification was issued stating that the Chief Commissioner had directed "that the employment in textile industry" should be added in Part I of the schedule.
On the 23rd November, 1950, another notification was published under the signature of the Secretary to 740 the Chief Commissioner containing the rules purporting to have been framed by the Chief Commissioner in exercise of his powers under section 30 of the Act.
Out of these, only rules 3, 8 and 9 are material for our present purpose.
Rule 3 provides that the term of office of the members of an advisory committee shall be such, as in the opinion of the State Government, is necessary for completing the enquiry into the scheduled employment concerned and the State Government may, at the time of the constitution of the committees, fix a term and may, from time to time, extend it as circumstances may require.
Rule 8 provides for filling up the vacancies occurring or likely to occur in the member ship of the committee by resignation of any of its members.
Rule 9 lays down that if a member of the committee fails to attend three consecutive meetings he would cease to be a member thereof.
The rule further states that such member could, if he so desires, apply, within a certain time for restoration of his membership and restoration could be made if the majority of the members are satisfied that there were adequate reasons for his failure to attend the meetings.
On the 17th January, 1952, a committee was appointed to hold enquiries and advise the Chief Commissioner in regard to the fixation of minimum wages relating to the textile industry within the State.
Ten members were nominated consisting of four represeiitatives of the employers, four of the employees and two independent members, one of whom Shri Annigeri was to act as an expert member of the committee and the other, Dr. Bagchi, as its Chairman.
The term of office of the members was fixed at six months from the date of the notification ending on the 16th of July, 1952.
The first meeting of the committee was held on the 29th February, 1952.
The expert member was present at that meeting and it was resolved that the minimum wages must not merely provide for the bare subsistence of life but should be adequate for the maintenance of the efficiency of the worker.
The second meeting was held on the 29th March, 1952, and the third on the 14th of June, 1952.
The expert member was not present at any other meeting except the first and on the 27th of 741 May, 1952, he wrote a letter to the Chief Commissioner stating that he was proceeding to Europe on the 3rdd June, 1952, for a period of three months.
He expressed ' his willingness to assist the Chairman in the preparation of the report after he came back from Europe by the first week of September, next, provided the term of the committee was extended.
If however that was not possible, he requested that his letter might be treated as a letter of resignation from the membership of the Committee.
No action appears to have been taken on receipt of the letter.
The fourth and the fifth meetings of the committee were held respectively on the 8th and the 15th of July, 1952.
On the 20th August, 1952, the the Chairman of the Committee informed the Chief Commissioner that Shri Annigeri had ceased to be a member of the committee by reason of his failing to attend three consecutive meetings.
He had also desired that his letter to the Chief Commissioner dated the 27th May, 1952, should be treated as a letter of resignation.
In the circumstances the Chief Commissioner was requested to fill up this vacancy in the membership.
On the very next day, that is to say, on the 21st August, 1952, a notification was issued by which the Chief Commissioner ordered the extension of the term of the committee up to the 20th of September, 1952, and on the 28th of August, following, another notification was made appointing Shri Annigeri as a member of the committee.
The term of the committee was extended by a further notification till the 5th of October, 1952.
In the meantime a meeting of the committee was held on the 10th September, 1952, in which Shri Annigeri was not present.
The only resolution passed was, that all relevant papers might besent to Shri Annigeri as desired by him.
It appears that some time after the 14th of September, 1952, the Chairman himself took the papers to Nagpur where Shri Annigeri was staying and a draft final report was prepared by the Chairman in consultation with the expert member and both of them signed the report at Nagpur.
The report was placed before the other members on the 4th October, 1952, and on the 7th of October, following, a notification was issued fixing 95 742 minimum rates of wages for the employees in the textile industry in the State of Ajmer, under the signature of the Secretary to the Chief Commissioner and stating that these rates should be deemed to be in force from the 1st of September, 1952.
Feeling aggrieved by this notification the three appellants in Appeal No. 138 of 1954 presented an application under article 226 of the Constitution before the Judicial Commissioner of Ajmer on the 31st October, 1952, praying for a writ in the nature of mandamus ordering the State of Ajmer not to enforce the same.
A similar application was filed by the Bijay Cotton Mills, the appellant in the other appeal, on the 6th of November, 1952.
Both the petitions were heard together and a common judgment was passed by the Judicial Commissioner on the 16th of February, 1953.
The applications were dismissed except that the Chief Commissioner was held to have exceeded his legal authority in giving retrospective effect to the notification of the 7th of October, 1952, and the State of Ajmer, was restrained from enforcing the notification from any date earlier than the 8th of January, 1953.
It is against this judgment that these two appeals have come up to this Court on the strength of certificates granted by the Judicial Commissioner, Ajmer.
Mr. Chatterjee, appearing for the appellants in Appeal No. 138, has put forward a three fold argument on behalf of his clients.
He has contended in the first place that without a delegation of authority by the President under article 239 of the Constitution, the Chief Commissioner of Ajmer was not competent to function as the "appropriate Government" for purposes of the .
All the steps therefore that were taken by the Chief Commissioner under the provisions of the Act including the issuing of the final notification on the 7th of October, 1952, were illegal and ultra vires.
The second contention raised is that the provision of section 27 of the Act is illegal and ultra vires inasmuch as it amounts to an illegal and unconstitutional delegation of legislative powers by the Legislature in favour of the "appropriate Government" as defined in the 743 Act.
The third and the last contention is, that the Chief Commissioner had no authority to extend retrospectively the term of the Advisory Committee after it expired on the 16th of July, 1952.
Mr. Seervai, who appeared in support of the other appeal, adopted all these arguments on behalf of his client.
He however raised some additional points impeaching the constitutional validity of the itself on the ground that its provisions conflicted with the fundamental rights of the appellants and its employees guaranteed under article 19(1) (g) of the Constitution.
These points were argued elaborately by the learned counsel in connection with the two petitions filed on behalf of the Bijay Cotton Mills Ltd., and a number of employees under them under article 32 of the Constitution and we will take them up for consideration when dealing with these petitions.
We will now proceed to consider the three points mentioned above which have been raised in support of the appeals.
So far as the first ground is concerned the argument of Mr. Chatterjee in substance is that the expression "appropriate Government" has been defined in section 2(b) (ii) of the to mean, in relation to any scheduled employment, not carried on by or under the authority of the Central Government, the State Government. "State Government" has been defined in section 3(60) of the General Clauses Act as meaning, in regard to anything done or to be done after the commencement of the Constitution in a Part C State, the Central Government.
Prior to the commencement of the Constitution, under section 94(3) of the Government of India Act, 1935, a chief commissioner 's Province could be administered by the GovernorGeneral acting to such extent, as he thought fit, through a Chief Commissioner to be appointed by him in his discretion; and under section 3(8) of the General Clauses Act, as it stood before the 26th of January, 1950, the expression "Central Government" included, in the case of a Chief Commissioner 's Province, the Chief Commissioner acting within the scope of authority given to him under section 94(3) of the Government of 744 India Act, 1935.
Article 239 of the Constitution which corresponds to section 94(3) of the Government of India Act, though it is much wider in scope, provides that a State specified in Part C of the First Schedule shall be administered by the President acting, to such extent as he thinks fit, through a Chief Commissioner or a Lieutenant Governor to be appointed by him or through the Government of a neighbouring State.
Agreed to this constitutional provision section 3(8 ) (b) (ii) Of the General Clauses Act, as amended by the Adaptation Laws Order, 1950, lays down that the expression "Central Government" shall include inter alia the Chief Commissioner of a Part C State acting within the scope of the authority given to him under article 239 of the Constitution.
Ajmer was admittedly a Chief Commis sioner 's Province under section 94(1) of the Government of India Act, 1935.
It has become a Part C State after the coming into force of the Constitution.
As has been stated already, the Central Government issued a notification on the 16th of March, 1949, under section 94(3) of the Government of India Act, directing that the function of the "appropriate Government" under the would, in respect of any Chief Commissioner 's Province, be exercised by the Chief Commissioner.
There was no such delegation of authority however under article 239 of the Constitution after the Constitution came into force.
Mr. Chatterjee contends that in the absence of such delegation under article 239 the Chief Commissioner of Ajmer cannot be regarded as "Central Government" as defined in section 3(8) (b) (ii) of the General Clauses Act as it stands at present and consequently he could not be held to be the "appropriate Government" within the meaning of section 2(b) (ii) of the .
The Government of India Act, it is said, stands repealed by article 395 of the Constitution.
An order issued under section 94(3) of the Government of India Act cannot possibly be operative after the inauguration of the Constitution, nor could it be regarded as an order made under article 239 of the Constitution.
The contention does not appear to us to be sound.
A complete reply to this argument is furnished, in our 745 opinion, by the provisions of clauses (1) and (2) of article 372 of the Constitution.
Article 372 runs as follows: "372.
(1) Notwithstanding the repeal by this Constitution of the enactments referred to in article 395 but subject to the other provisions of this Constitution, all the law in force in the territory of India immediately before the commencement of this Constitution shall continue in force therein until altered or repealed or amended by a competent Legislature or other competent authority.
(2) For the purpose of bringing the provisions of any law in force in the territory of India into accord with the provisions of this Constitution, the President may by order make such adaptations and modifications of such law, whether by way of repeal or amendment, as may be necessary or expedient, and provide that the law shall, as from such date as may be specified in the order, have effect subject to the adaptations and modifications so made, and any such adaptation or modification shall not be questioned in any court of law." Thus clause (1) of the article provides for continuance, in force, of the existing laws notwithstanding the repeal by the Constitution of the enactments mentioned in article 395 and clause (2) provides for their adaptation with a view to bring them into accord with the provisions of the Constitution.
The Government of India Act, 1935, undoubtedly stands repealed by article 395 of the Constitution, but laws made thereunder which were in existence immediately before the commencement of the Constitution would continue under article 372(1) and could be adapted :under the second clause of that article.
Mr. Chatterjee argues that article 372 has no application to the present case inasmuch as the order made by the Central Government under section 94(3) of the Government of India Act could not be regarded as "a law in force" within the meaning of article 372.
A distinction is sought to be made by the learned counsel between an "existing law" as defined in article 366(10) and a "law in force" and it is argued that though an "order" can come within the definition 746 of "existing law", it cannot be included within the expression "law in force" as used in article 372.
It is argued next that even if the word "law" is wide enough to include an order, that order must be a legislative and not a mere executive order promulgated by an administrative authority, and in support of this contention the learned counsel has relied on a number of cases decided by the Privy Council and the different High Courts in India.
The first point does not impress us much and we do not think that there is any material difference between " an existing law" and "a law in force".
Quite apart from article 366(10) of the Constitution, the expression "Indian law" has itself been defined in section 3(29) of the General Clauses Act as meaning any Act, ordinance, regulation, rule, order, or bye law which before the commencement of the Constitution had the force of law in any province of India or part thereof.
In out opinion, the words "law in force" as used in article 372 are wide enough to include not merely a legislative enactment but also any regulation or order which has the force of law.
We agree with Mr. Chatterjee that an order must be a legislative and not an executive order before it can come within the definition of law.
We do not agree with him however to ' at the order made by the Governor General in the present case under section 943) of the Government of India Act is a mere executive order.
Part IV of the Government of India Act, 1935, which begins with section 94, deals with Chief Commissioners ' Provinces and sub section (3) lays down how a Chief Commissioner 's Province shall be administered.
It provides that it shall be administered by the Governor General acting through a Chief Commissioner to such extent as he thinks fit.
An order made by the Governor General under section 94(3) investing the Chief Commissioner with the authority to administer a province is really in the nature of a legis lative provision which defines the rights and powers of the Chief Commissioner in respect to that province.
In our opinion such order comes within the purview of article 372 of the Constitution and being "a law in force" immediately before the commencement of the 747 Constitution would continue to be in force under clause (1) of the article.
Agreeably to this view it must also be held that such order is capable of adaptation to bring it in accord with the Constitutional provisions under clause (2) of article 372 and this is precisely what has been done by the Adaptation of Laws Order, 1950.
Paragraph 26 of the Order runs as follows: "Where any rule, order or other instrument was in force under any provision of the Government of India Act, 1935, or under any Act amending or supplementing that act, immediately before the appointed day, and such provision is re enacted with or without modifications in the Constitution, the said rule, order or instrument shall, so far as applicable, remain in force with the necessary modifications as from the appointed day as if it were a rule, order or instrument of the appropriate kind duly made by the appropriate authority under the said provision of the Constitution, and may be varied or revoked accordingly.
" Thus the order made under section 94(3) of the Government of India Act should be reckoned now as an order made under article 239 of the Constitution and we are unable to agree with Mr. Chatterjee that it was beyond the competence of the President under clause (2) of article 372 to make the adaptation order mentioned above.
The first contention of Mr. Chatterjee therefore fails.
Coming now to the second point.
Mr. Chatterjee points out that the preamble to the as well as its title indicate clearly that the intention of the Legislature was to provide for fixing minimum wages in certain employments only and that the Legislature did not intend that all employments should be brought within the purview of the Act.
The schedule attached to the Act gives a list of the employments and it is in respect to the scheduled employments that the minimum wages are to be fixed.
Under section 27 of the Act however ' power has been given to the "appropriate Government" to add to either part of the schedule any employment in respect to which it is of opinion that minimum wages shall be fixed by giving notification in a particular manner, and 748 thereupon the schedule shall, in its application to the State, be deemed to be amended accordingly.
It is argued that the Act nowhere formulates a legislative policy according to which an employment shall be chosen for being included in the schedule.
There are no principles prescribed and no standard laid down which could furnish an intelligent guidance to the administrative authority in making the selection.
The matter is left entirely to the discretion of the "appropriate Government" which can amend the schedule in any way it likes and such delegation of power virtually amounts to a surrender by the Legislature of its essential legislative function and cannot be held valid.
There is undoubtedly an element of delegation implied in the provision of section 27 of the Act, for the Legislature in a sense, authorises another body, specified by it, to do something which it might do itself But such delegation, if it can be so called at all, does not in the circumstances of the present case appear to us to be unwarranted and unconstitutional.
It was said by O 'Connor J. of the High Court of Australia in the case of Baxter vs Ah Way (1): "The aim of all legislatures is to project their minds as far as possible into the future, and to provide in terms as general as possible for all contingencies likely to arise in the application of the law.
But it is not possible to provide specifically for all cases and, therefore, legislation from the very earliest times, and particularly in modern times, has taken the form of conditional legislation, leaving it to some specified authority to determine the circumstances in which the law shall be applied, or to what its operation shall be extended, or the particular class of persons or goods to which it shall be applied.
" The facts of this Australian case, in material features, bear a striking resemblance to those of the present one.
The question raised in that case related to the validity of certain provisions of the Customs Act of 1901.
The Act prohibited the importation of certain goods which were specifically mentioned and then gave power to the Governor General in Council to include, by (1) ; at 637.
749 proclamation, other goods also within the prohibited list.
The validity of the provision was challenged on the ground of its being an improper delegation of legislative powers.
This contention was repelled and it was held that this was not a case of delegation of legislative power but of conditional legislation Of the type which was held valid by the Privy Council in the case of Reg vs Burah (1).
It can indeed be pointed out that in Burah 's case what was left to the Lieutenant Governor was the power to apply the provisions of an Act to certain territories at his option and these territories to which the Act could be extended were also specified in the Act.
The Legislature could be said therefore to have applied its mind to the question of the application of the law to particular places and it was left to the executive only to determine when the laws would be made operative in those places.
According to the High Court of Australia the same principle would apply even when the executive is given power to determine to what other persons or goods the law shall be extended besides those specifically mentioned therein.
Whether a provision like this strictly comes within the description of what is called "conditional legislation" is not very material.
The question is, whether it exceeds the limits of permissible delegation.
As was said by O 'Connor J. himself in the above case, when a Legislature is given plenary power to legislate on a particular subject there must also be an implied power to make laws incidental to the exercise of such power.
It is a fundamental principle of constitutional law that everything necessary to the exercise of a power is included in the grant of the power.
A Legislature cannot certainly strip itself of its essential functions and vest the same on an extraneous authority.
The primary duty of law making has to be discharged by the Legislature itself but delegation may be resorted to as a subsidiary or an ancillary measure.
Mr. Chatterjee contends that the essential legislative function is to lay down a policy and to make it a binding rule of conduct.
This legislative policy, he says, is not discernible anywhere in the (1) 3 App.
96 750 provisions of this Act and consequently there is no standard or criterion to guide the administrative authority in the exercise of the subsidiary legislative powers.
We do not think that this is the correct view to take.
The legislative policy is apparent on the face of the present enactment.
What it aims at is the statutory fixation of minimum wages with a view to obviate the chance of exploitation of labour.
The Legislature undoubtedly intended to apply this Act not to all industries but to those industries only where by reason of unorganized labour or want of proper arrangements for effective regulation of wages or for other causes the wages of labourers in a particular industry were very low.
It is with an eye to these facts that the list of trades has been drawn up in the schedule attached to the Act but the list is not an exhaustive one and it is the policy of the Legislature not to lay down at once and for all time to which industries the Act should be applied.
Conditions of labour vary under different circumstances and from State to State and the expediency of including a particular trade or industry within the schedule depends upon a variety of facts which are by no means uniform and which can best be ascertained by the person who is placed in charge of the administration of a particular State.
It is to carry out effectively the purpose of this enactment that power has been given to the "appropriate Government" to decide, with reference to local conditions, whether it is desirable that minimum wages should be fixed in regard to a particular trade or industry which is not already included in the list.
We do not think that in enacting section 27 the Legislature has in anyway stripped itself of its essential powers or assigned to the administrative authority anything but an accessory or subordinate power which was deemed necessary to carry out the purpose and the policy of the Act.
The second contention of Mr. Chatterjee cannot therefore succeed.
The third and the last point raised by Mr. Chatterjee is directed against the notification of the Chief Com missioner by which he extended the term of the Advisory Committee till the 20th of September, 1952.
It is argued that the term of the committee, as originally 751 fixed, expired on the 16th of July, 1952, and on and from the 17th of July all the members of the committee became functus officio.
The Commissioner therefore was not competent to give a fresh lease of life to the committee which was already dead.
We do not think that there is much substance in this contention.
Rule 3 of the rules framed under section 30 of the Act expressly lays down that the State Government may fix the term of the committee when it is constituted and may from time to time extend it as circumstances require.
The State Government had therefore a right to extend the term of the committee in such way as it liked.
The only question is whether it could do so after the period originally fixed had come to an end.
Mr. Chatterjee relied, in this connection,.
upon certain cases which held that the Court could not grant extension of time in an arbitration proceeding after the award was filed and an award made after the prescribed period is a nullity.
In our opinion this analogy is not at all helpful to the appellants in the present case.
It is not disputed that the committee did not function at all and did no work after the 16th of July, 1952, and before the 21st of August next when its term was extended.
No report was submitted during this period and there was no extension of time granted after the submission of the report.
Assuming that the order of the 21st August, 1952, could not revive a committee which was already dead, it could certainly be held that a new committee was constituted on that date and even then the report submitted by it would be a perfectly good report.
Quite apart from this, it is to be noted that a committee appointed under section 5 of the Act is only an advisory body and that the Government is not bound to accept any of its recommendations.
Consequently, procedural irregularities of this character could not vitiate the final report which fixed the minimum wages.
In our opinion, neither of the contentions raised in support of these appeals can succeed and both the appeals therefore should fail and stand dismissed with costs.
Appeals dismissed.
| The words 'law in force ' as used in article 372 of the Consti tution are wide enough to include not merely a legislative enactment but also any regulation or order which has the force of law.
An order made by the Governor General under section 94(3) of the Government of India Act, 1935, investing the Chief Commissioner with the authority to administer a province is really in the nature of a legislative provision which defines the rights and powers of the Chief Commissioner in respect of that province.
Such an order comes within the purview of article 372 of the Constitution and being a 'law in force ' immediately before the commencement of the Constitution would continue to be inforce under clause (1) of the article.
Such an order is capa ble of adaptation to bring it in accord with the constitutional provisions and this is precisely what has been done by the Adaptation of Laws Order, 1950.
Therefore an order made under section 94(3) of the Government of India Act, 1935, should be reckoned now as an order made under article 239 of the Constitution and it was within the competence of the President under clause (2) of article 372 to make the adaptation order.
Under section 27 of the , power has been given to the "appropriate Government" to add to either part of the schedule any employment in respect of which it is of opinion that minimum wages shall be fixed by giving notification in a particular manner, and thereupon the scheme shall, in its application to the State, be deemed to be amended accordingly.
There is an element of delegation implied in the provisions of section 27 of the Act, for the Legislature, in a sense, authorises another body specified by it, to do something which it might do itself.
But such delegation, if it can be so called at all, is not unwarranted and unconstitutional and it does not exceed the limits of permissible delegation.
The legislative policy is apparent on the face of the present enactment.
What it aims at is the statutory fixation of minimum wages with a view to obviate the chances of exploitation of labour.
It is to carry out effectively the purposes of the enactment that power has been given to the appropriate Government to decide with reference to local conditions whether it is desirable that minimum wages should be fixed in regard to a particular trade or industry which is not already included in the list.
Therefore in enacting section 27 the legislature has not stripped itself of its essential powers or assigned to the administrative authority anything but an accessory or subordinate power which was deemed necessary to carry out the purpose and the policy of the Act.
Rule 3 of the rules framed under section 30 of the Act empowers the State Government to fix the term of the committee appointed under section 5 of the Act and to extend it from time to time as circumstances require.
The period originally fixed had expired and its term was extended subsequently.
It did not function and submitted no 737 report during the period.
Assuming that the subsequent order could not revive a committee which was already dead, a new committee could be held to have been constituted and the report, submitted by it would be a perfectly good report.
Apart from this, a committee is only an advisory body and procedural irregularities of this character could not vitiate the final report which fixed the minimum wages.
Baxter vs Ah Way ; and Reg.
vs Burah (3 App.
Cas. 889) referred to.
|
ivil Appeal No. 3577 of 1988.
From the Judgment and Order dated 19.9.1986 of the Madras High Court in C.R.P. No. 3210 of 1985.
section Padmanabhan, Mr. T.A. Subramaniyam, R.N. Keshwani and section Balakrishnan for the Appellants.
G. Ramaswamy, Additional Solicitor General, K. Swami, section Srinivasan, Rajyappa, section Murlidhar, Diwan Balak Ram and M.K.D. Namboodari for the Respondents.
The Judgment of the Court was delivered by KULDIP SINGH, J.
Venkatarayulu Naidu Charities is a public trust V.P. Venkatakrishna Naidu and V.P. Rajagopala Naidu, filed an original suit No. 28 of 1909 (hereinafter called original suit) in the court of Subordinate Judge, Mayavaram under Section 92 of the Code of Civil Procedure praying inter alia that the defendant trustee be 763 removed from the said office and a new trustee be appointed with directions to recover trust properties improperly and fraudulently alienated by the defendant.
The subordinate court permitted the trustee to continue and framed a scheme decree dated September 9, 1910 for the future manage ment and administration of the trust.
Clauses 13 and 14 of the scheme are as under: "13 The trustee shall not effect any altera tions or additions to the existing buildings except with the permission of the Tanjore Sub Court." "14 Liberty is given to the parties to apply to the Tanjore Sub Court for further direc tions if any from time to time as regards the administration of the trusts.
" The question for consideration in this Appeal is whether "parties" mentioned in Clause 14 of the scheme decree repro duced above mean only the named plaintiffs and defendant in the suit title and their successors in interest or the suit being representative it includes all those who are interest ed in the trust.
Further necessary facts are as under: The trust owns several items of proper ties.
We are concerned with the following two properties alone of the trust.
Property situate at Muthukumara Moopannaar Road in T.S. No. 2936 to an extent of 11484 sq.
ft. 2.
Property situate at ward No. 6 Gandhiji Road, in T.S. No. 2937 to an extent of 4429 sq.
The trustees filed interim application No. 453 of 1984 in the Original Suit before the subordinate court for per mission to sell the first property which was granted by the order dated October 27, 1984 and the property was sold for Rs.11,000.
Similarly the second property was sold for Rs.69,328 with the permission of the court dated January 23, 1985.
R. Venugopala Naidu and three others who are the present appellants filed interim application No. 175 of 1985 in the original suit before the subordinate judge, Thanjavur for setting aside the orders dated October 27, 1984 and January 23, 1985 granting permission to 764 the trust to sell the above mentioned two properties.
It was alleged that the negotiated sale was at a price which was almost 20% of the market price.
There was no publication in any newspapers or even in the court notice board inviting the general public.
The learned subordinate judge dismissed the application on the ground that the applicants have no locus sandi to file the application under clauses 13 and 14 of the scheme decree as they were not parties to the original suit.
A further revision before the Madras High Court was dismissed.
The High Court also came to the conclusion that the applica tion was not maintainable.
It was also held by the High Court that two of the four applicants who are muslims cannot have any interest in the administration of the trust.
Against the High Court judgment the present appeal by way of special leave has been filed.
Mr. section Padmanabhan, learned counsel for the appellants has vehemently argued that though the appellants were not shown as parties in suit title but the suit under Section 92 of Civil Procedure Code being a representative suit the scheme decree binds not only the parties thereto but all those who are interested in the trust.
According to him "parties" in clause 14 of the scheme decree would include appellants and all those who are interested in the trust.
He has relied on Raje Anandrao vs Shamrao and Others, ; wherein this Court held as under: " . .
It is true that the pujaris were not parties to the suit under section 92 but the deci sion in that suit binds the pujaris as wor shipers so far as the administration of the temple is concerned, even though they were not parties to it, for a suit under section 92 is a representative suit and binds not only the parties thereto but all those who are inter ested in the trust." The learned counsel further relied on Ahmed Adam Sait and Others vs Inayathullah Mekhri and Others, ; wherein this Court observed as under: "A suit under section 92, it is urged, is a repre sentative suit, and so, whether or not the present respondents actually appeared in that suit, they would be bound by the decree, which had framed a scheme for the proper administra tion of the Trust.
In support of this argu ment, reliance is placed on the decision of this Court in Raja Anandrao vs Shamrao, 765 where it is observed that though the Pujaris were not parties to the suit under section 92, the decision in that suit binds the pujaris as worshipers so far as the administration of the temple is concerned, because a suit under section 92 is a representative suit and binds not only the parties thereto, but all those who are interested in the Trust . . " " . .
In assessing the validity of this argument, it is necessary to consider the basis of the decisions that a decree passed in a suit under section 92 binds all parties.
The basis of this view is that a suit under section 92 is a representative suit and is brought with the necessary sanction required by it on behalf of all the beneficiaries interested in the Trust.
The said section authorises two or more persons having an interest in the Trust to file a suit for claiming one or more of the reliefs specified in clauses (a) to (h) of sub section (1) after consent in writing there prescribed has been obtained.
Thus, when a suit is brought under section 92, it is brought by two or more persons interested in the Trust who have taken upon themselves the responsi bility of representing all the beneficiaries of the Trust.
In such a suit, though all the beneficiaries may not be expressly impleaded, the action is instituted on their behalf and relief is claimed in a representative charac ter.
This position immediately attracts the provisions of explanation VI to section 11 of the Code.
Explanation VI provides that where persons litigate bona fide in respect of a public right or of a private right claimed in common for themselves and others, all persons interested in such right shall, for the pur poses of this section, be deemed to claim under the persons so litigating.
It is clear that section 11 read with its explanation VI leads to the result that a decree passed in a suit instituted by persons to which explanation VI applies will bar further claims by persons interested in the same right in respect of which the prior suit had been instituted.
Explanation VI thus illustrates one aspect of constructive res judicata.
Where a representa tive suit is brought under section 92 and a decree is passed in such a suit, law assumes that all persons who have the same interest as the plaintiffs in the representative suit were represented by the said plaintiffs and, there fore, are constructively barred by res judica ta from reagitating the matters directly and substantially in issue in the said earlier suit.
A similar result follows if a suit is either brought or 766 defended under 0.1.
, r. 8.
In that case per sons either suing or defending an action are doing so in a representative character, and so the decree passed in such a suit binds all those whose interests were represented either by the plaintiffs or by the defendants . . " The legal position which emerges is that a suit under Section 92 of the Code is a suit of a special nature for the protection of Public rights in the Public Trusts and chari ties.
The suit is fundamentally on behalf of the entire body of persons who are interested in the trust.
It is for the vindication of public rights.
The beneficiaries of the trust, which may consist of public at large, may choose two or more persons amongst themselves for the purpose of filing a suit under Section 92 of the Code and the suit title in that event would show only their names as plaintiffs.
Can we say that the persons whose names are on the suit title are the only parties to the suit? The answer would be in the negative.
The named plaintiffs being the representatives of the public at large which is interested in the trust all such interested persons would be considered in the eyes of law to be parties to the suit.
A suit under Section 92 of the Code is thus a representative suit and as such binds only the parties named in the suit title but all those who are interested in the trust.
It is for that reason that explanation VI to Section II of the Code constructively bar by res judicata the entire body of interested persons from reagitating the matters directly and substantially in issue in an earlier suit under Section 92 of the Code.
Mr. G. Ramaswamy, learned counsel appearing for the respondent trust has argued that only the two persons who filed the original suit can be considered as "parties" in terms of clause 14 of the scheme decree and according to him since the appellants were not the plaintiffs they have no locus standi to file any application under clause 13 and 14 of the scheme decree.
According to the learned counsel Section 92 of the Code brings out a dichotomy in the sense that there are "parties to the suit" and "persons interested in the trust." According to him persons interested in the trust cannot be considered parties to the suit although the judgment/decree in the suit in binding on them.
He has also argued that a suit under Section 92 of Civil Procedure Code is different from a suit filed under Order 1 Rule 8 of Civil Procedure Code.
We do not agree with the learned counsel.
A suit whether under Section 92 of Civil Procedure Code or under Order 1 Rule 8 of Civil Procedure Code is by the representatives of large number of persons who have a common interest.
The very nature of a representative suit makes all those who have common interest in the suit as parties.
We, 767 therefore, conclude that all persons who are interested in Venkatarayulu Naidu Charities which is admittedly a public trust are parties to the original suit and as such can exercise their rights under clauses 13 and 14 of scheme decree dated September 9, 19 10.
It is not necessary to go into the finding of the High Court that two of the appellants being muslims can have no interest in the trust as the other two appellants claim to be the beneficiaries of the trust and their claim has not been negatived.
Moreover, the trust has been constituted to perform not only charities of a religious nature but also charities of a secular nature such as providing for drinking water and food for the general public without reference to caste or religion.
In view of our findings above the subordinate court and the High Court were in error in holding that the appellants had no locus standi to file the application for setting aside the order permitting the sale of the properties.
We, therefore, allow the appeal and set aside the order of the subordinate court and that of the High Court.
The subordinate court and the High Court did not go into the merits of the case as the appellants were non suited on the ground of locus standi.
We would have normally remanded the case for decision on merits but in the facts and circum stances of this case we are satisfied that the value of the property which the trust got was not the market value.
Two persons namely S.M. Mohamed Yaaseen ad S.N.M. Ubayadully have filed affidavit offering Rs.9.00 lacs and Rs. 10.00 lacs respectively for these properties.
In support of their bona fide they have deposited 10% of the offer in this Court.
This Court in Chenchu Ram Reddy and another vs Gov ernment of Andhra Pradesh and Others, [1986] 3 SCC 391 has held that the property of religious and charitable endow ments or institutions must be jealously protected because large segment of the community has beneficial interest therein.
Sale by private negotiations which is not visible to the public eye and may, even give rise to public suspi cion should not, therefore, be permitted unless there are special reasons to justify the same.
It has further been held that care must be taken to fix the reserve price after ascertaining the market value for safeguarding the interest of the endowment.
We, therefore, set aside the orders of subordinate court dated October 27, 1984 and January 23, 1985 permitting the sale of the two properties and also set aside the consequent sale in favour of the respondents.
We direct that the properties in question may be sold by 768 public auction by giving wide publicity regarding the date, time and place of public auction.
The offer of Rs. 10 lacs made in this Court will be treated as minimum bid of the person who has given the offer and deposited ten percent of the amount in this Court.
It will also be open to the re spondents/purchasers to participate in the auction and compete with others for purchasing the properties.
The respondents vendees from the trust shall be enti tled to refund of the price paid by them with 10% interest from the date of payment of the amount till the date of auction of the property.
They will also be entitled to compensation for any super structure put up by them in the properties including compensation for any additions or improvements made by them to the building and the property.
The value of such super structure and the improvements and additions shall be ascertained by the subordinate court through a qualified engineer and by Such other method as the court may deem fit.
The court shall fix the value and com pensation amount after affording opportunity to the respond ents and the trust to make their representation in that respect.
There shall be no order as to costs.
G.N. Appeal al lowed.
| Respondent No. 1 is a public trust.
The trust owns several properties.
On the ground that the trust properties were improperly and fraudulently alienated, a suit was fried under Section 92 CPC for removing the trustee and appointing a new trustee and to recover trust properties alienated by the said trustee.
The sub judge permitted the trustees to continue and framed a scheme decree for the future manage ment and administration of trust.
The scheme also granted liberty to the parties to apply to the sub court for further directions as regards the administration of the trust.
The trustees filed an interim application before the sub court and obtained permission to sell two properties.
The appellants filed an interim application for setting aside the order granting permission to the trust for selling the two properties, alleging that the negotiated price was only about 20% of the market price.
The sub judge dismissed the application on the ground that the applicants had no locus standi to file the application under clauses 13 and 14 of the Scheme decree as they were not parties to the Origi nal suit.
On revision the High Court also came to the conclusion that the application was not maintainable.
This appeal, by special leave, is against the said judgment of the High Court.
On behalf of the appellants, it was contended that since the suit under section 92 CPC being a representative suit, the scheme decree binds not only the parties thereto, but all those who are interested in the trust.
The contention of the Respondents was that only the two persons 761 who filed the original suit can be considered as "parties" in terms of clause 14 of the scheme decree and since the appellants were not plaintiffs in the suit, they have no locus standi to file an application under clauses 13 and 14 of the scheme decree.
Allowing the appeals, this Court, HELD: 1.1 A suit under Section 92 of the Code is a suit of a special nature for the protection of Public rights in the Public Trusts and charities.
The suit is fundamentally on behalf of the entire body of persons who are interested in the trust.
It is for the vindication of public rights.
The beneficiaries of the trust, which may consist of public at large, may choose two or more persons amongst themselves for the purpose of filing a suit under Section 92 of the Code and the suit title in that event would show only their names as plaintiffs.
The named plaintiffs being the repre sentatives of the public at large which is interested in the trust all such interested persons would be considered in the eyes of law to be parties to the suit.
A suit under Section 92 of the Code is thus a representative suit and as such binds not only the parties named in the suit title but all those who are interested in the trust.
It is for that reason that explanation VI to Section 11 of Code constructively bar by res judicata the entire body of interested persons from reagitating the matters directly and substantially in issue in an earlier suit under Section 92 of the Code.
[766B C] 1.2 A suit whether under Section 92 of the Civil Proce dure Code or under Order 1 Rule 8 of Civil Procedure Code is by the representatives of large number of persons who have a common interest.
The very nature of a representative suit makes all those who have common interest in the suit as parties.
In the instant case all persons who are interested in the respondent trust are parties to the original suit and as such can exercise their rights under clauses 13 and 14 of scheme decree.
[766H; 767A] Raje Anandrao vs Shamrao and Ors., ; ; Ahmed Adam Sait and Ors.
vs Inayatullah Mekhri and Ors., ; relied on.
2.1 The property of religious and charitable endowments or institutions must be jealously protected because large segment of the community has beneficial interest therein.
Sale by private negotiations which is not visible to the public eye and may even give rise to public suspicion should not, therefore, be permitted unless there are special 762 reasons to justify the same.
Care must be taken to fix the reserve price after ascertaining the market value for safe guarding the interest of the endowment.
[767F G] 2.2 The orders of subordinate court dated October 27, 1984 and January 23, 1985 permitting the sale of the two properties and consequent sale in favour of the respondents, are set aside.
The properties in question may be sold by public auction by giving wide publicity regarding the date, time and place of public auction.
The offer of Rs. 10 lacs made in this Court will be treated as minimum bid of the person who has given the offer and deposited ten percent of the amount in this Court.
It will also be open to the re spondents/purchasers to participate in the auction and compete with others for purchasing the properties.
The respondents vendees from the trust shall be entitled to refund of the price paid by them with 10% interest from the date of payment of the amount till the date of auction of the property.
They will also be entitled to compensation for any superstructure put up by them in the properties includ ing compensation for any additions or improvements made by them to the building and the property.
[767H; 768A C] Chenchu Ram Reddy and Anr.
vs Govt.
of Andhra Pradesh and Ors.
, [1986] 3 SCC 391, relied on.
|
tition (CRL) No. 1171 of 1982.
Under article 32 of the Constitution of India.
Petitioner in person.
Social Welfare.
Miss Kamini Jaiswal for Indian Council of Social Welfare.
J.B. Dadachanji & Co. for Indian Council of Child Welfare and Swedish Embassy.
Dr. N.M. Ghatate for all God 's Children Inc. Arizone, U.S.A. P.H. Parekh for Maharashtra State Women 's Council of Child Welfare, Bombay and for Enfants de L 'espoir.
804 P.K. Chakeravorty for Legal Aid Service, West Bengal.
Mrs. Manik Karanjawala for Indian Associations for Promotion of Adoption.
Mrs Urmila Kapur for SOS Children 's Village of India.
Kailash Vasdev for Missionary of Charity, Calcutta.
Baldev Raj Respondent in person.
G.M. Coelho Bar at Law for Enfant 's du Mande (France) Miss Rani Jethamalani for Kuanyin Charitable Trust.
B.M. Bageria for Terre Des Hommes (India) Society.
Sukumar Ghose for Mission of Hope (India) Society, Calcutta.
S.K. Mehta for Netherlands Inter Country Child Welfare Oraganisation.
Parijot Sinha for society for International Child Welfare.
Kailash Vasdev for Bhavishys.
The Judgment of the Court was delivered by BHAGWATI, J.
This writ petition has been initiated on the basis of a letter addressed by one Laxmi Kant Pandey, an advocate practising in this Court, complaining of malpractices indulged in by social organisations and voluntary agencies engaged in the work of offering Indian children in adoption to foreign parents.
The letter referred to a press report based on "empirical investigation carried out by the staff of a reputed foreign magazine" called "The Mail" and alleged that not only Indian children of tender age are under the guise of adoption "exposed to the long horrendous journey to distant foreign countries at great risk to their lives but in cases where they survive and where these children are not placed in the Shelter and Relief Homes, they in course of time become beggars or prostitutes for want of proper care from their alleged foreign foster parents.
" The petitioner accordingly sought relief restraining Indian based private agencies "from carrying out further activity of routing children for adoption abroad" and directing the Govern 805 ment of India, the Indian Council of Child Welfare and the Indian Council of Social Welfare to carry out their obligations in the matter of adoption of Indian children by foreign parents.
This letter was treated as a writ petition and by an Order dated 1st September, 1982 the Court issued notice to the Union of India the Indian Council of Child Welfare and the Indian Council of Social Welfare to appear in answer to the writ petition and assist the Court in laying down principles and norms which should be followed in determining whether a child should be allowed to be adopted by foreign parents and if so, the procedure to be followed for that purpose, with the object of ensuring the welfare of the child.
The Indian Council of Social Welfare was the first to file its written submissions in response to the notice issued by the Court and its written submission filed on 30th September, 1982 not only carried considerable useful material bearing on the question of adoption of Indian children by foreign parents but also contained various suggestions and recommendations for consideration by the Court in formulating principles and norms for permitting such adoptions and laying down the procedure for that purpose.
We shall have occasion to refer to this large material placed before us as also to discuss the various suggestions and recommendations made in the written submission by the Indian Council of Social Welfare when we take up for consideration the various issues arising in the writ petition.
Suffice it to state for the present that the written submission of the Indian Council of Social Welfare is a well thought out document dealing comprehensively with various aspects of the problem in its manifold dimensions.
When the writ petition reached hearing before the Court on 12th October, 1982 the only written submission filed was that the Indian Council of Social Welfare and neither the Union of India nor the Indian Council of Child Welfare had made any response to the notice issued by the Court.
But there was a telegram received from a Swedish Organisation called `Barnen Framfoer Allt Adoptioner" intimating to the Court that this Organisation desired to participate in the hearing of the writ petition and to present proper material before the Court.
S.O.S, Children 's Villages of India also appeared through their counsel Mrs. Urmila Kapoor and applied for being allowed to intervene at the hearing of the writ petition so that they could made their submissions on the question of adoption of Indian Children by foreign parents.
Since S.O.S, Children 's Villages of India is admittedly an organisation concerned with welfare of children, the Court, by an Order dated 12th October, 1982, allowed them to intervene and to make 806 their submissions before the Court.
The Court also by the same Order directed that the Registry may address a communication to Barnen Framfoer Allt Adoptioner informing them about the adjourned date of hearing of the writ petition and stating that if they wished to present any material and make their submissions, they could do so by filing an affidavit before the adjourned date of hearing.
The Court also directed the Union of India to furnish before the next hearing of the writ petition the names of "any Indian Institutions or Organisations other than the Indian Council of Social Welfare and the Indian Council of Child Welfare, which are engaged or involved in offering Indian children for adoption by foreign parents" and observed that if the Union of India does not have this information, they should gather the requisite information so far as it is possible for them to do so and to make it available to the Court.
The Court also issued a similar direction to the Indian Council of Child Welfare, Indian Council of Social Welfare and S.O.S. Children 's Villages of India.
There was also a further direction given in the same Order to the Union of India, the Indian Council of Child Welfare, the Indian Council of Social Welfare and the S.O.S. Children 's Villages of India "to supply to the Court information in regard to the names and particulars of any foreign agencies which are engaged in the work of finding Indian children for adoption for foreign parents".
The writ petition was adjourned to 9th November, 1982 for enabling the parties to carry out these directions.
It appears that the Indian Council of Social Welfare thereafter in compliance with the directions given by the Court, filed copies of the Adoption of Children Bill, 1972 and the adoption of Children Bill, 1980.
The adoption of Children Bill, 1972 was introduced in the Rajya Sabha sometime in 1972 but it was subsequently dropped, presumably because of the opposition of the Muslims stemming from the fact that it was intended to provide for a uniform law of adoption applicable to all communities including the Muslims.
It is a little difficult to appreciate why the Muslims should have opposed this Bill which merely empowered a Muslim to adopt if he so wished; it had no compulsive force requiring a Muslim to act contrary to his religious tenets: it was merely an enabling legislation and if a Muslim felt that it was contrary to his religion to adopt, he was free not to adopt.
But in view of the rather strong sentiments expressed by the members of the Muslim Community and with a view not to offend their religious susceptibilities, the Adoption of Children Bill, 1980 which was introduced in the Lok 807 Sabha eight years later on 16th December, 1980, contained an express provision that it shall not be applicable to Muslims.
Apart from this change in its coverage the Adoption of Children Bill, 1980 was substantially in the same terms as the Adoption of Children Bill, 1972.
The Adoption of Children Bill 1980 has unfortunately not yet been enacted into law but it would be useful to notice some of the relevant provisions of this Bill in so far as they indicate what principles and norms the Central Government regarded as necessary to be observed for securing the welfare of children sought to be given in adoption to foreign parents and what procedural safeguards the Central Government thought, were essential for securing this end.
Clauses 23 and 24 of the Adoption of Children Bill, 1980 dealt with the problem of adoption of Indian children by parents domiciled abroad and, in so far as material, they provided as follows: "23 (1) Except under the authority of an order under section 24, it shall not be lawful for any person to take or send out of India a child who is a citizen of India to any place outside India with a view to the adoption of the child by any person.
(2) Any person who takes or sends a child out of India to any place outside India in contravention of sub section (1) or makes or takes part in any arrangements for transferring the care and custody of a child to any person for that purpose shall be punishable with imprisonment for a term which may extend to six months or with fine, or with both.
(24) (1) If upon an application made by a person who is not domiciled in India, the district court is satisfied that the applicant intends to adopt a child under the law of or within the country in which he is domiciled, and for that purpose desires to remove the child from India either immediately or after an interval, the court may make an order (in this section referred to as a provisional adoption order) authorising the applicant to remove the child for the purpose aforesaid and giving to the applicant the care and custody of the child pending his adoption as aforesaid: Provided that no application shall be entertained 808 unless it is accompanied by a certificate by the Central Government to the effect that (i) the applicant is in its opinion a fit person to adopt the child; (ii) the welfare and interests of the child shall be safeguarded under the law of the country of domicile of the applicant; (iii) the applicant has made proper provision by way of deposit or bond or otherwise in accordance with the rules made under this Act to enable the child to be repatriated to India, should it become necessary for any reason.
(2) The provisions of this Act relating to an adoption order shall, as far as may be apply in relation to a provisional adoption order made under this section.
The other clauses of the Adoption of Children Bill, 1980 were sought to be made applicable in relation to a provisional adoption order by reason of sub clause (3) of clause 24.
The net effect of this provision, if the Bill were enacted into law, would be that in view of clause 17 no institution or organisation can make any arrangement for the adoption of an Indian child by foreign parents unless such institution or organisation is licensed as a social welfare institution and under Clause 21, it would be unlawful to make or to give to any person any payment or reward for or in consideration of the grant by that person of any consent required in connection with the adoption of a child or the transfer by that person of the care and custody of such child with a view to its adoption or the making by that person of any arrangements for such adoption.
Moreover, in view of Clause 8, no provisional adoption order can be made in respect of an Indian child except with the consent of the parent or guardian of such child and if such child is in the care of an institution, except with the consent of the institution given on its behalf by all the persons entrusted with or in charge of its management, but the District Court can dispense with such consent if it is satisfied that the person whose consent is to be dispensed with has abandoned, neglected or persistently ill treated the child or has persistently failed without reasonable cause to discharge his obligation as parent or guardian or can not be found or is incapable of giving consent or is withholding consent unreasonably.
When a 809 provisional adoption order is made by the District Court on the application of a person domiciled abroad, such person would be entitled to obtain the care and custody of the child in respect of which the order is made and to remove such child for the purpose of adopting it under the law or within the country in which he is domiciled.
These provisions in the Adoption of Children Bill, 1980 will have to be borne in mind when we formulate the guidelines which must be observed in permitting an Indian child to be given in adoption to foreign parents.
Besides filing copies of the Adoption of Children Bill, 1972 and the Adoption of Children Bill, 1980 the Indian Council of Social Welfare also filed two lists, one list giving names and particulars of recognised agencies in foreign countries engaged in facilitating procurement of children from other countries for adoption in their own respective countries and the other list containing names and particulars of institutions and organisations in India engaged in the work of offering and placing Indian children for adoption by foreign parents.
The Writ Petition thereafter came up for hearing on 9th November, 1982 when several applications were made by various institutions and organisations for intervention at the hearing of the writ petition.
Since the questions arising in the writ petition were of national importance, the Court thought that it would be desirable to have assistance from whatever legitimate source it might come and accordingly, by an order dated 9th November, 1982, the Court granted permission to eight specified institutions or organisations to file affidavits or statements placing relevant material before the Court in regard to the question of adoption of Indian children by foreign parents and directed that such affidavits or statements should be filed on or before 27th November, 1982.
The Court also issued notice of the writ petition to the State of West Bengal directing it to file its affidavit or statement on or before the same date.
The Court also directed the Superintendent of Tees Hazari courts to produce at the next hearing of the writ petition quarterly reports in regard to the orders made under the Guardian and Wards Act, 1890 entrusting care and custody of Indian children to foreign parents during the period of five years immediately prior to 1st October, 1982.
Since the Union of India had not yet filed its affidavit or statement setting out what was the attitude adopted by it in regard to this question, the Court directed the Union of India to file its affidavit or statement within the same time as the others.
The Court then adjourned the hearing of the writ petition to 1st December 1982 in order that the record may be completed by that time.
810 Pursuant to these directions given by the Court, various affidavits and statements were filed on behalf of the Indian Council of Social Welfare, Enfants Du Monde, Missionaries of Charity, Enfants De L 's Espoir, Indian Association for promotion of Adoption Kuan yin Charitable Trust, Terre Des Homes (India) Society, Maharashtra State Women 's Council, Legal Aid Services West Bengal, SOS Children 's Villages of India, Bhavishya International Union for Child Welfare and the Union of India.
These affidavits and statements placed before the Court a wealth of material bearing upon the question of adoption of Indian children by foreign parents and made valuable suggestions and recommendations for the consideration of the Court.
These affidavits and statements were supplemented by elaborate oral arguments which explored every facet of the question, involving not only legal but also sociological considerations.
We are indeed grateful to the various participants in this inquiry and to their counsel for the very able assistance rendered by them in helping us to formulate principles and norms which should be observed in giving Indian children in adoption to foreign parents and the procedure that should be followed for the purpose of ensuring that such inter country adoptions do not lead to abuse maltreatment or exploitation of children and secure to them a healthy, decent family life.
It is obvious that in a civilized society the importance of child welfare cannot be over emphasized, because the welfare of the entire community, its growth and development, depend on the health and well being of its children.
Children are a "supremely important national asset" and the future well being of the nation depends on how its children grow and develop.
The great poet Milton put it admirably when he said: "Child shows the man as morning shows the day" and the Study Team on Social Welfare said much to the same effect when it observed that "the physical and mental health of the nation is determined largely by the manner in which it is shaped in the early stages".
The child is a soul with a being, a nature and capacities of its own, who must be helped to find them, to grow into their maturity, into fulness of physical and vital energy and the utmost breadth, depth and height of its emotional, intellectual and spiritual being; otherwise there cannot be a healthy growth of the nation.
Now obviously children need special protection because of their tender age and physique mental immaturity and incapacity to look after themselves.
That is why there is a growing realisation in every part of the globe that children must be brought up in an atmosphere of love and affection 811 and under the tender care and attention of parents so that they may be able to attain full emotional, intellectual and spiritual stability and maturity and acquire self confidence and self respect and a balanced view of life with full appreciation and realisation of the role which they have to play in the nation building process without which the nation cannot develop and attain real prosperity because a large segment of the society would then be left out of the developmental process.
In India this consciousness is reflected in the provisions enacted in the Constitution.
Clause (3) of Article 15 enables the State to make special provisions inter alia for children and Article 24 provides that no child below the age of fourteen years shall be employed to work in any factory or mine or engaged in any other hazardous employment.
Clauses (e) and (f) of Article 39 provide that the State shall direct its policy towards securing inter alia that the tender age of children is not abused, that citizens are not forced by economic necessity to enter avocations unsuited to their age and strength and that children are given facility to develop in a healthy manner and in conditions of freedom and dignity and that childhood and youth are protected against exploitation and against moral and material abandonment.
These constitutional provisions reflect the great anxiety of the constitution makers to protect and safeguard the interest and welfare of children in the country.
The Government of India has also in pursuance of these constitutional provisions evolved a National Policy for the Welfare of Children.
This Policy starts with a goal oriented perambulatory introduction: "The nation 's children are a supremely important asset.
Their nurture and solicitude are our responsibility.
Children 's programme should find a prominent part in our national plans for the development of human resources, so that our children grow up to become robust citizens, physically fit, mentally alert and morally healthy, endowed with the skills and motivations needed by society.
Equal opportunities for development to all children during the period of growth should be our aim, for this would serve our larger purpose of reducing inequality and ensuring social justice.
" The National Policy sets out the measures which the Government of India proposes to adopt towards attainment of the objectives set out in the perambulatory introduction and they include measures designed to protect children against neglect, cruelty and exploitation 812 and to strengthen family ties "so that full potentialities of growth of children are realised within the normal family neighbourhood and community environment.
" The National Policy also lays down priority in programme formation and it gives fairly high priority to maintenance, education and training of orphan and destitute children.
There is also provision made in the National Policy for constitution of a National Children 's Board and pursuant to this provision, the Government of India has Constituted the National Children 's Board with the Prime Minister as the chair person.
It is the function of the National Children 's Board to provide a focus for planning and review and proper coordination of the multiplicity of services striving to meet the needs of children and to ensure at different levels continuous planning, review and coordination of all the essential services.
The National Policy also stresses the vital role which the voluntary organisations have to play in the field of education, health recreation and social welfare services for children and declares that it shall be the endeavour of State to encourage and strengthen such voluntary organisations.
There has been equally great concern for the welfare of children at the international level culminating in the Declaration of the Rights of the Child adopted by the General Assembly of the United Nations on 20th November, 1959.
The Declaration in its Preamble points out that "the child, by reason of his physical and mental immaturity, needs special safeguards and care, including appropriate legal protection, before as well as after birth", and that "mankind owes to the child the best it has to give" and proceeds to formulate several Principles of which the following are material for our present purpose: "PRINCIPLE 2: The child shall enjoy special protection and shall be given opportunities and facilities by law and by other means, to enable him to develop physically mentally morally, spiritually and socially in a healthy and normal manner and in conditions of freedom and dignity.
In the enactment of laws for this purpose the best interests of the child shall be the paramount consideration.
" PRINCIPLE 3: The child shall be entitled from his birth to a name and a nationality.
PRINCIPLE 6: The Child, for the full and harmonious development of his personality, needs love and under 813 standing.
He shall, wherever possible, grow up in the care and under the responsibility of his parents, and in any case in an atmosphere of affection and of moral and material security; a child of tender years shall not, save in exceptional circumstances, be separated from his mother.
Society and the public authorities shall have the duty to extend particular care to children without a family and to those without adequate means of support.
Payment of State and other assistance towards the maintenance of children of large families is desirable.
PRINCIPLE 9: The child shall be protected against all forms of neglect, cruelty and exploitation.
He shall not be the subject of traffic, in any form.
PRINCIPLE 10: The child shall be protected from practices which may foster racial, religious and any other form of discrimination.
He shall be brought up in a spirit of understanding, tolerance friendship among peoples, peace and universal brotherhood and in full consciousness that his energy and talents should be devoted to the service of his fellow men.
" Every child has a right to love and be loved and to grow up in an atmosphere of love and affection and of moral and material security and this is possible only if the child is brought up in a family.
The most congenial environment would, of course, be that of the family of his biological parents.
But if for any reason it is not possible for the biological parents or other near relative to look after the child or the child is abandoned and it is either not possible to trace the parents or the parents are not willing to take care of the child, the next best alternative would be to find adoptive parents for the child so that the child can grow up under the loving care and attention of the adoptive parents.
The adoptive parents would be the next best substitute for the biological parents.
The practice of adoption has been prevalent in Hindu Society for centuries and it is recognised by Hindu Law, but in a large number of other countries it is of comparatively recent origin while in the muslim countries it is totally unknown.
Amongst Hindus, it is not merely ancient Hindu Law which recognises the practice of adoption but it has also been legislatively recognised in the Hindu Adoption and Maintenance Act, 1956.
The Adoption of Children Bill 1972 sought to provide for a uniform law of adoption applicable to all communities includ 814 ing the muslims but, as pointed out above, it was dropped owing to the strong opposition of the muslim community.
The Adoption of Children Bill, 1980 is now pending in Parliament and if enacted, it will provide a uniform law of adoption applicable to all communities in India excluding the muslim community.
Now when the parents of a child want to give it away in adoption or the child is abandoned and it is considered necessary in the interest of the child to give it in adoption, every effort must be made first to find adoptive parents for it within the country, because such adoption would steer clear of any problems of assimilation of the child in the family of the adoptive parents which might arise on account of cultural, racial or linguistic differences in case of adoption of the child by foreign parents.
If it is not possible to find suitable adoptive parents for the child within the country, it may become necessary to give the child in adoption to foreign parents rather than allow the child to grow up in an orphanage or an institution where it will have no family life and no love and affection of parents and quite often, in the socioeconomic conditions prevailing in the country, it might have to lead the life of a destitute, half clad, half hungry and suffering from malnutrition and illness.
Paul Harrison a free lance journalist working for several U.N. Agencies including the International Year of the Child Secretariat points out that most third world children suffer "because of their country 's lack of resources for development as well as pronounced inequalities in the way available resources are distributed" and they face a situation of absolute material deprivation.
He proceeds to say that for quite a large number of children in the rural areas, "poverty and lack of education of their parents, combined with little or no access to essential services of health, sanitation and education, prevent the realisation of their full human potential making them more likely to grow up uneducated, unskilled and unproductive" and their life is blighted by malnutrition, lack of health care and disease and illness caused by starvation, impure water and poor sanitation.
What Paul Harrison has said about children of the third world applies to children in India and if it is not possible to provide to them in India decent family life where they can grow up under the loving care and attention of parents and enjoy the basic necessities of life such as nutritive food, health care and education and lead a life of basic human dignity with stability and security, moral as well as material, there is no reason why such children should not be allowed to be given in adoption to foreign parents.
Such adoption would be quite consistent with our National Policy on Children because it would 815 provide an opportunity to children, otherwise destitute, neglected or abandoned, to lead a healthy decent life, without privation and suffering arising from poverty, ignorance, malnutrition and lack of sanitation and free from neglect and exploitation, where they would be able to realise "full potential of growth".
But of course as we said above, every effort must be made first to see if the child can be rehabilitated by adoption within the country and if that is not possible, then only adoption by foreign parents, or as it is some time called 'inter country adoption ' should be acceptable.
This principle stems from the fact that inter country adoption may involve trans racial, trans cultural and trans national aspects which would not arise in case of adoption ' within the country and the first alternative should therefore always be to find adoptive parents for the child within the country.
In fact, the Draft Guidelines of Procedures Concerning Inter Country Adoption formulated at the International Council of Social Welfare Regional Conference of Asia and Western Pacific held in Bombay in 1981 and approved at the Workshop on Inter Country Adoption held in Brighten, U.K. on 4th September, 1982, recognise the validity of this principle in clause 3.1 which provides: "Before any plans are considered for a child to be adopted by a foreigner, the appropriate authority or agency shall consider all alternatives for permanent family care within the child 's own country".
Where, however, it is not possible to find placement for the child in an adoptive family within the country, we do not see anything wrong if: a home is provided to the child with an adoptive family in a foreign country.
The Government of India also in the affidavit filed on its behalf by Miss B. Sennapati Programme Officer in the Ministry of Social Welfare seems to approve of inter country adoption for Indian children and the proceedings of the Workshop on Inter Country Adoption held in Brighten, U.K. on 4th September, 1982 clearly show that the Joint Secretary, Ministry of Social Welfare who represented the Government of India at the Workshop "affirmed support of the Indian Government to the efforts of the international organisations in promoting measures to protect welfare and interests of children who are adopted aboard.
" But while supporting inter country adoption, it is necessary to bear in mind that the primary object of giving the child in adoption being the welfare of the child, great care has to be exercised in permitting the child to be given in adoption to foreign parents, lest the child may be neglected or abandoned by the adoptive parents in 816 the foreign country or the adoptive parents may not be able to provide to the child a life of moral or material security or the child may be subjected to moral or sexual abuse or forced labour or experimentation for medical or other research and may be placed in a worse situation than that in his own country.
The Economic and Social Council as also the Commission for Social Development have therefore tried to evolve social and legal principles for the protection and welfare of children given in inter country adoption.
The Economic and Social Council by its Resolution 1925 LVIII requested the Secretary General of the United Nations to convene a group of Experts with relevant experts with relevant experience of family and child welfare with the following mandate: "(a) To prepare a draft declaration of social and legal principles relating to adoption and foster placement of children nationally and internationally, and to review and appraise the recommendations and guidelines incorporated in the report of the Secretary General and the relevant material submitted by Governments already available to the Secretary General and the regional commissions.
(b) To draft guidelines for the use of Governments in the implementation of the above principles, as well as suggestions for improving procedures within the context of their social development including family and child welfare programmes.
" Pursuant to this mandate an expert Group meeting was convened in Geneva in December, 1978 and this Expert Group adopted a "Draft declaration on social and legal principles relating to the protection and welfare of children with special reference of foster placement and adoption, nationally and internationally".
The Commission for Social Development considered the draft Declaration at its 26th Session and expressed agreement with its contents and the Economic and Social Council approved the draft Declaration and requested the General Assembly to consider it in a suitable manner.
None of the parties appearing could give us information whether any action has been taken by the General Assembly.
But the draft Declaration is a very important document in as much it lays down certain social and legal principles which must be observed in case of inter country adoption.
Some of the relevant principles set out 817 in the draft Declaration may be referred to with advantage: "article 2.
It is recognised that the best child welfare is good family welfare.
When biological family care is unavailable or in appropriate, substitute family care should be considered.
Every child has a right to a family.
Children who cannot remain in their biological family should be placed in foster family or adoption in preference to institutions, unless the child 's particular needs can best be met in a specialized facility.
Children for whom institutional care was formerly regarded as the only option should be placed with families, both foster and adoptive.
The primary purpose of adoption is to provide a permanent family for a child who cannot be cared for by his/her biological family.
In considering possible adoption placements, those responsible for the child should select the most appropriate environment for the particular child concerned.
Sufficient time and adequate counselling should be given to the biological parents to enable them to reach a decision on their child 's future, recognizing that it is in the child 's best interest to reach this decision as early as possible.
Legislation and services should ensure that the child becomes an integral part of the adoptive family.
The need of adult adoptees to know about their background should be recognized.
Governments should determine the adequacy of their national services for children, and recognize those children whose needs are not being met by existing services.
For some of these children, inter country adoption may be considered as a suitable means of providing them with a oily.
In each country, placements should be made 818 through authorized agencies competent to deal with inter country adoption services and providing the same safeguards and standards as are applied in national adoptions.
Proxy adoptions are not acceptable, in consideration of the child 's legal and social safety.
No adoption plan should be considered before it has been established that the child is legally free for adoption and the pertinent documents necessary to complete the adoption are available.
All necessary consents must be in a form which is legally valid in both countries.
It must be definitely established that the child will be able to immigrate into the country of the prospective adopters and can subsequently obtain their nationality.
In inter country adoptions, legal validation of the adoption should be assured in the countries involved.
The child should at all times have a name, nationality and legal guardian.
" Thereafter at the Regional Conference of Asia and Western Pacific held by the International Council on Social Welfare in Bombay in 1981, draft guidelines of procedure concerning inter country adoption were formulated and, as pointed out above, they were approved at the Workshop held in Brighton, U.K. on 4th September, 1982.
These guidelines were based on the Draft Declaration and they are extremely relevant as they reflect the almost unanimous thinking of participants from various countries who took part in the Regional Conference in Bombay and in the Workshop in Brighton, U.K. There are quite a few of these guidelines which are important and which deserve serious consideration by us: "1.4.
In all inter country adoption arrangements, the welfare of the child shall be prime consideration.
Biological Parents: 2.2.
When the biological parents are known they shall be offered social work services by professionally qualified workers (or experienced personnel who are supervised by such qualified workers) before and after the birth of the child.
819 2.3.
These services shall assist the parents to consider all the alternatives for the child 's future.
Parents shall not be subject to any duress in making a decision about adoption.
No commitment to an adoption plan shall be permitted before the birth of the child.
After allowing parents a reasonable time to reconsider any decision to relinquish a child for adoption, the decision should become irrevocable.
If the parents decide to relinquish the child for adoption, they shall be helped to understand all the implications, including the possibility of adoption by foreigners and of no further contact with the child.
Parents should be encouraged, where possible, to provide information about the child 's background and development, and their own health.
It is the responsibility of the appropriate authority or agency to ensure that when the parents relinquish a child for adoption all of the legal requirements are met.
If the parents state a preference for the religious up bringing of the child, these wishes shall be respected as far as possible, but the best interest of the child will be the paramount consideration.
If the parents are not known, the appropriate authority or agency, in whose care the child has been placed, shall endeavour to trace the parents and ensure that the above services are provided, before taking any action in relation to adoption of the child.
The Child: 3.1.
Before any plans are considered for a child to be adopted by foreigners, the appropriate authority or agency shall consider all alternatives for permanent family care within the child 's own country.
A child study report shall be prepared by professional workers (or experienced personnel who are supervised by such qualified workers) of an appropriate authority or agency, to provide information which will form a basis for the selection of prospective adopters for the child, 820 assist with the child 's need to know about his original family at the appropriate time, and help the adoptive parents understand the child and have relevant information about him/her.
3.3 As far as possible, the child study report shall include the following: 3.3.1.
Identifying information, supported where possible by documents.
3.3.2.
Information about original parents, including their health and details of the mother 's pregnancy and the birth.
3.3.3.
Physical, intellectual and emotional development.
3.3.4.
Health report.
3.3.5.
Recent photograph.
3.3.6.
Present environment category of care (Own home, foster home, institution, etc.) relationships, routines and habits.
3.3.7.
Social Worker 's assessment and reasons for suggesting inter country adoption.
Brothers and sisters and other children who have been cared for as siblings should not be separated by adoption placement except for special reasons.
When a decision about an adoption placement is finalised, adequate time and effort shall be given to preparation of the child in a manner appropriate to his/her age and level of development.
Information about the child 's new country and new home, and counselling shall be provided by a skilled worker.
(a) Before any adoption placement is finalized the child concerned shall be consulted in a manner appropriate to his/her age and level of development.
When older children are placed for adoption, the adoptive parents should be encouraged to come to the child 's country of origin, to meet him/her there, learn 821 personally about his/her first environment and escort the child to its new home.
Adoptive Parents: 4.3.
In addition to the usual capacity for adoptive, parenthood applicants need to have the capacity to handle the trans racial, trans cultural and trans national aspects of inter country adoptions.
A family study report shall be prepared by professional worker (or experienced personnel who are supervised by such qualified workers) to indicate the basis on which the applicants were accepted as prospective adopters.
It should include an assessment of the parents ' capacity to parent a particular type of child and provide relevant in formation for other authorities such as Courts.
The report on the family study which must be made in the community where the applicants are residing, shall include details of the following: 4.5.1.
Identifying information about parents and other members of the family, including any necessary documentation.
4.5.2.
Emotional and intellectual capacities of prospective adopters, and their motivation to adoption.
4.5.3.
Relationship (material, family, relatives, friends, community) 4.5.4.
Health.
4.5.5.
Accommodation and financial position.
4.5.6.
Employment and other interests.
4.5.7.
Religious affiliations and/or attitude.
4.5.8.
Capacity for adoptive parenthood, and details of child preferred (age, sex, degree of disability).
4.5.9.
Support available from relatives, friends, community.
4.5.10.
Social worker 's assessment and details of adoption authority 's approval.
822 4,5.11.
Recent photograph of family.
Adoption Authorities and Agencies: 5.1.
Inter country adoption arrangements should be made only through Government adoption authorities (or agencies recognised by them) in both sending and receiving countries.
They shall use experienced staff with professional social work education or experienced personnel supervised by such qualified workers.
The appropriate authority or agency in the child 's country should be informed of all proposed inter country adoptions and have the opportunity to satisfy itself that all alternatives in the country have been considered, and that inter country adoption is the optimal choice of care for the child.
Before any inter country adoption plan is considered, the appropriate authority or agency in the child 's country should be responsible for establishing that the child is legally free for adoption, and that the necessary documentation is legally valid in both countries.
Approval of inter country adoption applicants is a responsibility of the appropriate authorities or agencies in both sending and receiving countries.
An application to adopt a child shall not be considered by a sending country unless it is forwarded through the appropriate authority or agency in the receiving country.
The appropriate authority or agency in both countries shall monitor the reimbursement of costs involved in inter country adoption to prevent profiteering and traffic king in children.
XX XX XX XX 5.7.
When a child goes to another country to be adopted, the appropriate authority or agency of the receiving country shall accept responsibility for supervision of the placement, and for the provision of progress reports for the adoption authority or agency in the sending country for the period agreed upon.
823 5.8.
In cases where the adoption is not to be finalised in the sending country, the adoption authority in the receiving country shall ensure that an adoption order is sought as soon as possible but not later than 2 years after placement.
It is the responsibility of the appropriate authority or agency in the receiving country to inform the appropriate authority or agency in the sending country of the details of the adoption order when it is granted.
5.8.1.
In cases where the adoption is to be finalised in the sending country after placement, it is the responsibility of the appropriate authority or agency in both the sending and receiving country to ensure that the adoption is finalised as soon as possible.
If the placement is disrupted before the adoption is finalised, the adoption authority in the receiving country shall be responsible for ensuring, with the agreement of the adoption authority in the sending country that a satisfactory alternative placement is made with prospective adoptive parents who are approved by the adoption authorities of both countries.
Adoption Services and Communities: 6.1.
Appropriate authorities or agencies in receiving countries shall ensure that there is adequate feedback to the appropriate authorities or agencies in sending countries, both in relation to inter country adoption generally and to individual children where required.
XX XX XX XX 6.3.
The appropriate authorities and agencies in both sending and receiving countries have a responsibility for public education in relation to inter country adoption, to ensure that when such adoption is appropriate for children, public attitudes support this.
Where public attitude is known to be discriminatory or likely to be hostile on grounds of race or colour, the appropriate authority or agency in the sending country should not consider placement of the child.
824 Status of the Child: 7.1.
Family: It is essential that in inter country adoption child is given the same legal status and rights of inheritance, as if she/he had been born to the adoptive parents in marriage.
Name: When the legal adoption process is concluded the child shall have the equivalent of a birth registration certificate.
Nationality: When the legal adoption is concluded, the child shall be granted appropriate citizenship.
XX XX XX XX 7.5.
Immigration: Before an inter country adoption placement with particular prospective adopters is proposed, the appropriate authority or agency in the child 's country shall ensure that there is no hindrance, to the child entering the prospective adopters ' country, and that travel documents can be obtained at the appropriate time.
We shall examine these provisions of the Draft Declaration and the draft guidelines of procedure when we proceed to consider and lay down the principles and norms which should be followed in intercountry adoption.
Now it would be convenient at this stage to set out the procedure which is at present being followed for giving a child in adoption to foreign parents.
Since there is no statutory enactment in our country providing for adoption of a child by foreign parents or laying down the procedure which must be followed in such a case, resort is had to the provisions of the Guardians & Wards Act 1890 for the purpose of facilitating such adoption.
This Act is an old statute enacted for the purpose of providing for appointment of guardian of the person or property of a minor.
Section 4 sub section (5) clause (a) defines the "court" to mean the district court 825 having jurisdiction to entertain an application under the Act for an order appointing or declaring a person to be a guardian and the expression "district court" is defined in sub section (4) of section 4 to have the same meaning as assigned to it in the Code of Civil Procedure and includes a High Court in the exercise of its ordinary original civil jurisdiction.
Section 7 sub section (1) provides that where the court is satisfied that it is for the welfare of a minor that an order should be made appointing a guardian of his person or property or both or declaring a person to be such a guardian, the court may make an order accordingly and, according to section 8, such an order shall not be made except on the application of one of four categories of persons specified in clauses (a) to (d), one of them being "the person desirous of being the guardian of the minor" and the other being "any relative or friend of the minor".
Sub section (1) of section 9 declares that if the 'application ' is with respect to the guardianship of the person of the minor and that is the kind of application which is availed of for the purpose of intercountry adoption it shall be made to the district court having jurisdiction in the place where the minor ordinarily resides.
Then follows section 11, sub section (1) which prescribes that if the court is satisfied that there is ground for proceeding on the application, it shall fix a date for the hearing thereof and cause notice of the application and of the date fixed for the hearing to be served on the parents of the minor if they are residing in any State to which the Act extends, the person if any named in the petition as having the custody or possession of the person of the minor, the person proposed in the application to be appointed guardian and any other person to whom, in the opinion of the court, special notice of the application should be given.
Section 17 provides that in appointing guardian of a minor, the court shall be guided by what, consistently with the law to which the minor is subject, appears in the circumstances to be for the welfare of the minor and in considering what will be for the welfare of the minor, the court shall have regard to the age sex, and religion of the minor, the character and capacity of the proposed guardian and his nearness of kin to the minor, the wishes, if any, of a deceased parent and any existing or previous relations of the proposed guardian with the minor or his property.
The last material section is section 26 which provides that a guardian of the person of a minor appointed by the court shall not, without the leave of the court by which he was appointed, remove the ward from the limits of its jurisdiction, except for such purposes as may be prescribed and the leave to be granted by the 826 court may be special or general.
These are the relevant provisions of the which have a bearing on the procedure which is at present being followed for the purpose of carrying through inter country adoption.
The foreign parent makes an application to the court for being appointed guardian of the person of the child whom he wishes to take in adoption and for leave of the court to take the child with him to his country on being appointed such guardian.
The procedure to be followed by the court in disposing of such application is laid down by three High Courts in the country with a view to protecting the interest and safeguarding the welfare of the child, but so far as the rest of the High Courts are concerned, they do not seem to have taken any steps so far in that direction.
Since most of the applications by foreign parents wishing to take a child in adoption in the State of Maharashtra are made on the original side of the High Court of Bombay that High Court has issued a notification dated 10th May 1972 incorporating Rule 361 B in Chapter XX of the Rules of the High Court of Bombay (Original Side) 1957 an this newly added Rule provides inter alia as follows: When a foreigner makes an application for being appointed as the guardian of the person or property of a minor, the Prothonotary and Senior Master shall address a letter to the Secretary of the Indian Council of Social Welfare, informing him of the presentation of the application and the date fixed for the hearing thereof he shall also inform him that any representation which the Indian Council of Social Welfare may make in the matter would be considered by the Court before passing the order on the application.
A copy of the application shall be forwarded to the Secretary of the Indian Council of Social Welfare along with the letter of Prothonotary and Senior Master.
" The High Court of Delhi has also issued instructions on the same lines to the Courts subordinate to it and these instructions read as follows: (i) A foreigner desirous of being appointed guardian or the person of a minor and praying for leave to remove the minor to a foreign country, shall make an application for the purpose in the prescribed form under the , attaching with it three copies of passport size 827 photographs of the minor, duly attested by the person having custody of the minor at the time; (ii) If the court is satisfied that there is no ground for proceedings on the application, it shall fix a day for the hearing there of and cause notice of the application and of the date fixed for the hearing on the person and in the manner mentioned in Section 11, as also to the general public and the Secretary of the Indian Council of child Welfare and consider their representation; (iii) Every person appointed guardian of the person of a minor shall execute a bond with or without a surety or sureties as the court may think fit to direct and in such sum as the court may fix, having regard to the welfare of the minor and to ensure his production in the court if and when so required by the court; (iv) On the court making an order for the appointment of a foreigner guardian of the person of an Indian minor, a copy of the minor 's photograph shall be counter signed by the Court and issued to the guardian or joint guardian, as the case may be, appointed by the court alongwith the certificate or guardianship.
" The High Court of Gujarat has not framed any specific rule for this purpose like the High Courts of Bombay and Delhi but in a judgment delivered in 1982 in the case of Rasiklal Chaganlal Mehta,(1) the High Court of Gujarat has made the following observations: "In order that the Courts can satisfactorily decide an intercountry adoption case against the aforesaid background and in the light of the above referred guidelines, we consider it necessary to give certain directions.
In all such cases, the Court should issue notice to the Indian Council of Social Welfare (175, Dadabhai Naroji Road, Bombay 828 400001) and seek its assistance.
If the Indian Council of Social Welfare so desires it should be made a party to the proceedings.
If the Indian Council of Social Welfare does not appear, or if it is unable, for some reason, to render assistance, the Court should issue notice to an independent, reputed and publicly/officially recognised social welfare agency working in the field and in that area and request it to render assistance in the matter.
" The object of giving notice to the Indian Council of Social Welfare or the Indian Council for Child Welfare or any other independent, reputed and publicly or officially recognised social welfare agency is obviously to ensure that the application of foreign parents for guardianship of the child with a view to its eventual adoption is properly and carefully scrutinised and evaluated by an expert body having experience in the area of child welfare with a view to assisting the Court in coming to the conclusion whether it will be in the interest of the child, promotive of its welfare, to be adopted by the foreign parents making the application or in other words, whether such adoption will provide moral and material security to the child with an opportunity to grow into the full stature of its personality in an atmosphere of love and affection and warmth of a family hearth and home.
This procedure which has been evolved by the High Courts of Bombay, Delhi and Gujarat is, in our opinion, eminently desirable and it can help considerably to reduce, if not eliminate, the possibility of the child being adopted by unsuitable or undesirable parents or being placed in a family where it may be neglected, maltreated or exploited by the adoptive parents.
We would strongly commend this procedure for acceptance by every court in the country which has to deal with an application by a foreign parent for appointment of himself as guardian of a child with a view to its eventual adoption We shall discuss this matter a little more in detail when we proceed to consider what principles and norms should be laid down for inter country adoption, but, in the meanwhile, proceeding further with the narration of the procedure followed by the courts in Bombay, Delhi and Gujarat, we may point out that when notice is issued by the court, the Indian Council of Social Welfare or the Indian Council for Child Welfare or any other recognised social welfare agency to which notice is issued, prepares what may conveniently be described as a child study report and submits it to the Court for its consideration.
What are the different aspects relating to the child in respect of which the child study report should give information is a matter which we shall presently discuss, but suffice it to state for the time 829 being that the child study report should contain legal and social data in regard to the child as also an assessment of its behavioural pattern and its intellectual, emotional and physical development.
The Indian Council of Social Welfare has evolved a standardised form of the child study report and it has been annexed as exhibit 'C ' to the reply filed in answer to the notice issued by the Court.
Ordinarily an adoption proposal from a foreign parent is sponsored by a social or child welfare agency recognised or licensed by the Government of the country in which the foreign parents resides and the application of the foreign parent for appointment as guardian of the child is accompanied by a home study report prepared by such social or child welfare agency.
The home study report contains an assessment of the fitness and suitability of the foreign parent for taking the child in adoption based on his antecedents, family background, financial condition, psychological and emotional adaptability and the capacity to look after the child after adoption despite racial, national and cultural differences.
The Indian Council of Social Welfare has set out in annexure 'B ' to the reply filed by it, guidelines for the preparation of the home study report in regard to the foreign parent wishing to take a child in adoption, and it is obvious from these guidlines which we shall discuss a little later, that the home study report is intended to provide social and legal facts in regard to the foreign parent with a view to assisting the court in arriving at a proper determination of the question whether it will be in the interest of the child to be given in adoption to such foreign parent.
The court thus has in most cases where an application is made by a foreign parent for being appointed guardian of a child in the courts in Bombay, Delhi and Gujarat, the child study report as well as the home study report together with other relevant material in order to enable it to decide whether it will be for the welfare of the child to be allowed to be adopted by the foreign parents and if on a consideration of these reports and material, the court comes to the conclusion that it will be for the welfare of the child, the court makes an order appointing the foreign parent as guardian of the child with liberty to him to take the child to his own country with a view to its eventual adoption.
Since adoption in a foreign country is bound to take some time and till then the child would continue to be under the guardianship of the foreign parent by virtue of the order made by the court, the foreign parent as guardian would continue to be accountable to the court for the welfare of the child and the court therefore takes a bond from him with or without surety or sureties in such sum as may be thought for ensuring its production if and when required by the court.
830 The foreign parent then takes the child to his own country either personally or through an escort and the child is then adopted by the foreign parent according to the law of his country and on such adoption, the child acquires the same status as a natural born child with the same rights of inheritance and succession as also the same nationality as the foreign parent adopting it.
This is broadly the procedure which is followed in the courts in Bombay, Delhi and Gujarat and there can be no doubt that, by and large, this procedure tends to ensure the welfare of the child, but even so, there are several aspects of procedure and detail which need to be considered in order to make sure that the child is placed in the right family where it will be able to grow into full maturity of its personality with moral and material security and in an atmosphere of love and warmth and it would not be subjected to neglect, maltreatment or exploitation.
Now one thing is certain that in the absence of a law providing for adoption of an Indian child by a foreign parent, the only way in which such adoption can be effectuated is by making it in accordance with the law of the country in which the foreign parent resides.
But in order to enable such adoption to be made in the country of the foreign parent, it would be necessary for the foreign parent to take the child to his own country where the procedure for making the adoption in accordance with the law of that country can be followed.
However, the child which is an Indian national cannot be allowed to be removed out of India by the foreign parent unless the foreign parent is appointed guardian of the person of the child by the Court and is permitted by the Court to take the child to his own country under the provisions of the .
Today, therefore, as the law stands, the only way in which a foreign parents can take an Indian child in adoption is by making an application to the Court in which the child ordinarily resides for being appointed guardian of the person of the child with leave to remove the child out of India and take it to his own country for the purpose of adopting it in accordance with the law of his country.
We are definitely of the view that such inter country adoption should be permitted after exhausting the possibility of adoption within the country by Indian parents.
It has been the experience of a large number of social welfare agencies working in the area of adoption that, by and large, Indian parents are not enthusiastic about taking a stranger child in adoption and even if they decide to take such child in adoption, they prefer to adopt a boy rather than a girl and they are wholly averse to adopting a handicapped child, with the result that the majority of abandoned, destitute or orphan girls and 831 handicapped children have very little possibility of finding adoptive parents within the country and their future lies only in adoption by foreign parents.
But at the same time it is necessary to bear in mind that by reason of the unavailability of children in the developed countries for adoption, there is a great demand for adoption of children from India and consequently there is increasing danger of ill equipped and sometimes even undesirable organisations or individuals activising themselves in the field of inter country adoption with a view to trafficking in children and sometimes it may also happen that the immediate prospect of transporting the child from neglect and abandonment to material comfort and security by placing it with a foreigner may lead to other relevant factors such as the intangible needs of the child, its emotional and psychological requirements and possible difficulty of its assimilation and integration in a foreign family with a different racial and cultural background, being under emphasized, if not ignored.
It is therefore necessary to evolve normative and procedural safeguards for ensuring that the child goes into the right family which would provide it warmth and affection of family life and help it to grow and develop physically, emotionally, intellectually and spiritually.
These safeguards we now proceed to examine.
We may make it clear at the outset that we are not concerned here with cases of adoption of children living with their biological parents, for in such class of cases, the biological parents would be the best persons to decide whether to give their child in adoption to foreign parents.
It is only in those cases where the children sought to be taken in adoption are destitute or abandoned and are living in social or child welfare centres that it is necessary to consider what normative and procedural safeguards should be forged for protecting their interest and promoting their welfare.
Let us first consider what are the requirements which should be insisted upon so far ar a foreigner whishing to take a child in adoption is concerned In the first place, every application from a foreigner desiring to adopt a child must be sponsored by a social or child welfare agency recognised or licensed by the government of the country in which the foreigner is resident.
No application by a foreigner for taking a child in adoption should be entertained directly by any social or welfare agency in India working in the area of inter country adoption or by any institution or centre or home to which children are committed by the juvenile court.
This is essential primarily for three reasons.
832 Firstly, it will help to reduce, if not eliminate altogether the possibility of profiteering and trafficking in children, because if a foreigner were allowed to contact directly agencies or individuals in India for the purpose of obtaining a child in adoption, he might in his anxiety to secure a child for adoption, be induced or persuaded to pay any unconscionable or unreasonable amount which might be demanded by the agency or individual procuring the child.
Secondly it would be almost impossible for the court to satisfy itself that the foreigner who wishes to take the child in adoption would be suitable as a parent for the child and whether he would be able to provide a stable and secure family life to the child and would be able to handle trans racial, trans cultural and trans national problems likely to arise from such adoption, because, where the application for adopting a child has not been sponsored by a social or child welfare agency in the country of the foreigner, there would be no proper and satisfactory home study report on which the court can rely.
Thirdly, in such a case, where the application of a foreigner for taking a child in adoption is made directly without the intervention of a social or child welfare agency, there would be no authority or agency in the country of the foreigner who could be made responsible for supervising the progress of the child and ensuring that the child is adopted at the earliest in accordance with law and grows up in an atmosphere of warmth and affection with moral and material security assured to it.
The record shows that in every foreign country where children from India are taken in adoption, there are social and child welfare agencies licensed or recognised by the government and it would not therefore cause any difficulty hardship or inconvenience if it is insisted that every application from a foreigner for taking a child in adoption must be sponsored by a social or child welfare agency licensed or recognised or recognised by the government of the country in which the foreigner resides.
It is not necessary that there should be only one social or child welfare agency in the foreign country through which an application for adoption of a child may be routed; there may be more than one such social or child welfare agencies, but every such social or child welfare agency must be licensed or recognised by the government of the foreign country and the court should not make an order for appointment of a foreigner as guardian unless it is satisfied that the application of the foreigner for adopting a child has been sponsored by such social or child welfare agency.
The social or child welfare agency which sponsors the application for taking a child in adoption must get a home study report prepared by a professional 833 worker indicating the basis on which the application of the foreigner for adopting a child has been sponsored by it.
The home study report should broadly include information in regard to the various matters set out in Annexure 'A ' to this judgment though it need not strictly adhere to the requirements of that Annexure and it should also contain an assessment by the social or child welfare agency as to whether the foreigner wishing to take a child in adoption is fit and suitable and has the capacity to parent a child coming from a different racial and cultural milieu and whether the child will be able to fit into the environment of the adoptive family and the community in which it lives.
Every application of a foreigner for taking a child in adoption must be accompanied by a home study report and the social or child welfare agency sponsoring such application should also send along with it a recent photograph of the family, a marriage certificate of the foreigner and his or her spouse as also a declaration concerning their health together with a certificate regarding their medical fitness duly certificate by a medical doctor, a declaration regarding their financial status alongwith supporting documents including employer 's certificate where applicable, income tax assessment orders, bank references and particulars concerning the properties owned by them, and also a declaration stating that they are willing to be appointed guardian of the child and undertaking that they would adopt the child according to the law of their country within a period of not more than two years from the time of arrival of the child in their country and give intimation of such adoption to the court appointing them as guardian as also to the social or child welfare agency in India processing their case, they would maintain the child and provide it necessary education and up bringing according to their status and they would also send to the court as also to the social or child welfare agency in India reports relating to the progress of the child alongwith its recent photograph, the frequency of such progress reports being quarterly during the first two years and half yearly for the next three years.
The application of the foreigner must also be accompanied by a Power of Attorney in favour of an Officer of the social or child welfare agency in India which is requested to process the case and such Power of Attorney should authorise the Attorney to handle the case on behalf of the foreigner in case the foreigner is not in a position to come to India.
The social or child welfare agency sponsoring the application of the foreigner must also certify that the foreigner seeking to adopt a child is permitted to do so according to the law of his country.
These certificates, declarations and documents which must accompany the application of the foreig 834 ner for taking a child in adoption, should be duly notarised by a Notary Public whose signature should be duly attested either by an Officer of the Ministry of External Affairs or Justice or Social Welfare of the country of the foreigner or by an Officer of the Indian Embassy or High Commission or Consulate in that country.
The social or child welfare agency sponsoring the application of the foreigner must also undertake while forwarding the application to the social or child welfare agency in India, that it will ensure adoption of the child by the foreigner according to the law of his country within a period not exceeding two years and as soon as the adoption is effected, it will send two certified copies of the adoption order to the social or child welfare agency in India through which the application for guardianship is processed, so that one copy can be filed in court and the other can remain with the social or child welfare agency in India.
The social or child welfare agency sponsoring the application must also agree to send to the concerned social or child welfare agency in India progress reports in regard to the child, quarterly during the first year and half yearly for the subsequent year or years until the adoption is effected, and it must also undertake that in case of disruption of the family of the foreigner before adoption can be effected, it will take care of the child and find a suitable alternative placement for it with the approval of the concerned social or child welfare agency in India and report such alternative placement to the court handling the guardianship proceedings and such information shall be passed on both by the court as also by the concerned social or child welfare agency in India to the Secretary, Ministry of Social Welfare, Government of India.
The Government of India shall prepare a list of social or child welfare agencies licensed or recognised for inter country adoption by the government of each foreign country where children from India are taken in adoption and this list shall be prepared after getting the necessary information from the government of each such foreign country and the Indian Diplomatic Mission in that foreign country.
We may point out that the Swedish Embassy has in Annexure II to the affidavit filed on its behalf by Ulf Waltre, given names of seven Swedish organisations or agencies which are authorised by the National Board for Inter Country Adoption functioning under the Swedish Ministry of Social Affairs to "mediate" applications for adoption by Swedish nationals and the Indian Council of Social Welfare has also in the reply filed by it in answer to the writ petition given a list of government recognised organisations or agencies dealing in inter country adoption in foreign countries.
It should not therefore be difficult for the Government of India to prepare a list 835 of social or child welfare agencies licensed or recognised for intercountry adoption by the Government in various foreign countries.
We direct the Government of India to prepare such list within six months from today and copies of such list shall be supplied by the Government of India to the various High Courts in India as also to the social or child welfare agencies operating in India in the area of inter country adoption under licence or recognition from the Government of India.
We may of course make it clear that application of foreigners for appointment of themselves as guardians of children in India with a view to their eventual adoption shall not be held up until such list is prepared by the Government of India but they shall be processed and disposed of in the light of the principles and norms laid down in this judgment.
We then proceed to consider the position in regard to biological parents of the child proposed to be taken in adoption.
What are the safeguards which are required to be provided in so far as biological parents are concerned ? We may make it clear at the outset that when we talk about biological parents, we mean both parents if they are together of the mother or the father if either is alone.
Now it should be regarded as an elementary requirement that if the biological parents are known, they should be properly assisted in making a decision about relinquishing the child for adoption, by the Institution or centre or Home for Child Care or social or child welfare agency to which the child is being surrendered.
Before a decision is taken by the biological parents to surrender the child for adoption, they should be helped to understand all the implications of adoptions including the possibility of adoption by a foreigner and they should be told specifically that in case the child is adopted, it would not be possible for them to have any further contact with the child.
The biological parents should not be subjected to any duress in making a decision about relinquishment and even after they have taken a decision to relinquish the child for giving in adoption, a further period of about three months should be allowed to them to reconsider their decision.
But once the decision is taken and not reconsidered within such further time as may be allowed to them, it must be regarded as irrevocable and the procedure for giving the child in adoption to a foreigner can then be initiated without any further reference to the biological parents by filing an application for appointment of the foreigner as guardian of the child.
Thereafter there can be no question of once again consulting the biological parents whether they wish to give the child in adoption or they want to take it back.
It would be most unfair if after a 836 child is approved by a foreigner and expenses are incurred by him for the purpose of maintenance of the child and some times on medical assistance and even hospitalisation for the child, the biological parents were once again to be consulted for giving them a locus penitential to reconsider their decision.
But in order to eliminate any possibility of mischief and to make sure that the child has in fact been surrendered by its biological parents, it is necessary that the Institution or Centre or Home for Child Care or social or child welfare agency to which the child is surrendered by the biological parents, should take from the biological parents a document of surrender duly signed by the biological parents and attested by at least two responsible persons and such document of surrender should not only contain the names of the biological parents and their address but also information in regard to the birth of the child and its background, health and development.
If the biological parents state a preference for the religious upbringing of the child, their wish should as far as possible be respected, but ultimately the interest of the child alone should be the sole guiding factor and the biological parents should be informed that the child may be given in adoption even to a foreigner who professes a religion different from that of the biological parents.
This procedure can and must be followed where the biological parents are known and they relinquish the child for adoption to an Institution or Centre or Home for Child Care or hospital or social or child welfare agency.
But where the child is an orphan, destitute or abandoned child and its parents are not known, the Institution or Centre or Home for Child Care or hospital or social or child welfare agency in whose care the child has come, must try to trace the biological parents of the child and if the biological parents can be traced and it is found that they do not want to take back the child, then the same procedure as outlined above should as far as possible be followed.
But if for any reason the biological parents cannot be traced, then there can be no question of taking their consent or consulting them.
It may also be pointed out that the biological parents should not be induced or encouraged or even be permitted to take a decision in regard to giving of a child in adoption before the birth of the child of within a period of three months from the date of birth.
This precaution is necessary because the biological parents must have reasonable time after the birth of the child to take a decision whether to rear up the child themselves or to relinquish it for adoption and moreover it may be necessary to allow some time to the child to overcome any health problems experienced after birth.
837 We may now turn to consider the safeguards which should be observed in so far as the child proposed to be taken in adoption is concerned.
It was generally agreed by all parties appearing before the Court, whether as interveners or otherwise, that it should not be open to any and every agency or individual to process an application from a foreigner for taking a child in adoption and such application should be processed only through a social or child welfare agency licensed or recognised by the Government of India or the Government of the State in which it is operating, or to put it differently in the language used by the Indian Council of Social Welfare in the reply filed by it in answer to the writ petition, "all private adoptions conducted by unauthorised individuals or agencies should be stopped".
The Indian Council of Social Welfare and the Indian Council for Child Welfare are clearly two social or child welfare agencies operating at the national level and recognised by the Government of India, as appears clearly from the letter dated 23rd August, 1980 addressed by the Deputy Secretary to the Government of India to the Secretary, Government of Kerela, Law Department, Annexure 'F ' to the submissions filed by the Indian Council for Child Welfare in response to the writ petition.
But apart from these two recognised social or child welfare agencies functioning at the national level, there are other social or child welfare agencies engaged in child care and welfare and if they have good standing and reputation and are doing commendable work in the area of child care and welfare, there is no reason why they should not be recognised by the Government of India or the Government of a State for the purpose of inter country adoptions.
We would direct the Government of India to consider and decide within a period of three months from today whether any of the institutions or agencies which have appeared as interveners in the present writ petition are engaged in child care and welfare and if so, whether they deserve to be recognised for inter country adoptions.
Of course it would be open to the Government of India or the Government of a State suo motu or on an application made to it to recognise any other social or child welfare agency for the purpose of inter country adoptions, provided such social or child welfare agency enjoys good reputation and is known for its work in the field of child care and welfare.
We would suggest that before taking a decision to recognise any particular social or child welfare agency for the purpose of intercountry adoptions, the Government of India or the Government of a State would do well to examine whether the social or child welfare agency has proper staff with professional social work experience, because otherwise it may not be possible for the social or child wel 838 fare agency to carry out satisfactorily the highly responsible task of ensuring proper placement of a child with a foreign adoptive family.
It would also be desirable not to recognise an organisation or agency which has been set up only for the purpose of placing children in adoption: it is only an organisation or agency which is engaged in the work of child care and welfare which should be regarded as eligible for recognition, since inter country adoption must be looked upon not as an independent activity by itself, but as part of child welfare programme so that it may not tend to degenerate into trading.
The Government of India or the Government of a State recognising any social or child welfare agency for inter country adoptions must insist as a condition of recognition that the social or child welfare agency shall maintain proper accounts which shall be audited by a chartered accountant at the end of every year and it shall not charge to the foreigner wishing to adopt a child any amount in excess of that actually incurred by way of legal or other expenses in connection with the application for appointment of guardian including such reasonable remuneration or honorarium for the work done and trouble taken in processing, filing and pursuing the application as may be fixed by the Court.
Situations may frequently arise where a child may be in the care of a child welfare institution or centre or social or child welfare agency which has not been recognised by the Government.
Since an application for appointment as guardian can, according to the principles and norms laid down by us, be processed only by a recognised social or child welfare agency and none else, any unrecognised institution, centre or agency which has a child under its care would have to approach a recognised social or child welfare agency if it desires such child to be given in inter country adoption, and in that event it must send without any undue delay the name and particulars of such child to the recognised social or child welfare agency through which such child is proposed to be given in inter country adoption.
Every recognised social or child welfare agency must maintain a register in which the names and particulars of all children proposed to be given in inter country adoption through it must be entered and in regard to each such child, the recognised social or child welfare agency must prepare a child study report through a professional social worker giving all relevant information in regard to the child so as to help the foreigner to come to a decision whether or not to adopt the child and to understand the child, if he decides to adopt it as also to assist the court in coming to a decision whether it will be for the welfare of the child to be given in adoption to the 839 foreigner wishing to adopt it.
The child study report should contain as far as possible information in regard to the following matters: "(1) Identifying information, supported where possible by documents.
(2) Information about original parents, including their health and details of the mother 's pregnancy and birth.
(3) Physical, intellectual and emotional development.
(4) Health report prepared by a registered medical practitioner preferably by a paediatrician.
(5) Recent photograph.
(6) Present environment category of care (Own home, foster home, institution etc.) relationships, routines and habits.
(7) Social worker 's assessment and reasons for suggesting inter country adoption.
" The government of India should, with the assistance of the Government of the States, prepare a list of recognised social or child welfare agencies with their names, addresses and other particulars and send such list to the appropriate department of the Government of each foreign country where Indian children are ordinarily taken in adoption so that the social or child welfare agencies licensed or recognised by the Government of such foreign country for intercountry adoptions, would know which social or child welfare agency in India they should approach for processing an application of its national for taking an Indian child in adoption.
Such list shall also be sent by the Government of India to each High Court with a request to forward it to the district courts within its jurisdiction so that the High Courts and the district courts in the country would know which are the recognised social or child welfare agencies entitled to process an application for appointment of a foreigner as guardian.
Of course, it would be desirable if a Central Adoption Resource Agency is set up by the Government of India with regional branches at a few centres which are active in inter country 840 adoptions.
Such Central Adoption Resource Agency can act as a clearing house of information in regard to children available for inter country adoption and all applications by foreigners for taking Indian children in adoption can then be forwarded by the social or child welfare agency in the foreign country to such Central Adoption Resource Agency and the latter can in its turn forward them to one or the other of the recognised social or child welfare agencies in the country.
Every social or child welfare agency taking children under its care can then be required to send to such Central Adoption Resource Agency the names and particulars of children under its care who are available for adoption and the names and particulars of such children can be entered in a register to be maintained by such Central Adoption Resource Agency.
But until such Central Adoption Resource Agency is set up, an application of a foreigner for taking an Indian child in adoption must be routed through a recognised social or child welfare agency.
Now before any such application from a foreigner is considered, every effort must be made by the recognised social or child welfare agency to find placement for the child by adoption in an Indian family.
Whenever any Indian family approaches a recognised social or child welfare agency for taking a child in adoption, all facilities must be provided by such social or child welfare agency to the Indian family to have a look at the children available with it for adopt on and if the Indian family wants to see the child study report in respect of any particular child, child study report must also be made available to the Indian family in order to enable the Indian family to decide whether they would take the child in adoption.
It is only if no Indian family comes forward to take a child in adoption within a maximum period of two months that the child may be regarded as available for inter country adoption, subject only to one exception, namely, that if the child is handicapped or is in bad state of health needing urgent medical attention, which is not possible for the social or child welfare agency looking after the child to provide, the recognised social or child welfare agency need not wait for a period of two months and it can and must take immediate steps for the purpose of giving such child in inter country adoption.
The recognised social or child welfare agency should, on receiving an application of a foreigner for adoption through a licensed or recognised social or child welfare agency in a foreign country, consider which child would be suitable for being given in adoption to the foreigner and would fit into the environment of his family and community and send the photograph and child study report of such child to the foreigner for the purpose of obtaining his 841 approval to the adoption of such child.
The practice of accepting a general approval of the foreigner to adopt any child should not be allowed, because it is possible that if the foreigner has not seen the photograph of the child and has not studied the child study report and a child is selected for him by the recognised social or child welfare agency in India on the basis of his general approval, he may on the arrival of the child in his country find that he does not like the child or that the child is not suitable in which event the interest of the child would be seriously prejudiced.
The recognised social or child welfare agency must therefore insist upon approval of a specific known child and once that approval is obtained, the recognised social or child welfare agency should immediately without any undue delay proceed to make an application for appointment of the foreigner as guardian of the child.
Such application would have to be made in the court within whose jurisdiction the child ordinarily resides and it must be accompanied by copies of the home study report, the child study report and other certificates and documents forwarded by the social or child welfare agency sponsoring the application of the foreigner for taking the child in adoption.
Before we proceed to consider what procedure should be followed by the court in dealing with an application for appointment of a foreigner as guardian of a child, we may deal with a point of doubt which was raised before us, namely, whether the social or child welfare agency which is looking after the child should be entitled to receive from the foreigner wishing to take the child in adoption any amount in respect of maintenance of the child or its medical expenses.
We were told that there are instances where large amounts are demanded by so called social or child welfare agencies or individuals in consideration of giving a child in adoption and often this is done under the label of maintenance charges and medical expenses supposed to have been incurred for the child.
This is a pernicious practice which is really nothing short of trafficking in children and it is absolutely necessary to put an end to it by introducing adequate safeguards.
There can be no doubt that if an application of a foreigner for taking a child in adoption is required to be routed through a recognised social or child welfare agency and the necessary steps for the purpose of securing appointment of the foreigner as guardian of the child have also to be taken only through a recognised social or child welfare agency, the possibility of any so called social or child welfare agency or individual trafficking in children by demanding exorbitant amounts from prospective adoptive parents under the guise of maintenance charges and medical expenses or 842 otherwise, would be almost eliminated.
But, at the same time, it would not be fair to suggest that the social or child welfare agency which is looking after the child should not be entitled to receive any amount from the prospective adoptive parent, when maintenance and medical expenses in connection with the child are actually incurred by such social or child welfare agency.
Many of the social or child welfare agencies running homes for children have little financial resources of their own and have to depend largely on voluntary donations and therefore if any maintenance or medical expenses are incurred by them on a child, there is no reason why they should not be entitled to receive reimbursement of such maintenance and medical expenses from the foreigner taking the child in adoption.
We would therefore direct that the social or child welfare agency which is looking after the child selected by a prospective adoptive parent, may legitimately receive from such prospective adoptive parent maintenance expenses at a rate not exceeding Rs. 60 per day (this outer limit being subject to revision by the Ministry of Social Welfare, Government of India from time to time) from the date of selection of the child by him until the date the child leaves for going to its new home as also medical expenses including hospitalisation charges, if any, actually incurred by such social or child welfare agency for the child.
But the claim for payment of such maintenance charges and medical expenses shall be submitted to the prospective adoptive parent through the recognised social or child welfare agency which has processed the application for guardianship and payment in respect of such claim shall not be received directly by the social or child welfare agency making the claim but shall be paid only through the recognised social or child welfare agency.
This procedure will to a large extent eliminate trafficking in children for money or benefits in kind and we would therefore direct that this procedure shall be followed in the future.
But while giving this direction, we may make it clear that what we have said should not be interpreted as in any way preventing a foreigner from making voluntary donation to any social or child welfare agency but no such donation from a prospective adoptive parent shall be received until after the child has reached the country of its prospective adoptive parent.
It is also necessary to point out that the recognised social or child welfare agency through which an application of a foreigner for taking a child in adoption is routed must, before offering a child in adoption, make sure that the child is free to be adopted.
Where the parents have relinquished the child for adoption and there is a docu 843 ment of surrender, the child must obviously be taken to be free for adoption.
So also where a child is an orphan or destitute or abandoned child and it has not been possible by the concerned social or child welfare agency to trace its parents or where the child is committed by a juvenile court to an institution, centre or home for committed children and is declared to be a destitute by the juvenile court, it must be regarded as free for adoption.
The recognised social or child welfare agency must place sufficient material before the court to satisfy it that the child is legally available for the adoption.
It is also necessary that the recognised welfare agency must satisfy itself, firstly, that there is no impediment in the way of the child entering the country of the prospective adoptive parent; secondly, that the travel documents for the child can be obtained at the appropriate time and lastly, that the law of the country of the prospective adoptive parent permits legal adoption of the child and that no such legal adoption being concluded, the child would acquire the same legal status and rights of inheritance as a natural born child and would be granted citizenship in the country of adoption and it should file along with the application for guardianship, a certificate reciting such satisfaction.
We may also at this stage refer to one other question that was raised before us, namely, whether a child under the care of a social or child welfare agency or hospital or orphanage in one State can be brought to another State by a social or child welfare agency for the purpose of being given in adoption and an application for appointment of a guardian of such child can be made in the court of the latter State.
This question was debated before us in view of the judgment given by Justice Lentin of the Bombay High Court of 22nd July, 1982 in Miscellaneous Petition No. 178 of 1982 and other allied petitions.
We agree with Justice Lentin that the practice of social or child welfare agencies or individuals going to different States for the purpose of collecting children for being given in inter country adoption is likely to lead to considerable abuse, because it is possible that such social or child welfare agencies or individuals may, by offering monetary inducement, persuade indigent parents to part with their children and then give the children to foreigners in adoption by demanding a higher price, which the foreigners in their anxiety to secure a child for adoption may be willing to pay.
But we do not think that if a child is relinquished by its biological parents or is an orphan or destitute or abandoned child in its parent State, there should be any objection to a social or child welfare agency taking the child to another State, even if 844 the object be to give it in adoption, provided there are sufficient safeguards to ensure that such social or child welfare agency does not indulge in any malpractice.
Since we are directing that every application of a foreigner for taking a child in adoption shall be routed only through a recognised social or child welfare agency and an application for appointment of the foreigner as guardian of the child shall be made to the court only through such recognised social or child welfare agency, there would hardly be any scope for a social or child welfare agency or individual who brings a child from another State for the purpose of being given in adoption to indulge in trafficking and such a possibility would be reduced to almost nil.
Moreover before proposing a child for adoption, the recognised social or child welfare agency must satisfy itself that the child has either been voluntarily relinquished by its biological parents without monetary inducement or is an orphan or destitute or abandoned child and for this purpose, the recognised social or child welfare agency may require the agency or individual who has the care and custody of the child to state on oath as to how he came by the child and may also, if it thinks fit, verify such statement, by directly enquiring from the biological parents or from the child care centre or hospital or orphanage from which the child is taken.
This will considerably reduce the possibility of abuse while at the same time facilitating placement of children deprived of family love and care in smaller towns and rural areas.
We do not see any reason why in cases of this kind where a child relinquished by its biological parents or an orphan or destitute or abandoned child is brought by an agency or individual from one State to another, it should not be possible to apply for guardianship of the child in the court of the latter State, because the child not having any permanent place of residence, would then be ordinarily resident in the place where it is in the care and custody of such agency or individual.
But quite apart from such cases, we are of the view that in all cases where a child is proposed to be given in adoption, enquiries regarding biological parents, whether they are traceable or not and if traceable, whether they have voluntarily relinquished the child and if not, whether they wish to take the child back, should be completed before the child is offered for adoption and thereafter no attempt should be made to trace or contact the biological parents.
This would obviate the possibility of an ugly and unpleasant situation of biological parents coming forward to claim the child after it has been given to a foreigner in adoption.
It is also necessary while considering placement of a child in adoption to bear in mind that brothers and sisters or children who have 845 been brought up as siblings should not be separated except for special reasons and as soon as a decision to give a child in adoption to a foreigner is finalised, the recognised social or child welfare agency must if the child has reached the age of understanding, take steps to ensure that the child is given proper orientation and is prepared for going to its new home in a new country so that the assimilation of the child to the new environment is facilitated.
We must emphasize strongly that the entire procedure which we have indicated above including preparation of child study report, making of necessary enquiries and taking of requisite steps leading upto the filing of an application for guardianship of the child proposed to be given in adoption, must be completed expeditiously so that the child does not have to remain in the care and custody of a social or child welfare agency without the warmth and affection of family life, longer than is absolutely necessary.
We may also point out that if a child is to be given in intercountry adoption, it would be desirable that it is given in such adoption as far as possible before it completes the age of 3 years.
The reason is that if a child is adopted before it attains the age of understanding, it is always easier for it to get assimilated and integrated in the new environment in which it may find itself on being adopted by a foreign parent.
Comparatively it may be some what difficult for a grown up child to get acclimatized to new surroundings in a different land and some times a problem may also arise whether foreign adoptive parents would be able to win the love and affection of such grown up child.
But we make it clear that we say this, we do not wish to suggest for a moment that children above the age of three years should not be given in inter country adoption.
There can be no hard and fast rule in this connection.
Even children between the ages of 3 and 7 years may be able to assimilate themselves in the new surroundings without any difficulty and there is no reason why they should be denied the benefit of family warmth and affection in the home of foreign parents, merely because they are past the age of 3 years.
We would suggest that even children above the age of 7 years may be given in inter country adoption but we would recommend that in such cases, their wishes may be ascertained if they are in a position to indicate any preference.
The statistics placed before us show that even children past the age of 7 years have been happily integrated in the family of their foreign adoptive parents.
846 Lastly, we come to the procedure to be followed by the court when an application for guardianship of a child is made to it.
Section 11 of the provides for notice of the application to be issued to various persons including the parents of the child if they are residing in any State to which the Act extends.
But, we are definitely of the view that no notice under this section should be issued to the biological parents of the child, since it would create considerable amount of embarrassment and hard ship if the biological parents were then to come forward and oppose the application of the prospective adoptive parent for guardianship of the child.
Moreover, the biological parents would then come to know who is the person taking the child in adoption and with this knowledge they would at any time be able to trace the whereabouts of the child and they may try to contact the child resulting in emotional and psychological disturbance for the child which might affect his future happiness.
The possibility also cannot be ruled out that if the biological parents know who are the adoptive parents they may try to extort money from the adoptive parents.
It is therefore absolutely essential that the biological parents should not have any opportunity of knowing who are the adoptive parents taking the child in adoption and therefore notice of the application for guardianship should not be given to the biological parents.
We would direct that for the same reasons notice of the application for guardianship should also not be published in any newspaper.
Section 11 of the Act empowers the court to serve notice of the application for guardianship on any other person to whom, in the opinion of the court, special notice of the application should be given and in exercise of this power the court should, before entertaining an application for guardianship, give notice to the Indian Council of Child Welfare or the Indian Council for Social Welfare or any of its branches for scrutiny of the application with a view to ensuring that it will be for the welfare of the child to be given in adoption to the foreigner making the application for guardianship.
The Indian Council of Social Welfare of the Indian Council of Child Welfare to which notice is issued by the court would have to scrutinise the application for guardianship made on behalf of the foreigner wishing to take the child in adoption and after examining the home study report, the child study report as also documents and certificates forwarded by the sponsoring social or child welfare agency and making necessary enquiries, it must make its representation to the court so that the court may be able to satisfy itself whether the principles and norms as also the procedure laid down by us in this judgment have been observed and followed, whether the foreigner 847 will be a suitable adoptive parent for the child and the child will be able to integrate and assimilate itself in the family and community of the foreigner and will be able to get warmth and affection of family life as also moral and material stability and security and whether it will be in the interest of the child to be taken in adoption by the foreigner.
If the court is satisfied, then and then only it will make an order appointing the foreigner as guardian of the child and permitting him to remove the child to his own country with a view to eventual adoption.
The court will also introduce a condition in the order that the foreigner who is appointed guardian shall make proper provision by way of deposit or bond or otherwise to enable the child to be repatriated to India should it become necessary for and reason.
We may point out that such a provision is to be found in clause 24 of the Adoption of Children Bill No. 208 of 1980 and in fact the practice of taking a bond from the foreigner who is appointed guardian of the child is being followed by the courts in Delhi as a result of practice instructions issued by the High Court of Delhi.
The order will also include a condition that the foreigner who is appointed guardian shall submit to the Court as also to the Social or Child Welfare Agency processing the application for guardianship, progress reports of the child along with a recent photograph quarterly during the first two years and half yearly for the next three years.
The court may also while making the order permit the social or child welfare agency which has taken care of the child pending its selection for adoption to receive such amount as the Court thinks fit from the foreigner who is appointed guardian of such child.
The order appointing guardian shall carry, attached to it, a photograph of the child duly counter signed by an officer of the court.
This entire procedure shall be completed by the court expediticusly and as far as possible within a period of two months from the date of filing of the application for guardianship of the child.
The proceedings on the application for guardianship should be held by the Court in camera and they should be regarded as confidential and as soon as an order is made on the application for guardianship the entire proceedings including the papers and documents should be sealed.
When an order appointing guardian of a child is made by the court, immediate intimation of the same shall be given to the Ministry of Social Welfare, Government of India as also to the Ministry of Social Welfare of the Government of the State in which the court is situate and copies of such order shall also be forwarded to the two respective ministries of Social Welfare.
The Ministry of Social Welfare, Government of India shall maintain a register containing names and other particulars of the children in 848 respect of whom orders for appointment of guardian have been made as also names, addresses and other particulars of the prospective adoptive parents who have been appointed such guardians and who have been permitted to take away the children for the purpose of adoption.
The Government of India will also send to the Indian Embassy or High Commission in the country of the prospective adoptive parents from time to time the names, addresses and other particulars of such prospective adoptive parents together with particulars of the children taken by them and requesting the Embassy or High Commission to maintain an unobtrusive watch over the welfare and progress of such children in order to safeguard against any possible maltreatment, exploitation or use for ulterior purposes and to immediately report any instance of maltreatment, negligence or exploitation to the Government of India for suitable action.
We may add even at the cost of repetition that the biological parents of a child taken in adoption should not under any circumstances be able to know who are the adoptive parents of the child nor should they have any access to the home study report or the child study report or the other papers and proceedings in the application for guardianship of the child.
The foreign parents who have taken a child in adoption would normally have the child study report with them before they select the child for adoption and in case they do not have the child study report, the same should be supplied to them by the recognised social or child welfare agency processing the application for guardianship and from the child study report, they would be able to gather information as to who are the biological parents of the child, if the biological parents are known.
There can be no objection in furnishing to the foreign adoptive parents particulars in regard to the biological parents of the child taken in adoption, but it should be made clear that it would be entirely at the discretion of the foreign adoptive parents whether and if so when, to inform the child about its biological parents.
Once a child is taken in adoption by a foreigner and the child grows up in the surroundings of the country of adoption and becomes a part of the society of that country, it may not be desirable to give information to the child about its biological parents whilst it is young, as that might have the effect of exciting his curiosity to meet its biological parents resulting in unsettling effect on its mind.
But if after attaining the age of maturity, the child wants to know about its biological parents, there may not be any serious objection to the giving of such information to the child because after the child attains maturity, it is not likely to be easily affected by such information and in such a 849 case, the foreign adoptive parents may, in exercise of their discretion, furnish such information to the child if they so think fit.
These are the principles and norms which must be observed and the procedure which must be followed in giving a child in adoption to foreign parents.
If these principles and norms are observed and this procedure is followed, we have no doubt that the abuses to which inter country adoptions, if allowed without any safeguards, may lend themselves would be considerably reduced, if not eliminated and the welfare of the child would be protected and it would be able to find a new home where it can grow in an atmosphere of warmth and affection of family life with full opportunities for physical intellectual and spiritual development.
We may point out that the adoption of children by foreign parents need not wait until social or child welfare agencies are recognised by the Government as directed in this order, but pending recognition of social or child welfare agencies for the purpose of inter country adoptions, which interregnum, we hope, will not last for a period of more than two months, any social or child welfare agency having the care and custody of a child may be permitted to process an application of a foreigner, but barring this departure the rest of the procedure laid down by us shall be followed wholly and the principles and norms enunciated by us in this Judgment shall be observed in giving a child in inter country adoption.
The writ petition shall stand disposed of in these terms.
Copies of this order shall be sent immediately to the Ministry of Social Welfare of the Government of India and the Ministry of Social Welfare of each of the State Governments as also to all the High Courts in the country and to the Indian Council of Social Welfare and the Indian Council of Child Welfare.
We would direct that copies of this Order shall also be supplied to the Embassies and Diplomatic Missions of Norway, Sweden, France, Federal Republic of Germany and the United States of America and the High Commissions of Canada and Australia for their informations since the statistics show that these are the countries where Indian children are taken in adoption.
S.R. 850 ANNEXURE 'A ' 1. Source of Referral.
Number of single and joint interviews.
Personality of husband and wife.
Health details such as clinical tests, heart condition, past illnesses etc.
(medical certificates required, sterility certificate required, if applicable), 5.
Social status and family background.
Nature and Adjustment with occupation.
Relationship with community.
Description of home.
Accommodation for the child.
Schooling facilities.
Amenities in the home.
Standard of living as it appears in the home.
Type of neighbourhood.
Current relationship between husband and wife.
(a) Current relationship between parents and children (if any children).
(b) Development of already adopted children (if any) and their acceptance of the child to be adopted.
Current relationship between the couple and the members of each other 's families.
851 17.
If the wife is working, will she be able to give up the job ? 18.
If she cannot leave the job, what arrangements will she make to look after the child ? 19.
Is adoption considered because of sterility of one of the maritial partners ? 20.
If not, can they eventually have children of their own ? 21.
If a child is born to them, how will they treat the adopted child ? 22.
If the couple already has children how will these children react to an adopted child ? 23.
Important social and psychological experiences which have had a bearing on their desire to adopt a child.
Reasons for wanting to adopt an Indian child.
Attitude of grand parents and relatives towards the adoption.
Attitude of relatives, friends, community and neighbourhood towards adoption of an Indian child.
Anticipated plans for the adopted child.
Can the child be adopted according to the adoption law in the adoptive parents country ? Have they obtained the necessary permission to adopt ? (Statement of permission required.) 29.
Do the adoptive parents know any one who adopted a child from their own country or another country ? Who are they ? From where did they fail to get a child from that source ? 30.
Did the couple apply for a child from any other source ? If yes, which source ? 31.
What type of child is the couple interested in ? (sex, age, and for what reasons.) 852 32.
Worker 's recommendation concerning the family and the type of child which would best fit into this home.
Name and address of the agency conducting the home study.
Name of social worker, qualification of social worker.
Name of agency responsible for post placement, supervision and follow up.
| The petitioner, an advocate of the Supreme Court addressed a letter in public interest to the Court, complaining of malpractices indulged in by social organisation and voluntary agencies engaged in the work of offering Indian Children in adoption to foreign parents, the petitioner alleged that not only Indian Children of tender age are under the guise of adoption "exposed to the long horrendous journey to distant foreign countries at great risk to their lives but in cases where they survive and where these children are not placed in the shelter and Relief Houses, they in course of time become beggars or prostitutes for want of proper care from their alleged foster parents.
" The petitioner, accordingly, sought relief restraining Indian based private agencies "from carrying out further activity of routing children for adoption abroad" and directing the Government of India, the Indian Council of Child Welfare and the Indian Council of Social Welfare to carry out their obligations in the matter of adoption of Indian Children by Foreign parents.
Being a public interest litigation, the letter was treated as a writ petition.
Disposing of the Writ Petition, after indicating the principles and norms to be observed in giving a Child in adoption to foreign parents, the Court ^ HELD: 1: 1.
Every child has a right to love and be loved and to grow up in an atmosphere of love and affection and of moral and material security and this is possible only if the child is brought up in a family.
The most congenial environment would, of course, be that of the family of his biological parents.
But if for any reason it is not possible for the biological parents or other near relative to look after the child or the child is abandoned and it is either not possible to trace the parents or the parents are not willing to take care of the child, the next best alternative would be to find adoptive parents for the child so that the child can grow up under the loving care and attention of the adoptive parents.
The adoptive parents would be the next best substitute for the biological parents.
[813E F] 1: 2.
When the parents of a child want to give it away in adoption or the child is abandoned and it is considered necessary in the interest of the child 796 to give it in adoption, every effort must be made first to find adoptive parents for it within the country, because such adoption would steer clear of any problems of assimilation of the child in the family of the adoptive parents which might arise on account of cultural, racial or linguistic differences in case of adoption of the child by foreign parents.
If it is not possible to find suitable adoptive parents for the child within the country, it may become necessary to give the child in adoption to foreign parents rather than allow the child to grow up in an orphanage or an institution where it will have no family life and no love and affection of parents and quite often, in the socioeconomic conditions prevailing in the country, it might have to lead the life of a destitute, half clad, half hungry and suffering from malnutrition and illness.
[8 4B D] 2: 1.
The primary object of giving the child in adoption should be the welfare of the child.
Great care has to be exercised in permitting the child to be given in adoption to foreign parents, lest the child may be neglected or abandoned by the adoptive parents in the foreign country or the adoptive parents may not be able to provide to the child a life or moral or material security or the child may be subjected to moral or sexual abuse or forced labour or experimentation for medial or other research and may be placed in a worse situation than that in his own country.
[815G H; 816A] 2: 2.
Since there is no statutory enactment in our country providing for adoption of a child by foreign parents or laying down the procedure which must be followed in such a case, resort is had to the provisions of the for the purpose of facilitating such adoption.
[ 824G] 2: 3.
The High Courts of Bombay, Delhi and Gujarat have laid down by Rules and Instructions certain procedure when a foreigner makes an application for adoption under the Guardian and Wards Act including issuing of a notice to the Indian Council of Social Welfare and other officially recognised social welfare agencies with a view to assist the court in properly and carefully scrutinising the applications of the foreign parents for determining whether it will be in the interest of the child and promotive of its welfare, to be adopted by the foreign parents making the application or in other words, whether such adoption will provide moral and material security to the child with an opportunity to grow into the full stature of its personality in an atmosphere of love and affection and warmth of a family health and home.
This Procedure is eminently desirable and it can help considerably to reduce, if notice imitate, the possibility of the child being adopted by unsuitable or undesirable parents or being placed in a family where it may be neglected, maltreated or exploited by the adoptive parents.
[828B E] Rasiklal Chaganlal Mehta 's case A.I.R. 1982 Gujarat 193, approved.
The requirements which should be insisted upon so far as a foreigner wishing to take a child in adoption and the procedure that should be followed for the purpose of ensuring that such inter country adoptions do not lead to abuse maltreatment or exploitation of children and secure to them a healthy, decent family life are as under: (1) Every application from a foreigner desiring to adopt a child must be 797 sponsored by a social or child welfare agency recognised or licensed by the government of the country in which the foreigner is resident.
No application by a foreigner for taking a child in adoption should be entertained directly by any social or welfare agency of India working in the area of inter country adoption or by any institution or centre or home to which children are committed by the juvenile court.
This is essential primarily for three reasons.
[831G H] Firstly, it will help to reduce, if not eliminate altogether, the possibility of profiteering and trafficking in children, because if a foreigner were allowed to contact directly agencies or individuals in India for the purpose of obtaining a child in adoption, he might, in his anxiety to secure a child for adoption, be induced or persuaded to pay any unconscionable or unreasonable amount which might be demanded by the agency to individual procuring the child.
Secondly it would be almost impossible for the court to satisfy itself that the foreigner who wishes to take the child in adoption would be suitable as a parent for the child and whether he would be able to provide a stable and secure family life to the child and would be able to handler trans racial, trans cultural and trans national problems likely to arise from such adoption, because where the application for adopting a child has not been sponsored by a social or child welfare agency in the country of the foreigner, there would be no proper and satisfactory home study report on which the court can rely.
Thirdly, in such a case, where the application of a foreigner for taking a child in adoption is made directly without the intervention of a social or child welfare agency, there would be no authority or agency in the country of the foreigner who could be made responsible for supervising the progress of the child and ensuring that the child is adopted at the earliest in accordance with law and grows up in an atmosphere of warmth and affection with moral and material security assured to it.
[832A E] Every application of a foreigner for taking a child in adoption must be accompanied by a home study report and the social or child welfare agency sponsor in such application should also send along with it a recent photograph of the family, a marriage certificate of the foreigner and his or her spouse as also a declaration concerning their health together with a certificate regarding their medical fitness duly certified by a medical doctor, a declaration regarding their financial status alongwith supporting documents including employer 's certificate where applicable, income tax assessment orders, bank references and particulars concerning the properties owned by them, and also a declaration stating that they are willing to be appointed guardian of the child and an undertaking that they would adopt the child according to the law of their country within a period of not more than two years from time of arrival of the child in their country and give intimation of such adoption to the court appointing them as guardian as also to the social or child welfare agency in India process.
sing their case, and that they would maintain the child and provide it necessary education and up bringing according to their status and they would also send to the court as also to the social or child welfare agency in India reports relating to the progress of the child alongwith its recent photograph, the frequency of such progress reports being quarterly during the first two years and half yearly for the next three years.
The application of the foreigner must also be accompanied by a Power of Attorney in favour of an officer of the social or child welfare agency in India which is requested to process the case and such 798 Power of Attorney should authorize the Attorney to handle the case on behalf of the foreigner in case the foreigner is not in a position to come to India.
The social or child welfare agency sponsoring the application of the foreigner must also certify that the foreigner seeking to adopt a child is permitted to do so according to the law of his country.
These certificates, declarations and documents must accompany the application of the foreigner for taking child in adoption, should be duly notarised by a Notary Public whose signature should be duly attested either by an officer of the Ministry of External Affairs or Justice or Social Welfare of the country of the foreigner or by an officer of the Indian Embassy or High Commission or Consulate in that country.
The social or child welfare agency sponsoring the application of the forefingers must also undertake while forwarding the application to the social or child welfare agency in India, that it will ensure adoption of the child by the foreigner according to the law of his country within a period not exceeding two years and as soon as the adoption is affected, it will send two certified copies of the adoption order to the social or child welfare agency in India through which the application for guardianship is processed, so that one copy can be filed in court and the other can remain with the social or child welfare agency in India.
The social or child welfare agency sponsoring the application must also agree to send to the concerned social or child welfare agency in India progress reports in regard to the child, quarterly during the first year and half yearly for the subsequent year or years until the adoption is effected, and it must also undertake that in case of disruption of the family of the foreigner before adoption can be effected, it will take care of the child and find a suitable alternative placement for it with the approval of the concerned social or child welfare agency in India and report such alternative placement to the court handling the guardianship proceedings and such information shall be passed on both by the court as also by the concerned social or child welfare agency in India to the Secretary, Ministry of Social Welfare, Government of India.
[833C H; 834A E] 3: 2.
The Government of India shall prepare a list of social or child welfare agencies licensed or recognised for inter country adoption by the Government of each foreign country where children from India are taken in adoption and this list shall be prepared after getting the necessary information from the government of each such foreign country and the Indian Diplomatic Mission in that foreign country.
Such lists shall be supplied by the Government of India to the various High Courts in India as also to the social or child welfare agencies operation in India in the area of inter country adoption under licence or recognition from the Government of India.
[834E F; [835 B] 3: 3.
If the biological parents are known, they should be helped to understand all the implications of adoption including the possibility of adoption by a foreigner and they should be told specifically that in case the child is adopted, it would not be possible for them to have any further contact with the child The biological parents should not be subjected to any duress in making a decision about relinquishment and even after they have taken a decision to relinquish the child for giving in adoption, a further period of about three months should be allowed to them to reconsider their decision.
But once the decision is taken and not reconsidered within such further time as may be allowed to them, it must be regarded as irrevocable and the procedure for 799 giving the child in adoption to a foreigner can then be initiated without any further reference to the biological parents by filling an application for appointment of the foreigner as guardian of the child.
Thereafter there can be no question of once again consulting the biological parents whether they wish to give the child in adoption or they want to take it back.
But in order to eliminate any possibility of mischief and to make sure that the child has in fact surrendered by its biological parents, it is necessary that the Institution or Centre or home for Child Care or social or Child Welfare Agency to which the child is surrendered by the biological parents, should take from the biological parents a document of surrender duly signed by the biological parents and attested by at least two responsible persons and such document of surrender should not only contain the names of the biological parents and their address but also information in regard to the birth of the child and its background, health and development.
If the biological parents state a preference for the religious upbringing of the child, their wish should as far as possible be respected, but ultimately the interest of the child alone should be the sole guiding factor and the biological parents should be informed that the child may be given in adoption even to a foreigner who professes a religion different from that of the biological parents.
The biological parents should not be induced or encouraged or even be permitted to take a decision in regard to giving of a child in adoption before the birth of a child or within a period of three months from the date of birth.
This precaution is necessary because the biological parents must have reasonable time after the birth of the child to take a decision whether to rear up the child themselves or to relinquish it for adoption and moreover it may be necessary to allow some time to the child to overcome any health problems experienced after birth.
[835 H; 836A D; 836G H] 3: 4.
It should not be open to any and every agency or individual to process an application from a foreigner for taking a child in adoption and such application should be processed only through a social or child welfare agency licensed or recognised by the Government of India or the Government of the State in which it is operating.
Since an application for appointment as guardian can be processed only by a recognised social or child welfare agency and none else, any unrecognised institution, centre or agency which has a child under its care would have to approach a recognised social or child welfare agency if it desires such child to be given in inter country adoption, and in that event it must send without any undue delay the name and must send without any undue delay the name and particulars of such child to the recognised social or child welfare agency through which such child is proposed to be given in inter country adoption.
The Indian Council of Social Welfare and the Indian Council for Child Welfare are clearly two social or child welfare agencies operating at the national level and recognised by the Government of India.
But apart from these two recognised social or child welfare agencies functioning at the national level, there are other social or child welfare agencies engaged in child care and welfare and if they have good standing and reputation and are doing commendable work in the are of child care and welfare they should also be recognised by the Government of India or the Government of the State for the purpose of inter country adoptions.
But before taking a decision to recognise any particular social or child welfare agency for the purpose of inter country adoptions the Government of India or the Government of a State would do well to examine whether the social or child welfare agency 800 has proper staff with professional social work experience, because otherwise it may not be possible for the social or child welfare agency to carry out satisfactorily the highly responsible task of ensuring proper placement of a child with a foreign adoptive family.
The Government of India or the Government of a State recognising any social or child welfare agency for inter country adoptions must insist as a condition of recognition that the social or child welfare agency shall maintain proper accounts which shall be audited by a chartered accountant at the end of every year and it shall not charge to the foreigner wishing to adopt a child any amount in excess of that actually in cured by way of legal or other expenses in connection with the application for appointment of guardian including such reasonable remuneration or honorarium for the work done and trouble taken in processing, filing and pursuing the application as may be fixed by the Court.
[837B H; 838A D] 3:5.
Every recognised social or child welfare agency must maintain a register in which the names and particulars of all children proposed to be given in inter country adoption through it must be entered and in regard to each such child, the recognised social or child welfare agency must prepare a child study report through a professional social worker giving all relevant information in regard to the child so as to help the foreigner to come to a decision whether or not to adopt the child and to understand the child, if he decides to adopt it as also to assist the court in coming to a decision whether it will be for the welfare of the child to be given in adoption to the foreigner wishing to adopt it.
The child study report should contain as far as possible information in regard to the following matters: (1) Identifying information, supported where possible by documents.
(2) Information about original parents, including their health and details of the mother 's pregnancy and birth.
(3) Physical, intellectual and emotional development.
(4) Health report prepared by a registered medical practitioner preferably by a paediatrician.
(5) Recent photograph.
(6) Present environment category of care (Own home, foster home, institution etc.) relationships routines and habits.
(7) Social worker 's assessment and reasons for suggesting inter country adoption.
[838G H; 839A E] 3:6.
The recognised social or child welfare agency must insist upon approval of a specific known child and once that approval is obtained the recognised social or child welfare agency should immediately without any undue delay proceed to make an application for appointment of the foreigner as guardian of the child.
Such application would have to be made in the court within whose jurisdiction the child ordinarily resides and it must be accompanied by copies of the home study report, the child study report and other certificates and documents forwarded by the social or child welfare agency 801 sponsoring the application of the foreigner for taking the child in adoption.
It is also necessary that the recognised social or child welfare agency through which an application of a foreigner for taking a child in adoption is routed must before offering a child in adoption, make sure that the child is free to be adopted.
The recognised social or child welfare agency must place sufficient material before the court to satisfy it that the child is legally available for adoption.
It is also necessary that the recognised social or child welfare agency must satisfy itself, firstly, that there is no impediment in the way of the child entering the country of the prospective adoptive parent; secondly, that the travel documents for the child can be obtained at the appropriate time and lastly, that the law of the country of the prospective adoptive parent permits legal adoption of the child and that on such legal adoption being concluded, the child would acquire the same legal status and rights of inheritance as a natural born child and would be granted citizenship in the country of adoption and it should file alongwith the application for guardianship, a certificate reciting such satisfaction.
[841C D; 842H; 843A D] 3: 7.
In cases where a child relinquished by its biological parents or an orphan or destitute or abandoned child is brought by an agency or individual from one State to another, there should be no objection to a social or child welfare agency taking the child to another State, even if the object be to give it in adoption, provided there are sufficient safeguards to ensure that such social or child welfare agency does not indulge in any malpractice.
There should also be no difficulty to apply for guardianship of the child in the court of the latter State.
because the child not having any permanent place of residence would then be ordinarily resident in the place where it is in the care and custody of such agency or individual.
[843H; 844A F] Section 11 of the provides for notice of the application to be issued to various persons including the parents of the child if they are residing in any State to which the Act extends.
But, no notice under this section should be issued to the biological parents of the child, since it would create considerable amount of embarrassment and hardship if the biological parents were then to come forward and oppose the application of the prospective adoptive parent for guardianship of the child.
Moreover, the biological parents would then come to know who is the person taking the child in adoption and with this knowledge they would at any time be able to trace the whereabouts of the child and they may try to contact the child resulting in emotional and psychological disturbance for the child which might affect his future happiness.
For the same reasons, notice of the application for guardianship should also not be published in any newspaper.
If the court is satisfied, after giving notice of the application to the Indian Council of Child Welfare or the Indian Council for Social Welfare or any of its branches for scrutiny of the application, that it will be for the welfare of the child to be give in adoption to the foreigner making the application for guardianship, it will only then make an order appointing the foreigner as guardian of the child and permitting him to remove the child to his own country with a view to eventual adoption.
The Court will introduce the following conditions in the order, namely: [846A H; 848A B] (i) That the foreigner who is appointed guardian shall make proper 802 provision by way of deposit or bond or otherwise to enable the child to be repatriated to India should it become necessary for any reason.
[847C] (ii) That the foreigner who is appointed guardian shall submit to the court as also to the Social or Child Welfare Agency processing the application for guardianship, progress reports of the child alone with a recent photograph quarterly during the first two years and half yearly for the next three years.
[847D] (iii) The order appointing guardian shall carry, attached to it, a photograph of the child duly counter signed by an officer of the court.
[817F] Where an order appointing guardian of a child is made by the court, immediate intimation of the same shall be given to the Ministry of Social Welfare, Government of India as also to the Ministry of Social Welfare of the Government of the State in which the court is situate and copies of such order shall also be forwarded to the two respective Ministries of Social Welfare.
The Ministry of Social Welfare, Government of India shall maintain a register containing names and other particulars of the children in respect of whom orders for appointment of guardian have been made as also names, addresses and other particulars of the prospective adoptive parents who have been appointed such guardians and who have been permitted to take away the children for the purpose of adoption.
The Govt.
of India will also sent to the Indian Embassy or High Commission in the country of the prospective adoptive parents from time to time the names, addresses and other particulars of such prospective adoptive parents together with particulars of the children taken by them and requesting the Embassy or High Commission to maintain and unobtrusive watch over the welfare and progress of such children in order to safeguard against any possible maltreatment exploitation or use for ulterior purposes and to immediately report and instance of maltreatment, negligence or exploitation to the Government of India for suitable action.
[847G H; 848A C] 3:8.
The social or child welfare agency which is looking after the child selected by a prospective adoptive parent, may legitimately receive from such prospective adoptive parent maintenance expenses at a rate of not exceeding Rs. 60 per day (this outer limit being subjective to revision by the Ministry of Social Welfare, Government of India from time to time) from the date of selection of the child by him until the date the child leaves for going to is new home as also medical expenses including hospitalization charges, any, actually incurred by such social or child welfare agency for the child.
But the claim for payment of such maintenance charges and medical expenses shall be submitted to the prospective adoptive parent.
[842C D] 3:9.
If a child is to be given in inter country adoption, it would be desirable that it is given in such adoption as far as possible before it completes the age of 3 years.
The reason is that if a child is adopted before it attains the age of understanding, it is always easier for it to get assimilated and integrated in the new environment in which it may find itself on being adopted by a foreign parent.
Children above the age of 3 years may also be given in inter country adoption.
There can be no hard and fast rule in this connection.
Even children between the ages of 3 to 7 years may be able to assimilate themselves in the new surroundings without any difficulty.
Even children 803 above the age of seven years may be given in inter country adoption but their wishes may be ascertained if they are in a position to indicate any preference.
[845D G] 3:10.
The proceedings on the Application for guardianship should be held by the Court in camera and they should be regarded as confidential and as soon as an order is made on the application for guardianship the entire proceedings including the papers and documents should be sealed.
[841C D] 3:11.
The social or child welfare agency which is looking after the child selected by a prospective adoptive parent, may legitimately receive from such prospective adoptive parent maintenance expenses at a rate of not exceeding Rs. 60 per day (this outer limit being subject to revision by the Ministry of Social Welfare, Government of India from time to time) from the date of selection of the child by him until the date the child leaves for going to its new home as also medical expenses including hospitalisation charges, if any, actually incurred by such social or child welfare agency for the child.
But the claim for payment of such maintenance charges and medical expenses shall be submitted to the prospective adoptive parent through the recognised social or child welfare agency which has processed the application for guardianship and payment in respect of such claim shall not be received directly by the social or child welfare agency making the claim but shall be paid only through the recognised social or child welfare agency.
However, a foreigner may make voluntary donation to any social or child welfare agency but no such donation from a prospective adoptive parents shall be received until after the child has reached the country of its prospective adoptive parent.
[842C G]
|
tition Nos. 6443 44/80, 8829 30, 9123 24, 370 87, 777 796, 658 62, 732 63, 824 31, 847 62, 1080 1103, 1131 52, 8916, 9071 74, 9130 32, 9176 79, 8965, 8971 72, 9347 48, 9352 67 of 1981.
(Under Article 32 of the Constitution of India) AND Writ Petitions Nos.
14 19/82, 333 25, 458 96, 1307 17, 1410 13, 1595, 8268 72 of 1981 and 152 of 1982.
(Under article 32 of the Constitution of India) C.M. Lodha.
in W. P. No. 6443 44/80, Shanti Bhushan, in WP.
732 63, 3423 25/81 S.N. Kackar, in W.P. 777 96 & 1131 52 of 81; R.K. Jain, section Mitter, K.K. Mohan, N.S. Das Bahl, Rameshwar Dial and Madan Gopal Gupta for the Petitioners.
G.N. Dikshit and Mrs. Shobha Dikshit for Respondents.
Girish Chandra and Miss A. Subhashini for Union of India in W.P. Nos. 6443 44/80.
The Judgment of the Court was delivered by: DESAI, J.
Even an innocuous marginally regulatory measure affecting the sugar trade at fringes is sufficient for this powerful industry to invade the courts with petitions galore almost proclaiming that there should be hands off policy in respect of this trade.
The filimsty albeit untenable grievance made in this group of petitions would underscore the truth of what is just stated.
In exercise of the power conferred by clause (4) third proviso of the Sugarcane (Control) Order, 1966, (Control Order ' for short), the 2nd respondent State of Uttar Pradesh, with the permission of 376 the 1st respondent Union of India, issued Notification dated September 3, 1980, which is impugned in these petitions.
The impugned Notification reads as under: "Sr.
No. 398 A (Ka) 13 38 16, 56 Government Gazette, U.P. Extraordinary Legislative Supplement Part 4, Section (b) (Kha) .
Order Lucknow, Wednesday, 3rd September, 1980.
Notification P.As. 306 In exercise of the powers conferred by clause 4 proviso 3 of the Sugarcane Control Order, 1966, the Governor, with the permission of the Central Government, allows in Uttar Pradesh in respect of Khandsari units, producing Gur, rab or Khandsari sugar, where sugarcane is brought in bundles and is weighed as such, a rebate in regard to the binding material at 0.650 kilograms per quintal.
By Order, R. Basudev, Secretary" It was stated that there was a printing error in mentioning the figure '0.650 kg. ' and a corrigendum has been issued to correct it to '0.625 kg. ' per quintal in the Notification.
The allegations in all the petitions are identical and, therefore, we would state a few representative facts from the writ petition filed by M/s. Sukhnandan Saran Dinesh Kumar and Another.
The petitioners are producers of sugar by open pan process, the product being described as Khandsari sugar.
This term is to be understood in contra distinction to the marketable commodity called 'sugar ' which is produced by vacuum pan process.
The raw material for manu 377 facturing sugar or Khandsari sugar is sugarcane.
The petitioners have set up a factory for manufacturing khandsari sugar by open pan process.
The petitioners buy sugarcane from the sugarcane growers.
In order to extend protection to the farmers who have undertaken raising of sugarcane crop, the Central Government issued the Control Order in exercise of the power conferred by section 3 of the .
By clause 3 of this order, power was conferred on the Central Government to fix minimum price of sugarcane to be paid by producers of sugar for sugarcane purchased by them.
Clause 4 confers similar power to fix the minimum price to be paid by the producers of khandsari sugar for sugarcane purchased by them.
Other clauses of the Order for the present purpose are not relevant.
Clause 3A was introduced by GSR 815 (E)/ESS.
COM./Sugarcane dated September 24, 1976, which, inter alia, conferred power on the Central Government and various other authorities mentioned therein to allow a suitable rebate in regard to the weight of the binding material not exceeding 0.625 kg, per quintal of sugarcane, when sugarcane was purchased by the producer of sugar.
Subsequently, by Notification GSR 197 (E)/Ess.
Com./Sugarcane dated March 20,1978, Clause 4A with the marginal note "Robate that can be deducted from the price paid for sugarcane by producers of Khandsari sugar" was introduced.
Clauses 4 and 4 A are material for the present discussion and they may be extracted: "4.
Minimum price of sugarcane payable by producers of Khandsari sugar: The Central Government or a State Government, with the concurrence of the Central Government, may, by notification in the Official Gazette, from time to time, fix the minimum price or the price of sugarcane to be paid by producers of khandsari sugar or their agents for the sugarcane purchased by them: x x x Provided also that the Central Government or, with the approval of the Central Government, the State Government, may in such circumstances and subject to such con 378 ditions as it may specify allow a suitable rebate in the price so fixed." *"4A. Rebate that can be deducted from the price paid for sugarcane by producers of khandsari sugar: A producer of khandsari sugar or his agent shall pay, for the sugarcane purchased by him, to the sugarcane grower or the sugarcane growers ' co operative society, either the minimum price of sugarcane fixed under clause 4, or the price agreed to between the producer or his agent and the sugarcane grower or the sugarcane growers ' co. operative society, as the case may be (hereinafter referred to as the agreed price:) Provided that: x x x x x x (iii) Where the sugarcane is brought bound in bundles and weighed as such, the Central Government, or, with the approval of the Central Government, the State Government or the Director of Agriculture or the Cane Commissioner or the District Magistrate within their respective jurisdiction, may allow a suitable rebate in regard to the weight of the binding material not exceeding 0.625 Kilograms per quintal of sugarcane; and, x x x Clause 4 conferred power on the Central Government or a State Government with the concurrence of the Central Government to fix the minimum price or the price of sugarcane to be paid by producers of khandsari sugar or their agents for the sugarcane purchased by them.
The second and third proviso to clause 4 were simultaneously introduced with clause 4A. By the Third proviso to clause 4, power was conferred on the Central Government or 379 with the approval of the Central Government on the State Government to allow a suitable rebate in the price fixed in exercise of the power conferred by clause 4.
The purpose underlying the proviso is manifest.
If the minimum price or price of sugarcane to be paid by producers of khandsari sugar is fixed, it is incumbent upon the producers of khandsari sugar to pay that price and nothing less than that price on the pain of criminal prosecution.
The authorities clearly envisaged a situation where sugarcane may be brought in bundles to the unit manufacturing khandsari sugar and if the sugarcane is weighed with the binding material used, the minimum price or price fixed by the Government to be paid per quintal of sugarcane would ipso facto include the weight of the binding material and if the power to grant rebate is not conferred the producer of khandsari sugar will be under an obligation to pay the same price even if the part of the payment was for something other than sugarcane, namely, binding material.
The raison d 'etre behind conferring this power is thus clearly discernible.
Clause 4A made it obligatory to pay the minimum price of sugarcane if so fixed under clause 4 or in the absence of price fixation, the negotiated price.
Proviso (iii) to clause 4A confers power to allow rebate not exceeding 0.625 kg.
per quintal of sugarcane where sugarcane is brought in bundles and is weighed as such, i.e. with the binding material.
Armed with this power, the 2nd respondent after obtaining approval of the Central Government, as per letter dated September 6, 1979, issued the impugned notification directing that where sugarcane is brought in bundles and is weighed as such a rebate in regard to the binding material at 0.625 kg.
per quintal be allowed.
Before adverting to the contentions raised in this group of petitions it may be made distinctly clear that though clause 3A was inserted in the Control Order in 1976 conferring similar power on the Central Government or with the approval of the Central Government, on the State Government to allow rebate at 0.625 kg.
per quintal of sugarcane purchased by manufacturers of sugar, such rebate was being prescribed by the Central Government since 1968.
The Gazettes of India setting out the notifications for the years 1968, 1971, 1972 and 1975 were shown to us.
The notifications were issued in exercise of the power conferred by clause 3 of the Sugarcane Control Order, 1966.
By the notifications hereinabove referred to minimum price of sugarcane per quintal payable by each sugar mill enumerated in the Schedule to the notification was fixed.
380 While fixing this minimum price the Central Government authorised itself as also conferred power on the State Governments or the Commissioner or Director of Agriculture within their jurisdiction to allow a suitable rebate in regard to the weight of binding material not exceeding 0.625 kg.
per quintal of sugarcane.
It thus clearly transpires that the power to fix the minimum price of sugarcane comprehended the power to fix rebate to be allowed for binding material where sugarcane is brought to the factory or the producing centre bound in bundles.
However, to avoid any quibbling about the power to fix such rates of rebate, clause 3A was added in 1976 and an identical clause 4A was added in 1978 acquiring power to prescribe rebate to be allowed for binding material where sugarcane is brought to the khandsari sugar producing units bound in bundles and weighed as such.
This would at least show that since 1968 rebate at 0.625 per quintal of sugarcane purchased by producers of sugar is being allowed.
Sugarcane is a raw material both for sugar and khandsari sugar, the distinction between them being that when vacuum pan process is employed the end product is called sugar and when open pan process is employed the end product is called khandsari sugar.
In case of either of them, the grower of sugarcane has hardly anything to do with the end product.
After the grower sells his sugarcane, as far as he is concerned, it is immaterial whether the producer produces sugar or khandsari sugar or rab or jaggery or shakkar.
Therefore, clause 4A was introduced to avoid discrimination between producers of sugar and khandsari sugar in the matter of rebate to be allowed when the grower of sugarcane brings the same bound in bundles to be delivered to the producer.
The producers of sugar have without a murmur accepted this position but once the producers of khandsari sugar are brought within the purview of an identical provision, they have filed the present petitions.
Mr. C.M. Lodha who led on behalf of the petitioners contended that the power to prescribe rate of rebate under third proviso to clause 4 is conditional upon the fixing of minimum price or price of sugarcane, and as the pre condition to exercise of power is not satisfied, the authorities cannot exercise power to prescribe rate of rebate.
The submission is that where minimum price of sugarcane is fixed by the Government, in order to ensure that that price is paid for sugarcane and simultaneously to avoid any unauthorised deduction, the Central Government or the State Government may prescribe the rate of rebate to be allowed beyond which no deduction 381 under the camouflage of rebate for binding material can be resorted to by the purchaser; but if the power to fix minimum price or price of sugarcane is not exercised, there does not arise a situation in which the power to prescribe rebate to be allowed for binding material can be exercised.
It was urged that the power to fix price or minimum price of sugarcane and to prescribe rate of rebate are not independent but they are inter dependent and one cannot be exercised without exercising the other.
Clause 4 confers power on the Central Government or a State Government with the concurrence of the Central Government to fix the minimum price or the price of sugarcane to be paid by producers of khandsari sugar for sugarcane purchased by them.
Third proviso to clause 4 provides that the Central Government or with the approval of the Central Government, the State Government may in such circumstances and subject to such conditions as it may specify, allow a suitable rebate in the price so fixed.
If the provision were to end with clause 4, a serious contention would arise whether the power to determine rate of rebate can be exercised de horse the power to fix minimum price or price of sugarcane or can be unilaterally exercised.
Undoubtedly, if the power was exercised under clause 4 probably the pre condition to exercise of power of prescribing suitable rebate viz. fixing of minimum price or price of sugarcane if not satisfied, the power to prescribe rate of rebate could not have been exercised because the latter power for its exercise is dependent upon the power to fix price or minimum price.
Both the powers are interrelated as would be evident from the language of third proviso: ". as it may specify, allow a suitable rebate in the price so fixed.
" The rebate is thus co related to price fixed.
Therefore prima facie it appears that the power to fix rate of rebate under the third proviso to clause 4 cannot be exercised without exercising the power to fix price or minimum price.
It being a conditional power, the satisfaction of condition giving rise to the occasion to exercise of power is a must.
Therefore, before the rate of rebate is prescribed the price or the minimum price of sugarcane as provided in the substantive part of clause 4 will have to be fixed.
From the price so fixed a rebate has to be allowed and, therefore, the power was conferred by the third proviso to prescribe the rate of rebate.
The rebate contemplated by the third proviso to clause 4 is not necessarily confined to rate of rebate for binding material only but per 382 missible rate of rebate from the price or minimum price fixed under the substantive provision of clause 4 can be prescribed.
Clause 4A stands on an independent footing and it is independent of clause 4.
Clause 4A is neither inter dependent nor interrelated to clause 4.
Clause 4A provides that the producer of khandsari sugar or his agent shall pay for the sugarcane purchased by him to the sugarcane grower or the sugarcane growers ' cooperative society either the minimum price of sugarcane fixed under clause 4 or the price agreed to between the producer or his agent and the sugarcane grower or the sugarcane growers ' co operative society as the case may be.
Clause 4A thus visualises a situation in which either the minimum price of sugarcane is fixed under clause 4 or where no such price if fixed, the price agreed to between the sugarcane grower and the producer who purchased sugarcane and even in this latter situation the power to prescribe rate of rebate only in respect of binding material was conferred on the Central Government or the authorities set out in the third proviso to clause 4A. Therefore, fixing of the minimum price may be a pre condition to the exercise of power under the third proviso of clause 4, as far as clause 4A is concerned, even where the price to be paid by the producer to the sugarcane grower is the one negotiated between the two, the producer or his agent will have to allow that much rebate and no more for binding material if notified in exercise of the power conferred by the third proviso.
This literal construction accords with the intendment of the provision as would be presently pointed out.
Mr. Lodha urged that if the purchaser and seller of sugarcane are free agents to negotiate the price, what useful purpose would be served by prescribing the rate of rebate statutorily ? Says Mr. Lodha, that if higher rebate is to be allowed, the producer of khandsari sugar and the grower of sugarcane would work out the price accordingly and if less rebate is allowed, it will have a direct impact on the negotiated price.
This submission proceeds on the unwarranted assumption that a producer of khandsari sugar and the grower of sugarcane are capable of negotiating the price as free agents and stand on a footing of equality.
Sugarcane is a perishable commodity.
The grower of the sugarcane is at the mercy of producers of sugar or khandsari sugar.
It would be uneconomic for him to transport sugarcane to a long distance.
By the very nature of the product, it being perishable and transport 383 over a distance being uneconomic, the grower of sugarcane has limited choice in selecting the producer to whom it could be sold.
Between the producer of khandsari and the grower of sugarcane, the first one is primarily in a position to dominate and dictate and they do not operate on the level of equality.
Unquestionably, therefore, the grower of sugarcane in relation to the producer of the khandsari sugar would be weaker and it is he who requires to be protected.
Now, if the protection of fixing of minimum price is not resorted to because the authorities under the Control Order may have information before them that looking to the supply and demand and the demand and the market economy, the grower of sugarcane would be able to obtain a reasonably fair price for his labour, the only thing which is required to be protected against is iniquitous, unauthorised and impermissible deductions.
It appears that in the State of Uttar Pradesh and Bihar the weight of the binding material when sugarcane is brought in bundles to the producer has been a fruitful source for the producers of khandsari sugar to make deductions from the weight of sugarcane delivered to them in such an exorbitant quantity as to deny in real money worth the negotiated price.
This can be demonstrably established by the claim made in these petitions that the weight of binding material is 2.5 kg.
per quintal of sugarcane while the authorities have prescribed only 0.625 kg.
per quintal of sugarcane and the national average as worked out by National Sugar Institute, Kanpur is 0.741 kg.
per quintal of sugarcane.
If the price of sugarcane is fixed per quintal and the deduction is made as contended herein, it does not require imagination or mathematician 's intellect to work out the invisible loss inflicted by the subtle method on the growers of sugarcane.
Therefore, while retaining the power to fix minimum price or price to be paid and also in a given situation leaving it to the purchaser of sugarcane and grower of sugarcane to negotiate the price in order to eschew any exploitation of the weaker section between the two, the power to prescribe the rate of rebate was acquired and can be rightly enforced.
Therefore, viewed from either angle, there is no merit in the submission that unless the power to fix the price or minimum price is exercised there is no power to prescribe the rate of rebate.
Language of clause 4A on a literal or grammatical construction negatives the submission and it must as well be rejected looking to the intendment underlying this provision.
Mr. Shanti Bhushan, learned counsel appearing for the petitioners in Writ Petitions No. 732 to 763 urged that assuming that 384 power to prescribe rate of rebate under clause 4A read with the third proviso could also be exercised where price of sugarcane may be left to be negotiated between the growers of sugarcane and producers of khandsari sugar, yet the quantum as determined must at least have reasonable relation to the reality of market situation as well as prevalent trade practice.
He urged that viewed from this angle fixation of rate of rebate at 0.625 kg.
per quintal of sugarcane is unjust and unfair and therefore the Court should strike down the impugned notification on the ground that the determination is arbitrary and utterly unrelated to trade and practice.
Simultaneously he contended that assuming that national average of weight of binding material works out at 0.741 kg.
per quintal as submitted by the Respondents on the strength of the report of National Sugar Institute, Kanpur, there was absolutely no justification for reducing the same to 0.625 kg.
per quintal and therefore prescribed rate of rebate apart from being arbitrary is unrelated to trade and practice and deserves to be quashed.
In this connection, he referred to Paragraph 6 of the counter affidavit filed by Shri H.A.M.L. Vaz, Deputy Secretary, Ministry of Agriculture, Department of Food in which it is stated as under: "The limit of 625 grams per quintal was adopted, as it was allowed by the States of U.P. and Bihar before the Central Government took over the control over the price of sugarcane, and has continued since then.
Representations were received from the Associations of the vacuum pan sugar mills etc.
against that limit.
A survey was carried out by the National Sugar Institute, Kanpur, and the average weight of the binding material worked out to 0.741 kg., per quintal for the winter season of the selected factories spread over the whole country.
Subsequently, on receipt of a representation from the Madras State Federation of Co operative Sugar Factories, views of the State Governments in the matter were also called for, with the specific request that they might also ascertain the views of the cane growers.
The major sugar producing State Governments of U.P., Punjab, Rajasthan, Maharashtra, Karnataka, Andhra Pradesh, Pondicherry, West Bengal, Orissa, Madhya Pradesh, Kerala and Gujarat, recommended that the limit already prescribed was adequate and that there was no need to revise it.
The Bihar Government had already indicated the same view.
Hence fixation 385 of that limit cannot be said to be unreal and arbitrary or contrary to actualities of trade and practice.
" Petitioners countered it by the affidavit in rejoinder of Shri Prem Parkash Aggarwal; the relevant portion of para 4 reads as under: "With reference to Para 6 of the counter affidavit I say that to the best of my information no survey was carried out at any time after 1976.
It is to the best of my information that National Sugar Institute, Kanpur, conducted some kind of survey in 1964 or earlier.
" This half hearted lack of knowledge would not be sufficient to reject what Mr. Vaz stated in his counter affidavit.
However, to put this factual averment beyond the pale of controversy Mr. Girish Chandra, learned advocate who appeared for the Union Government produced a file of the Department of Food, Sugar Policy Desk, in which claim for upward revision of allowance for binding material presently allowed under Sugar (Control) Order, 1966 in the light of the suggestions received from Indian Sugar Mills Association as per its letter dated July 14, 1977 has been meticulously examined.
It appears that Indian Sugar Mills Association approached the Central Government requesting it for upward revision of the rebate for binding material till then granted under the Control Order.
Indian Sugar Mills Association appears to be the spokesman of the sugar industry.
Probably a grievance was voiced that while producers of sugar are under a statutory obligation to grant the prescribed rate of rebate, the producers of khandsari sugar are under no such obligation even though they purchase sugarcane from the the same market.
Accordingly while examining the question whether any upward revision in the rate of rebate should be allowed to the producers of sugar who purchase sugarcane, it was decided to simultaneously introduce an identical provision in respect of purchase of sugarcane by producers of khandsari sugar.
That is the genesis of the introduction of clause 4A in the Control Order.
The file meticulously examines the suggestion for upward revision of the rate of rebate.
It clearly transpires from the file that a circular letter was sent to all the governments of sugar producing states requesting them to intimate their view on the desirability or otherwise of any upward revision in the existing quantum of rebate of 0.625 kg.
per quintal in respect of the weight of the binding material 386 where sugarcane is brought bound in bundles and weighed as such.
It may be briefly mentioned that Punjab, Gujarat, Karnataka and U.P., did not consider it necessary to grant any upward revision.
On the other hand, Tamilnadu, Kerala, West Bengal, Pondicherry, Haryana, Rajasthan and Orissa were of the opinion that there is some justification for an upward revision not exceeding 1 kg.
per quintal.
The State of Bihar took a neutral stand stating that in Bihar, sugarcane is not supplied bound in bundles and therefore the question of giving any rebate in respect of binding material does not arise.
After ascertaining the views of the different State Governments, the department was of the view that since the views of the State Governments are sharply divided, a request may be made to Director, National Sugar Institute, Kanpur to carry out an independent study in regard to the quantum of rebate that should be given for binding material, to enable the Government to take a final decision, on the request of the industry for upward revision of the existing rebate of 0.625 kg per quintal.
This is the genesis of the report of the Director, National Sugar Institute referred to in Para 6 of the counter affidavit.
The summary of the report of the Director, National Sugar Institute, Kanpur was examined and it was observed that the percentage of the binding materials varies from State to State and ranges between 0.64 to 1.5% except in Orissa where it is found to be 3.00%.
When the matter was still under consideration of the Department, the present writ petitions were field.
It was observed that the present rate of rebate is in force for the last over 20 years, so far as the vacuum pan sugar manufacturers are concerned and the same can be applied to the khandsari sugar manufacturers also.
Probably further examination of the request for upward revision came to be stalled in view of the fact that the present writ petitions were filed.
In the light of the fact situation hereinabove set out, it is difficult to accept the submission that the fixation of rate of rebate for binding material at 0.625 kg.
for the whole country is either arbitrary or unreal or unrelated to trade and practice.
The rate of rebate seems to have been determined by the law of averages after collecting information from all over the country.
Coupled with this is the fact that the present rate of rebate is in vogue for over a quarter of a century.
It in itself is sufficient to negative the contention that the rate of rebate is fixed arbitrarily or unrelated to trade and practice.
387 The next submission is that assuming that the Central Government was influenced by the report made by the Director of the National Sugar Institute, Kanpur, the report suggests that the average works out at 0.741 kg, per quintal, being approximately the mean between 0.64 and 1.5%.
Therefore, it was vehemently urged that there was no justification for further reducing it to 0.625 kg.
When the determination has to be made on law of averages and applicable to the whole country, the final figure cannot be mathematically determined.
If the existing rate of rebate, determined on the national average is marginally higher or lower than the average worked out by a later study team, it cannot be said that the existing prescription is arbitrary or unrelated to trade or practice No doubt, if the range is wide, and the gap is unexplained, realistic redetermination may be directed.
According to the average worked out by the Director of the National Sugar Institute, all India average rate of rebate would work out at 0.741 kg.
per quintal while the Government has been fixing for over a quarter of a century the rate of rebate at 0.625 kg.
per quintal.
Thus the differential between what is prescribed and what is calculated by the study is not so wide as to render the prescribed rate arbitrary or unrealistic.
The differentials being within a narrow range, the one which is in vogue for over a quarter of a century cannot be rejected as arbitrary or unrelated to trade and practice.
Nor is the Court competent to work out the exact permissible rebate with mathematical accuracy.
A reference at this stage to a piece of evidence furnished by the petitioners would suffice to repel the contention of the petitioners that the average weight of binding material is 2.5 kg.
per quintal and, therefore, the prescribed rate is not merely marginally low but wholly unrealistic.
Annexure I to the rejoinder affidavit filed by Shri Prem Prakash Aggarwal, Secretary of Gur Khandsari Utpadak Sangh, Roorkee, dated December 24, 1981, purports to be a report of the Assistant Sugarcane Commissioner on his visit to M/s Anand Prakash Atulkumar, a Khandsari sugar producing unit on January 25, 1978.
He was accompanied by Shri Shanker Shukla, Khandsari Officer, Sarvashri S.D. Verma, R.C. Kureel, Deoband and Navin Chandra, Khandsari Inspectors.
In order to ascertain the average weight of binding material a truck loaded to its full capacity with sugarcane was weighed.
The gross weight was 37 quintals and 36 kgs.
Shri Shobha Ram, the owner of the sugarcane was directed to 388 remove the joon (binding material) of sugarcane.
The weight of M. Trolly was found to be 21 quintals and 40 kgs.
Subtracting the weight of trolly from the gross weight, the weight of sugarcane with binding materials worked out at 15 quintals and 96 kgs.
Then followed the calculation which may be extracted: "The above farmer (kastkar) also reported that the sugarcane was being purchased at Rs. 9.
10 p. per quintal.
Approximately about 1800 quintals cane was lying at site.
The weight of the joon (binding material) after it had been removed came to 32 kgs.
" If the actual weight of the binding material in respect of 1800 quintals of sugarcane turned out to be 32 kg., obviously per each quintal it would be much less than 0.625 kg.
Mr. Shanti Bhushan, however, attempted to urge that the last sentence in the Report is disjointed and misplaced and he wanted us to read the Report as meaning that the weight of sugarcane in the trolly was 15.96 kg.
and that the weight of the binding material in respect of the same was 32 kg.
and, therefore, on an average it would work out at 2 kg.
per quintal.
It is not possible to read the Report in the manner indicated by Mr. Shanti Bhushan.
In fact, the Report was produced on behalf of the petitioners and not a word has been stated in the affidavit to which it is annexed as to how the Report is to be read.
It would thus appear that the rate of rebate set out in the impugned Notification bears resemblance to the sample testing of actual weight of binding material used in binding sugarcane when brought in bundles to the khandsari factory.
Our rejection of the submission should not be interpreted to imply that no case is made out for upward revision of the rate of rebate for binding material.
There is by the law of average as recently worked out in 1980 81, an examinable case for revision up to at least 0.741 kg.
per quintal.
We do not purport to indicate the figure as a judicial pronouncement but we believe that the Central Government would continue its examination of the request made by Indian Sugar Mills Association, shelved because of these petitions, for upward revision and realistically examine the same as early as possible and before the next crushing season commences.
With this we reject the submission that the fixation of rate of rebate at 389 0.625 kg.
per quintal in the impugned notification is arbitrary or unrelated to trade and practice.
Mr. Kackar, learned counsel who appeared in Writ Petitions 777 796 and 1131 52/81 urged that the impugned notification places a restriction on the freedom of trade guaranteed to the petitioners under Article 19 (1) (g) and as it is neither shown to be reasonable nor imposed in public interest, it is violative of the freedom of trade and is, therefore, void.
Whenever it is contended that a regulatory measure imposes restriction upon the freedom of trade guaranteed by Articles 19 (1) (g), it must be shown that the restriction so imposed directly and proximately interferes in presenti with the exercise of freedom of trade.
If the alleged restriction does not directly or proximately interfere with the exercise of freedom of trade, the freedom guaranteed by Article 19 (1) (g) is not violated.
Petitioners contend that they have a right to carry on trade on manufacturing khandsari sugar and for facilitating the carrying on of this trade they have to buy the raw material called sugarcane.
When they buy sugarcane in the absence of minimum price for sugarcane the sugarcane grower and the producer of khandsari sugar are free to negotiate the price.
The negotiated price would take care of the condition in which sugarcane should be supplied.
It would be open to the producer of khandsari sugar to buy sugarcane from the grower who may be asked to bring sugarcane not bound in bundles.
The rebate for binding material is to be allowed only when sugarcane is brought to the khandsari sugar producing unit bound in bundles.
It is always open to the purchaser of sugarcane to insist upon the grower bringing the sugarcane not bound in bundles and he is free to negotiate the price when price or minimum price of sugarcane is not fixed and the impugned notification will not even remotely impinge upon his freedom to carry on his trade.
Therefore, the short answer is that the restriction complained of does not directly and proximately interfere with the exercise of freedom of trade and Article 19 (1) (g) is not attracted.
Assuming that the impugned notification making it obligatory to grant rebate for binding material when sugarcane is brought bound bundles to the extent prescribed in the impugned notifica 390 tion does impose a restriction on the freedom to carry on trade, the next question is, whether the restriction is reasonable and imposed in the interest of general public.
Once it is assumed that the impugned notification imposes a restriction on the freedom of trade, the burden is on those who support it, to show that the restriction imposed by the impugned law is reasonable and is imposed in the interest of general public.
In other words, the burden is on those who seek the protection of clause (6) of Article 19 not on the citizen who says that the restrictive enactment is invalid (see Saghir Ahmad vs The State of U.P. & Ors.,(1) Khyerbari Tea Co. Ltd. & Anr.
vs The State of Assam(2) and Vrajlal Manilal & Co. and Ors.
vs State of Madhya Pradesh & Ors.,(3).
It is of course not necessary to recall the dissent of Sarkar, J. in Khyerbari Tea Co. Ltd. case.
The learned judge was of the view that the whole theory of burden of proof rests on the assumption that clause (6) of Article 19 carves out an exception and that the burden to prove that the case is covered by the exception is on him who pleads the same, but it was observed that this way of reading the Constitution is not proper and one may legitimately say that there is no exception because the real fundamental right is what is left after the restriction has been imposed.
Consistently with the majority view, the burden will be on the authority who claims the protection of clause (6) of Article 19 to show that the restriction is a reasonable one and that is imposed in the interest of general public.
Having settled the question of burden, the passing submission made by Mr. Kacker may be dealt with.
It was urged that in the batch of petitions in which he appears neither the Union Government nor the State of Uttar Pradesh has filed counter affidavit and therefore, one can say that no attempt has been made to justify the restriction.
We are not disposed to accept this submission because the Union Government has filed counter affidavit in Writ Petitions Nos.
6443 6444 of 1980 and all the petitions in this batch raised identical contentions and were directed to be heard with Writ Petitions Nos.
6443 6444 of 1980.
Undeserved respect for processual justice may have persuaded us to direct the Union Government to file a copy of the counter affidavit in each petition which we 391 consider superfluous.
At any rate, the petitioners in the petitions in which Mr Kacker appears, were supplied a copy of the counter affidavit and therefore this passing submission must be negatived.
If freedom of trade postulates, inter alia, freedom to negotiate price for purchase and sale both the raw material and the finished product, the control order confers power to fix price of sugarcane and to that extent there is a restriction on freedom of trade.
But the restriction is not under examination here Even when he is left free to negotiate the price where either the Central Government or with the approval of the Central Government, the State Government does not fix minimum price or price of sugarcane there is a further restriction on his freedom of negotiating the price because he is statutorily bound to give rebate for the binding material as prescribed in the impugned notification.
To that extent one may give credence to the contention that there is a marginal restriction on the freedom of trade.
The statutory prescription of quantum of rebate for binding material has been prescribed for the benefit of sugarcane growers.
Producers of sugar and khandsari sugar constitute a powerful trade lobby, the fact of which one can take judicial notice.
Sugar being an essential commodity occasionally kept in short supply and being a commodity needed for consumption by almost the entire population, the powerful industry magnates in this field are in a position to dominate both the growers of sugarcane as also the consumers of the essential commodity.
Number of regulations have been enacted almost since the dawn of independence to regulate this powerful combination of manufacturers of sugar and khandsari sugar all over the country for the ultimate benefit of consumers on the one hand and on the other hand the farmers and the growers of sugarcane with their small holdings and raising a perishable food crop.
The marginal farmers, are unable to stand up against the organised industry.
It does not require long argument in this predominantly agricultural society that the farmers having small holdings need protection for selling at fair price their meagre agricultural produce.
As far back as 1953, the U.P. Legislature enacted U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953, for rational distribution of sugarcane to factories, for its development on the organised scientific line, to protect the interest of cane 392 growers and of the industry, etc.
Constitutionality of this Act was challenged on various grounds including one under Article 19 (1) (g) In Ch.
Tika Ramji & Ors.
vs The State of Uttar Pradesh & Ors.,(1) this Court repelled the challenge under Article 19 (1) (g) holding that the restriction which is imposed upon the cane growers in regard to sales of their sugarcane to the occupiers of factories in areas where the membership of the Cane growers Co operative Society if not less than 75 per cent of the total cane growers within the area, is a reasonable restriction in the public interest designed for safeguarding the interest of the large majority of growers of sugarcane in the area and works for the greatest good of the greatest number.
The proposition is now beyond the pale of controversy that the State can impose a restriction in the interest of general public on the right of a party to contract where in the opinion of the Government the contracting parties are unable to negotiate on the footing of equality.
Constitutional validity of statutes prescribing minimum wages has been founded on this proposition.
The principle can be effectively extended to the powerful sugar industry and the cane growers because the cane growers admittedly are at a comparative disadvantage to the producers of sugar and khandsari sugar who were described in the course of arguments as sugar barons.
It does not require an elaborate discussion to reach an affirmative conclusion that sugarcane growers who are farmers cannot negotiate on the footing of the equality with the producers of sugar and khandsari sugar.
The State action for the protection of the weaker sections is not only justified but absolutely necessary unless the restriction imposed is excessive.
Viewed from another angle, the impugned restriction is entirely reasonable.
If price or minimum price of sugarcane is fixed, the producers of sugar would try to circumvent the price by unrealistic and impermissible deductions.
The rebate for the weight of binding material seems to be a source for indulging in this nefarious, if not wholly fraudulent conduct.
It is equally well settled that the State can impose reasonable restrictions under clause (6) of Article 19 to prevent fraud or where advantage of a fraudulent conduct is sought to be taken (see M/s. Fedco (P) Ltd. vs S.N. Bilgrami(1).
The impugned restriction serves two fold purpose: (i) it ensures price of sugarcane avoiding impermissible deductions; (ii) it circumvents 393 possible fraud by making such deductions as would render illusory even the negotiated price, if not fixed price.
And it is indisputable that if the rebate is not statutorily prescribed the cane growers will be at the mercy of the producers of sugar and khandsari sugar.
If price or minimum price of sugarcane can be fixed by the State, because this power was never questioned before us, this very power comprehends the power to provide such incidenta land ancillary regulations which will ensure the price.
Price fixation measure is for protection of the farmer from the exactions of producers against which he cannot protect himself.
(See Lee Nebbia vs People of the State of New York)(1).
The impugned measure ensures price either fixed or negotiated and, therefore, it is a restriction which is undoubtedly reasonable and is imposed in the interest of general public and the guarantee of freedom of trade is not violated.
The last submission is that in order that the restriction may be reasonable it must have reasonable relation to the object which the statute seeks to achieve and must not be in excess of the object.
It was urged that the Sugarcane Control Order was issued in exercise of power conferred by section 3 of the .
One of the objects sought to be achieved by the , is to ensure availability at fair price the essential commodity to the consumers.
It was further urged that one can visualise that the power to fix minimum price or price of sugarcane may have a rational nexus to the object sought to be achieved, namely, availability of sugar to the consumers at fair price.
But it was urged that prescribing the rate of rebate for binding material has no relation with the aforementioned object.
This submission does not commend to us for the obvious reason that the restriction is imposed in the interest of the cane growers and the State while ensuring that sugar, a commodity of daily consumption by almost every one in this country, is available to everyone at a fair price simultaneously wanted to ensure that the grower of sugarcane, another weaker section of the society is not left to vagaries of the trade or the powerful sugar industry.
To strike the balance between the conflicting interests not only State acquired power to fix minimum price of sugar and khandsari sugar but that this wholesome effort may not work to the disadvantage of the sugarcane growers section of the society, the power to prescribe rate of rebate was acquired.
And the power to fix price or minimum price comprehends the power to 394 so regulate supply as to ensure the price so fixed and to ensure that in the name of unauthorised and unwarranted deduction the price fixed or negotiated is not rendered illusory.
Viewed from either angle the restriction is both reasonable and it is imposed in the interest of general public, and has a rational relation to the object sought to be achieved by the Control Order.
These were all the contentions in this batch of petitions and as none has merit in it, the petitions fail and are dismissed with costs; hearing fee in one set.
N.V.K. Petitions dismissed.
| The Banco Nacional Ultramarino (B.N.U.) with its head office at Lisbon in Portugal carried on banking business in Goa, Daman and Diu.
On the eve of the liberation of these territories from Portuguese rule and their integration with India the B.N.U. removed a substantial portion of valuable assets held there to its head office at Lisbon.
To relieve the distress closure to the people by reason of the closure of the B.N.U. the President promulgated regulations by which the branches at these places were integrated into a fully constituted bank independent of the B.N.U. and a Custodian was appointed to take charge of the bank.
The Custodian was empowered to realise all debts due to the branches including any debts from the head office of the B.N.U.
The Custodian filed a suit against the appellants stating that the loan accounts of the appellants showed a debit balance in favour of the branch.
It was also stated that the promissory notes were not in his possession but that they could be presumed to have been removed to Portugal.
While suits similar in nature filed in some courts had been dismissed, suits filed in other courts were decreed against the original debtor as well as tho guarantor and surety.
The Additional Judicial Commissioner on appeal decreed the suits against tho appellants and granted the reliefs claimed by the Custodian, holding that the 17 Custodian was entitled to maintain the suits and sue for the realisation of debts arising out of the transactions entered into through the branches.
He further hold that the execution of the negotiable instruments having been admitted in the written statement and these documents having been removed by the B.N.U. to Lisbon there was nothing to preclude the Custodian from claiming relief without producing those negotiable instruments.
In appeal to this Court, it was contended on behalf of the appellants that since the loans had been granted by the head office of the B.N.U. and not its branches, the Custodian was not entitled to sue for recovery of loans granted by the head office.
Dismissing the appeals, ^ HELD: The transactions under consideration fell within the scope of the regulations and the Custodian was fully entitled to sue for the recovery of the debts covered by the loan agreements.
[28 C] It is settled law that a body corporate and its branches are not distinct and separate entities from each other, that the branches constitute mere components through which the corporate entity expresses itself and that all transactions entered into ostensibly with the branches are in legal reality transactions with the corporate body and that it is with the corporate body that a person must deal directly.
In the case of a bank which operates through its branches, however, the branches are regarded for many purposes as separate and distinct entities from the head office and from each other.
If the bank wrongly refuses to pay when a demand is made at the proper place and time, then it can be sued at its head office as well as at its branch office the reason being that the action is then not on the debt, but on the breach of the contract to pay at the place specified in the agreement.
The regulations had been made apparently in the light of this banking law and practice.
[24 B C; 25 B] The Delhi Cloth and General Mills Co. Ltd. vs Harnam Singh and others, at 422, referred to.
The regulations were intended to achieve what emergency legislation was designed to secure.
In all such emergency laws there is a departure from the general rule that the branches and agencies of a business are no more than components through which the entire enterprise is carried on and that they cannot be considered as distinct and separate from the head office.
[26 A B] It is abundantly plain from the object and purpose of the regulations and the provisions which seek to realise them that all transactions effected by or through the branches of the B.N.U. were intended to be brought within the compass of the Regulations.
[26 D] New York Life Insurance Co. vs Public Trustee, ; In re: W. Hagelberg Aktien Gesellschaft, 1916 Chancery Division 503 and Re The Banca Commercial Italiana, [1943] 1 All England Law Reports 480, referred to. 18 In the instant case although the loan agreements might have been entered into with the B.N.U, the branches were authorised by the head office to give effect to those agreements and accordingly the branch concerned embarked upon the execution of the agreements and the working out of the transactions.
The entire business involved in those transactions and dealings was effected by the branch concerned and it was only when occasion strictly so required that the branch made reference to the head office for authority to amend or enlarge the scope of the operation.
The transaction and the business nonetheless remained throughout those of the branch and this is fully affirmed by the existence and operation of the loan accounts in the books of the branch by the pledge or hypothecation of goods in almost all cases in favour of the branch and by the overall nature and character of the transaction as an ordinary banking transaction falling within the normal business of a branch.
[26 E F] The discharge of the debts under the Regulation amounted to their complete discharge and it was not open to anyone else to sue for their recovery.
No indemnity was required to be furnished by the Custodian on the ground that the relevant documents could not be produced.
Having regard to the circumstances of this case it was within the competence of The Court to base its decree on the books of account of the branches in Goa and on other evidence.
The Portuguese law stands superseded by reason of the express provisions of regulation 8 (1).
[31 A] The Delhi Cloth and General Mills Co. Ltd. vs Harnam Singh and others, , 425, distinguished.
|
mpt Petition No. 82 of 1992.
WITH Writ Petition No. 232 of 1992.
(Under Article 32 of the Constitution of India).
Vijay Kumar and Shiv Kumar Suri for the Petitioner/Applicant.
Milan K. Banerjee, Attorney General, D.P. Gupta, Solicitor General, V.C. Mahajan, Kapil Sibal, Mg.
A. Subhashii Gaurab Banarjee, K. Swamy, Ms. section Janani, S.K. Battacharya and L.K. Poonam for the Respondents.
The following Order of the Court was delivered: This matter came up for our consideration on December 8, 1992" pursuant to the order dated November 24, 1992, to decide the appropriate 774 order which needs to be made in the existing situation.
A brief resume of the events leading to the present stage may first be given.
This Court has held that the Speaker while deciding the question of disqualification of a Member of the Legislative Assembly under the Tenth Schedule to the Constitution acts as a statutory authority, in which capacity the Speaker 's decision is subject to judicial review by the High Court and this Court.
Pursuant thereto, certain orders were made by this Court in proceedings arising out of the order of disqualification of certain members, made by the contemner, Dr. H. Borobabu Singh who holds the office of Speaker of the Manipur Legislative Assembly, in spite of the clear decision of this Court that an order made under the Tenth Schedule by the Speaker relating to the disqualification of a Member of the Legislative Assembly is subject to judicial review and the Speaker while making an order under the Tenth Schedule acts merely as a statutory authority amenable to the court 's jurisdiction in that capacity, the contemner continued to resist the implementation of such orders made by this Court.
The petitioner, 1.
Manipal Singh was then the Secretary of the Manipur Legislative Assembly.
In his capacity as Secretary of the Assembly, the petitioner, 1.
Manilal Singh took steps to implement this Court 's orders.
The allegation made by 1.
Manilal Singh is that the contemner, Dr. H. Borobabu Singh got annoyed with him for or his attempt to secure obedience and implementation of this Court 's orders and, therefore, as an act of reprisal, the contemner has made an order of his compulsory retirement.
The petitioner, 1.
Manilal Singh, therefore, challenged the order of his compulsory retirement made by the contemner inter alia on the ground that it was mala fide being an act of reprisal by the contemner for the petitioner 's obedience of this Court 's orders.
This Court stayed the operation of the impugned order of compulsory retirement of the petitioner, I. Mandal Singh as well as the order of is sub is suspension passed by the contemner.
The petitioner then complained that in spite of this Court 's orders, the contemner was not permitting him of function as, the secretary of the Manipur Legislative Assewbly and was also not paying him his salary and other dues; and that another person had been appomted by the contemner to function as the Secretary.
On July 22, 1992, this Court made an order reiterating that the petitioner, 1.
Manilal Singh shall be allowed to function as the Secretary of the Manipur Legislative Assembly without delay and that all concerned with enable him to so function, and some further directions were also given 775 On August 4, 1992 another order was made by this Court as a result of the grievance made by the petitioner, I. Manilal Singh that in spite of the orders of this Court, he was neither allowed to function as the Secretary of the Legislative Assembly nor had he been paid his salary etc.
In that order, this Court further directed the Chief Secretary of the State of Manipur to ensure that the direction given for payment of dues to the petitioner was promptly obeyed.
When the matter was again taken up on August 25, 1992, the petitioner, I. Manilal Singh stated that another order had been made on August 19, 1992 declaring that the petitioner is to retire from service on August 31, 1992 as Joint Secretary which was in disobedience of this Court 's orders, and was a further act of reprisal against him by the contemner.
Accordingly, in the order dated August 25, 1992, this Court after recording that this action appears to be prima facie in violation of this Court 's order, stayed the operation of the order dated August 19, 1992.
The order after mentioning the statement made by the learned counsel for the Chief Secretary, H.V. Goswami expressed this Court 's concern at the apathy exhibited towards obedience of the mandate under Article 144 of the Constitution and after hearing all the counsel including Shri S.K. Bhattacharya, learned counsel for the contemner, directed that the Chief Secretary, H.V. Goswami, Deputy Secretary, Manipur Legislative Assembly, R.K. Chinglensana Singh and Dr. H. Borobabu Singh should be personally present in court at the next hearing which was fixed for September 8, 1992.
On September 8, 1992 the matter was adjourned to September 9, 1992.
On September 9, 1992, the Chief Secretary, Manipur, H.V. Goswami and R.K Chinglensana Singh, Deputy Secretary, Manipur Legislative Assembly were personally present.
On behalf of Dr. H. Borobabu Singh who did not appear, a request was made by his counsel, Shri Bhattacharya to adjourn the matter till after September 22, 1992 on the ground that the Manipur Legislative Assembly was in session.
The matter was, therefore, adjourned to September 25, 1992.
On September 25, 1992, in spite of earlier order in the contempt proceeding directing Dr. H. Borobabu Singh to appear in person, he did not appear.
His counsel.
Shri Bhattacharya filed an affidavit stating inter alia that Dr. H. Borobabu Singh is immune from such directions of the 776 court in view of his constitutional position as Speaker.
Accordingly, Shri Bhattacharya was heard on his objection which was found to be without substance.
On September 25, 1992, the Court while rejecting the contention of Shri Bhattacharya stated as under: ".
This is a case in which Dr. Singh 's function is not as a Speaker in the House.
The facts of the case which are on record in this matter clearly show that Dr. Singh was acting as Authority under the Tenth Schedule to the Constitution and in that capacity certain orders were passed which gave rise to the present contempt petition.
In a petition filed by the petitioner, Manilal Singh, directions issued by this Court relating to his service conditions which have, according to the allegations, not been respected by Dr. Singh.
In this context and background, we do not have any doubt that the capacity in which Dr. Singh was functioning was not that of the Speaker of the House, but as administrative head of the Secretariat of the Legislature in relation to the rights of one of the employees.
Accordingly, we hold that there is no merit at all in the plea raised regarding the jurisdiction of this Court and the objection is, therefore, rejected.
We asked Mr. G. Ramaswamy, learned Attorney General to examine the matter and indicate his opinion as to the enforceability of the directions of this Court requiring the personal appearance of Dr. H. Borobabu Singh in Court.
On earlier occasion also, learned Attorney General had indicated that this Court would have been justified in taking a far stricter view of the conduct of Dr. Singh and it is an appropriate case where it is not only within the power of this Court, but also its bounder duty to take such steps which will reassure the people of their faith in, and respect for the Institution, now that it is obvious that the indulgence granted so far to Dr. H. Borobabu Singh has been misplaced.
Mr. Altar Ahmed, learned Additional Solicitor General appearing for the Union of India fully supports the opinion and submission of learned Attorney General.
777 3.
Mr. Kapil Sibal who represents the Chief Secretary of Manipur also expressed his opinion on these lines. ' The remaining part of the order then considered the fact that Dr. H. Borobabu Singh was included as a Member of the Indian Parliamentary delegation to attend a conference abroad and the Court adjourned the matter to October 20, 1992 requiring the contemner, Dr. H. Borobabu Singh to give a written Undertaking, before he left the country that he would appear in the Court, and the Government of India was required to ensure compliance of that direction.
It is sufficient to mention that the contemner, Dr. H. Borobabu Singh did not give such an undertaking in spite of the persuasion of senior officers of the Government of India as well as the Union Home Minister, as appears from the documents filed on behalf of the Government of India.
Accordingly, the Government of India did not permit the contemner to leave the country.
When the matter was taken up on October 20, 1992, the contemner, Dr. H. Borobabu Singh did not appear in spite of the earlier direction given and the indulgence granted to him.
However, his counsel Shri Bhattacharya prayed for a short adjournment on the ground that he would be advising Dr. H. Borobabu Singh to file an unconditional affidavit to appear in person in court in pursuance to the direction of the court and to make a separate application for condoning his absence and exempting him from personal appearance in the court.
In spite of the background, we granted further indulgence to the contemner and accepting the request of Shri Bhattacharya adjourned the case to October 23, 1992 stating that if in addition to the unconditional affidavit to appear personally in the court pursuant, to the direction, a separate application, as indicated by Shri Bhattacharya, for condoning his absence and exempting him from personal appearance was filed by the contemner, the same would be considered on its merits.
At the request of Shri Bhattacharya, learned counsel for Dr. H. Borobabu Singh, we again adjourned the matter to November 12, 1992 recording his statement in the order as under : "Mr. S.K. Bhattacharya, the learned counsel for Dr. H. Borobabu Singh states that he has been instructed personally by Dr. H. B. Singh to make a statement in this Court that Dr. H.B. Singh will be filing his affidavit in the terms of our order of the last date.
We asked Mr. Bhattacharya 778 to clarify whether our order has been correctly understood that the affidavit has to be filed giving an unconditional undertaking to appear in this Court in pursuance of a direction by this Court and the application which Dr. H. B. Singh wants to make with a prayer for dispensing with his personal presence will be filed separately and be not a condition of the affidavit.
He states that the position has been correctly understood by Dr. H. B. Singh who has instructed Mr. Bhattacharya to state accordingly.
Mr. Bhat tacharya further states that the affidavit could not be filed today as Dr. H. B. Singh could not come to Delhi because of the prevailing deterioration of law and order situation due to insurgency in the eastern part of the country due to which he was advised by the authorities responsible for his security not to undertake a journey to Delhi at this stage.
He has also referred to the partial disruption in the air services between Manipur and Delhi.
Mr. Bhattacharya adds that the affidavit shall be filed by the 5th or the 6th November, 1992.
" When the matter was taken on November 12, 1992, the contemner, Dr. H. Borobabu Singh was again not present and the only thing done by him in the meantime was to file an affidavit dated November 6, 1992 indicating that he would not personally appear before the Court.
Thus, in spite of the clear statement made by Shri Bhattacharya on instructions of Dr. H. Borobabu Singh as stated by him and recorded in the order dated October 23, 1992, the contemner once again remained absent and neither filed the requisite affidavit containing his undertaking to appear nor made any application praying for condoning his absence and exempting him from personal presence for cogent reasons.
In these circumstances, it became necessary to consider the making of necessary consequential orders.
The matter was, therefore, adjourned to November, 24, 1992 to hear the learned Attorney General of India and all the other counsel appearing in the case for deciding the future course of action.
On November 24, 1992, the learned Solicitor General informed the Court that Mr. G. Ramaswamy had resigned from the office of Attorney General and, therefore, the matter may be adjourned to enable his successor in office to assist the court with his arguments.
The matter was, 779 therefore, adjourned to December 8, 1992.
On December 8, 1992 we have heard the learned Attorney General of India, the Solicitor General, on behalf of Union of India, Shri Kapil Sibal learned counsel for the Chief Secretary of the State of Manipur, Shri S.K Bhattacharya, learned counsel for the contemner, Dr. H. Borobabu Singh and learned counsel for the petitioner.
It may be mentioned that the contemner, Dr. H. Borobabu Singh has filed affidavits, the last being of December 7, 1992, making it amply clear repeatedly that he would not obey the orders of this Court directing his personal presence in the contempt matter nor would he make any application for condoning his absence and exempting him from personal presence for any cogent reasons.
The only reason indicated in the affidavit filed by Dr. H. Borobabu Singh and also reiterated by his counsel, Shri S.K. Bhattacharya is that by virtue of the office of Speaker of the Manipur Legislative Assembly held by Dr. H. Borobabu Singh, he is immune from the process of this Court even in a contempt proceeding where the direction for his personal presence has been given as a result of prima facie opinion formed by the court that he has wilfully disobeyed the orders of this Court in a capacity which does not relate to his functions as Speaker inside the House and has further deterred certain persons including the Chief Secretary of the State and officers of the Assembly Secretariat from acting in aid of this Court 's directions/orders in addition to taking ad ministrative action against the petitioner.
Manilal Singh, Secretary of the Manipur Legislative Assembly as an act of reprisal for his acting in aid of this Court 's orders.
This stand has been taken and continues to be persisted in spite of the contention being considered and rejected expressly on merits including in the order dated September 25, 1992.
The question, therefore, is of the action to be taken and the kind of order which it would be appropriate to make in these circumstances for implementation of this Court 's orders, to uphold the majesty of law for preservation of the 'rule of law.
The learned Attorney General submitted that the undisputed facts and the unequivocal stand taken by the contemner, Dr. H. Borobabu Singh leave no doubt about his wilful and contumacious disregard and disobedience of this Court 's orders which is without any doubt by itself sufficient to constitute criminal contempt of this Court.
The learned Attor 780 ney General submitted that apart from the power which this Court has under the and the Rules framed thereunder, the power of this Court under several provisions of the Constitution of India is wide enough to indicate that the procedure available to it for ensuring compliance of its orders directing the personal presence of the contemner, Dr. H. Borobabu Singh are not confined merely to the provisions in the and the Rules framed thereunder.
The learned Attorney General added that all steps considered necessary to ensure compliance of this Court 's order requiring the personal presence in this Court of the contemner, Dr. H. Borobabu Singh, are available to this Court which has a constitutional obligation to uphold the rule of law.
He submitted that the stage has now reached when this step can no longer be avoided due to the continuing contemptuous conduct of the contemner in persistently refusing to obey this Court 's orders requiring his personal presence in this contempt matter.
The learned Attorney General added that this Court also has the power to direct the Government of India to take the necessarily to produce the contemner, Dr. H. Borobabu Singh in this Court if the ordinary course of requiring a magistrate to produce him in the court is considered inappropriate in the present case.
The learned Solicitor General of India on behalf of the Government of India supported the submissions of the learned Attorney General of India and assured us that in case the Court considered it necessary to direct the Government of India to take the necessary steps to produce the contemner.
Dr. H. Borobabu Singh the direction would be duly and promptly complied with Shri Kapil Sibal on behalf of the Chief Secretary of the State of Manipur also supported the submission and so did the counsel for the petitioner, 1.
Manilal Singh, Shri S.K Bhattacharya, learned counsel for the contemner, Dr. H. Borobabu Singh reiterated the stand taken by the contemner that by virtue of the office of the Speakar which he holds, he is immune from the court 's process even in a contempt matter like this which does not relate to his function as Speaker inside the House.
The undisputed facts expose the conduct of the contemner, Dr. H Borobabu Singh, evident from the statement contained in his affidavits filed in this Court refusing to obey the orders of this Court directing him to appear in person in this Court to enable the hearing of the contempt proceedings against him, after the tentative opinion formed by this Court that his wilful and contemptuous violation of this Court 's orders and 781 deliberate obstruction of the persons acting in the aid of this Court 's orders coupled with his act of reprisal against the Secretary of the Legislative Assembly for obeying the orders made by this Court make out prima facie case of 'criminal contempt ', was recorded in the orders made in the presence of his counsel and known to him.
The contemner had refused to accept the notices sent to him directly but continued to be represented by counsel Shri S.K Bhattacharya through whom he communicated with the Court, in addition to filing some of his own affidavits to clearly indicate his refusal to appear in Court.
The only reason given by him, through counsel and in his affidavits is, that he being Speaker of a Legislative Assembly, is immune from process of court even in such a proceeding The present situation arises as a. result of repeated and emphatic refusal of the contemner to appear in person in this Court after due notice of the fact that his presence is required before the court on the date fixed for the hearing of the contempt proceeding to answer this charge of criminal contempt committed by him by acts done which were not per formed as a Speaker within the House.
Reference may now be made to some provisions of law applicable to the situation as indicated by the learned Attorney General and the other counsel supporting his submissions.
"The Rules to Regulate Proccedings for Contempt of the Supreme Court, 1975 ' framed by this Court provide in Rule 3 that the Court may take action even suo motu in such a matter.
Rule 6 requires the contemner, unless otherwise ordered, to appear in person before the Court as directed on the date fixed for hearing of the proceeding and to continue to remain present during hearing till the proceeding is finally disposed of by order of the Court.
Rule 10 provides that the Court may direct the Attorney General or the Solicitor General to appear and assist the Court.
It is in this manner that the Attorney General was directed to appear.
and assist the Court which the Solicitor General appeared in this matter for the Union of India.
Rule 11 provides that the Court may, if it has reason to believe, that the person charged is absconding or is otherwise evading service of notice, or if he fails to appear in person or to continue to remain present in person in pursuance of the directions, direct a warrant bailable or non bailable for his arrest, addressed to one or more police officers and the warrant shall be executed by the officer or officers to whom it is 782 directed.
These Rules, therefore, provides for procuring the personal appearance of the contemner in this Court if the Court has reason to believe that the contemner is evading service or he fails to appear in person in spite of the directions of this Court.
In the present case, the contemner 's repeated and categorical refusal to appear in this Court in spite of this Court 's orders and grant of considerable indulgence to him till now is clear from the statements made in his affidavits and through his counsel who has appeared for him throughout.
The learned Attorney General, the learned Solicitor General and Shri Kapil Sibal are right in their submission that the power of this Court in such matters is not confined merely to the provisions of the and the Rules framed thereunder but is plenary to punish any person for contempt of court, and for that purpose to require his presence in person in this Court in the manner considered appropriate in the facts of the case.
They refer particularly to Articles 129 and 142 apart from Article 145 of the Constitution of India.
Article 129 says that the Supreme Court shall be a court of record and shall have all the powers of such a court including the power to punish for contempt of itself Article 142 provides for enforcement of decrees and orders of Supreme Court and lays down that the Supreme Court shall have all and every power to make any order for the purpose of securing the attendance of any person, the discovery or production of any documents, or the investigation or punishment of any contempt of itself, Article 141 declares the binding effect of the law declared by the Supreme Court which is a clear provision to indicate that the meaning of 'law ' is to be understood as declared by the Supreme Court.
Obviously, it is not for any one else including the Speaker to decide what the 'lay/ is, and make an interpretation of the 'law ' contrary to the declaration of law made by the Supreme Court.
Article 144 contains the constitutional obligation of all authorities in the territory of India to act in aid of the Supreme Court.
These provisions are well known and they are mentioned in this order once again in the, present case merely for the benefit of the contemner who has wilfully and deliberately refused to obey and ignored not merely the orders of this Court but has also chosen to ignore the provisions in the Constitution itself, to which he must have sworn allegiance before taking his seat as a Member 783 of the Manipur Legislative Assembly.
The contention of the contemner 's immunity from the process of this Court even in a contempt proceeding, wherein a prima facie case of criminal contempt is made out against him, requiring his personal presence to answer that charge and to be present at the hearing, hinted by the contemner in his affidavits and raised by his counsel is totally misconceived, and this was indicated to his counsel repeatedly.
The immunity given by Article 381 of the Constitution is not to a Speaker and no other provision supports this submission.
From the documents filed by the Union of India, it is evident that even the Union Home Minister has strongly advised the conteimner to desist from the course he has chosen to adopt and to obey the orders of this Court, which is his constitutional obligation.
The present Attorney General as well as his predecessor in office and the Solicitor General have also categorically and repeatedly expressed their opinion that it is the duty of the contemner to obey the orders of this Court and appear in this Court in person as directed.
Shri Kapil Sibal who appears for the Chief Secretary of the State of Manipur has also expressed the same view in his submissions.
After hearing learned counsel at laugh on December 8, 1992 we had reserved the order for further reflection.
On further and in depth consideration of this matter on account of the fact that the contemner also happens to occupy the office of Speaker of a Legislative Assembly, we find that there is no escape from the obvious and logical conclusion emerging from the submissions made by the learned Attorney General of India and endorsed by the learned Solicitor General of India and Shri Kapil Sibal.
While we reach this unfortunate decision in discharge of our constitutional obligation, we draw some solace from the fact that this situation is the creation of the contemner, Dr. H. Borobabu Singh himself who continues to persist in his contumacy by repeatedly declaring that he would not obey the orders of this Court directing his personal appearance to participate in the contempt proceedings against him.
It is unfortunate that a person who holds the constitutional office of Speaker of a Legislative Assembly has chosen to ignore the constitutional mandate that this country is governed by the 'rule of law and what the law is, is for this Court to declare in discharge of its constitutional obligation which binds all in accordance 784 with Article 141 of the Constitution of India and Article 144 then says that all authorities are to act in aid of the orders made by this Court.
The contemner has chosen to ignore also the obvious corollary of rule of law that no person is above law.
Having done our best to make the contemner see reason and be present by granting him indulgence repeatedly to the extent that the learned Attorney General of India at one of the earlier stages said that our indulgence and leniency was being construed as the weakness of the court, we are constrained to now take the only appropriate and logical course to which the court is driven in these circumstances.
That obvious course is to require the production of the contemner, Dr. H. Borobabu Singh in person before this Court, giving such a direction to the authority considered to be appropriate, in the circumstances of the case, to ensure compliance of this order.
It is our constitutional duty which requires us to make this order, to uphold the majesty of law and justify the confidence of the people, that no one in this country is above the law and governance is not of men but of the 'rule of law.
It is unfortunate that this action has to be taken against a person who happens to be the Speaker of a Legislative Assembly, but that does not permit us to apply the law differently to him when he was wilfully and contumaciouly driven the court to this course.
We must remind ourselves that the 'rule of law ' permits no one to claim to be above the law and it means 'be you ever so high the law is above you. ' It was said long back : 'to seek to be wiser than laws, is forbidden by the law.
We are also of the opinion that the issuance of a direction to any Magistrate to produce the contemner in this Court would be merely an exercise in futility in view of the obvious conduct of the contemner which includes the threat even to the Chief Secretary of the State as indicated by him.
The learned Solicitor General of India appearing for the Union of India submitted that in case it is considered appropriate to issue such a direction to the Government of India, necessary action in this behalf would be taken by the Government of India to comply with the order.
We have no doubt that in the existing situation to which this Court has been driven by the wilful and contumacious conduct of the contemner himself, the only appropriate order to make is to direct the Government of India to produce the contemner, Dr. H. Borobabu Singh in person in this Court on the next date of hearing, taking such steps as are necessary for the purpose direct, accordingly.
It is further clarified that the Government of India 785 would be entitled to take all such steps, which are necessary including the use of minimilm force which may be required, for compliance of this Court 's order directing the production of the contemner in this Court.
A copy of this order be sent forthwith by the Registrar (Judicial) to the Home Secretary, Government of India for prompt compliance.
The next date of hearing is fixed for March 23, 1993 on which date the Government of India must produce the contemner, Dr. H. Borobabu Singh before this Court.
List on March 23, 1993.
ORDER In obedience to the earlier directions of this Court, Dr. H. Borobabu Singh is present in person in Court.
We take note of his earlier affidavit filed on 18.3.93 that he has fully complied with all the orders and directions relating to the case of Manilal Singh.
Dr. Singh has also expressed regret for the unhappy events.
We appreciate this gesture on his part, though he could have done the same much earlier.
We take note of this and drop all further proceedings in the matter.
These contempt proceedings, therefore, come to an end.
N.V.K Petitions dropped.
| Dr. H. Borobabu Singh, the first respondent in the Contempt Petition held the office of Speaker of Manipur Legislative Assembly.
This Court having held that the Speaker while deciding the question of disqualification of a Member of the Legislative Assembly under the Tenth Schedule to the Constitution acts as a statutory authority, in which capacity the Speaker 's decision is subject to judicial review by the High Court and this Court, made certain orders quashing the disqualification of certain members of the Manipur Legislative Assembly.
In spite of the clear decision of this Court it was submitted, the contemner continued to resist the Implementation of such orders made by this court.
petitioner In the contempt petition 1.
Manilal Singh was then the of the Manipur Legislative Assembly, and as the Secretary be took steps to implement this Court 's orders.
The allegation made by him was that the contemner Dr. H. Borobabu Singh got annoyed with him for his attempt to secure obedience and implementation of this Court 's orders and, therefore, as an act of reprisal, the contemner had made an 769 770 order of his compulsory retirement.
The petitioner challenged the aforesaid order of his compulsory retirement, alleging that it was mala fide being an act of reprisal by the contemner for the petitioner 's obedience of this Court 's orders.
This Court stayed the operation of the order of compulsory retirement as well as the order of suspension passed by the contemner.
The petitioner then complained that the contemner was not permitting him to function as the Secretary of the Manipur Legislative Assembly, and was also not paying him his salary and other dues; and that another person had been appointed by the contemner to function as the Secretary.
On July 22, 1992, this Court made an order reiterating that the petitioner shall be allowed to function as the Secretary of the Manipur Legislative Assembly without delay and that all concerned will enable him to so function.
Further directions were also given.
As a result of the grievance made by the petitioner that in spite of the orders of this Court, he was neither allowed to function as the Secretary nor paid his salary etc.
another order was made on August 4, 1992 directing the Chief Secretary of the State to ensure that the direction given for payment of dues was promptly obeyed.
On August 25, 1992 the Court after recording that the action to retire the petitioner from service on August 31, 1992 as Joint Secretary appeared to be prima facie in violation of the Court 's order, stayed the operation of the order, expression its concern at the apathy exhibited towards obedience of the mandate under Article 144 of the Constitution, and after hearing all the counsel made an order directing that the Chief Secretary, Deputy Secretary of the legislative Assembly and the contemner should be per sonally present in Court at the next hearing in September 9, 1992.
On the aforesaid date the Chief Secretary and the Deputy Secretary were personally present, but on behalf of the contemner his Counsel sought an adjournment till September 22, 1992 on "he ground that the Manipur Legislative Assembly was in session, which was granted.
On September 25, 1992 the contemner did not appear in person but his Counsel filed an affidavit that he is immune from the directions of the Court in view of his constitutional position as Speaker.
The Court heard 771 the Counsel and rejected the contention and adjourned the matter to 20, 1"2 the contemner to give a written undertaking before be left the country as a member of the Indian parliamentary delegation that he would appear in the court.
The contemner did not give the aforesaid undertaiking and when the matter was taken up on November 12, 1M, the contemner was not present and the only thing done by him was to Me an affidavit dated November 6, 1992 indicating that he would not personally appear before the Court In the aforesaid circumstances and having regard to the attitude adopted by the contemner It became necessary for the Court to consider the making of necessary consequential orders to secure the presence of the contemner.
It accordingly heard arguments on December 8, 1992.
The Attorney General of India submitted that the undisputed and the unequivocal stand taken by the contemner left no doubt about his wilful and contumacious disregard and disobedience of the Court 's orders which is without any doubt by Itself sufficient to constitute criminal contempt of this Court.
That, apart from the power which this Court has under the and the Rules framed thereunder, the powers of this Coon under several provisions of the Constitution of India is wide enough to indicate that the procedure available to It for ensuring compliance of it,; orders Includes the taking of all steps considered necessary to ensure compliance of this Court 's orders which is a constitutional obligation of the Court, to uphold the role of law , and that the Court also had the power to direct the Government of India to take the necessary steps to produce the contemner in the Court if the ordinary course of requiring a Magistrate to produce him In the Court Is considered inappropriate.
The Solicitor General of India on behalf of the Government of India; and the Counsel for the Chief Secretary and the petitioner supported the submissions of the Attorney General, while the Counsel for the contemner reiterated the stand taken by the contemner, that by virtue of the office of the Speaker which he holds, he is immune from the Court 's process even in a contempt matter which does not relate to his function as Speaker inside the House.
Directing the production of the contemner Dr. H. Borobabu Singh before the Court on March 23, 1"3.
HELD : 1.
The undisputed facts expose the conduct of the contemner, Dr. H. Borobabu Singh, in refusing to obey the orders of this Court 772 directing him to appear in person in this Court to enable the hearing of the contempt proceedings against him, after the tentative opinion formed by this Court that his wilful and contumacious violation of this Court 's orders and deliberate obstruction of the persons acting in the aid of this Courts orders coupled with his act of reprisal against the Secretary of the legislative Assembly for obeying the orders made by this Court, make out a prima facie case of ' contempt, as recorded in the orders made and known to him.
[780G H, 781A] 2.The contemner 's repeated and categorical refusal to appear in person in this Court in spite of this Court 's orders and grant of considerable indulgence to him is clear from the statements made in his affidavits and through his counsel, who has appeared for him throughout [782B] 3.
From the documents filed by the Union of India, it is evident that even the Union Home Minister has strongly advised the contemner to desist from the course he has chosen to adopt and to obey the orders of this Court, which is his constitutional obligation.
[783C] 4.
Articles 141, 142 and 144 of the Constitution are well known and they are mentioned for the benefit of the contemner who has wilfully and deliberately refused to obey and ignored not merely the orders of this Court but has also chosen to ignore the provisions in the Constitution itself, to which he must have sworn allegiance before taking his sent as a Member of the Manipur Legislative Assembly.
[782H] 5.
The immunity given by Article 361 of the Constitution is not to a Speaker and no other provision supports the submission made by the contemner.
It is unfortunate that a person who holds the constitutional officer of Speaker of a Legislative Assembly has chosen to ignore the constitutional mandate that this country is governed by the 'rule of law, and what the law is, is for this Court to declare in discharge of Its constitutional obligation which bind all in accordance with Article 141 of Constitution of India, and Article 144 then says that all authorities a are to act in aid of the orders made by this Court.
The contemner has chosen to ignore also the obvious corollary of rule of law that no person is above law.
[782F G] 773 7.
Having doen its best to make the contemner see reason and be present by granting indulgence repeatedly, to the extent that the Attorney General said that the indulgence and leniency was being construed as the weakness of the Court, this Court is constrained to now take the only appropriate and logical course to which the Court is driven in these circumstances, viz. to require the production of the contemner Dr. H. ' Borobabu Singh in person before this Court It is the constitutional duty ' of this Court to uphold the majesty of law and justify the confidence of the people, that no one in this country is above the law and governance is not of men but of the 'rule of law '.
[783B D] 8.The Government of India is directed to produce Dr. H. Borobabu ' Singh in person in this Court on the next date of hearing taking such steps as are necessary for the purpose.
The Government of India would be entitled to take all steps, which are necessary including the use of minimum force which may be required for compliance.
[784H, 795A] 9.
A copy of the order to be sent forthwith by the Registrar (judicial) to Home Secretary, Government of India for prompt compliance.
The next, date of hearing fixed for March 23, 1993.
[785B]
|
Appeal No. 407 of 1962.
Appeal from the judgment and decree dated January 31, 1957 of the Madras High Court in Appeal No. 969/1952.
R.Mamamurthi Aiyar, T. section Rangaraian and R. Gopala krishnan, for the appellant.
V.S. Venkataraman, M. R. Krishna Pillai and M. section K. lyengar, for the respondent No. 3.
February 11, 1964.
The Judgment of the Court was delivered by SUBBA RAO, J.
This appeal on a certificate issued by the High Court of Judicature at Madras is preferred against the judgment and decree of the said High Court modifying those of the Subordinate Judge, Tanjore, in a suit filed by the appellant to enforce a mortgage by deposit of title deeds.
The facts are as follows.
The first defendant borrowed from the plaintiff from time to time on seven promissory notes.
The plaintiff, alleging that the first defendant had created a mortgage by deposit of title deeds in his favour in respect of his half share in the properties specified in B Schedule, instituted O.S. No. 45 of 1951 in the Court of the Subordinate Judge, Tanjore, for enforcing the said mortgage against the said properties.
The suit was for recovery of a sum of Rs. 20,435 15 0, made up of principal amount of Rs. 16,500/ and interest thereon.
To that suit six persons were made defendants: defendant I was the mortgagor; defendant 2 was the subsequent purchaser of several of the items of the suit properties subject to plaintiff 's mortgage; defendant 3 was the subsequent morgagee; defendant 4 was the subsequent purchaser of one of the plaint schedule properties; and defendant 5 and 6 were sister and brother of the 1st defendant.
The plaintiff also alleged that in a partition ,effected between the 1st defendant and his brother properties described in the C Schedule annexed to the plaint were ,allotted to the 1st defendant.
He, therefore, asked in the alternative that the C Schedule properties should be sold for the realization of the amount due to him from the 1st defendant.
730 As the only contesting party before us is the 3rd defendant (3rd respondent herein), it is not necessary to notice the defences raised by defendants other than the 3rd defendant.
The 3rd defendant alleged that the 1st defendant had executed a security bond in his favour for a sum of Rs. 15,0001 on October 10, 1947 and that, being a bona fide purchaser for value, he had priority over the plaintiff 's security, even if it were true.
He put the plaintiff to strict proof of the fact that the sum claimed in the plaint under several promissory notes was owing to him and also of the fact that the 1st defendant effected a mortgage of the suit properties by deposit of title deeds in favour of the plaintiff.
The learned Subordinate Judge held that the suit loans were true, that the mortgage by deposit of title deeds was also true, but the plaintiff had a valid mortgage only of items 1 and 4 of the C Schedule in respect of a sum of Rs. 9,157 5 0 with interest at 6 per cent.
per annum thereon.
On that finding, he gave a decree in favour of the plaintiff against defendants 1 to 3 for the said amount with a charge over items 1 and 4 of the C Schedule properties, and he also gave a decree in favour of the plaintiff for a sum of Rs. 7,565 2 0 with further interest at 6 per cent.
per annum from July 5, 1947, against the 1st defendant personally.
The plaintiff preferred an appeal against the decree of the Subordinate Judge, insofar as it went against him, and the 3rd defendant filed cross objection in respect of that part of the decree which went against him.
A Division Bench of the Madras High Court, which heard the appeal and the cross objections, held that the 1st defendant did not effect a mortgage by deposit of title deeds on May 10, 1947, in favour of the plaintiff for the entire suit claim, but that he effected such a mortgage in favour of the plaintiff on January 25, 1947, for a sum of Rs. 3,000 / in respect of two of the plaint schedule items described in exhibit A 8.
On that finding, the High Court modified the judgment and decree of the Subordinate Judge by restricting the mortgage decree given to the plaintiff to the amounts covered by the first three promissory notes and interest thereon and to one half of the properties described in exhibit A 8 and by giving a money decree against the 1st defendant for the entire balance of the 731 decree amount.
The plaintiff has preferred the present appeal against the decree of the High Court.
Learned counsel for the appellant contends, (1) that the finding of both the lower courts that no mortgage by deposit of title deeds was effected for the entire plaint claim was vitiated by the fact that they had ignored exhibit A 19, a registered agreement entered into between the plaintiff and the 1st defendant on July 5, 1947, wherein the said fact was clearly and unambiguously recorded; and (2) that, even if such a mortgage was not effected on May 10, proprio vigore effected such a mortgage to come into effect at any rate from the date of the execution of the agreement.
Learned counsel for the contesting 3rd respondent argues that the definite case of the plaintiff was that such a mortgage was effected only on May 10, 1947, and that both the Courts below on a consideration of the oral and documen tary evidence concurrently found that no such transaction was effected on that date and that, therefore, this Court should not interfere with such a finding of fact.
He further contends that in exhibit A 19 the parties only recorded that a mortgage by deposit of title deeds was effected on May 10, 1947 and that, if that fact was not true, exhibit A 19 could not be of any help to the plaintiff.
If there was no mortgage on May 10, 1947, the argument proceeds, exhibit A 19 by its own force could not create a mortgage by deposit of title deeds on July 5, 1947, as in terms it only referred to a mortgage alleged to have been effected on May 10, 1947.
That apart, it is argued that as a mortgage by deposit of title deeds could only be effected at Madras and that, as one of the important ingredients of such a mortgage is that the delivery of the said title deeds to the creditor should have been given at Madras, no such mortgage could have been effected in law in the present case, as the delivery of the title deeds was given by the bank to the representative of the plaintiff at Kumbakonam.
Before we advert to the arguments advanced in the case it would be convenient at this stage to notice the relevant aspects of the law pertaining to mortgage by deposit of title deeds.
732 Section 58(f) of the Transfer of Property Act defines a mortgage by deposit of title deeds thus: "Where a person in any of the following towns, namely, the towns of Calcutta, Madras and Bombay. . . delivers to a creditor or his agent documents of title to immovable property, with intent to create a security thereon, the transaction is called a mortgage by deposit of title deeds.
" Under this definition the essential requisites of a mortgage by deposit of title deeds are, (i) debt, (ii) deposit of title deeds, and (iii) an intention that the deeds shall be security for the debt.
Though such a mortgage is often described as an equitable mortgage, there is an essential distinction between an equitable mortgage as understood in English law and the mortgage by deposit of title deeds recognised under the Transfer of Property Act in India.
In En land an equitable mortgage can be created either, (1) by actual deposit of title deeds, in which case parole evidence is admissible to show the meaning of the deposit and the extent of the security created, or (2) if there be no deposit of title deeds, then by a memorandum in writing, purporting, to create a security for money advanced: see White and Tudor 's Leading Cases in Equity, 9th edition, Vol. 2, at p. 77.
In either case it does not operate as an actual conveyance though it is enforceable in equity; whereas under the Transfer of Property Act a mortgage by deposit of title deeds is one of the modes of creating a legal mortgage whereunder there will be transfer of interest in the property mortgaged to the mortgagee.
This distinction will have to be borne in mind in appreciating the scope of the English decisions cited at the Bar.
This distinction is also the basis for the view that for the purpose of priority it stood on the same footing as a mortgage by deed.
Indeed a proviso has been added to section 48 of the Registration Act by Amending Act 21 of 1929.
It says: "Provided that a mortgage by deposit of title deeds as defined in section 58 of the , shall take effect against any mortgage deed subsequently executed and registered which relates to the same property." 733 Therefore, under the law of India a mortgage by deposit of title deeds, though it is limited to specific cities, is on a par with any other legal mortgage.
The text books and the cases cited at the Bar give some valuable guides for ascertaining the intention of parties and also the nature of delivery of the documents of title requisite for constituting such a mortgage Fisher in his book on The Law of Mortgage., 2nd edition, p. 32, suggests how the intention to create such a security could be established.
He says: "The intent to create such a security may be established by written documents, alone or coupled with parol evidence; by parol evidence only that the deposit was made by way of security; or by the mere inference of an agreement drawn from t he very fact of the deposit.
" In Norris vs Wilkinson(1) the Master of the Rolls in the context of that case where documents 'were delivered to the Attorney of the creditor for the purpose of enabling the attorney to draw a mortgage which it was alleged that the debtor had agreed to give, made the following observations: "It is clear, that these deeds, if voluntarily delivered at all, were not delivered by way of deposit, in the sense in which that word has been used in the cases : i.e., as a present and immediate security; but were delivered only for the purpose of enabling the attorney to draw the mortgage, which it is alleged, Wilkinson the father had agreed to give." The learned Master of the Rolls distinguished the cases cited before him thus: "Now in all the cases, that have been referred to.
the deeds were delivered by way of deposit.
Such deposit was indeed held to imply an obligation to execute a legal conveyance, whenever it should be required.
But the primary intention was to execute an immediate pledge; with an implied engagement to do all, that might be necessary to render the pledge effectual for its purpose.
" (1) ; , 76.
734 These passages indicate that an intention to create a mortgage deed in the future is not inconsistent with the intention to create in presenting a mortgage by deposit of title deeds.
Both may co exist.
In Keys vs Williams(1) it was held that an agreement to grant a mortgage for money already advanced and a deposit of deeds for the purpose of preparing a mortgage, was, in itself, an equitable mortgage by deposit.
Though the facts of the case do not appear in the report, this decision indicates that the fact that deposit of title deeds was given for the purpose of preparing a mortgage does not in itself without more, exclude the inference to create an equitable mortgage if the.
requisite conditions for creating thereof are satisfied.
The decision in Whitbread, Ex Parte(2) throws some light on the legal requirements of delivery of title deeds.
There, the petitioner claimed a lien, as an equitable mortgagee, by deposit in 1808 of the lease of a public house as a collateral security for pound 1,000, lent to the lessee on his promissory note, and a subsequent advance of pound 100 made in January 1810.
One of the points mooted was whether the subsequent advance of pound 100 was also charged on the property covered by the document.
The learned Chancellor in that context made the following observations : "If the original bargain did not look to future advances, no subsequent advance can be a charge, unless the subsequent transaction is equivalent to the original transaction.
If it is equivalent to a re delivery of the deed, receiving it back as a security for both sums, that will do; as it cannot depend upon that mere form : but I shall require them to swear expressly, that when the sum of pound 100 was advanced, it was upon the security of the deposit.
" The said observations emphasize the substance of the trans action rather than the form.
It implies that a debtor, who has already affected a mortgage by deposit of title deeds in respect of an earlier advance, need not go through the forma (1) (1838) 51 Revised Reports, 339.
(2) ; 735 lity of receiving back the said documents from the creditor and formally re delivering them to the creditor as security for further advances taken by him.
It would comply with the requirements of law if there was clear evidence that the documents already deposited with the creditor would also be charged by way of deposit of title deeds in respect of the further advances.
The doctrine accepted by this decision may, for convenience of reference, be described as the doctrine of constructive delivery.
Learned counsel for the respondent attempted to confine the scope of this decision to a case of further advances on the basis of documents already deposited with the creditor in respect of earlier advances.
It is true that the principle was enunciated in the context of the said facts, but it is of wider application.
In our view, the same principle will have to be invoked wherever documents of title have already been in the possession of creditor at the time when the debtor seeks to create a mortgage by deposit of title deeds.
In re Beetham, Ex Parte Broderick(1) the facts were A, being indebted to a banking company in respect of an overdrawn account, wrote to the directors promising to give them, when required, security over his reversionary interest in one fifth share of a farm, to come into possession on the death of the life tenant; but no formal security was ever executed in accordance with this promise.
After the death of the life tenant the deeds of the farm came into the possession of A 's brother, the manager of the bank , for the purpose of paying the succession duty.
As regards A 's share therein the brother claimed to hold them for the banking company with the consent of A as security for the overdrawn account.
There was no memorandum of the deposit in the bank books, nor was the usual printed form of deposit of title deeds by way of security made use of with reference to the transaction.
A subsequently became bankrupt.
The Queen 's Bench held that the banking company had no valid equitable mortgage on the bankrupt 's share in the farm and that it could not hold the rents as against his trustee in bank ruptcy.
On appeal the Court of Appeal confirmed the said decision of the Queen 's Bench.
It is contended that this decision negatives the doctrine of constructive deposit.
for (1) 736 it is said that though the manager of the bank with the con sent of A, held the title deeds as security for the bank, the Court did not accept that fact for holding there was an equitable mortgage.
In our view, this decision does not lay down any such proposition.
The main reason for the aforesaid conclusion of the Court of Appeal is found in the judgment of Lord Esher, M. R. at pp.
768 769 of ',he said Report.
After considering the facts of the case, the Master of the Rolls proceeded to state: "If this be so, there was nothing but the oral promise of the bankrupt to give the bank security, and that is not enough to satisfy the Statute of Frauds.
In order to take the case out of the statute it must be shown that there has been performance or part performance of the rat promise. . .
But nothing more was done with the deeds; they were left in precisely the same position.
Nothing was done, except that the one brother said something, and the other said something in reply.
Was this such a part performance of the original oral promise as will take the case out of the statute?" His Lordship concluded: "I take that proposition to amount to this that where there is a mere oral promise to do something, and nothing takes place afterwards but the speaking of more words by the parties when nothing more is done in fact there is no part performance which can exclude the application of the Statute of Frauds. " The entire judgment was based upon the doctrine of part performance and the Court of Appeal held that the facts established did not constitute part performance of the oral agreement.
The doctrine of constructive deposit was neither raised nor touched upon in that case.
Now let us consider some of the Indian decisions cited at the Bar.
In Dayal Jairaj vs Jivraj Ratansi(1), the plaintiff (1) Bom. 237.
737 had advanced to the 1st defendant Rs. 38,000/ , and had agreed to advance Rs. 27,000/ more, the whole of Rs. 65,000/ to be secured by a mortgage of the 1st defendant 's immovable property.
The 1st defendant had deposited with the plaintiff the title deeds of his immovable property, for the purpose of enabling him to get a mortgage deed prepared, and had agreed to execute such mortgage deed on payment to him by the plaintiff the balance of the amount of Rs. 65,000/ .
The title deeds were afterwards returned by the plaintiff to the 1st defendant for the purpose of enenabling him to clear up certain doubts as to his title to some of the premises comprised in the deeds, but the said deeds were neither subsequently returned by the 1st defendant, nor were others deposited in lieu thereof.
The balance of the Rs. 65.000/ was not paid by the plaintiff to the 1st defedant The Court held that there was an equitable mortagag of the said property to secure the sum of Rs. 38,000,/ The fact that the title deeds were deposited for the purpose of executing a mortgage deed, which did not fructify.
did not in any way preclude the Court from holding on the facts of the case that a mortgage by deposit of title deeds was created in respect of the amount that had already been paid to the debtor.
The court relied upon the principle enunciated by earlier English decisions based upon the fact wither amounts were lent before or after the deposit of In Jaitha Bhima vs Haji Abdul Vyad Cosman(1) the facts were these: The plaintiff consented to lend Rs. 10,000/ to the defendant.
The latter deposited with him on April 2, 1883, the title deeds of a certain property.
On receiving them the plaintiff told the defendant that he would take them to his attorney, have a deed drawn and then advance the money.
The defendant applied to the plaintiff for the money before the deed was prepared, but the plaintiff refused, saying, he would not advance the money until he was satisfied by his attorney, and the deed had been prepared.
At the time the deeds were handed over to the plaintiff, there was no existing debt date by the defendant to the plaintiff.
On April 6, 1885, the mortgage deed was executed, and on the same day the money was advanced by the plaintiff to the defendant.
The mortgage deed was not registered.
The plaintiff filed a suit for a declaration (1) Bom.
134 469 B.C. 47.
738 that he was entitled to an equitable mortgage upon the said property and for the sale thereof.
The court held that on the facts no equitable mortgage was created.
From the aforesaid narration of facts it would be obvious that the plaintiff lent the money immediately before the execution of the document indicating thereby that it was paid under that document.
Farran, J., who delivered the judgment, relied upon the following passage from Seton on Decrees, p. 1131: "If deeds be delivered to enable a legal mortgage for securing an existing debt to be prepared, there is an equitable mortgage until the legal mortgage is completed; secus is to secure a fresh loan yet to be made." Then the learned Judge cited the following passage from the judgment in Keys vs Williams(1): "Certainly, if, before the money was advanced, the deeds had been deposited with a view to prepare a future mortgage, such a transaction could not be considered as an equitable mortgage by deposit; but it is otherwise where there is a present advance, and the deeds are deposited under a promise to forbear suing, although they may be deposited only for the purpose of preparing a mortgage deed.
In such case the deeds are given in as part of the security, and become pledged from the very nature of the transaction.
" These two passages also indicate that the fact that title deeds were deposited for the purpose of preparing a future mortgage is in itself not decisive of the question whether such a mortgage was effected or not.
A Division Bench of The Bombay High Court in Behram Bashid Irani vs Sorabji Rusfomji Elavia(2) held that in that case there was no evidence, whatever of intention to connect the deposit of title deeds with the debt.
The plaintiff therein deposited with the defendant in Bombay title deeds of his property situate at Nasik and borrowed a sum from the defendant.
He also executed a document but that was held to be inadmissible for want of registration.
There was no other (1) (1838) 51 R.V. Rep. 339.
(2) Bom.
372, 374.
739 evidence to show under what circumstances the documents were deposited.
Beaman, J., made the following observations: "The doctrine thus created, amounted at that time to very much what the law now is, as I have just expressed it, although the learned Chancellor, I think, lent strongly to the supposed legal presumption arising from the fact of indebtedness and the contemporaneous or subsequent deposit of title deeds.
Then for the better part of a century, the Courts in England virtually adopted this presumption as a presumption of law and the need of proving intention almost disappeared.
Latterly, however, the legal doctrine in England veered in the opposite direction and the Courts began to insist more and more strongly upon the proof of intention as a question of fact, and that has been embodied in our own statute law and that is the law we have to administer.
" This decision only negatives the presumption of law, but does not exclude the presumption of fact of a mortgage arising under certain circumstances from the very deposit of titledeeds.
An elaborate discussion of the subject is found in V.E.R.M.A.R. Chettyar Firm vs Ma Joo Teen(1).
The main question decided in that case was, what did the terms "documents of title" and "title deeds" denote? The Court held that they denoted such a document or documents as show a prima facie or apparent title in the depositor to the property or to some interest therein.
But what is relevant for the present purpose is that the learned Chief Justice, who spoke for the Court, after considering the leading judgments on the subject, observed: "If the form of the documents of title that have been delivered to the creditor is such that from the deposit of such documents alone the Court would be entitled to conclude that the documents were deposited with the intention of creating a security for the repayment of the debt, prima (1) Rang.
239, 253.
740 facie a mortgage by deposit of title deeds would be proved; although, of course, such an inference would not be irrebuttable, and would not be drawn if the weight of the evidence as a whole told against it.
" The learned Chief Justice accepted the principle that if title deeds, as defined by him, were deposited and the money was lent, prima facie an inference of a mortgage could be drawn, though such an inference could be displaced by other evidence.
It is not necessary to pursue the matter further.
The foregoing discussion may be summarized thus: tinder the a mortagage by deposit of title deeds is one of the forms of mortgages whereunder there is a transfer of interest in specific immovable property for the purpose of securing payment of money advanced or to be advanced by way of loan.
Therefore, such a mortgaae of property takes effect against a mortgage deed subsequently executed and registered in respect of the same property.
The three requisites for such a mortality are, (1) debt, (ii) deposit of title deeds; and (iii) an intention that the deeds shall be security for the debt.
Whether there is an intention that the deeds shall be security for the debt is a question of fact in each case.
The said fact will have to be decided just like any other fact on presumptions and on oral, documentary or circumstantial evidence.
There is no presumption of law that the mere deposit of title deeds constitutes a mortgage, for no such presumption has been laid down either in the Evidence Act or in the Transfer of property Act.
But a court may presume under section 114 of the Evidence Act that under certain circumstances a loan and a deposit of titledeeds constitute a mortgage.
But that is really an inference as to the existence of one fact from the existence of some other fact or facts.
Nor the fact that at the time the titledeeds were deposited there was, an intention to execute a mortgage deed in itself negatives, or is inconsistent with.
the intention to create a mortgage by deposit of title deeds to be in force till the mortgage deed was executed.
The decision of English courts making a distinction between the debt preceding the deposit and that following it can at best to only a guide; but the said distinction itself cannot be con 741 sidered to be a rule of law for application under all circumstances.
Physical delivery of documents by the debtor to the creditor is not the only mode of deposit.
There may be a constructive deposit.
A court will have to ascertain in each case whether in substance there is a delivery of title deeds by the debtor to the creditor.
If the creditor was already in possession of the title deeds,it would be hypertension to insist upon the formality ofthe creditor delivering the title deeds to the debtor and thedebtor redelivering them to the creditor.
What would be necessary in those circumstances is whether the parties agreed to treat the documents in the possession of the creditor or his agent as delivery to him for the purpose of the transaction.
With this background we shall now proceed to consider the questions that arise for consideration on the facts of the present case.
The first question is whether there was a mortgage by deposit of title deeds of the B Schedule properties on May 10, 1947.
To put it in other words, whether on that date there was a loan and whether the first defendant delivered to the appellant the documents of title of B Schedule properties with the intent to create a security thereon.
Learned Subordinate Judge and, on appeal, the High Court.
held on the evidence that there was no such deposit of title deeds with the requisite intention on May 10, 1947.
Learned counsel for the respondent pressed on us to follow the usual practice of this Court of not interfering with concurrent findings of fact.
But the question whether on facts found a transaction is a mortgage by deposit of title deeds is a mixed question of fact and law.
That apart, both the courts in coming to the conclusion which they did missed the importance of the impact of the terms of exhibit A 19 on the question raised.
We, therefore, propose to consider the evidence on the said question afresh, along with exhibit A 19.
In para 5 of the plaint, after giving the particulars of the promissory notes executed by the first defendant in favour of the plaintiff, it is stated: "On 10th May 1947, the first defendant deposited with the plaintiff at Madras other title deeds and 742 papers relating to his half share in items specified in 'B ' schedule hereunder with intent to create a security over the same in respect of advances made and to be made by the plaintiff.
The first defendant has further executed a memorandum of agreement, dated 5th July 1947, in which the equitable martgage thus created and the amount borrowed by him till then were acknowledged and he has undertaken to repay the said sum of Rs. 16,500 with interest at 6 per cent.
per annum and to obtain a return of the title deeds and documents deposited by him with the plaintiff.
This memorandum of agreement has been duly registered and the same is herewith produced.
The plaintiff prays that its contents may be read as part and parcel of this plaint.
" There is, therefore, a clear averment in the plaint that an equitable mortgage was created on May 10, 1947, and that was acknowledged by the agreement dated July 5, 1947.
The 1st defendant did not file any written statement denying the said allegations.
The 3rd defendant, the only contesting defendant, filed a written statement wherein he put the plaintiff to strict proof of the fact that the sums claimed in the plaint were due to him from the 1st defendant and of the fact that the first defendant effected a mortgage in his favour by deposit of title deeds.
Before we consider the oral evidence, we shall briefly notice the documentary evidence in the case.
Exhibit A 1 dated January 25, dated February 13, dated March 2, dated April 7, dated April 13, dated May 10, 1947, and exhibit A 1 8 dated July 4, 1947 are the promissory notes executed by the 1st defendant in favour of the plaintiff.
The total of the amounts covered by the said promissory notes is Rs. 16,500/ .
It is not disputed that the promissory notes were genuine and that the said amounts were lent by the plaintiff to the 1st defendant on the dates the promissory notes bear.
On January 26, 1947, i.e., a day after the first promissory note was executed, a list of tittle deeds of the properties belonging to the 1st defendant in 743 Tanjore was given to the plaintiff as collateral security and by way of equitable mortgage for the loan of Rs. 1,500 borrowed under exhibit A 1.
On April 7, 1947, the 1st defen dant executed an unregistered agreement in favour of the plaintiff whereunder, as the plaintiff agreed to lend to the 1st defendant a sum of Rs. 15,000/ to discharge his earlier indebtedness and also his indebtedness to the Kumbakonam Bank and to enable him to do business, the 1st defendant agreed to execute a first mortgage of the Tanjore properties as well as of the properties mortgaged to 'the Kumbakonam Bank.
He also undertook to bring all the title deeds from the Kumbakonam Bank and hand them over to the plaintiff for preparing the mortgage deed.
This agreement shows that the 1st defendant was willing to execute a mortgage deed of his properties to the plaintiff and with that object undertook to bring the title deeds and hand them over to the plaintiff for preparing the mortgage deed.
Pursuant to this agreement, the plaintiff on the same day advanced to the 1st defendant a sum of Rs. 3,000/ under a promissory note of the same date.
On April 13, 1947, the plaintiff lent an other sum of Rs. 3,000/ under a promissory note to the 1st defendant.
The 1st defendant did not bring the title deeds, but by a letter dated April 27, 1947, (exhibit B 2), he authorised the Managing Director of the Kumbakonam Bank to hand over the title deeds and the mortgage deed duly discharged to the plaintiff or his representative on his paying the amount due by him to the Bank.
On May 5, 1947, the plaintiff wrote a letter, exhibit B 1, to the Kumbakonam Bank informing it that one section Narayana Ayyar of Madras would discharge the mortgage amount due to the Bank from the 1st defendant and authorizing the Bank to deliver to the said Narayana Ayyar the cancelled mortgage deed and the relative title deeds.
The said Narayana Ayyar took the letter.
exhibit B 1, to the Bank, paid the amount due to it from the 1st defendant and took the title deeds on behalf of the 1st defendant and sent them on to the plaintiff at Madras by registered post.
On May 10, 1947, the 1st defendant executed another promissory note, exhibit A 17, for a sum of Rs. 7,100/ in favour of the plaintiff in regard to the amount paid by Narayana Ayyar to the Bank.
On July 4, 1947, the 1st defendant executed another promissory note, exhibit A 18, in favour of the plaintiff for a sum of Rs. 400.
The total 744 of the amounts advanced up to that date by the plaintiff to the 1st defendant was Rs. 16,500/ .
exhibit A 19 dated July 5, 1947, is a registered memorandum of agreement executed between the plaintiff and the 1st defendant.
Though it was executed on July 5, 1947, it was presented for registration on October 31, 1947 and was eventually registered on June 22, 1948.
It is not disputed that the said agreement was executed on July 5, 1947.
Under section 47 of the Registration Act the said document would have legal effect from date of execution i.e., July 5, 1947.
Under that document the 1st defendant, after acknowledging that between January 25, 1947, and July 4, 1947, he had received from the plaintiff a sum of Rs. 16,500/ under various promissory notes executed in favour of the plaintiff, proceeded to state: "The borrower hereby acknowledges having deposited with the lender at Madras on 25th January 1947 the title deeds relating to the borrower 's undivided half share in items 17 to 2C mentioned in the B schedule hereunder and also having deposited with the lender on 10th May 1947 the title deeds and other papers relating to the borrower 's undivided half share in items 1 to 16 mentioned in B schedule hereunder with interest to create a security over the deposit of title deeds.
" This acknowledgment is couched in clear and unambiguous terms.
The 1st defendant acknowledges in express terms that a mortgage by deposit of title deeds was effected on May 10, 1947.
If there was no oral evidence adduced in this the said documentary evidence prima facie would establish that the 1st defendant borrowed a sum of Rs. 16.500/ from time to time from the plaintiff and effected a mortgage by deposit of title deeds on May 10, 1947, as security for the repayment of the said amount.
Exhibit A 19 contains a clear admission by the 1st defendant that he effected a mortgage by deposit of title deeds in favour of the plaintiff.
As the mortgage deed in favour of the 3rd defendant was executed subsequent to exhibit A 19, he is bound by that admission, unless there is sufficient evidence on the record to explain away the said admission.
The 1st defendant.
who could explain the circumstances under which exhibit A 19 was executed was 745 not examined as a witness in this case.
But it is said that the evidence of P.Ws 1, 2 and 3 displaces the evidentiary value of the recitals of the said document.
P.W. 1 is the plaintiff.
He says in his examination in chief: "On 10th May 1947 defendant I and Narayana Ayyar met my lawyer at Madras and I was sent for.
Exhibit A 17 is the pro note executed for Rs. 7,100/ for the payment made to the bank.
Defendant I then personally handed over the documents to me by way of deposit of titledeeds as security for the advance made and to be made.
Defendant I did not execute any mortgage.
In July 1947, defendant I asked for Rs. 400/ to buy stamps for the mortgage.
1 paid Rs. 400/ under Exhibit A 18.
On 5th July 1947 the memorandum, Exhibit A 19, was executed in my lawyer 's house.
My lawyer attested the document as well as Narayana Ayyar.
They saw defendant I sign the docu ment.
" If this evidence is accepted, the plaintiff 's case will be established to the.
But in the cross examination he deposed: "On 5th July 1947, the agreement about executing a simple mortgage was changed into one of equitable mortgage.
Defendant I suggested it and I was advised to accept and I accepted.
" Reliance is placed upon this statement to show that the idea of effecting an equitable mortgage dawned on the parties only on July 5, 1947, and.
therefore.
the case that sect a mortgage was effected on May 10, 1947 ', must be untrue.
We do not see any inconsistency between the statement made by the plaintiff in the examination in chief and that made in the cross examination.
What he stated in the cross exami nation is that though it was agreed earlier that a formal mortgage deed should be executed, on July 5, 1947, the parties, for one reason or other.
were content to have a deed of equitable mortgage.
It is too much to expect this witness to bear in mind the subtle distinction between the execution of an equitable mortgage on July 5.
1947, and the acknowledgment of an emitable mortgage that had already been effected.
In this statement he emphasized more on the 746 document than on the contents of the document.
So under stood, this evidence does not run counter to the express recitals found in exhibit A 19.
There is also nothing unusual that on the advice of the advocate the formalities of actual delivery were complied with in the presence of the advocate.
But one need not scrutinize the version of this witness meticulously in that regard, if in law a constructive delivery would be as good as a physical delivery.
We, therefore, do not see in the evidence of P.W. 1 anything to discountenance the admission made by the 1st defendant in exhibit A 19.
P.W. 2.
the advocate, also says in his evidence that he gave the title deeds to the 1st defendant and asked him to hand them over to P.W. 1 and to state that these and documents already deposited would be security for the loans advanced till that date.
There would be nothing unequal if an advocate, who knew the technicalities of a mortgage by de posit of title deeds, advised his client to conform to the formalities.
Even if the parties accepted constructive delivery, the evidence given by this witness is more an embellishment than a conscious effort to depart from the truth.
As to what happened on July 4, 1947, this witness says that on that date the 1st defendant and Narayana Ayyar came to him and suggested that the memorandum may be registered instead of executing a simple mortgage as that would be cheaper.
There is nothing usual in this conduct of the parties either.
If there was a mortgage by deposit of title deeds at an earlier stage, even though there was at that time an agreement to execute a formal document later on, there would be nothing out of the way in the parties for their own reasons giving up the idea of executing a formal document and being satisfied with a memorandum acknowledging the earlier form of security.
In the cross examination this witness stated that till July 4, 1947, the idea was only to make a simple mortgage over the half share covered by all the title deeds given to P.W. 1.
This statement only means that till that date the parties had no idea of executing a document acknowledging the earlier mortgage by deposit of title deeds, for they wanted a formal document.
This answer is in no way inconsistent with the statement of the advocate at the earlier stage that there was a mortgage by deposit of title deeds on May 10.
So too, Narayana Ayyar.
as P.W. 3, supports the evi 747 dence of P.Ws. 1 and 2.
He too in his cross examination says that it was only on July 4, 1947, the idea of executing an equitable mortgage was suggested by the 1st defendant and that on May 10, 1947, he did not suggest to the 1st defendant to execute any document.
Here again, his statement in the cross examination would not be inconsistent with that made by him in the examination in chief, if the former statement was understood to relate to exhibit A 19.
This witness only meant to say that the idea of executing exhibit A 19 dawned on the parties only on July 4, 1947.
The evidence of these three witnesses is consistent with the admission made by the first defendant in exhibit A 19.
The evidentiary value of the recitals in exhibit A 19 is in no way displaced by the evidence of the said witnesses: indeed, it supports the recitals therein in toto.
In the circumstances, we hold that on May 10, 1947, the 1st defendant deposited the title deeds with the plaintiff physically as security for the amounts advanced by the plaintiff to the 1st defendant up to that date.
Even if the evidence of the witnesses as regards the handing over of the documents physically by the 1st defendant to the plaintiff was an embellishment of what took place on that date and that there was only constructive delivery, we think that such delivery satisfied the condition laid down by section 58(f) of the .
Even so, it is contended by learned counsel for the res pondent that the delivery of the title deeds was to the appellant 's representative, Narayana Ayyar, at Kumbakonam and, therefore, the mortgage by deposit of title deeds, even if true, must be deemed to have been effected at Kumbakonam and that under the law such a mortgage could not be effected at Kumbakonam as it was not one of the places mentioned in section 58(f) of the .
But Narayana Ayyar, as P.W. 3, stated in his evidence that he had authority to take the title deeds on behalf of the 1st defendant and that, after having taken delivery of them on his behalf, he sent them to the plaintiff at Madras by registered post.
But whether Narayana Ayyar received the title deeds from the Bank as agent of the 1st defendant or as that of the plaintiff.
it would not affect the question to be decided in the present case.
We shall assume that Narayana Ayyar was the agent of the plaintiff.
But mere delivery of title deeds without the. 748 intention to create a mortgage by deposit of title deeds would not constitute such a mortgage.
On May 5, 1947, when the title deeds were received by the plaintiff through his agent, Narayana Ayyar, at Kumbakonam, they were received only for the purpose of preparing the mortgage deed.
The plaintiff had the physical possession of the title deeds at Madras on May 10, 1947.
On that date the possession of the titledeeds by the plaintiff was as agent of the 1st defendant.
He was not holding the said documents in his own right on the basis of his title or interest therein.
The agent 's possession was the possession of the 1st defendant, the principal.
On May 10, 1947, the creditor and the debtor, i.e., the plaintiff and the 1st defendant, met in the house of P.W. 2 and the 1st defendant agreed to deposit the said title deeds already in the physical possession of the plaintiff as his agent in order to hold them thereafter as security for the moneys advanced.
From May 10, 1947, the plaintiff ceased to hold the titledeeds as agent of the 1st defendant but held them only as a mortgagee.
If the plaintiff physically handed over the title deeds to the 1st defendant and the 1st defendant immediately handed over the same to the plaintiff with intention to mortgage them, it is conceded that a valid mortgage was created.
To insist upon such a formality is to ignore the ,substance for the form.
When the principal tells the agent "from today you hold my title deeds as security", in substance there is a physical delivery.
For convenience of reference such a delivery can be described as constructive delivery of title deeds.
The law recognizes such a constructive delivery.
We, therefore, hold that, even on the assumption that the form of physical.
delivery had not been gone through though we hold that it was so effected on May 10, 1947there was constructive delivery of the title deeds coupled with the intention to create a mortgage by deposit of titledeeds.
The last argument of learned counsel for the appellant is that even if there was no mortgage by deposit of titledeeds on May 10, 1947, under exhibit A 19 such a mortgage created at any rate from July 5, 1947.
It is true that ,he ,document in express terms says that the documents of title were deposited on May 10, 1947, with intention to create a mortgage by deposit of title deeds.
Assuming it was not so 749 done on that date.
can ' such an intention be inferred from the document as on July 50 1947 ? Admittedly on July 5, 1947 '. the title deeds were in the possession of the plaintiff.
If on that date the 1st defendant had expressed his intention 'that from that date he would consider the title deeds as security for the loans already advanced,, to him, 'all the necessary conditions of a mortgage by deposit of title deeds would be present, namely, (i) debt, (ii) constructive delivery, and (iii)) intention.
The fact that% he had such an intention, from an.
earlier date could not make any difference ' in law, as the intention expressed was a continuing one.
On July 5, 1947, according to the 1st defendant, the mortgage by deposit of ' title deeds was in existence and, therefore, on that date the, said three necessary ingredients of a mortgage by deposit of title deeds were present.
We, therefore, hold that even if there was no mortgage by deposit of title deeds on May 10, 1947, it was effected on July 5, 1947.
If the mortgage by deposit of title deeds was effected on.
May 10, 1947, or on July 5, 1947, the legal position wouldbe the same, as the mortgage deed in favour of the 3rd defen dant was executed only on October 10, 1947.
Though exhibit A 19 was registered on June 22, 1948, under section 47 of the.
Registration Act the agreement would take effect from July 5, 1947.
It is not disputed that in the partition that was effected ' between the 1st defendant and his brother the properties.
specified in 'C ' schedule were allotted to the share of the 1st defendant.
If so, the plaintiff would be entitled to have a mortgage decree in respect of the said properties.
In the result there will be a preliminary decree in favour of the plaintiff for the recovery of the sum of Rs. 20,434 15 0, with interest at 6 per cent.
per annum thereon till the said amount is paid The period of redemption will be three,, months from today and in default the 'C ' schedule properties will be sold for the realization of the same.
Liberty isreserved to the plaintiff to apply for personal decree against the 1st defendant in case there is any deficiency after the.
hypothetic has been sold.
The decree of the Subordinate Judge and of the High Court are set aside and there will be.
a decree in the said terms.
The 1st and 3rd defendants will pay the costs of the plaintiff throughout.
| 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.
|
Civil Appeal No. 34 of 1954.
Appeal from the judgment and decree dated July 2, 1951, of the Punjab High Court in Regular First Appeal No. 269 of 1945.
N. section Bindra, and Harbans Singh, for the appellant.
Gopal Singh, for the respondents.
November 3.
The Judgment of the Court was delivered by WANCHOO, J.
The suit out of which the present appeal arises has had a chequered history.
It was filed as far back as June 1943, the plaintiff being section Balwant Singh (hereinafter referred to as the respondent).
The main defendants were Kesar Singh and Jaswant Singh, of whom Kesar Singh will be referred to as the appellant hereinafter.
The suit was with respect to a house known as bunga Maharaja Sher Singh which is situate outside the tank around Sri Harmandir Saheb (hereinafter referred to as the Golden Temple) in Amritsar.
The case of the respondent was that he and his uncle who was made a defendant to the suit were managers of this bunga which was wakf property and that they and their ancestors had been in possession of it throughout.
There were proceedings before the Sikh Gurdwaras Tribunal established under the Sikh Gurdwaras Act, No. VIII of 1925, (hereinafter referred to as the Act) in 1933 with respect to this bunga.
The proceedings arose because a claim was put forward that the bunga was the property of the Golden Temple.
In those proceedings the appellant and the other defendant claimed the bunga.
The respondent also made a 327 claim to the bunga.
The proceedings were all consolidated and it was decided that the bunga was not the property of the Golden Temple; the claims of the appellant and the other defendant were also dismissed and the Tribunal held that the respondent and his uncle had the right to manage and supervise the bunga and were its managers.
There were appeals to the High court from that decision by the appellant and the other defendant which were dismissed with the result that the status of the respondent and his uncle as determined by the Tribunal was upheld.
Thereafter the respondent along with his uncle filed a declaratory suit against the appellant and the other defendant.
In that suit they were ordered to file a suit for possession.
Consequently the present suit was filed for possession and ejectment of the appellant and the other defendant.
The case for ejectment was based on the ground that the appellant and the other defendant were in possession of the bunga without any right.
They had been asked to deliver possession to the respondent but refused to do so and continued to treat the bunga, which was wakf property as their personal property.
The respondent therefore did not desire to keep the appellant and the other defendant as servitors to look after the bunga as they were claiming rights adverse to the wakf and consequently prayed for their ejectment and delivery of possession of the bunga to him and his uncle.
The suit was resisted by the appellant and the other defendant and it was contended that the respondent was not a descendant of Maharaja Sher Singh and was therefore not entitled to the management of the bunga.
It was denied that the bunga was wakf property.
It was also denied that the respondent and his uncle had ever anything to do with the bunga or were ever in possession of it as 328 managers.
It was further alleged that any decision of the tribunal against the appellant had no effect as the tribunal had no jurisdiction to give an decision and in any case the tribunal had given no decision in favour of the respondent and his uncle.
Further even if any decision was given in favour of the respondent and his uncle by the tribunal, it was not binding on the appellant as he was no party to those proceedings.
It was also claimed that the appellant was the owner of the bunga and in any case even if the bunga was wakf property the appellant was its hereditary manager and was entitled to its possession and could not be ejected by the respondent.
Finally, adverse possession was claimed against the respondent who was alleged to have never been in possession within 12 years before the suit was filed and in any case as the respondent 's application under section 25A of the Act had been dismissed in July 1935 he had no right to file a suit for possession thereafter.
On these pleadings, eight issues were framed by the trial court, which are as below: 1.
Whether the bunga in dispute is a wakf property founded by Maharaja Sher Singh, or any descendant of Maharaja Sher Singh? 2.
Is the plaintiff a descendant of Maharaja Sher Singh, and is therefore entitled to get possession of the bunga in dispute as a manager? 3.
Is the plaintiff entitled to bring this suit alone? 4.
Is the suit within time? 5.
Is the suit barred under section 92 Civil Procedure Code? 6.
Are the defendants debarred from denying the plaintiff 's title in view of the judgments.
329 of the Lahore High Court and the decision of the Sikh Gurdwaras Tribunal? 7.
Has the plaintiff relinquished his right and what is its effect? 8.
Relief? In the trial court, the parties agreed that the decision might be given only on issues 3 to 7 and issues Nos. 1 and " might be left undecided.
Consequently, the trial court Proceeded to decide issues 3 to 7 only.
It held on issue No. 3 that the respondent was entitled to bring the suit alone.
On issue No. 4, the trial court held that the suit was barred by time.
Issue No. 5 was not pressed and was therefore decided against the appellant.
On issue No. 6 the trial court was of the view that it was not necessary to give any finding on it in view of the finding on the question of limitation; even so it held that the defendants were debarred from denying the plaintiff 's title in view of the judgment of the Lahore High Court and the decision of the Tribunal.
On issue No. 7 it held that in view of the decision of the tribunal and judgment of the High Court it could not be said that the respondent had relinquished his rights.
In the result, the suit was dismissed on the ground of limitation.
The respondent then went in appeal to the Punjab High Court.
The High Court held on the question of limitation that the suit was not barred by time.
It then referred to the decision of the tribunal which had held that the bunga was wakf property founded by Maharaja Sher Singh and held that this decision of the tribunal was binding and conclusive.
It was of the view that the question whether the respondent was the descendant of Maharaja Sher Singh and therefore entitled to obtain possession of the bunga which was the subject matter of issue No. 2 should have been decided.
It therefore accepted the appeal and set aside the order of the trial court on the question of limitation 330 and remanded the case for the decision of issue No. 2 as framed by the trial court and further framed two additional issues and directed the trial court to decide them also.
These additional issues were: 1.
Was Jaswant Singh a bungai or a servitor of the plaintiff and defendant No. 3 or their ancetors? 2.
Can the plaintiff dispossess the defendants on any of the grounds specified in paragraph 4 of the plaint? On remand the trial court held against the respondent on issue No. 2.
Its finding was that it had not been proved that the respondent was the eescendant of Maharaja Sher Singh and therefore entitled to get possession of the bunga in dispute as manager.
On the first additional issue, the trial court found that the appellant and the other defendant were servitors or bungais.
On the second additional issue it was found that a bungai or servitor if he denies the title of the rightful owner on whose behalf he manages the property forfeits his rights to retain the property or to continue as servitor, and as the appellant and the other defendant had set up a title adverse to the respondent, they would be liable to ejectment on the ground specified in para 4 of the plaint, if the respondent is the rightful owner, whether as trustee or otherwise, of the bunga.
On receipt of these findings, the appeal was heard again, this time by another Bench of the High Court, The High Court pointed out that issue No. 6 had not been decided on the earlier occasion and took the view that if issue No. 6 were decided in favour of the respondent it would not be necessary to go into the question whether the respondent was the descendant of Maharaja Sher Singh and therefore entitled to sue for ejectment.
The High Court therefore addressed itself to the decision of 331 issue No. 6 and held that in view of the judgment of the Lahore High Court and the decision of the tribunal, the appellant and the other defendant were debarred from denying the respondent 's title as a descendant of Maharaja Sher Singh.
In that view of the matter it held that the suit must succeed as the question of limitation had been decided against the appellant and the other defendant and it was not open to go into the question whether the respondent was a descendant of Maharaja Sher Singh and therefore entitled to maintain the suit.
The appeal was therefore allowed and the suit was decreed.
The appellant then applied for leave to appeal to this Court, which was granted; and that is how the matter has come up before us.
The appeal came up for hearing before this Court in 1958.
This Court then took the view that it was difficult to decide the appeal satisfactorily without having a finding on the essential issue, namely, whether the plaintiff was a descendant of Maharaja Sher Singh and therefore entitled to get possession of the bunga in dispute as a manager.
This Court therefore directed the High Court to record a finding on issue No. 2 and also on the two additional issues framed by the High Court when the remand was made on an earlier occasion.
The appeal has now come up for hearing again after the findings of the High Court, which are that the respondent has not been proved to be the descendant of Maharaja Sher Singh and that the appellant and the other defendant were in possession of the bunga as bungais or sewadars and that they were liable to ejectment because they had denied the title of the rightful owner on whose behalf they were managing the property.
In effect the High Court confirmed the findings of the trial court on remand.
Before we go into the effect of the findings now submitted by the High Court on the direction of this court, it is in our opinion necessary to decide issue No. 6, for if that issue is decided in favour of 332 the respondent it will not be open to the appellant or the other defendant to question that the respondent was the descendant of Maharaja Sher Singh and consequently had the right to maintain the suit.
That brings us to the consideration of the effect of the decision of the tribunal and the judgment of the Lahore High Court in appeal therefrom, which in its turn requires a consideration of the provisions of the Act.
The Act was passed to provide for the better administration of certain Sikh Gurdwaras and for inquiries into matters and settlement of disputes connected therewith.
Section 3 (1) of the Act provides for forwarding by any Sikh or any present office holder of a Gurdwara, specified in Sch.
I, of a list of all rights, titles or interests in immovable properties situate in Punjab and in all monetary endowments yielding recurring income or profit received in Punjab which he claims to belong, within his knowledge, to the gurdwara along with the name of the person in possession of any such right, title or interest.
On receiving such lists, the State Government has to publish, inter alia, under section 3 (2) a consolidated list in which all rights, titles and interests in such properties as are described in sub s.(1) are included and also to send by registered post a notice of the claim to each of the persons named therein as being in possession of such right, title or interest.
Section 5 (1) then provides that any person may forward to the State Government a petition claiming a right, title or interest in any such property included in such consolidated list within a certain time of its publication.
Sub section (3) then lays down that if no claim is made under section 5 (1) within the time limited thereby, the State Government shall publish a notification declaring that no such claim has been made with respect to the property notified under section 3 (1).
Sections 7 and 10 make similar provisions with respect to gurdwaras which are not included in Sch.
I to the Act; but we 333 are not concerned with them in the present appeal for the Golden Temple is included in Sch.
I and sections 3 and 5 apply to it.
Section 12 then provides for setting up of a tribunal.
Section 14 gives power to the State Government to forward to the tribunal all petitions received by it under the provisions of section 5 and other sections and the tribunal has to dispose of such petitions in accordance with the provisions of the Act.
Section 15 is important and may be read in extenso "(1) In disposing of any matter in which it has jurisdiction a tribunal may order any dispute arising therefrom to be dealt within one proceeding separately or more such disputes than one to be dealt with in one proceeding, and may, by public advertisement or otherwise, enquire if any person desires to be made a party to any proceeding, and may join in any proceeding any person who it considers ought to be made a party thereto.
(2) The tribunal may order any person to submit within a fixed time a statement in writing setting forth the nature of his claim or objection and the grounds thereof.
(3) If any person fails to comply with an order passed under the provisions of subsection (2) and duly notified to him, the tribunal may decide the matter in dispute against him, provided that the tribunal may at any time extend the time fixed by its order for the submission of the statement if the person satisfies it that he had sufficient cause for not submitting the statement within the time fixed.
(4) A tribunal may pass any such order as to costs of a proceeding as a court might pass under the provisions of the Code of Civil Procedure, 1908.
" 334 Then comes section 25A which lays down that when it has been decided under the provisions of the Act that a right, title or interest in immovable property belongs to a notified Sikh Gurdwara, or any person, the Committee of the Gurdwara concerned or the person in whose favour a declaration has been made may, within a period of one year from the date of the decision or the date of the constitution of the Committee, whichever is later, institute a suit before a tribunal claiming to be awarded possession of the right, title or interest in the immovable property in question as against the parties to the previous petition, and the tribunal shall, if satisfied that the claim relates to the right, title or interest in the immovable property which has been held to belong to the Gurdwara, or to the person in whose favour the declaration has been made, pass a decree for possession accordingly.
Section 26 then inter alia lays down that when it has been decided, under the provisions of the Act, that a right, title or interest in immovable property belongs to a Notified Sikh Gurdwara or when a right, title or interest in such property has been included in a list published under the provisions of section 5 (3), the Collector of the district in which the property is situated shall, on application being made to him on this behalf and after making such enquiry as he may deem proper into the fact of such decision or inclusion, cause an entry to be made in the records of rights, if any, of the estate in which the property is situated recording the gurdwara as the owner of the right, title or interest in accordance with the provisions of the Punjab Land Revenue Act, 1887.
Section 28 then provides for a suit for possession in respect of properties in which no claim has been made under section 5 or section 10.
Section 34 (1) gives a right of appeal to the High Court to any party aggrieved by a final order passed by the tribunal determining any matter decided by it under the provisions of the Act.
Section 36 and 37 are important and may be read in extenso.
335 "36.
No suit shall lie in any court to question anything purporting to be done by the State Government or by a tribunal in exercise of any powers vested in it by or under this Act." "37.
Except as provided in this Act no court shall pass any order or grant any decree or execute wholly or partly, any order or decree, if the effect of such order, decree or execution would be inconsistent with any decision of a tribunal, or any order passed on appeal therefrom, under the provisions of this Part.
" It is clear therefore from the scheme of the Act that it gives jurisdiction to the tribunal to decide all claims to properties which are claimed to be the properties of a Sikh Gurdwara mentioned in Sch.
I to the Act.
It is true that where a property in notified in the list under section 3 each person who has a claim to that property has to make a separate claim on his own behalf which is forwarded to the tribunal for decision.
It is clear however from the provisions of section 15 that where a tribunal is dealing with a property which is claimed to belong to a Sikh Gurdwara and in respect of which counter claims have been made by other persons, it has jurisdiction to decide to whom that property belongs, whether to the Sikh Gurdwara or to any other person claiming it and for that purpose it can consolidate the proceedings resulting from different claims to the same property so that all dispute with regard to that property can be decided in one consolidated proceeding.
Further it has the power under section 15 to inquire by public advertisement or otherwise if any person desires to be made a party to any proceeding and may join in any proceeding any person who it considers ought to be made a party there to.
Where therefore a number of claims have been made under section 5 to the same property which is claimed under section 3 336 to belong to a Sikh Gurdwara the tribunal can consolidate all such claims under section 15 and treat all the claims as one proceeding.
Where therefore the tribunal consolidates the claims in one proceeding each claimant even though he had made a claim for himself as against the Sikh Gurdwara would be entitled under section 15 to contest the claim not only of the Sikh Gurdwara but of any other person who is making a rival claim to the property as against the Sikh Gurdwara.
It is also clear from section 25A that in deciding the claims made under section 5 it is open to the tribunal not only to decide whether the property to which claims have been made belongs to the Gurdwara but also to decide whether it belongs to any of the claimants.
It seems therefore that the Act has given full power to the tribunal to decide between the rival claims of the Sikh Gurdwara and other claimants under section 5 and empowers it not only to give a decision as to the rights of the Sikh Gurdwara but also of other claimants.
Further there is provision in section 34 of the Act for appeal to the High Court by any party aggrieved by a final order passed by a tribunal in matters decided by it under the provisions of the Act.
The words in section 34 (1) are very wide and where claims are consolidated in one proceeding under section 15 and the claim of the Gurdwara and the rival claims of various claimants under section 5 with respect to one property are decided in a consolidated proceeding, it is clear that any party who was party to the consolidated proceeding would be entitled to appeal against the order of the tribunal if it went against it and was in favour of the Sikh Gurdwara or of any other claimant in the consolidated proceeding.
Section 36 thereafter bars a suit in any court to question any decision of a tribunal in exercise of any powers vested in it by or under the Act.
Section 37 bars any court from passing any order or granting any decree or executing wholly or partly any order or decree, if the effect of such order, or decree or execution would be 337 inconsistent with any decision of a tribunal or any order passed on appeal therefrom under the provisions of the Act.
It is on this scheme of the Act that we have to see whether it is open to the appellant and the other defendant to raise the question in the present suit that Balwant Singh was not the descendant of Maharaja Sher Singh and therefore not entitled to maintain the present suit.
It is necessary for this purpose to examine the order of the tribunal which was made on June 22, 1933, by a majority of two to one.
It is not in dispute that this bunga was notified under section 3 of the Act as property claimed by the Golden Temple.
This notification led to four claims with respect to this bunga, namely, by Jaswant Singh who was a party to the suit from which the present appeal has arisen, Darbara Singh and others with whom we are not concerned, Kesar Singh appellant and Balwant Singh respondent.
The tribunal consolidated all the four claims under section 15 of the Act and dealt with the matter in one proceeding.
The case of Jaswant Singh was that he was in possession of the first storey of the bunga by virtue of his perpetual rights of possession and management in the bunga as bungai.
Kesar Singh 's case was that he was in possession of two rooms on the first and second floors of the bunga.
He did not define what his right was but denied that the bunga was wakf.
Balwant Singh 's case was that the bunga was built by his ancestors for spiritual and wordly benefit of their offspring and was in his possession and that of his ancestors and should be declared to be the property of his family.
All these three claimants denied that the Golden Temple had any kind of right in the bunga.
In the consolidated proceeding therefore the tribunal had to decide firstly whether the bunga was the property of the Golden Temple.
If it decided that, all the claims would necessarily fall 338 through.
But if it held that the bunga was not the property of the Golden Temple it had to adjudicate on the respective claims of Jaswant Singh, Kesar Singh and Balwant Singh.
By majority, the tribunal held that the bunga was not the property of the Golden Temple.
It therefore had to decide to which of the three claimants under section 5, if any, the bunga could be held to belong.
It negatived the claims of Kesar Singh and Jaswant Singh.
As to Balwant Singh 's claim it held by a majority that Balwant Singh had no personal or private right in the bunga.
It further held that the bunga was wakf property dedicated to the pilgrims to the Golden Temple and that the descendants of Maharaja Sher Singh were the managers of the bunga.
It is clear from the decision of the majority of the tribunal that the descent of Balwant Singh from Maharaja Sher Singh was not disputed before the tribunal either by the Golden Temple or by any other party.
It is clear therefore that the tribunal had jurisdiction to decide the rights to the bunga, as it was one of the properties notified under section 3.
It had also the jurisdiction to determine all claims made under section 5 and it consolidated all the claims into one proceeding and decided the rights of the claimants and the Golden Temple in that Proceeding.
Now the respondent was claiming in those proceedings that he was the owner of the bunga as the descendant of Maharaja Sher Singh.
Neither the Golden Temple nor the other claimants seem to have challenged the claim of the respondent before the tribunal on the ground that he was not a descendant of Maharaja Sher Singh and therefore had no right to maintain the claim.
The whole proceeding before the tribunal was conducted on the basis that the respondent was a descendant of Maharaja Sher Singh and the only question was whether as such descendant he had a right to the property.
The tribunal nagatived his claim of ownership of the bunga and held that it was wakf property under the management of the descendants or Maharaja Sher Singh.
339 It has been urged that the order of the tribunal does not mention in the operative part that Balwant Singh was entitled to manage the property as the descendant of Maharaja Sher Singh and this shows that though the tribunal was of opinion that the descendants of Maharaja Sher Singh were entitled to manage the bunga it was not accepting Balwant Singh 's claim as such descendant and there was thus no decision in favour of Balwant Singh.
We cannot accept this contention, for if Balwant Singh was not a descendant at all of Maharaja Sher Singh and if this point was raised by anybody before the tribunal his claim would have failed on the simple ground that he was nobody to put forward the claim of the descendants of Maharaja Sher Singh.
The reason why the tribunal used the words "that the descendants of Maharaja Sher Singh are managers of the bunga" appears to be that at that time the father of Balwant Singh was alive and in the presence of his father Balwant Singh could not claim a right to manage the bunga.
Therefore the tribunal used neutral words, namely, "the descendants of Maharaja Sher Singh are managers of the bunga", instead of mentioning Balwant Singh as the manager of the bunga.
This is clear from an earlier part of the decision of the tribunal where in dealing with the question of ownership of Balwant Singh, it has remarked that "it is hard to see that Balwant Singh has any personal or private rights over the bunga in the presence of his father Raghbir Singh".
Though therefore the respondent was held by the majority of the tribunal, not to have rights in himself because his father was alive the tribunal nevertheless went into the question of the rights of Maharaja Sher Singh 's descendants at the instance of Balwant Singh treating him as a representative of the descendants.
This is also clear from the form in which the issue No. 3 was framed, namely, "was the bunga in dispute built by Maharaja Sher Singh, ancestor of Balwant Singh petitioner in 1629, and has been in his possession ? What rights as he been exercising over it ?" It is 340 clear therefore that before the tribunal Balwant Singh 's claim as a descendant of Maharaja Sher Singh was not challenged by the appellant or the other defendant; and the tribunal found in favour of the descendants of Maharja Sher Singh at the instance of Balwant Singh.
It was in our opinion open to the appellant and the other defendant to challenge this finding in favour of the descendants of Maharaja Sher Singh at the instance of Balwant Singh under section 34 of the Act as all the claims were consolidated under section 15 and treated as one case relating to one property.
But though the appellant and the other defendant went in appeal to the High Court they do not seem to have challenged the finding of the tribunal in favour of the descendants of Maharaja Sher Singh.
Further the Golden Temple also went in appeal; but it also did not challenge the decision in favour of the descendants of Maharaja Sher Singh.
That decision has therefore become final and according to that decision the descendants of Maharaja Sher Singh are the managers of this bunga.
That decision was given at the instance of the respondent whose claim in those proceedings based on his being a descendant of Maharaja Sher Singh was never challenged on the ground that he was not the descendant of Maharaja Sher Singh.
The question therefore that arises is whether in view of sections 36 and 37 of the Act it would be open to any court now to give a decision which will go against what has been held in that decision of the Tribunal.
If a court cannot give a decision which would go against the decision of the Tribunal in 1933, it would obviously be not open to a party to those proceedings to raise any question which would have the effect of questioning the decision of the Tribunal.
Section 36 bars any court from questioning anything done by a Tribunal in exercise of the powers vested in it by or under the Act.
Section 37 bars any court from passing any order 341 or granting any decree or executing wholly or partly any order or decree if the effect of such order, decree or execution would be inconsistent with any decision of the tribunal or any order passed on appeal therefrom under the provisions of the Act.
Now the decision of the tribunal which became final as it was not appealed from either by the Golden Temple or by the appellant or the other defendant was that the bunga was wakf property under the management of the descendants of Maharaja Sher Singh and this decision was given at the instance of the respondent who claimed in those proceedings to be a descendant of Maharaja Sher Singh and this claim of his to be a descendant of Maharaja Sher Singh was never disputed.
If therefore the Court now holds at the instance of the appellant or the other defendant that the respondent is not the descendant of Maharaja Sher Singh it will be questioning the decision of the tribunal and passing an order or granting a decree which would be inconsistent with the decision of the tribunal.
Section 36 and 37 bar any such order or decree by the court and therefore the appellant and the other defendant are naturally debarred from raising point the decision of which is barred under sections 36 and 37 of the Act.
We are therefore of opinion that the view taken by the High Court in its judgment after remand on issue No. 6 is correct and it is not open to the appellant to raise the question whether the respondent is a descendant of Maharaja Sher Singh and as such entitled to maintain the present suit.
This brings us to the question of limitation, which was decided by the High Court on the earlier occasion when the remand was made.
The case of the appellant in that connection is that he was in adverse possession and the respondent had been out of possession for over 12 years before the suit was filed in 1943 and therefore the suit should be dismissed as barred under article 144 as well as article 142 342 of the Limitation Act.
The appellant contends that the plaint itself shows that the respondent had been dispossessed more than 12 years before the present suit was filed and therefore the suit must fail on the ground of limitation.
We agree with the High Court however that a careful reading of paras.
3 and 4 of the plaint shows that the respondents case was that he and his uncle were managers of the bunga as descendants of Maharaja Sher Singh and that the appellant and the other defendant were in possession as their servants or servitors.
But these servants had started denying the title of the respondent and his uncle they do not want to keep them any longer in their service.
They therefore filed the suit for ejectment of these servants and for possession of the property.
The High Court therefore was right in the view it took that it was a case of permissive possession arising in favour of the appellant and the other defendant.
Whatever may be the position about the actual possession, it appears from the decision of the tribunal that the claim of the appellant and other defendant before the tribunal in 1933 was that they were bungais i.e. servitors; and this was also the view of the High Court in the appeal from the decision of the tribunal where the High Court said that "no doubt Kesar Singh, his father and grandfather have been Bungais of the bunga, but there is no reliable evidence of their having set up a title adverse to the institution or that the nature of this bunga is exceptional." Similarly Jaswant Singh also claimed to be a mere bungai before the tribunal by virtue of his father being adopted by Natha Singh who was undoubtedly a bungai.
In these circumstances from the decision of the tribunal in favour of the respondent in 1933, it appears that no hostile title adverse to the respondent was ever set up by the appellant and the other defendant before that decision.
In consequence it cannot be said that adverse possession over 12 years has been established 343 before June 1, 1943 when the present suit was filed.
As originally the possession of the appellant and the other defendant was clearly permissive, there can be no question of the application of article 142 in the present case and the appellant could only succeed if he could prove adverse possession under article 144 for over 12 years.
The decision of the High Court on the question of limitation is correct.
Lastly, it is urged that the respondent had applied under section 25A to the tribunal but allowed that suit to be dismissed for default and therefore it was not open to him to file the present suit for possession.
It is enough to say that though this point was framed in the written statement no issue was framed with respect to it by the trial court.
When the matter was raised in the High Court on the first occasion it held that as no issue had been framed and no evidence had been led by the parties as to whether the cause of action was or was not the same and no copy of the plaint in the earlier proceeding had been filed the question whether the present suit was barred by virtue of O.IX.
of the Code of Civil Procedure could not be gone into and it must be held that it was not barred under O. IX.
In view of what the High Court has said we are of opinion that it is not open to the appellant to raise this point before us when he had failed to get an issue framed on it and no evidence was led in that behalf.
As the appellant cannot challenge that the respondent is the descendant of Maharaja Sher Singh the respondent would have a right to maintain the suit.
Further as the appellant and the other defendant are servitors and they have undoubtedly set up a title after the decision of the tribunal adverse to the respondents 's right as found by the tribunal, the respondent is entitled to eject the appellant and the other defendant, for servitors cannot claim to remain in possession after they set up an adverse title with respect to the property of 344 which they are servitors.
In view of our decision on issue No. 6, it is unnecessary to consider issue No. 2 on which a finding was called for by this Court by its interlocutory judgment in 1958.
The appeal therefore fails; there would be no order as to costs.
Appeal dismissed.
| The High Court set aside the Trial Court 's order of acquittal of the appellants and convicted them on a charge of murder under section 302 of the Indian Penal Code.
On appeal by the appellants by special leave ^ Held, that this Court in its earlier decisions emphasised that interference with an order of acquittal should be based only on "complying and substantial reasons" and held that unless such reasons were present an Appeal Court should not interface with an order of acquittal, but this Court did not try to curtail the powers of the appe11ate court under section 423 of the Code of Criminal Procedure.
Though in its more recent pronouncements this Court laid less emphasis on 105 "compelling reasons" the principle has remained the same.
That principle is that in deciding appeals against acquittal the Court of Appeal must examine the evidence with particular care and must also examine the reasons on which the order of acquittal was based and should interfere with the order only when satisfied that the view taken by the acquitting judge was clearly unreasonable.
Once the Court came to the conclusion that the view of the lower court was unreasonable that itself was a "compelling reason" for interference.
Once it was found that the High Court applied the correct principles in setting aside the order of acquittal this Court will not ordinarily interfere with the High Court 's order of conviction in appeal against acquittal o enter into the evidence to ascertain whether the High Court was right in its view of the evidence.
Only such examination of the evidence would ordinarily be necessary as is needed to see that the High Court approached the question properly and applied the principle correctly.
If the judgment of the High Court did not disclose a careful examination of the evidence in coming to the conclusion that the view of the acquitting court was unreasonable or if it appeared that the High Court erred on questions of law or misread the evidence or the judgment of the trial court, this Court would, unless the case was sent back to the High Court for re hearing, appraise the evidence for itself to examine the reasons on which the lower court based its order of acquittal and then decide whether the High Courts view that the conditions of the lower court was unreasonable, was correct.
If on such examination it appeared to the Court that the view of the acquitting court was unreasonable the acquittal would be set aside and if on the other had it appeared that the view was not unreasonable the order of acquittal would be restored.
Suraj Pal Singh vs State, , Ajmer Singh vs State of Punjab ; , Puran vs State of Punjab A.I.R. 1953 S.C. 459, Chinta vs State of M. P., Cr. A. No. 178 of 59 and Ashrafkha Haibatkha Pathan vs State of Bombay, Cr. A. No. 38 of 1960, referred to.
It was neither a rule of law nor of prudence that a dying declaration should be corroborated by other evidence before a conviction could be ba ed thereon.
Ram Nath vs state of M. P. A.l.
R. 1953 S.C. 420, referred to.
Khushal Ram vs State of Bombay, [l958] S.C.R. 552, followed.
A dying declaration did not become less credible if a number of persons were names are culprits 106 Khurshaid Hussain.
vs Emperor,(1941) 43 Cr.L.J.59, held erroneous.
|
Civil Appeal Nos.
1237 1238/1970.
From the Judgment and Order dated 15 12 1969 of the Punjab and Haryana High Court in Civil Writ Appeal Nos.
444/68 and 2975/67.
Hardayal Hardy, Mahinder Narain and Rameshwar Nath for the Appellants in both the Appeals.
section M. Ashri and M. N. Shroff for the Respondents in both the Appeals.
The Judgment of the Court was delivered by KAILASAM, J.
These two appeals are by certificate granted by the Punjab and Haryana High Court at Chandigarh in C. W. No.444/1968 and C. W. No. 2975 of 1967 respectively.
The petitions were disposed of by a full Bench of the High Court on 15 12 1969.
The appellants who were the petitioners before the High Court prayed for a writ of certiorari or mandamus or any other appropriate writ for quashing the resolution No. 6 dated 21st July, 1965 of the Municipality and letter of the Government of Haryana to the President of the Municipal Committee Bahadurgarh dated 30 10 1967.
The facts of the case briefly are as follows: The Municipal Committee of Bahadurgarh, Respondent No. 2, established Mandi Fateh in Bahadurgarh Town, with a view to improve trade in the area.
The Municipal Committee decided that the purchasers of the plots for sale in the Mandi would not be required 696 to pay octroi duty on goods imported within the said Mandi.
In pursuance of this decision, resolution No. 8 dated 20 12 1916 was passed by the Municipality.
Handbills were issued for the sale of the plots on the basis of the resolution and it was proclaimed that Fateh Mandi would remain exempt from payment of octroi.
Subsequently by resolution No. 4 dated 20 5 1917, the Municipal Committee decided that the term No. 14 to the conditions of sale, namely, that the plots would not be required to pay octroi, be amended to the effect that the Mandi shall remain immune from payment of Octroi Duty for ever.
When the resolution was received by the Commissioner of Ambala, in paragraph 3 of his letter dated 26 6 1917 marked as Annexure A in the writ petition, he noted: "I note that by its resolution No. 4 of 20 5 1917, the Municipal Committee has undertaken that Octroi shall never be imposed in the Mandi.
This is ultra vires, the Municipal Committee cannot make such an undertaking and this should be explained to the purchasers of sites before they begin building so that if they wish they may withdraw from the purchase".
Of course, it is unlikely that Octroi will be imposed." On receipt of this letter, the President of the Municipal Committee made representations that if octroi duty was to be levied, there will be no purchasers for the plots and the entire scheme will fall through.
On receipt of this representation on 20 9 1917 (Annexure B), the Commissioner revised his view and stated that he was cancelling para 3 of his letter dated 26 6 1917, that is to say, "that in deference to the strong views of the Municipal Committee and to your own opinion that the market will collapse if I insist upon it, I withdraw my objection to the undertaking made by the Municipal Committee that Octroi will not be imposed on the market.
As soon as the market is established it will be necessary to consider what form of taxation is best to cover the market share of Municipal expenses".
The Municipal Committee on 10 3 1919 imposed house tax of Rs. 3 14 6 per cent per annum on the shopkeepers to cover the expenditure of the market.
This state of affairs continued till 4 9 1953 when the Municipal Committee by notification No. 9697 C 53/63830 dated 4 9 1953 included Fateh Mandi, Bahadurgarh, within the Octroi limits.
The Examiner of Local Funds pointed out that the Municipal Committee is under obligation to charge octroi on goods imported into Fateh Mandi.
The President of the Municipal Committee made a representation to the Deputy Commissioner on 24 2 1954.
The Municipal Committee again passed another resolution No. 1 dated 2 3 1954 that the 697 Fateh Mandi will remain free from octroi duty according to the terms of the proclamation of the sale relating to the sale of plots.
The matter was referred to the Punjab State which after thoroughly examining the whole matter, confirmed Resolution No. 1 passed by the Municipal Committee on 2 3 1954.
Subsequently, the Municipal Committee changed its mind and by its resolution dated 8 5 1954, resolved that octroi duty should also be levied on the goods imported into Fateh Mandi.
But this resolution was annulled by the Punjab Government under section 236 of the Punjab Municipal Act.
The Examiner of Local Funds Accounts in the meantime insisted on the levy of octroi duty on the goods imported into Fateh Mandi and the Punjab Government after discussing the issue on 9 4 1956 informed the President of the Municipal Committee that the Government 's action in confirming the resolution No. 1 of 2 3 1954 of the Municipal Committee, Bahadurgarh exempting goods imported into Fateh Mandi from levy of octroi duty under section 70(2) (c) of the Municipal Act, 1911, is quite in order and that no separate notification to this effect was necessary under the rules.
Again on 21 7 1965, the Municipal Committee Bahadurgarh resolved that the Government be requested to cancel Resolution No. 1 dated 2 3 1954.
The State of Haryana Respondent No. 1 which came into existence on 1 11 1964 under the Punjab Reorganisation Act, by its memo dated 13 10 1967 approved the resolution No. 6 dated 21 7 1965 of Municipal Committee and cancelled the Municipal Resolution No. 1 of 2 3 1954.
As a result of the decision of the Government, the Municipal Committee started charging octroi duty on the goods imported into the Mandi.
On these facts, the petitioners submitted that the resolution No. 6 of the Municipal Committee dated 21 7 1965 (Annexure G) and the approval granted by the Haryana State as per its order dated 30 10 1967 (Ann.
H) are illegal and ultra vires and without jurisdiction.
A Full Bench of the High Court rejected the petition mainly on three grounds, Firstly, it found that the State Government is entitled under section 62 A of Punjab Act, 48/1953 to direct the Municipal Committee to impose octroi duty and as such even if the municipality is found to have erred in imposing the Octroi Duty, the legislative powers of the State cannot be questioned.
Secondly, it found, that it was not within the competence of the Municipality to grant any exemption from payment of octroi duty and this act is ultra vires of its powers and cannot be enforced.
Thirdly, it found that the Court cannot go into the question as to whether the petitioners ' plea based on equity that the Municipality is bound, cannot be gone into for want of adequate facts.
698 Dealing with the first contention, relating to the legislative powers of the State, it will be seen that Punjab Act 48/1953, introduced s.62A which runs as follows: "62 A. (1) The State Government may, by special or general order notified in the official Gazette, require a Committee to impose any tax mentioned in S.61, not already imposed at such rate and within such period as may be specified in the notification and the Committee shall thereupon act accordingly.
(2) The State Government may require a Committee to modify the rate of any tax already imposed and thereon the committee shall modify the tax as required within such period as the State Government may direct.
(3) If the Committee fails to carry out any order passed under Sub section (1) or (2) the State Government, may by a suitable order notified in the official gazette, impose or modify the tax.
The order so passed shall operate as if it were a resolution duly passed by the Committee and as if the proposal was sanctioned in accordance with the procedure contained in S.62.
" It is admitted that the State Government is empowered under section 62A to require the Municipal Committee to impose octroi Duty and under sub section
(3) if the Committee fails to carry out the order of the Government, the State Government may impose octroi Duty.
Under section 70(2) (c), a Municipal Committee by a resolution passed at a special meeting and confirmed by the State Government may exempt in whole or in part from the payment of any such tax any person or class of persons or any property or description of property.
In exercise of these powers, the State Government had by its order dated 4 5 1954 confirmed resolution No. 1 passed by the Municipal Committee in its special meeting held on 2 3 1954 regarding the exemption of goods imported into Fateh Mandi from levy of Octroi Duty.
Subsequently, in reply to the objection raised by the Examiner of Local Funds, the Government pointed out by its letter dated 9 4 1956 (Ann. F) that the Government 's action confirming the resolution No. 1 dated 2 3 1954 of the Municipal Committee exempting Goods imported into Fateh Mandi, under section 70(2) (c) of the Punjab Municipal Act, 1911, is quite in order.
By the impugned order dated 20 10 1967 the Government approved the resolution No. 6 of the Municipal Committee dated 21 7 1965 and permitted the Municipality to levy the Octroi Duty.
The action taken by the State Government is strictly in conformity with the powers conferred on it under section 70(2) (c) of the 699 Act.
It exempted the petitioners from payment of Octroi Duty for a particular period and ultimately withdrew the exemption.
The action of the Government cannot be questioned as it is in exercise of its statutory functions.
The plea of estoppel is not available against the State in the exercise of its legislative or statutory functions.
The Government have powers to direct the Municipality to collect the Octroi Tax if the Municipality fails to take action by itself under section 60(A) (3).
Further, even on facts, this plea is not available as against the Government as it is not the case of the petitioners that they acted on the representation of the Government.
We, therefore, agree with the view of the Full Bench that the plea of estoppel is not available against the Government for questioning the validity of the impugned Government order.
The second contention is that the Municipality is estopped from levying or recommending the levy of the tax to the Government as in the proclamation of sale it was notified that no Octroi Duty will be levied and it was only in pursuance of such representation, the petitioners purchased the property.
We feel this plea should also fail, because the Municipal Committee had no authority to exempt the Fateh Market from the levy of Octroi Duty.
If the Municipal Committee had passed a resolution or issued a notification that no Octroi Duty will be levied, it will be ultra vires of the powers of the Municipal Committee.
When a public authority acts beyond the scope of its authority the plea of estoppel is not available to prevent the authority from acting according to law.
It is in public interest that no such plea should be allowed.
The third contention that was raised by the learned counsel for the appellants before the High Court and reiterated before us, is that the Municipality and its successors are bound by the doctrine of promissory estoppel and as such are estopped from levying the Octroi Duty.
The High Court rejected the plea on the following grounds: 1.
The Petitioners are not the original purchasers of the plots in Fateh Mandi.
They are either descendants of or transferees from the original purchasers of the plots.
No sale deed was executed by the Municipal Committee in favour of the original purchasers undertaking that no octroi duty will be levied.
No allegation has been made that the original purchasers would not have purchased the plots, if condition No. 14 about immunity from payment of Octroi had not been there.
The learned counsel by reference to the names of the list of the purchasers was able to satisfy us that some of the appellants are the 700 original purchasers and as such the first objection raised before the High Court is not sustainable.
Again, regarding the third objection, that there is no allegation that the original purchasers would not have purchased the plots if condition 14 about immunity from payment of Octroi had not been there, it was submitted as erroneous as in the affidavit filed in support of the writ petition, the petitioners had pleaded in paragraph 2 that on the faith of the representation, the petitioners purchased the plots and constructed establishments.
The learned counsel is, therefore, right in his submission that the third objection raised before the High Court is without substance.
But the High Court was right in pointing out that none of the sale deeds executed by the Municipal Committee in favour of the purchasers was produced before the Court.
These circumstances would show that the contract between the parties have not been proved to have been reduced in writing and executed in the manner prescribed under section 47 of the Act.
Strictly, therefore, under the terms of the Municipal Act, the appellants are not entitled to any enforceable legal right.
But it was submitted that even though the contract had not been executed in due form, the appellants would be entitled to relief under, the doctrine of promissory estoppel.
The question that arises for consideration in these cases is whether the proclamation of sale which notified that there would be no octroi levy in the market relying on which statement the petitioners bid at the auction, would estop the Municipality by operation of the doctrine of promissory estoppel from recommending to the Government and the Government levying octroi duty under section 61 of the Punjab Municipal Act.
To answer this question it is necessary to examine at some length the rights and liabilities of the State under a contract entered into by it with third parties and in transactions carried on by it in exercise of its executive and statutory functions.
article 299 (1) of the Constitution of India provides that all contracts made in the exercise of the executive power of the Union or of a State shall be expressed to be made by the President, or by the Governor of the State, as the case may be, and all such contracts and all assurances of property made in the exercise of that power shall be executed on behalf of the President or the Governor by such persons and in such manner as he may direct or authorise.
This Article in the Constitution corresponds to section 175(3) of the Government of India Act, 1935.
In cases, that arose out of section 175(3) of the Government of India Act, 1935, this Court starting from Seth Bikhraj Jaipuria vs Union of India, has 701 repeatedly held that the provision is mandatory and not directory, that the provision is enacted as a matter of public policy, that the State should not be saddled with liability for unauthorised contracts and that the provision is enacted in the public interest.
In Mulamchand vs State of M. P., the earlier decisions of this Court were relied on and it was held that the reasons for enacting the provision is not for the sake of some form but for safeguarding the Government against unauthorised contracts.
The provisions are embodied on the ground of public policy on the ground of protection of general public and these formalities cannot be waived or dispensed with.
The Court clearly observed that if the plea of the respondent regarding estoppel or ratification is admitted that would mean, in effect, the repeal of an important constitutional provision intended for the protection of the general public.
That is why the plea of estoppel or ratification cannot be permitted in such a case." (emphasis Ours) It was contended before this Court in Karamshi Jethabhai Somayya vs State of Bombay, that in an agreement entered into under the Act by statutory authority in pursuance of a statutory power, that consequences provided under the statute would follow and would not fall within the ambit of section 175(3) of the Government of India Act.
This Court after examining the terms of the contract found that it did not fall within the provisions of the Act and, found it unnecessary to deal with the contention.
The scope of the doctrine of equitable estoppel arose for consideration before this Court in Collector of Bombay vs Municipal Corporation of the City of Bombay and Ors.
In 1865, the Government of Bombay called upon the predecessor in title of the Corporation of Bombay to remove some markets from a certain site and vacate it, and on the application of the then Municipal Commissioner the Government passed a resolution approving and authorising the grant of another site to the Municipality.
The resolution stated further that "the Government do not consider that any rent should be charged to the Municipality as the markets will be, like other public buildings, for the benefit of the whole community".
The Corporation gave up the sites on which the old markets were situated and spent a sum of over 17 lacs in erecting and maintaining markets on the new site.
In 1940, the Collector of Bombay, overruling the objection of the Corporation, assessed the new site under S.8 of the Bombay City Land Revenue Act to land revenue rising from Rs. 7,500/ to Rs. 30,000/ 702 in 50 years.
The Corporation sued for a declaration that the order of assessment was ultra vires and that it was entitled to hold the land for ever without payment of assessment.
The Supreme Court held by a majority of four Judges to one that the Government was not entitled to assess land revenue for the land in question.
Three of the Judges who were parties to the majority judgment found that the Corporation had taken possession of the land in terms of the Government resolution and continued in such possession openly, uninterruptedly and as of right for over 70 years and acquired limited title it had been prescribing for during the period, that is to say, the right to hold the land in perpetuity free of rent, but only for the purpose of a market and for no other purposes.
The right acquired included as part of it an immunity from payment of rent which constituted a right in limitation of the Government 's right to assess in excess of the specific limit established and preserved by the Government Resolution within the meaning of S.8 of the Bombay City Land Revenue Act.
Before the Court there was considerable discussion as to the scope and effect of the principle of equity enunciated in Ramsden vs Dyson, as to whether such principle should be extended to the facts of the case and as to whether the facts of the case attract the application of the equity established in Ramsden vs Dyson or attract the equity established in Maddison vs Alderson, and Walsh vs Lonsdale, and finally as to whether the decision of the Privy Council in Ariff vs Jadunath the equity in Ramsden vs Dyson can prevail against the requirement of formalities laid down in the Victorian Statute referred to above any more than the equity in Maddison vs Alderson can do against the requirements of the Transfer of Property Act.
The majority of the judges did not express any opinion on this question but decided the appeal on a narrower and shorter ground stated above.
One of the judges, Chandrasekhara Aiyar, J. constituting the majority expressed his view thus: "Whether it is the equity recognised in Ramsden 's case, or it is some other form of equity, is not of much importance.
Courts must do justice by the promotion of honesty and good faith so far as it lies in their power.
As pointed out by Jenkins C. J. in Dadoba Janardhan 's case a different conclusion would be opposed to what is reasonable, to what is probable and what is fair.
" The other judges of the Court who spoke for the Court refrained from going into this question.
The view of Chandrasekhara Aiyer, J. 703 being the view of one of the judges of the majority, cannot be taken as the view of the Court.
Patanjali Sastri, J. as he then was dissented with the majority and stated: "The principle of Ramsden vs Dyson cannot prevail against statutory requirements regarding disposition of property or making of contract by Government * * *The right to levy land revenue is no part of the Government 's right to property but a prerogative of the Crown and adverse possession of the land could not destroy the Crown 's prerogative to impose assessment on the land.
" A Bench of four judges of this Court in a decision Excise Commissioner.
U. P. Allahabad vs Ram Kumar, after examining the case law on the subject observed that "it is now well settled by a catena of decisions that there can be no question of estoppel against the Government in exercise of its legislative, sovereign or executive powers.
" The earlier decisions of this Court in M. Ramanathan Pillai vs State of Kerala, and State of Kerala and Anr.
vs The Gwalior Rayon Silk Manufacturing (Wvg.) Co. Ltd. were followed.
It may, therefore, be stated that the view of this Court has been that the principle of estoppel is not available against the Government in exercise of legislative, sovereign or executive power.
On behalf of the petitioners, it was submitted that a liberal view was taken by this Court in the decision Union of India vs M/s. Indo Afghan Agencies Ltd. which recognised the principle of promissory estoppel and held that whether the agreement is executive or administrative in character, the courts have power in appropriate cases to compel performance of the obligations imposed by the schemes upon the departmental authorities.
At this decision is relied on as the sheet anchor of the doctrine of promissory estoppel, the facts of the case and the decision rendered therein, have to be examined carefully.
Indo Afghan Agencies Ltd. the respondents before this Court exported woollen goods to Afghanistan and were issued an Import Entitlement Certificate by the Textile Commissions not for the full F. O. B. value of the goods exported, but for a reduced amount.
By virtue of the powers conferred under S.3 of the Imports and Exports (Control) Act, 1947, the Central Government issued the Imports (Control) Order, 1955 setting out the policy governing the grant of import and export licence.
During the relevant period, it provided for the grant to an exporter, certificates to import raw materials of a 704 total amount equal to 100% of the F. O. B. value of his exports.
Cl.10 of the Scheme provided that the Textile Commissioner could grant an import certificate for a lesser amount if he is satisfied after holding an enquiry that the declared value of the goods is higher than the real value of the goods.
It was contended, amongst other grounds, that the Government on grounds of executive necessity was the sole judge of the validity of its action in matters relating to import and export policy, because the policy depended upon the economic climate and other related matters and had to be in its very nature flexible with power in the Government to modify or adjust it as the altered circumstances necessitate.
It was pleaded that if the Government was held bound by every representation made by it regarding its intentions, it would amount to holding the Government as being bound by contractual obligations even though no formal contract in the manner required by article 299 of the Constitution was executed.
Regarding the objection on the ground of contravention of article 299 of the Constitution, the Court held that the respondents were not seeking to enforce any contractual right but were seeking to enforce compliance of the obligation which is laid upon the Textile Commissioner by the terms of the Scheme and the claim of the respondents was founded upon the equity which arose in their favour as a result of the representation made on behalf of the Government in the Export Promotion Scheme.
(emphasis supplied).
It may be noted that no finding was recorded by the Textile Commissioner, that there was any infringement which entitled him to reduce the quota under Cl.
10 of the scheme.
The facts of the case disclose that the defence of the executive necessity was not relied upon in the affidavit filed on behalf of the Union of India.
It was also not pleaded that the representation in the Scheme was subject to an implied term that the Union of India will not be bound to grant the import certificate for the full value of the goods if they deem it inexpedient to grant the certificate.
The Court after referring to earlier decisions of this Court accepted the view expressed in those decisions that reduction in the amount of import certificate may be justified on the ground of misconduct of the exporters in relation to goods exported or on such considerations as the difficult foreign exchange position or other matters which have a bearing on the general interest of the State (emphasis supplied).
Summing up the law laid down by the earlier cases, the Court found that in each of the three cases this Court held that it was competent to grant relief in appropriate cases, if, contrary to the Scheme, the authority declined to grant a licence or import certificate or the authority acted arbitrarily and that the Union of India and its Officers are not entitled at their mere whim to ignore the promises made by the Government (emphasis 705 supplied).
It rejected the plea on behalf of the Government that the Textile Commissioner is the sole judge of the quantum of the import licence to be granted to an exporter and that the Courts were powerless to grant relief if the promised import licence is not given to an exporter who has acted in his prejudice relying upon the representation.
The decision is, therefore, an authority for the proposition that in the absence of a plea of executive necessity, the Court in appropriate cases is entitled to compel performance of the obligations imposed by the Scheme on the departmental authority.
The right of the Government on relevant considerations such as difficult foreign exchange position or other matters which have a bearing on the general interest of the State, to reduce the amount of import certificate was recognised.
But the authorities have to act according to the terms of the scheme and not arbitrarily or at their mere whim to ignore the promises made by the Government (emphasis supplied).
On the facts of the case, the Court gave relief as the authorities declined to act according to the terms of the Scheme and acted arbitrarily and at their mere whim ignoring the promises made by the Government.
The question as to the applicability of the doctrine of promissory estoppel against the legislative or executive acts of the Government did not strictly arise in the case.
The decision was thus generally understood as stated above is seen from the view expressed by Mr. H.M. Seervai on Constitution of India, 2nd Edn.
I, paragraph 11 at para 146 B, p. 433: "The authorities considered by the Supreme Court, and the conclusions drawn from them, by Shah, J. in the present case, merely affirm the proposition that the Government could not go back upon promises made in the exercise of discretionary power as embodied in a scheme, merely on a whim (emphasis by Mr. Seervai) x x x x x X A promissory estoppel cannot stand on a higher footing than a contract entered into between a citizen or subject and a public authority and it is settled by numerous decisions that no public authority entrusted with discretionary power to be exercised for the public can bind itself by a contract not to exercise that discretion when the public good demands its exercise".
It is only in public interest that it is recognised that an authority acting on behalf of the Government or by virtue of statutory powers cannot exceed his authority.
Rule of ultra vires will become applicable when he exceeds his authority and the Government would not be bound by such action.
Any person who enters into an arrangement 706 with the Government has to ascertain and satisfy himself that the authority who purports to act for the Government, acts within the scope of his authority and cannot urge that the Government is in the position of any other litigant liable to be charged with liability.
In refuting the contention that the contract is unenforceable on the ground that there had been no strict compliance of the requirement of article 299 of the Constitution, the Court observed that the respondents were not seeking to enforce any contractual rights but were seeking to enforce compliance with the obligation which was laid upon the Textile Commissioner by the terms of the Scheme.
Thus, the relief that was granted by the Court was by enforcing the compliance of the obligation which was laid upon the Textile Commissioner by the terms of the Scheme.
The Court proceeded to state that the claim of the respondents is appropriately founded upon the equity (emphasis ours) which arises in their favour as a result of the representation made on behalf of the Union of India in the Export Promotion Scheme, and the action taken by the respondents acting upon that representation under the belief that the Government would carry out the representation made by it.
Thus the equity which the Court was enforcing was to direct compliance of the obligation which is laid upon the Textile Commissioner by the terms of the scheme.
The equity cannot be understood as barring the authority from modifying the scheme on special considerations such as difficult foreign exchange position or other matters which have a bearing on the general interest of the State (vide p. 380).
The purport of the judgment is made clear by its own observation: "Under our jurisprudence the Government is not exempt from liability to carry out the representation made by it as to its future conduct and it cannot be some undefined and undisclosed ground of necessity or expediency fail to carry out the promise solemnly made by it, nor claim to be the judge of its own obligation to the citizen on an ex parte appraisement of the circumstances in which the obligation has arisen.
" The observations of the Court that the claim of the respondents is properly founded on the equity should be understood on the facts and findings of the Court in the case.
The Court relying on the observations of Chief Justice Jenkins, observed that even though the case does not fall within the terms of S.115 of the Evidence Act, it is still open to a party who has acted on a representation made by the Government to claim that the Government shall be bound to carry out the promise made by it, even though the promise is not recorded in the from of a formal contract as required by the Constitution.
The Court 707 would be bound when the officer made the promise within the scope of his authority and failed to act upon it at his mere whim and acted arbitrarily on some undefined and undisclosed grounds of necessity.
Before proceeding further with the case, we will refer briefly to the purport of the doctrine of promissory estoppel.
The doctrine of promissory estoppel burst into sudden blaze in 1946 when Denning.
J. sitting in the Court of Kings Bench delivered the judgment in Central London Property Trust Ltd. vs High Trees House Ltd. which has now become famous as the High Trees Case.
The facts of the case are: During the war many people left London owing to bombing.
Flats were empty.
In one block, where the flats were let on 99 years leases at $ 2,500/ a year, the landlord agreed to reduce it by half and to accept $ 1,250/ a year.
When the bombing was over, and the tenants came back, the landlord sought to recover the full rent at $ 2,500/ a year.
Denning, J. held that the landlord could not recover the full amount for the time when the flats were empty.
The lease was a lease under seal which according to English Common Law, could not be varied by an agreement by parole, but only by deed.
The learned judge invoked equity to his aid and said that if there has been a variation of a deed by simple contract the courts may give effect to it.
The counsel for the lessee pleaded that the lessor had agreed though without consideration to accept the rent at a reduced rate, and set up a plea of estoppel by way of defence to the claim for arrears of rental calculated at the full rate.
Faced with Foakes vs Beer, if the defence was raised as a matter of contract and Jorden vs Money, if it was raised as estoppel.
Denning.
J. held that the estoppel sustained although based on an assurance as to the future, because the promisor intended to be legally bound and intended his promise to be acted upon, with the result that it was so acted upon.
In Jordan vs Money (supra), the House of Lords held that a promise to pay a smaller sum of money in discharge of larger amount which was due, was void since such a promise was without consideration.
Denning, J. relying on Fenner vs Blake, Re: Wickhem William Porter & Co. Ltd. and Buttery vs Pickard observed that they were cases of estoppel in the strict sense.
They are really promises promises intended to be binding intended to be acted upon, and in fact acted on and in the circumstances the plaintiff company will be bound by the arrangement in its letter.
Though the observations of 708 Denning, J. in High Trees case were in the nature of obiter dicta, the decision became the starting point of the several shades of opinion regarding the scope of promissory estoppel.
It is unnecessary for our purpose to go into the development of law of promissory estoppel starting from High Trees case.
It is sufficient to state that since the High Trees decision was rendered, many elaborations and glosses have appeared in the reports.
Turner in his book Estoppel by Representation, has a separate chapter dealing with promissory estoppel.
The doctrine, as observed by the author at the conclusion of the chapter, "burst out into sudden blaze in 1946 has ever since continued to smoulder, and that its original author has constantly maintained his interest in its further development, now in this direction, now in that".
But there has been high places counselling conservatism *** Lord Hailsham of St. Marylebone, has expressed his views in Woodhouse Ltd. vs Nigerian Produce Ltd. as follows: "I desire to add that the time may soon come when the whole sequence of cases based on promissory estoppel since the war *** systematically explored".
This subject though interesting may not be relevant in administering Indian Law.
section 63 of the Contract Act provides that when a creditor accepts a lesser sum in satisfaction of the whole debt, the whole debt become discharged.
This provision is a wide departure from the English Law and the discussion about Jordan vs Money wherein it was held that a promise to accept a smaller sum is devoid of consideration, becomes pointless.
So also the doctrine of estoppel referred to in the High Trees case is, to some extent taken care of by Ss. 65 and 70 of the Indian contract Act.
S.65 provides that when a contract becomes void, any person who has received any advantage under such agreement or contract is bound to restore it or to make compensation for it, to the person from whom he received it.
Under section 70 of the Contract Act, an obligation is cast on the person enjoying benefit of a non gratuitous act to compensate the person who lawfully performed the act.
As to whether the provisions of section 65 and 70 of the Indian Contract Act, are applicable to contract which is not according to section 175 of the Government of India Act and article 299 of the Constitution of India, there is a difference of opinion.
Sir Maurice Gwyer expressed his view that when a contract is void, recourse to S.70 cannot be had.
Later, the Supreme Court held in State of West Bengal vs B. K. Mondal & Sons, that S.70 was applicable to such a case.
This decision was 709 followed in New Marine Coal Co. Ltd. vs Union, and in later cases by the Supreme Court.
In discussing the scope of the doctrine of promissory estoppel, and its applicability against the Government and Government Officers in their dealings with the subject, Lord Denning J. in Robertson vs Minister of Pensions observed : "The Crown cannot escape by saying that estoppels do not bind the Crown for that doctrine has long been exploded.
Nor can the Crown escape by praying in aid the doctrine of executive necessity, that is, the doctrine that the Crown cannot bind itself so as to fetter its future executive action.
That doctrine was propounded by Rowlett J., in Redariaktiebolaget Amphtrite vs The King but it was unnecessary for the decision because the statement there was not a promise which was intended to be binding but only an expression of intention.
Rowlett, J., seems have been influenced by the cases on the right of the Crown dismiss its servants at pleasure, but those cases must now all be read in the light of the judgment of Lord Atkin in Reilly vs The King (1954) A. C. 176, 179) *** In my opinion the defence of executive necessity is of limited scope.
It only avails the Crown where there is an implied term to that effect or that is the true meaning of the contract." Lord Denning was dealing with a case of a serving army officer who wrote to the War Office regarding a disability and received a reply that his disability had been accepted as attributable to "military service".
Relying on that assurance, he forbore to obtain an independent medical opinion.
The Minister of Pensions took the view that appellant 's disability could not be attributed to war services.
Lord Denning held that between the subjects such an assurance would be enforceable because it was intended to be binding, intended to be acted upon, and it was in fact acted upon; and the assurance was also binding on the Crown because no term could be implied that the Crown was at liberty to revoke it.
The decision in Robertson 's case is quoted with approval in the Indo Afghan case but before we revert to the Indo Afghan case, we will follow the course which Robertson 's case took.
The correctness of the case came up for consideration before the House of Lords in Howell vs Falmouth Boat Construction Co. Ltd. The appeal was preferred to the 710 House of Lords from the Court of Appeal against the judgment of Bucknil, Singhleton and Denning, L.JJ.
In his judgment in the Court of Appeal, Denning L. JJ.
pressed the principle in the following terms: "Whenever Government Officers, in their dealings with a subject, take on themselves to assume authority in a matter with which he is concerned, the subject is entitled to rely on their having the authority which they assume.
He does not know and cannot be expected to know the limits of their authority, and he ought not to suffer if they exceed it.
That was the principle which I applied to Robertson vs Minister of Pensions, and it is applicable in this case also.
" Commenting on the view taken by Denning, L. J. Lord Simonds observed : "My Lords, I know of no such principle in our law nor was any authority for it cited.
The illegality of act is the same whether or not the actor has been misled by an assumption of authority on the part of a government officer however high or low in the hierarchy.
*** The question is whether the character of an act done in face of statutory prohibition is affected by the fact that it has been induced by a misleading assumption of authority.
In my opinion, the answer is clearly "no".
Such an answer may make more difficult the task of the citizen who is anxious to walk in the narrow way, but that does not justify a different answer being given.
" Lord Normand referred to the principle laid down by Denning L. J. and observed : "As I understand this statement, the respondents were in the opinion of the learned Lord Justice, entitled to say that the Crown was barred by representations made by Mr. Thompson and acted on by them from alleging against them a breach of the statutory order, and further that the respondents were equally entitled to say in a question with the appellant that there had been no breach.
But it is certain that neither a Minister nor any subordinate officer of the Crown can by any conduct or representation bar the crown enforcing a statutory prohibition or entitle the subject to maintain that there has been no breach of the contract.
" The view expressed by the House of Lords and the Privy Council has been followed in English cases.
711 The Privy Council in Antonio Buttigieg vs Captain Stephen H. Cross and Ors, has ruled that it is not competent for the Government to fetter its future executive action, which must necessarily be determined by the needs of the community when the question arises, that it cannot by contract hamper its freedom of action in matters which concern the welfare of the State.
The competent Military Authority approached the appellant for opening a club for officers serving in his Majesty 's forces.
The appellant stated his willingness to take on lease certain premises and asked the Military authorities to procure him a licence to continue the club after the termination of the war.
The military authorities failed to obtain a licence and the appellant was informed of their inability to obtain the licence and an officer on behalf of the military authorities stated that the appellant should have a guarantee seeing that the war was not likely to come to an end quickly and that the club would be kept open throughout the war.
The rules for the conduct of the club were drawn up and were approved by the Military Authorities.
Rule 18 provided that the club should endure during the time when the said hostilities existed.
The club was placed out of bounds for service members by order of the Military Authorities because the club was being mismanaged by the sale of liquor long after permitted hours.
As the club was a purely Service Club, it was subsequently wound up.
The appellant complained of the loss to which he had been put by placing the club out of bounds and sought to hold the Military Authorities responsible for such loss.
The Court of Appeal while giving judgment in favour of the Military Authorities observed : "It is a settled principle and it has been constantly held by this Court and in local case law, that those two functions of the civil or the military Government are totally distinct.
The Military Authorities could not have renounced those rights, in as much as it would have been immoral and against every fundamental principle of Constitutional Law if the Authorities, in order to open a club, which is a purely administrative act were to sacrifice interests which are far more important and therefore of a much higher order, whether political, moral or affecting public order.
Consequently when, within the administrative sphere, the Government enters into a contract with a private individual, the Government is bound to respect that contract, but it does not thereby deprive itself of its political power to issue orders that may become necessary by reason of public order, jure imperii even though, in consequence of such orders, the contract itself becomes impossible of fulfilment.
" 712 During the arguments before the Privy Council, it was conceded on behalf of the appellant taking into consideration the decision in Adams vs London Improved Motor Coach Builders and Redariaktiebolaget Amphtrite vs The King, that it was not open to the Crown to bind itself not to close the club if that course became necessary in the public interest and the order placing the club out of bounds was justified in the circumstances which existed.
Having thus observed the Privy Council quoted the following passage from the Judgment of Rowlatt, J. in Rederiaktiebolaget Amphtrite case that "it is not competent for the Government to fetter its future executive action, which must necessarily be determined by the needs of the community when the question arises.
It cannot by contract hamper the freedom of action in matters which concern the welfare of the State" and stated that these words appear to their Lordships to cover that aspect of the present case.
While House of Lords in Howell 's case disagreed with the observations of Lord Denning J. in Robertson 's case, the Privy Council approved the law laid down by Rowlatt, J. in Rederiaktiebolaget Amphtrite case which was dissented to by Denning, J. in Roberston 's case.
It may be noted that in Indo Afghan case, the Court quoted the passage from Denning 's judgment which did not approve the view of Rowlatt, J. The Privy Council approved the view taken by Rowlatt, J. in Rederiaktiabolaget Amphtrita case.
In William Cory & Son Ltd. vs London Corporation, London Corporation acting as sanitary authority under the Public Health (London) Act, 1936 made a contract with the claimants, barge and lighter owners, for the removal of refuse from a wharf in the City of Horn church, Essex, where it was to be dumped.
In April, 1948, the Corporation acting as port health authority for the Port of London, sealed by laws concerning the disposal of refuse in the area of the port one of which relating to co amings and coverings of barges, was far more onerous on the claimants than the requirements in the contract of 1936.
It was provided that this by law was not to come into effect until November 1, 1950.
It was contended by the claimants that by the provisions of the contract of 1936, there was an implied or an express term that the corporation should not impose more onerous burden on the claimants as to the coamings and coverings of their barges than those contained in the contract of 1936.
The plea of the claimants was rejected and the Court held relying on a decision in York Corporation vs Henry Leethem & Sons Ltd. that the Corporation being under a 713 duty under the Act of 1936, expressed in imperative language, to make by laws for the disposal of refuse within the area of the port, the term for which the claimants contended, whether express or implied was ultra vires the corporation.
In York Corporation vs Henry Leetham & Sons (supra), the Corporation made two contracts with the defendants to which they agreed to accept, in consideration of the right to navigate the Oues, a regular annual payment of $ 600/ per annum, in place of the authorised tolls.
It was held that the contracts were ultra vires and void because under them the corporation had disabled itself whatever emergency might arise, from exercising its statutory powers to increase tolls as from time to time might be necessary.
The decision was based on the incapacity of a body charged with statutory powers for public purpose to divest itself of such powers or to fetter itself in the use of such powers.
In Commissioner of Crown Lands vs Page, in 1945, the Minister of Works, acting on behalf of the Crown and in exercise of powers conferred by the Defence (General) Regulations, 1939 requisitioned premises which had been demised in 1937 by the Commissioners of Crown Lands for a term of 25 years.
The premises were derequisitioned on September 5, 1945 until July 5, 1955 and the landlord brought proceedings claiming arrears of rent.
The lessee alleged that she had been evicted by the requisitioning and that, accordingly, payment of rent has been suspended.
It was conceded that the Crown was one and indivisible as lessor and requisitioning authority.
It was held that since the entry was by the Crown in the proper exercise of its executive authority, it did not amount to an eviction and rent, accordingly, continued to be payable.
The view expressed by Lord Denning, J. in Robertson vs Minister of Pensions (supra) that in the present day age no distinction should be drawn as to the legal effect of its or their actions between the Crown and the ordinary subjects, so that the effect of a representation made by the Crown could no longer be qualified so as to be subject to the future exercise by the Crown of its Executive authority, was relied on.
Lord Evershet M. R. while observing that the facts of the case were different held that the general proposition laid down by Denning L. J. was not accepted by the House of Lords in Howell vs Falmouth Boat Construction Co. Ltd. (supra).
Devlin, J. stated the principle in the following terms : "When the Crown, or any other person, is entrusted, whether by virtue of the prerogative or by statute, with discretionary powers to be exercised for the public good, it does not when making a private contract in general terms, undertake (and 714 it may be that it could not even with the use of specific language validly undertake) to fetter itself in the use of those powers, and in the exercise of the discretion.
" Referring to the view of Denning, L. J. in Robertson vs Minister of Pension (supra), the learned Judge observed : "The observations of Denning, L. J. in Robertson vs Minister of Pensions on the doctrine of `executive necessity ', were I think, directed to a case of that sort.
Here we are dealing with an act done for a general executive purpose, and not done for the purpose of achieving a particular result under the contract in question.
" In Southend on Sea Corporation vs Hodgson (Wickford) Ltd. a company wished to establish a builder 's yard and found suitable premises.
They wrote to the borough engineer, a Chief Official employed by the local planning authority asking for a lease of the premises for 20 years for the purpose of establishing a builders yard.
The engineer replied that the premises had an existing user right as a builders ' yard and that no planning permission was, therefore, necessary.
Relying on the borough engineer 's letter, the company bought the premises and started to use them as builder 's yard.
They would not have done so if, as a consequence of the letter, they had not thought that no further planning permission was required.
Later, the local planning authority notified the company that a considerable amount of evidence had been presented to them showing that the premises had not been used as a builder 's yard and had no existing user as such; that they had decided that the premises could not be used without planning permission.
The Court on the above facts held that assuming that the statement that the premises had an existing user right as a builder 's yard was a pure representation of fact, estoppel could not operate to hinder or prevent the exercise by the local planning authority of their statutory discretion under section 23 of the Act in deciding whether to serve an enforcement notice, since this discretion was intended to be exercised for the benefit of the public or section thereof.
The decisions of the English Courts referred to above clearly indicate that the English Courts did not accept the view of Denning, J. in Robertson vs Minister of Pensions (supra).
The house of Lords in Howell vs Falmouth Boat Construction Co. Ltd. disagreed with the view of Lord Denning, J holding that there could not be an estoppel against express provisions of the law nor could the State by its action waive its rights to exercise powers entrusted to it for the public good.
The 715 Privy Council in Antonio Buttigieg 's case approved the view of Rowlatt.
J. in Raderiaktiabolaget Amphtrits 's case with which Denning, J. did not agree.
We may now revert back to Indo Afghan Agencies case.
The Court after quoting a passage from Rowlatt, J. in Rederiakiabolaget Amphtrte vs The King (supra) agreed that the view expressed by Anson 's English Law of Contract 22nd Ed.
p. 174 that the observation is clearly very wide and it is difficult to determine its proper scope.
The Court quoted the passage of Denning, J. at p. 231 wherein the learned Judge expressed the disagreement with the view of Rowlatt, J : "The Crown cannot escape by saying that estoppel do not bind the Crown for that doctrine has long been exploded.
Nor can the Crown escape by praying in aid the doctrine of executive necessity, that is, the doctrine that the Crown cannot bind itself so as to fetter its future executive action.
The doctrine was propounded by Rowlatt, J. in Rederiaktiebolaget Amphitrite vs The King but it was unnecessary for the decision because the statement there was not a promise which was intended to be binding but only an expression of intention.
Rowlatt, J., seems to have been influenced by the cases on the right of the Crown to dismiss its servants at pleasure, but those cases must now all be read in the light of the judgment of Lord Atkin in Reilly vs The King , 179).
In my opinion the defence of executive necessity is of limited scope.
It only avails the Crown where there is an implied term to that effect or that is the true meaning of the contract." After quoting the above passage, the Court summarised the facts and decision rendered by Denning, J.
The decision of the House of Lords in Howell 's case or that of the Privy Council was not brought to the notice of the Court.
The law laid down by the House of Lords in Howell 's case has been accepted as correct by this Court in recent decision of this Court by a Bench of four Judges in Excise Commissioner, U. P. Allahabad vs Ram Kumar.
The respondents before this Court were the highest bidders in an auction for exclusive manufacture and selling of liquor in the State of U. P. Before holding the auction, the rates of excise duty and prices of different varieties of country liquor and also the conditions of licence were announced.
No announcement was made as to whether the exemption from sales tax in respect of sale of country liquor granted by the notification dated 6 4 1959 was or was not likely 716 to be withdrawn.
On the day following the day when the licences were granted, the Government of U. P. issued a notification under section 3A and 4 of U. P. Sales Tax Act, 1948 superseding the earlier notification exempting the payment of sales tax and imposing sales tax on the turnover in respect of country liquor at the rate of 10 paise per rupee.
The respondents challenged the validity of the notification issued under the Sales Tax Act on the ground that the State Government did not announce at the time of the earlier auction that the earlier notification was likely to be withdrawn.
This Court on a consideration of the question whether the State Government is estopped from levying the Sales Tax, after referring to the earlier decisions of this Court held that the State Government is not estopped or precluded from subjecting the sales of liquor to tax if it felt impelled to do so in the interest of revenue of the State.
The Court followed two earlier decisions of this Court viz. M. Ramanathan Pillai vs State of Kerala (supra) and State of Kerala vs The Gwalior Rayon Silk Manufacturing (Wvg.) Co. Ltd. (supra).
In Ramanathan Pillai 's case, Ray, Chief Justice while dealing with the question whether the Government has a right to abolish a post in the service, observed that the power to create or abolish a post is not related to the doctrine of pleasure.
It is a matter of governmental policy.
Every sovereign Government has this power in the interest and necessity or internal administration.
The creation or abolition of a post is dictated by policy decision, exigencies of circumstances and administrative necessity.
The creation, the continuance and the abolition of post are all decided by the Government in the interest of administration and general public.
The learned Chief Justice after quoting a passage in American Jurisprudence 2d.
at p. 783, paragraph 123, observed that the estoppel alleged by the appellant Ramanathan Pillai was on the ground that he entered into an agreement and thereby changed his position to his detriment.
The High Court rightly held that the Courts exclude the operation of the doctrine of estoppel, when it is found that the authority against whom estoppel is pleaded has owed a duty to the public against whom the estoppel cannot fairly operate.
In State of Kerala vs Gwalior Rayon Silk Manufacturing (Wvg.) Co. Ltd. (supra), Palekar, J. who delivered the opinion with which Krishna Iyer, J. and Bhagwati, J. agreed, rejected the contention that an agreement entered into by the Government with the parties, excluded the legislation on the subject.
The plea of equitable estoppel was put forward on the ground that the company established itself in Kerala for the production of rayon cloth pulp on an understanding that the Government would bind itself to supply the raw material.
Later Government was unable to supply the raw material and by an 717 agreement undertook not to legislate for the acquisition of private forests for a period of 60 years if the company purchased forest lands for the purpose of its supply of raw materials.
Accordingly, the company purchased 30,000/ acres of private forests from the Nilabhuri Kovila Kanna Estate for Rs. 75 lacs and, therefore, it was argued that the agreement would operate as equitable estoppel against the State.
This Court agreed with the High Court that the surrender by the Government of its legislative powers to be used for public good cannot avail the company or operate against the Government as equitable estoppel.
In Assistant Custodian of E. P. and Ors.
vs Brij Kishore Agarwala, it was pleaded that the first respondent made an enquiry from the Assistant Custodian whether the property was evacuee property and was told that it was not.
As the first respondent acted on this representation, it was pleaded that the Assistant Custodian was estopped from contending that the property was evacuee property.
Thus, dismissing this plea, the Court observed : "We do not consider that the fact that the 1st respondent had made an enquiry from the Assistant Custodian whether the property in question was an evacuee property and was told that it would not make any difference to the question." Reliance was placed on the observations of Denning L. J. in Robertson vs Minister of Pensions (supra), holding that the letter by the war office which assured that the appellant 's disability had been accepted as attributable to the military service, was binding on the Crown and through the Crown the Minister of Pensions.
The Court pointed out that the decision in Robertson vs Minister of Pensions had been disapproved by the House of Lords in Howell 's case.
After referring to the passage from the judgment of Lord Denning, Lord Simonds and Lord Normand which have been extracted earlier, this Court expressed its opinion that the view taken by the House of Lords it correct and not that is taken by Lord Denning.
In Excise Commissioner U. P., Allahabad vs Ram Kumar (supra), the Court after consideration of the case law on the subject, held that it was settled by a catena of cases that there could be no question of estoppel against the legislative and sovereign functions.
A passage in American Jurisprudence 2d.
at page 783 paragraph 123 was extracted by Ray C. J. in Ramanathan Pillai 's case and Jaswant 718 Singh J. in Excise Commissioner 's case.
The passage at p. 123 is as follows : "Generally, a State is not subject to an estoppel to the same extent as an individual or a private corporation.
Otherwise, it might be rendered helpless to assert its powers in Government.
Therefore, as a general rule the doctrine of estoppel will not be applied against the State in its Governmental, Public or sovereign capacity.
An exception however arises in the application of estoppel to the State where it is necessary to prevent fraud or manifest injustice.
" But the learned Judges did not include the last sentence : "An exception however arises in the application of estoppel to the State where it is necessary to prevent fraud or manifest injustice.
" In Bihar Eastern Gangetic Fisherman Co operative Society Ltd., vs Sipahi Singh & Ors.
this Court held that the respondent could not invoke the doctrine of promissory estoppel because he was unable to show that relying on the representation of the Government, he had altered his position to his prejudice.
The Court accepted the view of this Court expressed in Ram Kumar 's case and held that there cannot be any estoppel against the Government in the exercise of its sovereign, legislative or executive functions.
The leading case of the Supreme Court of the United States cited and relied upon in Ram Kumar 's case (supra), is Federal Crop Insurance Corporation vs Marril, in which the United States Supreme Court observed as follows : "It is too late in the day to urge that the Government is just another private litigant, for the purposes of charging it with liability, whenever it takes over a business theretofore conducted by private enterprises or engages in competition with private ventures * * * Whatever the form in which the Government functions, anyone entering into an arrangement with the Government takes the risk of having accurately ascertained that he who purports to act for the Government stays within the bounds of his authority * * * And this is so even though, as here, the agent himself may have been unaware of the limitations upon his authority* * * `Men must turn square corners when they deal with the Government ' does not reflect a callous outlook.
It merely 719 expresses the duty of all courts to observe the conditions defined by congress for charging the public treasury".
The Court also relied on the views of the text book writer Melville M. Bigelow and concluded that the plea of estoppel does not operate against the Government or its assignees.
The extract from the American Jurisprudence which summarises the American Law, and the decision in Federal Crop Insurance Corporation case, make it clear that the plea of estoppel is not available against the Government and its legislative or executive functions except for preventing fraud or manifest injustice.
It was submitted that the cases cited above cannot be relied on as an authority for the proposition that the doctrine of promissory estoppel is not applicable against the Government in the exercise of its legislative and statutory functions as they were in the nature of obiter dicta and that on the facts the present case could be distinguished.
The Indo Afghan Agencies, Century Spinning and Manufacturing Co. and Turner Morisson Co. Ltd. vs Hungerford Investment Trust Ltd., were strongly relied on.
We have pointed out that all that the Indo Afghan Agencies case laid down was, that a public authority acting on behalf of the Government cannot on its own whim and in an arbitrary manner seek to alter the conditions accepted by him to the prejudice of the other side.
The decision in terms accepts the view expressed in earlier cases that after taking into consideration the exigencies and change of circumstances, the authority can modify the conditions in exercise of his powers as a public authority.
In Century Spinning and Manufacturing Co. Ltd. and Anr.
vs The Ulhasnagar Municipal Council and Anr.
, the facts of the case is set out in the head note and may be briefly stated.
The State of Maharashtra on the representation made by certain manufacturers proclaimed the exclusion of the Industrial Area from the Municipal Jurisdiction.
The Municipality made representations to the State requesting that the proclamation be withdrawn, agreeing to exempt the factories in the industrial area from payment of octroi from the date of levy.
The State acceded to the request of the Municipality.
The appellants expanded their activities relying on the Municipality 's assurance.
The Maharashtra Municipalities Act was enacted and the municipality took over the administration.
Thereafter, the Municipality sought to levy octroi duty on the appellant amounting to about Rs. 15 lacs per 720 annum.
The High Court dismissed the petition in limini filed by the Industrialists against the levy of octroi.
In an appeal to this Court it was held that the High Court had not given any reason for dismissing the petition in limini and that on a consideration of the averments in the petition and the materials placed before the High Court, the appellants were entitled to have its grievance heard against the action of the Municipality which was prima facie unjust.
In remanding the matter to the High Court, this Court observed : "A representation that something will be done in future may involve an existing intention to act in future in the manner represented.
If the representation is acted upon by another person it may, unless the statute governing the person making the representation provides otherwise, result in an agreement enforceable at law; if the statute requires that the agreement shall be in a certain form, no contract may result from the representation and acting thereupon but the law is not powerless to raise in appropriate cases an enquiry against him to compel performance of the obligation arising out of his representation".
In dealing with the question as to how far the public bodies are bound by representation made by them on which other persons have altered their position to their prejudice, the Court held that the obligation arising against an individual out of his representation amounting to a promise may be enforced ex contractu by a person who acts upon the promise; when the law requires that a contract enforceable at law against a public body shall be in certain form or be executed in the manner prescribed by statute, the obligation may be if the contract be not in that form be enforced against it in appropriate case in equity.
The Court read the decision in Union of India and Ors.
vs Indo Afghan Agencies (supra) as holding that the Government is not exempt from the equity arising out of the acts done by citizens to their prejudices, relying upon the representations as to its future conduct made by the Government.
This observation will have to be read alongwith the conditions that were laid down in the Indo Afghan case and cannot be read as holding that the rule of estoppel will be applicable against the Government in the exercise of its legislative and statutory powers.
The Court quoted the following passage from Denning J. : "Crown cannot escape by saying that estoppel do not bind the Crown for that doctrine has long been exploded.
Nor can the Crown escape by praying in aid the doctrine of executive necessity, that is, the doctrine that the Crown cannot bind itself so as to fetter its future executive action".
721 and observed that the Court in Indo Afghan case held that it was applicable to India.
It may be noted that apart from not noticing Howell 's case, the Court in Indo Afghan case did not say that the law as extracted from Denning J 'section judgment was applicable to India.
The Court after considering the Indo Afghan case and Howell 's case, expressed thus : "If our nascent democracy is to thrive different standards of conduct for the people and the public bodies cannot ordinarily be permitted.
A public body is, in our judgment, not exempt from liability to carry out its obligation arising out of representation made by it relying upon which a citizen has altered his position to his prejudice".
The third decision on which reliance was placed, for the proposition that doctrine of promissory estoppel is applicable against the State acting in exercise of its legislative or executive function is Turner Morrison and Co. Ltd. vs Hungerford Investment Trust Ltd. (supra).
The case related to the payment of tax due from Hungerford by Turner Morrison.
The Court observed that if for any reason Turner Morrison had not undertaken any responsibility to discharge the liability of Hungerford, the latter could have taken recourse to voluntary liquidation.
Hence there could be no doubt that acting on the basis of the representation made by Turner Morrison, Hungerford placed itself in a disadvantageous position.
Hungerford raised the plea that the resolution was of the company, afforded a good basis for raising a plea of promissory estoppel.
This plea was accepted by the Court relying on the observations of Denning J. in High Trees case (supra).
The later decision of the House of Lords in Howell 's case which disapproved Lord Denning 's judgment was not brought to its notice.
The scope of the plea of doctrine of promissory estoppel against the Government may be summed up as follows : (1) The plea of promissory estoppel is not available against the exercise of the legislative functions of the State.
(2) The doctrine cannot be invoked for preventing the Government from discharging its functions under the law.
(3) When the officer of the Government acts outside the scope of his authority, the plea of promissory estoppel is not available.
The doctrine of ultra vires will come into operation and the Government cannot be held bound by the unauthorised acts of its officers.
(4) When the officer acts within the scope of his authority under a scheme and enters into an agreement and makes a representation 722 and a person acting on that representation puts himself in a disadvantageous position, the Court is entitled to require the officer to act according to the scheme and the agreement or representation.
The Officer cannot arbitrarily act on his mere whim and ignore his promise on some undefined and undisclosed grounds of necessity or change the conditions to the prejudice of the person who had acted upon such representation and put himself in a disadvantageous position.
(5) The officer would be justified in changing the terms of the agreement to the prejudice of the other party on special considerations such as difficult foreign exchange position or other matters which have a bearing on general interest of the State.
Before we conclude, we would refer to a recent decision of this Court in M/s. Moti Lal Padampat Sugar Mills Co. (P.) Ltd. vs State of Uttar Pradesh and Ors.
It has been held that there can be no promissory estoppel against the exercise of legislative power and the legislature cannot be precluded from exercising its legislative functions by resort to the doctrine of promissory estoppel.
It has also held that when the Government owes a duty to the public to act differently, promissory estoppel could not be invoked to prevent the Government from doing so.
The doctrine cannot be invoked for preventing the Government from acting in discharge of its duty under the law.
The Government would not be bound by the acts of its officers and agents, who act beyond the scope of their authority.
A person dealing with an agent of the Government must be held to have noticed all the limitations of his authority.
With respect, we are in complete agreement with the law as stated above but we find the judgment is not in accordance with the view consistently taken by this Court in some respects.
We have read the Judgment of Bhagwati, J. with considerable care and attention which it deserves.
Firstly, with great respect we are unable to construe the decision in Union of India & Ors.
vs M/s. Indo Afghan Agencies Ltd. case in the manner in which it has been done.
As pointed out by us, all that the case purports to lay down is that the court can enforce an obligation incurred by an authority on which another has acted upon and put himself in a disadvantageous position, when the authority resiles arbitrarily or on mere whim or on some undefined and undisclosed grounds of necessity.
With respect, we feel we are unable to agree with the interpretation put by Bhagwati, J. Bhagwati, J. states "The defence of executive necessity was thus clearly negatived by this Court and it was pointed 723 out that it did not release the Government from its obligation to honour the promise made by it, if the citizen acting in reliance on the promise, had altered his position.
The doctrine of promissory estoppel was in such a case applicable against the Government and it could not be defeated by invoking the defence of executive necessity.
" The same view has again been reiterated at page 682 where it is stated" The law may, therefore, now be taken to be settled as a result of this decision that where the Government makes a promise knowing or intending that it would be acted on by the promises and in fact, the promisee, acting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promisee, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Article 299 of the Constitution.
" These observations would be right if they are read with the qualifications, laid down in the Indo Afghan Agencies case and other cases.
The further observations of the learned Judge that: "Every one is subject to the law as fully and completely as any other and the Government is no exception.
It is indeed the pride of constitutional democracy and rule of law that the Government stands on the same footing as a private individual so far as the obligation of the law is concerned, the former is equally bound as the latter." Again "but if the Government makes such a promise and the promises acts in reliance upon it and alters his position, there is no reason why the Government should not be compelled to make good such promise like any other private individual do not appear to convey the true effect of the decision.
" The decision of this Court in Century Spinning and Manufacturing Co. Ltd. and Anr.
vs The Ulhashagar Municipal Council and Anr.
(supra) was understood by Justice Bhagwati as refusing to make a distinction between the private individual and public body so far as the doctrine of promissory estoppel is concerned.
These observations would be correct only if they are read with the exceptions recognised by Justice Bhagwati himself elsewhere in his judgment along with other restrictions imposed by Judgments of this Court.
We find ourselves unable to ignore the three decisions of this Court, two by Constitution Benches M. Ramanatha Pillai vs The State of Kerala and Anr.
(supra) and State of Kerala and Anr.
vs The Gwalior Rayon Silk Manufacturing (Wvg.) Co. Ltd. etc.
(supra) and the third by a Bench of four Judges of this Court in Excise Commissioner, U. P. Allahabad vs Ram Kumar (Supra) on the ground that the observations are in the nature of obiter dicta and that it cannot be insisted as intend 724 ng to have laid down any proposition of law different from that enunciated in the Indo Afghan Agencies case.
It was not necessary for this Court in the cases referred to above to refer to Union of India and Ors.
vs M/s. Indo Afghan Agencies Ltd., or if properly understood it only held that the authority cannot go back on the agreement arbitrarily or on its mere whim.
We feel we are bound to follow the decisions of the three Benches of this Court which in our respectful opinion have correctly stated the law.
We are also unable to read the case of the House of Lords in Howell vs Falmouth Boat Construction Co. Ltd. (supra) as not having overruled the view of Denning, J and as not having expressed its disapproval of the doctrine of promissory estoppel against the Crown nor overruled the view taken by Denning, J in Robertson vs Minister of Pensions that "the Crown cannot escape the obligation under the doctrine of promissory estoppel.
" We find ourselves unable to share the view of the learned Judge that the Constitution Bench of this Court in Ramanathan Pillai 's case (supra) heavily relied upon the quotation from the American jurisprudence para 123 p. 873 Vol. 28.
Again we feel to remark that "unfortunately this quotation was incomplete and had overlooked perhaps inadvertently" is unjustified (emphasis supplied).
We feel we are in duty bound to express our reservations regarding the "activist" jurisprudence and the wide implications thereof which the learned Judge has propounded in his judgment.
The first part of the judgment relates to the development of law relating to promissory estoppel in England following the High Trees case.
As pointed out by us earlier the doctrine of promissory estoppel is not very helpful as we are governed by the various provisions of the Indian Contract Act Sections 65 and 70 provide for certain reliefs in void contracts and in unenforceable contracts where a person relying on a representation has acted upon it and put himself in a disadvantageous position.
Apart from the case in Robertson vs Minister of Pensions, the House of Lords in Howell 's case and the Privy Council in Antonio Buttigieg 's case and the other English Authorities do not agree with the view that the plea of promissory estoppel is available against the Government.
Further we have to bear in mind that the Indian Constitution as a matter of high policy in public interest, has enacted Article 299 so as to save the Government liability arising out of unathorised acts of its officers and contracts not duly executed.
The learned Judge has considered at some length the doctrine of consideration and how it has thwarted the full development of the new equitable principle of promissory estoppel.
After discussing the American Law on the subject, he has observed that the leading text book 725 writers view with disfavour the importance given to "consideration".
The learned Judge proceeds to observe that : "having regard to the general opprobrium to which the doctrine of consideration has been subjected to by eminent jurists, we need not be unduly anxious to project this doctrine against assault of erosion nor allow it to dwarf or stultify the full development of the equity of promissory estoppel or inhibit or curtail its operational efficacy as a justice device for preventing injustice.
" Here again we have to bear in mind that the Indian Contract Act regulates the right of parties, and expressly insists on the necessity for lawful consideration which cannot be dispensed with by invoking some equitable doctrine.
Section 10 of the Contract Act provides : "All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void.
" It will be seen that for a contract to be valid, it should be for a lawful consideration.
Section 25 of the Contract Act provides that an agreement made without consideration is void unless it satisfies one of the conditions mentioned in this section.
The learned Judge has held that if the Government is to resist its liability it will have to disclose to the Court what are the facts and circumstances on account of which the Government claims to be exempted from the liability and it would be for the Court to decide whether these facts and circumstances are such as to render it inequitable to enforce the liability against the Government.
This statement will have to be read with the exceptions stated by the Learned Judge himself and those recognised by the decisions of this Court.
In C. Sankaranarayanan vs State of Kerala it was held that the power of the Government under Article 309 to make rules regulating the conditions of service of Government employees or of teachers of aided schools cannot in any way be effected by any agreement.
Rule of estoppel against Government cannot be invoked in such cases.
In Narendra Chand Hem Ram and Ors.
vs Lt. Governor Administrator Union Territory, Himachal Pradesh and Ors., this Court has laid down that the power to impose tax is undoubtedly a legislative power and that no Court can issue mandate to a legislature to enact a particular law and similarly no Court can direct a subordinate legislative body to enact or not to enact a law which it may be competent to enact.
Again in State of Tamil 726 Nadu and Ors.
vs section K. Krishnamurthi etc.
this Court held that the policy of State to nationalise text books cannot be challenged by the publishers on the ground that the rules were in derogation of their rights.
It was held that the rules were in the nature of Departmental instructions and do not confer any right on the publishers nor are they designed to safeguard the interest of publishers and that the policy of nationalisation was conceived in public interest and as the Government is at liberty to change the text books and delete from and add to the list of approved text books and the publishers can have no grievance.
In M/s. Andhra Industrial Works vs Chief Controller of Imports and Ors., a four judges Bench of this Court held that an applicant for a permit under Import Trade Policy has no absolute right to the grant of import licence and that the applicant cannot complain that the existing instructions or orders made in pursuance of the Import and Export Control Act place "unreasonable restrictions" on the petitioners ' right to carry on trade or business.
These restrictions obviously have been imposed in the interests of the general public and national economy and with the development of imports, regulating foreign exchange have necessarily to be appropriately controlled and regulated.
Professor section A. De Smith in his Judicial Review on Administrative Action, 3rd Edn.
p. 279 sums up the position thus: "Contracts and Covenants entered into by the Crown are not to be construed as being subject to implied terms that would exclude the exercise of general discretionary powers for the public good: On the contrary they are to be construed as incorporating an implied term that such powers remain exercisable.
This is broadly true of other public authorities also.
But the status and functions of the Crown in this regard are of a higher order.
The Crown cannot be allowed to tie its hands completely by prior undertakings is as clear as the proposition that the Courts cannot allow the Crown to evade compliance with ostensibly binding obligations whenever it thinks fit: If a public authority lawfully repudiates or departs from the terms of a binding contract in order to exercise its overriding discretionary powers, or if it is held never to have been bound in law by an ostensibly binding contract because the undertakings would improperly fetter its general discretionary powers, the other party to the agreement has no right whatsoever to damages or compensation under the general law, no matter how serious the damages that party may have suffered." Professor H. W. R. Wade in Administrative Law Fourth Edn.
329 330 has pointed out that the doctrine of estoppel cannot be allowed to impede the proper exercise 727 of public and statutory functions by the State and public authorities.
In Public Law the most obvious limitation on the doctrine of estoppel is that it cannot be invoked so as to give an authority powers which it does not in law possess.
In other words, no estoppel can legitimate action which is ultra vires.
As has been amply illustrated the Court is normally extremely careful to prevent any legal doctrine from impeding the exercise of statutory discretion in the public interest.
On a consideration of the decisions of this Court it is clear that there can be no promissory estoppel against the exercise of legislative power of the State.
So also the doctrine cannot be invoked for preventing the Government from acting in discharge of its duty under the law.
The Government would not be bound by the act of its officers and agents who act beyond the scope of their authority and a person dealing with the agent of the Government must be held to have notice of the limitations of his authority.
The Court can enforce compliance by a public authority of the obligation laid on him if he arbitrarily or on his mere whim ignores the promises made by him on behalf of the Government.
It would be open to the authority to plead and prove that there were special considerations which necessitated his not being able to comply with his obligations in public interest.
In a fervent plea for the doctrine to speak in all its activist magnitude the learned Judge observes "that is no reason why this new principle, which is a child of equity brought into the world with a view to promoting honesty and good faith and bringing law closer to justice should be held in fetters and not allowed to operate in all the activist magnitude, so that it may fulfil the purpose for which it was conceived and born".
It is no doubt desirable that in a civilised society man 's word should be as good as his bond and his fellow men should be able to rely on his promise.
It may be an improvement if a cause of action would be based on a mere promise without consideration.
The law should as far as possible accord with the moral values of the society, and efforts should be made to bring the law in conformity with the moral values.
What are the moral values of the Society ? This is a very complex question because the concept of moral values amongst different persons and classes of persons is not always the same.
The concept of moral values is not static one.
It differs from time to time and from society to society.
It is hazardous for a Court to attempt to enforce what according to it is the moral value.
As pointed out by Roscoe Pound: "It leads to an attempt to enforce overhigh ethical standards and to make legal duties out of moral duties which are not sufficiently, tangible to be made effective by the machinery of the legal order.
A more serious difficulty is that the attempt to identify 728 law and morals gives too wide a scope to judicial discretion".
The question is how should it be brought about.
The learned Judge says that it should be the constant endeavour of the Courts and the legislature to close the gap between the law and morality and bring about as near an approximation between the two as possible.
Lord Denning might have exhorted the Judges not to be timorous sours but to be bold spirits, ready to allow a new cause of action if justice so requires.
These are lofty ideals which one should steadfastly pursue.
But before embarking on this mission, it is necessary for the Court to understand clearly its limitations.
The powers of the Court to legislate is strictly limited.
"Judges ought to remember that their office is jus dicere and not jus dare to interpret law, and not to make law or give law." Chandrachud, C. J. Speaking for a Constitution Bench in Shri Gurbaksh Singh Sibbia etc.
vs State of Punjab, has clearly pointed out the limited powers of the Courts to make laws in construing the provisions of the statutes.
The Learned Chief Justice has observed: "The true question is whether by a process of construction, the amplitude of judicial discretion which is given to the High Court and the Court of Session, to impose such conditions as they may think fit while granting anticipatory bail, should be cut down by reading into the statute conditions which are not to be found therein *** Our answer, clearly and emphatically is in the negative.
" Again the Learned Chief Justice warned "Judges have to decide cases as they come before them, mindful of the need to keep passions and prejudices out of their decisions.
And it will be strange if, by employing judicial artifices and techniques, we cut down the discretion so wisely conferred upon the Courts, by devising a formula which will confine the power to grant anticipatory bail within a strait jacket.
" "Therefore, even if we were to frame a 'code for the grant of anticipatory bail ', which really is the business of the legislature, it can at best furnish broad guide lines and cannot compel blind adherence".
The Courts by its very nature are most ill suited to undertake the task of legislating.
There is no machinery for the Court to ascertain the conditions of the people and their requirements and to make laws that would be most appropriate.
Further two Judges may think that a particular law would be desirable to meet the requirements whereas another two Judges may most profoundly differ from the conclusions arrived at by two Judges.
Conscious of these handicaps, the law requires that even an amendment of the Supreme Court Rules which 729 govern the procedure to be adopted by it for regulating its work, can only be effected by the whole Court sitting and deciding.
The result is that so far as the recommendation of the Municipal Committee to the Government to levy octroi duty, is concerned though it is contrary to the representation it made to the buyers of the sites in the Mundi, the Municipality is not estopped as the representation made by it was beyond the scope of its authority.
The levy of tax being for a public purpose i.e. for augmenting the revenues of the Municipality as laid down in Ram Kumar 's case, the plea of estoppel is not available.
The order of the Government directing the levy of octroi in pursuance of the resolution of the Municipality cannot also be challenged as it is in the exercise of its statutory duty.
The result is both the appeals fail and are dismissed with costs of one set to be borne equally by the two appellants.
section R. Appeals dismissed.
| The selection of candidates admitted to the Government Medical College, Jammu are to be made in accordance with the manner and procedure laid down in the various orders issued by the Government of Jammu and Kashmir from time to time.
The earliest order made on July 9, 1973 concerns admission to technical institutions which include medical colleges and says that "the man power requirements of various parts of the State have not received uniform and equal treatment with the result that there has been imbalance in the development of human resources in these parts", and "since the admissions to technical institutions also lead to the development of human resources", it had, therefore, "become necessary to provide equal opportunities to the permanent resident candidates of all parts of the State and all sections of the society".
As, per this order 50% of the seats were earmarked for selection on open competition, 25% of the seats were reserved for candidates belonging to the categories specified in clause (2) of the order according to the percentage indicated against each.
It was further provided in the order that after selection, as above, the remaining 25% of the seats "should be filled on the basis of inter se merit to ensure rectification of imbalance in the admissions for various parts of the State, if any, so as to give equitable and uniform treatment to those parts".
In case there was no "visible imbalance" or where no candidates were available under a particular category mentioned in clause (2) above the seats earmarked under these two heads "shall be added to the percentage under [clause] I above".
The annexure to the order contained instructions concerning the "identification of the persons claiming benefit" under clause 2 of the order and "the procedure connected therewith".
The instructions defined the different categories mentioned in clause (2): "Areas adjoining actual line of control Candidates permanently residing in any village of the State specified in Appendix I to these instructions".
"Bad pockets Candidates permanently residing in any village of the State specified in Appendix II to these instructions". "Social Castes Candidates of the State belonging to any of the castes indicated in Appendix III to these instructions".
The instructions also provided for the issue of a certificate by the concerned authority stating that a candidate fell under any of the categories.
1254 On June 27, 1974 another order was issued refixing the percentage of seats reserved for the different categories "with a view to affording more accommodation for open merit".
Open merit percentage was increased to 60, by reducing by 5% the percentage of seats allotted for children of freedom fighters and by reducing the percentage of seats of 25% earmarked to ensure "rectification of imbalance" from 25% to 20%.
3% of seats reserved for candidates from areas known as bad pockets which included Ladakh under the category "socially and educationally backward classes" was reduced to 1% and the resultant difference of 2% was earmarked to candidates from Ladakh which was excluded from the above category.
By another order dated April 21, 1976, the existing reservation of 20% for meeting regional imbalance was reduced to 18% and the "resultant 2% vacancies earmarked for candidates possessing, outstanding proficiency in sports".
An order made on April 16, 1976 earmarked 10 seats at the Government Medical College, Jammu, for girl students "subject to enough girl students being found otherwise suitable".
The order also laid down the procedure to be followed by the selection committee in selecting candidates for admission to technical training course.
By this order, comparative performance of the candidates at an interview to be conducted for the purpose by the selection committee was made the only basis of selection.
The order added that the marks obtained by a candidate in the qualifying university examination should be taken into consideration only to determine the initial eligibility to compete for selection.
This order was modified by a subsequent order issued on April 3, 1978.
Instead of the marks obtained by a candidate in the qualifying university examination being treated as relevant only to determine eligibility, the subsequent order provided: "there will be 100 marks for academic merit which shall be allotted to each candidate in accordance with the percentage of marks secured by him/her in the basic qualifying examination or its equivalent".
This order further provided that 50 marks would be allotted for interview, 10 marks for each of the five factors: physical, fitness, personality, aptitude general knowledge and general intelligence.
By notification published in the Jammu and Kashmir Government Gazette on June 21, 1979 applications were invited for admission to the M.B.B.S. course in the aforesaid college.
Only those candidates who had passed the Pre Medical or Inter Science or First Year T.D.C. (Medical Group) examination from the University of Jammu or any other equivalent examination and had secured not less than 50 per cent marks in science subjects in aggregate (theory and practical) were eligible to apply for admission; however, for scheduled castes, scheduled tribes Bakarwal and Gujjar candidates and candidates from Ladakh district and 'Bad pockets ' the qualifying marks was 45 per cent.
Candidates who had been selected or nominated by the Government of Jammu and Kashmir or had been already selected by a selection committee constituted by the Government for any training course in or outside the State were not eligible to apply or to appear for interview for admission to this college.
The notification added: "Comparative merit of the candidates will be adjudged with respect to physical fitness, aptitude personality, general knowledge and general intelligence in the interview, for which marks will be awarded according to the performance of the candidates".
It was further provided that the selection would be made in accordance with the manner and procedure laid down in the various orders issued by the Government from time to time.
The total number of seats filled by selection in this college for the year 1979 80 was 52.
The candidates numbered 526, out of which 473 actually appeared for interview.
In addition 10 1255 seats were filled by candidates nominated by the Government.
The nomination had to be made only from two sources: wards of non resident Defence personnel, and students from other states.
The petitioners challenged the selection of candidates admitted to the Government Medical College, Jammu for the academic year 1979 80 as bad and that the categories mentioned in the several orders as arbitrary and unconstitutional.
^ HELD: 1.
The classification made for rectification of regional imbalance is vague and the selections (serial Nos.
43 to 51 to the List) made under this head are invalid for the following reasons: [1263 C D,] (i) The notification dated June 21, 1979 by which applications were invited for admission to the medical college provided that the selection of candidates would be made in accordance with the manner and procedure laid down in the various orders issued by the Government from time to time, but none of these orders contains an explanation offered in the supplementary affidavit filed by the State of Jammu & Kashmir that: ". the State Government has found that for peculiar historical, geographical and topographical reasons there prevails an imbalance in the matter of development of the various parts of the State which has resulted in certain areas being backward as compared with the rest.
In order therefore to rectify the distinction which inevitably would otherwise creep in to the selection, the State Government has reserved 18% of seats for rectification of such imbalance".
Even with this explanation, the affidavit, does not identify the area of imbalance.
There was thus no objective standard to guide the selection committee.
[1261 E H, 1262 A] (ii) Even in the supplementary affidavit it is not claimed that the area of imbalance is only another name for the areas adjoining the actual line of control and the had pockets, as contended on behalf of the State.
What is said in the affidavit is that the areas of imbalance are similar to the aforesaid areas in being equally backward.
But this does not mean that these categories are all identical and co extensive in all respects.
Further in spite of similarity, even areas adjoining the actual line of control and the bad pockets have been put under different categories; and [1262 B ] (iii) The contention was that the classification was justified on the report of the Anand Committee.
The Selection Committee was required to follow not the Anand Committee report but what was provided in the orders passed by the Government.
There is no order containing any reference to the Anand Committee Report.
Neither the Government adopted the Anand Committee 's report nor did the Selection Committee proceeded on the basis of that report.
Though the Anand Committee did not accept "social castes" as a category indicative of backwardness, the Selection Committee has selected one candidate under this category which clearly shows that the Selection Committee was not guided by the Anand Committee Report, the selection made was not and could not be on the basis of that report.
[1263 A C] 2.
In Janki Prasad Parimoo and Ors.
vs State of Jammu and Kashmir and Ors., [1973] 3 SCR p. 236, the Supreme Court did not approve 4 out of 23 "low social castes" mentioned in the Wazir Committee Report "as educationally and economically extremely backward", as having no basis for inclu 1256 sion in the List.
In Appendix III, 19 of these castes have been retained which were not disapproved in Parimoo 's case.
Chapter XIII of the Wazir Committee report makes it clear that the classification is with reference to the nature of occupations which the people belonging to this category pursue.
That being so, the classification does not offend Article 14 or Article 15 of the Constitution.
The selection of Edwin Khakkar, a Christian is in order since he falls under one such category listed and since the category is based on occupation and not on caste as such.
[1263 G H, 1264 A B] 3.
The areas adjoining actual line of control and bad pockets are really backward areas and the residents of these areas are indisputably socially and educationally backward.
Reservations made for such candidates from such backward classes cannot be said to offend Article 14 of the Constitution.
[1264C D] Janaki Prasad Parimoo and Ors. etc.
vs State of Jammu & Kashmir and Ors., [1973]3 SCR p. 236; followed.
Though the contention that "interviewing candidates to judge their suitability was not a reliable test as many uncertain factors were likely to affect the result of the interview" reflects a legitimate point of view, but it is a point of view only and cannot be taken as the last word on the subject.
However, it is impossible within allotted span of time (4 minutes) to make a fair estimate of a candidate 's suitability on a consideration of the five specified factors which are not capable of easy determination such as physical fitness, personality, aptitude, general knowledge and general intelligence.
By merely looking at a candidate, the selection committee could not come to a conclusion about one 's physical fitness.
Therefore, the fact that the allotment of marks is in accordance with a policy decision may not conclude the matter in all circumstances; if that decision is found to be arbitrary and infringing Article 14 of the Constitution it cannot claim immunity from challenge.
[1264 E H, 1265 G H, 1266 A] R. Chitralekha and anr.
vs State of Mysore and Ors. ; ; A Peeriakaruppan etc.
vs State of Tamil Nadu and Ors., [1971] 2 SCR 430; distinguished and held inapplicable to the facts of the instant case.
The selection under the category "wards of Medical College Staff" is invalid as such a category does not find place in any of the orders.
[1266 G H] 6.
Reservation for students from other states on reciprocal basis, as seen from Anita Jain 's case has not worked in practice and she is entitled to a seat.
Nor did the two clauses 17 and 18 of the notification dated June 21, 1979 apply to Kulbhushan Gupta since he was not selected or nominated by the Government of Jammu and Kashmir for admission to the Engineering College nor was he selected by any selection committee constituted by the Government of Jammu and Kashmir.
[1267 E H, 1268 G H]
|
N: Criminal Appeal Nos.
543 545 of 1979.
Appeals by special leave from the judgment and order dated the 15th April, 1978 of the Madhya Pradesh High Court in Criminal Revision No. 701/77, 105/78 & 103/78 respectively.
H.K. Puri for the Appellant.
R.K. Garg, Sunil Kumar Jain and V.J. Era for Respondents Nos. 1, 2, 5 & 6.
S.K. Gambhir and Vijay Mansaria for the State.
The following Judgments were delivered CHINNAPPA REDDY, J. I agree with my brother A.P. Sen that the order passed by the High Court should be set aside and that the Magistrate should be directed to record the plea of the accused under Sec.
251 Criminal Procedure Code and thereafter, to proceed with the trial according to law.
The facts leading to these appeals have been stated in the judgments of both my brethren A.P. Sen and Baharul Islam and it is unnecessary for me to state them over again.
The prayer in the application before the High Court was merely to quash the order dated November 30, 1977 of the learned Chief Judicial Magistrate, Bhopal and not to quash the complaint itself as the High Court has done.
But, that was only a technical defect and we do not take serious notice of it in an appeal under article 136 of the Constitution where we are very naturally concerned with substantial justice and not with shadow puppetry.
The position now is this: The news item in the Blitz under the caption 'MISA Rape in Bhopal Jail ' undoubtedly contained serious imputations against the character and conduct of the complainant.
In order to attract the 9th Exception to Sec.
499 of the Indian Penal Code, the imputations must be shown to have been made (1) in good 631 faith, and (2) for the protection of the person making it or of any other person or for the public good. 'Good Faith ' is defined, in a negative fashion, by Sec.
52 Indian Penal Code as follows: "Nothing is said to be done or believed in 'Good faith ' which is done or believed without due care and attention".
The insistence is upon the exercise of due care and attention.
Recklessness and negligence are ruled out by the very nature of the definition.
The standard of care and attention must depend on the circumstances of the individual case, the nature of the imputation, the need and the opportunity for verification, the situation and context in which the imputation was made, the position of the person making the imputation, and a variety of other factors.
Good faith, therefore is a matter for evidence.
It is a question of fact to be decided on the particular facts and circumstances of each case.
So too the question whether an imputation was made for the public good.
In fact the 1st Exception of Sec.
499 Indian Penal Code expressly states "Whether or not it is for the public good is a question of fact". 'Public Good ' like 'Good faith ' is a matter for evidence and not conjecture.
In Harbhajan Singh vs State of Punjab, this Court observed (at p. 244): "Thus, it would be clear that in deciding whether an accused person acted in good faith under the Ninth Exception, it is not possible to lay down any rigid rule or test.
It would be a question to be considered on the facts and circumstances of each case. what is the nature of the imputation made, under what circumstances did it come to be made; what is the status of the person who makes the imputation; was there any malice in his mind when he made the said imputation; did he make any enquiry before he made it; are there reasons to accept his story that he acted with due care and attention and was satisfied that the imputation was true? These and other considerations would be relevant in deciding the plea of good faith made by an accused person who claims the benefit of the Ninth Exception".
Again in Chaman Lal vs The State of Punjab this Court said (at p. 916): 632 "In order to establish good faith and bona fide it has to be seen first the circumstance under which the letter was written or words were uttered; secondly, whether there was any malice; thirdly, whether the appellant made any enquiry before he made the allegations; fourthly, whether there are reasons to accept the version that he acted with care and caution and finally whether there is preponderance of probability that the appellant acted in good faith".
Later the Court said (at p. 918): "Good faith requires care and caution and prudence in the background of context and circumstances.
The position of the person making the imputation will regulate the standard of the person making the imputation will regulate the standard of care and caution".
Several questions arise for consideration if the Ninth Exception is to be applied to the facts of the present case.
Was the Article published after exercising due care and attention? Did the author of the article satisfy himself that there were reasonable grounds to believe that the imputations made by him were true? Did he act with reasonable care and a sense of responsibility and propriety? Was the article based entirely on the report of the Deputy Secretary or was there any other material before the author? What steps did the author take to satisfy himself about the authenticity of the report and its contents? Were the imputations made rashly without any attempt at verification? Was the imputation the result of any personal ill will or malice which the author bore towards the complainant? Was it the result of any ill will or malice which the author bore towards the political group to which the complainant belonged? Was the article merely intended to malign and scandalise the complainant or the party to which he belonged? Was the article intended to expose the rottenness of a jail administration which permitted free sexual approaches between male and female detenus? Was the article intended to expose the despicable character of persons who were passing off as saintly leaders? Was the article merely intended to provide salacious reading material for readers who had a peculiar taste for scandals? These and several other questions may arise for consideration, depending on the stand taken by the accused at the trial and how the complainant proposes to demolish the defence.
Surely the stage for deciding these questions has not arrived yet.
Answers to these questions at this stage, even before the plea of the 633 accused is recorded can only be a priori conclusions. 'Good faith ' 'public good ' are, as we said, questions of fact and matters for evidence.
So, the trial must go on.
SEN, J.
This appeal, by special leave, is directed against an order of the Madhya Pradesh High Court dated April 15, 1978 quashing the prosecution of the respondent, R.K. Karanjiya, Chief Editor, Blitz, for an offence under section 500 of the Indian Penal Code for publication of a news item in that paper which was per se defamatory, on the ground that he was protected under Ninth Exception to section 499 of the Code.
During the period of Emergency the appellant, who is a senior lawyer practising at Bhopal, was placed under detention under s.3 (1) (a) (ii) of the and was lodged in the Central Jail, Bhopal.
There were several other detenus belonging to the opposition parties lodged along with him in the same jail, including three lady detenus, viz., Smt.
Uma Shukla, Smt.
Ramkali Misra, Advocate and Smt.
Savitha Bajpai, later State Minister, Public Works Department.
The husband of Smt.
Uma Shukla, a practising advocate at Bhopal, was not detained.
Shukla was released on parole for a week between June 10 and 18, 1976.
On her return to the jail it was found that she had conceived.
She was examined on July 30, 1976, by a lady doctor, Dr. (Mrs) N.C. Srivstava, Woman Asst.
Surgeon and the pregnancy was reported to be six weeks old.
Shukla was again released on parole in the month of August 1976 and on August 24, 1976, she got the pregnancy terminated by Dr. (Mrs) Upadhayay at the Zanana Hamidia Hospital, Bhopal with the written consent of her husband under s.3 of the Medical (Termination of Pregnancy) Act, 1976.
While the order of detention of the appellant was still in operation, there was an ex parte confidential enquiry held by Shri S.R. Sharma, I.A.S. Deputy Secretary (Home) Government of Madhya Pradesh, into the circumstances leading to the pregnancy of Smt.
Shukla.
The Enquiry Officer by his report dated November 3, 1976, apparently held that the pregnancy was due to illicit relations between the appellant and Smt.
Shukla, during their detention in the Central Jail.
On December 25, 1976, the Blitz, in its three editions in English, Hindi and Urdu simultaneously flashed a summary of the report and the story as given out was that (i) there was a mixing of male and female detenus in the Central Jail, Bhopal, (ii) the appellant had the opportunity and access to mix with Smt.
Shukla freely, and (iii) Smt.
Shukla became pregnant through the 634 appellant.
The news item was per se defamatory.
It is somewhat surprising that the Enquiry Report, which was a document of highly confidential nature, should have found its way to the Press.
With the revocation of Emergency, the appellant along with the other political detenus was released from detention.
On his release, the appellant lodged a criminal complaint for defamation against the respondent, R.K. Karanjia.
The respondent, on appearing before the Magistrate, moved an application under section 91 of the Code of the Criminal Procedure, 1973, praying that the report of the Enquiry Officer be sent for as it was likely to be lost or destroyed.
On August 23, 1976 the learned Magistrate allowed the application and directed that the report with the concerned file be produced.
The State Government, however, did not comply with the direction and by an application dated December 31, 1977, claimed privilege in respect of the Enquiry Report which still awaited consideration.
On October 29, 1977 when the case was fixed for recording the plea of the accused under section 251 of the Code, the respondent moved an application stating that the plea should be recorded only after the Enquiry Report was produced.
The learned Magistrate by his order dated November 30, 1977, rejected the said application of the respondent as to the summoning of the records and directed the accused persons to appear in person or through counsel for explaining to them the substance of the accusation and also for recording their pleas.
Thereafter, the respondent filed a revision before the High Court under section 397 of the Code for setting aside the order of the learned Magistrate and alternatively under section 482 of the Code, if it were held to be an interlocutory order.
The revision was heard by a learned Single Judge and it appears that the Government Advocate made available a copy of the Enquiry Report for the perusal of the learned Judge.
The learned Judge by his order dated April 15, 1978, quashed the proceedings on the ground that the respondent 's case "clearly falls within the ambit of exception 9 of section 499 of the Indian Penal Code".
In reaching that conclusion, he observed that "it would be abuse of the process of the court if the trial is allowed to proceed which ultimately would turn out to be a vexatious proceeding".
The reasoning advanced by him was as follows: The real question to ask is, did the applicants publish the report for public good, in public interest and in good faith? My answer is in the affirmative.
It was a publication 635 of a report for the welfare of the society.
A public institution like prison had to be maintained in rigid discipline; the rules did not permit mixing of male prisoners with female prisoners and yet the report said the prison authorities connived at such a thing, a matter which was bound to arouse resentment and condemnation.
The balance of public benefit lay in its publicity rather than in hushing up the whole episode.
Further, there was good faith in the publication.
The source on which the publishers acted was the proper source on which they were entitled to act and they did so with care and circumspection.
The report further shows that the publication had been honestly made in the belief of its truth and also upon reasonable ground for such a belief, after the exercise of such means to verify its truth as would be taken by a man of ordinary prudence under like circumstances.
(emphasis added) It is somewhat strange that the learned Judge should have made public the contents of a document in respect of which the State Government claimed privilege.
The order recorded by the High Court quashing the prosecution under section 482 of the Code is wholly perverse and has resulted in manifest miscarriage of justice.
The High Court has pre judged the whole issue without a trial of the accused persons.
The matter was at the stage of recording the plea of the accused persons under section 251 of the Code.
The requirements of section 251 are still to be complied with.
The learned Magistrate had to ascertain whether the respondent pleads guilty to the charge or demands to be tried.
The circumstances brought out clearly show that the respondent was prima facie guilty of defamation punishable under section 500 of the Code unless he pleads one of the exceptions to section 499 of the Code.
The offending article which is per se defamatory, is as follows: MISA RAPE IN BHOPAL JAIL (By Blitz Correspondent).
Blitz: A shocking sex scandal involving a top RSS leader of M.P. was discussed at a secret meeting of Jan Sangh MLAs and MPs here recently.
The alleged escapades of 55 years old Sewakram Sobhani, a close confidant of RSS Chief Bhausaheb Devras, with the young wife of another RSS man in the Bhopal Central Jail, where both were detained under MISA, have rocked RSS Jan Sangh circles of the State.
636 According to a report submitted to the State Government by a Deputy Secretary in the Home Deptt.
who inquired into the grisly affair, Sobhani was reportedly responsible for making Mrs. Uma Shukla, 22 year old wife of a lawyer Yogesh Shukla, pregnant.
Abortion? When this was discovered she was quietly released on parole and, at her own request, taken for abortion to the Sultania Zanana Hospital.
After discharge she refused to rejoin her husband but stayed during the remaining period of her parole in the hide out of the 'total revolutionaries ' in the Professor 's Colony.
She returned to jail later and was transferred to the Hoshangabad Jail, while Sobhani was sent to the Raipur Central Jail.
The Official report throws light on how Sobhani allegedly enticed Mrs. Shukla with the help of a high official of the Bhopal Central Jail despite a ban on contacts between male and female detenus.
The jail official, himself a close sympathiser of the RSS allowed Sobhani to meet her frequently in his office and their love sessions were in his anteroom.
Yogesh Shukla has made a representation to the State Government alleging that Sobhani had committed adultery with his wife and demanded action against the jail authorities for permitting a "rape" of his wife.
It is for the respondent to plead that he was protected under Ninth Exception to section 499 of the Code.
The burden, such as it is, to prove that his case would come within that exception is on him.
The ingredients of the Ninth Exception are that (1) the imputation must be made in good faith, and (2) the imputation must be for the protection of the interests of the person making it or any other person or for the public good.
We are completely at a loss to understand the reasons which impelled the High Court to quash the proceedings.
The respondent, in his revision directed against the order of the learned Magistrate dated November 30, 1977, asserted in paragraph 5 that the case pre eminently a fit case for quashing the impugned order either in the revisional jurisdiction of the High Court or in the exercise of its inherent powers under section 482 of the Code to prevent the abuse of 637 the process of law and to secure the ends of justice.
The prayer made in the revision was in these terms: The applicants pray that the impugned order be quashed and the learned Magistrate be directed to persue the report which he has sent for under section 91, Criminal Pro.
Code and pass suitable orders according to law.
All that the respondent wanted is that learned Magistrate should not proceed to record the plea of the accused persons under section 251 of the Code without perusing the Enquiry Report under section 91 of the Code.
There was no application made before the High Court under section 482 of the Code for quashing the prosecution itself.
The averment contained in paragraph 4 that the Blitz only published a concise summary from the findings reached by the Deputy Secretary (Home) who was the Enquiry Officer appointed by the Government and, therefore, it was the duty of the learned Magistrate, to go through the report for himself and hold that no accusation had been made and the question of explaining it to the accused did not arise and the proceedings were liable to be dropped because no ingredients constituting an offence under section 500 of the Code had been made out, must be read in conjunction with paragraph 5 and in support of the limited prayer made in revision.
This cannot be construed as invoking the High Court 's powers under section 482 of the Code for quashing the whole proceedings.
We have considerable doubt about the propriety of the High Court making use of the Enquiry Report which has no evidentiary value and in respect of which the Government claimed privilege.
The application made by the Government claiming privilege still awaited consideration.
While the Government claimed privilege at one stage, it appears to have waived the claim and produced the Enquiry Report and made the contents public.
There was no factual basis for the observations made by the High Court underlined by me, except the Enquiry Report.
The contents of the Enquiry Report cannot be made use of unless the facts are proved by evidence aliunde.
There is also nothing on record to show that the accused persons made any enquiry of their own into the truth or other wise of the allegations or exercised due care and caution for bringing the case under the Ninth Exception.
The Enquiry Report cannot by itself fill in the lacunae.
A bare perusal of the offending article in Blitz shows that it is per se defamatory.
There can be no doubt that the imputation 638 made would lower the appellant in the estimation of others.
It suggested that he was a man devoid of character and gave vent to his unbridled passion.
It is equally defamatory of Smt.
Shukla in that she was alleged to be a lady of easy virtue.
We need not dilate on the matter any further.
It is for the accused to plead Ninth Exception in defence and discharge the burden to prove good faith which implies the exercise of due care and caution and to show that the attack on the character of the appellant was for the public good.
In Sukro Mahto vs Basdeo Kumar Mahto & Anr this Court observed: The ingredients of the Ninth Exception are first that the imputation must be made in good faith; secondly, the imputation must be for protection of the interest of the person making it or of any other person or for the public good.
Good faith is a question of fact.
So is protection of the interest of the person making it.
Public good is also a question of fact.
After referring to the two earlier decisions in Harbhajan Singh vs State of Punjab and Chaman Lal vs State of Punjab the Court held that there must be evidence showing that the accused acted with due care and caution. "He has to establish as a fact that he made enquiry before he made the imputation and he has to give reasons and facts to indicate that he acted with due care and attention and was satisfied that the imputation was correct.
The proof of the truth of the statement is not an element of the Ninth Exception as of the First Exception to section 499.
In the Ninth Exception the person making the imputation has to substantiate that his enquiry was attended with due care and attention and he was thus satisfied that the imputation was true.
" The High Court appears to be labouring under an impression that journalists enjoyed some kind of special privilege, and have greater freedom than others to make any imputations or allegations, sufficient to ruin the reputation of a citizen.
We hasten to add that journalists are in no better position than any other person.
Even the truth of an allegation does not permit a justification under First Exception unless it is proved to be in the public good.
The question 639 whether or not it was for public good is a question of fact like any other relevant fact in issue.
If they make assertions of facts as opposed to comments on them, they must either justify these assertions or, in the limited cases specified in the Ninth Exception, show that the attack on the character of another was for the public good, or that it was made in good faith: per Vivian Bose, J. in Dr. N.B. Khare vs M.R. Masani and Ors.
As the matter is of great public importance, it would, perhaps, be better to quote the well known passage of Lord Shaw in Arnold vs King Emperor (2) The freedom of the journalist is an ordinary part of the freedom of the subject, and to whatever lengths the subject in general may go, so also may the journalist, but, apart from statute law, his privilege is no other and no higher.
The responsibilities which attach to this power in the dissemination of printed matter may, and in the case of a conscientious journalist do, make him more careful: but the range of his assertions, his criticisms, or his comments, is as wide as, and no wider than, that of any other subject.
No privilege attaches to his position.
For these reasons, we must set aside the order passed by the High Court and direct the Magistrate to record the plea of the accused persons under section 251 of the Criminal Procedure Code, 1973 and thereafter, to proceed with the trial according to law.
BAHARUL ISLAM, J. Had there been no subsequent development after the impugned judgment of the High Court, I could have persuaded myself to agree to the order proposed by my Brother Sen, J., but after the Inquiry Report has been released by the Government and placed before us I regret my inability to agree to the order of sending back the case to the Magistrate as proposed by my Brother, and proceed to give my own judgment.
The facts material for the purpose of disposal of these appeals may be stated thus: During the period of Emergency between June 1975 and March 1976 the appellant, Shri Sewakram Sobhani, an advocate, was one of the detenus under the Main 640 tenance of Internal Security Act, 1976 (hereinafter 'MISA ') and lodged in the Bhopal Central Jail.
There were also three women detenus including Smt.
Uma Shukla and Smt.
Ramkali Mishra, Advocate.
The husband of Smt.
Uma Shukla was a practising advocate at Bhopal.
He was not a detenu.
Uma Shukla became pregnant while in detention in the aforesaid Central Jail and abortion was carried out in the month of August, 1976 in the Zanana Hamidi Hospital to relieve her of the pregnancy.
This circumstance created an uproar and an inquiry into the affairs had to be held by Shri S.R. Sharma, Dy.
Secretary (Home), Government of Madhya Pradesh, (hereinafter 'Sharma ') who submitted his report dated 7.10.1976 to the Government.
Respondent No. 1 is the Chief Editor of the Blitz and respondent No. 5 was, at the relevant time, Bhopal Correspondent of the Blitz.
Respondents 2, 3 and 4 are persons connected with the Blitz Weekly publication.
The Blitz weekly is published in three languages, viz., English, Hindi and Urdu.
The Blitz weekly dated 25.12.76 published a news item purported to be a summary of the report submitted by Sharma in its Urdu and Hindi editions.
The appellant took exception to the publication and filed a criminal case for defamation against the respondents under Sections 500 and 501 of the Penal Code.
The Magistrate issued processes to the respondents.
The respondents appeared before the Magistrate and made an application on 23.8.77 under Section 91 of the Code of Criminal Procedure, 1973 (hereafter 'the Code ') requesting the court, before arriving at a conclusion whether it should proceed further with the case or not, to call for (a) the original Enquiry Report submitted by Sharma on 7.10.76; (b) the statement of witnesses recorded by Sharma, (c) the original complaint; and (d) documents of the jail Department including letters from the Government to the Department (Vide para 4 of Annexure D to the Special Leave Petition).
The Magistrate called for the original Inquiry Report dated 7.10.76 submitted by Sharma to the Government, and then posted the case for production of the said records by the Government and recording the plea of the respondents.
The Government failed to produce the inquiry report before the Magistrate whereupon the Magistrate issued a notice to the Government to show cause as to why contempt proceedings should not be initiated against them.
The Magistrate, however, did not wait for the receipt of the report and wanted to record the plea of respondents.
641 The respondents then filed an application before the High Court of Madhya Pradesh under Section 397/401 read with Section 482 of the Code.
It was alleged by the respondents that the Deputy Home Secretary in his report came to the following conclusions : (1) There was free mixing of male and female prisoners in the Bhopal Central Jail ; (2) Shri Sewakram Sobhani had opportunity and also availed of the opportunity and mixed very freely with Smt.
Uma Shukla; and (3) Smt.
Uma Shukla became pregnant through Shri Sewak Ram Sobhani.
It may be mentioned that the Government later on produced the inquiry report before the High Court but claimed privilege.
The learned High Court presumably perused the report before passing the impugned order.
It may also be mentioned that although the Government claimed privilege in respect of the report at that time, it appears, they subsequently, after the impugned order of the High Court, waived the claim of privilege, and released the inquiry report; for, in fact, a copy of the report has been annexed and is available in the paper book of these appeals before us as Annexure `A '. 5.
The submission of the appellants is that the impugned order of the High Court is beyond its revisional jurisdiction.
The submission is that the respondents prayed for quashing the order of the Magistrate proceeding to record their plea before the inquiry report was produced by the Government, but the High Court has wrongly quashed the complaint itself.
On the other hand the reply of the respondent is that although there was no specific prayer in the petition, the petition was also made for quashing the criminal case under Section 500/501 of the Penal Code pending before the Magistrate.
The respondents ' submission is that they are not guilty for the impugned publication in view of Exception 9 to Section 499 of the Penal Code.
A perusal of the respondents ' petition before the High Court and its impugned judgment justifies the factual submission of the respondents, namely, that their application before the High 642 Court (Copy Annexure C) was under Section 482 as well as Sections 397 and 401 of the Code, and that the respondents claimed and canvassed the protection under the Ninth Exception of Section 499 of the Penal Code.
For, para 6 of the Judgment of the High Court reads : "The applicants feeling aggrieved have come to this Court for quashing the complaint, since they contend that the publication would squarely fall within exception 9 of Section 499 of the Indian Penal Code.
The applicants further contend that the report of the Deputy Secretary (Home) is the document on the basis of which the reporting was done and unless that is got produced and inspected, the defence of exception 9 cannot be made out. (Emphasis added) 7.
The omission in the prayer portion of a petition of a part of the claim, particularly in a criminal case, is not fatal.
The High Court in its revisional jurisdiction can always grant suitable relief justified by law as well as facts and circumstances of a particular case.
That a part, Article 136 of the Constitution of India gives wide powers to the Supreme Court to grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India.
The power is discretionary and therefore to be sparingly exercised.
This power is to be exercised to meet ends of justice, to enhance justice and remove miscarriage of justice in a particular case.
It does not exercise such powers for academic reasons but for practical purposes.
The High Court in the impugned order has held that "it would be abuse of the process of the court if the trial is allowed to proceed or alternatively to turn out to be vexatious proceeding" and therefore quashed the complaint.
Such an order would be warranted under Section 482 of the Code of Criminal Procedure if the merit of the case before the High Court justified it.
We have therefore to examine whether the respondents ' case falls within the ambit of the Ninth Exception to Section 499 of the Penal Code as held by the High Court.
643 9.
The appellant has not submitted before us that the summary of the report published in the Blitz is not a correct summary of the Inquiry Report.
The copy of the Report, Annexure A, shows that a complaint was received from one Shri Krishsan Gopal Maheshari, advocate, alleging certain objectionable activities and misconduct on the part of the appellant and Shrimati Uma Shukla.
Annexure A also shows that the Inquiry Officer Sharma, examined several witnesses including Shri Yogesh Shukla, husband of Smt.
Uma Shukla.
Para 4 of the report reads : "The following points are in dispute : (a) whether as alleged by the complainant there was free mixing of female members with male members detained under MISA; (b) in case (a) is in the affirmative, whether Shri Sewakram Sobhani had an opportunity to mix freely with Smt.
Uma Shukla; (c) in case (a) and (b) are in the affirmative when, how and through whom Smt.
Uma Shukla a MISA detenu conceived".
His findings are "(a) There was a free mixing of male and female prisoners in the Bhopal Central Jail; (b) Shri Sewakram Sobhani had opportunity and also availed of opportunity and mixed very freely with Smt.
Uma Shukla; (c) Smt.
Uma Shukla became pregnant through Shri Sewakram Sobhani".
It, therefore, appears that the impugned publication is a correct summary of the report and no submission has been made to the contrary by the appellant before us.
The only question is whether the publication falls within the Ninth Exception to Section 499 of the Penal Code, as claimed by the respondents.
644 Before we do that, we must not be oblivious of the fact that the Inquiry Report in question was a privileged document; it is now an unprivileged open document as indicated above.
The High Court proceeded on the footing that if the document is not produced to be utilized by the accused, the benefit would go to him.
Section 499 defines `defamation '.
It is as follows: "section 499.
Whoever, by words either spoken or intended to be read, or by signs or by visible representations makes or publishes any imputation concerning any person intending to harm, or knowing or having reason to believe that such imputation will harm the reputation of such person, is said, except in the cases hereinafter defame that person".
The Ninth Exception reads: "It is not defamation to make an imputation on the character of another provided that the imputation be made in good faith for the protection of the interests of the person making it, or of any other person, or for the public good".
The Ninth Exception requires, inter alia, that the imputation made must be in good faith for the public good.
`Good faith ' has been defined in Section 52 of the Penal Code as: "52.
Nothing is said to be done or believed in "good faith" which is done or believed without due care and attention", The definition is expressed in negative terms.
Normally proof of an exception lies on the person who claims it; but the definition of the expression "good faith" indicates that lack of good faith has been made a part of the offence which the prosecution has to establish beyond reasonable doubt.
On the other hand the mere proof by the accused of the report to be an authentic document is enough; it will create a doubt in the mind of the Court as to the lack of "good faith" on the part of the accused.
The inquiry was made and the report prepared by a highly responsible officer and submitted to the Government.
It was in pursuance of a complaint made by one of the citizens pointing 645 out laxity in observance of jail rules and highly objectionable practices of some of the prisoners and seeking improvement in jail administration.
The object was to see improved conditions, and maintenance of certain standard of moral conduct by prisoners, in jail.
If the complaint and the consequent inquiry report be for public good, and the respondents had reasons to believe its contents to be true, they will be protected under the Ninth Exception.
Even if the burden of proof of `good faith ' be on the accused `good faith ' need not be proved beyond reasonable doubt.
Once this is done, whether the publication was for public good would be a matter of inference.
The Dy.
Secretary (Home) examined Shri Bhandari, Editor of Prach who was a MISA detenu as witness No. 1, complainant Maheshwari as witness No. 2, Smt.
Ramkali Mishra, an advocate, and a member of Jana Sangha, another MISA detenu, as witness No. 4, Dr. Hamid Quireshi, another MISA detenu as witness No. 6, Shri Ramesh Chand Shrivastava an `independent ' witness as witness No. 7, and Shri Yogesh Shukla, husband of Smt.
Uma Shukla as witness No. 3.
Most of the said witnesses, it appears, were the party colleagues of the appellant and his co MISA detenus.
I must not be understood to suggest the contents of the inquiry report are true; it is an exparte inquiry report; it might be the result of political rivalry, as alleged by the appellant, but it appears that political rivalry, if any, was between the members of the appellant 's party and not between the party in power and party in opposition.
The comment of Mr. Sharma on the evidence of witness No. 3 is as follows: "Shri Yogesh Shukla witness No. 3 has categorically stated that he had no connection with his wife and that she became pregnant through Shri Sobhani, Advocate and got the child aborted.
It is worth consideration as to why the husband will come up with such an open allegation against his own wife, unless there be no very strong reasons for such a conviction.
Normally, no husband, even though his wife may have conceived through somebody else will like to see his name being scandalised.
Shri Yogesh Shukla witness No. 3 is an advocate, quite an educated person and we can safely presume that he knows the consequences of his statement and also their legal and moral implications on his profession.
Such an open scandalous statement against 646 his own wife could not but be a result of very strong abhoration or an outcome of utter desperation.
It could also be an expression of a naked truth.
" The entire report is exhaustive, reasoned and based on evidence.
A perusal of the report will normally lead one to believe the imputations.
If that be so, it cannot be said that the respondents published the report or its summary without due care and attention.
This establishes `good faith ' as required by the Ninth Exception to Section 499 of the Penal Code.
From what has been stated above, the publication obviously appears to be for public good.
The appellant submitted that he wanted an opportunity to clear himself of the imputations made against him by adducing evidence before the Magistrate to establish the falsity of the imputations made in the publication.
We are not concerned with the truth or falsity of the imputations published.
Even if the findings in the report be proved to be false, the respondents will be protected.
Sending back the case to the Magistrate to record the respondents ' plea after the perusal of the Inquiry Report will, in my opinion, be an exercise in futility and abuse of the process of the criminal court.
The appellant may seek his remedy, if any, in the Civil Court.
The learned High Court, therefore, in my opinion committed no error in quashing the complaint.
The appeal is dismissed.
ORDER In view of majority judgments, the appeals are allowed.
P.B.R. Appeals allowed.
| The appellant, a commissioned officer in the Indian Air Force, on a General Court Martial was cashiered and sentenced to suffer rigorous imprisonment for six years.
Later the Central Government remitted the unexpired portion of the punishment of rigorous imprisonment.
Subsequently, he was appointed by the Indian Institute of Technology for a project work on a purely temporary basis and subject to verification of his character and antecedents from the Government and subject to the further condition that his services could be terminated on 24 hours notice in writing by either side.
On a reference by the I.I.T., the Ministry of Defence by its letter dated November 19, 1977 invited attention to the Ministry of Home Affairs Memorandum dated May 14, 1965 to the effect that persons who were dismissed from service were disqualified from future employment under the Government but left it open to the I.I.T. whether it would follow that principle in the case of the appellant.
The Professor under whom the appellant was working recommended the retention of the appellant in service.
The I.I.T. did not accept the said recommendation and by its order dated January 21,1978 terminated the appellant 's services on the expiry of 24 hours.
A writ petition filed by the appellant challenging the validity of the said order was dismissed in limine by the Delhi High Court and hence the appeal by special leave.
Dismissing the appeal, the Court, ^ HELD: The relief claimed by the appellant for reinstatement to his post in the Institute must be denied for the reasons, namely, (a) the appointment was temporary only and could be terminated on 24 hours notice; (b) the Professor incharge of the project passed away subsequently in June 1978 and, therefore, the project in which he was engaged was finally closed and (c) the period for which the appellant 's post of Senior Research Assistant had been, created had come to an end.
[43 D E]
|
Appeal No. 92 of 59.
Appeal from the judgment and order dated August 31, 1956, of the Orissa High Court in second appeal No. 1.5.1 of 1951.
A. V. Viswanatha Sastri and T. V. R. Tatachari, for the appellant.
M. section K. Sastri, for respondents.
674 1961.
September 20.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
This is an appeal by a certificate granted by the High Court of Orissa and it raises a short question about the scope and effect of the provisions of section 7 (1) of the Orissa Tenants Protection Act, 1948 (Act III of 1948) (hereafter called the Act).
The appellant Magiti Sasamal sued the respondents Pandab Bissoi and others in the Court of the District Munsiff, Berhampur, for a permanent injunction restraining them from entering the suit lands belonging to the appellant.
The appellants case was that the suit lands belonged to him and were in his personal cultivation for many years.
In the year of the suit the appellant had cultivated the said lands as usual, manured and raised paddy crop thereon after spending a large amount in that behalf According to the appellant the respondents had no manner of right or title to the said lands and had never cultivated them.
From the notice given by them to the appellant, however, it appeared that the respondents wanted to enter upon the lands forcibly and to remove the standing crop therefrom.
This they desired to do by setting up a false claim that they were the tenants of the lands and as such were entitled to the protection of the Act.
The appel lant alleged that the respondents were local rowdies and were known for their high handed action in the neighbourhood.
On these allegations the appellant claimed a permanent injunction against the respondents.
The respondents admitted the title of the appellant to the lands in suit but pleaded that they were the tenants in respect of separate portions of the said lands.
Their version was that they had cultivated their holdings and raised the paddy crop thereon in the year in question.
According to them they had been in cultivating possession of their respective holdings as tenants long before September 1, 1947, and so they were entitled to remain in possession as such tenants under the 675 they had filed petitions under the Act before the Sub Collector, Berhampur, claiming appropriate relief against the appellant.
They urged that they were ever ready and willing to pay the Rajabhag as provided by the Act and they contended that the Suit was not maintainable in a civil court.
On these pleadings the learned trial judge framed appropriate issues.
Three issues of law had been framed by him on the pleas raised by the respondents.
These issues were, however, not pressed at the hearing, One of them, namely issue 5, refers to the jurisdiction of the Court to try the suit in view of the provisions of the Act.
Thus, it if; clear that the issue of jurisdiction was not pressed by the respondents at the trial.
On the merits the learned trial judge considered the evidence and held that though the appellant was the owner of the property the respondents had proved that they were the tenants in possession of their respective holdings and that their possession was long before September 1, 1947.
On these findings the learned judge came to the conclusion that the appellant was not entitled to claim an injunction against the respondents and so he dismissed his suit.
The matter was then taken by the appellant before the District Judge, Ganjam, Nayagarh.
The learned District Judge considered the evidence led by the parties and reversed the conclusions of the trial court.
He held that the onus was on the respondents to prove their possession of their respective holdings as tenants on or before the specified date, and according to him they had failed to dis charge that onus.
The question of jurisdiction was not raised before the appellate court by the respondents.
Having held against the respondents on the merits the learned District Judge allowed the appeal, set aside the decree passed by the trial court and directed that an injunction should be issued against the respondents as claimed by the appellant.
676 The respondents then moved the High Court by second appeal ; and the main point which they urged before the High Court was that the learned trial judge had no jurisdiction to entertain the suit having regard to the provisions of section 7 (1) of the Act.
The appellant pointed out to the High Court that this question of jurisdiction bad not been pressed before the trial court and had not been raised before the lower appellate court.
Even so the High Court allowed the point to be raised and decided it in favour of the respondents.
As a result of the finding that the civil court bad no jurisdiction to entertain the suit the second appeal preferred by the respondents has been allowed and the appellant 's suit dismissed with costs throughout.
It is against this decree that the appellant has come to this Court with the certificate granted by the High Court; and the short point which has been raised before us on his behalf by Mr. Viswanatha Sastri is that in holding that the present suit is outside the jurisdiction of the civil court the High Court has misconstrued the scope and effect of the Provisions of section 7(1) of the Act.
The Act received the assent of the Governor General on February 5, 1948 and was published on February 14,194S.
It is a temporary Act and by s.1(4) it has been provided that it shall cease to have effect on April 15, 1949 except is respects things done or omitted to be done before the expiration thereof.
It has been passed in order to provide for temporary protection to certain classes of tenants in the Province of Orissa.
Legislature thought that the said tenants deserved protection and so as a beneficent measure the Act has been passed.
Section 2(c) of the Act defines landlord and section 2(g) defines a tenant.
The main operative provision of the Act is contained in section 3.
This Section provides that not withstanding anything contained in any other law for the time being in force, or any express or implied agreement to the contrary, but subject to the provisions of this Act, 677 a person who, on the first day of September 1947, was cultivating any land as a tenant shall continue to have the right to cultivate such land and it shall not be lawful for the landlord to evict the tenant from the land or interfere in any way with the cultivation of such land by the tenant.
It would thus be seen that the Act purports to provide protection to tenants who were in possession of lands on the appointed day which is September 1, 1947.
The other sub sections of section 3 make material and subsidiary provisions in regard to the said protection.
Section 7(1) reads thus: " 'Any dispute between the tenant and the landlord as regards, (a) tenant 's possession of the land on the 1st day of September, 1947 and his right to the benefits under this Act.
or (b) misuse of the land by the tenant, or (c) failure of the tenant to cultivate the land properly, or (d) failure of the tenant to deliver to the landlord the rent accrued due within two months from the date on which it becomes payable, or (e) the quantity of the produce payable to the landlord as rent, shall be decided by the Collector on the application of either of the parties".
The appellant contends that section 7(1) covers disputes between landlords and tenants which are specified under cls.
(a) to (e) but it does not cover a dispute between the parties as to whether the relationship of landlord and tenant 'exists between them.
It is only where such a relation ship is either admitted or established in a civil court that the specified disputes fall within the exclusive jurisdiction of the Collector on the other hand the respondents ' case is that the dispute as to the status of the tenant is also included under section 7(1).
The High Court has upheld the respondents ' interpretation, and Mr. Viswanatha Sastri contends that this interpretation is based on a misconstruction of the section.
It is true that having regard to the beneficent object which the Legislature had in view in passing the Act its material provisions should be liberally 678 construed.
The Legislature intends that the 'disputes contemplated by the said material provisions should be tried not by ordinary civil courts but by tribunals specially designated by it, and so in dealing with the scope and effect of the jurisdiction of such tribunals the relevant words used in the section should receive not a narrow but a liberal construction.
While bearing this principle in mind we must have regard to another important principle of construction, and that is that if a statute purports to exclude the ordinary jurisdiction of civil courts it must do so either by express terms or by the use of such terms as would necessarily lead to the inference of such exclusion.
As the Privy Council has observed in Secretary of State vs Mask & Co., (1) "it is settled law that the exclusion of the jurisdiction of the civil courts is not to be readily inferred, but that such exclusion must either be explicitly expressed or clearly implied".
There can be no doubt that ordinarily a dispute in regard to the relationship between the parties such as that between a landlord and a tenant would be a dispute of a civil nature and would fall within the competence of the civil court.
If the respondents contend that the jurisdiction of the civil court to deal with such a civil dispute has been taken away by section 7 (1) we must enquire whether section 7(1) expressly takes away the said jurisdiction or whether the material words used in the section lead to such an inference or the scheme of the Act inescapably establishes such an inference.
The relevance and materiality of both these principles are not in dispute.
Let us then revert to section 7.
It would be noticed that a. 7(1) has expressly and specifically provided for five categories of disputes which are within the jurisdiction of the Collector and which must therefore be taken to be excluded from the jurisdiction of the civil court.
On a reasonable construction of section 7(1) a dispute specified by section 7(1)(a) would be a dispute between a tenant and a landlord in regard (1) (1940) L. R. 67 1.
A. 222, 236.
679 to the former 's possession of the land on September 1, 1947.
It is clear that the dispute to which section 7(1)(a) refers is a narrow dispute as to the possession of the tenant on a specific date and his consequential right to the benefits of the Act.
The same is the position with regard to the other categories of the dispute specified by section 7(1).
In none of the said categories is a dispute contemplated as to the relationship of the parties itself.
In other words section 7(1) postulates the relationship of tenant and landlord between the parties and proceeds to provide for the exclusive jurisdiction of the Collector to try the five categories of disputes that may arise between the landlord and the tenant.
The disputes which are the subject matter of section 7(1) must be in regard to the five categories.
That is the plain and obvious construction of the words "any dispute as regards".
On this construction it would be unreasonable to hold that a dispute about the status of the tenant also falls within the purview of the said section.
The scheme of section 7(1) is unambiguous and clear.
It refers to the tenant and landlord as such and it contemplates disputes of the specified character arising between them.
Therefore, in our opinion, even on a liberal construction of section 7(1) it would be difficult to uphold the argument that a dispute as regards the existence of the relationship of landlord and tenant falls to be determined by the Collector under section 7(1).
In this connection it would be relevant to take into consideration the provisions of section 7(2).
This clause provides that the Collector may, after making such enquiries as he may deem necessary, order the tenant, by a notice served in the prescribed manner and specifying the grounds on which the order is made, to cease to cultivate the land.
It is significant that the making of the enquiry and its mode are left to the discretion of the Collector.
If a serious dispute as to the existence of the relationship of landlord and tenant between the parties had been covered by section 7(1) it is difficult to imagine that the 680 Legislature would have left the decision of such an important issue to the Collector giving him full freedom to make such enquiries as he may, deem necessary.
As is well known, a dispute as to the existence of the relationship of landlord and tenant raises serious questions of fact for decision, and if such a serious dispute was intended to be tried by the Collector the Legislature would have provided for an appropriate enquiry in that behalf and would have made the provisions of the Code of Civil Procedure applicable to such an enquiry.
Section 7(2) can be easily explained on the basis that the relationship between the parties is outside section 7(1) and so the disputes that are covered by section 7(1) are not of such a nature as would Justify a formal enquiry in that behalf The provisions of sub sections
(3), (6) and (7) also indicate that the relationship between the parties is not, and cannot be, disputed before the Collector.
The parties arrayed before him are landlord and tenant or vice versa, and it is on the basis of such relationship between them that he proceeds to deal with the disputes entrusted to him by section 7(1).
It is true that when the relationship of landlord and tenant is proved or admitted the disputes falling within the five categories enumerated in section 7(1) will have to be tried by the Collector.
Let us take the present case itself to illustrate how section 7(1) will operate.
In the suit filed by the appellant against the respondents the issue about the status of the respondents was framed and so it had to be tried by the civil court.
In such a suit if the civil court holds that the relationship between the landlord and the tenant had not been established it may proceed to deal with the suit on the merits.
If, however, it holds that the said relationship is established then the civil court cannot deal with the dispute between the parties if it falls within any one of the categories specified by section 7(1).
In such a case, having made the finding about the relationship between the parties the civil court will either dismiss the suit on the ground that it can give no relief to 681 the landlord, or may, if it is permissible to do so, return the plaint for presentation to the Collector.
What course should be adopted in such a case it is unnecessary for us to decide in the present appeal.
All that we wish to emphasise is that the initial dispute between the parties about the relationship subsisting between them will still continue to be tried by the civil court and is outside the purview of section 7(1).
In support of the argument that a dispute as to the existence of relationship as landlord and tenant should be taken to be included under section 7(1) reliance is placed on the provisions of section 8(1) of the Act.
Section 8(1) provides that subject to the provisions of section 7 all disputes arising between landlord and tenant shall be cogniscible by the revenue court and shall not be cogniscible by the civil court.
It must be pointed out that we are really not concerned with section 8(1) in the present appeal because even according to the respondents the present dispute between the parties attracted section 7(1.) and should have been tried by the Collector and not by 'the civil court.
However, the question about the construction of section 8(1) has been incidentally raised before us.
In appreciating the scope and effect of section 8(1) it is necessary to bear in mind the provisions of section 13 of the Act.
The said section provides that the Act shall, as far as may be, read and construed.
as forming part of the Madras Estates Land Act, 1908, or as the case may be, of the Orissa tenancy Act, 1913.
Therefore reading the provisions of section 8(1) and section 13 tog other it follows that all that section 8 (1) provides is that except for the disputes covered by section 7 (1) all disputes arising between landlord and tenant shall be cogniscible by the revenue court and to the trial of such disputes by the revenue court the relevant provisions of the Orissa Tenancy Act, 1913 would apply.
It is true that disputes to which section 8(1) applies are entrusted to the exclusive jurisdiction of the revenue courts and are excluded from the jurisdiction of civil courts, but the effect of this 682 the other relevant provisions of the parent Act of which this temporary Act forms a part.
Now, if we turn to some of the relevant provisions of the, parent Act it would be clear that when the revenue courts are given jurisdiction to try the disputes the enquiry held by them purports to be a formal enquiry to which the provisions of the Code of Civil Procedure may apply (Vide: section 192 of the Orissa Tenancy Act, 1913).
Similarly, the provisions of section 204(1) which provides for appeals contemplate appeals to the District Court and the High Court where questions of title are involved.
These provisions illustrate the point that where serious disputes about title are entrusted to special tribunals usually the Legislature contemplates a formal en quiry and makes the provisions of the Code of Civil Procedure applicable to such an enquiry and provides for appropriate appeals.
Now, in regard to the order passed by the Collector under section 7(1) the only provision about appeals is that made by section 11 which provides that an appeal shall lie to the prescribed superior revenue authority whose decision shall be final, and shall not be subject to any further appeal or revision.
Departure made by the Legislature in providing only one appeal and that too in every case to the prescribed superior revenue authority clearly brings out that the disputes which are entrusted to the Collector under section 7(1) axe the simple disputes specified in the five categories and do not include a serious dispute like that of the relation,ship between the parties as landlord and tenant.
, If such a dispute had been intended to be tried by the Collector the Legislature would have provided for a formal enquiry and would have prescribed appropriate appeals on the lines of sections 192 and 204 of the parent Act.
In this connection we may in passing refer to the provisions of section 126 of the parent Act.
This section deals with the jurisdiction of civil courts in matters relating to rent.
Section 126(3) provides for the institution of suits in civil courts on the 683 grounds specified by cls.
(a) to (g).
Clause (c) deals with the ground that the relationship of landlord and tenant does not exist.
This clause shows that if a dispute arose between the parties as to the existence of the relationship of landlord and tenant a suit in a civil court a.% contemplated is prescribed by section 126(3) (c).
That also has some bearing on the construction of section 7(1); and it is for that limited purpose that we have referred to it.
Therefore, we are satisfied that the High Court was in error in holding that under a. 7(1) of the Act it was competent to the Collector to try the issue between the appellant and the respondents whether or not the Respondents were the tenants of the appellant and that the civil court had no jurisdiction to entertain the said dispute.
In the result, the appeal must be allowed, the order passed by the High Court set aside and that of the District Court restored with.
costs throughout.
Appeal allowed.
| The official receiver put the properties of the insolvents N and his sons for sale, which were subject to mortgage.
The properties were ultimately knocked down to the appellant whose bid was the highest.
The first respondent made an application under section 68 of the which was allowed by the Subordinate Judge on the ground that the price fetched was very low on appeal under section 75 of the Act the District Judge, inter alia, held that the price fetched was not low.
In revision under the proviso to section 75 of the Act, the High Court did not consider whether the order of the District Judge was according to law but accepted an offer made by the first respondent and allowed the revision petition.
^ Held, that the power of the court under section 68 is a judicial power, and must be exercised on well recognised principles, justifying interference with an act of the receiver which he is empowered to do under section 59(a) , and the court must not arbitrarily set aside a sale decided upon by the official receiver, unless there are good judicial grounds to interfere with the discretion exercised by the official receiver, for example that there was fraud or collusion between the receiver and the insolvent or intending purchaser, or the court is of the opinion that there were irregularities in the conduct of the sale which might have affected the price fetched at the sale, or price was low as to justify the Court to hold that the property should not be sold at that price.
691 The High Court had therefore to see whether the Sub Judge 's order was justified on these grounds and whether the District Judge made any mistake in law in reversing that order otherwise the High Court cannot interfere in revision under the proviso to section 75 of the , for the High Court 's jurisdiction to interfere arises only if it is of opinion that the District Judge 's order was not according to law, and only then it can pass such order as it may think fit.
|
Appeal No. 34 of 1965.
Appeal by special leave from the judgment and decree dated November 6, 1962 of the Allahabad High Court in Second Appeal No. 3745 of 1958.
B. C. Misra and section section Shukla, for the appellants.
section P. Sinha, E. C. Agarwala and P. C. Agarwala, for the respondents.
The Judgment of the Court was delivered by Shah, J.
A piece of agricultural land bearing Survey Nos. 723/2, 724, 725 and 726 of Naugawan, tahsil Fatehabad, District Agra, originally belonged, to two brothers Tota Ram and Lajja Ram.
Tota Ram and Lajja Ram were declared to be bhumidhars in respect of that land and a Sanad was issued in their favour under section 7 of the U.P. Act 10 of 1949.
On October 20, 1951, Tota Ram and Lajja Ram sold their interest in the land 619 to two brothers Sri Ram and Ram Prasad who will hereinafter be called 'the plaintiffs '.
Disputes arose thereafter about the possession of the land between one Pritam Singh and the plaintiffs, and proceedings under section 145 of the Code of Criminal Procedure were started before the Sub Divisional Magistrate at the instance of Pritam Singh.
The Sub Divisional Magistrate attached the land and called upon the parties to agitate the dispute as to their respective rights therein in a civil suit.
The plaintiffs then commenced an action in the Court of the Munsif, Fatehabad, against Pritam Singh and Tota Ram for a declaration of their rights as bhumidhars in possession of the land in suit and for an order "expunging" the name of Pritam Singh from the revenue records.
Pritam Singh resisted the suit contending, inter alia, that the land was abandoned by Tota Ram and Lajja Ram and that since it was under his cultivation continuously since Fasli year 1356 (the year commencing from July 1, 1948 and ending on June 30, 1949) he had acquired the rights of an adhivasi in the land and he was not liable to be evicted from the same.
The Munsif referred the following issue arising out of the pleadings to the Assistant Collector, Agra, for decision: "Whether the defendant No. 1 (Pritam Singh) has acquired adhivasi rights, if so, its effect?" The Assistant Collector held that the revenue records did not "how that Pritam Singh was in possession at any time in or before 'the end of 1359 Fasli and that the entries in the khasra relied upon by Pritam Singh had been fabricated to support his case.
Consistently with the finding of the Assistant Collector, the Munsif passed judgment in favour of the plaintiffs.
But in appeal to the District Court, Agra, that judgment was reversed.
The Appellate Judge held that the revenue entries were genuine entries posted by the Patwari in discharge of his duty and that Pritam Singh was in possession in the year 1356 Fosli and also in 1359 Fasli and he had acquired the rights of an adhivasi.
The plaintiffs then carried the dispute to the High Court of Allahabad.
The High Court reversed the decree passed by the First Appellate Court and restored the decree of the Munsif.
With special leave, the heirs and legal representatives of Pritam Singh have appealed to this Court.
It was not the case of Pritam Singh that he has acquired title to the land by transfer or by adverse possession.
Pritam Singh relied merely.
upon the entries in khasra for 1356 Fasli and his claim of possession of the land in Fasli 1359, and upon statutory consequences arising from the entries under section 20(b) of the U.P. Zamindari Abolition and Land Reforms Act 1 of 1951, and section 3 of the U.P. Land Reforms (Supplementary) Act 31 of 1952.
The U.P. Zamindari Abolition and Land Reforms Act 1 of 1951 was brought into force from July 1, 1952.
By section 20 certain rights were conferred upon persons whose names were recorded 620 in the revenue records in respect of agricultural land.
The material clause (b) of section 20 on which reliance is placed reads as follows: "20.
Every person who (a) (b) was recorded as occupant (i) of any land (other than grove land or lands to which section 16 applies) in the khasra or khatauni prepared under sections 28 and 33 respectively of the U.P. Land Revenue Act, 1901, or who was on the date immediately preceding the date of vesting entitled to regain possession thereof under clause (c) of sub section (1) of section 27 of the United Provinces Tenancy (Amendment) Act, 1947, or The land in dispute is not grove land, nor it is land to which section 16 of the Act applies.
Pritam Singh claimed that his name was entered as an occupant in the khasra of 1356 Fasli prepared under the U.P. Land Revenue Act, 1901, and he was on that account entitled to the rights of an adhivasi in respect of the land.
It was held by this Court in Amba Prasad vs Abdul Noor Khan and Others(1) that section 20 of U.P. Act 1 of 1951 does not require proof of actual possession: it eliminates inquiries into disputed possession by accepting the record in the khasra or khatauni of 1356 Fasli or its correction before July 1, 1952.
In view of that decision it must be held that the Civil Court in adjudging a claim of a person to the rights of an adhivasi is not called upon to make an enquiry whether the claimant was actually in possession of the land or held the right as an occupant: cases of fraud apart, the entry in the record alone is relevant.
But the entries on which reliance was placed by Pritam Singh do not support his case that he was recorded as an occupant in the khasra or khatauni of 1356 Fasli.
In the certified extract of the khasra for 1356 Fasli (Ext.
A/ 1) tendered in evidence by Pritam Singh in the column 'Name and caste of cultivator ' the entry is "Tota Ram and others" and in the column for 'remarks ' the entry is "Pritam Singh s/o Pyarelal of Sankuri".
Our attention has not been invited to any provision of the U.P. Tenancy Act or instructions issued by the Revenue authorities which tend to establish that the name of an occupant of land is liable to be entered in the column reserved for 'remarks '.
In order that a person may be regarded as an adhivasi of a piece of land, section 20(b) of Act 1 of 1951 requires that his name must be recorded in the khasra or khatauni for 1356 Fasli as an occupant.
The Assistant Collector has pointed out that according to paragraph 87 of the Land Records Manual it is necessary for a Patwari to make an (1) ; 621 enquiry about the status of the occupant, and if he thinks that a claimant is an occupant, he should enter the name in red ink in khsra as "Kabiz, sajhi etc.".
Admittedly Pritam Singh was not shown as Kabiz or sajhi nor was the entry posted in red ink.
There is also strong evidence on the record which shows that the name of Pritam Singh was surreptitiously entered in the khasra for 1356 Fasli.
In the khasra Barahsala i.e. consolidated khasra for 1347 to 1358 Fasli Tota Ram and Lajja Ram are shown its persons cultivating the land and there is no record of the name of any sub tenant on the land.
Before the Assistant Collector two certified extracts of the khasra for 1356 Fasli in respect of the land in dispute were produced.
In the certified extract Ext.
A/ 1 tendered by Pritam Singh his name was shown in the 'remarks ' column.
in the certified extract tendered by the plaintiffs there was no such entry.
The Assistant Collector did not call for the original record, nor did he attempt to probe into the circumstances in which the entry of Pritam Singh dame to be made.
He, however, observed that in Ext.
A/ 1 the name of Pritam Singh was entered in the 'remarks ' column against Survey No. 723/1 which had fallen in an earlier partition to the share of one Kunjilal and in respect of which Pritam Singh had never claimed any right.
The First Appellate Court did not refer to these important pieces of evidence.
His conclusion cannot be regarded as binding upon the High Court in Second Appeal.
It must therefore be held that relying upon the entry of his name in the 'remarks ' column in the khasra for 1356 Fasli Pritam Singh could not claim that he had established his rights as an adhivasi of the land under section 20(b) of the U.P. Zamindari Abolition and Land Reforms Act 1 of 1951.
The alternative case under section 3 of the U.P. Land Reforms (Supplementary) Act 31 of 1952 may now be considered.
Section 3 of Act 31 of 1952 provides, insofar as it is material: "(1) Every person who was in cultivatory possession of any land during the year 1359 fasli but is not a, person who as a consequence of vesting under Section 4 'of the U.P. Zamindari Abolition and Land Reforms Act, 1950 (U.P. Act 1 of 1951) (hereinafter referred to as the said Act), has become a bhumidhar sirdar, adhivasi or asami under Sections 18 to 21 of the said Act shall be and is hereby declared to be, with effect from the appointed date (a) if the bhumidhar or sirdar of the land was, or where the land belongs jointly to two or more bhumidars or sirdars, all of them were, on the appointed date person or persons referred to in item (i) to (vi) of sub section (2) of Section 10 of the said Act, an asami from year to year, or 622 (b) if the bhumidhar or sirdar was not such a person, an adhivasi, and shall be entitled to all the rights and be subject to all the liabilities conferred or imposed upon an asami or an adhivasi, as the case may be, by or under the said Act.
Explanation A person shall not be deemed to be in cultivatory possession of the land, if he was cultivating it as a mortgagee with possession or a thekedar, or he was merely assisting or participating with a bhumidhar sirdar, adhivasi or asami concerned in the actual performance of agricultural operations.
" The section appears to be somewhat involved in its phraseology.
But its purport is fairly clear.
A person who is not in consequence of the provisions of sections 18 to 21 of the U.P. Act 1 of 1951 a bhumidhar, sirdar, adhivasi or asami but who is in "cultivatory possession" of land during 1359 Fasli shall be entitled to the rights in respect of that land of an asami from year to year if the bhumidhar or sirdar of the land was on the appointed date a person who is referred to in item (i) to (vi) of section 10(2) of the U.P. Act 1 of 1951, and he shall be entitled to the rights of an adhivasi if the bhumidhar or sirdar of the land was not a person referred to in items (i) to (vi) of section 10(2).
The U.P. Act 31 of 1952 was enacted to grant protection to certain persons who had been in "cultivatory possession" of land in the holdings of bhumidhars or sirdars, and had been or were being forcibly evicted from the land by the tenure holders.
The language of the section clearly shows that it was intended to grant the rights of an asami or adhivasi according as the case fell within cl.
(a) or cl.
(b) to a person who had been admitted to cultivatory possession and who was in such possession in 1359 Fasli.
Pritam Singh had no right to the land at all and the revenue record shows that till the end of 1358 Fasli i.e. till June 30, 1951, the land was not in his possession.
Pritam Singh is recorded in the khasra of 1359 Fasli in the column for shikmi (sub tenant) as without settlement of rent", and Tota Ram and Lajja Ram are entered as cultivators.
In the khatauni for 1359 Fasli Pritam Singh is shown as "cultivator for ' one year, without settlement of rent".
There are similar entries in the khasra and khatauni for 1361 Fasli, and in 1362 Fasli the names of the plaintiffs are entered in the column of cultivator, and the name of Pritam Singh is shown in the column for shikmi.
The scheme of section 3 of the U J.P. Land Reforms (Supple mentary) Act, 1952 is different from the scheme of section 20(b) of the U.P. Zamindari Abolition and Land Reforms Act 1 of 1951.
Whereas under Act 1 of 1951 the entry is made evidence without further enquiry as to his right of the status of the person who is recorded as an occupant, under section 3 of the U.P. Land Reforms (Supplementary) Act, 1952, a person who claims the status of an asami or an adhivasi must establish that he was in "cultivatory 623 possession" of the land during the year 1359 Fasli.
The expression " cultivatory possession" is not defined in the Act, but the Explanation clearly implies that the claimant must have a lawful right to be in possession of the land, and must not belong to the classes specified in the explanation.
"Cultivatory possession" to be recognized for the purpose of the Act must be lawful, and for the whole year 1359 Fasli.
A trespasser who has no right to be in possession by merely entering upon the land forcibly or surreptitiously cannot be said to be a person in "cultivatory possession" within the meaning of section 3 of U.P. Act 31 of 1952.
We are of the view that the Allahabad High Court was right in holding in Ram Krishna vs Bhagwan Baksh Singh(1) that a person who through force inducts himself over and into some land and succeeds in continuing his occupation over it cannot be said to be in cultivatory possession of that land so as to invest him with the rights of an asami or an adhivasi, and we are unable to agree with the subsequent judgment of a Full Bench of the Allahabad High Court in Nanhoo Mal vs Muloo and others(2) that occupation by a wrongdoer without any right to the land is "cultivatory possession" within the meaning of section 3 of the U.P. Act 31 of 1952.
A person who has no right to occupy land may rely upon his occupation against a third person who has no better title, but he cannot set up that right against the owner of the land.
It must be remembered that by section 3 of U.P. Act 31 of 1952 the Legislature conferred rights upon persons in possession of land against the tenure holders, and in the absence of any express provision, we are unable to hold that it was intended by the Act to put a premium upon forcible occupation of land by lawless citizens.
We have no doubt therefore that by forcibly occupying the land after 1358 Fasli, Pritam Singh could not acquire as against the bhumidhar of the land the rights of an adhivasi by virtue of section 3 of U.P. Act 31 of 1952.
Counsel for the appellants contended that the finding recorded by the First Appellate Court that Pritam Singh was in "cultivatory possession" in 1359 Fasli was binding upon the High Court in Second Appeal.
For reasons already set out, possession of a person in wrongful occupation cannot be deemed cultivatory possession.
Again the Appellate Judge in arriving at his conclusion ignored very important evidence on the record, and on that account also the conclusion was not binding on the High Court.
Pritam Singh 's name was recorded in the khasra for the year 1359 Fasli as sub tenant "without settlement of rent".
Pritam Singh did not offer to give evidence at any stage of the trial before the Assistant Collector, and it was not his case that he had entered into any contract of sub tenancy with Tota Ram and Lajja Ram.
The entry which records him as a sub tenant of Tota Ram and Lajja Ram for the year 1359 Fasli is on his own case (1) (2) I.L.R. [1963] All. 751.
624 untrue.
There is further no oral evidence in support of the case of Pritam Singh that he was in actual "cultivatory possession" of land and the entry relied upon by him does not support his case.
To get the benefit of section 3 of U.P. Act 31 of 1952, it had to be established that Pritam Singh was in actual cultivatory possession of the land and that fact is not established by direct evidence of possession, nor is it established by the entry relied upon by him.
The conclusion of the learned Appellate Judge that Pritam Singh was in "cultivatory possession" was partially founded on the conclusion recorded by him that in 1356 Fasli Pritam Singh was in possession of the land.
We have already pointed out that in so concluding he misread the khasra entry for 1356 Fasli and gave no effect to the khasra Baralisala which showed that Pritam Singh was not in possession of the land till the end of 1358 Fasli.
The learned Judge also inferred that because it was stated by Sri Ram the first plaintiff and his witness Maharaj Singh that no crops were cultivated during the Kharif season and as the khasra for 1359 Fasli showed that Bajra was sown in one of the plots in 1359 Fasli and gram was raised in all the plots, Pritam Singh must have been in possession as a sub tenant and must have cultivated the land in the Kharif season of 1.359 Fasli.
This was, in our judgment, a far fetched inference.
The Appellate Judge also did not refer to other evidence to which pointed attention was directed in support of his conclusion, by the Assistant Collector Agra: for instance, Banwari Lal, Naib Registrar examined on behalf of the plaintiffs had clearly stated that Pritam Singh was not in possession of the land prior to 1359 Fasli and that Tota Ram who was examined as a witness stated that Pritam Singh was not in possession of the land and he had not given the land to Pritam Singh on lease, and that he did not receive rent from Pritam Singh.
We are unable, therefore, to hold that a conclusion arrived at only from an entry in the revenue records which does not prima facie support the case of Pritam Singh, that he wrong fully trespassed upon the land and cultivated it may be regarded as conclusive in Second Appeal.
The High Court was, in our judgment, right in reaching the conclusion that Pritam Singh was not in "cultivatory possession" of the land in 1359 Fasli within the meaning of section 3 of Act 31 of 1952.
Counsel for the appellants finally contended that the High Court was incompetent in this suit to grant a decree for possession of the land to the plaintiffs.
Counsel submitted that a suit for possession, even against a trespasser, could lie only in the Revenue Court and not in the Civil Court, and the High Court by allowing amendment of the plaint in the Second Appeal before it could not assume to itself the jurisdiction which the Civil Courts do not possess.
Our attention was not invited to any provision which enacts that even against a rank trespasser the Civil Court may not pass a decree, in favour of an owner of the land, in ejectment in respect of agricultural land.
But even assuming that the statute 625 law in the State of U.P. warrants that submission, we think that the High Court had jurisdiction in the circumstances of the Present case to allow amendment of the plaint and to grant a decree for possession.
it may be recalled that the plaintiffs had originally tiled a suit for a declaration of title and for injunction restraining Pritam Singh from interfering with their possession.
The land was at the date of the suit under attachment by the order of the Magistrate, Ist Class, Agra, in proceedings under section 145 of the Code of Criminal Procedure, started by Pritam Singh, and the Magistrate had directed the parties to establish their possession or right to possession in a competent Civil Court.
A suit for declaration and injunction in that state of affairs was Properly filed.
If the plaintiffs established their title to the land, they could claim an order from the Criminal Court for delivery of Possession, and an injunction restraining Pritam Singh from interfering with their possession was an appropriate relief.
But it ap pears that pursuant to the order of the First Appellate court Pritam Singh obtained possession from the Criminal Court and hereafter the plaintiffs amended the plaint with the leave of the High Court and a decree for possession was claimed.
When the High Court held in favour of the plaintiffs and rejected the claim made by Pritam Singh, in our judgment, the High Court was justified, and indeed bound, to avoid giving a fresh lease of life to his litigation, to make an order consistently with the rights declared by it, since Pritam Singh had during the pendency of the suit managed to obtain possession of the land from the Court Officer who was in possession of the land.
A party who is defeated on the merits of the dispute may not by securing an order from another Court during the pendency of a ,suit be permitted to displace the jurisdiction of the Civil Court to, try the suit which was within its competence when the suit was filed.
The appeal therefore fails and is dismissed with costs.
Appeal dismissed.
| Under s.10(1) of the Central Provinces and Berar Sales Tax Act 1947 every dealer required so to do by the Commissioner by notice, and every registered dealer, shall furnish such returns by such dates and so such authority as may be prescribed, and r.19 of the Rules framed under the Act provides that every registered dealer should furnish quarterly returns accompanied by a treasury challan in proof of payment of the tax payable.
If the registered dealer does not so furnish his return, the Commissioner may, after giving the dealer a reasonable opportunity assess him to the best of his judgment (4)(a).
Under s.11(4) (a).
Rule 32 prescribes that ordinarily not less than 30 days notice should be given to an assessee for submitting his explanation before action is taken under s.11(4)(a).
In 1953, s.11A was added to the Act.
Under s.11A(1) if in consequence of any information which has come into his possession, the other Commissioner is satisfied that any turnover of a dealer has escaped assessment, the Commissioner may, within three calendar years from the expiry of such period, after giving the dealer a reasonable opportunity of being heard, proceed to re assess the tax payable on any such turnover and also direct the dealer to pay a penalty.
In 1959, s.11A(3) was added by which, nothing in s.11A(1) shall apply to any proceeding including any notice under s.11, that is, the period of limitation of 3 years mentioned in s.11A(1) shall not apply to a proceeding under s.11(4)(a) on best judgment basis.
The appellants were registered dealers.
Their assessment year was from 1st November to 31st October.
They submitted their quarterly returns upto 30th April 1952.
Since no returns were submitted thereafter, on 13th September 1955, the assessing authority issued a notice with respect to the period 1st January 1953 to 31st December 1953 calling upon them to show cause why action should not be taken against them under s.11(4) (a).
A similar notice was issued on 27th October 1955 for the period 1st January 1954 to 31st December 1954, and on 7th July 1956, for the period 1st January 1955 to 31st December 1955.
The appellants repeatedly took time for submitting their explanation.
In 1958, fresh notices were issued for L/P(N) 7SCI (3)(a) 662 the calendar years1952 to 1955 and the appellants raised the objection, for the first time, that their assessment year was not the calendar year, but 1st November to 31st October.
In view of that objection, the first respondent issued another set of notices on 8th July 1959 for the periods 1st May 1952 to 31st October 1952, 1st November 1952 to 31st October 1953, 1st November 1953 to 31st October 1954 and 1st November 1954 to 31st October 1955 respectively.
The appellants contended that those notices were barred by the 3 year period of limitation under s.11A(1), but the assessing authority assessed the appellants on best judgment basis under section 11 (4) (a).
The appellants thereupon filed writ petitions in the High Court challenging the validity of the notices and the order of assessment, but the petitions were dismissed.
In appeals to this Court, the appellant contended that: (1) Section 11(4), (a) read with s.11A(3) contravenes article 14 of the Constitution, because, a registered dealer who had failed to submit his return could be proceeded against either under s.11(4)(a) or s.11A(1), but, whereas s.11A(1) provides a 3 year period of limitation, a proceeding under section 11(4)(a) could be initiated at any time in view of s.11A(3); (2) the notices of 1959 were barred by time; and (3) the notices of 1955 and 1956 were not valid, because, (a) the issue of one notice for several quarters was contrary to law, (b) that portion of the printed notice which said that the appellants had failed to furnish the return as required by a notice in that behalf served on them under s.10(1) did not apply to the appellants as no notice under s.10(1) had been given to them, (c) the assessment year mentioned in the notice was the calendar year which was not the assessment year of the appellants, and (d) though r. 32 provides that ordinarily not less than 30 days notice should be given to the assessee for submitting his explanation, the first notice gave to the appellants only 9 days time.
Held: (Per Wanchoo C. J., Mitter and Hegde, JJ.) (1) Section 11(4) (a) is void as it is violative of article 14.
The expression 'dealer ' in s.11A(1) includes both registered and unregistered dealers, and it cannot be contended that dealers are classified into registered and unregistered dealers, the former coming under s.11(4)(a) and the latter under s.11A(1).
To be a valid classification, it must not only be founded on an intelligible differential which distinguishes persons and things that are grouped together from others left out of the group, but that differentia must have a reasonable relation to the object sought to be achieved.
In the present case, both s.11(4)(a) and section 11A(1) are concerned with taxing escaped assessments, and judged from this object sought to be achieved by the Act, the classification of dealers into registered and unregistered dealers is not reasonable.
Therefore, even registered dealers are covered by section 11A(1).
As the 'information ' contemplated by s.11A(1) need not be from outside sources but could be gathered by the assessing authority from his own records, his knowledge of the facts that the appellants had not submitted quarterly returns and treasury challans and that they were notassessed to tax with respect to the turnovers in question constituted 'information ' to the assessing authority from which he could be satisfied that the turnovers had escaped assessment.
It would thus be open to the assessing authority to proceed against the appellants either under s.11(4)(a) or s.11A(1).
But as they were proceeded against under section 11(4)(a), they could not get the benefit of the limitation prescribed under section 11A(1).
It follows that section 11(4)(a) has become a discriminatory provision in view of section 11A(3), [672 B; 674 D E; 675 H; 676 A G].
663 Ghanshyam Das vs Regional Assistant Commissioner of Sales tax, Nagpur ; and Suraj Mall Mohta & Co. vs A, V. Visvanatha Sastri & Anr. ; , followed.
Maharaj Kumar Kamal Singh vs Commissioner of Income tax, Bihar & Orissa [1959] Supp. 1 S.C.R. 10, Commissioner of Incometax, Bombay City vs M/s. Narsee Nagsee & Co. Bombay, Salem Provident Fund Society Ltd. vs C. I, T. Madras, and United Mercantile Co. Ltd. vs Commissioner of Income tax, Kerala, referred to.
(2) But s.11(4)(a) is severable from the rest of the Act and its severance does not affect the implementation of the other provisions of the Act.
Therefore, the validity of the notices should be tested under s.11A(1).
So tested, the notices of 1959 are all barred by the 3 year period of limitation.
[676 G H].
(3) Since there was no valid notice for the period 1st May 1952 to 31st October 1952, there could be no assessment in respect of that period.
As regards the quarter 1st November 1952 to 31st January 1953 also, there was no valid notice.
The notice issued on 13th September 1955, no doubt refers to the period 1st January 1953 to 31st January 1953, but that is only a part of the quarter.
As a quarter is a unit in itself and there should be a notice for the entire quarter, the proceeding in respect of the quarter from 1st November 1952 to 31st January 1953 is also barred by limitation [677 E F].
But the notices issued in 1955 and 1956 are valid notices in so far as they relate to the period 1st February 1953 to 31st October 1955.
Any irregularity in the issue of the notices does not vitiate the proceeding, because, the liability to pay tax is founded on the charging sections.
[680 B C].
Chatturam & Ors.
vs C.I.T. Bihar, ; , applied.
Further, (a) The issue of one notice for several quarters is not contrary to law.
[678 E].
State of Orissa and Anr.
vs M/s. Chakobhai Chelabhai & Co. ; , followed.
(b) The assessing authority, by mistake, had failed to strike out the portion in the printed form which was inapplicable to the appellants who were registered dealers and on whom no notice need be served to furnish a return.
But this circumstance could not have prejudiced the appellants and such a mistake does not vitiate the notice.
[678 H].
Chakobhai Chelabhai 's case; , , followed.
(c) The mistake as regards the assessment year in the notices does not render the notices invalid.
The assesses deliberately kept silent and when they felt that the period of limitation prescribed by section 11A had expired, brought the fact to the notice of the authority.
The assesses were not prejudiced and could not be permitted to take advantage of such a mistake.
[679 G H].
(d) Rule 32 prescribes that ordinarily 30 days ' notice should be given.
Therefore, the period is not mandatory.
All that ss.11(4) and 11A require is that an assessee should be given a reasonable opportunity before he is proceeded against.
Since, in the present 664 A case, the appellants appeared before the assessing authority and did not object to the validity of the notices but asked for sub mitting their explanation, and as the time asked for was given, the appellants had a reasonable opportunity, for submitting their explanation.
[679 D G].
(Per Bachawat and Ramaswami JJ.) (1) Section 11(4) is not violative of article 14.
Construing ss.11(4)(a) and 11A(1) together it must be held that cases falling within s.11(4)(a) are excluded from the purview of S.11A(1).
Section 11(4)(a) specially provides for the initiation of proceedings against a registered dealer.
Having made this special provision, the legislature must be taken to have intended that the sales tax authorities must proceed against.
a registered dealer under s.11(4)(a) and not under s.11A(1).
[683 C B].
The classification and differential treatment of registered and unregistered dealers are based on substantial difference having a reasonable relation to the object of the Act.
The legislature did not prescribe a period of limitation for a proceeding initiated under section 11(4)(a) against a registered dealer, because, (i) the registered dealer is under a statutory obligation to file a return, (ii) no penalty is leviable under s.11(4) and (iii) the registered dealer is given many advantages under the Act which are denied to an unregistered dealer.
Therefore, the bar of limitation in the case of an unregistered dealer and the absence of such a bar in the case of a registered dealer cannot be regarded as unjust or discriminatory.[684 B, G H].
Ghanshyam Das vs Regional Assistant Commissioner of sales Tax Nagpur, [1964]4 S.C.R. 436, Maharaj Kumar Kamal Sing vs Commissioner of Income tax, Bihar & Orissa, [1959] Supp. 1 S.C.R. 10 and Commissioner of Income tax vs Narsee Nagsee & Co. , explained.
(2) Section 11A(3) expressly provides that nothing in section 11 A(1) shall apply to any proceeding including any notice under section 11 and the section is retrospective.
It follows that the period of limitation provided by s.11A(1) cannot be applied to a proceeding or notice under section 11(4).
Consequently, the impugned notices of 1959, issued under s.11(4) are not barred by limitation and are not invalid [682 H; 683 A].
Ghanshyam Das 's Case; , , referred to (3) Even the notices issued in 1955 and 1956 initiated proceedings validly under section 11(4) for the period from 1st February 1953 to 31st October 1955, as the irregularities in the notices did not invalidate them.
[685 B C].
|
Appeal No. 615 of 1966.
Appeal by special leave from the judgment and decree dated June, 25, 1962 of the Bombay High Court, Nagpur Bench in Appeal No. 191 of 1956 from original Decree,.
B. R. L. Iyengar, section K. Mehta, for the appellant.
section N. Kherdekar, G. L. Sanghi and A. G. Ratnaparkhi, for respondent No. 1.
The Judgment of the Court was delivered by Hegde, J.
One Prem Sukh was the owner of the suite pro perties.
Parvatibai was his wife They had no children.
Prem Sukh gifted some of his properties to his wife on June 14, 1943.
Dr. Madan Lal 's (1st respondent in this appeal) case is that Prem Sukh adopted him on July 12, 1943.
Thereafter it is said that Prem Sukh adopted on April 10, 1946, the appellant Vallabh Das.
On April 29, 1946, Dr. Madan Lal instituted a suit for a declaration that he is the adopted son of Prem Sukh and for partition and possession of his share in the family properties.
Prem Sukh denied the adoption pleaded by Dr. Madan Lal.
On the other hand he alleged that Vallabh Das was his adopted son.
In view of that allegation, Vallabh Das was added as a supplemental defendant in that suit.
No relief was claimed against him.
During the pendency of that suit Prem Sukh died.
Thereafter Dr. Madan Lal moved the court to withdraw the suit.
He was permitted to withdraw the same with liberty to file a fresh suit on the same cause of action on condition that he pays the defendants ' costs of that suit before instituting a fresh suit.
Thereafter Parvatibai bequeathed her properties to Dr. Madan Lal and died soon after.
The suit from which this appeal arises was brought on November 29, 1951 even before the costs of Vallabh Das (the appellant herein) in the previous suit had been paid.
Vallabh Das resisted the suit on various grounds.
He contended that Dr. Madan Lal was not adopted by Prem Sukh; even if he 213 had been adopted, that adoption was not valid under the Benaras School of Hindu law by which the parties were governed as Madan Lal was a married man on July 12, 1943 and lastly the suit as brought is not maintainable as Dr. Madan Lal had not paid the costs due to him under the order in the previous suit before instituting the present suit.
Both the trial court as well as the High Court in appeal rejected every one of the contentions taken by Vallabh Das and decreed the suit as prayed for.
Thereafter this appeal was brought after obtaining special leave from this Court.
The factum of the adoption has been upheld both by the trial court as well as by the High Court.
There is evidence to support that finding.
No convincing circumstance was brought to our notice requiring us to review the evidence over again.
This Court ordinarily does not interfere with concurrent findings of fact.
We see no justification to disturb the concurrent finding of fact arrived at by the trial court and the High Court.
As regards the validity of the adoption, the contention of Vallabh Das that the adoption was invalid rests on the plea that on July 12, 1943, Dr. Madan Lal was a married man.
This plea has been negatived by the trial court as well as by the High Court.
They have come to the conclusion that Dr, Madan Lal was not a married man on that date and that he was married subsequently.
Here again there is no good ground for us to interfere with the finding of fact reached by those courts.
The only contention that was seriously pressed before us on behalf of the appellant was that the suit under appeal is not maintainable as the condition precedent imposed by the court in the earlier suit namely the payment of defendants ' costs by the plaintiff before bringing a fresh suit on the same cause of action had not been complied with.
We do not think that this contention is well founded.
Rule 1, Order 23, Code of Civil Procedure empowers the courts to permit a plaintiff to withdraw from the suit brought by him with liberty to institute a fresh suit in respect of the subject matter of that suit on such terms as it thinks fit.
The terms imposed on the plaintiff in the previous suit was that before bringing a fresh suit on the same cause of action, he must pay the costs of the defendants.
Therefore we have to see whether that condition governs the institution of the present suit.
For deciding that question we have to see whether the suit from which this appeal arises is in respect of the same subject matter that was in litigation in the, previous suit.
The expression "subject matter" is not defined in the Civil Procedure Code.
It does not mean property.
That expression has a reference to a right in the property 214 which the plaintiff seeks to enforce.
That expression includes the cause of action and the relief claimed.
Unless the cause of action and the relief claimed in the second suit are the same as in the first suit, it cannot be said that the subject matter of the second suit is the same as that in the previous suit.
Now coming to the case before us in the first suit Dr. Madan Lal was seeking to enforce his right to partition and separate possession.
In the present suit he seeks to get possession of the suit properties from a trespasser on the basis of his title.
In the first suit the cause of action was the division of status between Dr. Madan Lal and his adoptive father and the relief claimed was the conversion of joint possession into separate possession.
In the present suit the plaintiff is seeking possession of the suit properties from a trespasser.
In the first case his cause of action arose on the day he got separated from his family.
In the present suit the cause of action, namely, the series of transactions which formed the basis of his title to the suit properties, arose on the death of his adoptive father 'and mother.
It is true that both in the previous suit as well as in the present suit the factum and validity of adoption of Dr. Madan Lal came up for decision.
But that adoption was not the cause of action in the first nor is it the cause of action in the present suit.
It was merely an antecedent even which conferred certain rights on him.
Mere identity of some of the issues in the two suits does not bring about an identity of the subject matter in the two suits.
As observed in Rakhma Bai vs Mahadeo Narayan(1), the expression "subject matter" in Order 23, Rule 1, Code of Civil Procedure means the series of acts or transactions alleged to exist giving rise to the relief claimed.
In other words "subject matter" means the bundle of facts which have to be proved in order to entitle the plaintiff to the relief claimed by him.
We accept as correct the observations of Wallis C.J. in Singa Reddi vs Subba Reddi(2), that where the cause of action and the relief claimed in the second suit are not the same as the cause of action and the relief claimed in the first suit, the second suit cannot be considered to have been brought in respect of the same subject matter as the first suit.
For the reasons mentioned above this appeal fails and the same is dismissed with costs.
G.C. Appeal dismissed.
(1)I.L.R. 42 Bom.1155.
| The appellant was convicted of the offence under section 302 I.P.C. Being a pauper he was defended by counsel at State expense.
The entire evidence was circumstantial and the dead body, when it was recovered, was in a, decomposed state and was incapable of identification.
Therefore, this Court, examined the evidence afresh, contrary to its settled practice and came to the conclusion that the evidence on record established the appellant 's guilt beyond all reasonable doubt.
With respect to three items of evidence, namely, (1) an extra judicial confession by the appellant to his nephew; (2) the 'recovery of the dead body as a result of the appellant 's statement; and (3) the conduct of the appellant in absconding immediately after the police suspected his complicity in the crime, HELD : (1) An unambiguous confession if admissible in evidence, and free from suspicion suggesting its falsity, is a valuable piece of evidence.
which possesses a high probative force because it emanates directly from the person committing the offence.
The Court, must however be satisfied that it is voluntary and was not the result of inducement, threat or promise as contemplated by section 24 of the Evidence Act and that the surrounding circumstances do not indicate that it was inspired by improper or collateral considerations.
For this purpose, the court must scrutinise all the relevant factors, such as the person to whom the confession is.
made, the time and place of making it, the circumstances in which it was made and finally, the actual words used.
[224 C] In the present case, the person to whom the extra judicial confession.
was made was not a person in authority and there was no question of any inducement, threat or promise.
Nor has any cogent reason been suggested as to why the appellant should have made an untrue confession within 24 hours of the disappearance of the deceased.
The appellant appears to have been impelled by some inner urge to take the assistance of his nephew to go to the place of occurrence and see what happened to the dead body, Such behaviours cannot be considered unnatural.
The confession is free from any taint which would throw suspicion on its voluntary character and it has a ring of truth in it.
The fact that during the investigation the nephew was also suspected of being involved in the murder would also not cast any doubt on the voluntary character of the confession or on its true nature, because, it was his knowledge derived from the confession that invited suspicion on him.
Further, though the evidence of the nephew does not require corroboration, the finding of the dead body and other articles and other evidence on record corroborate it in material particulars.
Therefore the confession to, the nephew is admissible in evidence and being true, deserves to be acted upon.
[224 E H] (2) When the nephew was suspected of complicity he would have in all probability, disclosed to the police the existence of the dead body and 216 the other articles at the place where they were actually found.
Therefore, it would, in the circumstances of the case, be unsafe to rely upon the information given by the accused, leading to the discovery of the dead body, for proving his 'guilt.
[225 D F] (3) Evidence of absconding is relevant as evidence of conduct under section 8 of the Evidence Act but the guilty mind of the accused is not the only conclusion that could be drawn by the Court, because, even innocent persons when suspected of grave crimes are tempted to evade arrest.
[225 G H]
|
Civil Appeals Nos.
272 1 & 2722 (N) of 1972.
From the Judgment and order dated 30.3.1972 of the Bombay High Court in First Appeal No. 440/62 and 577 of 1962.
Dr. D.Y. Chandrachud, section Dutt and P.H. Parekh for the Appelant.
A.M. Khanwilkar and Ajit section Bhasme for the Respondents.
The Judgment of the Court was delivered by THAKKAR, J.
Controversy is centred on the question of valuation of the lands under acquisition.
The trial Court had correctly valued the lands and the High Court had erroneously revised the valuation downwards complains the original owner of the land who is the appellant in these two allied appeals.
The lands in question situated in a locality known as 'Tigris Camp ' within the city limits of Poona in Maharashtra admeasuring 15 acres and 17 Gunthas, comprised in Survey Nos. 85 and 86, were 1.
By Certificate under Article 133( l)(a) of the Constitution of India as it existed at the material time.
534 placed under acquisition pursuant to a Notification under section 4 of the Land Acquisition Act published on March 8, 1956.
The acquisition was a part of the total acquisition of 101 acres 33 Gunthas made for a public purpose viz. for construction of the Headquarters, Poona Rural Police Charge.
The appellant was not satisfied with the compensation offered by the Land Acquisition officer in respect of his parcel of 15 Acres 7 Gunthas and applied for a reference being made under section 18 of the Land Acquisition Act.
Two references were made to a Civil Court under section 18 of the Land Acquisition Act for determining the market value of the lands for the purpose of awarding compensation to the appellants.
The Trial Court determined the market value of 2 1/4 acres forming part of Survey Nos. 85 and 86 at Rs.15,00 per acre.
Market value in respect of the remaining 13 acres and 7 Gunthas was determined at Rs.8692 per acre.
The present dispute is confined to valuation of 13 Acres 7 Gunthas forming part of Survey No. 85.
The High Court has reduced the total compensation payable in respect of the land in question from Rs.1,14,517 computed at Rs.8692 per acre to Rs.63,846 (which works out at Rs.4845.87 per acre) thereby reducing the compensation awarded to the appellant by Rs.50,554 in respect of this parcel of land.
Before tackling the problem of valuation of the land under acquisition it is necessary to make some general observations.
The compulsion to do so has arisen as the Trial Court has virtually treated the award rendered by the Land Acquisition officer as a judgment under appeal and has evinced unawareness of the methodology for valuation to some extent.
The true position therefore requires to be capsulized.
The following factors must be etched on the mental screen: (1) A reference under section 18 of the Land Acquisition Act is not an appeal against the award and the Court cannot take into account the material relied upon by the Land Acquisition officer in his Award unless the same material is produced and proved before the Court.
(2) So also the Award of the Land Acquisition officer is not to be treated as a judgment of the trial Court open or exposed to challenge before the Court hearing the Reference.
It is merely an offer made by the Land Acquisition officer and the material utilised by him for making his valuation cannot be utilised by the Court unless produced and proved before 535 it.
It is not the function of the Court to suit in appeal against the Award, approve or disapprove its reasoning, or correct its error or affirm, modify or reverse the conclusion reached by the Land Acquisition officer, as if it were an appellate court.
(3) The Court has to treat the reference as an original proceeding before it and determine the market value afresh on the basis of the material produced before it.
(4) The claimant is in the position of a plaintiff who has to show that the price offered for his land in the award is inadequate on the basis of the materials produced in the Court.
Of course the materials placed and proved by the other side can also be taken into account for this purpose.
(5) The market value of land under acquisition has to be determined as on the crucial date of publication of the notification under sec.
4 of the Land Acquisition Act (dates of Notifications under secs.
6 and 9 are irrelevant).
(6) The determination has to be made standing on the date line of valuation (date of publication of notification under sec.
4) as if the valuer is a hypothetical purchaser willing to purchase land from the open market and is prepared to pay a reasonable price as on that day.
It has also to be assumed that the vendor is willing to sell the land at a reasonable price.
(7) In doing so by the instances method, the Court has to correlate the market value reflected in the most comparable instance which provides the index of market value.
(8) only genuine instances have to be taken into account.
(Some times instances are rigged up in anticipation of Acquisition of land).
(9) Even post notification instances can be taken into account (1) if they are very proximate,(2) genuine and (3) the acquisition itself has not motivated the purchaser to pay a higher price on account of the resultant improvement in development prospects.
536 (l0) The most comparable instances out of the genuine instances have to be identified on the following considerations: (i) proximity from time angle, (ii) proximity from situation angle.
(11) Having identified the instances which provide the index of market value the price reflected therein may be taken as the norm and the market value of the land under acquisition may be deduced by making suitable adjustments for the plus and minus factors vis a vis land under acquisition by placing the two in juxtaposition.
(12) A balance sheet of plus and minus factors may be drawn for this purpose and the relevant factors may be evaluated in terms of price variation as a prudent purchaser would do.
(13) The market value of the land under acquisition has there after to be deduced by loading the price reflected in the instance taken as norm for plus factors and unloading it for minus factors (14) The exercise indicated in clauses (11) to (13) has to be undertaken in a common sense manner as a prudent man of the world of business would do.
We may illustrate some such illustrative (not exhaustive) factors: Plus factors Minus factors 1.
smallness of size.
largeness of area.
2. proximity to a road.
situation in the interior at a distances from the Road.
frontage on a road.
narrow strip of land with very small frontage compared to death.
nearness to developed area.
lower level requiring the depressed portion to be filled up.
regular shape.
remoteness from developed locality.
537 6.
level vis a vis land 6.
some special under acquistion.
disadvantageous factor which would deter a purchaser.
special value for an owner of an adjoining property to whom it may have some very special advantage.
(15) The evaluation of these factors of course depends on the facts of each case.
There cannot be any hard and fast or rigid rule.
Common sense is the best and most reliable guide.
For instance, take the factor regarding the size.
A building plot of land say 500 to 1000 sq.
yds cannot be compared with a large tract or block of land of say l000 sq.
yds or more.
Firstly while a smaller plot is within the reach of many, a large block of land will have to be developed by preparing a lay out, carving out roads, leaving open space, plotting out smaller plots, waiting for purchasers (meanwhile the invested money will be blocked up) and the hazards of an entrepreneur.
The factor can be discounted by making a deduction by way of an allowance at an appropriate rate ranging approx.
between 20% to 50% to account for land required to be set apart for carving out lands and plotting out small plots.
The discounting will to some extent also depend on whether it is a rural area or urban area, whether building activity is picking up, and whether waiting period during which the capital of the entrepreneur would be looked up, will be longer or shorter and the attendant hazards.
(16) Every case must be dealt with on its own facts pattern bearing in mind all these factors as a prudent purchaser of land in which position the Judge must place himself.
(17) These are general guidelines to be applied with understanding informed with common sense.
The problem which has surfaced in the present appeals needs to be recapitulated.
The question is whether in scaling down the total compensation payable to the appellant from Rs.1,14,517 to Rs.63,846, the High Court has violated any principle of valuation or adopted any faulty methodology.
538 The formula evolved by the High Court may be briefly outlined.
The High Court has taken into account the market value reflected in the instances pertaining to small parcels of land cited by the parties which on the analysis of the evidence have been considered as compar able subject to factors of differentiation.
The High Court has valued the land having best situation admeasuring 9 acres comprised in Survey No. 86 which abuts on the Ganeshkhand Road at Rs.20,000 per acre.
Having done so the market value reflected therein has been unloaded to account for the minus factors pertaining to the rest of the lands including the land in question.
The lands comprised in Survey No. 86 situated in the interior were valued at Rs.16,000 per acre, whereas lands abutting on Pashan Road were valued at Rs.12,000 per acre.
The appellant 's land, which was agricultural land albeit with future potential for development as building site, was situated far far in the interior in the midst of blocks of undeveloped land.
The formula for evaluation involved taking of three steps: (1) The High Court formed the opinion that allowance for largeness of block deserved to be made at 25% instead of 20% as done by the Trial Court.
(2) The High Court formed the opinion that the development would take about 12 years to reach the appellant 's land.
On these premises the High Court formed the opinion that the land of the appellant could be valued at Rs.7000 per acre as a block.
(3) The High Court directed that the market value so ascertained should be further depressed to account for the factor as regards the waiting period of 12 years which was the estimated period for development reaching the appellant 's land.
The 'present value ' of the land was accordingly de duced by depressing the valuation of Rs.7000 per acre by reference to Miram 's Tables on the basis of discount rate of 5% per annum to account for the factor that approximately 12 years would elapse before development could reach the appellant 's land.
That is how the total compensation payable to the appellant for the block of land admeasuring 13 acres 7 gunthas was determined at Rs.63,846 which works out at approximately Rs.4,845.87 per acre.
539 The valuation made by the High Court has been faulted on three A grounds: (1) The High Court should not have made a deduction of 25% in place of deduction made by the Trial Court at 20% to account for the factor pertaining to the largeness of the block of land under acquisition.
(2) The High Court had grossly undervalued the land in determining the market value of the appellants ' land at Rs.7,000 per acre.
(3) There was no warrant for pushing down or depressing the market value of land as determined by the Trial Court in order to deduce the 'present value ' by reference to Miram 's Tables to account for the factor as regards the estimated time lag for development reaching the block of land in question which was situated in the interior.
Besides, the time lag of 12 years as estimated by the High Court was excessive and unrealistic.
The first two grounds are devoid of merit.
It is common knowledge that when a large block of land is required to be valued, appropriate deduction has to be made for setting aside land for carving out roads, leaving open spaces, and plotting out smaller plots suitable for construction of buildings.
The extent of the area required to be set apart in this connection has to be assessed by the Court having regard to shape, size and situation of the concerned block of land etc.
There cannot be any hard and fast rule as to how much deduction should be made to account for this factor.
It is essentially a question of fact depending on the facts and circumstances of each case.
It does not involve drawing upon any principle of law.
It cannot be said that the High Court has committed any error in forming the opinion that having regard to the facts and circumstances of the case 25% deduction was required to be made in this connection.
The High Court cannot be faulted on this score.
The more serious grievance of the appellant however is that the High Court has depressed the market value excessively in evaluating the land in question at Rs.7,000 per acre as compared to the land abutting on the Ganeshkhand Road valued at Rs.20,000 per acre, the land abutting in the interior of Survey No. 86 valued at Rs.16,000, and land abutting on Pashan Road valued at Rs.12,000 per acre.
A glance 540 at the sketch on the record shows that the appellant 's land is situated very much in the interior as compared to the other parcels of land.
It is in the midst of large blocks of undeveloped land.
A hypothetical purchaser would not offer the same market value for lands with such a situation as lands which are nearer to the developed area and abut on a road or are nearer to a road.
The development of lands which are nearer to the developed area and nearer to the road can reasonably be expected to take place much earlier.
Only after such lands are developed and construction comes up, the development would proceed further in the interior.
It would not be unreasonable to visualize that a considerable time would elapse before development could reach the block of undeveloped land located in the interior.
Besides, the land which is situated in the interior does not fetch the same value as the land which is nearer to the developed area and nearer to the road.
If a hypothetical purchaser opts to purchase the land situated in the interior in the midst of an undeveloped area, he would doubtless take into account the factor pertaining to the estimated time for development to reach the land in the interior.
For, his capital would be unprofitably looked up for a very long time depending on the estimated time required for the development to reach the land in the interior.
Meanwhile he would have to suffer loss of interest.
It is, therefore, understandable that the land in the interior would fetch much smaller price as compared to the lands situated nearer to the developed locality.
More so as all these factors are incapable of precise or scientific evaluation.
The valuer has to indulge in some amount of guess work and make the best of the situation.
The High Court having accorded anxious consideration to all these factors of uncertainty has arrived at the valuation of Rs.7000 per acre.
Says the High Court in paragraph 51 of the Judgment: "This brings up for final consideration the plots which we have described as interior plots in all the survey numbers and which do not have a frontage on the roads.
A lower price will have to be provided for these plots, since the plot holders will have to spend moneys for getting water and drainage connections which are given only upto the Municipal Roads.
Then again, in our opinion, the interior plots would not be sold at all as long as any of the plots having a frontage on Pashan Road or Baner Road are sold, though once such plots have been disposed of the demand for interior plots would certainly pick up.
Here again, it is impossible to be precise in fixing the value; but in our opinion the interior plots may fairly be valued at Rs.7,000 541 per acre.
As stated earlier, the sales of these plots would commence after all the plots having a frontage on Pashan Road and Baner Road are disposed of i.e. after 12 years, and we may say that those plots would be sold within a period of about 4 years.
" It is not possible to find fault with the reasoning or conclusion of the High Court.
The High Court was day in and day out engaged in valuation of the lands in different parts of the state and was fully aware of the landscope.
There is no yardstick by which the future can be forseen with any greater degrees of preciseness.
The High Court has made the estimate as regards the time lag for development to reach the appellant 's land to the best of its judgment.
Having taken into account all the relevant factors, the High Court has arrived at the aforesaid determination.
And in doing so, the High Court has not committed any error or violated any principle of valuation.
It is purely a question of fact and it is not possible to detect any error even in the factual findings recorded by the High Court.
In fact the High Court has been extremely considerate and has approached the question of valuation with sympathy and understanding for the land owner.
The High Court did not opt for an easy way out by taking the view that since there was no comparable instance of undeveloped lands in the interior on the basis of which the valuation of the appellant 's land could be made, the Award made by the land Acquisition officer should remain undisturbed.
The High Court has done the best under the circumstances albeit by making recourse to some guess work which in the circumstances of the case was inevitable.
There is no material on the basis of which this Court can uphold the plea of the appellant that the valuation at Rs.7,000 per acre does not reflect the true market value or that the land in question is under valued.
The argument urged by the appellant in this behalf, under the circumstances, cannot be accepted.
Turning now to the third ground, it appears that the appellant 's grievance is justified.
The grievance is that there was no warrant for making any further deduction once the land was valued at Rs.7,000 as against the valuation of the best parcel of land at Rs.20,000 which was made precisely to account for the factor pertaining to its situation in the interior.
There was therefore no warrant for ascertaining the present value of Rs.7,000 as if Rs.7,000 would be fetched after 12 years.
Now the parcel of land admeasuring 13 acres 7 gunthas comprised in Survey No. 85 which was situated very much in the interior was valued by the Trial Court at Rs. 10,866 per acre (less 20% to account for roads etc.).
This parcel of land was valued at Rs.7,000 per acre by the High 542 Court.
The High Court had valued the land with the best situation on the Ganeshkhand Road at Rs.20,000 per acre.
As against this the appellant 's land was valued at mere Rs.7,000 per acre which reflected an unloading by Rs.13,000 per acre which works out at 65%.
This pushing down was made to account for its situation in the interior on the premise that development would take about 12 years to reach the land under acquisition.
If the appellant 's land just adjoined the land valued at Rs.20,000 per acre it would have been valued at the same figure of Rs.20,000.
It has been valued at Rs.7,000 per acre precisely because it is so situated that development would reach the appellant 's land after 12 years as estimated by the High Court.
But after 12 years it would become land adjoining to developed area and not land which could be treated as in the interior.
Therefore, if present value was to be ascertained it should be ascertained on the basis of present value of land which would fetch Rs.20,000 per acre after 12 years and not present value of land which would fetch Rs.7.000 per acre after 12 years.
In fact present value of Rs.20,000 payable at the end of 12 years at 8% would work out at Rs.6942 (.3971 x 20,000 = 6942)1.
The High Court was therefore right in valuing the land in interior at Rs.7,000 per acre but wrong in directing that present value of Rs.7,000 payable after 12 years should be ascertained.
The last ground is thus well founded .
In the result appellant must be awarded compensation at Rs.7,000 per acre subject to deduction or allowance of 25% to account for land required to be set apart for roads, open spaces etc.
In other words appellant will be entitled to be paid compensation for 13 acres 7 gunthas comprised in Survey No. 85 at Rs.5,250 per acre (Rs.7,000 less 25% i.e. Iess 1750=Rs.5,250) in place of the lesser sum awarded by the High Court.
Appeal must be partly allowed to this extent accordingly.
F The question however remains whether the appellant is entitled to the benefit of Central Amending Act (Act 68 of 1984) providing payment of solatium and interest at enhanced rates on the ground that present appeals were pending before this Court on 30th April, 1982.
The appellants would be entitled to the benefit thereof by virtue of section 30(2) of the Act if the view is taken that the said Act has retrospective operation in the sense that amended section 23(2) and section 28 apply also in relation to an order under appeal against an award made by the Collector of Court between April 30, 1982 and the commencement of the Amending Act.
This must depend on the deci 1.
See Mirarm 's Table 7 at 657 of A.K. Mitra 's Theory and Practice of Valuation (2nd Edition) Published by Eastern Law House.
543 sion of the Constitution Bench which is expected soon.
The appellant Will be entitled to the benefit of Central Amending Act (Act 68 of 1984) in case the Constitution Bench upholds the view expressed in Bhag Singh case [1985] 3 SCC p. 737 and overrules the view expressed in Kamalajammanniavaru Case [1985] 1 SCC p. 582.
In case the Constitution Bench affirms the view taken in Kamalajammanniavaru Case, the appellant will not be entitled to such benefit.
Appeal is partly allowed accordingly to the aforesaid extent.
Order passed by the High Court is modified to the corresponding extent.
Having regard to the facts and circumstances of the case there will be no order regarding costs in this Court.
S.L. Appeal allowed.
| The short point which arose for consideration in this case was whether without a prior agreement between two or more Regional Transport Authorities of the regions through which an inter regional route passes, it was open to any one of the said Regional Transport Authorities to grant a permit to ply a stage carriage on the said inter regional route under the provisions of the ( 'the ').
The North Bihar Regional Transport Authority invited applications for granting stage carriage permits in respect of inter regional routes connecting certain places within its jurisdiction and certain other places within the jurisdiction of the South Bihar Regional Transport Authority.
The petitioner filed a writ petition in the High Court, questioning the power of the North Bihar Regional Transport Authority to grant permits above said without a prior agreement between it and the South Bihar Regional Transport Authority.
The High Court dismissed the writ petition.
Aggrieved by the order of the High Court, the petitioner moved this Court for relief by this petition for special leave.
Dismissing the petition, the Court, ^ HELD: Under section 45(1) of the , an application for a permit for a vehicle proposed to be used in two or more regions within the same State, has to be made to the Regional Transport Authority of the region in which the major portion of the proposed route or area lies, and in case the portion of the proposed route or area in each of the regions is approximately equal, to the Regional Transport Authority of the region in which it is proposed to keep the vehicle.
[596F G] 594 Under section 63 of the , in the absence of any rules to the contrary under the , a permit granted by the Regional Transport Authority of one region is not valid in any other region unless the permit has been counter signed by the Regional Transport Authority of the other region, while counter signing a permit, it is open to the Regional Transport Authority of the other region to impose its own conditions which it might have imposed if it had granted the permit.
If there are any rules framed by the State Government under the , they supersede the provisions of section 63.
If there is an agreement between the States concerned with regard to the grant and the counter signature of the permits, then it is not necessary to comply with the procedure prescribed by section 63, for counter signature of permits.
In this case, the provisions of section 63 of the applied to all the inter regional permits in the State of Bihar.
as no rule framed under the by the State of Bihar regarding the procedure to be followed in the case of counter signature of permits was brought to the notice of the Court.
[598R H;599A] Section 47(3) being inapplicable to the inter State or inter regional permits, it is open to the Regional Transport Authority concerned to decide whether there is any necessity to issue the permit applied for.
The does not contain any procedure for two or more Regional Transport Authorities entering into an agreement before an application for an inter regional permit is granted.
The only provision which provides for an agreement to be arrived at for purposes of counter signature is the agreement between two or more States referred to in the first proviso to sub section (3) of section 63 of the .
An inter State agreement of that nature can be arrived at only after following the procedure prescribed under sub section (3A) of section 63 when it is open to the parties affected by the proposal to make representations.
In one sense, the procedure prescribed in sub section (3A) of section 63 takes the place of procedure to be followed by a Regional Transport Authority while granting or counter signing permits.
In this case, since there is no provision in the or in the Rules made by the State Government, requiring the existence of such a prior agreement, it is difficult to hold that in the absence of such a prior agreement between the Regional Transport Authorities concerned, an application for the grant of an inter regional permit should not be taken up for consideration by a Regional Transport Authority which had the jurisdiction to grant it under section 45 of the .
If a permit is issued by a Regional Transport Authority and it is not counter signed by the other Regional Transport Authority, the permit will not be effective in the other region.
What has been observed above is in accord with the deci 595 sion of a Constitution Bench of this Court in M/s. Bundelkhand Motor Transport Co., Nowgaon vs Behari Lal Chaurasia and Anr., [599B; 601F G; 602E G] The North Bihar Regional Transport Authority had jurisdiction to consider the applications for the grant of the inter regional permits in question.
After they were granted, it was open to the South Bihar Regional Transport Authority to consider whether they should be counter signed or not after following the prescribed procedure.
The High Court was right in dismissing the Writ Petition.
[603C D] Mohd. lbrahim etc.
vs State Transport Appellate Tribunal, Madras, etc., ; M/s. Bundelkhand Motor Transport Company, Nowgaon vs Behari Lal Chaurasia and Another, ; , referred to.
|
No. 1810 of 1971.
(Appeal by Special Leave from the Judgment and Order dated 1.3.1971 of the Orissa High Court in O.J.C. No. 1597 of 1968) AND C.A. No. 1170 of 1972 (Appeal by Special Leave from the Judgment and Order dated 8.3.1971 of the Orissa High Court in O.J.C. No. 316 of 1970) AND Civil Appeal No. 1981 of 1972 (Appeal by Special Leave from the Judgment and Order dated 28.3 .1971 of the Orissa High Court in O.J.C. No. 1885 of 1968) AND Civil Appeal No. 1982 of 1972.
(Appeal by Special Leave from the Judgment and Order dated 28.6.1971 of the Orissa High Court in O.J.C. No. 153 of 1971) AND Civil Appeal No. 1603 & 1604 of 1972 716 (Appeal by Special Leave from the Judgment and Order dated 2.3.1971 of the Orissa High Court in O.J.C. Nos. 202 and 203 of 1969.) A.K. Sen, Bishamber Lal Khanna and Bishamber Lal for the appellants in CA No. 1810/71.
A.K. Sen, (CA No. 40/72) H.R. Gokhale (CAs 1603 1604) Gobind Das (CAs 1170, 198, 1982, SLPs and for the interven ers) Bijoy Mohenty, Mrs. Sunanda Bhandare, M.S. Narsimhan, A. K. Mathur, A.K. Sharma and Miss Malini Poduval for the appellants in CA Nos.
1170, 1981 1982, 1603 1604 of 1972 and CA No. 40/72 and in the SLPs Nos. 305 310/72 and for the Interveners.
G. Rath, Adv.
During the pendency of the writ petitions filed by the appellants in the Orissa High Court, the Orissa Legislature passed the Orissa Taxation (on Goods carried by Roads or Inland Waterways) Validation Act, 18 of 1962, validating the Act of 1959.
The High Court accepted the appellants ' contention that the Act of 1959 was unconstitutional but it dismissed the Writ petitions on the ground that the appellants were not entitled to any relief as they had not challenged the Act of 1962 which had validated the Act of 1959.
After the decision of the High Court.
respondent No. 2, the Tax Officer, assessed tax in varying amounts for different quarters on the goods carried by the appellants by road.
The appellants then filed fresh writ petitions under article 226 of the Constitution challeng ing the Act of 1962.
Those petitions were dismissed by the High Court but in appeal, the judgment of the High Court was set aside by this Court on August 10, 1967.
It was held by this Court that the Validating Act of 1962 did not cure the defect from which the Act of 1959 suffered and therefore, respondents were not entitled to recover any tax from the appellants under the aforesaid Acts.
On March 25, 1968 the Orissa Legislature, having ob tained the previous sanction of the President to the moving of the Bill. passed the Orissa Taxation (on Goods carried by Roads or Inland Waterways) Act, 8 of ' 1968, imposing the same levy which it had unsuccessfully attempted to levy under the Act of 1959 and to validate under the Act of 1962.
Some of the appellants from whom the State Government had recovered taxes after the Act of 1962 was upheld by the High Court asked for refund thereof after that Act was declared unconstitutional by this Court.
The refund having been refused by the Governments, the appellants filed writ peti tions in the High Court 717 challenging the validity of the 1968 Act.
The dismissal of those writ petitions has given rise to these appeals by special leave.
There is no substance in any of the contentions raised on behalf of the appellants regarding the constitutionality of the Act of 1968.
The bill which matured into the impugned Act was introduced by the Orissa Legislature after obtaining the previous sanction of the President under the Proviso to article 304 of the Constitution.
As shown by the Preamble, the Act was passed in order to provide for the level of tax on certain goods carried by roads or inland waterways in the State of Orissa and to validate certain taxes imposed on such goods.
By section 1 (3), the Act was to be deemed to have come into force on April 27, 1959 being the date on which the Act of 1959 had come into force.
Section 3 of the Act which contains the charging provision provides that there shall be levied a tax on goods of the description mentioned in the section and carried by means specified therein.
Section 27 of the Act provides in so far as material that notwithstanding the expiry of the Act of 1959 and notwith standing anything contained in any judgment, decree or order of any Court, all assessments made, all taxes imposed or realised, any liability incurred or any action taken under the Act of 1959 shall be deemed to have been validly made, imposed, realised, incurred or taken under the corresponding provisions of the Act of 1968.
These provisions of the Act of 1968 show that what the State legislature did thereby was to enact, with retrospective effect, a fresh piece of taxing statute after complying with the constitutional mandate contained in the proviso to article 304 that no Bill for the purposes of clause (b) of the Article shall be introduced or moved in the Legislature of a State without the previous sanction of the President.
The reliance of the appellants on the judgment of this Court in Jawaharmal vs State of Rajasthan(1) is wholly misconceived.
In that case, section 4 of the impugned Act of 1964 in truth and substance provided that the failure to comply with the constitutional mandate of Presidential sanction shall no.t invalidate the Finance Acts of 1961 and 1962.
It was held by this Court that it was not competent to the legislature to pass an Act providing that an earlier Act shall be deemed to be valid even though it did not company with the requirements of the Constitution.
In the instant case, the State Legislature passed an independent enactment in 1968 after complying with the constitutional requirement but it gave to that enactment retrospetive effect from the date that the 1959 Act had come into force and it created a legal fiction, which was permissible for it to do, that all actions taken under the Act of 1959 shall be deemed to have been taken under the Act or 1968.
Mr. Gobind Das, appearing on behalf of some of the appellants, raised points commonly associated with high constitutional concepts, but lacking in substance.
He urged that the Act of 1968 is a piece of colourable legislation, that it constitutes a flagrant encroachment on (1) ; 718 the functions of the judiciary and that since the Act has no operation in futuro and operates only on the dead past, it is void as lacking in legislative competence.
Learned counsel also employed the not unfamiliar phrase that the Act is a fraud on the Constitution.
Happily all ' of these attacks, in so far as they at all require an answer,"can be met effectively in a brief compass.
In Khyerbari Tea Co. Ltd. vs State of Assam(1), it was held by this Court that article 304(b) of the Constitution does not require that laws passed under it must always be prospective.
Nor was it correct to say that once the State Legislature passes an Act without recourse to that Article and that Act is struck down, the Legislature cannot re enact, that Act under that article and give it retrospective effect.
The Court fur ther held in Khyerbari (supra) that the mere fact that a validating taking statute has.
retrospective operation does not change the character of the tax ' nor can it justify the Act being branded as a colourable piece of legislation in any sense.
We may only add that since it is well settled that the power to legislate carries with it the power to legislate retrospectively as much as prospectively, the circumstance that an enactment operates entirely in the past and has no prospective life cannot effect the competence of the legislature to pass the enactment, if it fails within the list on which that competence can operate.
As regards the power to pass a validating Act, that power is essen tially subsidiary to the legislative competence to pass a law under an appropriate: entry of the relevant list.
Thus the impugned enactment is a valid exercise of legislative power and is in no sense a fraud on the Constitution.
As regards the alleged encroachment by the legislature on fields judicial, the argument overlooks that the Act of 1968 does not, like the Act under consideration in Jawahar mal(2), declare that an invalid Act shall be deemed to be valid.
It cures the constitutional vice from which the Act of 1959 suffered by obtaining the requisite sanction of the President and thus armed, it imposes a new tax, though with retrospective effect.
Imposition of taxes or valida tion of action taken under void laws is not the function of the judiciary and therefore, by taking these steps the legislature cannot be accused of trespassing on the preserve of the judiciary.
Courts have to be vigilant to ensure that the nice balance of power so thoughtfully conceived by our Constitution is not allowed to be upset but the concern for safeguarding the judicial power does not justify conjur ing up trespasses for invalidating laws.
There is a large volume of authority showing that if the vice from which an enactment suffers is cured by due compliance with the legal or constitutional requirements, the legislature has the ' competence to validate the enactment and such validation does not constitute an encroachment on the functions of the judiciary.
The validity of a validating taxing law depends upon whether the legislature possesses the compe tence over the subject matter of the law, whether ' in making the validation it has removed the defect from which the earlier enactment suffered and whether it has made due and adequate provision in the validating law for a valid imposi tion of the tax; ( See, for example Prithvi Cotton Mills vs Broach Borough Municipality(3) (1) ; (2) ; (3) [1970]1 S.C.R. 388. 719 Tirath Ram Rajindra Nath vs State of U.P.(1); Government of Andhra Pradesh vs Hindustan Machine Tools Ltd.(2).
The passage from Cooley 's ConstitutiOnal Limitations ' (Ed. 1927, Vol.
I, p. 183) that a legislative act is a "pre determination of what the law shall be for the regulation of all future cases falling under its provisions" does not bear upon the power of the legislature to pass laws which are exclusively retrospective.
Mr. Gobind Das 's reliance on that passage cannot therefore further his contention.
Mr. Gokhale, who appears on behalf of some of the appel lants, attempted to challenge the Act of 1968 on the ground of unreasonableness but he did not pursue that argument.
But he made another point which requires some attention.
The appellants or some of them, did not challenge the orders of assessment passed against them as the Acts of 1959 and 1962 were held unconstitutional.
Counsel 's apprehen sion is that any appeal filed hereafter for challenging the assesSment made under the earlier Acts would be barred by limitation and the appellants would be deprived of their statutory right to question the correctness of the assess ment.
This apprehension is unfounded because the 2nd proviso tO section 12 of the Act of 1968 empowers the appropriate authority to admit an appeal after the period of limitation is over if it is satisfied that the dealer had sufficient cause for not preferring the appeal within the said period.
Sub section (3) confers on the Commissioner the power of revision and sub section (4) of section 12 confers the power of review subject to the rules made under the Act.
We have no doubt that if any appeal challenging.
an order of assessment is filed beyond the period of limitation and the authority is satisfied that the appeal could not be filed within limitation for the reason that the Acts of 1959 and 1962 were held to be unconstitutional, the delay in filing the appeal would be condoned.
We are equally confident that if any appeal filed for challenging an order of assessment was withdrawn or not pursued for the reason that the two Acts were held unconstitutional, the authority concerned would pass appropriate orders reviving the appeal.
We are happy to note the assurance of the learned Advocate General of the State of Orissa that the State will not oppose in such cases the condonation of delay or the revival of appeals.
For these reasons we dismiss the appeals but there will be no order as to costs.
The Special Leave Petitions which were kept pending to await the decision of these appeals are hereby dismissed.
We may take this opportunity to dwell upon the incon venience resulting from the enactment of article 144A which was introduced by the 42nd Amendment to the Constitution.
That article reads thus: "Special provisions as to disposal of ques tions relating to Constitutional validity of laws.
(1) [1975] Supp S.C.R. 394.
720 "144A (1) The minimum number of Judges of the Supreme Court who shall sit for the purpose of determining any question as to the Constitu tional validity of any central law or State law shall be seven.
(2) A Central law or a State law shall not be declared to be constitutionally invalid by the Supreme Court unless a majority of not less than two thirds of the Judges sitting for the purposes of determining the question as to the constitutional validity of such law hold it to be constitutionally invalid."" The points raised in these appeals undoubtedly involve the determination of questions as to the constitutional validity of a State law but they are so utterly devoid of substance that Mr. Asoke Sen and Mr. Gokhale who appear for the appel lants could say nothing in support of their contentions beyond barely stating them.
Were it not for the valiant, though vain, attempt of Mr. Gobind Das to pursue his points, the appeals would have taken lesser time to dispose of than for a Court of seven to assemble.
Article 13(3)(a) of the Constitution defines "law" to include any Ordinance, Order, bye law, rule, regulation, notification etc.
having the force of law with the result that seven judges of this Court may have to sit for determining any and every question is to the constitutional validity of even orders and notifica tions issued by the Government, which have the force of law.
A Court which has large arrears to contend with has now to undertake an unnecessary burden by seven of its members assembling to decide all sorts of constitutional questions, no matter what their weight or worth.
It is hoped that article 144A will engage he prompt attention of the Parliament so that it may, be general consensus, be so amended as to leave to the Court itself the duty to decide how large a Bench should decide any particular case.
S.R. Appeals dismissed.
| In Appeal No. 1347(N) 1977 by special leave against the interlocutory orders dated 21 4 1977 of the Company Judge of the Calcutta High Court in the company petition No. 85/75, filed by the respondents sections 397/398 of the Companies Act, '1956, complaining of oppression by majority and praying for certain reliefs against the appellants and also the orders dated 25 4 1977 of the Division Bench against that order, this Court made an order on 31 5 1977, in terms of an agreement reached between the par ties.
By one such term the company was directed to purchase 1300 shares held by the respondents petitioners.
The price of the shares was to be determined by Messrs. Price Water House and Peet, Chartered Accountants and Auditors, as on the date of the filing of the petition sections 397 398, on the basis of the existing as also contingent and anticipated debts, liabilities, claims, payments and receipts of the ' company.
The Chartered Accountants were to determine the value of the shares after examining accounts and calling for necessary explanations and after giving opportunity to both the groups to be heard in the matter and the determination of the value by the Chartered Accountants was to be final and binding and not open to any challenge by either side on any ground whatsoever.
After such determination of the value the company has to purchase the shares, and, on such purchase, the share capital of the company was to stand reduced protanto.
The order made it ;fear that if the value of the shares is more than Rs. 65/ per share, the company will have to pay the balance, and, if it is less than Rs. 65/ per share, the respondents who have to sell the shares, will have to refund the difference between.
the price of the shares calculated at the rate of Rs. 65/ per share and the rate determined by the Chartered Accountants and Auditors within four weeks from the date of determination.
After the appeal was thus disposed of, the interveners, claiming to be the creditors of the company to the extent of 40 lakhs, in their petition dated 22 8 1977 requested the Court (i) to permit them to be heard and (ii) to postpone the purchase of shares by the company until such time as the company adopts proceedings in a competent court by following the procedure laid down by the , particularly in Sections 100 to 104 for reduction of the share capital.
In the alternative they prayed for safeguarding their interests by modifying the Court 's order dated 31 5 1977.
Rejecting the petition to interfere with its order dated 31 5 1977, the Court, after hearing the interveners, HELD : (i) Section 77 envisages that, on the purchase by a company of its own shares, reduction of its share capital may be effected and sanctioned in either of two different modes : (i) according to the procedure prescribed in Sections 100 to 104; or (ii) under section 402, depending upon the circumstances in which reduction becomes necessary.
[427E F] (ii) Section 77 of the prohibits the company from buying its own shares unless the consequent reduction of capital is effected and sanctioned in pursuance of Sections 100 to 104 or Section 402.
It places an embargo on the company purchasing its own shares so as to become its own member, but the embrago is lifted, if the company reduces its share capital protanto.
[427E] 423 (iii) Section 77 leaves no room for doubt that reduction of share capital may have to be brought about in two different situations by two different modes.
Undoubtedly, where the company has passed a resolution for reduction of its share capital and has submitted it to the Court for confirmation, the procedure prescribed by Sections 100 to 104 will have to be followed, if they are attracted.
On the other hand, where the Court, while disposing of a petition under Ss. 397 and 398, gives a direction to the company to purchase shares of its own members, consequent reduction of the share capital is bound to ensue, and, before making such a direction it is not always necessary to give notice of the consequent reduction of the share capital to the creditors of the company.
No such requirement is laid down by the Act.
The two procedures ultimately bringing about reduction of the share capital are distinct and separate and stand apart from each other; and one or the other may be resorted to according to the situation.
That is the clearest effect of the disjunctive 'or ' in section 77.
[428H, 429AB] (iv) Where the reduction of share capital is necessitated by directions given by the Court in it petition under sections 397 and 398, the procedure prescribed in Sections 100 to 104 is not required to be followed in order to make the direction effective.
[428G] (v) It would not be correct to say that, whenever it becomes necessary to reduce the capital of a company, the reduction can be brought about only by following the procedure prescribed in Ss. 100 to 104.
Sections 100 to 104 specifically prescribe the procedure for reduction of share capital where the Articles of the company permit and the company adopts a special resolution which can only become effective on the Court according sanction to it.
Reduction of share capital may also take pursuant to a direction of the Court requiring the company to purchase the shares of a group of members while granting relief u/s 402.
Both the procedures, by which reduction of capital of a company may be effected, are.
distinct and separate and stand apart from each other.
[427F H] (vi) The scheme of Ss. 397 to 406 is to constitute a code by itself for granting relief to oppressed minority shareholders and for granting appropriate relief, a power of widest amplitude, inter alia, lifting the ban on company purchasing its share under Court 's direction, is conferred on the Court.
When the Court exercises this power by directing a purchase of its shares by the company, it would necessarily involve reduction of the capital of the company.
Such a power of the Court is not subject to a resolution to be adopted by the members of the company which, when passed with, statutory majority, has to be submitted to Court for confirmation.
No canon of construction would permit such an interpretation in which the statutory power of the Court for its exercise depends upon the vote of the members of the company.
[428C E] (vii) If reduction of share capital can only be brought about by resorting to the procedure prescribed in Ss. 100 to 104, it would cause inordinate delay and the very purpose of granting relief against oppression would stand self defeated.
[428E F] (viii) When minority shareholders complain of oppression by majority and seek relief against oppression from the Court under Ss. 397 and 398 and the Court, in a petition of this nature, considers it fair and just to direct the com pany to purchase the shares of the minority shareholders to relieve oppression, if the procedure prescribed by Ss. 100 to 104 is required to be followed, the resolution will have to be first adopted by the members of the company, but that would be well nigh impossible because the very majority against whom relief is sought would be able to veto it at the threshold and the power conferred on the Court would be frustrated.
That could never have been the intention of the Legislature.
[428F H] (ix) The object_behind prescribing this procedure requiring, in special circumstances as contemplated in Section 101(3), the court to give notice to the creditors is that the members of the company may not unilaterally act to the detriment of the creditors behind their back.
If such a procedure were not prescribed, the Court might, unaware of all the facts, be persuaded by the members to confirm the resolution and that might cause, serious prejudice to the creditors.
But such a situation would not be likely to arise in a petition 424 under Ss. 397 and 398.
In such a petition the Court would be in a better position to have all the relevant facts and circumstances before it and it would be the Court which would decide whether to direct purchase of shares of the members by the company.
Before giving such a direction, the Court Would certainly, keep in view all the relevant facts and circumstances, including the interest of the creditors.
Even if the petition is being disposed ' of on a compromise between the parties, yet the Court, before sanctioning the compromise, would certainly satisfy itself that the direction proposed to be given by it pursuant to the consent terms, would not adversely affect or jeopardise the interest of the creditors.
Therefore, it cannot be said that merely because section 402 does not envisage consent of the creditors before the Court gives direction for reduction of share capital consequent upon purchase of shares of some of the members by the company.
there is no safeguard for the creditors.
[430EH] In the instant case, there is no scope for apprehension on behalf of the interveners that the reduction of share capital to be effected under the Court 's direction, without reference or notice to creditors, would adversly affect their interests because : (1) As per the order of the Court dated 31st May, 1977 while ascertaining the break up value of the shares on the date of filing the petition under Sections 397 and 398, the Chartered Accountants and Auditors will have to take into account the assets of the company as also the existing, contingent and anticipated debts, liabilities, claims, and demands etc., as revealed in the accounts of the company for the last five years, which would indisputably include the claims made by the interveners in the two suits filed by them to the extent to which they appear genuine and well founded and.
(ii) the order of the Court did not fix any minimum price at which the shares shall be purchased by the company.
[431A C, D] (x) A right to notice by reason of any rule of natural justice, which a party may establish, must depend for its existence upon proof of an interest which is bound to be injured by not hearing the party claiming to be entitled to a notice and to be heard before an order is passed.
If the duty to give notice and to hear a party is not mandatory, the actual order passed on a matter must be shown to have injuriously affected the interest of the party which was to be given no notice, of the matter.
[431G] In the instant case, after hearing the intervener , it was found that no interest of theirs has been injured by not hearing them before the order was passed.
The order passed by this Court on 31st May, 1977, is not vitiated on the ground of non issue of notices to them under the inherent powers of the Court under Rule 9 of the Company (Court) Rules, 1959, even though there was no statutory duty to hear them.
[431H. 432A] (xi) Undoubtedly, when a petition is made to the Court under Ss. 397 and 398, it is obligatory upon the Court to give notice u/s 400 of the petition to the Central Government and it would be open to the Central Government to make a representation and if any such representation is made, the Court would have to take it into consideration before passing the final order in the proceeding.
But Section 400 does not envisage a fresh notice to be issued at the appellate stage.
[432C D] (The Court directed to expedite the suit Nos.
729/74 and 933/76 filed by the interveners in the Bombay High Court and dispose off within a period of six months).
|
Appeal No. 252 of 1956.
Appeal from the judgment and decree dated September 29, 1953, of the Rajasthan High Court (Jaipur Bench) in Civil Writ Application No. 28 of 1951.
Gopal Singh and T. M. Sen, for the appellants.
section N. Andley, J. B. Dadachanji and P. L. Vohra,for the respondent.
January 19.
The Judgment of the Court was delivered by SINHA, C. J.
This appeal on a certificate granted by the Jaipur Bench of the High Court of Judicature for Rajasthan that " the case involves a substantial question of law as to the interpretation of articles 277, 278, 294 and 295 of the Constitution of India and the case is a fit one for appeal to the Supreme Court under article 132(1) and also under article 133(1)(c) of the Constitution of India" is directed against the judgment dated September 29, 1953, of the High Court of Judicature for Rajasthan at Jaipur to the effect that the appellant, the Union of India, was not entitled to levy and recover arrears of excise duty on cotton cloth for the period April 1, 1949, to March 31, 1950, from the respondent, the Maharaja Krishnagarh Mills Ltd. The facts of this case, which have not been in dispute at any stage of the proceedings, may shortly be stated as follows.
The respondent is a cloth mill located in Krishnagarh in District Jaipur in the State of Rajasthan.
It had a stock of manufactured cloth on April 1, 1949, and also manufactured cloth during the period, April 1, 1949, and March 31,1950.
In respect of such cloth an excise duty became payable under the Rajasthan Excise Duties Ordinance, 1949 (XXV of 1949), at rates set forth in the schedule to the Ordinance.
The sum of Rs. 1,56,291 odd became payable on that account out of which only a sum of Rs. 19,739 odd was paid to the Government of Rajasthan, thus leaving the sum of Rs. 1,36,551 odd outstanding against the respondent.
After the Indian Constitution came into effect the Central Excise and 526 Salt Act, 1944, and the rules framed thereunder were extended to the State of Rajasthan by section 11 of the Finance Act of 1950.
Hence, the duty became payable in respect of the cloth manufactured on and from April 1, 1950, under the provisions of that Act.
The appellant claimed that as a result of the agreement between the Government of India and the State of Rajasthan, to be noticed hereinafter in detail, and of the Constitution, the Union of India became entitled to realise the arrears of the excise duty in respect of the cloth manufactured by the respondent before April 1, 1950.
In enforcement of that claim the Superintendent of Central Excise, Jaipur, served a notice dated February 16, 1951, on the respondent demanding payment of the outstanding amount of Rs. 1,36,551 odd.
The respondent thereupon filed a writ petition in the High Court of Rajasthan, Jaipur, under article 226 of the Constitution against (1) the Union of India, (2) the Central Board of Revenue, Delhi, (3) the Collector of Central Excise for Rajasthan, Delhi, and (4) the Superintendent of Central Excise, Jaipur, who are the appellants before us, praying for a writ of prohibition against them prohibiting them from imposing, levying or collecting any tax or duty by way of excise as also for any appropriate direction, order or writ.
The writ petition was founded on the contentions that the notice of demand served upon the respondent as aforesaid was illegal and unauthorised on the ground (1) that the Central Government had no jurisdiction to levy any tax before January 26, 1950, (2) that the Central Excise and 'Salt Act was not in force in Rajasthan before April 1, 1950, and (3) that without the application of the rules framed by the Central Government under section 37 of the Central Excise and Salt Act, 1944, to Rajasthan no duty could be imposed, levied or collected and those rules were made applicable to Rajasthan only on December 16, 1950.
On behalf of the appellants, who were the respondents in the High Court, it was contended that it was got correct to say that the rules framed under s, 37 527 of the Central Excise and Salt Act, 1944, were made applicable to the State of Rajasthan by virtue of the notification dated December 16, 1950, and it was asserted that those rules became applicable to the State of Rajasthan with effect from April 1, 1950, as a result of section 11 of the Finance Act, 1950.
It was also contended that by virtue of section 3 of Rajasthan Excise Duties Ordinance (XXV of 1949) promulgated by His Highness the Rajpramukh of Rajasthan on September 5, 1949, excise duty was levied on cloth and other articles produced and manufactured in Rajasthan on and after April 1, 1949, at the rates set forth in the first schedule of the said Ordinance.
It was also contended that in pursuance of articles 278 and 295 of the Constitution the President of India had entered into an agreement with the Rajpramukh of Rajasthan on February 25, 1950, whereby the parties agreed to accept the recommendations of the Indian States Finance Enquiry Committee, 1948 49, contained in part I of its report, read with chapters 1, 11 and III of part II of its report, in so far as they applied to the State of Rajasthan together with the recommendations contained in Chapter VIII of part 11 of the said report.
By virtue of the said agreement the Union of India became entitled to claim and recover all excise duties, whether assessed or un assessed, which the State of Rajasthan was entitled to recover from the respondent as from April 1, 1949, before the Central Excise and Salt Act, 1944, was extended to the State of Rajasthan, as aforesaid.
The matter was first heard by a Bench consisting of Ranawat and Sharma, JJ., which, in view of the importance of the points involved in the case, referred the following two points for decision by a larger Bench by its judgment dated November 5, 1951: " 1.
Whether by virtue of Articles 278, 279 and 295 of the Constitution of India and the agreement entered into between the President of India and the Rajpramukh of Rajasthan on the 25th of February, 1950, the Union of India is entitled to levy and recover arrears of excise duty on cloth held in stock or manufactured before the 1st of April, 1950, 68 528 in case excise duty thereon was payable to the State of Rajasthan under the provisions of the Rajasthan Excise Duties Ordinance No. 25 of 1949 ? 2.
Whether the publication of the Government notification by which the Jaipur Excise Rules were adopted under the provisions of the Rajasthan Excise Ordinance was sufficient publication within the meaning of section 28 of the Rajasthan Excise Duties Ordinance No. 25 of 1949, and whether the publication of the aforesaid notification should be deemed to have been properly authenticated by authentication of the publication of the Ordinance.
If not, whether want of authentication would have the effect of invalidating the said Excise Rules ? " The case was then heard by a Full Bench consisting of Wanchoo, C.J., Ranawat and Dave, JJ.
The judgment of the Court was delivered by the learned Chief Justice on November 24, 1952, in substance upholding the contentions raised on behalf of the petitioner before the High Court, now respondent.
The High Court came to the conclusion that article 277 of the Constitution was a complete answer to the claim of the Government of India to collect the dues in question for any period anterior to April 1, 1950.
This conclusion was based on the reasoning that the agreement aforesaid between the Government of India and the Government of Rajasthan was in effect overridden by article 277 and that the agreement contemplated by article 278 was in respect of a duty which was leviable by the Government of India.
By virtue of article 277 of the Constitution cotton excise duty was actually leviable by the State of Rajasthan up to March 31, 1950, because Parliament made the contrary provision only from April 1, 1950.
Therefore, it was further observed by the High Court that the effect of article 277 on Art 278 of the Constitution was that cotton excise duty could not be said to be leviable by the Government of India so far as the State of Rajasthan was concerned up to March 31, 1950.
In view of that conclusion it was further held that the right to collect the arrears of excise duty in question could not be held to have been transferred to the Union of India 529 by virtue of the agreement aforesaid of February 25, 1950.
The first question referred to the Full Bench was thus answered in favour of the petitioner in the High Court.
The second question relating to the publication and authentication of the Excise Rules was also answered in favour of the petitioner, now respondent.
The High Court held that the Hindi Gazette relied upon on behalf of the Government did not contain any authentication of the Rules and did not show by whose authority they had been published.
This conclusion was based on the ground that the contention raised on behalf of the Government that the publication in the Gazette and the authentication therein did not only apply to the Ordinance but covered the Rules also, was not correct.
The answers given by the Full Bench to the questions referred to it by the Division Bench were returned to the Bench concerned and the Bench, in pursuance of the opinion of the Full Bench, ordered by its judgment dated September 29, 1953, that "a direction be issued against the opposite party not to recover from the petitioner the amount of Rs. 1,36,551 12 as per their notice of demand of the 16th of February, 1950.
The petitioner shall get costs of this petition from the respondents.
" The Union of India applied for and obtained the necessary certificate, as quoted above, from the High Court of Rajasthan.
That is how the matter is before this Court.
It is manifest that if the opinion of the Full Bench on the second question referred to as to the publication and authentication of the Rules is correct, then no other question will arise for determination by this Court.
It ' the Rules under the Rajasthan Excise Duties Ordinance, XXV of 1949, had not been properly promulgated and authenticated, then the Ordinance by itself could not be sufficient for the levy and collection of the tax sought to be imposed.
It is, therefore, necessary for us first to determine that controversy.
At the outset, it may be mentioned that the writ petition filed by the respondent in the High Court under article 226 of the Constitution did not allege any facts bearing on this part of the controversy.
530 Thus, there was no foundation laid in the pleadings for a contention that the Rules aforesaid had not been promulgated on a proper authentication.
As already indicated, the petition was founded only on the lack of power in the Union Government to levy and collect the excise duty with reference to the provisions of the Central Excise and Salt Act of 1944 and the Rules framed thereunder.
There is no reference to the provisions of Ordinance XXV of 1949 promulgated by the Rajasthan Government.
It was only in the reply to the writ petition made by the respondent in the High Court that reliance was placed upon the said Ordinance and the Rules framed thereunder.
We do not find any pleadings, or any petition by way of amendment of the pleadings, in the record of this case raising the contention that the Rules framed under the Ordinance aforesaid had not been promulgated on a proper authentication.
The High Court, therefore, on the face of the pleadings, was not justified in permitting the petitioner before it to raise this contention, but our decision need not be rested on the lack of pleadings only.
We have examined the Rajasthan Gazette, the Hindi version of which is entitled Rajasthan Raj Patra published by authority of the Rajasthan Government dated Margashirsa Krishna 7, Saturday, Samvat 2006, containing the notification dated Jaipur, September 15, 1949, the preamble of which states that Shriman Rajpramukh had made and promulgated the following Ordinance which was being published for the information of the public and it purports to have been authenticated by the Law Secretary, Sanyukta Rajasthan Sarkar.
Under that authentication follows the Ordinance, XXV of 1949, dated September 5, 1949.
The Ordinance goes to the end of page 169 and from the next page 170 ending with page 172 appear the Rules.
They begin with the declaration which may be translated as follows: " In exercise of the powers conferred under sections 5 and 26 of the Rajasthan Excise Duties Ordinance of 1949 the Rajasthan Government orders that till new Rules are framed under the said Ordinance, the Rules framed under the Jaipur Excise Duties Act 531 of 1945 known as the Jaipur Excise Duty Rules of 1945 will be in force throughout the whole of Rajasthan with necessary modifications and for this purpose will be treated as made under the Rajasthan Ordinance.
" It would thus appear that the authentication by the Law Secretary appearing on the first page of the Gazette as aforesaid was intended to govern not only the Ordinance in question but also the Rules which had been promulgated thereunder.
Apparently, section 28 of the Ordinance which ran " All rules made and notifications issued under this Ordinance shall be made and issued by publication in the Rajasthan Gazette.
All such rules and notifications shall thereupon have effect as if enacted in this Ordinance " was understood to authorise such a mode of promulgation and authentication.
The authority that promulgated the rule having intended the signature of the Law Secretary appearing at the beginning of the publication as an authentication of the rules, we are of opinion that the formal requirements of section 8 (2) of the Ordinance V of 1949 were satisfied.
Whether the authentication appears in the beginning of the notification or at the end of it is not material so long as it is clear on a reference to the publication in the Gazette that the matter is substantially covered by the authentication, whether appearing at the beginning or the end of the notification.
The High Court, therefore, was in error in coming to the conclusion that the authentication covered the Ordinance proper without the Rules framed thereunder.
The correct conclusion from the record as it stands is that the authentication covers the entire notification including both the Ordinance proper and the Rules framed thereunder which became parts of the Statute.
In view of this conclusion it becomes necessary now to examine the ratio of the decision of the High Court on the first question referred to it, namely, the authority of the Union of India to realise the arrears of the duty in question.
It is clear in view of our conclusion 532 that the Ordinance and the Rules framed thereunder have been properly promulgated in the Official Gazette, that the Government of Rajasthan was entitled to levy and collect the duty of excise in respect of.
cotton cloth from the respondent.
As a matter of fact, the respondent appears to have paid about Rs. 19,739 odd out of the duty payable by it to that Government.
The remaining amount for which the notice of demand had been issued by the official of the Government of India was certainly payable to the Government of Rajasthan.
We have, therefore, to consider whether the Government of India by any process of law stepped into the shoes of the Rajasthan Government in respect of the arrears aforesaid.
In this connection reliance was placed on the agreement between the President of India and the Rajpramukh of Rajasthan dated February 25, 1950.
The relevant provisions of the agreement are these: " Whereas provision is made by Articles 278, 291, 295 and 306 of the Constitution of India for certain matters to be governed by agreements between the Government of India and the Government of a State specified in Part B of the First Schedule to the Constitution. .
Now, therefore, the President of India and the Rajpramukh of Rajasthan have entered into the following agreement, namely: The recommendations of the Indian States Finance Enquiry Committee, 1948 49 (hereafter referred to as the Committee) contained in Part I of its Report read with Chapters 1, 11 and III of Part 11 of its Report in so far as they apply to the State of Rajasthan (hereafter referred to as the State) together with the recommendations contained in Chapter VIII of Part 11 of the Report, are accepted by the Parties hereto, subject to the following modifications, namely. .
The modifications are not material to this case.
The agreement thus incorporates as terms of the agreement the report of the Committee, the relevant portion of which is in these terms: 533 " With effect from the prescribed date, the Centre will take over all 'federal ' sources of Revenue and all 'federal ' items of expenditure in State together with the administration of the Departments concerned.
The Centre must also take over all current out standings (including pending assessments, refunds, and arrears), liabilities, claims, etc., and all productive and unproductive capital assets connected with these Departments.
" It is common ground that "federal sources of revenue" include the duty of excise in question.
It is also clear that all outstanding dues from assessees including pending assessments and arrears have been by the terms of the agreement made over to the Centre.
This agreement, as the preamble itself indicates, has been made in accordance with the provisions of articles 278 and 295 of the Constitution.
The relevant portions of article 278 are as under: " 278.
(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;. and, when an agreement is so entered into, the provisions of this Chapter shall in relation to such State have effect subject to the terms of such agreement.
" It is noteworthy that the provisions of article 278 override pro tanto other provisions of the Constitution including article 277 and the terms of the agreement override the provisions of the Chapter, namely, Chapter I of Part XII.
In this Chapter are contained articles 264 to 291.
Thus, on a construction of the pro.
visions of articles 277 and 278, it is clear that in the absence of any agreement between the Government of India and the Government of a State specified in Part B, duties of customs which immediately before 534 the commencement of the Constitution were being lawfully levied by the Government of such a State continue to be levied by that State until provision to the contrary is made by Parliament by law, notwithstanding that such a duty is mentioned in the Union List.
Article 277, therefore, is in the nature of a saving provision permitting the States to levy a tax or a duty which, after the Constitution, could be levied only by the Centre.
But article 277 must yield to any agreement made between the Government of India and the Government of a State in Part B in respect of such taxes or duties, etc.
The pro.
vision to the contrary contemplated by article 277 was made by the Finance Act, XXV of 1950, section 11, which extended the Central Excise and Salt Act, 1944, along with other Acts to the whole of India except the State of Jammu and Kashmir.
But that section has effect only from April 1, 1950, and therefore does not apply to the arrears of duty of excise now in controversy.
The agreement envisaged by article 278 was entered into as aforesaid on February 25, 1950.
That agreement conceded to the Centre the right to levy and collect the arrears of the duty in question.
The reasons given by the High Court for the conclusion that in spite of article 278 read with the agreement aforesaid, the Union Government was not entitled to realise the arrears are (1) that the agreement does not contain any specific provision about levy and collection of cotton excise duty in Rajasthan, (2) that the mere approval in the agreement of the principles set out in the report is not enough in view of article 277 which made a distinctly different provision from that contemplated in the report and (3) that the agreement could be only with respect to a duty which was leviable by the Government of India.
In our opinion, none of these reasons aforesaid can stand in the way of the Union of India.
Though the agreement does not in terms refer to levy and collection of cotton excise duty in Rajasthan, it is clear that the agreement has to be read with the relevant portions of the report quoted above.
So read, there cannot be the least doubt that cotton excise duty in Rajasthan, as a " federal 535 source of revenue," is also covered by the agreement.
Nor is it correct to say that the agreement read with the report is not enough to override the provisions of article 277.
The agreement read with article 278, as already indicated, in terms, overrides the provisions of article 277.
The only other reason which weighed with the High Court in getting over the terms of article 278 cannot also hold good.
That a duty of the kind now in controversy on the date of the agreement after coming into force of the Constitution is leviable only by the Government of India even in respect of the State of Rajasthan is clear beyond all doubt.
The Union List only, namely, entry 84 in the Seventh Schedule, authorises the levy and collection of the duty in question.
Neither the State List, List II, nor the Concurrent List, List III, contains any such authorisation.
It is true that article 277 has saved, for the time being, until Parliament made a provision to the contrary, the power of the State of Rajasthan to levy such a duty, but that is only a saving provision, in terms subject to the provisions of article 278.
Thus, the combined operation of articles 277 and 278 read with the agreement vests the power of levy and collection of the duty in the Union of India.
It is only in the absence of an agreement like the one we have in this case that the Rajasthan Government could continue to levy and collect the duty in question.
The agreement between the two Governments completely displaced the operation of article 277 in regard inter alia to the levy of this duty so far as the State of Rajasthan is concerned.
It is clear, therefore, that the High Court was in error in holding that Art,.
277 was any answer to the claim of the Government of India and should override the provisions of article 278 read with the agreement.
On a proper construction of these provisions, in our opinion, the result is just to the contrary.
In this view of the matter, it is not necessary to consider the other arguments advanced on behalf of the appellants, whether article 295 should prevail over article 277.
For the reasons aforesaid, this appeal is allowed and the decision of the High Court set aside.
The result 69 536 is that the writ petition filed by the respondent in the High Court stands dismissed with costs here and in the High Court.
Appeal allowed.
| The question for determination in the appeal was whether the Union of India was entitled to levy and recover arrears of excise duty on cotton cloth for the period April 1, 1949, to March 31, 1950, payable by the respondent, a cloth mill in the State of Rajasthan, under the Rajasthan Excise Duties Ordinance, 1949.
After the coming into force of the Indian Constitution and the extension of the Central Excise and Salt Act, 1944, and the rules framed thereunder to the State of Rajasthan by section II of the Finance Act of 1950, the duty in respect of cloth manufactured on and from April 1, 1950, became payable under that Act.
The appellant Union, however, claimed that as a result of the agreement entered into on February 25, 1950, by the President of India with the Rajpramukh of Rajasthan under article 278 and article 295 of the Constitution, the Union of India became entitled as from April 1, 1950, to claim and recover all arrears of excise duties which the State of Rajasthan was entitled to recover from the respondent before the Central Excise and Salt Act, 1944, was extended to Rajasthan.
Notice having been accordingly served on the respondent demanding payment of the outstanding amount of Rs. 1,36,551 12 as payable by it, it moved the High Court under article 226 of the Constitution.
On a reference by the Division Bench which heard the matter in the first instance, the Full Bench finding in favour of the respondent held that article 277 was a complete refutation of the said claim by the Union and article 278 and the said agreement were overridden by it.
Held, that the provisions of articles 277 and 278 of the Con stitution, properly construed, leave no manner of doubt that article 277 was in the nature of a saving provision, subject in terms to the provisions of article 278, permitting the States to levy a tax or duty which, after the Constitution could be levied only by the centre.
But article 277 had to yield place to any agreement in respect of such taxes and duties made between the Union Government and the Government of a Part B State under article 278.
Since there could not be the least doubt in the instant case that the agreement between the President and the Rajpramukh of Rajasthan conceded to the Union the right to levy and collect the arrears of the cotton excise duty in Rajasthan, the High Court was wrong in taking a contrary view of the matter.
|
Appeal No. 370 of 1967.
Appeal from the judgment and order dated July 22, 1963 of the Calcutta High Court in Appeal from Original Order No. 58 of 1963.
E. Udayaratnan and A. P. Chatterjee, for the appellants.
H. R. Gokhale and D. N. Mukherjee, for respondents Nos. 1 3.
The Judgment of the Court was delivered by Bhargava, J.
On an industrial dispute referred to it, the Fifth Industrial Tribunal of West Bengal gave an award, which was published on September 19, 1955, under which 41 persons, including the 30 appellants who had been dismissed from service by the two Companies, which are respondents 1 & 2 in this appeal, were directed to be reinstated in service.
Under the award, it was held that these appellants were entitled to half their salary from October 2, 1953 to the date.
of their actual resumption of duty.
According to the appellants, they were not allowed to resume duty by the Companies, even though they offered to do so.
The Companies did not admit that there was any such offer and went up in appeal to the Labour Appellate Tribunal and obtained an order of stay of implementation of the award from it.
The Labour Appellate Tribunal dismissed the appeal, where after the Companies came in further appeal to this Court, and this Court also granted stay of the implementation of the award during the pendency of that appeal.
After the final dismissal of the appeal by this Court, the appellants were allowed to resume their duty.
Thereafter, a dispute arose as to the amount to which the appellants were entitled under the award until the date of resumption of duty by them.
The appellants, by separate applications, applied to the Second Labour Court, West Bengal, for determination of the amounts due to them under section 33C(2) of the (No. 14 of 1947) (hereinafter referred to as "the Act").
The Companies challenged the jurisdiction of the Second Labour Court on the ground that that Court had not been specified for the purpose of determining the amount at which the benefit claimed by the workmen is to be computed in terms of money under section 33C(2) of the Act.
This preliminary objection was accepted by the Second Labour Court which held that it had no jurisdiction to make any order on the applications presented by the appellants.
The appellants then filed a petition under Article 226 of the Constitution in the High Court of Calcutta challenging the correctness of the view taken by the Second Labour Court.
A learned single Judge of that Court came to the decision that the Second Labour Court had jurisdiction to take proceedings on the applications of the appellants under section 33C(2) of the Act, and 99 consequently, issued, a writ of certiorari vacating the order made by the Second Labour Court and a writ of mandamum directing the Second Labour Court to decide on merits the applications presented on behalf of the appellants.
The Companies then went before a Division Bench by a Letters Patent Appeal and, in that appeal, the decision of the learned single Judge was set aside and that of the Second Labour Court was restored.
The appellants have now come up to this Court by special leave against this order of the Division Bench of the Calcutta High Court by which it has been held that the Second Labour Court had no jurisdiction to deal with these applications of the appellants.
For convenience, the provisions of sub sections
(1) and (2) of section 33C of the Act, as they stood at the relevant time, are reproduced below: "33C. Recovery of money due from the Employer (1) Where any money is due to a workman from an employer under a settlement or an award or under the provisions of Chapter VA, the workman may, without prejudice to any other mode of recovery, make an application to the appropriate Government for the recovery of the money due to him, and if the appropriate Government is satisfied that any money is so due, it shall issue a certificate for that amount to the Collector who shall proceed to recover the same in the same manner as an arrear of land revenue.
(2)Where any workman is entitled to receive from the employer any benefit which is capable of being computed in terms of money, the amount at which such benefit should be computed may, subject to any rules that may be made under this Act, be determined by such Labour Court as may be specified in this behalf by the appropriate Government, and the amount so determined may be recovered as provided for in sub section (1).
" The language of Sub section
(2) of section 33C is perfectly clear in laying down that the computation in terms of money of the benefit claimed by a workman is to be made by such Labour Court as may be specified in this behalf by the appropriate Government and, consequently, the only question that falls for determination is whether it can be held that the Second Labour Court, to which applications were presented by the appellants, bad been specified as "the Court" to make the determination under section 33C(2).
It was conceded by counsel for both parties that there was no general or specific order mentioning the Second Labour Court, West Bengal as the 100 Court specified for purposes of making the determination under section 33C(2).
On behalf of the appellants, it was urged that the Second Labour Court should be held to have jurisdiction to deal with these applications, because it was constituted under section 7(1) of the Act and every Labour Court constituted under the Act would be competent to make the determination under section 33C(2) by virtue of the provision contained in that sub section itself.
Section 7(1) of the Act lays down that: "The appropriate Government may, by notification in the Official Gazette, constitute one or more Labour Courts for the adjudication of industrial disputes relating to any matter specified in the Second Schedule and for performing such other functions as may be assigned to them under this Act.
" The submission which was made before the High Court was that the matter which was raised by the applications presented on behalf of the appellants related to one of the matters specified in the Second Schedule, because the Second Schedule at Item No. 6 contained the entry "all matters other than those specified in the Third Schedule" and determination of money value of a benefit claimed by a workman is not one of the matters specified in the Third Schedule.
This contention was rejected by the appellate Bench of the High Court.
It was not sought to be pressed before us by learned counsel for the appellants when it was pointed out to him that even if it be held that the matter raised by the appellants him their applications related to one of those enumerated in the Second Schedule, that would be immaterial, because, tinder s.7(1) of the Act, a Labour Court is constituted for the purpose of adjudication of industrial disputes relating to those matters, and it cannot possibly be contended that these disputes raised by in dividual workmen for determination of amounts due to them under the award constituted industrial disputes.
In fact, this Court, in the Central Bank of India Ltd. vs P.S. Rajagopalan etc.
,(1) clearly held that proceedings under section 33C of the Act are in the nature of execution proceedings and are not meant to include in them proceedings for adjudication of industrial disputes which can only be competently decided by a Labour Court on reference by the appropriate Government under s 10(1) of the Act.
It was in view of this clear legal position that the counsel appearing for the appellants relied on the second part of s.7(1) of the Act, under which Labour Courts are constituted "for performing such other functions as may be assigned to them under this Act".
Labour Court, West Bengal, having been constituted for performing such other functions also as may be assigned to it under the (1)[1964] 3 S.C.R. 140.
101 Act, it should be held that it was competent to decide the dispute raised by these applications of the appellants, because this function of deciding the applications had been assigned to it by section 33C(2) of the Act.
The submission of learned counsel was that section 33(C)(2) should be read as containing a general assignment to all Labour Courts of the function of determining the money value of a benefit claimed by a workman under that provision.
We are unable to accept this interpretation.
The language of section 33C(2) itself makes it clear that the appropriate Government has to specify the Labour Court which is to discharge the functions under this sub section.
The use of the expression "specified in this behalf" is significant.
The words "in this behalf" must be given their full import and effect.
They clearly indicate that there must be a specification by the appropriate Government that a particular Court is to discharge the function under section 33C(2) and, thereupon, it is that Court alone which will have jurisdiction to proceed under that provision.
The more fact that a Labour Court has been constituted under section 7(1) of the Act for the purpose of adjudication of industrial disputes as well as for performing other functions that may be assigned to it under the Act does not mean that that Court is automatically specified as the Court for the purpose of exercising jurisdiction under section 33C(2) of the Act.
section 33(C)(2) confers jurisdiction only on those Labour Courts which are specified in this behalf, i.e., such Labour Courts which are specifically designated by the State Government for the purpose of computing the money value of the benefit claimed by a workman.
The Second Labour Court, West Bengal, was in fact, never specified by any order of the State Government as one of those Labour Courts which is to exercise the powers or discharge the functions under section 33C(2).
In this connection, learned counsel appearing for the appel lants wanted to draw an analogy with section 13 of the Bengal, Agra and Assam Civil Courts Act XII of 1887, under which a State Government may, by notification in the Official Gazette, fix and alter the local limits of the jurisdiction of any Civil Court under that Act.
It was urged by him that this provision was similar to the provision contained in section 7(1) of the Act.
Section 13(2) of the Bengal, Agra and Assam Civil Courts Act thereafter gives the power to the District Judge, in cases where same local jurisdiction is assigned to two or more Subordinate Judges or to two or more Munsifs, to assign to each of them such civil business cognizable by the Subordinate Judge or Munsif, as the case may be, as, subject to any general or special orders of the High Court, he thinks fit.
It was suggested that s.33C(2) of the Act makes a provision in respect of Labour Courts of the same nature as the provision made by s.13(2) of the Bengal, Agra and Assam Civil Courts Act in respect of Subordinate Judges or Munsifs, and since Subordinate Judges and Munsifs can exercise jurisdiction by virtue of section 13(1) of that Act to decide civil suits, it should be held that Labour 102 Courts, by virtue of their constitution under s.7(1) of the Act, get the jurisdiction to decide applications under s.33C(2) also, and the specification of Courts mentioned in that sub section is only for the purpose of deciding which Labour Court should exercise jurisdiction where there may be more than one Labour Court.
We do not think that this comparison is correct or justified.
Though Civil Courts are constituted under s.13 of the Bengal, Agra and Assam Civil Courts Act, it has to be remembered that the power of those Courts to take cognizance of civil suits and decide them is conferred by the Code of Civil Procedure.
It is not by virtue of their constitution under s.13 of the Bengal, Agra and Assam Civil Courts Act that the Courts take cognizance of civil suits and decide them.
Section 33C(2), in the matter of applications made by individual workmen, is, therefore, not comparable with s.13(2) of the Benaal, Agra and Assam Civil Courts Act, but, in fact, lays down the requirement which must be satisfied before the Labour Court can take cognizance of the matter raised before it by the applications of the workmen.
Section 33C(2) would, thus, serve the purpose in the case of Labour Courts which is served by the provisions of the Code of Civil Procedure relating to cognizance in respect of.
civil courts.
section 33C(2), by its language, makes it clear that the jurisdiction under that provision is to be exercised only by those particular Courts which are specified in that behalf by the State Government and, in fact, confers jurisdiction on only those Courts and not on all Labour Courts, which may have been constituted under s.7(1) of the Act.
It was also urged by learned counsel before us that we should give a liberal construction to the provisions of s.33C(2) so as to ensure that the benefits of that provision are not denied to a workman even if a State Government neglects to specify a Labour Court in that behalf.
We do not think that there is any force in this submission.
When a provision has been made in s.33C(2) for specification of a Labour Court in that behalf by the appropriate Government, it is presumed that that Government will carry out its duty and will make the necessary specification.
Even under s.7(1) of the Act, the power is granted to a State Government to constitute Labour Courts, and if the State Government neglects to constitute Labour Courts, the provisions of s.33C(2) would automatically become ineffective.
This would be no ground for giving an interpretation to s.7(1) which would do away with the necessity of the Labour Court being constituted by a State Government.
It may also be incidentally mentioned that in West Bengal the State Government had made Rules in 1958 under s.38 of the Act and Rule 74 was as follows: "74.
Application for recovery of dues An application under section 33C shall be delivered personally or forwarded by registered post in triplicate to the Secretary 103 to the Government of West Bengal in the Department of Labour or to such officers to whom powers have been delegated under section 39 of the ." This Rule lays down that all applications under s.33C are to be delivered to the Secretary to the Government of West Bengal in the Department of Labour, or to such officers to whom powers may have been delegated under s.39 of the Act.
The purpose of the application being sent to the Government is clear.
If the application is under s.33C(1), the Government is to take action on that application itself and is to realise the money claimed in that application.
On the other hand, if the application happens to be under s.33C(2), the purpose of delivery of that application to the Secretary to the Government clearly would be that, on that applica tion, the Government would specify the Labour Court which is to deal with that application.
It appears that, in some States, the appropriate Government has.
by general orders, specified Labour Courts for the purpose of exercising jurisdiction under s.33C(2).
So far as the Government of West Bengal is concerned, it did not issue any similar general order, and the intention of Rule 74 was that any workman wishing to obtain relief under s.33C(2) should apply to the State Government when the Government would specify the Labour Court for the purpose of dealing with that application.
This position has been further clarified by a subsequent amendment of Rule 74 under which it is clearly provided that where any work.
man is entitled to receive from the employer any benefit which is capable of being computed in terms of money, the workman concerned may apply to the State Government in the prescribed Form for the specification of a Labour Court for determining the amount of his dues.
It is true that this Rule 74 did not in this form exist at the relevant time, with which we are concerned in the pro sent case, but we agree with the Bench of the Calcutta High Court that Rule 74, as it stood at that time, was also intended to lay down that a workman claiming relief under s.33C(2) must present his application to the State Government, whereupon the State Government would specify the Labour Court which was to deal with it under s.33C(2) of the Act.
For the reasons given above, we hold that the decision of the Division Bench of the Calcutta High Court is correct and must be upheld.
The appeal fails and is dismissed, but, in the circumstances of this case, we make no order as to costs.
Y. P. Appeal dismissed.
| The respondents workmen filed applications in 1962 claiming bonus under the Scheme framed by the Central Government under the Coal Mines Provident Fund and Bonus Schemes Act, 1948 and railway fares and leave wages from 1948 onwards.
The Labour Court, Dhanbad allowed their claims under section 33C(2) of the , which, in appeals to this Court, the appellant Company challenged, contending, that (1) the Labour Court had no jurisdiction to try these applications under section 33C(2); (ii) the applications were barred by Limitation prescribed by the bonus Scheme and/or due to laches.
and (iii) under the said Scheme the workmen were not entitled to bonus as they were employed as domestic servants.
HELD:The appeals must fail.
(i)The right to the benefit which is sought to be computed must be an existing one, that is to say, already adjudicated upon or provided for and must arise in the course of and in relation to the relationship ' between an industrial workman and his employer.
Since the scope of sub see.
2 of section 33C is wider than that of sub s 1, and the sub section is not confined to cases arising under an award settlement or under the provisions of Chapter VA there is no reason to hold that a benefit provided by statute or a Scheme made thereunder, without there being anything contrary under such statute or section 33C(2), cannot fall within sub section 2.
Consequently.
the benefit provided in the bonus scheme made under the Coal Mines Provident Fund and Bonus Schemes Act, 1948 which remained to be computed must fall under sub section 2 and the Labour Court therefore had jurisdiction to entertain and try such a claim, it being a claim in respect of an existing right arising from the relationship of an industrial workman and his employer.
[144B D].
Punjab National Bank Ldt.
vs Kharbanda [1962] Supp.
2 S.C.R. 977 Central Bank of India vs Rajagopalan [1964] 3 S.C.R. 140, and Bombay Gas Co., Ltd. vs Gopal Bhiva [1964] 3 S.C.R. 709 relied on, (ii)There is no justification for inducting a period of limitation provided in the Limitation Act into the provisions of section 33C(2) which do not lay down any limitation.
It is a matter of some significance that though the legislature amended section 33C by Act 36 of 1964 and introduced limitation in that Section, it did so by means of a proviso only in respect of claims made under sub sec.
1 but did not provide any such limitation for claims under sub sec.
[14 4H 145B].
Bombay Gas Co. Ltd. vs Gopal Bhiva ; relied on.
141 The period of three years of limitation provided for by clause (3) of section 9A of ;the Bonus Scheme applies to applications for payment by the Coal Mines Provident Fund Commissioner from the deposit made in the Government treasury and has no application to claims under section 33C(2) which makes no provision for limitation.
[145D E].
(iii)Two conditions are necessary to render an employee ineligible for Bonus under section 1 of the Bonus Scheme: (1) that he is employed as a mali, a sweeper or a domestic servant, and (2) that he performs during the relevant period domestic or personal work.
To render an employee ineligible for bonus under this exception both the capacity and the nature of work are relevant factors.
It follows that even though an employee is employed as a mali, a sweeper or a domestic servant if he does non domestic or non personal work he will be entitled to bonus and would lose his right to A only during that period that he does domestic or personal work.
[146B C].
Bhowra Colliery vs Its Workmen, , relied on.
On the evidence, the respondents were employed in the colliery, they were not assigned the exclusive duty of supplying water at the residence of the junior officers but they supplied water at certain pit heads.
So the exception did not apply.
|
Appeal No. 198 of 1954.
Appeal from the judgment and order dated October 16, 1952, of the former Nagpur High Court in Misc.
; No. 1231 of 1951.
M. section K. Sastri, for the appellant.
H. L. Khaskalam, B. K. B. Naidu and I. N. Shroff, for the respondent.
64 502 1960.
November 18.
The Judgment of the Court was delivered by IMAM, J.
This is an appeal from the judgment of the Nagpur High Court dismissing the appellants petition under articles 226 and 227 of the Constitution of India.
The High Court certified under article 132(1) of the Constitution that the case involved a substantial question of law as to the interpretation of the Constitution.
Hence the present appeal.
The appellant was the Ruler of the State of Baster.
After the passing of the Indian Independence Act, 1947, the appellant executed an Instrument of Accession to the Dominion of India on August 14, 1947.
Thereafter, he entered into an agreement with the Dominion of India popularly known as "The Stand Still Agreement".
On December 15, 1947, he entered into an agreement with the Government of India whereby he ceded the State of Baster to the Government of India to be integrated with the Central Provinces and Berar (now the State of Madhya Pradesh) in such manner as the Government of India thought fit.
Con sequently the Governments in India came to have exclusive and plenary authority, jurisdiction and powers over the Baster State with effect from January 1, 1948.
The Legislature of the State of Madhya Pradesh passed the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 (Madhya Pradesh Act 1 of 1951), hereinafter referred to as the Act, which received the assent of the President of India on January 22, 1951.
The preamble of the Act stated that it was one to provide for the acquisition of the rights of proprietors in estates, mahals, alienated villages and alienated lands in Madhya Pradesh and to make provisions for other matters connected therewith.
Under section 3 of the Act, vesting of proprietary rights in the State Government takes place on certain conditions,, mentioned in that section, being complied with.
The definition of 'proprietor ' is stated in section 2 cl.
(m) and it is "in relation to 503 (i) the Central Provinces, includes an inferior proprietor, a protected thekadar or other thekadar, or protected headman; (ii) the merged territories, means a maufidar including an ex Ruler of an Indian State merged with Madhya Pradesh, a Zamindar, Ilaquedar, Khorposhdar or Jagirdar within the meaning of wajib ul arz, or any sanad, deed or other instrument, and a gaontia or a thekadar of a village in respect of which by or under the provisions contained in the wajib ul arz applicable to such village the maufidar, the gaontia, or the thekadar, as the case may be, has a right to recover rent or revenue from persons holding land in such village;".
The definition of 'mahal ' is stated in section 2(j) and it is "mahal", in relation to merged territories, means any area other than land in possession of a raiyat which has been separately assessed to land revenue, whether such land revenue be payable or has been released, compounded for or redeemed in whole or in part;".
Before the High Court the appellant contended that he was still a Sovereign Ruler and absolute owner of the villages specified in Schedules A and B of his petition under articles 226 and 227 of the Constitution.
He urged that his rights had been recognized and guaranteed under the agreements entered into by him with the Government of India.
The provisions of the Act, therefore, did not apply to him.
It was further contended that the provisions of the Act did not apply to a Ruler or to the private property of a Ruler which was not assessed to land revenue.
He relied on article 6 of the Instrument of Accession and the first paragraph of article 3 of the Merger Agreement.
The High Court held that if the petitioner 's rights under article 6 of the Instrument of Accession and article 3 of the Merger Agreement had been infringed it was clear from the provisions of article 363 of the Constitution that interference by the courts was barred in disputes arising out of these two instruments.
The High Court was also of the opinion that article 362 of the Constitu tion was of no assistance to the appellant.
504 After referring to the definition of the word 'proprietor ' in the Act, the High Court was of the opinion that the word 'maufidar ' in section 2(m) of the Act had not been used in any narrow or technical sense.
A 'maufidar ' was not only a person to whom a grant of maufi lands had been made but was also one who held land which was exempt from the payment of "rent or tax".
It accordingly rejected the contention on behalf of the appellant that the word 'maufidar ' is necessarily confined to a grantee from the State or Ruler and therefore a Ruler could not conceivably be a maufidar.
The High Court also rejected the contention on behalf of the appellant that as he was a "Ruler" within the meaning of that expression in article 366(22) of the Constitution he did not come within the expression 'ex Ruler ' as contained in the definition of the word 'proprietor ' in the Act.
The expression 'Ruler ' as defined in article 366(22) of the Constitution applied only for interpreting the provisions of the Constitution.
The expression 'ex Ruler ' given in the Act must therefore be given the ordinary dictionary meaning.
According to Shorter Oxford English Dictionary, 'Ruler ' means "one who, or that which, exercises rule, especially of a supreme or sovereign kind.
One who has control, management, or head ship within some limited sphere".
The High Court accordingly took the view that although the appellant did exercise such a rule in the past he ceased to exercise it in his former Domain after the agreements of accession and merger had come into operation.
Accordingly the appellant must be regarded as an ex Ruler and as he was also a maufidar he fell within the definition of the word 'proprietor ' in the Act.
The question whether the villages mentioned in Schedules A and B of the petition under articles 226 and 227 of the Constitution fell in any of the categories, "Estates, Mahals, Alienated lands", was also considered by the High Court.
In its opinion they did not fall within the category of Estates or Alienated lands but they did fall within the category of Mahals.
According to the definition of 'Mahal ' in section 2(j) of the Act the same must be separately assessed to land 505 revenue.
According to the appellant they had not been assessed to land revenue but this was denied on behalf of the State of Madhya Pradesh.
The High Court was of the opinion that in these circumstances it was for the appellant to establish that the villages in question had never been assessed to land revenue but no evidence had been led to this effect.
On the contrary, according to the High Court, it would appear from the documents on the record that the villages known as 'Bhandar villages ' had been assessed to land revenue.
As the rest of the villages in Schedule A and the villages in Schedule B, upto the date of the High Court judgment, had not been recognized as the private property of the appellant by the Government of India as required by the second and third paragraphs of the Merger Agreement, the appellant could not assert his ownership over them.
The High Court, accordingly, dismissed his petition under articles 226 and 227 of the Constitution.
Two questions in the main were urged before us (1) whether the appellant is a proprietor within the meaning of that expression in the Act and (2) whether the villages in question came within the definition of the word 'mahal ' contained in the Act.
On behalf of the appellant it had also been urged that the Act could not defeat the rights of the appellant guaranteed under article 3 of the Merger Agreement.
It seems clear to us, however, that in view of the provisions of article 363(1) of the Constitution any dispute arising out of the Merger Agreement or the Instrument of Accession is beyond the competence of the courts to enquire into.
The High Court rightly decided this point against the appellant.
With reference to the first point we would first consider whether the appellant is an ex Ruler for the purposes of the Act.
That he is so factually cannot be denied, since he ceded his State to the Government of India to be integrated with the Central Provinces and Berar (now the State of Madhya Pradesh) in such manner as the Government of India thought fit.
He further ceded to the Government ' of India full and exclusive authority, jurisdiction and powers in relation 506 to the governance of his State when he agreed that the administration of that State would be transferred to the Government of India as from January 1, 1948.
The question is whether his recognition for the purposes of the Constitution as Ruler by virtue of the provisions of article 366(22) of the Constitution of India continues his status as a Ruler for purposes other than the Constitution.
article 366(22) states: " "Ruler" in relation to an Indian State means the Prince, Chief or other person by whom any such covenant or agreement as is referred to in clause (1) of article 291 was entered into and who for the time being is recognised by the President as the Ruler of the State, and includes any person who for the time being is recognised by the President as the successor of such Ruler".
Article 291 refers to the privy purse payable to Rulers.
It states: "Where under any covenant or agreement entered into by the Ruler of any Indian State before the commencement of this Constitution, the payment of any sums, free of tax, has been guaranteed or assured by the Government of the Dominion of India to any Ruler of such State as privy purse (a) such sums shall be charged on, and paid out of, the Consolidated Fund of India; and (b) the sums so paid to any Ruler shall be exempt from all taxes on income.
" Article 291 refers to any covenant or agreement entered into by the Ruler of any Indian State before the commencement of the Constitution.
The covenant or agreement referred to in this Article certainly includes the Instrument of Accession and the Merger Agreement.
The effect of the Merger Agreement is clearly one by which factually a Ruler of an Indian State ceases to be a Ruler but for the purposes of the Constitution and for the purposes of the privy purse guaranteed, he is a Ruler as defined in article 366(22) of the Constitution.
There is nothing in the provisions of article 366(22) which requires a court to recognise such a person as a Ruler for purposes outside the Constitution.
In our opinion, the High Court rightly held that 507 the appellant was an ex Ruler and that article 366(22) of the Constitution did not make him a Ruler for the purposes of the Act.
As the appellant was an 'ex Ruler ', he was within the class of persons who were by name specifically included in the definition of 'proprietor ' and therefore clearly within the scope of the Act.
That the appellant was not only an ex Ruler but a maufidar appears to us to be clear.
The ordinary dictionary meaning of maufi is "Released, exempted, exempt from the payment of rent or tax, rent free" and maufidar is "A holder of rent free land, a grantee".
It was common ground in the High Court that the villages in question were exempt from the payment of rent or tax.
In our opinion, the High Court rightly took the view that the expression 'maufidar ' was not necessarily confined to a grantee from a State or a Ruler of a State.
A maufidar could be a person who was the holder of land which was exempted from the payment of rent or tax.
In our opinion, the appellant certainly came within the expression 'maufidar ' besides being an ex Ruler ' of an Indian State merged with Madhya Pradesh.
It is, however, contended on behalf of the appellant that the most important part of the definition was the concluding portion where it was stated that in the case of a maufidar he must be a person who by or under the provisions contained in the wajib ul arz applicable to his village, had the right to recover rent or revenue from persons holding land in such village.
It was contended that even if the appellant was a maufidar, there was nothing to show that with reference to any village held by him it was entered in the wajib ul arz, that he had a right to recover rent or revenue from persons holding land in such village.
In the petition under articles 226 and 227 of the Constitution, filed by the appellant in the High Court, it was nowhere asserted that even if he was regarded as a maufidar it was not entered in the wajib ul arz with respect to any of his maufi villages that he had a right to recover rent or revenue from persons holding land in such villages.
From the judgment of the High 508 Court it would appear that no such argument was advanced before it.
In the application for a certificate under article 132(1) of the Constitution we can find no mention of this.
In the statement of the case filed in this Court also there is no mention of this fact.
There is thus no material on the record to establish that the appellant as a maufidar had no right to recover rent or revenue from persons holding land in his villages.
The burden was on the appellant to prove this fact which he never attempted to discharge.
It is impossible therefore to accept this contention on behalf of the appellant raised for the first time before us in the course of the submissions made on behalf of the appellant.
Regarding the second point arising out of the definition of 'Mahal ', the High Court definitely found that the petitioner had given no evidence to establish that the villages in question were not assessed to land revenue.
On the contrary, at least with reference to the Bhandar villages documents on the record showed that these villages had been assessed to land revenue.
Since it was a question of fact whether the villages had been assessed to land revenue, which was denied on behalf of the State of Madhya Pradesh, the High Court rightly held that the contention of the appellant in this respect could not be accepted.
As for the other villages, in Schedules A and B of the petition of the appellant under articles 226 and 227 of the Constitution the High Court, in our opinion, rightly held that the petition was not maintainable as these villages had not yet been recognised by the Government of India as the private property of the appellant.
In our opinion, the appeal accordingly fails and is dismissed with costs.
Appeal dismissed.
| The appellant was the Ruler of the State of Baster which was later integrated with the State of Madhya Pradesh.
He was recognised by the President as a Ruler under article 366(22) of the Constitution.
The respondent resumed certain lands belonging to the appellant under the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950.
The appellant contended that he was still a Ruler and not an ex Ruler and as such did not come within the definition of "proprietor" given in the Act.
Held, that the appellant was an ex Ruler for the purposes of the Act and was within the class of persons who were by name included in the definition of 'proprietor ' and was within the scope of the Act.
Factually the appellant was an ex Ruler.
He was a Ruler for the purposes of the privy purse guaranteed to him.
There was nothing in article 366(22) which required a court to treat such a person as a Ruler for purposes outside the Constitution.
Further, the appellant was also a maufidar in respect of the lands acquired which were exempt from the payment of rent or tax.
The expression "maufidar" was not necessarily confined to a grantee from a State or a Ruler of a State; he could be the holder of land which was exempted from payment of rent or tax.
|
Civil Appeal No. 2 of 1982.
From the Judgment and order dated 16.
10.1981 of the Kerala High Court in C. R. P. No. 1927 of 1987.
N. Sudhakaran for the Appellants.
E.M.S. Anam for the Respondents.
83 The Judgment of the Court was delivered by A SABYASACHI MUKHARJI, J.
This appeal by special leave is directed against the order of the High Court of Kerala at Ernakulam dated the 16th October 1981 in Civil Revision Petition No. 1927 of 1981.
The appellants are the heirs of the original tenant.
The original appellant died and his heirs have been substituted in his place.
The landlord being the respondent herein wanted the premises in question for his own use and occupation.
He accordingly applied to the Rent Controller for permission.
The Rent Controller after hearing the parties granted such permission The Appellate Authority upholding the order of the Rent Controller, maintained the order of eviction.
There was a revision before the learned District Judge.
The learned District Judge dismissed the revision petition holding that it was difficult to interfere with the concurrent findings of facts of the Courts below on the bona fide need of the landlord for his own use and occupation.
The tenant came up before the High Court in second revision and the High Court after hearing the parties and considering the contentions urged before it, dismissed the revision upholding the order of Rent Controller, the Appellate Authority and the District Court under Section 20 of the Kerala Building (Lease and Rent Control) Act, 1965 that the landlord required the premises for his bona fide need and for self occupation.
The only contention that was urged in the matter was that the landlord was not entitled to eviction under sub section (3) of Section 11.
Sub section (3) of Section l l provides as under: "A landlord may apply to the Rent Control Court for an order directing the tenant to put in possession of the building if he bona fide needs the building for his own occupation or for the occupation be any member of his family dependent on him.
" The contention urged before the Courts below including the High Court was that the second proviso to Sub section (3) of Section 11 had not been fulfilled and the second proviso provides as under: "That the Rent Control Court shall not give any direction to a tenant to put the landlord in possession, if such tenant is depending for his livelihood mainly on the 84 income derived from any trade or business carried on in A such building and there is no other suitable building available in the locality for such person to carry on such trade or business.
" All the Courts have found against the tenant 's contention on this aspect of the matter.
As this is a question of fact, the High Court in our opinion has rightly declined to interfere with that findings of fact.
Before we proceed further it was pointed out by the counsel for the respondents that in view of the provisions of the said Act and in view of the decision of this Court in the case of Aundal Ammal vs Sadasivan Pillai, ; the second revision before the High Court in the facts and circumstances of this case did not lie.
For the purpose of this appeal, we are not proceeding with on that basis but have examined the facts found by the courts below to find out if there is any infirmity in their findings as mentioned hereinbefore.
It is found as a fact that the landlord bona fide needed the premises in question for his own use and occupation.
Therefore, Section 11(3) has been complied with.
The only contention raised was whether on the second proviso to Section 11(3) of the Act the landlord was not entitled to eviction.
That was rejected by the High Court on the ground that this was a question of fact and all the Courts have found in favour of the landlord.
We agree with this.
Even if a second revision lay the scope of interference by the High Court in the second revision is very limited.
This has been so held by this Court in M/s Sri Raja Lakshmi Dyeing Works and others, vs Rangaswamy Chettiar, A.I.R. 1980 S.C. 1253.
We adhere to this principle.
It was urged before us that the building in question was used for non residential purpose by the tenant and the bona fide need of the landlord was said to be for the use and occupation of the landlord and his family which is a residential purpose.
It was submitted that such a need cannot justify in this case the eviction of the tenant.
It was also submitted that Section 17 of the Act prohibited such conversion.
Sub section (1) of Section 17 which is relevant for the present purpose provides as follows: "Section 17.
Conversion of buildings and failure by land 85 lord to make necessary repairs: (1) No residential buildings shall be converted into a nonresidential building or vice versa and no such building shall be divided into separate portions for letting on rent or for other purposes except with the permission in writing of the Accommodation Controller: Provided that where such conversion involves structural alteration of the building, the consent of the landlord shall also be necessary.
" It appears clear that this conversion as contemplated for which permission was required is conversion by the tenant and cannot be a conversion by the landlord.
Quite apart from the fact that in this case there was no conversion of the building sought.
The building was used for non residential purpose and the purpose for which the building was sought was for residential purpose.
It appears to us that putting to a different purpose the user of the building is not a conversion of the building as such.
It has been found that the building as it is without any structural change can be put to residential purpose.
There was no conversion of the building as such is involved in this case but a change of user of the building.
Furthermore, in any event the proviso to Section ( I) makes it clear, in our opinion, that such conversion as contemplated by Section 17 of the Act for which permission in writing by the Accommodation Controller required is in case of change of the user of the premises by the tenant and not by the landlord.
The use of the expression "such conversion" in the proviso indicates that in case of conversion by the tenant permission is required on the consent of the landlord.
Therefore the absence of permission in writing of the Accommodation Controller in this case does in our opinion affect the position.
This appears to be the view of the Kerala High Court on this aspect of the matter.
See in this connection Muhammed vs Abdul Rahiman, and Das Naik vs Narayanan, This appears to be the correct view of law.
Our attention was also not drawn to any decision of the Kerala High Court which has taken any contrary view.
The view held by the Kerala High Court in this aspect has been relied by the High Court in the judgment under appeal.
It seems to be logical view.
We would therefore follow that view.
In view of the proviso explaining the ambit of that requirement that permission sought for or mentioned in Section 17(1) is in respect of the different user by the tenant and not by the landlord.
The High Court has also observed in term 86 "convert" does not denote a mere change in the mode of occupation, but covers only alterations of the physical features, the prescriptions of Section 17 are not attracted to the present case at all.
Admittedly the building in question has rooms which can be used as bed rooms, sitting room etc.
and it has a kitchen and dining hall.
No alteration or conversion is required if the building is to be used for residential purposes.
In the aforesaid view of the matter there was hardly any scope for interference by the District Judge and he declined to do so on this basis.
In our opinion he was right.
Similar was the position of the High Court on these facts and it declined to interfere with the findings of fact.
In the aforesaid view there is no merit in this appeal.
The appeal fails and is dismissed accordingly.
Parties will pay and bear their own costs.
Since the tenants have been in possession of the premises for some time we direct that the decree for eviction shall not be executed till 30.9.1988 provided all the heirs of deceased appellant file an usual undertaking in this Court within four weeks from today stating inter alia.
as follows; 1.
That the appellant will hand over vacant and peaceful possession of the suit premises to the respondent on or before 30.9.1988 from today.
That the appellants will pay to the respondent arrears of rent, if any, within one month from today.
That the appellants will pay to the respondent future compensation for use and occupation of the suit premises month by month before 10th of every month.
That the appellants will not induct any other person in the suit premises.
It is further directed that in default of compliance with any one or more of these conditions or if the undertaking is not filed as required within the stipulated time, the decree shall become executable forthwith.
P.S.S. Appeal dismissed .
| % The petitioner, the Association of the U.P. Income tax Department Contingen.
Paid Staff is aggrieved that even though its members have been rendering service as class IV employees in the U.P. Incometax Department for a large number of years, the Department is not regularising their services and absorbing them in the class lV services, and they are being paid wages as daily rated labourers, lower than the salary and allowances paid to the class IV employees of the Department.
The petitioner filed a Writ Petition in this Court, praying for a writ of mandamus for the relief above mentioned.
Allowing the petition, the Court, ^ HELD: The questions involved in this case are almost the same as in the Writ Petitions Nos. 373 and 302 of 1986, decided by this Court by its judgment dated October 27, 1987, reported in Daily Rated Casual Labour Employed under P
|
iminal Appeal Nos.
216 218 of 1976.
Appeals by Special Leave from the Judgments and Orders dated the 12 2 1975, 17 2 1975 and 8 7 1975 in Crl.
Revision Petitions Nos. 383, 294/74 and Crl.
Petition No. 570/75 respectively and CRIMINAL APPEAL Nos.
204/76, 32/78 AND 307/77 Appeals by Special Leave from the Judgments and Order dated the 15 7 1975, 12/13 11 1975 and 18 11 1975 in Crl.
Appln.
No. 678/75, Crl.
Appeal No. 311/74 and Crl.
A. No. 325/74 respectively and 823 CRIMINAL APPEAL Nos.
278/76, 408 410/77, 429, 372/77, 33 36/78.
Appeals by Special Leave from the Judgments and Order dated the 19 4 1976, 24 12 76, 7 12 76, 17 1 77, 30 11 76, 22 11 76, 19 5 76, 8 2 77 in Crl.
Revision No. 53/75, 294/74, 258/76, 1707/ 76, 86/76, 212/76, 82/75; 231/76 and 1603/76 & 239/76 respectively.
section V. Gupte, Attorney General of India (In C.A. 216), K. R. Nambiar for the Appellant in C.As. 216 and 217/76.
N. Sudhakaran for Appellant in Crl.
A. 218/76.
V. section Desai, (in CA. 204), H. R. Khanna and M. N. Shroff for the Appellant in Crl.
A. 204/76, 307/77 and 32/78.
section V. Gupte, Attorney General of India (In CA. 278), B. P. Maheshwari, N. K. Jain, Suresh Sethi and Randhir Jain for the Appellant in Crl.
A.278/76, 408 410, 429, 372 of 1977 and 33 36 of 1978.
D.Mukherjee and section K. Sabharwal for Respondent in Crl.
A. 34/78.
A.S. Nambiar for Respondent in Crl.
A. 216/76.
M. C. Bhandare, B. P. Singh and A. K. Srivastava for Respondent No. 1 in Crl.
A No., 278/76.
Vepa Sarathy and P. K. Pillai fort Respondent No. 1 in Crl.
A.35/ 78.
Veena Devi Khanna and V. N. Ganpule for Respondent No. 1 in Crl.
A. No. 36/78.
D. P. Mukherjee for Intervener in Cr.
A. No. 278.
Ganatra (V. B.), 1.
N. Shroff and H. section Parihar, for the Intervener in Crl.
A. No. 204 and R. 1 in Crl.
A. No. 307.
The Judgment of the Court was delivered by UNTWALIA J.
.
In these appeals by special leave the common and important question of law which falls for our determination is whether the non compliance with the requirement of Rule 22 of the Prevention of Food Adulteration Rules, 1955 hereinafter called the Rules, framed under The hereinafter to be referred to as the Act, vitiates the trial or the conviction recorded under section 16(1)(a)(i) of the Act.
In Rajal Das Guru Nanal Pamanant vs The States of Maharashtra(1) the conviction of the appellant was set aside on the ground : "The Public Analyst did not have the quantities mentioned in the Rules for analysis,.
The appellant rightly contends that non compliance with the quantity to be supplied caused not only infraction of the provisions but also injustice.
The quantities mentioned are required for correct analysis.
Shortage in quantity for analysis is not permitted by the Statute.
" This larger Bench was constituted for examining the correctness of the above view.
(1) [1975] 2S.C.R.886 =A.I.R. 1975 S.C. 189.
824 We shall, at the outset, notice the scheme of the Act with reference to the relevant provisions of the Act and the Rules.
The Act was very substantially amended by Act 34 of 1976.
We will however, for the purpose of these appeals be referring to die pro.visions of the Act as they stood before the said amendment.
When an article of food shall be deemed to be adulterated has been mentioned and defined in section 2 (i) of the Act.
It is not seriously in dispute in any of these appeals that the articles of food sold to the Food Inspectors by the dealers were found to be adulterated within the meaning of one or the other sub clause of clause (i) of section 2 of the Act.
Of course, the type and extent of adulteration did vary.
In some cases it was of a serious nature in others it was of a technical nature and in some it was as a result of misunderstanding as to nature of the article sold, as for example, whether it was Vanaspati or Ghee.
As usual, according to clause (xii) the word "prescribed" in the Act means prescribed by rules made under the Act.
Clause (xiv) defines the "sample" to mean ."a sample of any article of food taken under the provisions of this Act or of any rules made thereunder.
" A Central Committee for food standards has been constituted by the Central Government in accordance with section 3 to advise on matters arising out of the administration of the Act and to carry out the other functions assigned to it.
Section 7 provides that no person shall manufacture for sale, store, sell or distribute any adulterated food.
Public Analysts are appointed under section 8.
Food Inspec tors appointed under section 9 have been conferred the powers enumerated in section 10.
A Food Inspector has got power to take a sample of any article of food from any person selling such article under section 10(1) (a) (i) and to send such sample for analysis to the Public Analyst for the local area within which such sample has been taken as provided for in clause (b).
The procedure to be followed by Food.
Inspectors is provided for in section 11.
Under sub section (1), Food Inspector taking a sample of food for analysis has to give notice.
to the person from whom he has taken the sample, separate the sample then and there into three parts, mark and seal or fasten up each part in such a manner as its nature permits, deliver one of the parts to the person from whom the sample has been taken, send another part for analysis to the Public Analyst and retain the third part for production in any legal proceedings or for analysis by the Director of the Central Food Laboratory.
Sub section (2) says : "If the person from whom the sample has been taken.
declines to accept one of the parts, the food inspector shall send intimation to the public analyst of such refusal and thereupon the public analyst receiving a sample for analysis shall divide it into two parts and shall seal or fasten up one of those parts and shall cause it, either upon receipt of the sample or when he delivers his report, to be delivered to the food inspector who shall retain it for production in case legal proceedings are taken.
" Now sub section (3) should also be to read as a whole.
825 "When a sample of any article of food is taken under sub section (1) or sub section (2) of section 10, the food inspector shall send a sample of it in accordance with the rules prescribed for sampling to the public analyst for the local area concerned.
" Any purchaser of any article of food other than a food inspector can also get the food purchased by him analysed in accordance with section 12.
Section 13 deals with the report of the Public Analyst and makes it, in certain cases, subject to the over riding effect of the report of the Director of the Central Food Laboratory.
Sub section (5) of section 13 says that any document purporting to be a report signed by a public analyst, unless it has been superseded under subsection (3) by a certificate of the Director of the Central Food Laboratory, may be used as evidence of the facts stated therein in any proceeding under the Act.
It shall be final and conclusive evidence of the facts, stated therein.
Of course, if necessary, the Public Analyst can be called as a witness, in accordance with the Code of Criminal Procedure, to depose about certain facts in relation to his report either at the instance of the prosecution or the accused.
Even the Court may summon him as its witness if the justice of the case so requires.
And until and unless the report of the Public Analyst is demolished, shaken or becomes doubtful, it is final and conclusive evidence of the facts stated therein.
A person can be convicted under section 16 (1 ) (a) (i) merely on the basis of the report of the Public Analyst.
His report, therefore, has got a great sanctity for protecting the general public and their health against use and consumption of adulterated food.
On the other hand, it has great significance and importance for the protection of a citizen as he can be convicted under the Act only on its basis.
Amongst the Rules, the relevant ones for our purpose are Rules 14 to 22A contained in Chapter V the heading of which is "Sealing, Fastening and Despatch of Samples.
" The manner of sending sample for analysis is provided in Rule 14 and the method of labelling and addressing the bottles or containers is to be found in Rule 15.
Rule 16 deals with the manner of packing and sealing the samples.
How a container of a sample is to be sent to the Public Analyst is mentioned in Rule 17.
The precaution of sending the memorandum and impression of seal is provided for in Rule 18.
Rules 19, 20 and 21 deal with preservatives to be added to certain types, of samples.
The important Rule 22 with which we are mainly concerned in these appeals specifies the quantity of sample to be sent to the Public Analyst and says "The quantity of sample of food to be sent to the Public Analyst or Director for analysis shall be as specified below.
" Items 1 to 22 _gives a list of various articles of food.
The residuary item is 23 which includes all foods not specified in items 1 to 22.
In the last column of this list as against the quantity to be supplied,the heading is "Approximate quantity to be supplied.
" The first question which was mooted before us was whether Rule of the Rules is directory or mandatory.
Attention of the Bench deciding Pamanani 's case (supra) was not called to this aspect of the 826 matter.
It seems to have been assumed, however, that the Rule is mandatory.
Rules of interpretation for determining whether a particular provision is directory or mandatory are well known.
Even in regard to Rule 22, many High Courts of India had taken the view that the Rule was directory or recommendatory as the use of the word approximate ' in one of the columns of the Rule indicates.
The object of the Rule, according to the said decisions, was to secure evidence as to whether the article of food sold was adulterated or not.
If the quantity sent by the Food Inspector to the Public Analyst was sufficient for analysis and caused no prejudice to the accused, then the mere fact of his sending a lesser quantity than that prescribed could not vitiate the evidentiary value of the report of the Public Analyst of the conviction based thereupon; vide State of Bombay vs Ramanlal Jamnadas Gandhi(1); Nagar Swatha Adhikari, Nagar Mahapalika, Agra vs Ant Ram(2) Public Prosecutor vs Basheer Sahib(3); Public Prosecutor, Andhra Pradesh vs Pasara Rama Rao(4); Public Prosecutor vs Ediga Venkata Swami(5); Food Inspector, Quilon vs Koyakutty(6) and Food Inspector, Calicut vs T. Karunakaran & others.
(7 ) No decision of any High Court taking a contrary view was brought to our notice.
In the Bombay decision mentioned above, it was also observed, and rightly, that, whether the Rule is recommendatory or mandatory, it should be observed by the Food Inspectors concerned.
We may add that the decisions of the Courts holding that the Rule is merely directory and if the quantity sent by the Food Inspector is sufficient for the purpose of analysis, the report of the Public Analyst should not be thrown out merely on the ground of the breach of the Rule, are not meant to give a charter or a licence to the Food Inspectors for violating ' the Rule.
They must remember that even directory Rules are meant to be observed and substantially complied with.
A Food Inspector committing a breach of the Rule may be departmentally answerable to the higher authorities.
He should, therefore, always be cautious in complying with the Rules as far as possible and should not send a lesser quantity of sample than prescribed to the Public Analyst unless there be a sufficient reason for doing so.
In the eleventh edition of the well known treatise, Maxwell on Interpretation of Statutes.
are to be found at page 362 onwards certain guidelines laid down for determining whether a particular Statute or Statutory Rule is imperative or directory.
"Where, indeed, the whole aim and object of the legislature would be plainly deflated if the command to do the thing in a particular manner did not imply a prohibition to do it in any other manner, no doubt can be entertained as to the intention"; that is to say, such a requirement would be imperative. ' At page 364 it is stated : "The general rule is, that an absolute enactment must be obeyed or fulfilled exactly, but it is sufficient if a directory enactment be obeyed or fulfilled substantially." (1) I.L.R. [1960] Bombay, 404.
(2) A.I.R. 1966 Allahabad, 32.
(3) A.I.R. 1966 Madras 325.
(4) A.I.R. 1967 Andhra Pradesh 49.
(5) A.I.R. 1967 Andhra Pradesh, 131.
(6) 1972 Kerala Law Times, 464.
(7) 1973 Kerala Law Times, 595.
827 A few principles may now be extracted with advantage from the seventh edition of Craies on Statute Law Page 62: When a statute is passed for the purpose of enabling something to be done, and prescribed the formalities which are to attend its performance, those prescribed formalities which are essential to the validity of the thing when done are called imperative or absoute; but those which are not essential, and may be disregarded without invalidating the thing to be done, are called directory".
Page 262 "It is the duty of courts of justice to try to get at the real intention of the, legislature by carefully attending to the whole scope of the statute to be construed. .
that in each case you must look to the subject matter, consider the importance of the provision and the relation of that provision to the general object intended to be secured by the Act, and upon a review of the case in that aspect decide whether the enactment is what is called imperative or only directory.
" It is not necessary to refer to the numerous decided cases on this point.
Applying the statutory principles extracted above, it would be noticed that the use of the word 'shall ' in sub section (3) of section 11 and in Rule 22 would, on its face, indicate that an imperative duty has been cast upon the Food Inspector to send a sample in accordance with the prescribed Rules.
But it is well known that the mere use of the word 'shall ' does not invariably lead to this result.
The whole purpose and the context of the provision has to be kept in view for deciding the issue.
The object of the Act is to obtain the conviction of a person dealing in adulterated food.
It was brought to our notice by counsel on either side that the quantities of various samples of food to be sent to the Public Analyst as fixed from time to time have varied.
As observed by this Court in the case of State of Uttar Pradesh vs Kartar Singh(1) the standards of food are fixed after consultation with the Committee constituted under section 3 of the Act.
The quan tities of samples are also fixed from time to.
time by the Government presumably in consultation with the Committee and on the basis of the Experts ' opinions.
By and large, it appears,, as was stated before us by the.
learned Attorney general with reference to the various tests and the quantities required therefor from the Manual of Methods of Tests and Analysis for food, that generally the quantities fixed are more than double the quantity required for analysis by the Public Analyst.
As, for example, the total quantity required for the various tests of Ghee is approximately 55 gms.
But the quantity prescribed in Rule 22 is 150 gms.
The purpose of prescribing more than double the quantity required for analysis.
is that a Food Inspector while taking a sample of food for analysis in accordance with section 11 is not aware at the threshold whether the person from whom the sample has been taken would decline to accept one of the three parts.
It is to (1) [1964]6 S.C.R. 679. 828 guard against such an eventuality that the quantity prescribed is more than double because if the person declines to accept one part of the sample, then, as mentioned in sub section (2), the Food Inspector has to send an intimation to the Public Analyst of such refusal and thereupon the letter has to divide the 1/3rd part sent to him into two: parts.
The half of the one third is retained for further tests, if necessary, or for production in case legal proceedings are taken.
It would thus be seen that the whole object of section 11 and Rule 22 is to find out by ,a correct anaysis, subject to further.
verifications and tests by the Director of the Central Laboratory or otherwise, as to whether the sample of food is adulterated or not.
If the quantity sent to the Public Analyst, even though it is less than that prescribed, is sufficient and enables the Public Analyst to make a correct analysis, then merely because the quantity sent was not in strict compliance with the Rule will not result in the nullification of the report and obliterate its evidentiary value.
If the quantity sent is less, it is for the Public Analyst to see whether it is sufficient for his analysis or not.
if he finds it insufficient, there is an end of the matter.
If, however, he finds it sufficient, but due to one reason or the other, either because of further tests or otherwise,, it is shown that the report of the Public Analyst based upon the short quantity sent to him is not trustworthy or beyond doubt, the case may fail.
In other words, if the object is frustrated by the sending of the short quantity by the Food Inspector to the Public Analyst, it is obvious, that the case may end in acquittal.
But if the object is not frustrated and is, squarely and justifiably achieved without any shadow of doubt, then it will endanger public health to acquit offenders on technical grounds which have no substance.
To quote the words of Sir George Rankin, C. J. from the decision of the Calcutta High Court in Chandra Nath Bagchi vs Nabadwip Chandra Dutt and others(1) at page 478, it would be merely piling unreason upon technicality.
" In our considered judgment the Rule is directory and not mandatory.
But we must hasten to reiterate what we have said above that, even so, Food Inspectors should take care to see that they comply with the Rule as far as possible.
We may also advert to one more aspect of the wording of the Rule to find out whether it is directory or mandatory and that is the use of the word 'approximate ' in the second column of the list.
The use of this term does indicate the directory nature 'of the Rule but does not necessarily militate against the view that the Rule is mandatory.
The expression 'approximate quantity ' is meant to convey that the quantity to be supplied must be in the close vicinity of the quantity specified So long it is so, there is no infraction of the Rule at all.
But the question of non compliance with the Rule comes in when the quantity supplied is not in close vicinity of the quantity specified and appreciably below it.
Even so, if the quantity supplied is sufficient and enables the Public Analyst to do his duty of making a correct analysis,, it should be inferred that the Rule has been substantially complied with, as the purpose of the Rule has been achieved.
(1)A.I.R. 1931 Calcutta 476.
829 In Pamanani 's case (supra) the Court seems to have, been Over whelmed by a sense of injustice when the High Court, which had acquitted the manufacturer, convicted the appellant, a grocer although facts of the case did indicate that the real culprit was the manufacturer.
Technically, the grocer could not succeed in getting protection under section 19 (2) (a) of the Act.
It is in this background, we are inclined.
to think that the Court 's sense of justice weighed heavily in favour of the grocer and prompted it to say "that non compliance with the quantity to be supplied caused 'not only infraction of the provisions but also injustices".
How did it cause injustice? There is not elaboration in the judgment.
There is no indication of the basis for saying "The quantities mentioned are required for correct analysis.
" A lesser quantity also could enable the Analyst to make a correct analysis.
That being so, the inference, from the two premises stated above, that "Shortage in quantity for analysis is not permitted by the statute", if we may say so, with great respect, is not a correct statement of the law.
We may, in passing, note that the Rules have now been amended and Rule 22B has been added in 1977 which reads as follows "22B Quantity of sample sent to be considered as sufficient Notwithstanding anything contained in Rule 22, the quantity of sample sent for analysis shall be considered as sufficient unless the public analyst or the Director reports to the contrary.
" In our opinion, the new Rule has been added for the purpose of clarifying the law and not by way of amending it.
The law, as we have enunciated it, was so even without Rule 22B and it is stated here, to place it beyond any debate or doubt.
We may usefully refer to a recent decision dated July 6, 1976 of the Supreme Court of the United States of America in the cases of W. T. Stone, Warden, Petitioner, 74 1055 vs Lloyad Charles Powell and Charles L. Wolff, Jr., Warden, Petitioner, 72 1222 vs David L. Rice wherein the majority of the Court made a conspicuous departure from its previous decision of about half a century in the application of the exclusionary Rule of evidence.
The prosecution relied upon evidence obtained by searches and seizures Which were said to be unconstitutional and unlawful.
The issue was of considerable importance in the administration of criminal justice.
Mr. Justice Powell in his leading majority judgment dissenting from the earlier view said "Upon examination, we conclude, in light of the nature and purpose of the Fourth Amendmen t exclusionary rule, that this view is unjustified.
We hold, therefore, that where the State has provided an opportunity for full and fair litigation of a Fourth Amendment claim, the Constitution does not require that a State prisoner be granted federal habeas corpus relief on the ground that evidence obtained in an unconstitutional search or seizure was introduced at his trial." 830 A very wholesome principle was adverted to by the learned Judge when he said : "Application of the rule thus deflects the truth finding process and often frees the guilty.
The disparity in partiCular cases between the error committed by the police officer and the windfall afforded a guilty defendant by application of the rule is contrary to the idea of proportionality that is essential to the concept of justice.
Thus, although the rule is thought to deter unlawful police activity in part through the nurturing of respect for Fourth Amendment values, if applied indiscriminately it may well have the opposite effect of generating disrespect for the law and administration of justice.
" Chief Justice Burger in his concurring opinion said "To vindicate the continued existence of this judge made rule, it is incumbent upon those who seek its retention and surely its extension to demonstrate that it serves its declared deterrent purpose and to show that the results outweigh the rule 's heavy costs to rational enforcement of the criminal law.
See, e.g. Killough vs United States, ; (1962).The burden rightly rests upon those, who ask society to ignore trustworthy evidence of guilt, at the expense of setting obviously guilty criminals free to ply their trade.
" We may now briefly deal with some of the submissions made on behalf of the respondents in support of the decision of this Court in Pamanani 's case.
It was argued with reference to Mothods in food Analysis, second edition by Maynard A. Joslyn, that the sample must be a representative sample.
It is with that view that the quantity was prescribed in Rule 22 and should not be permitted to be tampered with in any manner.
We are not impressed by this argument at all.
A representative sample has got a different connotation, meaning and purpose in commercial transactions.
If for instance, an average price is to be fixed for a huge quantity of, say, wheat lying in bulk in different storages, then samples must be taken from all the storages to make them a representative sample of the entire quantity for the fixation of the average price.
Taking sample from one storage will not be sufficient.
In our statute the ingredient of the offence is, as mentioned in the 7th section of the Act, manufacturing for sale, storing, selling or distributing any adulterated food.
If the food sold to the Inspector is proved to be adulterated, it is.
immaterial whether the sample purchased by him is a representative sample or not of the entire stock in possession of the person.
A person who. stores or sells such sample is liable to be punished under section 16 (1) (a) (i) of the Act.
Reliance was placed upon the case of Dwerryhouse vs United Co operative Dairies, Ltd. (1) The question for consideration in that case was the scope and ambit of certain sections of the Food and Drugs Act, 1955.
The Justice had come to.
the conclusion on the facts of the (1) [1962] 1 All England Law Reports, 936.
831 case that no sample under the Act had been procured and decided that section 108 did not prevent their hearing the, case and that the supplier was entitled.
to the defence laid down by section 94(4) of the Act.
On a case stated by Justices for the county of Chester, Lord Parker, C.J. said at page 941 "I think that they were wrong in holding that the respondent was entitled to the statutory defence laid down in section 94(4) of the Act.
That defence is only open in respect of a sample of milk taken.
I cannot think that one can give a sample of milk any other meaning than a sample of milk procured under the Act, which are the words used in section 108 (1) (a) (i).
Indeed, sub section
(4) of section 94 appears in a section which is dealing particularly with the sampling of milk, and subsequent proceedings, and I am quite satisfied, therefore, that if, as I think, no sample was procured under the Act, sub section
(4) does not come into operation.
" On a consideration of the various relevant provisions of the English Statute for the application of section 1108(1) and section 94(4) it was found necessary that the sample should have been procured under the said Act.
Since it was not so, both the said provisions were held to be inapplicable.
In the context of our Statute the decision is of no help to the respnodents.
Reliance was also placed upon the case of Skeate vs Moore(1).
In that case the report of the Public Analyst showed that the aggregate of meat in the two pies represented a smaller percentage of meat than was required to be contained in one meat pie under the Meat Pie and Sausage Roll Regulations, 1967.
He did not find separately the meat content of each of the two pies sent to him.
Under Regulation 5, a meat content of each pie was necessary to be found out.
The proceeding had to be "in respect of an article of substance sampled.
" They were found to relate to part only of the sample taken.
And in that view of the matter the conviction was quashed.
In our opinion, the Language of the 1955 Act and the Regulations framed thereunder being quite dissimilar to our Statute and the Rules, the decision aforesaid cannot be assessed into service in favour of respondents.
On a careful consideration of the matter, we have come to the conclusion, and we say so with very great respect, that Pamanani 's case on the point at issue before us was not correctly decided.
And this would have necessitated our passing of various consequential orders in these cases.
In some cases High Court refused special leave against orders of acquittal; in others some other grounds of attack on the order of conviction were available but were neither gone into nor decided by the High Court; in some others the High Court following the decision of this Court in Pamanani 's case recorded orders of acquittal.
We also (1) [1971] 3 All England Law Reports, 1306.
832 found that, in some cases, the adulteration was of a minor and technical character, although in some it was of, rather, serious nature too.
In some cases, decisions were given on the footing that chillies powder is condiment and not spice a matter which we are not deciding.
But taking the totality of the facts and circumstances of each case and specially the fact that Pamanani 's case has held the field for about three years, by now, we did not feel that justice required that we should interfere with the orders of acquittal in all these cases and send some cases back to the High Court while deciding others ourselves by recording orders of conviction.
Rule 22B clarifying the law has also been introduced as late as December, 1977 although Pamanani 's case was decided in December, 1974.
We were informed at the Bar, and so far we are aware, rightly 'too, that for non compliance with the requirements of Rule 22, many cases in different States had ended in acquittal.
Decision in many of them became final and only a few could be brought to this Court.
Each one of the Food Inspectors concerned had jailed in discharging his duty strictly in accordance with the requirements, of the law, and, in such a situation, after great harassment, long delay, and expenses which the respondents bad to incur, they should not be punished by this Court.
In the three Kerala cases Mr. section V. Gupte appearing with Mr. K. R. Nambiar and Mr. Sudhakaran stated before us that the State was interested more in the correct enunciation of the law than in seeing that the respondents in these appeals are convicted.
They were not anxious to prosecute these matters to obtain ultimate conviction of the respondents.
A large number of the other appeals are by the Municipal Corporation of Delhi for whom the Attorney General appeared assisted by Mr. B. P. Maheshwari.
Although a categorical stand was not taken on behalf of the appellants in these appeals as the one taken in the Kerala cases, eventually, the learned Attorney General did net seriously object to the course indicated by us.
In the few Bombay appeals M/s. V. section Desai and M. N. Shroff showed their anxiety for obtaining ultimate convictions of the offenders, but we do not find sufficient reason 'or passing a different kind of order in the Bombay appeals.
In similar situations in the case of The State of Bihar vs Hiralal Kejriwal and Another(") this Court refused to exercise its discretionary jurisdiction under Article 136 of the Constitution and did not order the continuance of the criminal proceeding any further.
In Food Inspector, Calicut Cororation vs Cherukattil Gopalan and anr.(2) this Court said at page 730 : "But in view of the fact that the appellant has argued the appeal only as a test case and does not challenge the aquittal of the respondents, we merely set aside the order and judgment of the High Court.
But we may make it clear that apart (1) [1960] 1 S.C.R. 726.
(2) 833 from holding the respondents technically guilty, we are not setting aside the order of acquittal passed in their favour.
" For the reasons stated above, we dispose of these appeals by merely laying down the correct proposition of law but do not make any con sequential orders setting aside the acquittal of any of the respondents or sending back the cases to the Courts below or convicting any of them by an order of this Court.
Appeals allowed.
| Rule 22 of the Prevention of Food Adulteration Rules, 1955 framed under the specifies the quantity of sample of food to lye sent to the Public Analyst or Directorate for analysis as the case may be.
Items 1 to 22 gives a list of various articles of food and the residuary item 23 includes all foods not specified in items 1 to 22.
In the last column of the list, as against the quantity to be supplied, the heading is "Approximate quantity to be supplied".
While considering the said provisions, in Rajal Day Guru Namal Pamanani vs The State of Maharashtra ; 1975 SC 189 conviction of the appellant was set aside by this Court on the ground : "The Public Analyst did not have the quantities mentioned in the Rules for analysis.
The appellant rightly contends that non compliance with the quantity to be supplied caused not only infraction of the provisions but also injustice.
The quantities mentioned are required for correct analysis.
Shortage in quantity for analysis is not permitted by the Statute.
" Since under Article 141 of the Constitution, the above decision of the Supreme Court is binding on all the High Courts, following the above view in some cases the High Court refused special leave against the order of acquittal; in others, some other grounds Of attack on the order of conviction were available but were neither gone into nor decided by the High Court; in some others the High Court recorded orders of acquittal; in some cases, the adulteration was of a minor and technical character, although in some it was of, rather, serious nature too and in some cases, decisions were given on the footing that chillies powder is condiment and not spice.
Hence, the appeals by special leave.
The appellants contended that the view in Pamanani 's case was not correct and needed further examination.
Disposing of the appeals by laying down.
the correct proposition of the law, the Court HELD : (1) The report of the Analyst under section 13 of the has got a great sanctity for protecting the general public and their health against use and consumption of adulterated food.
On the other hand, it has great significance and importance for the protection of a citizen, as he can be convicted under the Act only on its basis, under section 16(1) 821 (a)(ii) of the Act, because unless and until the report of the Public Analyst is demolished shaken or becomes doubtful, it is final and conclusive evidence of the facts stated therein, under section 13 (5) of the Act.
[825 D E] (2) The use of the word 'shall ' in sub section
(3) of section 11 and in Rule 22 would on its face, indicate that an imperative duty has been cast upon the Food Inspector to send a sample in accordance with the prescribed rules.
The mere use of the word 'shall ' does not invariably lead to this result.
The whole purpose and the context of the provisions has to be kept in view for deciding the issue.
[827 D E] (3) The purpose of prescribing more than double the quantity required for analysis is that a Food Inspector while taking a sample of food for analysis in accordance with section 11 of the .
is not aware at the threshold whether the person from whom the sample has been taken would decline to accept one of the three parts.
It is to guard against such an eventuality that the quantity prescribed is more than double because if the person declines to accept one part of the sample then, as mentioned in sub section
(2), the Food Inspector has to send an intimation to the Public Analyst of such refusal and thereupon the latter has to divide 1/3rd part sent to him into two parts.
The half of the one third is retained for further tests, if necessary, or for production in case legal proceedings are taken.
[827 G H, 828 A B] State of Uttar Pradesh vs Kartar Singh ; referred to.
(4) The object of the Act is to obtain the conviction of a person dealing in adulterated food.
The whole object of section 11 and Rule 22 is to find out by a correct analysis, subject to further verifications and tests by the Director of the Central Laboratory or otherwise, as to whether the sample of food is adulterated or not.
If the quantity sent to the Public Analyst, even though it is less than that prescribed, is sufficient and enables the Public Analyst to make a correct analysis, then merely because the quantity sent was not in strict compliance with the rule will not result in the nullification of the report and obliterate its evi dentiary value.
If the quantity sent is less, it is for the public Analyst to see whether it is sufficient for his analysis or not.
If he finds it insufficient, there is an end of the matter.
If, however, he finds it sufficient, but due to one reason or the other, either because of further tests or otherwise, it is shown that the report of the Public Analyst based upon the short quantity sent to him is not trustworthy or beyond doubt, the case may fail.
in other words, if the object is frustrated by the sending of the short quantity, by the Food Inspector to the Public Analyst, the case will end in acquittal.
But if the object is not frustrated and is squarely and justifiably achieved without any shadow of doubt, then it will endanger public health by acquitting offenders on technical grounds which have no substance.
[827 E, 828 B F] Chandra Nath Bagchi vs Nabadwip Chandra Dutt and others A.I.R. 1931 Calcutta 476 quoted with approval.
(5) The object of rule 22 is to secure evidence as to whether the article of food sold is adulterated or not.
That being so, even directory Rules are meant to be observed and substantially complied with.
A Food Inspector committing a breach of the Rule may be departmentally answerable to the higher authorities.
He should, therefore, always be cautious in complying with the Rules as far as Possible and should not send a lesser quantity of sample than prescribed to the Public Analyst unless there be a sufficient reason for doing so.
[823 A B D E] State of Bombay vs Ramanlal Jamnadas Gandhi I.L.R. [1960] Bombay, 404, Nagar Swatha Adhikari, Nagar Mahapalika Aqra vs Ant Ram A.I.R. 1906 Allahabad, 32 Public Prosecutor vs Basheer Sahib A.I.R. 1966 Madras 325 Public Prosecutor vs Ediga Venkata Swami A.I.R. 1967 Andhra Pradesh 131 Andhra Pradesh vs Pusala Rama Ram A.I.R. 1967 Andhra Pradesh 49, FoodInspector, Quilon vs Kovakutty (1972) Kerala Law Times.
464 and Food Inspector, Calicut vs T. Karunakaran Others (1973) Kerala Law Times, 595 approved.
(6) Rule 22 is directory and not mandatory, as it seems to have been assumed by this Court in Pamanani 's case.
The use of the word 'approximate ' does in 822 dicate the directory nature of the Rule but does not necessarily militate against the view that the Rule is mandatory.
[826 A, 827 A B] (7) The expression 'approximate quantity ' is meant to convey that the quantity to be supplied must be in the close vicinity of the quantity specified.
So long it is so, there is no infraction of the Rule at all.
But the question of non compliance with the Rule comes in when the quantity supplied is not in close vicinity of the quantity specified and is appreciably below it.
Even so, if the quantity supplied is sufficient and enables the Public Analyst to do his duty of making a correct analysis, it should be inferred that the Rule has been substantially complied with, as the purpose of the Rule has been achieved.
[828 F H] (8) In Pamanani 's case, the Court seems to have been overwhelmed by a sense of injustice when the High Court, which had acquitted the manufacturer, convicted the appellant, a grocer, although facts of the case did indicate that the real culprit was the manufacturer.
Technically, the grocer could not succeed in getting protection under section 19(2)(a) of the Act.
It is in this background, that the Court 's sense of justice weighed heavily in favour of the grocer and promoted it to say "that non compliance with the quantity to be supplied caused not only infraction of the provisions but also injustice.
[829 A B] (9) The new Rule 22B added in 1977 to the Prevention of Food Adulteration Rules, 1955 is for the purpose of clarifying the law and not by way of amending it.
The law was so, even without any amendment.
Rule 22B places it beyond any debate of doubt.
[829 E] W. T. Stone, Warden, Petitioner 74 1055 vs Lloyd Charles Powell and Charles L. Wolff.
Jr. Warden Petitioner, 72 1227 vs David L. Rice decided on July 6, 1976 quoted with approval.
A representative sample has got a different connotation, meaning and purpose in commercial transaction.
In our statute, the ingredient of the offence is manufacturing for sale, storing, selling or distributing any adulterated food.
If the food sold to the Inspector is proved to be adulterated, it is immaterial whether the sample purchased by him is a representative sample or not of the entire stock in possession of the person.
A person who stores or sells such sample is liable to be punished under section 16(1)(a)(i) of the Act.
[830 F G] Dwerryhouse vs United Co operative Dairies, Ltd. [1962] 1 All England Law Reports 936 and Skeate vs Moore [1971] 3 All England Law Reports, 1306 distinguished.
Rajal Das Guru Namal Pamanani vs The State of Maharashtra ; overruled.
[ln ,view of Pamanani 's case holding the field for about 3 years, the introduction of the new section 22B and the States ' interest being more in the correct enunciation of the law than in seeing that the respondents in these appeals are convicted, the Court, in larger interest of justice, disposed of the appeals without disturbing or setting aside the orders under appeals or making any consequential orders]
|
Appeal No. 12 of 1953.
Appeal from the Judgment and Decree dated the 31st March, 1949, of the High Court of Judicature at Bombay (Chagla C.J., Weston and Dixit JJ.) in First Appeal No. 175 of 1946, arising out of the Judgment and Decree dated the 28th February, 1946, of the Court of the Civil Judge, Senior Division at Broach in Special Suit No. 9 of 1941.
K. section Krishnaswamy Aiyangar (H. J. Umrigar, with him) for the appellants.
C. K. Daphtary, Solicitor General for India (J. B. Dadachanii, with him) for respondents Nos.
I and 2. 1953.
November 18.
The Judgment of the Court was delivered by MUKHERJEA J.
This appeal is directed against a judgment and decree of the Bombay High Court, dated the 31st March, 1949, confirming, on appeal, the decision of the Civil Judge, Senior Division, at Broach, in Special Suit No. 9 of 1941.
The facts of the case, though a bit long, are not in controversy at the present stage and the entire dispute bet ween the parties centres round certain points of law relating to the rights of the reversioners, in whose favour a deed of surrender was executed by a Hindu widow, to recover 341 possession of the properties, belonging to the last male owner, during the lifetime of the widow from persons who acquired title to the same by adverse possession against the widow.
To appreciate the contentions that have been raised by the parties before us, it will be convenient to give a brief narrative of the material facts in their chronological order.
A reference to the short genealogical table given below will show at once the relationship between the parties to the present litigation.
Jijibhai | | | | | | Tribhovan Kashibhai | (died in 1914) | | Mathurbhai | | (diedin 1924) Shankarabhai Rukmini== ==Hirabai (died in 1922) Manubhai | ==Bai Kashi (husband) | (widow) | unjabhai (Deft. No. 3) | (died in 1931) | | | | | | | | | Natvarlal Ravajibhai Dadubhai RajiniKant (Deft. No. 1) (Deft.
No. 2) (Piff.1) (Plff. 2) One Jijibhai, whose name appears at the head of the table, had two sons, Tribhovan and Kashibhai.
Tribhovan had a son named Mathurbhai who died in 1924 leaving, behind him, his widow Hirabai and a son Punjabhai.
Kashibhai died in 1914 leaving a son Shankarbhai and a daughter Rukmini.
Shankarbhai, whose property is the subject matter of dispute in the present case, died without any issue in 1922, leaving his widow Bai Kashi who is defendant No. 3 in the suit.
It is said, that there was a notional partition between Kashibhai and Mathurbhai in 1913 which effected a severance of their joint status without any actual division of properties by metes and bounds.
Mathurbhai died on 26th January, 1924, and on the 2nd of June following Hirabai, his widow, made an application to the District Judge for appointment of a guardian of the person and property of her minor son Punjabhai, alleging, inter alia, that the minor was the sole owner of the entire joint estate by right 342 of survivorship.
On the 1st of July, 1924, Bai Kashi, the widow of Shankarbhai, was served with a notice of this application.
On the 17th of July following, she purported to adopt a son named Sivabhai and in answer to the notice in the guardianship proceeding served upon her, put forward the claim of her adopted son.
The District Judge regarded the adoption to be invalid and by his order dated November 29, 1924, appointed the Deputy Nazir of his court as guardian of the properties of the minor Punjabhai, the properties including the share of Shankarbhai in the joint estate.
The Deputy Nazir took possession of all the properties on behalf of the minor and it is not disputed that Bai Kashi never got possession of any portion of these properties since then.
In 1926 Bai Kashi as the guardian of her infant adopted son Sivabhai brought a Title Suit, being Suit No. 180 of 1926, claiming partition of the joint family properties on the allegation that, by adoption, Sivabhai became a co owner to the extent of a half share in them.
The suit was resisted by Punjabhai represented by his court guardian and the main contention put forward on his behalf was that the adoption, by the widow, of Sivabhai was invalid in law.
This contention was given effect to by the trial judge and by his judgment dated the 4th July, 1927, the suit was dismissed.
An appeal was taken against this decision, on behalf of Sivabhai, to the High Court of Bombay, but the appeal was withdrawn on the 25th July, 1927.
Thereafter in 1930, Rukmini, the sister of Shankarbhai and the mother of the present plaintiffs, instituted a suit, being Suit No. 350 of 1930, for a declaration that the joint status of the family was disrupted by the notional partition effected between Mathurbhai and Kashibhai in 1913 and she, as the next heir of Shankarbhai, was entitled to succeed to Shankarbhai 's share of the properties on the death of Bai Kashi.
The trial judge was of opinion that there was, in fact, a severance of joint status by an informal partition between Mathurbhai and Kashibhai, but he dismissed the suit on the ground that a suit of this character was not maintainable in law.
343 Rukmini died soon after that and her two sons, who were then minors, represented by their father as next friend, pre ferred an appeal to the High Court against this order of dismissal.
The High Court allowed the appeal and gave a declaration in favour of the appellants to the effect that there was disruption of the joint family in the year, 1913.
This judgment is dated the 8th of February, 1939, and there after on the 30th of January, 1941, Bai Kashi executed a deed of surrender in favour of the plaintiffs relinquishing her widow 's estate in favour of the husband 's nearest rever sioners.
On the basis of this deed of surrender the plaintiffs brought the suit, out of which this appeal arises, in the Court of the Civil Judge, Broach, claiming possession of the disputed properties as the next heirs of Shankarbhai against the defendants who are the sons and heirs of Punjabhai.
Bai Kashi was impleaded as defendant No. 3 in the suit.
The suit was resisted by defendants I and 2 who raised a number of pleas in answer to the plaintiffs ' claim.
The material defence was of a, three fold character.
It was contended in the first place that there was no partition between Mathurbhai and Kashibhai as alleged by the plaintiffs and the family being still joint when Shankarbhai died, the entire joint estate vested in Mathurbhai by right of survivorship.
It was alleged in the second place, that even if the family had separated, the adopted son of Bai Kashi being a nearer heir the plaintiffs had no title to the property.
The last and the main defence was that the defendants having acquired a title by adverse possession against the widow, and the widow having lost whatever interest she had in her husband 's property, the deed of surrender was invalid, and even if it was valid, the surrenderees could not claim possession so long as the widow was alive.
The trial court overruled all these contentions and decreed the plaintiff 's suit.
The defendants I and 2 preferred an appeal against this decision to the High Court of Bombay and the appeal first came up for hearing before a Division Bench consisting of Chagla C.J., and Dixit J.
The learned Judges, by their judgment 344 dated the 23rd January, 1948, which has been described as an interlocutory judgment, disposed of the first two points mentioned above and affirmed the decision of the trial court thereon.
It was held that the decision in Rukmini 's Title Suit No. 350 of 1930, to which the defendants were made parties, precluded them from challenging the fact of there being a partition between Mathurbhai and Kashibhai in 1913 and also from contending that Sivabhai was a validly adopted son.
There remained the only other question, namely, as to whether the plaintiffs could, on the basis of the deed of surrender, lay a claim for possession of the properties during the lifetime of the widow, as against persons, who had acquired title by adverse possession against her.
In regard to this point, a contention was raised on behalf of the appellants that the deed of surrender was not duly proved and as there was no definite finding on this point, the learned Judges sent the case back for findings on the two following issues which they themselves framed: (i)Whether the plaintiffs proved the deed of surrender dated 30th January, 1941 ? and (ii)Whether Bai Kashi surrendered the whole of her husband 's interest in the whole property of her husband? The trial court recorded its findings on both these issues after taking additional evidence and its findings were in favour of the plaintiffs.
After the findings were returned to the High Court, the appeal was heard by a Full Bench con sisting of Chagla C.J. and Weston and Dixit JJ.
The Full Bench confirmed the decree of the trial court and dismissed the appeal.
It was held by the learned Judges that even though the defendants acquired by adverse possession a title against the Hindu widow, the deed of surrender executed by her did not become infructuous or inoperative thereby; and as there was acceleration of inheritance in favour of the plaintiffs who were the next heirs of Shankarbhai, they were competent to recover possession of the properties at once by 34 5 evicting the defendants and were not bound to wait till the widow actually died.
It is the propriety of this decision that has been challenged bedore us by the defendants 1 and 2 in this appeal.
The arguments advanced by Mr. Krishnaswami Ayyangar, who appeared in support of the appealcan be conveniently considered under two heads.
The first branch of his contention is, that as the widow 's estate was in this case completely extinguished by adverse possession exercised by the defendants, she had, in fact, no interest left in her, which she could make a surrender of in favour of the reversions.
What is said is, that the widow, by suffering the trespassers to remain in possession of her husband 's estate for more than the statutory period, had placed it ab solutely beyond her power to deal with it any further; and her title being already extinguished by adverse possession, no further extinction by any act of surrender on her part was possible.
The other branch of the learned counsel 's contention is, that assuming, that the widow could make a surrender, such surrender could not prejudice the rights of persons, acquired by grant from the widow or by prescription against her prior to the date of surrender and these rights would, in law, endure during the entire period of the widow 's natural life.
Whatever rights the reversions could assert, they could assert only after the widow 's death and not during her lifetime.
A number of decided authorities have been canvassed before us in this connection by the learned counsel and it cannot be disputed that judicial opinion on these points is not at all uniform.
It seems to us that for a proper determination of the questions, it is necessary first of all to formulate as clearly as possible the precise nature and effect of what is known as "surrender" by a Hindu widow.
The word "surrender" cannot be said to be free from ambiguity.
It connotes nothing more than the English doctrine of merger and a Hindu widow, whose interest is usually, though incorrectly, likened to that of a life tenant under the English law, merely accele 346 rates the reversion by surrendering her limited interest in favour of the reversioner, undoubtedly no surrender can be effective if the widow has already parted with her interest in the property by a voluntary act of her own or her rights therein have been extinguished by adverse possession of a stranger.
The English doctrine of merger, though it may have influenced some of the judicial pronouncements in our country has really speaking no application to a Hindu widow 's estate.
The law of surrender by a Hindu widow as it stands at present, is for the most part, judge made law, though it may not be quite correct to say that there is absolutely no textual authority upon which the doctrine could be founded, at least, impliedly.
So far as the Dayabhag law is concerned, its origin is attributed to Jimutabahan 's commentary on the well known text of Katyayana which describes the interest of a childless widow in the estate left by her husband and the rights of the reversioners after her death(1).
While commenting on Katyayana 's text, Jimutabahan lays down that the persons who should be the next heirs on failure of prior claimants would get the residue of the estate after her use on the demise of the widow in whom the succession had vested, as they would have succeeded if the widow 's rights were non existent or destroyed (in otherways) [jatadhikaraya ; patnya: adhikikara pradlvamsspi bhogavasishtam dhanam grrhiyu : ] (2).
It was observed by Ashutosh Mookerjee J. in Debi Prosad vs Golap Bhagat(3) that the theory of relinquishment or surrender was foreshadowed in these remarks of Jimutabahan.
This much is clear from the passage referred to above that the commenta tor had in mind other modes of extinction of the widow 's interest in her husband 's properties besides the natural death of the widow, which would have the effect of letting in her husband 's heirs.
There is indeed no mention of surrender or renunciation in the text and it was not on the basis of any textual authority that the law of surrender developed in (1) Vide Dayabhag Chap.
II, section 1, paragraph 56.
(2) Dayabhag Chap.
II, section I, paragraph 59.
(3) at 771.
347 India.
But it Must be noticed that though certain terms and expressions of English law have been made use of in a some what loose sense, yet the radical idea involved in the doctrine of surrender by a Hindu widow is totally different from what is implied in the merger of a life interest in the reversionary estate under the English law.
In English law the reversioner or remainderman has a vested interest in the property and his rights are simply augmented by the surrender of the life estate.
In the Hindu law, on the other hand, the widow, so long as she is alive, fully represents her husband 's estate,.
though her powers of alienation are curtailed and the property after her death goes not to her but to her husband 's heirs.
The presumptive reversioner has got no interest in the property during the lifetime of the widow.
He has a mere chance of succession which may not materialise at all.
He can succeed to the property at any particular time only if the widow dies at that very moment.
The whole doctrine of surrender is based upon this analogy or legal fiction of the widow 's death.
The widow 's estate is an interposed limitation or obstruction which prevents or impedes the course of suc cession in favour of the heirs of her husband.
It is open to the widow by a voluntary act of her own to remove this obstruction and efface herself from the husband 's estate al together.
If she does that, the consequence is the same as she died a natural death and the next heirs of her husband then living step in at once under the ordinary law of inheritance.
In spite of some amount of complexity which is unavoidable in a law evolved by judicial decisions, this fund.
mental basis of the doctrine of surrender can be said to be established beyond doubt.
Thus Lord Dunedin in Gounder, v Gounden(1) enunciated the law in clear terms as follows: "It is settled by long practice and confirmed by decision that a Hindu widow can renounce in favour of the neares, reversioner if there be only one or of all the reversioners (1) 46 I.A. 72 at 79.
348 nearest in degree if more than one at the moment.
That is to say, she can, so to speak, by voluntary act operate her own death.
" Again in repudiating the suggestion that there could be any such thing as a partial surrender, His Lordship observed: "As already pointed out, it is the effacement of the widow an effacement which in other circumstances is effected by actual death or by civil death which opens the estate of the deceased husband to his next heirs at that date.
Now, there cannot be a widow who is partly effaced and partly not so.
" Thus surrender is not really an act of alienation of the widow of her rights in favour of the reversioner.
The rever sioner does not occupy the position of a grantee or transferee, and does not derive his title from her.
He derives his title from the last male holder as his successor in law and the rights of succession are opened out by the act of self effacement on the part of the widow which operates in the same manner as her physical death.
It is true that a surrender may and in the majority of cases does take the form of transfer, e.g., when the widow conveys the entire estate of her husband.
without consideration and not as a mere device to share the estate with the reversioner, in favour of the latter.
But "it is the self effacement by the widow that forms the basis of surrender and not the ex facie transfer by which such effacement is brought about"(2).
The true nature and effect of a surrender by a Hindu widow of her husband 's estate have been thus summoned up, and in our opinion quite correctly, by a Division Bench of the Madras High Court(3): "It is settled that the true view of surrender under the Hindu law is that it is a voluntary act of self effacement by the widow having the same consequences as her death, in opening up the succession to the next heirs of the last male owner.
The intermediate stage is merely extingushed and (1) I.L.R. 39 Mad. 1035.
(2) See Vytla Sitanna vs Mariwada 61 I.A. 200, 207 ; Mumareddi vs Pitti Darairaja , 661.
(3) Vide Damaraju vs T.Narayana I.L.R.1941 Mad.551,557.
349 not transferred and the law then steps in to accelerate succession so as to let in the next reversioner.
The surrender conveys nothing in law; it is purely a self effacement which must of necessity be complete; for, as the Privy Council has said, there cannot be a widow partly effaced and partly not just as there cannot be a widow partly dead and partly alive.
The fiction of a civil death is thus assumed when a surrender takes place; and when the reversioners come in they come in their own right as heirs of the last owner and not as transferees from the widow.
" As surrender conveys nothing in law and merely causes extinction of the widow 's rights in her husband 's estate, there is no reason why it should be necessary that the estate must remain with the widow before she could exercise her power of surrender.
The widow might have alienated the property to a stranger or some one might have been in adverse possession of the same for more than the statutory period.
If the alienation is for legal necessity, it would certainly be binding upon the estate and it could not be impeached by any person under any circumstance.
But if the alienation is not for legal necessity, or if a squatter has acquired title by adverse possession against the widow, neither the alienation nor the rights of the adverse possessor could affect the reversioners ' estate at all.
These rights have their origin in acts or omissions of the widow which are not binding on the husband 's estate They are in reality dependent upon the widow 's estate and if the widow 's estate is extinguished by any means known to law, e.g., by her adopting a son or marrying again, these rights must also cease to exist.
The same consequences should follow when the widow withdraws herself from her husband 's estate by an act of renunciation on her part.
Whether any equitable principle can be invoked in favour of a third party who has acquired rights over the property by any act or omission of the widow may be a matter for consideration.
But the learned counsel for the appellants is not right when he says that as adverse possession extinguished the rights of the widow, no fresh extinction by an act of surrender was possible.
As the rights acquired by adverse possession are 350 available only against the widow and not against the hus band 's heirs, the husband 's estate still remains undestroyed and the widow may withdraw herself from that estate leaving it open to the reversioners to take possession of it at once as heirs of the last male holder unless there is any other rule of law or equity which prevent them from doing so.
The first branch of the appellants ' contention cannot, therefore, succeed.
This leads us to the other branch of the appellants ' contention and the question arises whether in case of sur render by a Hindu widow, a person, who has, prior to the date of surrender, acquired, by adverse possession, an inte rest in the widow 's estate, can be ousted from possession of the property so long as the widow remains alive? This question, Mr. Ayyangar argues, should be answered in the negative.
His contention, in substance, is, that by reason of adverse possession for more than 12 years the title of the limited owner became extinguished under article 28 of the Limitation Act and the possessor acquired good title against the widow.
This title, it is said, cannot be displaced by the surrenderee who gets the property by reason of a, subsequent voluntary act on the part of the widow.
In support of this contention the learned counsel has placed reliance upon a number of cases, principally of the Madras High Court, where it has been held that a reversions in whose favour a surrender has been made by the widow cannot challenge the right of a prior alienee from the widow, even though the alienation was not for legal necessity, so long as the widow remains alive; and the same protection could be claimed by one who acquired the limited interest of a widow by adverse possession against her.
It is undisputed that there is considerable divergence of judicial opinion on this point and in these circumstances it is necessary to examine briefly the different lines of reasoning adopted by the different High Courts in dealing with the subject.
In Subbamma vs Subramanyam(4), which can be taken to be the leading pronouncement of the Madras High Court (1) I.L.R. 39 Mad.
351 on the point, it was held that a surrender by a Hindu widow could not affect prior alienations made by her, and even though such alienations might not be binding on the reversions as not being made for a proper or necessary purpose, they are binding on the widow for her life time or at any rate during the period of her widowhood.
In deciding this case the learned Judges relied mainly upon an earlier decision of the same court in Sreeramulu vs Kristamma(1), where the view taken was that an alienation, not for legal necessity, made by a Hindu widow, prior to adopting a son, could not be challenged by the adopted son so long as the widow remained alive.
In other words, the effect of a surrender by a Hindu widow was treated to be the same as that of an act of adoption by her.
Two years later, a Full Bench(2) of the Madras High Court overruled the decision in Sreeramulu vs Kristamma(1) and held that where a Hindu widow alienated property for a purpose not binding on the inheritance and thereafter adopt ed a son, the right of the adopted son was not prejudiced by the unauthorised transfer and he could sue for possession at once.
Although the Full Bench overruled the decision in Sreeramu vs Kristamma(1) which was relied on as an authority in Subbamnia 's case(3), yet the law enunciated in the latter case as regards the effect of surrender on previous alienations made by the widow was not dissented from, and Kumaraswami Sastriyar J., who was one of the Judges com posing the Full Bench.
in the course of his judgment, expressed the view that the adoption of a son by a Hindu widow to her husband was quite different from surrender in favour of the reversions, and to a relinquishment by the widow, based on no consideration of duty to her husband or his spiritual benefit, courts could very properly refuse to annex rights to defeat prior alienations made by her.
(1) (2) Vide Vaidyanatha Sastri vs Savithri I.L.R. (3) I.L.R. 39 Mad.
352 This view was approved in Sundarasiva vs Viyyamma(1) and has been accepted since then as good law in all the subsequent cases(2) of the Madras High Court.
The Madras High Court has also expressly held that the position of a person, who has acquired by adverse possession the limited interest of a Hindu widow is exactly the same as that of an alienee from her and if the title of such person has been completed already, it could not be defeated by a surrender made by the widow(1).
These decisions undoubtedly support the appellants ' case.
In the Calcutta High Court the question was raised in Prafulla Kamini vs Bhabani(4) as to whether a gift made by widow prior to surrendering her husband 's estate could be challenged by the reversioner during the period of the widow 's life.
The two Judges, constituting the Bench, differed in their opinion; and whereas Walmsley J. held that the gift was valid for the period of the widow 's life, Page J., on the other hand, after an elaborate discussion of the law relating to the legal affect of a widow 's surrender, came to the conclusion that the reversioner became immediately entitled to recover possession from the donee.
In view of the difference of opinion between the two Judges, there was an appeal filed under clause 15 of the Letters Patent, but the point in controversy was not decided by the Letters Patent Bench.
The matter again came up before another Bench of the Calcutta High Court consisting of D. N. Mitter and Rao JJ.(5).
Both the Judges concurred in holding that the view expressed by Page J. in the earlier case was right and that on a surrender by the Hindu widow of her husband 's estate and the consequent extinguish (1) I.L.R. (2) Vide the oases collected in Arunachala vs Arumugha I.L.R. (3) Vide Kamiraju vs Singaraju A.I.R. 1935 Mad. 664; Korabala vs Ratala A.I.R. 1951 Mad. 753.
(4) (5) Vide Ram Krishna vs Kausalya 353 ment of her interest therein all prior alienations in excess of her power were liable to be challenged by the reversioner immediately on the surrender taking effect just as they could be impeached if the widow died a natural death.
In the judgment under appeal the Bombay High Court has substan tially accepted the view taken by the Calcutta Judges in the case referred to above.
In the Allahabad High Court a Division Bench, consisting of Boys and Sulaiman JJ.
took a view similar to that of the Madras High Court, in Lachmi vs Lachho(1).
Boys J. in course of his judgment observed: "The doctrine of surrender having been imported into the Hindu law by judicial decision, we are entitled to import the complementary rule essential to the prevention of fraud that the widow cannot by making a surrender defeat rights created by herself and creation of which was within her authority." Sulaiman J., on the other hand, was very critical of this view and he expressed his own opinion(2) as follows: "I find great difficulty in discovering any true basis for holding that though the reversioner in whose favour the surrender has taken place has succeeded to the estate of the last male owner and derives title from him, he is nevertheless 1stopped from challenging any alienations made by the Hindu widow during her lifetime as if he were a grantee from her." In spite of these observations, however, the learned Judge agreed with Boys J. in the conclusion arrived at by the latter, principally on the ground that it would not work any hardship if the reversioner, in whose favour the surrender is made, were to take the property subject to the transfers made by the widow so as to allow the transfers to remain valid for her lifetime.
There has however been a definite change in the (1) I.L.R. 49 All. 334.
(2) I.L.R. 49 All 334 346.
354 view taken by the Allahabad High Court since then, and in a very recent pronouncement(1) of that court the learned Judges have expressly approved of the decision of the Calcutta High Court which is in entire agreement with the opinion actually expressed by Sulaiman J. as stated above.
So far as the Patna High Court is concerned, the case of Basudeo vs Baidyanath(2) was decided sometime before the case of Ram Krishna vs Kausalya(3) was heard by the Calcutta High Court and the learned Judges, without examining the principles of law independently, followed the Madras autho rities which had at that time been accepted by the Allahabad High Court.
An analysis of the Madras decisions, referred to above, upon which the learned counsel for the appellant places his reliance, will show that the grounds upon which they purport to be based are of a threefold character.
The first is that an alienation of property by a Hindu widow, in excess of her powers, though not binding on the inheritance, creates in the alience an interest commensurate with the period of her natural life.
A part of the interest, it is said, is severed from the husband 's estate when there is an alienation by the widow, and the reversioner when he takes the estate on surrender, takes it subject to the interest already created.
A person, who has acquired the widow 's interest by adverse possession against her, occupies, according to the Madras decisions, as stated above, the same position as an alienee from the widow.
The second ground is, that as the widow herself is in capable of disputing the title of the alienee or of the person who has acquired interest by adverse possession against her, a like disability attaches to the reversioner also who could not have obtained the properties but for the surrender made by the widow.
The third ground assigned is that the law of (1) Vide Raghuraj Singh vs Raba Singh A.I.R. 1952 All. 875.
(2) A.I.R. 1935 Pat.
(3) 355 surrender being a judge made law, the courts in recognising the right of surrender by a Hindu widow can and ought to impose conditions on the exercise of her power based on considerations of justice, equity and good conscience, and surrender being a purely voluntary act on the part of the widow, she could not be allowed by her own act to prejudice the interests which she had already created.
The first line of reasoning mentioned above is based upon the dictum of Bhashyam Ayyangar J. in Sreeramulu vs Kristamma(1), which though accepted in ubbamma 's case(1), was expressly dissented from in the subsequent Full Bench decision in Vaidyanatha vs Savithri(3).
This view, in our opinion, proceeds upon a misconception regarding the true nature of a, Hindu widow 's estate and the rights and duties which vest in her under the Hindu law.
Though loosely des cribed as a "life estate", the Hindu widow 's interest in her husband 's property bears no analogy to that of a "life tenant" under the English law.
As was pointed out by the Judicial Committee(1) as early as 1861, the estate which the Hindu widow takes is a qualified proprietorship with powers of alienation for purely worldly or secular purposes only when there is a justifying necessity and the restrictions on the powers of alienation are inseparable from her estate.
The restrictions, as the Judicial Committee pointed out, which are imposed on the Hindu widow 's powers of alienation, are not merely for the protection of the material interest of her husband 's relations, but by reason of the opinion expressed by all the Smriti writers that the Hindu widow should live a life of moderation and cannot have any power of gift, sale or mortgage except for religious or spiritual purposes.
The Hindu law certainly does not countenance the idea of a widow alienating her property without any necessity, merely as a (1) (2) I.L.R. 39 Mad. 1035.
(3) I.L.R. 41 Mgad.
(4) Vide Collector of Masulipatam vs Cavaly Venkata 8 M.I.A. 529.
356 mode of enjoyment, as was suggested before us by Mr. Ayyangar.
If such a transfer is made by a Hindu widow, it is not correct to say that the transferee acquires necessarily and in law an interest commensurate with the period of the natural life of the widow or at any rate with the period of her widowhood.
Such transfer is invalid in Hindu law, but the widow, being the grantor herself, cannot derogate from the grant and the transfer cannot also be impeached so long as a person does not come into existence who can claim a present right to possession of the property.
As in the majority of cases, persons with such rights come into existence only when the widow dies it is generally said that the alienee gets the estate for the term of the widow 's life.
We think that the legal position has been correctly indicated by Kumaraswami Shastriyar J. in the Full Bench case(1) referred to above.
On the one hand, a Hindu widow has larger rights than those of a life estate holder, inasmuch as, in case of justifying necessity she can convey to another an absolute title to the properties vested in her.
On the other hand, where there is no necessity for alienation, the interest, which she herself holds and which she can convey to others, is not an indefeasible life estate, but an estate liable to be defeated on the happening of certain events which in Hindu law cause extinction of the widow 's estate.
Remarriage by the widow is one such event which completely divests her of any interest in her husband 's property.
Adoption of a son to her husband is another circumstance which puts an end to her estate as heir to her husband, the effect of adoption being to bring in a son who has prior claims to succession under the Hindu law.
In both these sets of circumstances it is not disputed that prior rights derived from the widow, if not supported by legal necessity, could be defeated by the next heir of the husband or the adopted son as the case may be.
If the effect of surrender, as explained above, is to destroy the widow 's estate in the same way as if she suffered physical or civil death, there is no conceivable reason why the reversioner should not, subject to any question of fraud or collusion that might arise, be in a position to recover possession of the properties from (1) Vide, Vaidyanatha vs Savithri, I.L.R. 357 an alienee from the widow or from one who has obtained title by adverse possession against her, as none of them could acquire rights except against the widow herself.
Kumaraswami Shastriyar J. is of opinion(1) that a, surrender stands on a different footing from adoption by a widow.
According to the learned Judge, the surrender by the widow and the acceptance of the estate by the reversioner are purely matters of contract.
The widow is not bound to surrender the estate, nor is the reversioner bound to accept it, except on terms which would apply to any other transfer of immovable property so far as prior alienees are concerned.
This, in our opinion, involves a total misapprehension of the nature and legal effect of surrender by a Hindu widow as we have already explained.
Surrender is not alienation of an interest of the widow in favour of the reversioner, and no acceptance by the reversioner is necessary as a condition precedent to the vesting of the estate in him.
The estate vests in the reversioner under operation of law without any act on his part.
It is also difficult to see why the learned Judge looked upon surrender as a matter of contract between the widow and the reversioner.
It is true that the widow at the time of surrendering her husband 's estate can, if she likes, stipulate for a right to be maintained out of the properties for her lifetime; but reservation of such small benefit absolutely necessary for her maintenance does not invalidate a surrender as has been held by the Privy Council in more cases than one(1).
Mr. Ayyangar argues that a widow, who requires to be maintained out of her husband 's property, cannot be said to have suffered death.
But this argument is fallacious.
Nobody says that the surrendering widow actually dies.
It is a fiction of law pure and simple and it is for the law to determine under what circumstances this fiction of natural or civil death would arise.
There is such a legal fiction involved in adoption also when a son is adopted by a widow subsequent to the death of her husband.
Such adopted son is given the rights of a posthumous son and the fiction is that he was in existence from before (1) Vide Vaidyanatha vs Savithri, I.L.R. at 99.
(2) Vide Sureswar Misra vs Mahesarani, 47 T. A. 233.
358 the date of the proprietor 's death, although the fact is otherwise.
So far as the legal consequences are concerned, there is no material difference between an adoption and an act of surrender by the widow.
In our opinion, there is no warrant in Hindu law for the proposition that in case of alienation by a Hindu widow of her husband 's property without any justifying necessity, or in the case of a stranger acquiring title by adverse possession against her the interest created is to be deemed to be severed from the inheritance and if a surrender is made subsequently by the widow, the surrenders must take it subject to such prior interest.
Sulaiman J. in the Allahabad case(1) cited above enunciated the law with perfect precision when he said that the effect of an alienation by a widow is not to spilt up the husband 's estate into two parts or to give to the alienee an interest necessarily co extensive with her lifetime.
The reversionary right to challenge it is no part of the widow 's estate at all and, therefore, could not be surrendered to the reversioner.
The first line of reasoning, therefore, seems to us to be of no substance.
The second ground upon which the Madras decisions purport to be based is manifestly untenable.
The widow her self may be incapable of derogating from her own grant and disputing the alienation which she has herself made; but as has been said already, surrender is not an alienation and as the reversioner does not derive his title from her, there is no principle of law under which the acts of the widow could bind him.
As Sulaiman J. pointed out in the case just referred to, that if the reversion were a grantee from the widow, he would not only have been stopped from challenging the alienation during her lifetime, but would have been equally estopped from challenging it after her death; admittedly that is not the case(1).
It is true that the surrender benefits the reversioner but the benefit comes to him under the provision of general law as a result of self effacement by the widow.
No estoppel can possibly be founded on the receipt of such bene (1) Vide Lachini Chand vs Lachho, I.L.R. 49 All.
(2) Vide I.L.R. 49 All.
334 at 346.
355 Coming now to the third ground, it is certainly true that a surrender is a voluntary act on the part of the widow and she is under no legal or moral obligation to surrender her estate.
Instances do arise where an alienee has paid valuable and substantial consideration for a property on the expectation of enjoying it so long as the widow would remain alive and his expectations have been cut short by a surrender on the part of the widow, which no doubt benefits the reversioner in the sense that he gets the inheritance even during the widow 's lifetime.
On the other hand, a person, who takes transfer from a Hindu widow, acts with his eyes open.
If the transfer is without any legal necessity, there is a risk always attached to the transaction, and there is no law, as we have already ,explained, which secures to him necessarily an estate for life.
A man making a purchase of this character is not expected to pay the same value which he would pay if the purchase were made from a full owner.
Be that as it may, even assuming that the court is not incompetent to impose conditions on the reversions ' right of recovering possession of the property during the widow 's lifetime on grounds of equity, justice and good conscience in proper cases, it is clear that in the case before us no equitable considerations at all arise.
The appellants are not alienees from the widow ; they came upon the land as trespassers with,out any right and it is the law of limitation that has legalised what was originally a clear act of usurpation.
They have enjoyed their property since 1925, and as the title which they have acquired is not available against the reversionary interest, we do not see any reason sanctioned by law or equity for not allowing the reversions their full legal rights.
The result is that in our opinion the decision of the High Court is right and this appeal must stand dismissed with costs.
Appeal dismissed.
Agent for respondents Nos.
I & 2 : A. C. Dave.
| The appellant, drove a jeep at an excessive speed and dashed against a wall.
In the jeep was also a bottle with a label on it as "Tincture Zingeberis".
On medical examination the appellant was found to be intoxicated.
He was prosecuted under sections 66(1)(b) and, 85(1)(1), (2) and (3) of the Bombay Prohibition Act, 1949; the Magistrate convicted him under the aforesaid sections and sentenced him under sections 66(1)(b) and 85(1) of the Act.
On appeal the Sessions Judge acquitted the appellant under section 66(1)(b) but confirmed the sentence under section 85(1)(1).
The respondent filed an appeal against the acquittal and the appellant filed a revision against the conviction, which the High Court heard together and allowed the respondent 's appeal and dismissed the revision of the appellant.
In appeal by certificate; HELD Whatever meaning may be given to the expression "drunk", in this case there was clear evidence that the appellant had taken the drink for the purpose of intoxication and not for indication and that under the influence of drink he had rashly driven his Jeep.
He was drunk and was, therefore, incapable of taking care of him self.
[363 G] If a person consumes liquor, i.e. any liquid consisting of or containing alcohol, he commits an offence under section 66(1) of the Act and, therefore, is liable to be convicted thereunder.
But by reason of section, 24A(2) of the Act, if it is established that the liquor consumed is contained in any medicinal preparation which is unfit for use as intoxicating liquor, the consumption of such liquor is not an offence under the Act, for the Act itself does not apply to such medicinal preparation.
[360 B, C] In terms of section 66(2) of the Act, the burden of proving that the, liquor consumed was a medicinal preparation containing alcohol, the consumption of which was not in contravention of the Act etc., or the rules made thereunder, shifted to the accused.
[361 E] In this case not only the accused failed to discharge the burden so shifted to him by the statute; but the prosecution had also established that the said medicinal preparation was fit for use as an intoxicating liquor.
[361 G] State of Borabay (Now Gujarat) vs Naraindas Mangilal Agarwal, (1962] Supp. 1 S.C.R. 15, held inapplicable.
|
ivil Appeal No. 539 of 1976.
From the Judgment and Order dated 26.8.1975 of the Gujarat High Court in Spl.
Civil Application No. 1627 of 1972.
Soli J. Sorabjee, Attorney General, A. Subba Rao, C.V.S. Rao, P. Parmeswaran and Ms. Nisha Bache for the Appellants.
S.K. Dhingra for the Respondents.
The Judgment of the Court was delivered by R.M. SAHAI, J.
By this appeal Union Government has challenged correctness of construction by High Court of Gujarat of notification No. 163 of 1965 issued under Rule 8 framed under Central Excise and Salt Act allowing exemption to all sorts of papers by "any factory commencing produc tion" to refer "not to the production of excisable goods paper in general failing under Item 17, but to pro duction of these specified exempted categories of paper in Column 2 of this notification" and canvasses for acceptance of the construction put on it by the Collector, Central Excise "that the factory must have commenced production on or after that date and not that the production of these items must have been commenced after the date".
M/s. Arvind Boards & Paper Products Limited, Antalia, Bilimora, Gujarat State, was established in 1942.
From 1944 when it went into production till 1964 it manufactured only straw boards and mill boards.
It expanded its activities in 1965 and commenced manufacture of duplex board.
The packing and wrapping paper was manufactured 661 on experimental basis in 1966 and on commercial basis after 1967.
In December, 1971 the company wrote a letter to the Assistant Collector of Central Excise inquiring as to wheth er the company would be entitled to exemption under notifi cation No. 163/65 both in respect of the production at tributable to its installed capacity as in 1967 as well as in respect of the production attributable to its expanded capacity.
In 1972 it was informed that it would be entitled to concession under Column 5 of the Table of the notifica tion in respect of the production attributable to the en larged capacity, namely, the third machine only.
Consequent ly the claim of the petitioners for exemption on capacity as it existed in 1967 was not accepted.
The order was main tained in appeal as well.
The Appellate Collector held: "I do not agree with the appellant 's contention that the Assistant Collector erred in holding that "any factory which commenced production" related to any factory manufacturing paper falling under Item 17 of the said schedule irrespec tive of the varieties manufactured thereof.
The exemption contained in the aforesaid Notification No. 163/65 as amend ed is in respect of the goods.
Said exemption is conditional i.e. it is applicable to paper produced in a factory which commenced production on or after a specific date.
Therefore, the condition is that the factory must have commenced pro duction on or after that date and not that the production of these items must have been commenced after that date.
" The High Court did not agree with the construction of the Notification made by the Collector (Appeal) and held: "That is why the whole controversy has arisen as regards these key words "commencement of production".
On a plain literal construction, bearing in mind the context of the exemption, where only certain specified categories of paper which is excisable item as specified in Column 2 had been exempted, it is obvious that the commencement of production must refer not to the production of excisable goods paper in general falling under item 17, but to production of these specified exempted categories of paper in Col. 2 of this notification.
Any other interpretation would make the speci fication of various kinds of paper in Column 2 which alone attracted exemption redundant and would make even this condition in Cols.
3, 4 and 5 unworkable.
" Excise duty was leviable under the Act on manufacture and clearance of paper under Item 17 of Schedule 1 to the Act.
It reads as 662 "MANUFACTURED GOODS CLASSIFIED CHIEFLY BY MATERIAL 17.
PAPER, all sorts (including pasteboard, millboard.
straw board and cardboard), in or in relation to the manu facture of which any process is ordinarily carried on with the aid of power '.
XXX XXX XXX (3) Printing and writing paper, packing and wrapping paper, straw board and pulp board, including grey board, corrugated board, duplex and triplex boards, other sorts . . 35 paise per kg." In 1965 the Central Government issued notification exempting papers of all sorts, from so much of the excise duty levi able thereon under the said item read within notification for the time being in force issued by the Central Government in relation to the duty so leviable, as is specified in the corresponding entry in Columns 3, 4, 5(a), 5(b) & 5(c) of the Table as the case may be: TABLE section Des Any factory Any factory Any factory commen cription which comm which comm production for the enced pro enced pro time on or after the duction duction on 1st March, 1964, or before the or after the any factory existing 1st April, 1st April, immediately, before 1961.
1961 but the 1st March 1964 before the whose production 1st March capacity has been 1964.
enlarged and brought into operation on or after the extent such production is attributable to the enlarge capacity.
During the During During the first 12 the period months of second subsequent the com 12 mon to the first mencement mence 24 months of produc ment of of the com duction.
produc mencement of produc tion.
663 1 2 3 4 5(a) 5(b) 5(c) Entitlement of exemption depends on construction of the expression "any factory commencing production" used in the Table extracted above.
Literally exemption is freedom from liability, tax or duty.
Fiscally it may assume varying shapes, specially in a growing economy.
For instance tax holiday to new units, concessional rate of tax to goods or persons for limited period or with the specific objective etc.
That is why its construction, unlike charging provi sion, has to be tested on different touchstone.
Infact an exemption provision is like an exception and on normal principle of construction or interpretation of statutes it is construed strictly either because of legislative inten tion or on economic justification of inequitable burden or progressive approach of fiscal provisions intended to aug ment state revenue.
But once exception or exemption becomes applicable no rule or principle requires it to be construed strictly.
Truly, speaking liberal and strict construction of an exemption provision are to be invoked at different stages of interpreting it.
When the question is whether a subject falls in the notification or in the exemption clause then it being in nature of exception is to be construed strictly and against the subject but once ambiguity or doubt about ap plicability is lifted and the subject fails in the notifica tion then full play should be given to it and it calls for a wider and liberal construction.
Therefore, the first exer cise that has to be undertaken is if the production of packing and wrapping material in the factory as it existed prior to 1964 is covered in the notification.
From the table extracted above it is clear that it is in two parts and exemption is allowable in the first part to the factory commencing production on or after 31st March, 1964, and in the second part to the existing factory to extent of enlarged capacity.
If the first part is read in isolation it is susceptible of construction as was adopted by the High Court.
But the notification has to be read in its entirety and constured as a whole.
Once that is done cloud of uncertainty disappears.
A close reading of both the parts together leaves no room for doubt that it was intended to be exhaustive granting exemption to all factories produc ing packing and wrapping paper whether existing or commenc ing production from 1st March, 1964.
To the former to the extent of enlarged capacity and to latter to full extent.
The ambiguity arose because of absence of words new before 'factory ' or goods after the word 'production ' in the first clause.
To harmonise it the High Court added the words 'goods '.
But what was lost sight of that the words 'commenc ing ' in the first part and 'existing ' in the second part had to be read in juxtaposition.
That is all those factories which were existing from before 664 were entitled to exemption on production of goods to the extent of enlarged capacity.
This enlargement could be as a result of installation of additional machinery.
The word 'capacity must necessarily relate to capacity of factory and not to goods.
For instance a factory with capacity of say 1 lakh kg. of paper but producing only 75 thousand kg.
achiev ing maximum after 1964 could not be covered in the clause as the production cannot be held to be due to enlarged capaci ty.
That could be only if the capacity to produce goods increased due to installation of additional machinery.
If this be true and correct, as it appears to be, then the first part presents no difficulty.
The expression 'commenc ing production ' has to be read as commencing production of goods by a factory which was not existing and has started production on or after 1st March, 1864.
Any other construc tion shall result in discrimination.
A factory like respond ent existing from 1942 producing straw board and mill board shall be entitled to exemption on production of wrapping and packing paper on construction of the expression 'commencing production ' by the High Court even though it switched over from straw board and mill board to packing and wrapping paper after the relevant date whereas another unit existing and producing wrapping and packing paper itself from before 1st March, 1964 could not be entitled to exemption except to the extent of enlarged capacity.
That is if an existing unit would have installed a new machinery it would have been entitled to exemption of production only to that extent whereas any unit producing goods other than the exempted goods would become entitled to exemption in respect of entire production.
That could not have been the intention.
A construction which results in inequitable results and is incongruous, has to be avoided.
Therefore, production of packing and wrapping paper by respondent was entitled to exemption only to the extent it was attributable to enlarged capacity and not to the existing capacity.
Hansraj Goverdhan vs
H.H. Dave, Asstt.
Collector, Central Excise & Customs, Surat and Others, relied on behalf of respondent demonstrates mis conception about interpreting an exemption provision.
It was a case where goods of third persons were manufactured by cooperative society.
But once initial hurdle was crossed and it was held that goods had been produced by cooperative society it was found squarely covered in the notification and the Court extended it to goods manufactured by third persons and repelled the submission that object of granting exemption was to encourage formation of cooperative societies and it should be confined to goods manufactured by its members and not others.
Similarly in Commissioner of Income Tax vs Madho Prasad, ; the provision 665 allowing exemption to 'such part of the income in respect of which the said tax is payable.
under the head 'property ' as is equal to the amount of rent payable for a year ', was construed liberally and it was held that the expression 'equal to the amount of rent payable for a year ' did not 'warrant the inference that the benefit of exemption ' could 'be claimed only once ' because the amount of rent which was sought to be deducted in more than one years was found squarely to fall in Item 36 of notification.
It was again a case of interpreting an exemption notification at later stage.
Recently in Tata Oil Mills Co. Ltd. vs Collector of Central Excise, ; , exemption was to soap made from indigenous rice bran oil as against edible oil.
The assessee was engaged in manufacture of soap from rice bran fatty acid which was extracted from rice bran oil, in assesses factory.
It was found rice bran oil as such could not be used unless it was converted into fatty acid.
Therefore the assessee was covered in the notification.
Once the ambiguity or about manufacture of soap from rice bran fatty acid was removed the Bench proceeded to construe the word "indigenous" in the notification liberally.
In Collector of Central Excise vs Parle Exports (P) Ltd., AIR 1989 644 this Court while accepting that exemption clause should be construed liberally applied rigorous test for determining if expensive items like Gold Spot base or Limca base or Thums Up base were covered in the expression food products and food preparations used in item No. 68 of First Schedule of Central Excise and Salt Act and held 'that it should not be in consonance with spirit and the reason of law to give exemption for non alchoholic beverage basis under the notification in question. ' Rationale or Ratio is same.
Do not extend or widen the ambit at stage of applicability.
But once that hurdle is crossed construe it liberally.
Since the respondent did not fall in the first clause of the notification there was no question of giving the clause a liberal construction and hold that production of goods by respondent mentioned in the notification were entitled to benefit.
In the result this appeal succeeds and is allowed.
The order of the High Court is set aside and the Writ Petition is dismissed with costs.
R.N.J. Appeal allowed.
| The Respondent Company which was established in 1942 went into production in 1944 manufacturing Straw Boards and Mill boards only uptil the year 1964.
In 1965 it expanded its activities by manufacturing duplex board.
In the follow ing year it started manufacturing packing and wrapping paper on experimental basis and on commercial basis after 1967.
Sometime in 1971 the Company wrote to the Assistant Collec tor of Central Excise enquiring as to whether it would be entitled to exemption from duty under Notification No. 163/1965 both in respect of production attributable to its installed capacity as in 1967 as well as in respect of production attributable to its expanded capacity.
The As sistant Collector passed an Order holding the company was entitled to concession under column 5 of the Table of the Notification No. 163 of 1965 in respect of production at tributable to its enlarged capacity namely, the third ma chine and rejected its claim for exemption on production attributable to its capacity as it existed in 1967.
Dissat isfied the company preferred appeal to the Appellate Collec tor who maintained the order of the Assistant Collector.
The Respondent Company thereupon moved the High Court by a writ petition under Article 226 of the Constitution of India.
In allowing the writ Petition the High Court held that on a plain literal construction it is obvious that the commencement of production must refer not to the production of excisable goods paper in general failing under item 17.
but to production of those specified exempted categories of paper in column 2 of the aforesaid notification.
Hence this appeal by the Union of India.
Allowing the appeal and dismissing the Writ Petition of the Company.
this Court.
HELD: When the question is whether a subject falls in the Notification or in the exemption clause then it being in nature of exception is to be construed strictly and against the subject but once ambiguity or doubt about applicability is removed and the subject falls in the notification then full play should be given to it and it calls for a wider and liberal construction.
[663D E] A close reading of both parts of the Notification together leaves no 660 room for doubt that it was intended to be exhaustive grant ing exemption to all factories producing packing and wrap ping paper whether existing or commencing production from 1st March.
1964 to the former to the extent of enlarged capacity and to latter to the full extent.
[663G H] As the Respondent Company did not fall in the first clause of the notification there was no question of giving the clause a liberal construction and hold that production of goods by the Respondent mentioned in the Notification were entitled to the benefit.
Production of packing and wrapping paper by Respondent was entitled to exemption only to the extent it was at tributable to enlarged capacity and not to the existing capacity.
[665F; 664F] Hansraj Goverdhan vs H.H. Dave, Asstt.
Collector, Cen tral Excise & Customs, Surat and Others, [1969] 2 S.C.R. 2.52; Commissioner of Inome tax vs Madho Prasad, ; ; Tara Oil Mills Co. Ltd. vs Collector of Central Excise, ; referred to.
|
Civil Appeals Nos.
493 495 of 1 974 Appeals by special leave from the judgment and order dated the 9th August, 1973 of the Madras High Court in Civil Revision Petition Nos.
1470 to 1472 of 1973.
K. section Ramamurthi, T. N. Vallinayagam, R. N. Nath and V. Maya Krishnan, for the appellant.
M. Natesan, K. Jayaram and R. Chandrasekhar, for the respondent.
The Judgment of the Court was delivered by GOSWAMI, J.
These appeals by special leave are directed against the order of the High Court of Madras in three Civil Revision Petitions under section 25 of the Madras Buildings (Lease and Rent Control) briefly the (Act) whereby the High Court refused to interfere A with the orders of the appellate authority under the Act holding that the appellant (hereinafter to be described as the landlord) has no right to evict the respondents (hereinafter to be described as the tenants) from the premises in question on the ground of demolition and reconstruction.
The tenancy under the landlord is admitted by the tenants there is also no question with regard to validity of the notice of eviction.
The only questions in controversy in these appeals are whether the landlord in this case, who is the holder of life interest in the property, is entitled to evict the tenants under section 14(1) (b) of the Act on the ground that the building is bona fide required by the landlord for demolition and for reconstruction.
The second question raised` in one of the appeals is whether a single petition is maintainable to evict the tenants from two different tenancies one for residential purpose and the other for non residential purpose.
The latter point has been held by the High Court in favour of the landlord but the tenants are raising it in seeking to support the earlier order of the appellate authority.
The premises are situated at Anna Pinai Street, Madras.
Originally the premises belonged to late section Manicka Chettyar, father of section M. Gopalakrislina, the present landlord.
By virtue of a Deed of Settlement executed by section Manicka Chettyar on May 9, 1934, possession of the premises was delivered to his wife, Manoranjithammal, as trustee and guardian an of his three minor children, section M. Gopalakrishna then aged 13` years, and his two minor daughters, Indrani Ammal and Palani Ammal.
We are not concerned with the various directions in the Deed of Settlement except to note the admitted position that Manoranjithammal was allowed to enjoy the rents and profits of the property for her life time subject to certain charges mentioned in the Deed.
After the life time of the settlor 's wife, his son, section M. Gopalakrishna (appellant) shall enjoy the rents and profits of the said property. for his life time" subject lo certain charges on account of his two sisters.
It is further mentioned in the Deed that after the life time of Gopalakrishna, his son and son 's heir of any predeceased son living at that time shall enjoy the property subject to identical charges as absolute owners, with right of sale, gift, etc.
There are further directions in case of other contingencies with which we are not concerned.
We may, however, note that section M. Gopalakrishna is issueless.
From the above terms of the Settlement it is contended by the tenants that the landlord has only a life interest in the premises in question and that it is inherent in such a life interest that it is not permissible for the landlord to invoke section 14(1) (b) as grounds for eviction of the: tenants by demolition of the property for the purpose of reconstruction.
It is emphasised that since the interest of the remainder man may be prejudiced? the landlord with a life interest in the premises cannot evict the tenants on these grounds.
The Rent, Controller held that the requirement of the landlords bona fide and ordered for eviction of the tenants.
The Court of Small Causes, 275 which is the appellate authority, allowed the appeals lodged by the tenants against the orders of eviction and set aside the orders of eviction.
As noticed earlier the High Court refused to interfere in revision.
The High Court agreed with the! view of the appellate authority that the landlord had no right to ask for eviction of the respondents on the ground of demolition and reconstruction, he admittedly having only a life interest or right to enjoy the property for his life.
The appellant sub mits that this view is not legally tenable.
Before we proceed to consider the point in controversy, we may read section 14(1)(b): 14.
"Recovery of possession by landlord for repairs or for reconstruction. (1) Notwithstandig anything contained in this Act, but subject to the provisions of section 12 and 13, on an application made by a landlord the Controller shall, if he is satisfied (b) that the building is bona fide required by the landlord for the immediate purpose of demolishing it and such demolition is to be made for the purpose of erecting a new building on the site of the building sought to be demolished, pass an order directing the tenant to deliver possession of the building to the landlord before a specified date".
The expression landlord is defined under section 2(6) as follows: " 'Landlord ' includes the person who is receiving or is entitled to receive the rent of a building, whether on his own ac count or on behalf of another or on behalf of himself and others 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".
x x x x This inclusive definition o landlord would clearly take in its sweep the present landlord who holds a life interest in the premises and who admittedly has been on his own right under the Deed of Settlement as a trustee receiving rents of the premises from the tenants.
We are not even concerned with the question as has been sought to be established in the case by proving that there is no possibility or any objection from the daughters of the settlor or from any other remainder man.
It is sufficient to observe that the rights between section M. Gopalakrishna and the remainder man with regard to the terms of the Deed of Settlement win have to be worked out in appropriate proceedings, if necessary and the general law win govern the matter if any occasion arises.
On the other hand, the Act with which we are concerned is a self contained and complete code for regulation of the rights between landlord and tenants as defined in the Act (See M/s Raval and Co. vs K. G. 276 Ramachandra and others (1).
Thus a controversy that may arise between a landlord and others, who are not his tenants under the Act, is outside the ken of this Act.
Even a possible dispute, imaginary or real, between the landlord and the remainder man cannot affect adjudication of the claim of the landlord against his tenants under the provisions of the Act.
It win also not affect the efficacy of the nature of the plea of bona fide on the part of the landlord, if otherwise so.
Such questions as are raised in this appeal by the tenants are, therefore, irrelevant in a litigation between the landlord and tenants when a suit for eviction is instituted by the former on any of the grounds available to him under the Act.
It is clear that when the objection on the score of the landlord being a holder of life interest and hence incapable of invoking section 14 (1) (b) fails the suit must be decreed.
lt was strenuously submitted by Mr. Natesan that a tenant with a life interest cannot be allowed to demolish the property in order to reconstruct it as that action would, per se be not bona fide.
We are unable to accede to this submission.
A landlord has every right to demolish his property in order to build a new structure on the site with view to improve his business or to get better returns on his investment.
Such a step per se, cannot be characterised as mala fide on the part of the landlord.
There is therefore.
no merit in this contention.
Mr. Natesan faintly submitted that a single petition with regard to two different tenancies, although in the same premises, one for residential purpose and the other for non residential purpose, is not maintainable.
We do not find any substance in such a contention when the tenancy is one.
In the result the appeals are allowed and the order of the High Court as well as that of the appellate authority are set aside.
The order of the Controller allowing eviction of the tenants stands restored.
We win, however, allow time to the tenants upto 31st January, 1976, to vacate the premises on the distinct condition that they shall submit affidavits in this Court undertaking to vacate the premises by the aforesaid date within two weeks from to day.
The appellant win be entitled to his costs in these appeals.
One set of costs P.H.P. Appeal allowed.
| In 1950, the respondent had executed three trust deeds for the benefit of three ladies who were described as his wives, and himself, as the father of their minor children.
After the returns in respect of the assessment year 1955 56, 1956 57, 1957 58 and 1958 59 were filed by the respondent, the Income tax Officer, who had the three trust deeds before him called upon the respondent for information regarding his relationship to those three ladies as well as his relationship to a fourth lady.
A statement was filed, on behalf of the respondent, before the Income tax Officer, wherein it was stated that only the fourth lady was his legally wedded wife, that the other three were merely referred to as the wives, and that their children were not the legitimate children of the respondent.
The Income tax Officer, in assessing the total income of the respondent did not include, under section 16(3) of the 1922 Act, the income of those three ladies and their minor children arising out of the trust properties.
In fact, he assessed them separately with respect to their income from the trust properties.
In 1964 the Income tax Officer issued notices under section 148 of the 1961 Act seeking to reopen the assessments under section 147 on the ground that there were two other trust deeds of 1957, which were not produced before the I. T. 0.
in which also two of the ladies were acknowledged as the wives of the respondent and their children as his children and that their marriage should be presumed because of the acknowledgement.
The respondent there upon challenged the validity of the proceedings and the High Court allowed his petition.
Dismissing the appeal to this Court, HELD : (1) Section 147(a) provides that if the Income tax Officer has reason to believe that by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for any year, income chargeable to tax has escaped assessment for that year, he may assess or reassess such income for the assessment year concerned.
The fact that the ladies and their children had been described in the 1957 documents as wives and children of the respondent would have been material if the description were any thing new that the Income tax Officer happened to discover for the first time.
But the 1950,deeds also contained the same description.
The non production of the 1957 documents at the time of the original assessment cannot therefore be regarded as non disclosure of any material fact necessary for the assessment of the respondent for the relevant assessment years.
Having second thoughts on the same material does not warrant the initiation of a proceeding under section 147.
[467G H; 468B; D E] (2) The law has not changed or since the original assessments were made and it was open to the Income tax Officer to have made the presumption that the ladies were the wives at the time when he made the assessment.
He cannot avail of section 147 to correct his mistake.
[468F G] (3) The expression 'reason to believe ' occurring in section 147 of the 1961 Act or the corresponding section 34 of the 1922 Act, does not mean a purely subjective satisfaction on the part of the Income tax Officer.
The reasons for the belief must have a rational connection or relevant bearing to the formation of the belief.
Therefore, the High Court, under article 226, has power to set aside a notice under section 147 of the 1961 Act or section 34 of the 1922 Act, if the condition precedent to the exercise of the .jurisdiction under those sections did not exist.
[469C D]
|
Civil Appeal No. 1784 of 1966.
Appeal from the judgment and decree dated March 17, 1952 of the Bombay High Court in Appeal No. 385 of 1948 from original decree.
276 D. Narsaraju, .4.
K. Sen, Balkrishan Acharya and S.S. Shukla, for respondents Nos. 3 and 4.
K. K, Jain, M.K. Garg and H.K. Puri, for respondents Nos.
13(a) to 13(f).
The judgment of the Court was delivered by Hegde J.
The main question for decision in this appeal is whether the Haveli at Nadiad in which the idol of Shree Gokulnathji is installed as well as the other properties detailed in plaint schedules A & B are the properties of a public religious trust created by the followers of Vallabh cult, residing at Nadiad.
The history of the suit institution and its management as also the various pleas taken by the parties have been elaborately set out by the High Court in a well considered judgment.
Hence we shall refer only to such pleas as are necessary to decide the contentions advanced before us.
The plaintiffs are the residents of Nadiad.
They are Vaishnavites.
They belong to the Vallabh Sampradaya.
They sued for a declaration that the properties mentioned in S.chs.
A & B of the plaint are properties oF the ownership of the trust ,mentioned earlier.
They are suing on behalf of the Vallabha Sampradayees residing at Nadiad.
According to their case as finally evolved that even during the last quarter of the 18th century, the Mandir of the Gokulnathji existed at Nagarwad in Nadiad Prant but in about 1821 a new Mandir was constructed by the followers of the Vallabha School at Santh Pipli, Nadiad and the idol of Gokulnathji which was previously worshiped at Nagarwad was taken and consecrated there.
In about 1831 they invited Goswami Mathuranathji, a direct descendant of Shree Vallabhacharya to come over to Nadiad and take up the management of the Mandir as its Maha Prabhu.
According to the plaintiffs the Mandir in question was constructed by the Vallabha Sampradayees and the expenses of the sevas as well as the utsavas performed in the Mandir were contributed by them.
They ,further say that the properties belonging to the trust were purchased from the contributions made by the devotees of that temple.
They assert that the persons belonging to the Vallabha Sampradaya have a right to have darshan of the deities in the Mandir, according to usage, as of right.
In short their case is that the Mandir in question is a place of public religious worship by the persons belonging to Vallabh Sampradaya and the Maha 'Prabhuji is ' only a trustee.
He has a right to reside in the upstair portion of the Mandir and further he can utilise a reasonable portion of the income of the trust, after meeting the requirements of the trust for his maintenance as well as the maintenance of the members of his family.
They contend that the suit properties were dedicated to Shri Gokulgathji 277 and the Maha Prabhu has no independent right of his own in those properties.
It is further said that the management of the temple was carried on efficiently by Mathuranathji and his descendants till about the time Annirudhalalji became the Maha Prabhu in Samy 1955.
Annirudhalalji under evil advice sought to.
secure the Jamnagar Gadi and for that purpose spent enormous sums of money from out of the funds belonging to the suit temple.
He also incurred considerable debts in that connection.
He died in Samy.
Thereafter defendant No. 1, his widow took over the management of the suit temple and its properties.
During her management she began to.
assert that she was the absolute owner of the suit properties including the suit temple.
She alienated several items out of the suit properties.
Hence they were constrained to bring the suit under appeal for the declaration mentioned earlier and also for a further declaration that the alienations effected by her are illegal, improper and unauthorised and not binding on the deity.
They also sought a mandatory injunction against defendants Nos. 2, 7 to 14 to restore lot No. 2 property in Sch.
A to defendant No. 1 for the benefit of the deity Shree Gokulnathji after declaring that the sale deed dated 19th April 1953 passed by defendant No. 1 to defendant No. 2 in respect of it is illegal, improper, unauthorised and without consideration and the same is not binding on the deity.
They have also asked for a permanent injunction against defendants 3, 4, 5 and 6 restraining them from enforcing the mortgages dated 4 3 1939, 27 1 1942, 12 1 1942 and 17 12 1941 passed by defendant No. 1 in their favour.
The suit was mainly contested by defendant No. 1 According to her Goswami Mathuranathji Maharaj was the owner of the idol Shri Gokulnathji.
It is he who established the Haveli at Nadiad and rounded his Gadi there; he was not only the owner of the Haveli but he.
was also the owner of the deities that were being worshiped in that Haveli.
She further pleaded that as per the tenets ,and usages of the Vallabha school, it is not possible for the members of that cult to found a temple.
They can only worship through the Acharya (Maha Prabhu) in his house known as Haveli.
According to.
their cult the Goswami Maharaj otherwise known as Maha Prabhu is the emblem of God head and the living representative of divinity.
She went further and took up the plea that according to the.
Vallabha Sampradaya no deity can own any property.
She further averred that Mathuranathji Maharaj and his descendants received from time to time presents and gifts made by his followers.
Those presents were made to them as a mark of reverence and respect to them and with a view to receive their grace.
They were the absolute owners of the idols they worshiped, the presents and gifts made to them and of the properties acquired by them.
She denied that the Haveli in which Shree Gokulnathji is worshiped is a public temple.
She also denied that the Vallabh Sampradayees were entitled L2Sup.
CI/70 6 278 to have the Darshana of that deity in that Haveli as of right.
She denied the plaint averments that all or any portion of the suit properties were acquired from the funds raised by the devotees or that the sevas or festivals were conducted from out of the contributions made by them.
She justified the impugned alienations mainly on the ground that she had absolute right to deal with the suit properties as she pleased.
The other defendants supported the defence taken by the Ist defendant.
They further pleaded that the alienations effected in their favour were supported by consideration and they were bona fide alienees and therefore those alienations they are not open to challenge.
The trial court dismissed the plaintiffs ' suit principally on the ground that as per the tenets and usages of Vallabha School it is impermissible for Vallabh Sampradayees to found a public temple and therefore, it is not possible to uphold the pleas advanced on behalf of the plaintiffs.
In appeal the High Court reversed the judgment and decree of the trial court.
It accepted the plaintiffs case that suit properties were the properties of a public religious trust and the alienations impeached were not valid and binding on the trust.
This appeal has been brought by the I st defendant.
The alienees have not appealed against the decree of the High Court.
In this Court they merely supported the pleas taken by the Ist defendant.
In this case voluminous evidence both oral and documentary has been led by the parties.
Fiftyone witnesses were examined in court and two on commission.
The oral evidence mainly relates to the tenets and beliefs of the devotees of the Vallabh Cult and the usages that prevail in their places of worship.
Before proceeding to examine the issues arising for decision in the case it is necessary to mention certain circumstances which have a bearing on those issues.
At the stage of pleadings it was common ground between the parties that Mathuranathji was the first person to be recognised as their Mahraj by the Vallabh Sampradayees of Nadiad.
The plaintiffs ' case as mentioned earlier, was that there was a temple of Shree Gokulnathji at Nagarwad in Nadiad even before Mathuranathji arrived ,at that place and according to them Mathuranathji had in fact been invited by the Vallabh Sampradayees of Nadiad to take over the manage ment of the temple that was already existing.
In her written statement defendant No.1 admitted that Mathuranathji was the first descendant of Vallabha to settle down in Nadiad.
According to her he brought with him the idol of Shree Gokulnathji and started worshiping that idol in his Haveli.
At a later stage the 1st defendant changed her version and put forward the theory that the ancestors of Mathuranathji had brought the idol of Shree 279 Gokulnathji to Nadiad and installed the same there long before Mathuranathji came to that place.
This significant deviation in the Ist defendant 's case has evidently been introduced to meet the evidence led on behalf of the plaintiffs about the existence of Gokulnathji temple even before Mathuranathji was born in 1806.
Yet another circumstance that has to be borne in mind in appreciating the evidence adduced by the parties is about the manner in which Mathuranathji and his descendants were managing the Haveli.
They had maintained regular and systematic accounts.
It is obvious they were maintaining two sets of accounts, one relating to.
the income and expenses of the deity and another relating to the personal income 'and expenses of the Maharaj.
But when the I st defendant was summoned to produce those accounts, the accounts relating to certain important periods were not produced and no satisfactory explanation is forthcoming for their non production.
From this omission the High Court has drawn the inference that those account books have been kept back as the evidence which those books would have afforded was not favorable to the 1st defendant 's case.
We agree with that conclusion.
Similarly certain important documents have been kept back by the 1st defendant.
Some of those documents were available at the time of the inventory but when the I st defendant was summoned to produce them she failed to do so.
This circumstance has again led the High Court to infer that those documents were deliberately kept back in order to suppress material evidence supporting the plaintiffs ' case.
Two of the important documents produced into court namely Exhs.
501 and 503 were found to have been tampered with.
501 appears to be a register of the temple properties but the title page of that book has been mutilated.
The top portion of that page had been clearly cut and removed.
It is reasonable to assume that the portion that has been removed contained the title of the register.
Possibly it mentioned that it is the property register of Shree Gokulnathji 's temple.
It is reasonable to draw this inference from the surrounding circumstances.
503 is the register relating to the expenses incurred for repairs of Shree Gokulnathji 's temple.
That register was also tampered with.
The original book was not made available to us for examination but the High Court which had the opportunity of examining that book has made the following remarks.
in its judgment: "a new slip was affixed to this document, and the heading which showed that the properties belonged to Shree Gokulnathji 's temple was torn out.
" The High Court has also held that Exh. 633, which evidences the sale of section No. 1840, was torn in such a way as to justify the plaintiffs complaint that in the torn portion was the description 280 of the Maharaj as the Vahiwatdar of the temple.
The High Court observed: "We have looked at all these three documents (Exhs. 501,503 and 633) and we are satisfied that the complaint made by the plaintiffs against the advisers of defendant No. 1 cannot be said to be without substance.
It seems to us clear, on examining these documents that the advisers of defendant No. 1 have unscrupulously tampered with the documents.
This conduct naturally raises suspicion against the defence, and we would be justified in drawing an inference against defendant No. 1 by holding that, if the books of account which have been kept back by her had been produced they would have supported the plaintiffs ' case.
We agree with these observations.
We may now proceed to examine the material on record for finding out 'the true character of the suit properties viz. whether they are properties of a public trust arising from their dedication of those properties in favour of the deity Shree Gokulnathji or whether the deity as well as the suit properties are the private properties of Goswami Maharaj.
In her written statement as noticed, earlier, the Ist defendant took up the specific plea that the idol of Shree Gokulnathji is the private property of the Maharaj the Vallabh Cult does not permit any dedication in favour of an idol and in fact there was no dedication in favour of that idol.
She emphatically denied that the suit properties were the properties of the deity Gokulnathji but in this Court evidently because of the enormity of evidence adduced by the plaintiffs, a totally new plea was taken namely that several items of the suit properties had been dedicated to Gokulnathii but the deity being the family deity of the Maharaj, the resulting trust is only a private trust.
In other words the plea taken in the written statement is that the suit properties were the private properties of the Maharaj and that there was no trust, private or public.
But the case argued before this Court is a wholly different one viz. the suit properties were partly the properties of a private trust and partly the private properties of the Maharaj.
The Ist defendant cannot be permitted to take up a case which is wholly inconsistent with that pleaded.
This belated attempt to bypass the evidence adduced appears to be more a manor than a genuine explanation of the documentary evidence adduced.
It is amply proved that ever since Mathuranathji took over the management of the shrine, two sets of account books have been maintained, one relating to the income and expenses of the shrine and the other relating to that of the Maharaj.
These account books and other documents show that 281 presents and gifts used to.
be made to the deity as well as to the Maharaj.
The two were quite separate and distinct.
Maharaj himself has been making gifts to the deity.
He has been, at times utilising the funds belonging to.
the deity and thereafter reimbursing the same.
The account books which have been produced clearly go.
to show that the deity and the Maharaj were treated as two different and distinct legal entities.
The evidence afforded "by the account books is tell tale.
In the trial court it was contended on behalf of the I st defendant that none of the account books produced relate exclusively to the affairs of the temple.
They all record the transactions of the Maharaj, whether pertaining to.
his personal dealings or dealings in connection with the deity.
This is an obviously untenable contention.
That contention was given up in the High Court.
In the High Court it was urged that two sets of account books were kept, one relating to the income and expenditure of the deity and the other of the Maharai, so.
that the Maharai could easily find out his financial commitments relating to the affairs of the deity.
But in this Court Mr. Narasaraju, learned Counsel for the appellant realising the untenability of the contention advanced in the courts below presented for our consideration a totally new case and that is that Gokulnathji undoubtly is a legal personality; in the past the properties had been dedicated in favour of that deity; those properties are the properties of a private trust of which the Maharaj was the trustee.
On the basis of this newly evolved theory he wanted to explain away the effect of the evidence afforded by the account books and the documents.
We are unable to accept this new plea.
It runs counter to the case pleaded in the written statement.
This is not a purely legal contention.
The I st defendant must have known whether there was any dedication in favour of Shri Gokulnathji and whether any portion of the suit properties were the properties of a private trust.
She and her adviser 's must have known at all relevant times the true nature of the accounts maintained.
Mr. Narasaraju is not right in his contention that the plea taken by him in this Court is a purely legal plea.
It essentially relates to questions of fact.
Hence we informed Mr. Narasaraju that we will not entertain the plea in question.
We shall now proceed to assess the evidence adduced in this case to find whether the plaintiffs have succeeded in establishing that the suit temple and the properties annexed thereto constitute a public trust.
Before doing so, it is necessary to examine certain basic contentions advanced on behalf of the appellant.
It is the case of the appellant that Vallabh Sampardaees cannot worship in a public temple; according to their cult they can have the Darshan of one or the other swaroops of Lord Krishna in the house of their Maharaj.
In Other words their cult prohibits public 282 worship.
They can only worship through their Maharaj and that too in his Haveli.
In support of this contention great deal of reliance was placed in the High Court and the trial court on the views expressed by Dr. Bhandarkar in his Works on 'Vaishnavism, S 'aivism and Minor Religous systems '.
The views expressed by Dr. Bhandarkar had greatly weighed with the trial court and it is mainly o.n the basis of those views, the trial court rejected the plaintiff 's suit.
The High Court after examining the doctrines of Vallabha School, its tenants and usages as well as the views expressed by eminent writers like Dr. Radhakrishanan and Dasgupta came to.
the conclusion that it would not be correct to.
say that worship.
in public temple is prohibited by the Vallabh cult though in the absence of any positive evidence it may be taken that the place where the Vallabha Sampardaees worship is a private temple.
It is not necessary for us to go into that controversy in view of the decision of this Court in Tilkavat Shri Govindlalji Maharaj vs The State of Rajasthan and ors.(1) In that case this Court was.
called upon to consider whether Nathdwara Temple in Udaipur, a temple rounded by the Vallabha Sampardaees is a public temple or not.
After examining the various treatises on the subject including Dr. Bhandarkar 's book on 'Vaishnavism, S 'aivism and Minor Religious Systems ', this Court observed (at p.585): "Therefore, we are satisfied that neither the tenets nor the religious practices of the Vallabha school necessarily postulate that the followers of the school must worship in a private temple.
Some temples of this cult may have been private even today.
Whether or not a particular temple is a public temple must necessarily be considered in the light of the relevant facts relating to it.
There can be No. general rule that a public temple is prohibited in Vallabha School.
" In view of this decision Mr. Narasaraju, learned Counsel for the appellant did not press forward the contention that the Vallabha School prohibits worship in public temple.
Yet another contention taken on behalf of the appellant is that the architecture of the building in which Gokulnathji is housed and the nature of that building is such as to show that it is not a public temple.
It was urged that building does not possess any of the characteristics of a Hindu temple.
It has not even a dome.
This contention again has lost much of its force in view of the decision of this Court referred to earlier.
Evidence establishes that Ballabha 's son and his immediate successor Vithaleshwar had laid down a plan for the construction of temples (1) [1964] 1 S.C.R. 561.
283 by the Vallabha Sampardaees.
He did not approve the idea of constructing rich and costly buildings.
for temples.
Evidently he realised that religious temple buildings were not safe under the Mohommedan rule.
For this reason he advised his followers to construct temples of extremely simple type.
The external view of those temples gave the appearance of dwelling houses.
It appears to be a common feature of the temples belonging to the Vallabha Sampardaees that the ground floor is used as the place of worship and the first floor as the residence of Goswami Maharaj, therefore the fact that Gokulnathji temple at Nadiad had the appearance of a residential house does not in 'any manner militate against the contention that the temple in question is a public temple.
It was said that according to the usage prevailing in that temple, the public are asked to enter the temple only after the Maharaj had finished his worship.
This circumstance again is of no consequence.
Each sect nay each temple has its own customs.
The usage pleaded by the appellant is not inconsistent with that temple being a public temple.
The appellant attempted to prove that on two occasions certain individuals were forbidden from entering the temple.
In the first place this plea has not been satisfactorily established.
Further according to the evidence adduced on behalf of the appellant those individuals were kept out of the temple because of some act of indiscipline on their part.
The power to manage a temple includes within itself the power to maintain discipline within the precincts of that temple.
The only other circumstance relied on by the appellant to establish that the temple in question is not a public temple is that the sale proceeds of Nagarwad Haveli were credited to the account of the Maharaj.
The learned judges of the High Court have carefully looked into that aspect.
After examining the relevant evidence on record they arrived at the conclusion that though initially the amount in question was credited to the account of the Maharaj, at a subsequent stage it was transferred to the account of the temple by means of adjustment entries.
The learned Counsel for the appellant was unable to satisfy us that this conclusion of the High Court was incorrect.
We shall now see how far the plaintiffs have succeeded in establishing that Gokulnathji Mandir is a public Mandir.
The burden of establishing that fact is undoubtedly on them.
Though most of the present day Hindu public temples have been found as public temples, there are instances of private temples becoming public temples in course of time.
Some of the private temples have acquired great deal of religious reputation 284 either because of the eminence of its founder or because of other circumstances.
They have attracted large number of devotees.
Gradually in course of time they have become public temples.
Public temples are generally built or raised by the public and the deity installed to enable the members of the public or a section thereof to.
offer Worship.
In such a case the temple would clearly be a public temple.
If a temple is proved to have originated as a .public temple, nothing more is necessary to be proved to show that it is a public temple but if a temple is proved to have originated as a private temple or its origin is unknown or lost in antiquity then there must be proof to show that it is being used as a public temple.
In such cases the true character of the particular temple is decided on the basis of various circumstances.
In those cases the courts have to.
address themselves to various questions such as : (1 ) Is the temple built in such imposing manner that it may prima facie appear to be a public temple? (2) Are the members of the public entitled to worship in that temple as of right ? (3 ) Are the temple expenses met from the contributions made by the public ? (4) Whether the sevas and utsavas conducted in the temple are those usually conducted in public temples ? (5) Have the management as well as the devotees been treating that temple as a public temple ? Though the appearance of a temple is a relevant circum stance, it is by no means.
a decisive one.
The architecture of temples differs from place to place.
The circumstance that the public or a section thereof have been regularly worshiping in the temple as a matter of course and they can take part in the festivals and ceremonies conducted in that temple apparently as a matter of fight is a strong piece of evidence to establish the public character of the temple.
If votive offerings are being made by the public in the usual course and if the expenses of the temple are met by public contribution, it is safe to presume that the temple in question is a public temple.
In brief the origin of the temple, the manner in which its affairs are managed, the nature and extent of gifts received by it, rights exercised by the devotees in regard to worship therein, the consciousness of the manager and the consciousness of the devotees themselves as to the public character of the temple are factors that go to establish whether a temple is a public temple or a private temple.
In 285 Lakshmana vs Subramania(1) the Judicial Committee was dealing with a temple which was initially a private temple.
The Mahant of this, temple opened it on certain days in each week to the Hindu public free to worship in the greater part of the temple, and on payment of fees in one part only.
The income thus received by the Mahant was utilised by him primarily to meet the expenses of the temple and the balance went to support the Mahant and his family.
The Privy Council held that the conduct of the Mahant showed that he had held out and represented to the Hindu public that the temple was a public temple at which all Hindus might worship and the inference was, therefore, that he had dedicated it to the public.
In Mundancheri Koman vs Achutan Nair,(2) the Judicial Committee again observed that the decision of the case would depend on the inferences to be derived from the evidence as to the way in which the temple endowments had been dealt with and from the evidence as to the public user of the temples.
Their Lordships were satisfied that the documentary evidence in the case conclusively showed that the properties standing in the name of the temples belonged to the temples and that the position of the manager of the temples was that of a trustee.
Their Lordships further, added that if it had been shown that the temples had originally been private temples they would have been slow to hold that the admission of the public in later times possibly owing to altered conditions would affect the private character of the trusts.
In Deoki Nandan vs Murlidar(3), this Court observed that the issue whether a religious endowment is a public.
or a private one is a mixed question of law and fact, the decision of which must depend on the application of legal concepts of a public and private endowment to the facts found.
Therein it was further observed that the distinction between a public and private endowment is that whereas in the former the beneficiaries, which means the worshipers are specific individuals and in the later the general public or class thereof.
In that case the plaintiff sought to establish the true scope of the dedication from the user of the temple by the public.
In Narayan Bhagwant Rao Gosavi Balajiwale vs Gopal Vinayak Gosavi and Ors.(4), this Court held that the vastness of the temple, the mode of its construction, the long user of the public as of right, grant of land and cash by the Rulers taken along with other relevant factors in that case were consistent only with the public nature of the temple.
In examining the evidence adduced by the plaintiffs in proof of the fact that the temple in question is a public.
temple we have to bear in mind the tests laid down by the courts for determining whether a given temple is a public temple or not.
(1) [1923] A.I.R. 1924 PC.
44 (2) (3) ; (4) ; 286 The case for the plaintiffs is that this temple originated as a public temple.
According to them it was rounded long before Mathuranathji was born; the idol of Gokulnathji was originally worshiped at Nagarwad and later on the suit temple was built and that idol installed therein.
We have earlier seen that the case of the I st defendant on this point was that the idol of Gokulnathji was the private property of Mathuranathiji.
Mathuranathji brought that idol alongwith him when he came to Nadiad and worshiped the same as his private deity.
This part of her case was given up at a later stage, and she put forward a new case to the effect that the idol Gokulnathji was brought by the ancestors of Mathuranathii to: Nadiad and it is they who started worshiping that idol at Nadiad.
From this it is clear that the appellant has no consistent case as to the origin of the worship of Gokulnathji at Nadiad.
The new plea put forward by her was evidently intended to meet the evidence adduced to show that the idol of Gokulnathji was being worshiped at Nadiad even before Mathuranathji was born.
In order to show that the idol of Gokulnathji was being worshiped in Nadiad even in the 18th century, oral evidence of local repute has been adduced by the plaintiffs.
In the very nature of things that evidence cannot, but be inconclusive.
In this connection the plaintiffs have also placed reliance on Exh.791, an extract showing the list of Devasthans in the Pargana of Nadiad to.
which the former Baroda State was making contributions, one of such Devasthan is the "Shree Gokulnathji".
This extract relates to Fasli Samvat 1833 (i.e. 1781 82 A.D.).
On the basis of this exhibit, we are asked to conclude that the suit temple was in existence even before 1781 82 A.D. The. evidence afforded by this document undoubtedly probabilises the version of the plaintiffs but it cannot be said with any definiteness that the entry in question relates to the suit temple.
Therefore it is not possible to come to a positive conclusion that the suit temple originated as a public temple nor there is any conclusive evidence before us to determine the date of its origin.
All that we can say is that the origin of this temple is lost in antiquity.
Therefore for determining whether it is a public temple or not we must depend on other circumstances.
It is established by the evidence on record that Gokulnathji is neither the Nidhi Swaroop nor Seva Swaroop of Mathuranathji 's branch.
Therefore it is unlikely that Mathuranathji branch would have installed the idol of Shree Gokulnathji for their private worship though the idol of Shree Gokulnathji is one of the Swaroops of Lord Krishna.
The plea taken by the appellant that Gokulnathji was one of the Nidhi Swaroop given to the branch of Mamuranathji by Vallabha is opposed to the documentary evidence produced by herself.
That plea has not been pressed before us for our acceptance.
287 From the account books produced in this case, it is clear that ever since 1965 two sets of accounts had been maintained by the Maharai, one relating to the temple and another relating to him.
The temple accounts are referred to as "Nichena Khata" and Maharaj 's accounts as "Uparna Khata".
At this stage we may emphasize that the evidence discloses that the entire ground floor is being used as the place of worship of Gokulnathji and upstairs portion as the residence of the Maharaj.
For the years 187 '7 to 1892, no books of account have been produced.
The appellant has stated that these books are not with her.
But this is not a satisfactory explanation for their disappearance.
The temple accounts for the years 1892 to 1894 have been produced but the personal accounts of the Maharaj for those years have not been produced.
Again for the years 1900 to 1907, only the temple accounts have been produced but for the period from 1908 and 1934 both the sets have been produced.
Again for the period 1935 to 1943, only the temple account books have been produced and not the personal account books of the Maharaj.
This pick and choose method adopted in the matter of producing account books unmistakably indicate that the appellant was deliberately keeping back unfavorable evidence.
Evidence on record establishes that some of the documents.
which were there at the time of the inventory were not produced when summoned.
Under those circumstances the High Court was justified in drawing an adverse inference against the appellant.
The existence of two sets of accounts ' clearly goes to indicate that the Maharajas had always considered the temple as an entity different from themselves.
That circumstance goes to negative the contention of the appellant that the deity was owned by the Maharaj and therefore the deity as well as the suit properties are his private properties.
Right back in 1861 under a gift deed executed by a devotee by name Bai Jasubai, two fields and a house were gifted in favour of the temple of Gokulnathji Maharaj at Nadiad.
The properties gifted by Jasubai were sold in 1865 and the sale proceeds credited in the 'Nichen Khata '.
In 1865 when Sri Vrairatna Maharaj left Nadiad he made a present of Rs. 5 to the idol of Shree Gokulnathii.
This was also.
credited in the 'Nichen Khata '.
Then we come to Exh.
593, an application made by several merchants and other residents of Nadiad to the Collector of Kaira in the year 1866.
That application recites that the ancestors of the applicants had voluntarily levied a cess known as Laga on several articles four the benefit of the suit temple.
Originally this Laga was separately recovered from the devotees by the Maharaj but later on at the request of the merchants the same 288 used to be recovered by the Government alongwith the custom duty and made over to Maharaj for the benefit of the temple.
Therein it was prayed that the newly established municipality should be directed to collect the Laga alongwith its dues and make up over to the Maharaj.
That application was signed by a large number of persons.
That application inter alia states : "There is a temple of Shree Gokulnathji at Nadiad.
A son of our preceptor, Shree Goswami Mathuranathji performs the seva in the said temple.
Our ancestors have granted for his expenses from the town a laga on several articles which may be received, a list whereof is enclosed herewith.
" The signatories to that application must have been familiar with the history of the suit temple.
We can reasonably assume that the facts stated therein are correct.
Those facts support the case ,of the plaintiffs.
We next go to the entries in the account books.
In the temple accounts for the year 1870, there is a credit entry of Rs. 27/4/It is in respect of the fine imposed by the Mahajan on three persons who appear to have played mischief at the time of darshan.
This entry clearly shows that the supervision of the 'temple, in a general sense, vested in the Mahajan of the place.
It appears from the accounts that in 1874, the Mahajan examined the account books of the temple see Exh.
This conduct on the part of the Mahajan would be inconsistent with the appellant 's claim that Gokulnath 's shrine is her private property.
In 1881 one Bai Harkore under her will made certain bequests in the name of the Gokulnathji Maharaj at Nadiad for providing Samagri for Shree Gokulnathii.
This is a bequest to.
the idol. 'Therein the.there is no refere.nce to the Maharaj.
Then we come to Exh.
534, under which a substantial portion of lot No. 1 of the :suit properties wherein the temple is situated was purchased on April 4, 1885.
The sale deed was taken in the name of Pari Pranvallabh Vrajlal and others on behalf of Shree Gokulnathji of Nadiad.
This is a clear indication that the deity of Gokulnathji was treated by the devotees as an independent legal entity.
Further the importance of this document is that it is taken in the name of the representatives of the public and not in the name of the Maharaj.
Under Exh. 691, a gift was made in 1888 in the name of Vrajratnalalji for and on behalf of Shree Gokulnathji temple.
The donor paid Rs. 1,200 and desired that a meal of six breads every day should be given till the temple exists to the person whom the Mabaraj would name and if the person named by the Maharai does not come to take the meal the same should be given to any visitor to the temple.
Still more significant is the bequest contained in Exh.
512, the will executed by one Bai 289 Vasant.
Under this will two bequests were made, one in favour of the temple of Shree Gokulnathji and the other in favour of the Maharani Vahuji who was then the Maharani of .the temple.
This will was executed on September 20, 1897.
Under a prior will executed by the same devotee (Exh. 189), the same distinction between the Maharaj and the temple is to.
be found.
That document was executed in 1888.
Similarly when bhets (presents) were made by .the devotees to the idol as well as to the Maharaj, they were separately credited in the respective account books.
As an illustration, we may refer to entries in the accounts books for the year 1896.
Therein Rs. 22 was credited to the temple accounts and Rs. 5 to the Maharaj 's personal account.
The account books clearly show the various presents made to the temple as well as to the Maharaj.
It is established by evidence that in 1896 when the question of taxing the income of the Maharaj came up for consideration, the Maharaj pleaded that the income of the temple cannot be treated as his income.
The balance sheets prepared in that connection showed the income of the temple separately from that of the Maharaj.
The correspondence that passed between the Maharaj and the authorities in that connection establishes beyond doubt that the Maharaj did not treat the income of the temple as his income.
The contention that the admission in question was made under wrong advice receives No. support from the evidence on record.
Similarly with regard to the payment of the municipal tax, the properties of the Maharaj had been treated separately from that of the temple.
In 1907 one Shah Chaganlal made a gift of some property to the temple.
That property was subject to a mortgage.
The donor directed that the Maharaj of the temple should divide the annual income of the mortgaged property into nine shares, out of which one share should be given for the samagri of Shree Gokulnathji Maharaj on posh vad 3rd of every year and eight shares of the income should be given for the samagri of the said Gokulnathji every year on Vaishakh Sud 8th.
In that document the Maharai was shown as the agent of the temple.
property was subsequently sold and the sale proceeds were credited to.
the temple accounts.
The: accounts show numerous other instances of receipts and expenses relating to the temple as distinguished from that of the Maharaj.
The High Court has enumerated those receipts and expenses with elaborate fullness.
It would be superfluous to.
refer to them.
The above mentioned instances go to falsify the contension of the appellant that the idol of Shree Gokulnathji was the private property of the.
Maharaj.
On the other hand they establish that the temple in question was treated by all concerned as a public temple.
290 In proof of her case that the suit temple and the properties are individual properties of the Maharaj, the appellant relied on the wills executed by Vrajratanlalji in 1882 and Maharani Vahuji in 1898.
Under the former the testator provided for the management of the properties mentioned therein after Iris death.
Therein he asserted his right to make vahivat according to his pleasure of movable and immovable properties shown in the will during his.
life time.
One of the stipulations in the will was that if he dies leaving no son, natural or adopted, those properties should go to his wife, as owner subject to the condition that the expenses of worship of "his Shree Thakorji" according to usage should come out of its income.
There are similar assertion in the will executed by Maharani Vahuji .in 1898.
These statements are at best self serving statements.
They have little evidentiary value.
They are likely to. have been made by the executants of those wills under a misconception as to their rights.
If the account books for the years 1877 to 1892 had been produced we would have been able to find out how Vrajratanlalji himself dealt with the properties of the temple.
There is clear, consistent and reliable evidence to show that Vallabha Sampardaees have been worshiping in the suit temple as of right.
There is also evidence to show that the temple has all along been primarily maintained from the contributions made by the devotees belonging to the Vallabha School.
The suit temple appears to be an important temple attracting a large number of devotees.
Utsavas and other festivals are performed in that temple in a reasonably grand scale.
The devotees as well as the Maharaj were treating that temple as a public temple.
From the facts proved we have no hesitation in agreeing with the High Court that the temple in question is a public.
temple.
This takes us to the question whether all or any of the properties detailed in the plaint schedule are proved to.
be that of the temple.
We have earlier come to the conclusion that the temple has been getting substantial contributions from its devotees in diverse ways.
It was also.
the recipient of several gifts.
It had adequate resources to make the acquisitions with which we are concerned in this case.
The temple is exclusively managed by the Goswamiji Maharaj.
It maintains regular accounts.
Maharaj also maintains his separate accounts.
Therefore it was easy for the appellant to.
prove the source from which the acquisitions in question were made and how their income was treated.
The appellant has led no evidence to show that they were her own properties.
She has failed to produce some of the accounts relating to the relevant periods.
In this background let us proceed to examine the title to the suit properties.
291 Lot No. 1 is.
the site in which the suit temple is situate.
It was conceded on behalf of the appellant that if we come to the conclusion that the suit temple is a public temple that item of property will have to. be considered as the property of the temple.
Lot No. 2 is.
the garden land in Survey No. 2031.
It is used for raising flowers for worship in the temple.
That land appears to have been granted to Mathuranathji but the appellant admitted in her deposition that that item of property was at all time managed by the Haveli and whoever is the owner of the Haveli is the owner of the garden.
This admission is corroborated by considerable other evidence.
Vaishnav merchants of Nadiad contributed for the expenses of installation of an electric pump in that garden and for its subsequent repairs.
All expenses incurred for that garden have always been debited and all income received therefrom credited to the temple accounts.
That garden is included in the Patriks of the temple property, prepared long before the present dispute arose.
When a part of that property was compulsorily acquired on three different occasions, the compensation received was credited to.
the temple account.
These circumstances.
conclusively establish that lot No. 2 is temple property.
Lot No. 3 is the building known as Goshala.
Its Survay survey No. is 994.
It is used for the purpose of tethering the cows reared for supplying milk and butter for the worship of Balkrishnalalji, one of the deities installed in the temple.
This property is included in Exh. 500 and 501.
It is shown in the property register as the property belonging to the Devasthan Charity.
The balance sheet prepared in 1896 treats the rent of the shops and houses in that site as the income from temple properties see Exh.
We think the High Court was right in concluding on the basis of this evidence that that item belongs to the temple.
Lot No. 4 is a shop bearing city survey No. 720.
This property was gifted by Kuber Jetha Vashram as per his will Exh. 673 for the samagri of the temple.
The bequest is made in favour of Shree Gokulnathji Maharai.
Hence this is clearly an item of property belonging to the suit temple.
Lot No. 5 is survey No. 121.
It is gifted under Exh.
610 dated June 29, 1868.
The gift is purported to have been made in favour of the Maharaj but the income from this property has always been credited to the temple accounts, the earliest entry being that of the year 1870.
In the property register, this property is shown as temple property and the rent note Exh.
535 is taken in the name of the Vahivatdar of Shree Gokulnathji.
Hence this item of the property should also be held to be that of the temple.
292 Lot No. 6 consists of 14 small items.
of property.
They are all agricultural fields.
They have been shown in the property register as the properties of the temple.
Out of 14 items in this lot, items No.s. 6, 9, 11, 12 and 14 originally belonged to the Maharaj but they have been all along dealt with by the Maharaj as temple property.
Item No. 1 in lot No. 6 belongs to the temple.
The mortgage Exh. 608 relates to this item and the same was executed in favour of the, temple on May 17, 1897.
A rent note in respect of this property was taken on April 22, 1915 in the name of the Vahivatdar of the temple.
Items 2, 3 and 4 of that lot are shown in the record of rights in the name of the Maharaj but the income from those properties and the expenses incurred for the same have always been entered in the temple accounts.
Item 5 of this lot had been gifted to the temple under Exh.
Item 8 of this lot had bee.n purchased in the name of the Maharani Vahuji on June; 2, 1897 for Rs. 1150.
The income of this property has been shown in the temple accounts.
far as item 10 is.
concerned though the record of rights stands in the name of the.
Maharaj personally, its sale p.rice (Rs. 800 0 6) has been credited to the temple accounts.
From all this it is clear that the temple is the owner of lot No. 6.
Now coming to.
lot No. 7, the entries in the account books clearly show that this is temple property.
The consideration for the purchase of a portion of it was paid from the temple funds.
A portion of that property had been gifted to the temple under Exh.
Lot No. 8 was purchased in 1877 from the temple funds and lot No. 13 was gifted to the temple.
Lo.t No. 9 was received by the temple under will Exh. 512 and lot No. 10 was always treated as temple property in the account books.
So also lot Nos. 11 and 12.
Similarly lots Nos. 13 and 14 were always being treated as temple properties.
We are in agreement with the learned judges of the High Court that the properties detailed in the plaint schedule are all temple properties.
For the reasons mentioned above this appeal must fail.
But before we conclude we should like to clarify one aspect which undoubtedly is implicit in the judgment of the High Court.
The Goswami Maharais o.r Maharanis are not mere managers.
In the temples belonging to the Vallabha School they have an important place.
The Maharaj is the Maha Prabhu.
The Vallabh devotees worship their deity through him.
It is true that the income from temple properties.
has to be primarily used for the expenses of the sevas and utsavas in the temple, the upkeep renovation and improvements of the temple premises but subject to these demands, the Maharaj has a right to utilise the temple income in 293 maintaining himself and his family in a reasonably comfortable manner.
The learned Counsel for the plaintiffs conceded this position.
This suit has been brought by the plaintiffs with the sole purpose of preserving the temples assets and maintaining its dignity.
They do not want to undermine the position or prestige of their Maha Prabhu.
In the circumstances of the case we see no useful purpose in directing the: appellant to pay the costs of the plaintiffs in this appeal.
She can only pay the same from temple funds.
The alienees have not appealed against the judgment of the High Court.
When we mentioned this aspect to Mr. S.T. Desai, learned Counsel for the plaintiffs he indicated that the parties may be left to bear their own costs in this appeal.
For the reasons mentioned above this appeal is dismissed but we make no order as to costs.
| In deciding whether a temple is private or public, Courts have to address themselves to various questions such as: (1) Is the temple built in such imposing manner that it may prima facie appear to be a public temple ? (2) Are the members of the public entitled to worship in that temple as of right ? (3) Are the temple expenses met from the. contributions made by the public ? (4) Whether the sevas and utsavas conducted in the temple are those usually conducted in public temples ? (5) Have the management as well as the devotees been treating the temple as a public temple.
Though the appearance of a temple is a relevant circumstance, it is by no means 'a decisive one.
The architecture of temples differs from place to place.
The circumstance that the public or a section thereof have been regularly worshiping in the. temple as a matter of course and they can take part in the festivals 'and ceremonies conducted in that temple apparently as a matter of right is a strong piece of evidence to establish the public character of the temple.
If votive offerings are being made by the public in the usual course and if the expenses of the temple are met by public contribution, it is safe to presume that the temple question is a public temple.
In brief the origin of the temple.
, the manner in which its affairs are managed, the nature and extent of gifts received by it, rights exercised by the devotees in regard to worship therein, the consciousness of the manager and the consciousness of the devotees themselves as to the public character of the temple are factors that go to establish whether a temple is public temple or a private temple.
[286 H H] Tilkayat Shri Govindlalji Mahraj vs The State of Rajasthan and Ors.
,[1964] 1 S.C.R. 561; Lakshmana vs Subramania, (1923) A.I.R. 1924 P.C. 44; Mundancheri Koman vs Achutan Nair (1934) 61 I.A. 405; Deoki Nandan vs Murlidar, ; ; Narayan Bhagwant Rao Gosavi Balajiwle vs Gopal Vinayak Gosavi and Ors.
[1960] I S.C.R. 773; referred to.
|
Criminal Appeal No. 378 of 1986.
From the Judgment and Order dated 11.10.
1985 of the Bombay High Court in Crl.
Revision Appln.
No. 167 of 1985.
V.N. Ganpule for the Appellant.
A.M. Khanwilkar, A.S. Bhasme and G.B. Sathe for the Respondents.
The Judgment of the Court was delivered by DUTT, J.
The only point that is involved in this appeal by special leave is whether the respondent No. 1 is entitled to claim maintenance from the appellant, his married daugh ter, under section 125(1)(d) Cr.
The appellant Dr. Mrs. Vijaya Arbat, a medical practi tioner at Kalyan, District Thane, is the married daughter of the respondent No. 1 Kashirao Rajaram Sawai, by his first wife.
Her mother died in 1948.
Thereafter, the respondent No. 1 remarried and is living with his second wife.
The respondent No. 1 filed an application before the Judicial Magistrate, First Court, Kalyan, claiming maintenance from the appellant, his daughter, at the rate of Rs.500 per month on the ground that he was unable to maintain himself.
At the outset, the appellant raised a preliminary objec tion to the maintainability of the application on the ground that section 125(1)(d) Cr.
P.C. does not entitle a father to claim maintenance from his daughter.
The preliminary objec tion was overruled by the learned Magis 334 trate, and it was held by him that the application was maintainable.
Being aggrieved by the order of the learned Magistrate, the appellant moved the Bombay High Court in revision.
The High Court affirmed the order of the learned Magistrate and held that the application of a father for maintenance who is unable to maintain himself is maintain able against his married daughter having sufficient means.
In that view of the matter the High Court dismissed the revisional application of the appellant.
Hence this appeal by special leave.
Sub section (1) of section 125 Cr.
P.C. provides as under: "If any person having.
sufficient means ne glects or refuses to maintain (a) his wife, unable to maintain herself or (b) his legitimate or illegitimate minor child, whether married or not, unable to maintain itself, or (c) his legitimate or illegitimate child (not being a married daughter) who has at tained majority, where such child is, by reason of any physical or mental abnormality or injury unable to maintain itself, or (d) his father or mother, unable to maintain himself or herself, a Magistrate of the first class may, upon proof of such neglect or refusal, order such person to make a monthly allowance for the maintenance of his wife or such child, father or mother, at such monthly rate not exceeding five hundred rupees in the whole, as such Magistrate thinks fit, and to pay the same to such person as the Magistrate may from time to time direct: Provided that the Magistrate may order the father of a minor female child referred to in clause (b) to make such allow ance, until she attains her majority, if the Magistrate is satisfied that the husband of such minor female child, if married, is not possessed of sufficient means.
" Sub section (1) of section 125 confers power on the Magistrate of the First Class to order a person to make a monthly allowance for the 335 maintenance of some of his close relations like wife, chil dren, father and mother under certain circumstances.
It has been observed by this Court in Bhagwan Dutt vs Kamla Devi, ; that the object of section 125 Cr.
P.C. is to provide a summary remedy to save dependents from destitu tion and vagrancy and thus to serve a social purpose.
There can be no doubt that it is the moral obligation of a son or a daughter to maintain his or her parents.
It is not desirable that even though a son or a daughter has sufficient means, his or her parents would starve.
Apart from any law, the Indian society casts a duty on the chil dren of a person to maintain their parents if they are not in a position to maintain themselves.
It is also their duty to look after their parents when they become old and infirm.
The learned Counsel, appearing on behalf of the appel lant, has urged that under clause (d) of section 125(1) a father is not entitled to claim maintenance from his daugh ter whether married or not.
Our attention has been drawn to the use of the pronoun 'his ' in clause (d) and it is submit ted that the pronoun indicates that it is only the son who is burdened with the obligation to maintain his parents.
Counsel submits that if the legislature had intended that the maintenance can be claimed by the parents from the daughter as well, it would not have used the pronoun 'his '.
We are unable to accept this contention.
It is true that clause (d) has used the expression "his father or mother" but, in our opinion, the use of the word 'his ' does not exclude the parents claiming maintenance from their daugh ter.
Section 2(y) Cr.
P.C. provides that words and expres sions used herein and not defined but defined in the Indian Penal Code have the meanings respectively assigned to them in that Code.
Section 8 of the Indian Penal Code lays down that the pronoun 'he ' and its derivatives are used for any person whether male or female.
Thus, in view of section 8 IPC read with section 2(y) Cr.
P.C., the pronoun 'his ' in clause (d) of section 125(1) Cr.
P.C. also indicates a fe male.
Section 13(1) of the General Clauses Act lays down that in all Central Acts and Regulations, unless there is anything repugnant in the subject or context, words import ing the masculine gender shall be taken to include females.
Therefore, the pronoun 'his ' as used in clause (d) of sec tion 125(1) Cr.
P.C. includes both a male and a female.
In other words, the parents will be entitled to claim mainte nance against their daughter provided, however, the other conditions as mentioned in the section are fulfilled.
Before ordering maintenance in 336 favour of a father or a mother against their married daugh ter, the court must be satisfied that the daughter has sufficient means of her own independently of the means or income of her husband, and that the father or the mother, as the case may be, is unable to maintain himself or herself.
Much reliance has been placed by the learned Counsel for the appellant on a decision of the Kerala High Court in Raj Kumari vs Yashodha Devi, In that case it has been held by a learned Single Judge of the Kerala High Court, mainly relying upon the report of the Joint Committee on the Criminal Procedure Code Bill, 1973, that a daughter is not liable to maintain her parents who are unable to maintain themselves.
The Joint Committee in their report made the following recommendations: "The committee considers that the right of the parents not possessed of sufficient means, to be maintained by their son should be recog nised by making a provision that where the father or mother is unable to maintain himself or herself an order for payment of maintenance may be directed to a son who is possessed of sufficient means.
If there are two or more children the parents may seek the remedy against any one or more of them" (Emphasis supplied).
The learned Judge of the Kerala High Court did not refer in his judgment to the sentence which has been underlined.
It is true that in the first part of the report the word 'son ' has been used, but in the latter part which has been underlined the recommendation is that if there are two or more children the parents may seek the remedy against any one or more of them.
If the recommendation of the Joint Committee was that the liability to maintain the parents, unable to maintain themselves, would be on the son only, in that case, in the latter portion of the report the Joint Committee would not have used the word 'children ' which admittedly includes sons and daughters.
In our opinion, as we read the report of the Joint Committee, it did not place the burden of maintaining the parents only on the son, but recommended that the liability to maintain the parents should be of the sons and the daughters as well.
We have referred to the report of the Joint Committee inasmuch as the same has been relied upon in Raj Kumari 's case (supra) by the Kerala High Court and also on behalf of the appellant in the instant case.
When the statute provides that the pronoun 'his ' not only denotes a male but also a female, we do not think it necessary to refer to the report of the Joint Committee for the 337 interpretation of clause (d) of section 125(1) Cr.
The father or mother, unable to maintain himself or herself, can claim maintenance from their son or daughter.
The expression "his father or mother" is not confined only to the father or mother of the son but also to the father or mother of the daughter.
In other words, the expression "his father or mother" should also be construed as "her father or mother".
In M. Areera Beevi vs Dr. K.M. Sahib, [1983] Cr.L.J. 412, and Repalli Masthanamma vs Thota Sriramulu, , another Single Bench of the Kerala High Court and the Andhra Pradesh High Court have respectively taken the view that the parents who are unable to maintain them selves can claim maintenance also from their daughters under section 125(1)(d) Cr.
P.C. We are unable to accept the contention of the appellant that a married daughter has no obligation to maintain her parents even if they are unable to maintain themselves.
It has been rightly pointed out by the High Court that a daugh ter after her marriage does not cease to be a daughter of the father or mother.
It has been earlier noticed that it is the moral obligation of the children to maintain their parents.
In case the contention of the appellant that the daughter has no liability whatsoever to maintain her parents is accepted, in that case, parents having no son but only daughters and unable to maintain themselves, would go desti tute, if the daughters even though they have sufficient means refuse to maintain their parents.
After giving our best consideration to the question, we are of the view that section 125(1)(d) has imposed a liabil ity on both the son and the daughter to maintain their father or mother who is unable to maintain himself or her self.
Section 488 of the old Criminal Procedure Code did not contain a provision like clause (d) of section 125(1).
The legislature in enacting Criminal Procedure Code, 1973 thought it wise to provide for the maintenance of the par ents of a person when such parents are unable to maintain themselves.
The purpose of such enactment is to enforce social obligation and we do not think why the daughter should be excluded from such obligation to maintain their parents.
The judgment of the High Court is affirmed and this appeal is dismissed.
There will, however, be no order as to costs.
338 The learned Magistrate will now dispose of the applica tion under section 125(1)(d) Cr.
P.C. of the respondent on merits in accordance with law.
We make it clear that we have not expressed any opinion on the merits of the case.
S.R. Appeal dis missed.
| These two petitions challenged the constitutional validity of the Punjab Special Powers (Press) Act, 1956 (No. 38 of 1956) passed by the State Legislature in the wake of the serious communal tension that had arisen between the Hindus and the Akali Sikhs over the question of the partition of the State on a linguistic and communal basis.
The petitioners were the editors, printers and publishers, respectively, of the two daily newspapers, Pratap and Vir Arjun, printed and published simultaneously from jullundur and New Delhi, whose admitted policy was to support the "Save Hindi agitation".
Two notifications under section 2(1)(a) of the impugned Act were issued against the editor, printer and publisher of the two papers published from Jullundur by the Home Secretary prohibiting him from printing and publishing any matter relating to the 'Save Hindi agitation ' in the two papers for a period of two months.
Two other notifications in identical terms were issued under section 3(1) of the impugned Act against the other petitioner, the editor, printer and publisher of the two papers in New Delhi prohibiting him from bringing into the Punjab the newspapers printed and published in.
New Delhi from the date of the publication of the notifications.
Unlike section 2(1) of the impugned Act which provided a time limit for the operation of an order made thereunder as also for a representation to be made by the aggrieved person, section 3 of the Act made no such provision.
It was contended on behalf of the petitioners that both the sections were ultra vires the State Legislature inasmuch as they infringed articles 19(1)(a) and 19(1)(g) of the Constitution and were not saved by articles 19(2) and 19(6) of the Constitution.
It was urged that the sections imposed not merely restrictions but a total prohibition against the exercise of the said fundamental rights by prohibiting the publication of all matters relating to the 'Save Hindi agitation ' under section 2(1)(a) and by a complete prohibition of the entry of the two papers into the whole of the Punjab under section 3(1) of the Act, that even supposing 309 that the sections merely imposed restrictions and not a total prohibition, the restrictions were not reasonable, that the sections gave unfettered and uncontrolled discretion to the State Government and its delegate, that the Act did not provide for any safeguard against an abuse of the power, that the language of the sections being wide enough to cover restrictions both within and cutside the limits of constitutionally permissible legislative action they were ultra vires the Constitution and that the notification under section 2(1)(a) of the Act as made would prevent even the publication of anything against the 'Save Hindi agitation ' and should have been restricted to such matters alone as were likely to prejudicially affect the public order.
Held, that the restrictions imposed by section 2(1)(a) of the impugned Act were reasonable restrictions within the meaning of article 19(2) of the Constitution and the petition directed against the notifications issued thereunder must fail, but since section 3 Of the Act did not provide for any time limit for the operation of an order made thereunder nor for a representation by the aggrieved party to the State Government, the restrictions imposed by it were not reasonable restrictions under article 19(6) of the Constitution and the petition directed against the notifications made thereunder must succeed.
Held further, that there can be no doubt that the right of freedom of speech and expression carries with it the right to propagate one 's views and the several rights of freedom guaranteed by article 19(1) of the Constitution are exercisable throughout India but whether or not any restrictions put on those rights amount to a total prohibition of the exercise of such rights must be judged by reference to their ambit.
So judged, the restrictions imposed in the instant cases with regard to the publications relating to only one topic and the circulation of the papers only in a particular territory could not amount to a total prohibition of the exercise of the fundamental rights.
The expression "in the interest of" in articles 19(2) and 19(6) of the Constitution makes the protection they afford very wide and although free propagation and interchange of views are ordinarily in social interest, circumstances may arise when social interest in public order is greater and the imposition of reasonable restrictions on the freedom of speech and expression and on the freedom of carrying on trade or business becomes imperative.
Regard being had to the surrounding circumstances in which the impugned Act was passed, its object, the extent and urgency of the evil it sought to remedy, and the enormous power wielded by the Press, with modern facilities of quick circulation, and the consequence that any abuse of it might lead to, the restrictions imposed by the impugned Act must be held to be reasonable restrictions under the Articles.
The State of Madras vs V. G. Row, ; , followed.
310 It was only in the fitness of things that the State Legislature should have left the wide preventive powers under the sections to the discretion of the State Government, charged with the maintenance of law and order, or to its delegate, to be exercised on their subjective satisfaction.
To make the exercise of these powers justiciable and subject to judicial scrutiny would be to defeat the purpose of the enactment.
Dr. N. B. Khare vs The State of Delhi, ; , referred to.
But such discretion was by no means unfettered and uncontrolled.
The two sections laid down the principle that the State Government or its delegate could exercise such powers only if they were satisfied that such exercise was necessary for the purpose mentioned in the sections and not otherwise.
Where there was any abuse of such powers, therefore, what could be struck down was the abuse itself but not the statute.
Dwaraka Prasad Laxmi Nayain vs The State of Uttar Pradesh, ; , held inapplicable.
Harishankar Bagla vs The State of Madhya Pradesh, , relied on.
In view of the amended provisions of article 19(2) of the Constitution and the language of the two sections limiting the exercise of the powers to the purposes specifically mentioned therein, the principles enunciated by this Court in Ramesh Thappay 's case and applied to Chintaman Rao 's case could have no application to the instant cases.
Ramesh Thappay vs The State of Madras, ; and Chintaman Rao vs The State of Madhya Pradesh, (1950) S.C. R. 759, held inapplicable.
The two provisos to section 2(1)(a) and cl.
(b) of section 2(1) clearly show that the restrictions imposed by section 2 are reasonable restrictions on the exercise of the rights guaranteed by articles 19(1)(a) and 19(1)(g) and are, therefore, protected by articles 9(2) and 19(6) of the Constitution.
There could be no basis for the grievance that the notifica tion under section 2(1)(a) prevented the publication even of matters against the 'Save Hindi agitation '.
If there was a change in the policy of the papers, the time limit provided for the operation of the notifications and the right to make a representation provided ample remedies for the petitioner.
To introduce into the notifications the suggested qualification would be to make the exercise of the powers conferred by the section dependent on an objective test subject to judicial scrutiny and defeat the very purpose of the section.
|
N: Criminal Appeal No. 273 of 1979.
Appeal by special leave from the Judgment and Order dated the 14th August, 1978 of the Punjab & Haryana High Court in Criminal Appeal No. 234 of 1978) WRIT PETITIONS NOS.
564, 165, 179, 168, 434, 89, 754, 756 & 976 of 1979.
(Under Article 32 of the Constitution of India) AND Special Leave Petition (Criminal) No. 1732 of 1979 R.K. Jain, R.P. Singh, Shiv Kumar Sharma Suman, Kapoor and Sukumar Sahu for the Petitioner in W.P. 564/79.
Dr. Y.S. Chitale, Mukul Mudgal and A.K. Ganguli for the Petitioner in W.P. No. 165 of 1979.
Vimal Dave and Miss Kailash Mehta for the Petitioner in W.P. 179 of 1979.
168 & 89 of 1979; Jail Petitions.
162 H.K. Puri, A.C. for the Appellant in Crl.
Appeal.
S.S. Khanduja and Lalit Kumar Gupta for the Petitioner in W.P. No. 434 of 1979.
L.N. Gupta for the Petitioner in S.L.P. L.M. Singhvi and S.K. Jain for the Petitioner in WP.
754/79.
Harbans Singh for the Petitioner in W.P. 756/79 N.D. Garg for Mr. S.K. Bisaria and T.L. Garg for the Petitioner in WP.
976 of 1979.
Soli J. Sorabjee, Sol.
in WP.
564 & 165 U.R. Lalit, in WP.
564; for U.O.I., R.N. Sachthey, for U.O.I., Gujarat, Haryana States, M.L. Shroff for Gujarat, Haryana & Maharashtra, Miss A. Subhashini, and Mr. K.N. Bhatt, for U.O.I. for Respondent No. 1 in WPs.
554, 179, R. 2 in WPs.
434 & 754, R.1 in WP.
165, R. 3 in WP.
756, R. 2 in WPs.
564 & 165.
R in 168 & 89, RR 1 & 2 in WP.
756 and RR 1 and 3 in WP.
754 of 1979.
D.P. Singh Chauhan, Addl.
Advocate General, U.P. and O.P. Rana for R. 2 in WP.
R.S. Sodhi and Hardev Singh for R. 1 in WP.
434 & Respondent in Crl.
A. 273 of 1979.
R.S. Sodhi for Respondent No. 3 in WP.
434/79.
R.L. Kohli and R.C. Kohli for the compalinant in WP.
754/79.
D.P. Mukherjee for the Intervener No. 1.
Dr. LM Singhvi for the Intervener No. 2.
Intervener No. 3 in person.
V.J. Francis for the intervener No. 4.
R.K. Garg and R.K. Jain for the intervener No. 5.
FOR THE ADVOCATES GENERAL: 1.
Andhra Pradesh : P. Ramachandra Reddy, Advocate General A.P. Rao and G. Narayana 163 2.
Gujarat : D.V. Patel, (Maharashtra) 3.
Maharashtra : R.N. Sachthey, (Gujarat) M.N. Shroff Gujarat & Maharashtra 4.
Jammu & : Altaf Ahmed Kashmir 5.
Madhya : S.K. Gambhir Pradesh 6.
Punjab : R.S. Sodhi and Hardev Singh 7.
Orissa : G.B. Patnaik, Advocate General and R.K. Mehta 8.
Tamil Nadu : A.V. Rangam 9.
West Bengal : Sukumar Ghosh and G.S. Chatterjee The following Judgments were delivered: SARKARIA, J.
This reference to the Constitution Bench raises a question in regard to the constitutional validity of death penalty for murder provided in Section 302, Penal Code, and the sentencing procedure embodied in sub section (3) of Section 354 of the Code of Criminal Procedure, 1973.
The reference has arisen in these circumstances: Bachan Singh, appellant in Criminal Appeal No. 273 of 1979, was tried and convicted and sentenced to death under Section 302, Indian Penal Code for the murders of Desa Singh, Durga Bai and Veeran Bai by the Sessions Judge.
The High Court confirmed his death sentence and dismissed his appeal.
Bachan Singh 's appeal by special leave, came up for hearing before a Bench of this Court (consisting of Sarkaria and Kailasam, JJ.).
The only question for consideration in the appeal was, whether the facts found by the Courts below would be "special reasons" for awarding the death sentence as required under Section 354(3) of the Code of Criminal Procedure 1973.
Shri H.K. Puri, appearing as Amicus Curiae on behalf of the appellant, Bachan Singh, in Criminal Appeal No. 273 of 1979.
164 contended that in view of the ratio of Rajendra Prasad vs State of U.P.,(1) the Courts below were not competent to impose the extreme penalty of death on the appellant.
It was submitted that neither the circumstance that the appellant was previously convicted for murder and committed these murder after he had served out the life sentence in the earlier case, not the fact that these three murders were extremely heinous and inhuman, constitutes a "special reason" for imposing the death sentence within the meaning of Section 354(3) of the Code of Criminal Procedure 1973.
Reliance for this argument was placed on Rajendra Prasad (ibid) which according to the counsel, was on facts very similar, if not identical, to that case.
Kailasam, J. was of opinion that the majority view in Rajendra Prasad taken by V.R. Krishna Iyer, J, who spoke for himself and D.A. Desai, J., was contrary to the judgment of the Constitution Bench in Jagmohan Singh vs State of Uttar Pradesh(2), inter alia, on these aspects: (i) In Rajendra Prasad, V.R. Krishna Iyer, J. observed : "The main focus of our judgment is on this poignant gap in 'human rights jurisprudence ' within the limits of the Penal Code, impregnated by the Constitution.
To put it pithily, a world order voicing the worth of the human person, a cultural legacy charged with compassion, an interpretative liberation from colonial callousness to life and liberty, a concern for social justice as setting the sights of individual justice, interest with the inherited text of the Penal Code to yield the goals desiderated by the Preamble and Articles 14, 19 and 21.
" According to Kailasam, J., the challenge to the award of the death sentence as violative of Articles 19, 14 and 21, was repelled by the Constitution Bench in Jagmohan 's case.
(ii) In Jagmohan 's case, the Constitution Bench held: "The impossibility of laying down standards (in the matter of sentencing) is at the very core of criminal law as administered in India which invests the judges with a 165 very wide discretion in the matter of fixing the degree of punishment and that this discretion in the matter of sentence in liable to be corrected by superior Courts.
The exercise of judicial discretion on well recognised principles is, in the final analysis, the safest possible safeguard for the accused." In Rajendra Prasad, the majority decision characterised the above observations in Jagmohan as: "incidental observations without concentration on the sentencing criteria", and said that they are not the ratio of the decision, adding. "Judgments are not Bible for every line to be venerated." (iii) In Rajendra Prasad, the plurality observed: "It is constitutionally permissible to swing a criminal out of corporeal existence only if the security of State and society, public order and the interests of the general public compel that course as provided in Article 19(2) to (6).
" This view again, according to Kailasam, J., is inconsistent with the law laid down by the Constitution Bench in Jagmohan, wherein it was held that deprivation of life is constitutionally permissible if that is done according to "procedure established by law".
(iv) In Rajendra Prasad, the majority has further opined: "The only correct approach is to read into Section 302.
I.P.C. and Section 354(3) Cr.
P.C., the human rights and humane trends in the Constitution.
So examined, the rights to life and the fundamental freedoms is deprived when he is hanged to death, his dignity is defiled when his neck is noosed and strangled.
" Against the above, Kailasam, J. commented : 'The only change after the Constitution Bench delivered its judgment is the introduction of Section 354(3) which requires special reasons to be given if the Court is to award the death sentence.
If without the restriction of stating sufficient reasons death sentence could be constitutionally awarded under the I.P.C. and Cr.
P.C. as it stood before the amendment, it is difficult to perceive how by requiring special reasons to 166 be given the amended section would be unconstitutional unless the "sentencing sector is made most restrictive and least vagarious".
(v) In Rajendra Prasad, the majority has held that: "Such extraordinary grounds alone constitutionally qualify as special reasons as leave on option to the Court but to execute the offender if State and society are to survive.
One stroke of murder hardly qualifies for this drastic requirement, however, gruesome the killing or pathetic the situation, unless the inherent testimony coming from that act is irresistible that the murderous appetite of the convict is too chronic and deadly that ordered life in a given locality or society or in prison itself would be gone if this man were now or later to be at large.
If he is an irredeemable, like a bloodthirsty tiger, he has to quit his terrestrial tenancy.
" According to Kailasam, J., what is extracted above, runs directly counter to and cannot be reconciled with the following observations in Jagmohan 's case: "But some (murders) at least are diabolical in conception and cruel in execution.
In some others where the victim is a person of high standing in the country, society is liable to be recked to its very foundation.
Such murders cannot be simply wished away by finding alibis in the social maladjustment of the murderer.
Prevalence of such crimes speaks, in the opinion of many, for the inevitability of death penalty not only by way of deterrence but as a token of emphatic disapproval by the society A very responsible body (Law Commission) has come to the conclusion after considering all the relevant factors.
On the conclusions thus offered to us, it will be difficult to hold that capital punishment as such is unreasonable or not required in the public interest." (vi) Kailasam, J. was further of the opinion that it is equally beyond the functions of a Court to evolve "working rules for imposition of death sentence bearing the markings of enlightened flexibility and social sensibility" or to make law "by cross fertilisation 167 from sociology, history, cultural anthropology and current national perils and developmental goals and, above all, constitutional currents".
This function, in his view, belongs only to Parliament.
The Court must administer the law as it stands.
(vii) The learned Judge has further expressed that the view taken by V.R. Krishna Iyer, J. in Rajendra Prasad that " 'special reasons ' necessary for imposing death penalty must relate not to the crime as such, but to the criminal" is not warranted by the law as it stands today.
Without expressing his own opinion on the various questions raised in that case including the one with regard to the scope, amplification and application of Section 354 (3) of the Code of Criminal Procedure, 1974, Sarkaria, J., in agreement with Kailasam, J., directed the records of the case to be submitted to the Hon 'ble the Chief Justice, for constituting a large Bench "to resolve the doubts, difficulties and inconsistencies pointed out by Kailasam, J." In the meanwhile, several persons convicted of murders and sentenced to death, filed writ petitions (namely, Writ Petitions 564, 165, 179, 434, 89, 754, 756 and 976 of 1979) under Article 32 of the Constitution directly challenging the constitutional validity of the death penalty provided in Section 302 of the Indian Penal Code for the offence of murder, and the sentencing procedure provided in Section 354 (3) of the Code of Criminal Procedure, 1974.
That is how, the matter has now come up before this larger Bench of five Judges.
At the outset, Shri R.K. Garg submitted with some vehemance and persistence, that Jagmohan 's case needs reconsideration by a larger Bench if not by the Full Court.
Reconsideration of Jagmohan, according to the learned counsel, is necessitated because of subsequent events and changes in law.
Firstly, it is pointed out that when Jagmohan was decided in 1972, the then extant Code of Criminal Procedure, 1898 left the choice between death and life imprisonment as punishment for murder entirely to the discretion of the Court.
This position has since undergone a complete change and under Section 354 (3) of the Code of Criminal Procedure, 1973, death sentence has ceased to be the normal penalty for murder.
Secondly, 168 it is argued, the seven Judge decision of this Court in Maneka Gandhi vs Union of India(1) has given a new interpretative dimension of the provisions of Articles 21, 19 and 14 and their inter relationship, and according to this new interpretation every law of punitive detention both in its procedural and substantive aspects must pass the test of all the three Articles.
It is stressed that an argument founded on this expansive interpretation of these Articles was not available when Jagmohan was decided.
Thirdly, it is submitted that India has since acceded to the international Covenant of Civil and Political Rights adopted by the General Assembly of the United Nations, which came into force in December 16, 1976.
By virtue of this Covenant.
India and the other 47 countries who are a party to it, stand committed to a policy for abolition of the 'death penalty '.
Dr. L.M. Singhvi submitted that the question of death penalty cannot be foreclosed for ever on the abstract doctrine of stare decisis by a previous decision of this Court.
It is emphasised that the very nature of the problem is such that it must be the subject of review from time to time so as to be in tune with the evolving standards of decency in a maturing society.
The learned Solicitor General, Shri Soli Sorabji opposed the request of Shri Garg for referring the matter to a larger Bench because such a course would only mean avoidable delay in disposal of the matter.
At the same time, the learned counsel made it clear that since the constitutionality of the death penalty for murder was now sought to be challenged on additional arguments based on subsequent events and changes in law, he would have no objection on the ground of stare decisis, to a fresh consideration of the whole problem by this very Bench.
In view of the concession made by Shri Sorabji, we proceeded to hear the counsel for the parties at length, and to deal afresh with the constitutional questions concerning death penalty raised in these writ petitions.
We have heard the arguments of Shri R.K. Garg.
appearing for the writ petitioners in Writ Petition No. 564/79 for more than three weeks and also those of Dr. L.M. Singhvi, Dr. Chitaley and 169 S/Shri Mukhoty, Dave and R.K. Jain, appearing for interveners or for the other writ petitioners.
We have also heard the arguments of Shri Soli Sorabji, Solicitor General, appearing for the Union of India and Shri Patel appearing for the State of Maharashtra and the other counsel appearing for the respondents.
The principal questions that fall to be considered in this case are: (I) Whether death penalty provided for the offence of murder in Section 302, Penal Code is unconstitutional.
(II) If the answer to the foregoing question be in the negative, whether the sentencing procedure provided in Section 354 (3) of the Code of Criminal Procedure, 1973 (Act 2 of 1974) is unconstitutional on the ground that it invests the Court with unguided and untrammelled discretion and allows death sentence to be arbitrarily or freakishly imposed on a person found guilty of murder or any other capital offence punishable under the Indian Penal Code with death or, in the alternative, with imprisonment for life.
We will first take up Question No. (I) relating to the constitutional validity of Section 302, Penal Code.
Question No. (I): Before dealing with the contentions canvassed, it will be useful to have a short survey of the legislative history of the provisions of the Penal Code which permit the imposition of death penalty for certain offences.
The Indian Penal Code was drafted by the First Indian Law Commission presided over by Mr. Macaulay.
The draft underwent further revision at the hands of well known jurists, like Sir Barnes Peacock, and was completed in 1850.
The Indian Penal Code was 170 passed by the then Legislature on October 6, 1860 and was enacted as Act No XLV of 1860.
Section 53 of the Penal Code enumerates punishments to which offenders are liable under the provisions of this Code.
Clause Firstly of the Section mentions 'Death ' as one of such punishments.
Regarding 'death ' as a punishment, the authors of the Code say: "We are convinced that it ought to be very sparingly inflicted, and we propose to employ it only in cases where either murder or the highest offence against the State has been committed." Accordingly, under the Code, death is the punishment that must be awarded for murder by a person under sentence of imprisonment for life (Section 303).
This apart, the Penal Code prescribes 'death ' as an alternative punishment to which the offenders may be sentenced, for the following seven offences: (1) Waging war against the Government of India.
(section 121) (2) Abetting mutiny actually committed.
(section 132) (3) Giving or fabricating false evidence upon which an innocent person suffers death.
(section 194) (4) Murder which may be punished with death or life imprisonment.
(section 302) (5) Abetment of suicide of a minor or insane, or intoxicated person.
(section 305) (6) Dacoity accompanied with murder.
(section 396) (7) Attempt to murder by a person under sentence of imprisonment for life if hurt is caused.
(section 307) In the instant cases, the impugned provision of the Indian Penal Code is Section 302 which says: "Whoever commits murder shall be punished with death, or imprisonment for life, and also be liable to fine." The related provisions are contained in Sections 299 and 300.
Section 299 defines 'culpable homicide '.
Section 300 defines 'murder '.
Its material part runs as follows: "Except in the cases hereinafter excepted, culpable homicide is murder, if the act by which the death is caused is done with the intention of causing death, or 171 Secondly If it is done with the intention of causing such bodily injury as the offender knows to be likely to cause death of the person to whom the harm is caused, or Thirdly If it is done with the intention of causing bodily injury to any person and the bodily injury intended to be inflicted is sufficient in the ordinary course of nature to cause death, or Fourthly If the person committing the act knows that it is so imminently dangerous that it must, in all probability, cause death, or such bodily injury as is likely to cause death, and commits, such act without any excuse for incurring the risk of causing death or such injury as aforesaid.
" The first contention of Shri Garg is that the provision of death penalty in Section 302, Penal Code offends Article 19 of the Constitution.
It is submitted that the right to live is basic to the enjoyment of all the six freedoms guaranteed in clauses (a) to (e) and (g) of Article 19 (1) of the Constitution and death penalty puts an end to all these freedoms: that since death penalty serves no social purpose and its value as a deterrent remains unproven and it defiles the dignity of the individual so solemnly vouchsafed in the Preamble of the Constitution, its imposition must be regarded as an 'unreasonable restriction ' amounting to total prohibition, on the six freedoms guaranteed in Article 19 (1).
Article 19, as in force today, reads as under: "19 (1).
All citizens shall have the right (a) to freedom of speech and expression; (b) to assemble peaceably and without arms; (c) to form associations or unions; (d) to move freely throughout the territory of India; (e) to reside and settle in any part of the territory of India; (f) . . . . ; 172 (g) to practice any profession, or to carry on any occupation, trade or business.
(2) Nothing in sub clause (a) of clause (1) shall affect the operation of any existing law, or prevent the State from making any law, in so far as such law imposes reasonable restrictions on the exercise of the right conferred by the said sub clause in the interests of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality, or in relation to contempt of court, defamation or incitement to an offence.
(3) Nothing in sub clause (b) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the sovereignty and integrity of India or public order, reasonable restrictions on the exercise of the right conferred by the said sub clause.
(4) Nothing in sub clause (c) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the sovereignty and integrity of India or public order or morality, reasonable restrictions on the exercise of the right conferred by the said sub clause.
(5) Nothing in sub clauses (d) and (e) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevents the State from making any law imposing, reasonable restrictions on the exercise of any of the rights conferred by the said sub clauses either in the interests of the general public or for the protection of the interests of any Scheduled Tribe.
(6) Nothing in sub clause (g) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevents the State from making any law imposing, in the interests of the general public, reasonable restrictions on the exercise of the right con 173 ferred by the said sub clause, and in particular, nothing in the said sub clause, shall affect the operation of any existing law in so far as it relates to, or prevent the State from making any law relating to, (i) the professional or technical qualifications necessary for practising any profession or carrying on any occupation, trade or business, or (ii) the carying on by the State, or by a corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise.
" It will be seen that the first part of the Article declares the rights in clause (1) comprising of six sub clauses namely, (a) to (e) and (g).
The second part of the Article in its five clauses (2) to (6) specifies the limits upto which the abridgement of the rights declared in one or more of the sub clauses of clause (1), may be permitted.
Broadly speaking, Article 19 is intended to protect the rights to the freedoms specifically enumerated in the six sub clauses of clause (1) against State action, other than in the legitimate exercise of its power to regulate these rights in the public interest relating to heads specified in clauses (2) to (6).
The six fundamental freedoms guaranteed under Article 19 (1) are not absolute rights.
Firstly, they are subject to inherent restraints stemming from the reciprocal obligation of one member of a civil society to so use his rights as not to infringe or injure similar rights of another.
This is on the principle sic utere tuo ut alienum non laedas.
Secondly, under clauses (2) to (6) these rights have been expressly made subject to the power of the State to impose reasonable restrictions, which may even extend to prohibition, on the exercise of those rights.
The power, if properly exercised, is itself a safeguard of the freedoms guaranteed in clause (1).
The conferment of this power is founded on the fundamental truth that uncontrolled liberty entirely freed from restraint, degenerates into a licence, leading to anarchy and chaos; that libertine pursuit of liberty, absolutely free, and free for all, may mean liberticide for all.
"Liberty has, therefore," as 174 Justice Patanjali Sastri put it, "to be limited in order to be effectively possessed." It is important to note that whereas Article 21 expressly deals with the right to life and personal liberty, Article 19 does not.
The right to life is not one of the rights mentioned in Article 19 (1).
The first point under Question (1) to be considered is whether Article 19 is at all applicable for judging the validity of the impugned provision in Section 302, Penal Code.
As rightly pointed out by Shri Soli Sorabji, the condition precedent for the applicability of Article 19 is that the activity which the impugned law prohibits and penalises, must be within the purview and protection of Article 19 (1).
Thus considered, can any one say that he has a legal right or fundamental freedom under Article 19 (1) to practise the profession of a hired assassin or to form associations or unions or engage in a conspiracy with the object of committing murders or dacoities.
The argument that the provisions of the Penal Code, prescribing death sentence as an alternative penalty for murder have to be tested on the ground of Article 19, appears to proceed on the fallacy that the freedoms guaranteed by Article 19 (1) are absolute freedoms and they cannot be curtailed by law imposing reasonable restrictions, which may amount to total prohibition.
Such an argument was advanced before the Constitution Bench in The State of Bombay vs R.M.D. Chamarbaugwala.(1) In that case the constitutional validity of certain provisions of the Bombay Lotteries and Prize Competition Control Act, 1952, as amended by Bombay Act No. XXX of 1952, was challenged on the ground, inter alia, that it infringes the fundamental rights of the promoters of such competitions under Article 19 (1) (g), to carry on their trade or business and that the restrictions imposed by the said Act cannot possibly be supported as reasonable restrictions in the interest of the general public permissible under Article 19 (b).
It was contended that the words "trade" or "business" or "commerce" in sub clause (g) of Article 19 (a) should be read in their widest amplitude as any activity which is undertaken or carried on with a view to earning profit since there is nothing in Article 19 (1) (g) which may qualify or cut down the meaning of the critical words; that there is no justification for excluding from the meaning 175 of those words activities which may be looked upon with disfavour by the State or the Court as injurious to public morality or public interest.
Speaking for the Constitution Bench, S.R. Das, C.J. repelled this contention, in these terms: "On this argument it will follow that criminal activities undertaken and carried on with a view to earning profit will be protected as fundamental rights until they are restricted by law.
Thus there will be a guaranteed right to carry on a business of hiring out goondas to commit assault or even murder, or house breaking, or selling obscene pictures, of trafficking in women and so on until the law curbs or stops such activities.
This appears to us to be completely unrealistic and incongruous.
We have no doubt that there are certain activities which can under no circumstance be regarded as trade or business or commerce although the usual forms and instruments are employed therein.
To exclude those activities from the meaning of those words is not to cut down their meaning at all but to say only that they are not within the true meaning of those words.
" This approach to the problem still holds the field.
The observations in Chamarbaugwala, extracted above, were recently quoted with approval by V.R. Krishna Iyer., J., while delivering the judgment of the Bench in Fatehchand Himmatlal & Ors.
vs State of Maharashtra(1).
In A.K. Gopalan vs The State of Madras (2), all the six learned Judges constituting the Bench held that punitive detention or imprisonment awarded as punishment after conviction for an offence under the Indian Penal Code is outside the scope of Article 19, although this conclusion was reached by them by adopting more or less different approaches to the problem.
It was contended on behalf of A.K. Gopalan that since the preventive detention order results in the detention of the detenu in a cell, his rights specified in clauses (a) to (e) and (g) of Article 19 (1) have been infringed.
176 Kania, C J. rejected this argument, inter alia, on these grounds: (i) Argument would have been equally applicable to a case of punitive detention, and its acceptance would lead to absurd results.
"In spite of the saving clauses (2) to (6), permitting abridgement of the rights connected with each other, punitive detention under several sections of the Penal Code, e.g. for theft, cheating, forgery and even ordinary assault, will be illegal, (because the reasonable restrictions in the interest of "public order" mentioned in clauses (2) to (4) of the Article would not cover these offences and many other crimes under the Penal Code which injure specific individuals and do not affect the community or the public at large).
Unless such conclusion necessarily follows from the article, it is obvious that such construction should be avoided.
In my opinion, such result is clearly not the outcome of the Constitution." (The underlined words within brackets supplied.) (At page 100 of the Report) (ii) Judged by the test of direct and indirect effect on the rights referred to in article 19 (1), the Penal Code is not a law imposing restrictions on these rights.
The test is that "the legislation to be examined must be directly in respect of one of the rights mentioned in the sub clauses.
If there is a legislation directly attempting to control a citizen 's freedom of speech or expression or his right to assemble peaceably and without arms, etc., the question whether that legislation is saved by the relevant saving clause of Article 19 will arise.
If, however, the legislation is not directly in respect of any of these subjects, but as a result of the operation of other legislation, for instance, for punitive or preventive detention, his right under any of these sub clauses is abridged, the question of the application of Article 19 does not arise.
The true approach is only to consider the directness of the legislation and not what will be the result of the detention otherwise valid, on the mode of the detenu 's life." (Pages 100 101).
177 (iii)"The contents and subject matter of articles 19 and 21 are thus not the same. " (Page 105).
"Article 19 (5) cannot apply to a substantive law depriving a citizen of personal liberty." "Article 19 (1) does not purport to cover all aspects of liberty or of personal liberty.
Personal liberty would primarily mean liberty of the physical body.
The rights given under article 19 (1) do not directly come under that description.
In that Article only certain phases of liberty are dealt with".
(Page 106) "In my opinion therefore, Article 19 should be read as a separate complete Article".
(Page 107).
Patanjali Sastri, J., also, opined "that lawful deprivation of personal liberty on conviction and sentence for committing a crime, or by a lawful order of preventive detention is "not within the purview of Article 19 at all, but is dealt with by the succeeding Articles 20 and 21." (Page 192).
In tune with Kania, C.J., the learned Judge observed: "A construction which would bring within Article 19 imprisonment in punishment of a crime committed or in prevention of a crime threatened would, as it seems to me, make a reductio ad absurdum of that provision.
If imprisonment were to be regarded as a 'restriction ' of the right mentioned in article 19 (1) (d), it would equally be a restriction on the rights mentioned by the other sub clauses of clause (1), with the result that all penal laws providing for imprisonment as a mode of punishment would have to run the gauntlet of clauses (2) to (6) before their validity could be accepted.
For instance, the law which imprisons for theft would on that view, fall to be justified under clause (2) as a law sanctioning restriction of freedom of speech and expression." (Page 192).
"Article 19 confers the rights therein specified only on the citizens of India, while article 21 extends the protection of life and personal liberty to all persons citizens and non citizens alike.
Thus, the two Articles do not operate in a coterminous field." (Page 193). "(Personal liberty) was used in Article 21 as a sense which excludes the freedoms dealt in Article 19 . ." Rejecting the argument of the Attorney General, the learned Judge held that clauses (4) to (7) of Article 22 do not form a complete 178 Code and that "the language of Article 21 is perfectly general and covers deprivation of personal liberty or incarceration, both for punitive and preventive reasons." (Page 207).
Mahajan, J., however, adopted a different approach.
In his judgment, "an examination of the provisions of Article 22 clearly suggests that the intention was to make it self contained as regards the law of preventive detention and that the validity of a law on the subject of preventive detention cannot be examined or controlled either by the provisions of Article 21 or by the provisions of Article 19(5)." (Page 229).
Mukerjee, J. explained the relative scope of the Articles in this group, thus: "To me it seems that Article 19 of the Constitution gives a list of individual liberties and prescribes in the various clauses the restraints that may be placed upon them by law so that they may not conflict with public welfare or general morality.
On the other hand, Articles 20, 21 and 22 are primarily concerned with penal enactments or other laws under which personal safety or liberty of persons could be taken away in the interests of the society and they set down the limits within which the State control should be exercised.
In my opinion, the group of articles 20 to 22 embody the entire protection guaranteed by the Constitution in relation to deprivation of life and personal liberty both with regard to substantive as well as to procedural law." (Page 255).
"The only proper way of avoiding these anomalies is to interpret the two provisions (articles 19 and 21) as applying to different subjects.
It is also unnecessary to enter into a discussion on the question. as to whether article 22 by itself is a self contained Code with regard to the law of Preventive Detention." (Page 257).
S.R. Das, J., also, rejected the argument that the whole of the Indian Penal Code is a law imposing reasonable restriction on the rights conferred by Article 19 (1), with these observations (at Page 303) : "To say that every crime undermines the security of the State and, therefore, every section of the Indian Penal Code, irrespective of whether it has any reference to speech or expression, is a law within the meaning of this clause is wholly unconvincing and betrays only a vain and forlorn 179 attempt to find an explanation for meeting the argument that any conviction by a Court of law must necessarily infringe article 19 (1) (a).
There can be no getting away from the fact that a detention as a result of a conviction impairs the freedom of speech for beyond what is permissible under clause (2) of article 19.
Likewise, a detention on lawful conviction impairs each of the other personal rights mentioned in sub clauses (3) to (6).
The argument that every section of the Indian Penal Code irrespective of whether it has any reference to any of the rights referred to in sub clauses (b) to (e) and (g) is a law imposing reasonable restriction on those several rights has not even the merit of plausibility.
There can be no doubt that a detention as a result of lawful conviction must necessarily impair the fundamental personal rights guaranteed by article 19 (1) far beyond what is permissible under clauses (2) to (6) of that article and yet nobody can think of questioning the validity of the detention or of the section of the Indian Penal Code under which the sentence was passed." (ii) Das, J. then gave an additional reason as to why validity of punitive detention or of the sections of the Penal Code under which the sentence was passed, cannot be challenged on the ground of article 19, thus : "Because the freedom of his person having been lawfully taken away, the convict ceases to be entitled to exercise . any of the . rights protected by clause (1) of article 19." (iii) The learned Judge also held that "article 19 protects some of the important attributes of personal liberty as independent rights and the expression 'personal liberty ' has been used in article 21 as a compendious term including within its meaning all the varieties of rights which go to make up the personal liberties of men." (Page 299).
Fazal Ali, J. dissented from the majority.
In his opinion: "It cannot be said that articles 19, 20, 21 and 22 do not to some extent overlap each other.
The case of a person who is convicted of an 180 offence will come under article 20 and 21 and also under article 22 so far as his arrest and detention in custody before trial are concerned.
Preventive detention, which is dealt with in article 22, also amounts to deprivation of personal liberty which is referred to in article 19 (1) (d)." (Page 148).
Fazal Ali, J. held that since preventive detention, unlike punitive detention, directly infringes the right under Article 19(1)(d), it must pass the test of clause (5).
According to the learned Judge, only those laws are required to be tested on the anvil of Article 19 which directly restrict any of the rights guaranteed in Article 19(1).
Applying this test (of direct and indirect effect) to the provisions of the Indian Penal Code, the learned Judge pointed out that the Code "does not primarily or necessarily impose restrictions on the freedom of movement, and it is not correct to say that it is a law imposing restrictions on the right to move freely.
Its primary object is to punish crime and not to restrict movement.
The punishment may consist in imprisonment or a pecuniary penalty.
If it consists in a pecuniary penalty, it obviously involves no restriction on movement, but if it consists in imprisonment, there is a restriction on movement.
This restraint is imposed not under a law imposing restrictions on movement but under a law defining crime and making it punishable.
The punishment is correlated with the violation of some other person 's right and not with the right of movement possessed by the offender himself.
In my opinion, therefore, the Indian Penal Code does not come within the ambit of the words "law imposing restriction on the right to move freely." (Pages 145 146).
In applying the above test, which was the same as adopted by Kania, C.J., Fazal Ali, J. reached a conclusion contrary to that reached by the Chief Justice, on the following reasoning ; "Punitive detention is however essentially different from preventive detention.
A person is punitively detained only after trial for committing a crime and after his guilt has been established in a competent court of justice.
A person so convicted can take his case to the State High Court and sometimes bring it to this Court also; and he can in the course of the proceedings connected with his trial take all pleas available to him including the plea of want of jurisdiction of the Court of trial and the invalidity of the law 181 under which he has been prosecuted.
The final judgment in the criminal trial will thus constitute a serious obstacle in his way if he chooses to assert even after his conviction that his right under article 19(1)(d) has been violated.
But a person who is preventively detained has not to face such an obstacle whatever other obstacle may be in his way." (Page 146) We have copiously extracted from the judgments in A.K. Gopalan 's case, to show that all the propositions propounded, arguments and reasons employed or approaches adopted by the learned Judges in that case, in reaching the conclusion that the Indian Penal Code, particularly those of its provisions which do not have a direct impact on the rights conferred by Article 19(1), is not a law imposing restrictions on those rights, have not been overruled or rendered bad by the subsequent pronouncements of this Court in Bank Nationalizaton(1) case or in Maneka Gandhi 's case.
For instance, the proposition laid down by Kania, C.J., Fazal Ali, Patanjali Sastri, and S.R. Das, J.J. that the Indian Penal Code particularly those of its provisions which cannot be justified on the ground on reasonableness with reference to any of the specified heads, such as "public order" in clauses (2), (3) and (4), is not a law imposing restrictions on any of the rights conferred by Article 19(1), still holds the field.
Indeed, the reasoning, explicit, or implicit in the judgments of Kania, C.J., Patanjali Sastri and S.R. Das JJ.
that such a construction which treats every section of the Indian Penal Code as a law imposing 'restriction ' on the rights in Article 19(1), will lead to absurdity is unassailable.
There are several offences under the Penal Code, such as theft, cheating, ordinary assault, which do not violate or effect 'public order, ' 'but only law and order '.
These offences injure only specific individuals as distinguished from the public at large.
It is by now settled that 'public order ' means 'even tempo of the life of the community. ' That being so, even all murders do not disturb or affect 'public order '.
Some murders may be of purely private significance and the injury or harm resulting therefrom affects only specific individuals and, consequently, such murders may not be covered by "public order" within the contemplation of clauses (2), (3) and (4) of article 19.
Such murders do not lead to public disorder but to disorder simpliciter.
Yet, no rational being can say (1) ; 182 that punishment of such murders is not in the general public interest.
It may be noted that general public interest is not specified as a head in clauses (2) to (4) on which restriction on the rights mentioned in clause (1) of the Article may be justified.
It is true, as was pointed out by Hidayatullah, J. (as he then was) in Dr. Ram Manohar Lohia 's(1) case, and in several other decisions that followed it, that the real distinction between the areas of 'law and order ' and 'public order ' lies not merely in the nature or quality of the act, but in the degree and extent.
Violent crimes similar in nature, but committed in different contexts and circumstances might cause different reactions.
A murder committed in given circumstances may cause only a slight tremor, the wave length of which does not extent beyond the parameters of law and order.
Another murder committed in different context and circumstances may unleash a tidal wave of such intensity, gravity and magnitude, that its impact throws out of gear the even flow of life.
Nonetheless the fact remains that for such murders which do not affect "public order", even the provision for life imprisonment in Section 302, Indian Penal Code, as as alternative punishment, would not be justifiable under clauses (2), (3) and (4) as a reasonable restriction in the interest of 'Public Order '.
Such a construction must, therefore, be avoided.
Thus construed, Article 19 will be attracted only to such laws, the provisions of which are capable of being tested under clauses (2) to (5) of Article 19.
This proposition was recently (1975) reiterated in Hardhan Saha & Anr.
vs State of West Bengal(2).
In accord with this line of reasoning in A.K. Gopalan 's case, a Constitution Bench of this Court in Hardhan Saha 's case restated the principle for the applicability of Article 19 by drawing a distinction between a law of preventive detention and a law providing punishment for commission of crimes, thus : "Constitution has conferred rights under Article 19 and also adopted preventive detention to prevent the greater evil of elements imperilling the security, the safety of a State and the welfare of the nation.
It is not possible to think that a person who is detained will yet be free to move (1) ; (2) ; at p. 784.
183 for assemble or form association or unions or have the right to reside in any part of India or have the freedom of speech or expression.
Suppose a person is convicted of an offence of cheating and prosecuted (and imprisoned) after trial, it is not open to say that the imprisonment should be tested with reference to Article 19 for its reasonableness.
A law which attracts Article 19 therefore must be such as is capable of being tested to be reasonable under clauses (2) to 5 of Article 19." (emphasis and parenthesis supplied.) The last sentence which has been underlined by us, appears to lend implicit approval to the rule of construction adopted by the majority of the learned Judges in A.K. Gopalan 's case, whereby they excluded from the purview of Article 19 certain provisions of the Indian Penal Code providing punishment for certain offences which could not be tested on the specific grounds embodied in clauses (2) to (5) of that Article.
This proposition enunciated in A.K. Gopalan 's case is only a product of the application of the basic canon that a construction which would lead to absurdity, should be eschewed.
In R.C. Cooper vs Union of India (popularly known as Bank Nationalization case), the majority adopted the two fold test for determining as to when a law violated fundamental rights, namely: "(1) It is not the object of the authority making the law impairing the right of a citizen, nor the form of action that determines the protection he can claim.
(2) It is the effect of the law and of the action upon the right which attract the jurisdiction of the Court to grant relief.
The direct operation of the act upon the rights forms the real test.
" In Maneka Gandhi vs Union of India (ibid), Bhagwati, J. explained the scope of the same test by saying that a law or and order made thereunder will be hit by article 19, if the direct and inevitable consequence of such law or order is to abridge or take away any one or more of the freedoms guaranteed by Article 19(1).
If the effect and operation of the statute by itself, upon a person 's fundamental rights is remote or dependent upon "factors which may or may not come into play", then such statute is not ultra vires on the ground of its being violative of that fundamental right.
Bhag 184 wati J. described this proposition as "the doctrine of intended and real effect" while Chandrachud, J. (as he then was) called it "the test of proximate effect and operation of the statute.
" The question is, whether R.C. Cooper & Maneka Gandhi have given a complete go by to the 'test of direct and indirect effect, sometimes described as form and object test ' or 'pith and substance rule ', which was adopted by Kania, C.J. and Fazal Ali, J. in A.K. Gopalan 's case.
In our opinion, the answer to this question cannot be in the affirmative.
In the first place, there is nothing much in the name.
As Varadachariar, J. put it in Subrahmanyan Chettiar 's(1) case, such rules of interpretation were evolved only as a matter of reasonableness and common sense and out of the necessity of satisfactorily solving conflicts from the inevitable overlapping of subjects in any distribution of powers.
By the same yardstick of common sense, the 'pith and substance rule ' was applied to resolve the question of the constitutionality of a law assailed on the ground of its being violative of a fundamental right.
Secondly, a survey of the decisions of this Court since A.K. Gopalan, shows that the criterion of directness which is the essence of the test of direct and indirect effect, has never been totally abandoned.
Only the mode of its application has been modified and its scope amplified by judicial activism to maintain its efficacy for solving new constitutional problems in tune with evolving concepts of rights and obligations in a strident democracy.
The test of direct and indirect effect adopted in A.K. Gopalan was approved by the Full Court in Ram Singh vs State of Delhi.(2) Therein, Patanjali Sastri, J. quoted with approval the passages (i) and (ii) (which we have extracted earlier) from the judgment of Kania, C. J.
Although Mahajan and Bose, JJ.
differed on the merits, there was no dissent on this point among all the learned Judges.
The first decision, which, though purporting to follow Kania, C. J 'section enunciation in A.K. Gopalan, imperceptibly added another dimension to the test of directness, was Express Newspapers (Private) Ltd. & Anr.
vs The Union of India & Ors.(3) In that case, the cons (1) (2) ; (3) 185 titutional validity of the Working Journalists (Conditions of Service) and Miscellaneous Provisions Act, 1955, and the legality of the decision of the Wage Board, constituted thereunder, were challenged.
The impugned Act, which had for its object the regulation of the conditions of service of working journalists and other persons employed in newspaper establishments, provided, inter alia, for the payment of gratuity to a working journalist who had been in continuous service for a certain period.
It also regulated hours of work and leave and provided for retrenchment compensation.
Section 9 (1) laid down the principles that the Wage Board was to follow in fixing the rates of wages of working journalists.
One of the contentions of the petitioners in that case was that impugned Act violated their fundamental rights under Articles 19 (1) (a), 19 (1) (g), 14 and 32 of the Constitution and that the decision of the Wage Board fixing the rates and scales of wages which imposed too heavy a financial burden on the industry and spelled its total ruin, was illegal and void.
It was contended by the learned Attorney General in that case that since the impugned legislation was not a direct legislation on the subject of freedom of speech and expression.
article 19 (1)(a) would have no application, the test being not the effect or result of legislation but its subject matter.
In support of his contention, he relied upon the observations on this point of Kania, C. J. in A. K. Gopalan.
It was further urged that the object of the impugned Act was only to regulate certain conditions of service of working journalists and other persons employed in the newspaper establishments and not to take away or abridge the freedom of speech or expression enjoyed by the petitioners and, therefore, the impugned Act could not come within the prohibition of Article 19 (1) (a) read with Article 32 of the Constitution.
On the other hand, the petitioners took their stand on a passage in the decision of the Supreme Court of United States in Minnesota Ex Rel.
Olson,(1) which was as under : "With respect to these contentions it is enough to say that in passing upon constitutional questions the Court has regard to substance and not to mere matters of form, and that, in accordance with familiar principles, the statute must be tested by its operation and effect." (1) ; at p. 708.
186 It was further submitted that in all such cases, the Court has to look behind the names, forms and appearances to discover the true character and nature of the legislation.
Thus considered, proceeded the argument, the Act by laying a direct and preferential burden on the press, would tend to curtail the circulation, narrow the scope of dissemination of information and fetter the petitioners ' freedom to choose the means of exercising their rights of free speech (which includes the freedom of the press).
It was further submitted that those newspaper employers who were marginally situated may not be able to bear the strain and have to disappear after closing down their establishments.
N.H. Bhagwati, J. who delivered the unanimous Judgment of the Constitution Bench, after noting that the object of the impugned legislation is to provide for the amelioration of the conditions of the workmen in the newspaper industry, overruled this contention of the employers, thus: "That, however would be a consequence which would be extraneous and not within the contemplation of the legislature.
It could therefore hardly be urged that the possible effect of the impact of these measures in conceivable cases would vitiate the legislation as such.
All the consequences which have been visualized in the behalf by the petitioners, viz., the tendency to curtail circulation and thereby narrow the scope of dissemination of information, fetters on the petitioners ' freedom to choose the means of exercising the right, likelihood of the independence of the press being undermined by having to seek government aid; the imposition of penalty on the petitioners ' right to choose the instruments for exercising the freedom or compelling them to seek alternative media, etc., would be remote and depend upon various factors which may or may not come into play.
Unless these were the direct or inevitable consequences of the measures enacted in the impugned Act, it would not be possible to strike down the legislation as having that effect and operation." (emphasis added) The learned Judge further observed that the impugned Act could be "legitimately characterised as a measure which affects the press", but its "intention or the proximate effect and operation" was not such as would take away or abridge the right of freedom of speech and 187 expression guaranteed in Article 19 (1) (a), therefore, it could not be held invalid on that ground.
The impugned decision of the Wage Board, however, was held to be ultra vires the Act and contrary to the principles of natural justice.
It may be observed at this place that the manner in which the test of direct and indirect effect was applied by N.H. Bhagwati, J., was not very different from the mode in which Fazal Ali, J. applied it to punitive detention as punishment after conviction for an offence under the Indian Penal Code.
N.H. Bhagwati, J., did not discard the test adopted by Kania, C.J., in A.K. Gopalan, in its entirety; he merely extended the application of the criterion of directness to the operation and effect of the impugned legislation.
Again, in Sakal Papers (P) Ltd. & Ors.
vs The Union of India(1) this Court, while considering the constitutional validity of the and Daily Newspaper (Price and Page) Order, 1960, held that the "direct and immediate" effect of the impugned Order would be to restrain a newspaper from publishing any number of pages for carrying its news and views, which it has a fundamental right under Article 19 (1) (a) and, therefore, the Order was violative of the right of the newspapers guaranteed by Article 19 (1) (a), and as such, invalid.
In this case, also, the emphasis had shifted from the object and subject matter of the impugned State action to its direct and immediate effect.
In Naresh Shridhar Mirajkar & Ors.
vs State of Maharashtra & Anr.
,(2) an order prohibiting the publication of the evidence of a witness in a defamation case, passed by a learned Judge (Tarkunde, J.) of the Bombay High Court, was impugned on the ground that it violated the petitioners ' right to free speech and expression guaranteed by Article 19 (1) (a).
Gajendragadkar, C.J., (Wanchoo, Mudholkar, Sikri and Ramaswami, JJ., concurring) repelled this contention with these illuminating observations: "The argument that the impugned order affects the fundamental rights of the petitioners under Article 19 (1), is based on a complete misconception about the true nature and (1) ; (2) ; 188 character of judicial process and of judicial decisions.
When a Judge deals with matters brought before him for his adjudication, he first decides questions of fact on which the parties are at issue, and then applies the relevant law to the said facts.
Whether the findings of fact recorded by the Judge are right or wrong, and whether the conclusion of law drawn by him suffers from any infirmity, can be considered and decided if the party aggrieved by the decision of the Judge takes the matter up before the appellate Court.
But it is singularly inappropriate to assume that a judicial decision pronounced by a Judge of competent jurisdiction in or in relation to matter brought before him for adjudication can affect the fundamental rights of the citizens under Article 19 (1).
What the judicial decision purports to do is to decide the controversy between the parties brought before the court and nothing more.
If this basic and essential aspect of the judicial process is borne in mind, it would be plain that the judicial verdict pronounced by court in or in relation to a matter brought before it for its decision cannot be said to affect the fundamental rights of citizens under Article 19 (1)." "It is well settled that in examining the validity of legislation, it is legitimate to consider whether the impugned legislation is a legislation directly in respect of the subject covered by any particular article of the Constitution, or touches the said article only incidentally or indirectly '. ' "If the test of direct effect and object which is sometimes described as the pith and substance test, is thus applied in considering the validity of legislation, it would not be inappropriate to apply the same test to judicial decisions like the one with which we are concerned in the present proceedings.
As we have already indicated, the impugned order was directly concerned with giving such protection to the witness as was thought to be necessary in order to obtain true evidence in the case with a view to do justice between the parties.
If, incidentally, as a result of this order, the petitioners were not able to report what they heard in court, that cannot be said to make the impugned order invalid under Article 19 (1) (a).
" 189 We have already mentioned briefly how the test of directness was developed and reached its culmination in Bank Nationalization 's case and Maneka Gandhi 's case.
From the above conspectus, it is clear that the test of direct and indirect effect was not scrapped.
Indeed, there is no dispute that the test of 'pith and substance ' of the subject matter and of direct and of incidental effect of legislation is a very useful test to determine the question of legislative competence i.e., in ascertaining whether an Act falls under one Entry while incidentally encroaching upon another Entry.
Even for determining the validity of a legislation on the ground of infringement of fundamental rights, the subject matter and the object of the legislation are not altogether irrelevant.
For instance, if the subject matter of the legilation directly covers any of the fundamental freedoms mentioned in Article 19 (1), it must pass the test of reasonableness under the relevant head in clauses (2) to (6) of that Article.
If the legislation does not directly deal with any of the rights in Article 19 (1), that may not conclude the enquiry.
It will have to be ascertained further whether by its direct and immediate operation, the impugned legislation abridges any of the rights enumerated in Article 19 (1).
In Bennett Coleman,(1) Mathew, J. in his dissenting judgment referred with approval to the test as expounded in Express Newspapers.
He further observed that "the 'pith and substance ' test, though not strictly appropriate, must serve a useful purpose in the process of deciding whether the provisions in question which work some interference with the freedom of speech, are essentially regulatory in character".
From a survey of the cases noticed above, a comprehensive test which can be formulated, may be re stated as under: Does the impugned law, in its pith and substance, whatever may be its form and object, deal with any of the fundamental rights conferred by Article 19 (1)? If it does, does it abridge or abrogate any of those rights? And even if it does not, in its pith and substance, deal with any of the fundamental rights conferred by Article 19(1), is the 190 Direct and inevitable effect of the impugned law such as to abridge or abrogate any of those rights? The mere fact that the impugned law incidentally, remotely or collaterally has the effect of abridging or abrogating those rights, will not satisfy the test.
If the answer to the above queries be in the affirmative, the impugned law in order to be valid, must pass the test of reasonableness under Article 19.
But if the impact of the law on any of the rights under clause (1) of Article 19 is merely incidental, indirect, remote or collateral and is dependent upon factors which may or may not come into play, the anvil of Article 19 will not be avilable for judging its validity.
Now, let us apply this test to the provisions of the Penal Code in question.
Section 299 defines 'culpable homicide ' and Section 300 defines culpable homicide amounting to murder.
Section 302 prescribes death or imprisonment for life as penalty for murder.
It cannot, reasonably or rationally, be contended that any of the rights mentioned in Article 19(1) of the Constitution confers the freedom to commit murder or, for the matter of that, the freedom to commit any offence whatsoever.
Therefore, penal laws, that is to say, laws which define offences and prescribe punishment for the commission of offences do not attract the application of Article 19(1).
We cannot, of course, say that the object of penal laws is generally such as not to involve any violation of the rights conferred by Article 19(1) because after the decision of this Court in the Bank Nationalization case the theory, that the object and form of the State action alone determine the extent of protection that may be claimed by an individual and that the effect of the State action on the fundamental right of the individual is irrelevant, stands discredited.
But the point of the matter is that, in pith and substance, penal laws do not deal with the subject matter of rights enshrined in Article 19(1).
That again is not enough for the purpose of deciding upon the applicability of Article 19 because as the test formulated by us above shows, even if a law does not, in its pith and substance, deal with any of the fundamental rights conferred by Article 19(1), if the direct and inevitable effect of the law is such as to abridge or abrogate any of those rights, Article 19(1) shall have been attracted.
It would then become necessary to test the validity of even a penal law on the touchstone of that Article.
On this latter aspect of the matter, we are of the opinion that the deprivation of freedom consequent upon an order of conviction and sentence is not a direct 191 and inevitable consequence of the penal law but is merely incidental to the order of conviction and sentence which may or may not come into play, that is to say, which may or may not be passed.
Considering therefore the test formulated by us in its dual aspect, we are of the opinion that Section 302 of the Penal Code does not have to stand the test of Article 19(1) of the Constitution.
This is particularly true of crimes, inherently vicious and pernicious, which under the English Common Law were classified as crimes mala in se as distinguished from crimes mala prohibita crimes mala in se embrace acts immoral or wrong in themselves, such as, murder, rape, arson, burglary, larceny (robbery and dacoity); while crimes mala prohibita embrace things prohibited by statute as infringing on others ' rights, though no moral turpitude attaches to such crimes.
Such acts constitute crimes only because they are so prohibited.
(See Words and Phrases, Permanent Edition, Vol. 10).
While crimes mala in se do not per se, or in operation directly and inevitably impinge on the rights under Article 19(1), cases under the other category of crimes are conceivable where the law relating to them directly restricts or abridges such rights.
The illustration given by Shri Sorabji will make the point clear.
Suppose, a law is enacted which provides that it shall be an offence to level any criticism, whatever, of the Government established by law and makes a further provision prescribing five years ' imprisonment as punishment for such an offence.
Such a law (i.e. its provision defining the offence) will directly and inevitably impinge upon the right guaranteed under clause (a) of Article 19(1).
Therefore, to be valid, it must pass the test of reasonableness embodied in clause (2) of the Article.
But this cannot be said in regard to the provisions of the Penal Code with which we are concerned.
Assuming arguendo, that the provisions of the Penal Code, particularly those providing death penalty as an alternative punishment for murder, have to satisfy the requirements of reasonableness and public interest under Article 19 the golden strand of which according to the ratios of Maneka Gandhi runs through the basic structure of Article 21 also the further questions to be determined, in this connection, will be: On whom will the onus of satisfying the requirements under Article 19, lie ? Will such onus lie on the State or the person challenging its validity ? And what will be the nature of the onus? 192 With regard to onus, no hard and fast rule of universal application in all situations, can be deducted from the decided cases.
In some decisions, such as, Saghir Ahmad vs State of Uttar Pradesh(1) and Khyerbari Tea Co. vs State of Assam & Ors.
(2) it was laid down by this Court that if the writ petitioner succeeds in showing that the impugned law ex facie abridges or transgresses the rights coming under any of the sub clauses of clause (1) of Article 19, the onus shifts on the respondent state to show that the legislation comes within the permissible limits imposed by any of the clauses (2) to (6) as may be applicable to the case, and, also to place material before the court in support of that contention.
If the State does nothing in that respect, it is not for the petitioner to prove negatively that it is not covered by any of the permissive clauses.
A contrary trend, however, is discernible in the recent decisions of this Court, which start with the initial presumption in favour of the constitutionality of the statute and throw the burden of rebutting that presumption on the party who challenges its constitutionality on the ground of article 19.
In B. Banerjee vs Anita Pan (3) this Court, speaking through V.R. Krishna Iyer, J., reiterated the ratio of Ram Krishna Dalmia 's case,(4) that : "there is always a presumption in favour of the constitutionality of an enactment and the burden is upon him who attack it to show that there has been a clear transgression of the constitutional principles"; and "that it must be presumed that the legislature understands and correctly appreciates the need of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds.
" It was emphasised that "Judges act not by hunch but on hard facts properly brought on record and sufficiently strong to rebuff the 193 initial presumption of constitutionality of legislation.
Nor is the Court a third Chamber of the House to weigh whether it should draft the clause differently".
Referring, inter alia, to the decision of this Court in R.M.D. Chamarbaugwala (ibid), and Seervai 's 'Constitutional Law of India ', Vol.
I, page 54, it was recalled, "Some courts have gone to the extent of holding that there is a presumption in favour of constitutionality, and a law will not be declared unconstitutional unless the case is so clear as to be free from doubt; and to doubt the constitutionality of a law is to resolve it in favour of its validity".
Similar view was taken by a Bench of seven learned Judges of this Court in Pathumma vs State of Kerala.(1) Behind the view that there is a presumption of constitutionality of a statute and the onus to rebut the same lies on those who challenge the legislation, is the rationale of judicial restraint, a recognition of the limits of judicial review; a respect for the boundaries of legislative and judicial functions, and the judicial responsibility to guard the trespass from one side or the other.
The primary function of the courts is to interpret and apply the laws according to the will of those who made them and not to transgress into the legislative domain of policy making.
"The job of a Judge is judging and not law making".
In Lord Devlin 's words : "Judges are the keepers of the law and the keepers of these boundaries cannot, also, be among out riders.
" A similar warning was echoed by the Supreme Court of the United States in Dennis vs United States(2) in these terms : "Courts are not representative bodies.
They are not designed to be a good reflex of a democratic society.
Their judgment is best informed, and therefore most dependable, within narrow limits.
Their essential quality is detachment, founded on independence.
History teaches that the independence of the judiciary is jeopardized when courts become embroiled in the passions of the day and assume primary responsibility in choosing between competing political, economic and social pressures.
" 194 In Gregg vs Georgia,(1) one of the principal questions for consideration was, whether capital punishment provided in a statute for certain crimes was a "cruel and unusual" punishment.
In that context, the nature of the burden which rests on those who attack the constitutionality of the statute was explained by Stewart, J., thus : "We may not require the legislature to select the least severe penalty possible so long as the penalty selected is not cruelly inhumane or disproportionate to the crime involved.
And a heavy burden rests on those who would attack the judgment of the representatives of the people.
This is true in part because the constitutional test is intertwined with an assessment of contemporary standards and the legislative judgment weighs heavily in ascertaining such standards.
In a democratic society legislatures, not courts, are constituted to respond to the will and conse quently the moral values of the people.
" Even where the burden is on the State to show that the restriction imposed by the impugned statute is reasonable and in public interest, the extent and the manner of discharge of the burden necessarily depends on the subject matter of the legislation, the nature of the inquiry, and the scope and limits of judicial review.
(See the observations of Sastri.
J. in State of Madras vs V.C. Rao,(2) reiterated in Jagmohan).
In the instant case, the State has discharged its burden primarily by producing for the persual of the Court, the 35th Report of the Law Commission, 1967, and the judgments of this Court in Jagmohan Singh and in several subsequent cases, in which it has been recognised that death penalty serves as a deterrent.
It is, therefore, for the petitioners to prove and establish that the death sentence for murder is so outmoded, unusual or excessive as to be devoid of any rational nexus with the purpose and object of the legislation.
The Law Commission of India, after making an intensive and extensive study of the subject of death penalty in India, published 195 and submitted its 35th Report in 1967 to the Government.
After examining, a wealth of evidential material and considering the arguments for and against its retention, that high powered Body summed up its conclusions at page 354 of its Report, as follows : "The issue of abolition or retention has to be decided on a balancing of the various arguments for and against retention.
No single argument for abolition or retention can decide the issue.
In arriving at any conclusion on the subject, the need for protecting society in general and individual human beings must be borne in mind.
It is difficult to rule out the validity of, of the strength behind, many of the arguments for abolition nor does, the Commission treat lightly the argument based on the irrevocability of the sentence of death, the need for a modern approach, the severity of capital punishment and the strong feeling shown by certain sections of public opinion in stressing deeper questions of human values.
Having regard, however, to the conditions in India, to the variety of the social up bringing of its inhabitants, to the disparity in the level of morality and education in the country, to the vastness of its area, to diversity of its population and to the paramount need for maintaining law and order in the country at the present juncture, India cannot risk the experiment of abolition of capital punishment.
" This Report was also, considered by the Constitution Bench of this Court in Jagmohan.
It was the main piece of evidence on the basis of which the challenge to the constitutional validity of Section 302 of the Penal Code, on the ground of its being violative of Article 19, was repelled.
Parliament must be presumed to have considered these views of the Law Commission and the judgment of this Court in Jagmohan, and must also have been aware of the principles crystallised by judicial precedents in the matter of sentencing when it took up revision of the Code of Criminal Procedure in 1973, and inserted in it, Section 354(3) which indicates that death penalty can be awarded in exceptional cases for murder and for some other offences under the Penal Code for special reasons to be recorded.
Death penalty has been the subject of an age old debate between Abolitionists and Retentionists, although recently the 196 controversy has come in sharp focus.
Both the groups are deeply anchored in their antagonistic views.
Both firmly and sincerly believe in the rightcousness of their respective stands, with overtones of sentiment and emotion.
Both the camps can claim among them eminent thinkers, penologists, sociologists, jurists; judges, legislators, administrators and law enforcement officials.
The chief arguments of the Abolitionists, which have been substantially adopted by the learned counsel for the petitioners, are as under : (a) The death penalty is irreversible.
Decided upon according to fallible processes of law by fallible human beings, it can be and actually has been inflicted upon people innocent of any crime.
(b) There is no convincing evidence to show that death penalty serves any penological purpose : (i) Its deterrent effect remains unproven.
It has not been shown that incidence of murder has increased in countries where death penalty has been abolished, after its abolition.
(ii) Retribution in the sense of vengeance, is no longer an acceptable end of punishment.
(iii)On the contrary, reformation of the criminal and his rehabilitation is the primary purpose of punishment.
Imposition of death penalty nullifies that purpose.
(c) Execution by whatever means and for whatever offence is a cruel, inhuman and degrading punishment.
It is proposed to deal with these arguments, as far as possible, in their serial order.
Regarding (a) : It is true that death penalty is irrevocable and a few instances, can be cited, including some from England, of persons who after their conviction and execution for murder, were discovered to be innocent.
But this, according to the Retentionists is not a reason for abolition of the death penalty, but an argument for reform of the judicial system and the sentencing procedure.
Theore 197 tically, such errors of judgment cannot be absolutely eliminated from any system of justice, devised and worked by human beings, but their incidence can be infinitesimally reduced by providing adequate safeguards and checks.
We will presently see, while dealing with the procedural aspect of the problem, that in India, ample safeguards have been provided by law and the Constitution which almost eliminate the chances of an innocent person being convicted and executed for a capital offence.
Regarding (b): Whether death penalty serves any penological purpose.
Firstly, in most of the countries in the world, including India, a very large segment of the population, including notable penologists judges, jurists, legislators and other enlightened people still believe that death penalty for murder and certain other capital offences does serve as a deterrent, and a greater deterrent than life imprisonment.
We will set out very briefly, by way of sample, opinions of some of these distinguished persons.
In the first place, we will notice a few decisions of Courts wherein the deterrent value of death penalty has been judicially recognised.
In Paras Ram vs State of Punjab,(1) the facts were that Paras Ram, who was a fanatic devotee of the Devi, used to hold Satsangs at which bhajans were sung in praise of the Goddess.
Paras Ram ceremonially beheaded his four year old boy at the crescendo of the morning bhajan.
He was tried, convicted and sentenced to death for the murder.
His death sentence was confirmed by the High Court.
He filed a petition for grant of special leave to appeal to this Court under Article 136 of the Constitution.
It was contended on behalf of Paras Ram that the very monstrosity of the crime provided proof of his insanity sufficient to exculpate the offender under Section 84, Indian Penal Code, or material for mitigation of the sentence of death.
V. R. Krishna Iyer, J., speaking for the Bench, to which one of us (Sarkaria, J.) was a party, refused to grant special leave and summarily dismissed the petition with these observations : 198 "The poignantly pathological grip of macabre superstitions on some crude Indian minds in the shape of desire to do human and animal sacrifice, in defiance of the scientific ethos of our cultural heritage and the scientific impact of our technological century, shows up in crimes of primitive horror such as the one we are dealing with now, where a blood curdling butehery of one 's own beloved son was perpetrated, aided by other 'pious ' criminals, to propitiate some blood thirsty diety.
Secular India, speaking through the Court, must administer shock therepy to such anti social 'piety ' when the manifestation is in terms of inhuman and criminal violence.
When the disease is social, deterrence through court sentence must, perforce, operate through the individual culprit coming up before court.
Social justice has many facets and Judges have a sensitive, secular and civilising role in suppressing grievous injustice to humanist values by inflicting condign punishment on dangerous deviants.
" (emphasis added) In Jagmohan, also, this Court took due note of the fact that for certain types of murders, death penalty alone is considered an adequate deterrent: "A large number of murders is undoubtedly of the common type.
But some at least are diabolical in conception and cruel in execution.
In some others where the victim is a person of high standing in the country society is liable to be rocked to its very foundation.
Such murders cannot simply be wished away by finding alibis in the social maladjustment of the murderer.
Prevalence of such crimes speaks, in the opinion of many, for the inevitability of death penalty not only by way of deterrence but as a token of emphatic disapproval of the society.
" Examining whether life imprisonment was an adequate substitute for death penalty, the Court observed: "In the context of our criminal law which punishes murder, one cannot ignore the fact that life imprisonment works out in most cases to a dozen years of punishment, and it may be seriously questioned whether that sole alter 199 native will be an adequate substitute for the death penalty." In Ediga Anamma vs State of Andhra Pradesh,(1) V.R. Krishna Iyer, J., speaking for the Bench to which one of us (Sarkaria, J.,) was a party, observed that "deterrence through threat of death may still be a promising strategy in some frightful areas of murderous crime." It was further observed that "horrendous features of the crime and the hapless and helpness state of the victim steel the heart of law for the sterner sentence." In Shiv Mohan Singh vs State (Delhi Administration),(2) the same learned Judge, speaking for the Court, reiterated the deterrent effect of death penalty by referring to his earlier judgment in Ediga Annamma 's case, as follows: "In Ediga Annamma this Court, while noticing the social and personel circumstances possessing an extenuating impact, has equally clearly highlighted that in India under present conditions deterrence through death penalty may not be a time barred punishment in some frightful areas of barbarous murder." Again, in Charles Sobraj vs The Superintendent, Central Jail, Tihar, New Delhi,(3) the same learned Judge, speaking for a Bench of three learned Judges of this Court, reiterated that deterrence was one of the vital considerations of punishment.
In Trop vs Dulleh,(4) Brennan, J. of the supreme Court of the United States, concurring with the majority, emphasised the deterrent end of punishment, in these words: "Rehabilitation is but one of the several purposes of the penal law.
Among other purposes are deterrents of the wrongful act by the threat of punishment and insulation of society from dangerous individuals by imprisonment or execution.
" 200 In Furman vs Georgia, Stewart, J. took the view that death penalty serves a deterrent as well as retributive purpose.
In his view, certain criminal conduct is so atrocious that society 's interest in deterrence and retribution wholly outweighs any considerations of reform or rehablitation of the perpetrator, and that, despite the inconclusive empirical evidence, only penalty of death will provide maximum deterrence.
Speaking for the majority, in Gregg vs Georgia, Stewart, J. reiterated his views with regard to the deterrent and retributive effect of death penalty.
Now, we may notice by way of specimen, the views of some jurists and scholars of note.
Sir James Fitzjames Stephen, the great jurist, who was concerned with the drafting of the Indian Penal Code, also, was a strong exponent of the view that capital punishment has the greatest value as a deterrent for murder and other capital offence.
To quote his words: "No other punishment deters men so effectually from committing crimes as the punishment of death.
This is one of those propositions which it is difficult to prove, simply because they are in themselves more obvious than any proof can make them.
It is possible to display ingenuity in arguing against it, but that is all.
The whole experience of mankind is in the other direction.
The threat of instant death is the one to which resort has always been made when there was an absolute necessity for producing some result.
No one goes to certain inevitable death except by compulsion.
Put the matter the other the way.
Was there ever yet a criminal who, when sentenced to death and brought out to die, would refuse to offer of commutation of his sentence for the severest secondary punishment? Surely not.
Why is this ? It can only be because 'All that a man has will he give for his life '.
In any secondary punishment, however terrible, there is hope; but death is death; its terrors cannot be described more forcibly." Even Marchese De Cesare Bonesana Beccaria, who can be called the father of the modern Abolitionist movement, concedes in his treatise, "Dei Delitti a della Pana" (1764), that capital punishment would be justified in two instances: Firstly, in an execution 201 would prevent a revolution against popularly established Government; and, secondly, if an execution was the only way to deter others from committing a crime.
The adoption of double standards for capital punishment in the realm of conscience is considered by some scholars as the biggest infirmity in the Abolitionists ' case.
Thorsten Sallin is one of the penologists who has made a scientific study of the subject of capital punishment and complied the views of various scholars of the 19th and 20th centuries.
In his book "Capital Punishment", he has made an attempt to assemble the arguments for and against the death penalty.
He has also given extracts from the Debates in the British House of Commons in 1956 and, also, in March and April 1966, in the Candian House of Commons.
In the last part of his book, the learned Editor summarises his ideas about capital punishment.
In his opinion, Retribution seems to be outdated and unworkable.
It is neither efficient nor equitably administered.
"Justice is a relative concept that changes with the times".
A retributive philosophy alone is not now socially acceptable.
"In the last analysis, the only utilitarian argument that has being to be given attention is the one that defends capital punishment as a uniquely powerful means of protecting the community." He ends his book with the observation : "I have attempted to show that, as now used, capital punishment performs none of the utilitarian functions claimed by its supporters, nor can it ever be made to serve such functions.
It is an archaic custom of primitive origin that has disappeared in most civilized countries and is withering away in the rest.
" In his article appearing in "Criminology Review Year Book" (1979) Vol. 1, complied by Sheldon L. Messinger & Egon Bittner(1), Isaac Ehrlich, after surveying the past literature on the relation between capital punishment and capital crimes, has (at pp.
31 33) pointed out the following shortcomings in the thesis of Sellin : "The principal shortcoming of the work by Sellin and others using his methodology is that the approach taken and the methods applied do not permit a systematic examination of the main implications emanating from the general theory of deterrence.
The shortcoming is basic, because the implications following from the general deterrence 202 hypothesis are what Sellin was challenging.
Yet his work neither develops nor tests the full range of implications following from the theory he attempts to reject; nor does he develop or test a competing theory.
In addition, to my knowledge, Sellin never reported in any of his studies the results of any systematic (parametric or non parametric) statistical tests that could justify his strong and unqualified inferences." . . "Another fundamental shortcoming of Sellin 's studies is their failure to account systematically for other factors that are expected by the deterrence hypothesis to affect the frequency of murder in the population, apart from the relevant risk of execution.
These are variables such as the probability of apprehension, the conditional probability of conviction given apprehension, the severity of alternative punishments for murder, the distribution of income, the probability of unemployment, and other indicators of differential gains from criminal activities occurring jointly with murder.
Since, as I shall argue later, some of these variables are expected to be highly correlated with the conditional probability of execution given conviction of murder, their exclusion from the statistical analysis can seriously bias estimates of the partial deterrent effect of capital punishment.
Aware of the problem, Sellin attempted to compare states that are as alike as possible in all other respects.
However, his "matching procedure", based on the assumption that neighbouring states can satisfy such pre requisites without any explicit standardization, is simply insufficient for any valid inferences.
Pairs of states, such as New York, and Rhode Island, Massachusetts and Maine, or Illinois and Wisconsin all included in his comparisons, differ in their economic and demographic characteristics, in their law enforcement activities, and in the opportunities they provide for the commission of other crimes.
Moreover, the direction of the causal relationship between the murder rate and the overall risk of punishment be it the death penalty or any other sanction is not self evident because, for example, states with high murder rates are expected to and, in fact do devote more 203 resources to apprehend, convict and execute offenders than do states with lower rates.
Specifically, variations in the legal or practical status of the death penalty occasionally may be the result of, rather than the cause for, changes in the murder rate, and thus may give rise to an apparent positive association between these two variables.
The same general point applies in connection with the identification of the effect of any other variable which is a product of law enforcement activity or private protection against crime.
For these reasons, the true deterrent effect of a sanction such as the death penalty cannot be readily inferred from simple comparisons of the sort performed by Sellin.
" The learned author then (at page 33) arrives at this conclusion : "If investigations indicate that probability and length of imprisonment do impart significant deterrent effects, then failure of the research to demonstrate specifically the deterrent efficacy of capital punishment may be taken more as evidence for shortcomings in the research design and methodology or in the measures of the theoretically relevant variables used than as a reflection on the validity of the deterrence theory itself.
" The scholar then stresses another purpose of capital punishment, namely, incapacitation of the offender, which, in fact, is another aspect of its deterrent effect.
To quote his words : "There is an additional point worth stressing.
Even if punishment by execution or imprisonment does not have any deterrent effect, surely it must exert some incapacitative effect on punished offenders by reducing or eliminating the possibility of recidivism on their part." This eminent social scientist, Prof. Ehrlich(1) whose views we have extracted, has made intensive studies of the deterrent effect of capital punishment.
Then, a result of his study was also published 204 in the American Economic Review in June, 1975.
He includes a specific test for the presence of a deterrent effect of capital punishment to the results of earlier studies.
He has in his study(1) claimed to identify a significant reduction in the murder rate due to the use of capital punishment.
A version of his detailed study is said to have been filed with the United States Supreme Court on March 7, 1975 in the case of Fowler vs North Carolina.(2) In 1975, Robert Martinson, a sociologist, published the results of a study he had made in New York regarding the rehabilitation of of prisoners.
Among the conclusions he drew: "The prison which makes every effort at rehabilitation succeeds no better than the prison which leaves its inmates to rot.
The certainty of punishment rather than the severity, is the most effective crime deterrent.
We should make plain that prisons exist to punish people for crimes committed." (Quoted in Encyclopaedia Britannica 1978 Book of the Year, pp.
593 594) Many judges especially in Britain and the United States, where rising crime rates are the source of much public concern have expressed grave doubts about the wisdom of the view that reform ought to take priority in dealing with offenders.
"They have argued that the courts must reflect a public abhorrence of crime and that justice demands that some attempt be made to impose punishment fitting to the crime." (Encyclopaedia Britannica, ibid.) Professor Jean Graven, Judge of the Court of Appeal of Geneva, and a distinguished jurist, maintains in his learned analysis, (see the Postscript in reply to A World View of Capital Punishment by James Avery Joyce), of the views of Camus and Koestler, that neither of these two authors has faced up to the really basic objection to the abolitionist 's case.
According to Graven, there are two groups of people, which are not covered by the abolitionist 's case and Camus and Koestler have therefore left their cause open to attack at its _______________________ (1) See Lee section Friedman 's article at pages 61 87, Review Year Book, 1979, compiled by Messinger and Bittner.
(2) 428 US 904=49 L. Ed. 1212 (1976).
205 weakest point.
"The true problem", as Graven sees it, "is the protection of the organized, civilized community", the legitimate defence of society against criminal attacks made upon it by those anti social elements which can be stopped only by being eliminated, in the "last resort".
"For such, the death penalty should be preserved, and only for such".
Professors Graven 's second challenge is, which the abolitionist must accept, the existing division between civil and military protection.
According to him, in doing so, the abolitionist cannot avoid applying double standard and two mutually destructive criteria to their approach to the death penalty.
"For if the death penalty is accepted as protective in principle to society, then it should be so in all cases and in all circumstances in troubled times as well as in peaceful times, in respect of the traitor, the spy, the deserter, or the hostage, as well as of the brigand, the "gangster", or the professional killer.
We must be logical and just at the same time.
In the realm of conscience and of 'principles ', there cannot be two weights and measures.
There cannot be a morality for difficult times and another morality for easy times; one standard for military justice and another for civil justice.
What then should be done with those individuals who have always been considered proper subjects for elimination? If the capital sentence is objectionable and illegal.
If the death penalty must be absolutely repudiated because it 'degrades man, (quoting Camus) then we accept the position.
But, in that case, no right to kill exists any longer. the greatest war criminals, those responsible conscious of what they have done and intended to do for the worst crimes of genocide, who gassed, incinerated in ovens or buried in quicklime a million innocent victims, or allowed them to perish in mines and marshes.
Society has not the right then to kill even these "Monsters".
(Quoted in A World View of Capital Punishment, by James Avery Joyce).
J.J. Maclean, a Parliamentarian, articulated his views with regard to the deterrent, value of capital punishment in the Canadian House of Commons in the March April, Debates 1966, as follows: "Whether it (capital punishment) is a greater or lesser deterrent than life imprisonment.
This is an argument that cannot be proven on either side but I would not like to 206 have to try to convince any one that capital punishment is not a deterrent.
Statistically this cannot be proven because the deterrent effect on both capital punishment and life imprisonment is obscured by the fact that most criminals plan a crime on the basis that they are going to avoid any penalty.
I say, the deterrent value is with respect to people who did not commit crimes, who were deterred from becoming murderers by the fact that capital punishment or some other heavy penalty would be meted outto them if caught." (Quoted in Sellin 's Capital Punishment).
The Law Commission of India in its 35th Report, after carefully sifting all the materials collected by them, recorded their views regarding the deterrent effect of capital punishment as follows: "In our view capital punishment does act as a deterrent.
We have already discussed in detail several aspects of this topic.
We state below, very briefly, the main points that have weighed with us in arriving at this conclusion: (a) Basically, every human being dreads death.
(b) Death, as a penalty, stands on a totally different level from imprisonment for life or any otber punishment.
The difference is one of quality, and not merely of degree.
(c) Those who are specifically qualified to express an opinion on the subject, including particularly the majority of the replies received from State Governments, Judges, Members of Parliament and Legislatures and Members of the Bar and police officers are definitely of the view that the deterrent object of capital punishment is achieved in a fair measure in India.
(d) As to conduct of prisoners released from jail (after undergoing imprisonment for life), it would be difficult to come to a conclusion, without studies extending over a long period of years.
207 (e) Whether any other punishment can possess all the advantages of capital punishment is a matter of doubt.
(f) Statisties of other countries are inconclusive on the subject.
If they are not regarded as proving the deterrent effect; neither can they be regarded as conclusively disproving it.
" Views of the British Royal Commission: The British Royal Commission, after making an exhaustive study of the issue of capital punishment and its deterrent value, in their Report (1949 53), concluded: "The general conclusion which we reach, after careful review of all the evidence we have been able to obtain as to the deterrent effect of capital punishment, may be stated as follows.
Prima facie the penalty of death is likely to have a stronger effect as a deterrent to normal human beings than any other form of punishment, and there is some evidence (though no convincing statistical evidence) that this is in fact so.
But this effect does not operate universally or uniformly, and there are many offenders on whom it is limited and may often be negligible.
" We may add that whether or not death penalty in actual practice acts as a deterrent, cannot be statistically proved, either way, because statistics as to how many potentisim murderers were deterred from committing murders, but for the existence of capital punishment for murder, are difficult, if not altogether impossible, to collect.
Such statistics of deterred potential murderers are difficult to unravel as they remain hidden in the innermost recesses of their mind.
Retribution in the sense of reprobation whether a totally rejected concept of punishment.
Even retribution in the sense of society 's reprobation for the worst of crimes, i.e., murder, is not an altogether outmoded concept.
This view is held by many distinguished sociologist, jurists and judges.
Lord Justice Denning, Master of the Rolls of the Court of 208 Appeal in England, appearing before the British Royal Commission on Capital Punishment, stated his views on this point as under: "Punishment is the way in which society expresses its denunciation of wrong doing, and, in order to maintain respect for law, it is essential that the punishment inflicted for grave crimes should adequately reflect the revulsion felt by the great majority of citizens for them.
It is a mistake to consider the objects of punishment as being deterrent or reformative or preventive and nothing else.
The truth is that some crimes are so outrageous that society insists on adequate punishment, because the wrong doer deserves it, irrespective of whether it is a deterrent or not." That retribution is still socially acceptable function of punishment, was also the view expressed by Stewart, J., in Furman vs Georgia, at page 389, as follows: ".
I would say only that I cannot agree that retribution is a constitutionally impermissible ingredient in the imposition of punishment.
The instinct for retribution is part of the nature of man, and channeling that instant, in the administration of criminal justice serves an important purpose in promoting the stability of a society governed by law.
When people begin to believe that organized society is unwilling or unable to impose upon criminal offenders the punishment they 'deserve ', then there are sown the seeds of anarchy of self help, vigilant justice, and lynch law.
" Patrick Devlin, the eminent jurist and judge, in his book, "The Judge", emphasises the retributive aspect of the purpose of punishment and criminal justice, thus: "I affirm that justice means retribution and nothing else.
Vindictiveness is the emotional outflow of retribution and justice has no concern with that.
But it is concerned with the measurement of deserts.
The point was put lucidly and simply by the Vicar of Longton in a letter to The Times, from which with his permission I quote: Firstly, far from pretending that retribution should have no place in our penal system, Mr. Levin should recognize that it is 209 logically impossible to remove it.
If it were removed, all punishments should be rendered unjust.
What could be more immoral than to inflict imprisonment on a criminal for the sake of deterring others, if he does not deserve it? Or would it be justified to subject him to a compulsory attempt to reform which includes a denial of liberty unless, again he deserves it?.
Retribution and deterrence are not two divergent ends of capital punishment.
They are convergent goals which ultimately merge into one.
How these ends of punishment coalesce into one was described by the Law Commission of India, thus: "The retributive object of capital punishment has been the subject matter of sharp attack at the hands of the abolitionists.
We appreciate that many persons would regard the instinct of revenge as barbarous.
How far it should form part of the penal philosophy in modern times will always remain a matter of controversy.
No useful purpose will be served by a discussion as to whether the instinct of retribution is or is not commendable.
The fact remains, however, that whenever there is a serious crime, the society feels a sense of disapprobation.
If there is any element of retribution in the law, as administered now, it is not the instinct of the man of jungle but rather a refined evolution of that instinct the feeling prevails in the public is a fact of which notice is to be taken.
The law does not encourage it, or exploit it for any undesirable ends.
Rather, by reserving the death penalty for murder, and thus visiting this gravest crime with the gravest punishment, the law helps the element of retribution merge into the element of deterrence." [Para 265 (18), 35th Report] Earlier in 1949 1953, the British Royal Commission in Para 59 of its Report spoke in a somewhat similar strain: "We think it is reasonable to suppose that the deterrent force of capital punishment operates not only by affecting the conscious thoughts of individuals tempted to commit murder, but also by building up in the community, over a 210 long period of time, a deep feeling of peculiar abhorrence for the crime of murder.
The fact that men are hung for murder is one great reason why murder is considered so dreadful a crime.
This widely diffused effect on the moral consciousness of society is impossible to assess, but it must be at least as important as any direct part which the death penalty may play as a deterrent in the calculations of potential murderers.
" According to Dr. Ernest Van Den Haag, a New York psychologist and author, and a leading proponent of death penalty, "a very strong symbolic value" attaches to executions.
"The motives for the death penalty may indeed include vengeance.
Legal vengeance solidifies social solidarity against law breakers and probably is the only alternative to the disruptive private revenge of those who feel harmed." (See The Voice (USA) June 4, 1979) The views of Lloyd George, who was the Prime Minister of England during the First World War, have been referred to in the book "Capital Punishment" (1967) by Thorsten Sellin at page 65, as below: "The first function of capital punishment is to give emphatic expression to society 's peculiar abhorrence of murder.
It is important that murder should be regarded with peculiar horror.
I believe that capital punishment does, in the present state of society, both express and sustain the sense of moral revulsion for murder.
" This view is not without respectable support in the jurisprudential literature of today, despite an opinion to the contrary.
(See also the Royal Commission 's Report, 1949 53).
In relying, inter alia, upon the evidence before it, including that of Lord Denning, the Royal Commission recognised a strong and widespread demand for retribution.
It is a common phenomenon in all the civilized countries that some murders are so shockingly offensive that there is a general outcry from the public for infliction of the ultimate penalty on the criminal.
In regard to the retributive aspect of capital punishment, we may cite one recent illustration showing how demand for retribu 211 tion, in the sense of society 's instinctive disapproval of the outrageous conduct of the murderer is indelibly ingrained in contemporary public opinion even in advanced countries.
In November 1978, George Moscone (Mayor) and Harvey Milk (Supervising Officer) of San Francisco were cruelly, assassinated by Dan White, a police man.
Six months later, on May 22, 1979, a jury of seven men and five women rejected the charge of first degree murder, and in consequence, did not award capital punishment to Dan White for this heinous double murder.
Public opinion reacted sharply.
Public protest against this decision spontaneously manifested itself in a burst of flame and fury.
Thousands of outraged demonstrators rampaged through the Civic Centre, smashing windows, burning police cars, chanting: "We want justice" Writing in 'The Voice ', a local paper from San Franscisco, in its issue of June 4, 1979, Lawrence Mullen, fired at the jury a volley of questions, to which the agitated public would demand answers: "What comment did the jury make on the value of life? Was the tragedy of the execution style murders the central issue, or was the jury only concerned with technicalities, absurdities and loopholes of the law? Was justice considered not revenge but justice? High irony, Dan White 's strong belief in capital punishment has found thousands of new converts.
From now on, a lot of people will die because Dan White lives.
Are we so insensitive, callous and inhuman that we accept or excuse violence and brutality? Consider White 's defence lawyer, Douglas Schmidt 's reference to that tragic Monday in November: "It was a tragedy.
Now it 's behind us." "For those who loved and still miss George Moscone and Harvey Milk, for those who were cast into darkness and cried for justice, for those who still seek answers, the lawyer 's words are a chilling reminder that we must not forget that we must not 'put it behind us '.
" The former cop, a law and order and capital punishment advocate driven by his passion, by his lack of reason, to destroy those who he disagreed with, and by doing so 212 demonstrated the greatest human failure the inability to co exist. "Dan White symbolizes the violence and brutality that is undermining civilization.
" Dan White 's case and the spontaneous reaction of the public opinion that followed, show that opposition to capital punishment has (to use the words of Raspberry),"(1) much more appeal when the discussion is merely academic than when the community is confronted with a crime, or a series of crimes, so gross, so heinous, so cold blooded that anything short of death seems an inadequate response".
The Editor of 'Capital Punishment ', Thorsten Sellin has noted at page 83 of his compilation, the following views of an outstanding Justice of the Ontario Appeal Court: "The irrevocable character of the death penalty is a reason why all possible measures should be taken against injustice not for its abolition.
Now a days, with the advent of armed criminals and the substantial increase in armed robberies, criminals of long standing if arrested, must expect long sentences.
However, if they run no risk of hanging, when found guilty of murder, they will kill police men and witnesses with the prospect of a future no more unhappy, as one of them put it, than being fed, lodged, and clothed for the rest of their lives.
In addition, once in prison, such people who are capable of anything could kill their guards and their fellow inmates with relative impunity.
" J.J. Maclean, the Canadian Parliamentarian justifies, from another angle, the right of the State to award capital punishment for murder: "If the State has the right and the duty to defend the community against outside aggression, such as in time of war, and within the country, for instance, in case of treason ______________ (1) Raspberry, Death Sentence, the Washington Post, March 12, 1976, p, 27 cols.
213 crimes against the State, etc., and that to the extent of taking the life of the aggressors and guilty parties, if the citizen wants to protect his own life by killing whoever attacks him without any reason, the State can do the same when a criminal attacks and endangers the life of the community by deciding to eliminate summarily another human being.
Capital punishment must be retained to prove the sanctity of that most precious thing which is the gift of life; it embodies the revulsion and horror that we feel for the greatest of crimes.
For most people, life is priceless and they will do anything and suffer the worst privations to preserve it, even when life itself does not hold many consolations or bright prospects for the future.
As a deterrent, the death penalty is playing its part for which there is no substitute.
I suggest that statistics do not prove much, either on one side or the other.
There are too many variations, too many changes as regards circumstances, condition between one period and the other, to enable us to make worthy comparisons." (See page 84 of Sellin 's Capital Punishment).
Some penologists justify capital penalty and life imprisonment on the 'isolation ' or 'elimination ' theory of crime and punishment.
Vernon Rich in his "Law & the administration of justice" (Second Edition, at page 10), says: "The isolation theory of crime and punishment is that the criminal law is a device for identifying persons dangerous to society who are then punished by being isolated from society as a whole, so that they cannot commit other antisocial acts.
The isolation theory is used to justify the death penalty and long term imprisonment.
Obviously, this theory is effective in preventing criminal acts by those executed or permanently incarcerated.
" While the Abolitionists look upon death penalty as something which is per se immoral and inhuman, the Retentionists apprehened that if we surrender even the risk of the last remaining horrifying deterrent by which to frighten the toughts of the underworld, we may 214 easily tip the scales in favour of the anti social hoodlums.
They fear that abolition of capital punishment, will result in increase of murders motivated by greed, and in affable "crime passionelle." "It is feared", wrote George A. Floris,(1) "the most devastating effects of the abolition will, however, show themselves in the realm of political murder.
An adherent of political extremism is usually convinced that the victory of his cause is just round the corner.
So, for him long term imprisonment holds no fear.
He is confident that the coming ascendency of his friends will soon liberate him.
" To prove this proposition, Floris cites the instance of Von Paper 's Government who in September 1932, reprieved the death sentence passed on two of Hitler 's storm troopers for brutal killing of one of their political opponents.
The Retentionists believe that the dismantling of the gallows will almost everywhere enhance the hit and run attacks on political opponents.
On this premise, they argue that capital punishment is the most formidable safeguard against terrorism.
The argument cannot be rejected out of hand.
A number of instances can be cited where abolitionist States feeling the inadequacy of their penological armour to combat politically motivated gangsterism, have retrieved and used their capital weapon which they had once thrown away.
Despite their traditional abhorrence of death penalty, the Norwegians executed Major Vedkun Quisling after World War II.
The Belgians, too, executed no less than 242 collaborators ' and traitors after the liberation, although in their country, the death penalty was otiose since 1880.
In England, death penalty was retained for high treason in the Silverman Bill of 1956.
Even at present, for that offence, death penalty is a valid sanction in England.
In the aftermath of assassination of Prime Minister Bandernaike in 1959, Ceylon hurriedly reintroduced capital punishment for murder.
Owing to similar considerations, Israel sanctioned death penalty for crimes committed against the Jewish people, and executed the notorious Jew baiter, Adolf Eichmann in 1962.
Recently, on April 9, 1979, confronted with a wave of violent incidents after the signing of Egypt Israel Peace Treaty.
Israel sanctioned the use of death penalty "for acts of inhuman cruelty".
____________ (1) Sunday Tribune, December 8, 1963.
215 In India, very few scientific studies in regard to crime and punishment in general, and capital punishment, in particular, have been made.
Counsel for the petitioners referred us to Chapter VI, captioned 'Capital Punishment, in the book, 'Quantum of Punishment in Criminal Law in India, written by Dr. Kripal Singh Chhabra, now on the staff of G.N. University, Amritsar.
In this article, which was primarily meant as LL.
D. thesis, the learned author concludes: "On the basis of statistics both of India and abroad, U.N.O. findings and other weighty arguments, we can safely conclude that death penalty is not sustainable on merits.
Innately it has no reformative element.
It has been proved that death penalty as operative carries no deterrent value and crime of murder is governed by factors other than death penalty.
Accordingly, I feel that the death penalty should be abolished.
" It will be seen, in the first place, that the analysis by Dr. Chhabra in coming to the conclusion, that death penalty is of no penological value, is based on stale, incomplete and inadequate statistics.
This is more particularly true of the data relating to India, which does not cover the period subsequent to 1961.
Secondly, the approach to the problem adopted by him, like the other Abolitionists referred to by him, is mainly, if not merely, statistical.
As already noticed, the proponents of the opposite view of capital punishment, point out that statistics alone are not determinative of the question whether or not death penalty serves any deterent or other penological purpose.
Firstly, statistics of deterred potential murderers are hard to obtain.
Secondly, the approach adopted by the Abolitionists is oversimplified at the cost of other relevant but imponderable factors, the appreciation of which is essential to assess the true penological value of capital punishment.
The number of such factors is infinitude, their character variable duration transient and abstract formulation difficult.
Conditions change from country to country and time to time.
Due to the inconstancy of social conditions, it is not scientifically possible to assess with any degree of accuracy, as to whether the variation in the incidence of capital crime is attributable to the presence or absence of death penalty in the penal law of that country for such crimes.
216 That is why statistical attempts to assess the true penological value of capital punishment, remain inconclusive.
Pursued beyond a certain point, both the Abolitionists and the Retentionists retreat into their own conceptual bunkers firmly entrenched in their respective "faiths".
We need not take sides with either of them.
There is always a danger in adhering too rigidly to concepts.
As Prof. Brett has pointed out "all concepts are abstractions from reality, and that in the process of abstraction something of the reality is bound to be lost ' '(1).
We must therefore, view the problem against the perspective of the hard realities of the time and the conditions prevailing in the world, particularly in our own country.
A review of the world events of the last seven or eight years, as evident from Encyclopaedia Britannica Year Books and other material referred to by the learned counsel, would show that most countries in the world are in the grip of an ever rising tide of violent crime.
Murders for monetary gain or from misdirected political motives, robbery, rape assault are on the increase.
India is no exception.
The Union of India has produced for our perusal a statement of facts and figures showing the incidence of violent crime, including murder, dacoity and robbery, in the various States of India, during the years 1965 to 1975.
Another statement has been furnished showing the number of persons convicted of murder and other capital offences and sentenced to death in some of the States of India during the period 1974 to 1978.
This statement however, is incomplete and inadequate.
On account of that deficiency and for the general reasons set out above, it cannot, even statistically show conclusively or with any degree of certainty, that capital punishment has no penological worth.
But the first statement does bring out clearly the stark reality that the crimes of murder, dacoity and robbery in India are since 1965 increasing.
Now, looking around at the world during the last decade, we may recall that in Purman vs Georgia (decided on June 29, 1976), the Supreme Court of the United States held by a majority, that the imposition and carrying out of the death penalty constitutes 'cruel and unusual ' punishment, in violation of the Eighth and Fourteenth ____________ (1) An Enquiry into Criminal Guilt by Prof. Peter Brett, 1963 Edn.
Melbourne, page 13.
217 Amendments.
Brennan and Marshall, JJ.
(differing from the plurality) went to the extent of holding that death penalty was per se unconstitutional as it was a cruel and unusual punishment.
In so holding, these learned Justices purported to adopt the contemporary standards of decency prevailing among the enlightened public of the United States.
Justice Marshall ruled that "it was morally unacceptable to the people of the United States".
This opinion of the learned Justices was sharply rebuffed by the people of the United States through their chosen representatives.
Soon after the decision in Furman, bowing to the thrust of public opinion, the Legislatures of not less than 32 States, post haste revised their penal laws and reinstituted death penalty for murder and certain other crimes.
Public opinion polls then taken show that approximately 70 per cent of Americans have been in favour of death penalty.
(See 'The Voice ', supra).
In 1976, a Gallup Poll taken in the Unitted States showed that more than 65 per cent of those polled preferred to have an operative death penalty.
Incidently, the rejection by the people of the approach adopted by the two learned Judges in Furman, furnishes proof of the fact that judicial opinion does not necessarily reflect the moral attitudes of the people.
At the same time, it is a reminder that Judges should not take upon themselves the responsibility of becoming oracles or spokesmen of public opinion: Not being representatives of the people, it is often better, as a matter of judicial restraint, to leave the function of assessing public opinion to the chosen representatives of the people in the legislature concerned.
Coming back to the review of the world crime situation, during the last decade, Saudi Arabia and some other countries have reinstated death penalty or enacted harsher punishments not only for murder but some other crimes, also.
In America, apart from 32 States which reinstated death penalty under revised laws after Furman, the legislatures of some of the remaining 15 States have either reinstituted or are considering to reintroduce death penalty.
Currently, a federal legislation for reinstituting or prescribing capital punishment for a larger range of offences of homicide is under consideration of United States ' Congress.
According to the report of the Amnesty International, in U.S.A., as on May 1, 1979, death penalty can be imposed for aggravated murder in 35 States.
Attempts have been made in other countries, also to reintroduce death penalty.
In Britain, in 218 the wake of serious violent incidents of terrorism, a Bill was moved in Parliament to reintroduce capital punishment for murder and certain other offences.
It was defeated by a free vote on April 19, 1979.
Even so, no less than 243 Members of Parliament had voted in favour of this measure.
We have noted that Israel has also recently reinstituted death penalty for certain criminal 'acts of in human cruelty '.
In People 's Republic of China, a new legislation was adopted on July 1, 1979 by China 's Parliament, according to Article 43 of which, death penalty can be imposed "for the most heinous crimes".
In Argentina, the death penalty was reintroduced in 1976.
Similarly, Belgium reintroduced death penalty and increased the number of crimes punishable with death.
In France, in 1978 a movement in favour of abolition initiated by the French bishops failed to change the law under which death penalty is a valid sanction for murder and certain other offences.
In Japan, death penalty is a legal sanction for 13 crimes.
In Greece and Turkey, death penalty can be imposed for murder and other capital offences.
In Malaysia and the Republic of Singapore under the Drugs Act of May, 1979, misuse of drugs is also punishable with death.
Cuba introduced a new penal code in February 1978, which provides punishment of death by shooting for crimes ranging from some types of murder and robbery to hijacking and rape.
In the U.S.S.R. (Russia), as many as 18 offences are punishable with death.
In Russia, at present, the following offences committed in peacetime are punishable with death under the RSFSR Criminal Code: "Treason (Article 64); espoinage (Article 65); terrorism (if the offence includes the killing of an official (Article 66); terrorism against representative of foreign State (if the offence includes the killing of such a representative "for the purpose of provoking war or international compli cations") (Article 67); sabotage (Article 68); organizing the commission of any of the above named offences (Article 72); commission of any of the above named offences against other Working People 's State (Article 73); banditry (Article 77); actions disrupting the work of corrective labour institutions (Article 77 1); making or passing counterfeit money or securities (when the offence is committed as a form of business) (Article 87); violation of rules for currency transactions (when committed as a form of business or on 219 a large scale, or by a person previously convicted under this Article) (article 88); stealing of State property on an especially large scale, regardless of the manner of stealing (Article 93 1); intentional homicide with aggravating circumstances (Article 102); rape, when committed by a group of persons or by an especially dangerous recidivist, or resulting in especially grave consequences, or the rape of a minor (Article 117); taking a bribe, with especially aggravating circumstances (Article 173); infringing the life of a policeman or People 's Guard, with aggravating circumstances (Article 191 2); hijacking an aircraft, if the offence results in death or serious physical injuries (Article 213 2); resisting a superior or compelling him to violate official duties, an offence applicable only to military personnel, and carrying the death penalty in peace time if committed in conjunction with intentional homicide of a superior or any other person performing military duties (Article 240)." (Vide, Report of Amnesty International, 1979) Our object in making the above survey is to bring out the hard fact that in spite of the Abolitionist movement, only 18 States (as on 30 May 1979) in the world have abolished the death penalty for all offences, while 8 more have retained it for specific offences committed in time of war, only.
(See Amnesty International Report (1979) page 92).
This means, most of the countries in the modern world still retain death penalty as a legal sanction for certain specified offences.
The countries which retain death penalty in their penal laws, such as, Russia, U.S.A., France, Belgium, Malaysia, China and Japan, etc., cannot, by any standard, be called uncivilized nations or immature societies.
Surveyors and students of world events and current trends believe that the reversal of the attitudes towards criminals and their judicial punishments in general, and capital punishment in particular in several countries of the world, is partly due to the fact that milder sanctions or corrective processes, or even the alternative of imprisonment, have been found inadequate and wanting to stem the mounting tide of serious crime.
Writing in Encyclopaedia Britannica, 1978 Book of the Year under the caption, 'Changing Attitudes Towards Criminals ', Richard Whittingham sums up the cause that has led to the adoption of this New Hard Line, thus : 220 "Horror Story after horror story of dangerous criminals sent back into society on bail or parole from a penitentiary or (in many cases) release from a mental institution to commit further crimes have forced people to say that enough is enough.
The consensus seemed to be that there must be no repetition of such situations as the one described by Chicago Sun Times Columnist Roger Simon in a September 4, 1977, article about a man who had just been convicted of a particularly despicable crime.
" Faced with the spectre of rising crime, people and sociologists alike, have started questioning the rehabilitation policy.
"In California another study from the Rand Cooperation, suggests that keeping habitual criminals locked up would do more to reduce crime than any rehabilitation efforts.
Despite treatment or preventive measures, habitual criminals commonly go back to crime after they are released from prison, the study showed.
In addition, the study found that deterrence to crime was in direct proportion to the relative certainty of going to jail, after being caught." According to Encyclopaedia Britannica Year Book 1979, in 1978 also penologists were seriously divided in their views about the end of punishment.
Some penologists argued that "It is not possible to punish and reform simultaneously": while "others would prefer to strip punishment of its moral overtones", "While many Legislators and most penologists have supported the idea that reform ought to take priority in dealing with offenders, many Judges especially in Britain and the United States, where rising crime rates are the source of much public concern have expressed grave doubts about the wisdom of this view.
They have argued that the courts must reflect a public abhorrence of crime and that justice demands that some attempt be made to impose punishment fitting to the crime".
India also, as the statistics furnished by the respondent (Union of India) show, is afflicted by a rising rate of violent crime, particularly murder, armed robbery and dacoity etc., and this has been the cause of much public concern.
All attempts made by individual members to move Bills in the Parliament for abolition or restriction of the area of death penalty have ended in failure.
At least four of such unsuccessful attempts were made after India won Independence, in 1949, 1958, 1961 and 1978.
It may be noted that the last of 221 these cttempts was only to restrict the death penalty to a few types of murders specified in the Bill.
Though it was passed by the Rajya Sabha after being recast, it has not been passed by Lok Sabha.
To sum up, the question whether or not death penalty serves any penological purpose is a difficult, complex and intractable issue.
It has evoked strong, divergent views.
For the purpose of testing the constitutionality of the impugned provision as to death penalty in Section 302, Penal Code on the ground of reasonableness in the light of Articles 19 and 21 of the Constitution, it is not necessary for us to express any categorical opinion, one way or the other, as to which of these two antithetical views, held by the Abolitionists and Retentionists, is correct.
It is sufficient to say that the very fact that persons of reason, learning and light are rationally and deeply divided in their opinion on this issue, is a ground among others, for rejecting the petitioners argument that retention of death penalty in the impugned provision, is totally devoid of reason and purpose.
If, notwithstanding the view of the Abolitionists to the contrary, a very large segment of people, the world over, including sociologists, legislators, jurists, judges and administrators still firmly believe in the worth and necessity of capital punishment for the protection of society, if in the perspective of prevailing crime conditions in India, contemporary public opinion chanalised through the people 's representatives in Parliament, has repeatedly in the last three decades, rejected all attempts, including the one made recently to abolish or specifically restrict the area of death penalty, if death penalty is still a recognised legal sanction for murder or some types of murder in most of the civilised countries in the world, if the framers of the Indian Constitution were fully aware as we shall presently show they were of the existence of death penalty as punishment for murder, under the Indian Penal Code, if the 35th Report and subsequent Reports of the Law Commission suggesting retention of death penalty, and recommending revision of the Criminal Procedure Code and the insertion of the new Sections 235 (2) and 354 (3) in that Code providing for pre sentence hearing and sentencing procedure on conviction for murder and other capital offences were before the Parliament and presumably considered by it when in 1972 1973 it took up revision of the Code of 1898 and replaced it by the Code of Criminal Procedure, 1973, it is not possible to hold that the provision of death penalty as an alternative punishment for murder, in Section 302, Penal Code is unreasonable and not in the 222 public interest.
We would, therefore, conclude that the impugned provision in Section 302, violates neither the letter nor the ethos of Article 19.
We will now consider the issue whether the impugned limb of the provision in Section 302, Penal Code contravenes Article 21 of the Constitution.
Before dealing with the contention canvassed on the point, it will be proper to notice briefly the principles which should inform the interpretation of Article 21.
In Maneka Gandhi 's case, which was a decision by a Bench of seven learned Judges, it was held by Bhagwati, J. in his concurring judgment, that the expression 'personal liberty ' in Article 21 is of the widest amplitude and it covers a variety of rights which go to constitute the personal liberty of man and some of them have been raised to the status of distinct fundamental rights under Article 19.
It was further observed that Articles 14, 19 and 21 are not to be interpreted in water tight compartments, and consequently, a law depriving a person of personal liberty and prescribing a procedure for that purpose within the meaning of Article 21 has to stand the test of one or more of the fundamental rights conferred under Article 19 which may be applicable in a given situation, ex hypothesi it must also be liable to be tested with reference to Article 14.
The principle of reasonableness pervades all the three Articles, with the result, that the procedure contemplated by Article 21 must be 'right and just and fair ' and not 'arbitrary ' fancifu or 'oppressive ', otherwise, it should be no procedure at all and the requirement of Article 21 would not be satisfied.
Article 21 reads as under: "No person shall be deprived of his life or personal liberty except according to procedure established by law.
" If this Article is expanded in accordance with the interpretative principle indicated in Maneka Gandhi, it will read as follows: "No person shall be deprived of his life or personal liberty except according to fair, just and reasonable procedure established by valid law." 223 In the converse positive form, the expanded Article will read as below: "A peron may be deprived of his life or personal liberty in accordance with fair, just and reasonable procedure established by valid law." Thus expanded and read for interpretative purposes, Article 21 clearly brings out the implication, that the Founding Fathers recognised the right of the State to deprive a person of his life or personal liberty in accordance with fair, just and reasonable procedure established by valid law.
There are several other indications, also, in the Constitution which show that the Constitution makers were fully cognizant of the existence of death penalty for murder and certain other offences in the Indian Penal Code.
Entries 1 and 2 in List III Concurrent List of the Seventh Schedule, specifically refer to the Indian Penal Code and the Code of Criminal Procedure as in force at the commencement of the Constitution.
Article 72 (1) (c) specifically invests the President with power to suspend, remit or commute the sentence of any person convicted of any offence, and also "in all cases where the sentence is a sentence of death".
Likewise, under Article 161, the Governor of a State has been given power to suspend, remit or commute, inter alia the sentence of death of any person convicted of murder or other capital offence relating to a matter to which the executive power of the State extends.
Article 134, in terms, gives a right of appeal to the Supreme Court to a person who, on appeal, is sentenced to death by the High Court, after reversal of his acquittal by the trial Court.
Under the successive Criminal Procedure Codes which have been in force for about 100 years, a sentence of death is to be carried out by hanging.
In view of the aforesaid constitutional postulates, by no stretch of imagination can it be said that death penalty under Section 302, Penal Code, either per se or because of its execution by hanging, constitutes an unreasonable, cruel or unusual punishment.
By reason of the same constitutional postulates, it cannot be said that the framers of the Constitution considered death sentence for murder or the prescribed traditional mode of its execution as a degrading punishment which would defile "the dignity of the individual" within the contemplation of the Preamble to the Constitution.
On parity of reasoning, it cannot be said that death penalty for the offence of murder violates the basic structure of the Constitution.
224 Before we pass on to the main Question No. II, we may dispose of another contention convassed by Dr. L.M. Singhvi.
It is pointed out that India, as a member of the International Community, was a participating delegate at the international conference that made the Stockholm Declaration on December 11, 1977, that India has also accepted the International Covenant on Civil and Political Rights adopted by the Central Assembly of the United Nations, which came into force on March 23, 1966, and to which some 47 countries, including India, are a party.
This being the position, it is stressed, India stands committed to the abolition of the death penalty.
It is contended that the constitutional validity and interpretation of the impugned limb of Section 302, Penal Code, and the sentencing procedure for capital cases provided in Section 354 (3) of the Code of Criminal Procedure, 1973, must be considered in the light of the aforesaid Stockholm Declaration and the International Covenant, which represent the evolving attitudes and standards of decency in a maturing world.
Let us examine this contention.
The European Convention of Human Rights came into force on September 1, 1953, and 18 countries had signed this Convention on November 4, 1950.
India acceded to this Resolution of the Convention on March 27, 1979.
The International Covenant on Civil and Political Rights, inter alia, provides: "Article 6 (1) Every human being has the inherent right to life.
This right shall be protected by law.
No one shall be arbitrarily deprived of his life.
(2) In countries which have not abolished the death penalty, sentence of death may be imposed only for the most serious crimes in accordance with the law in force at the time of the commission of the crime.
It will be seen that clauses (1) and (2) of Article 6 do not abolish or prohibit the imposition of death penalty in all circumstances.
All that they require is that, firstly, death penalty shall not be arbitrarily inflicted; secondly, it shall be imposed only for most serious crimes in accordance with a law, which shall not be an ex post facto legislation.
Thus, the requirements of these clauses are substantially 225 the same as the guarantees or prohibitions contained in Articles 20 and 21 of our Constitution.
India 's commitment therefore does not go beyond what is provided in the Constitution and the Indian Penal Code and the Criminal Procedure Code.
The Penal Code prescribes death penalty as an alternative punishment only for heinous crimes which are not more than seven in number.
Section 354 (3) of the Criminal Procedure Code, 1973, as we shall presently discuss, in keeping with the spirit of the International Covenant, has further restricted the area of death penalty.
India 's penal laws, including the impugned provisions and their application, are thus entirely in accord with its international commitment.
It will be pertinent to note that most of the countries including those who have subscribed to this International covenant, retain death penalty for murder and certain other crimes even to the present day in their penal laws.
Neither the new interpretative dimensions given to Articles 19 and 21 by this Court in Maneka Gandhi and Charles Sobraj vs The Superintendent Central Jail, Tihar, New Delhi(1) nor the acceptance by India of the International Covenant on Civil and Political Rights, makes any change in the prevailing standards of decency and human dignity by which counsel require us to judge the constitutional validity of the impugned provisions.
The International Covenant, as already noticed, does not outlaw capital punishment for murder, altogether.
For all the foregoing reasons, we would answer the first main question in the negative.
This takes us to Question No. II.
Question No.II.
Are the provisions of Section 354 (3) of the Code of Criminal Procedure, 1973 unconstitutional ? That is the question.
The constitutional validity of section 354 (3) is assailed on these grounds: (i) (a) Section 354 (3) of the Code of Criminal Procedure, 1973, delegates to the Court the duty to legislate the field of 'special reasons ' for choosing between life and death, and ____________________ (1) ; 226 (b) permits imposition of death penalty in an arbitrary and whimsical manner in as much as it does not lay down any rational principies or criteria for invoking this extreme sanction.
(Reliance has been placed on Furman vs Georgia (ibid).
(ii) If Section 354 (3) is to be saved from the vice of unconstitutionality, the Court should so interpret it and define its scope that the imposition of death penalty comes to be restricted only to those types of grave murders and capital offences which imperil the very existence and security of the State.
(Reliance for this argument has been placed on Rajendra Prasad 's case (ibid) ).
As against this, the learned Solicitor General submits that the policy of the law in the matter of imposition of death sentence is writ large and clear in Section 354 (3), namely, that life imprisonment is the rule and death sentence an exception; that the correct approach should be to apply this policy to the relevant facts of the particular case, bearing on the question of sentence, and to find out if there are any exceptional reasons justifying imposition of the death penalty, as a departure from the normal rule.
It is submitted that conferment of such sentencing discretion on the courts, to be exercised judicially, in no sense, amounts to delegation of the legislative powers by Parliament.
Shri Sorabji further submits that there is no inherent impossibility in formulating broad guidelines consistent with the policy indicated by the legislature, for the exercise of the judicial functions under Section 354 (3).
He emphasises that only broad guidelines, as distinct from rigid rules, can be laid down by the Court.
Since the discretion proceeds the argument is to be exercised judicially after taking into consideration all the aggravating and mitigating circumstances relating to the crime and the criminal in a particular case, and ample safeguards by way of appeal and reference to the superior courts against erroneous or arbitrary exercise of the sentencing discretion have been provided, Section 354 (3) cannot be said to be violative of Articles 14, 19 and 21 or anything else in the Constitution, 227 Before embarking upon a discussion of the arguments advanced on both sides, it is necessary to have a peep into the history and the legislative background of the procedural provisions relating to sentencing in the Code of criminal Procedure.
Under the Code of Criminal Procedure, 1898, as it stood before its amendment by Act No. 26 of 1955, even for the seven offences mentioned earlier, which are punishable in the alternative with death, the normal sentence was the death sentence, and if the Court wanted to depart from this rule, it had to give reasons for doing so.
This requirement was embodied in subsection (5) of Section 367, which, as it then stood, was as follows: "If the accused is convicted of an offence punishable with death and the Court sentences him to any punishment other than death, the Court shall in its judgment state the reason why sentence of death was not passed.
The Law Commission in its 35th Report (Vol.
I), made the following comments on this provision: ". a considerable body of opinion is in favour of a provision requiring the court to state its reasons for imposing the punishment either of death or of imprisonment for life.
Further, this would be good safeguard to ensure that the lower courts examine the case as elaborately from the point of view of sentence as from the point of view of guilt.
It would increase the confidence of the people, in the courts, by showing that the discretion is judicially exercised.
It would also facilitate the task of the High Court in appeal or in proceedings for confirmation in respect of the sentence (where the sentence awarded is that of death) or in proceedings in revision for enhancement of the sentence (where the sentence awarded is one of imprisonment of life.
" In deferance to this recommendation, section 66 of the Code of Criminal Procedure (Amendment) Act, 1955 (XXVI of 1955) deleted old sub section (5) of Section 367 with effect from January 1, 1956, and thereafter, for such capital offences, it was left to the Court, on the facts of each case, to pass, in its discretion, for reason to be 228 recorded, the sentence of death or the lesser sentence.
This led to some difference of opinion whether, even after the Amendment of 1955, in case of murder the normal punishment was death or imprisonment for life (See A.I.R. Commentaries on the Code of Criminal Procedure, Vol. 3, page 565, by D.V. Chitaley and section Appu Rao).
Overruling its earlier decision, the Bombay High Court in the State vs Vali Mohammad,(1) held that death is not a normal penalty for murder.
As against this, the Division Bench of the Madras High Court in Veluchami Thevar,(2) held that death was the normal punishment where there were no extenuating circumstances.
The third set of cases held that both the sentences were normal but the discretion as regards sentence was to be exercised in the light of facts and circumstances of the case.
This view appears to be in accord with the decision of this Court in Iman Ali & Anr.
vs State of Assam.(3) In that case, there was a clear finding by the Court of Session which had been upheld by the High Court, that each of the two appellants therein, committed a cold blooded murder by shooting two inmates of the house simply with the object of facilitating commission of dacoity by them.
Those persons were shot and killed even though they had not tried to put up any resistence.
It was held by this Court (speaking through Bhargava, J.) that in these circumstances where the murders were committed in cold blood with the sole object of committing dacoity, the Sessions Judge had not exercised his discretion judicially in not imposing the death sentence, and the High Court was justified in enhancing the sentence of the appellants from life imprisonment to death.
Jagmohan Singh 's case, which we shall notice presently in further detail, proceeds on the hypothesis that even after the deletion of sub section (5) of Section 367 in the Code of 1898, both the alternative sentences provided in Section 302, Penal Code are normal punishment for murder, and the choice of either sentence rests in the discretion of the Court which is to be exercised judicially, after taking into account all the relevant circumstances of the case.
__________________ (1) AIR 1959 Bom.
294 (299).
(2) A.I.R. 1965 Mad. 48 at p. 49.
(3) ; 229 Section 354 (3) of the Code of Criminal Procedure, 1973, marks a significant shift in the legislative policy underlying the Code of 1898, as in force immediately before Apr. 1, 1974, according to which both the alternative sentences of death or imprisonment for life provided for murder and for certain other capital offences under the Penal Code, were normal sentences.
Now, according to this changed legislative policy which is patent on the face of Section 354 (3), the normal punishment for murder and six other capital offences under the Penal Code, is imprisonment for life (or imprisonment for a term of years) and death penalty is an exception.
The Joint Committee of Parliament in its Report, stated the object and reason of making this change, as follows: "A sentence of death is the extreme penalty of law and it is but fair that when a Court awards that sentence in a case where the alternative sentence of imprisonment for life is also available, it should give special reasons in support of the sentence" Accordingly, sub section (3) of Section 354 of the current Code provides: "When the conviction is for an offence punishable with death or, in the alternative, with imprisonment for life or imprisonment for a term of years, the judgment shall state the reasons for the sentence awarded, and, in the case of sentence of death, the special reasons for such sentence.
" In the context, we may also notice Section 235 (2) of the Code of 1973, because it makes not only explicit, what according to the decision in Jagmohan 's case was implicit in the scheme of the Code, but also bifurcates the trial by providing for two hearings, one at the pre conviction stage and another at the pre sentence stage.
It requires that: "If the accused is convicted, the Judge shall, unless he proceeds in accordance with the provisions of Section 360, hear the accused on the question of sentence, and then pass sentence on him according to law.
" 230 The Law Commission on its 48th Report had pointed out this deficiency in the sentencing procedure: "45.
It is now being increasingly recognised that a rational and consistent sentencing policy requires the removal or several deficiencies in the present system.
One such deficiency is the lack of comprehensive information as to characteristics and background of the offender.
The aims of sentencing: Themselves obscure become all the more so in the absence of information on which the correctional process is to operate.
The public as well so the courts themselves are in the dark about judicial approach in this regard.
We are of the view that the taking of evidence as to the circustances relevant to sentencing should be encouraged and both the prosecution and the accused should be allowed to cooperate in the process." By enacting Section 235 (2) of the New Code, Parliament has accepted that recommendation of the Law Commission.
Although sub section (2) of Section 235 does not contain a specific provision as to evidence and provides only for hearing of the accused as to sentence, yet it is implicit in this provision that if a request is made in that behalf by either the prosecution or the accused, or by both, the Judge should give the party or parties concerned an opportunity of producing evidence or material relating to the various factors bearing on the question of sentence.
"Of course", as was pointed out by this Court in Santa Singh vs State of Punjab,(1) "care would have to be taken by the Court to see that this hearing on the question of sentence is not turned into an instrument for unduly protracting the proceedings.
The claim of due and proper hearing would have to be harmonised with the requirement of expeditious disposal of proceedings.
" We may also notice Sections 432, 433 and 433A, as they throw light as to whether life imprisonment as currently administered in ______________ (1) A.I.R. 1976 SC.
231 India, can be considered an adequate alternative to the capital sentence even in extremely heinous cases of murder.
Sections 432 and 433 of the Code of 1973 continue Sections 401 and 402 of the Code of 1898, with necessary modifications which bring them in tune with Articles 72 and 161 of the Constitution.
Section 432 invests the "appropriate Government" (as defined in sub section (7) of that Section) with power to suspend or remit sentences.
Section 433 confers on the appropriate Government power to commute sentence, without the consent of the person sentenced.
Under clause (a) of the Section, the appropriate Government may commute a sentence of death, for any other punishment provided by the Indian Penal Code.
With effect from December 18, 1978, the Code of Criminal Procedure (Amendment) Act, 1978, inserted new Section 433A, which runs as under : "433A. Restriction on powers of remission or commutation in certain cases Notwithstanding anything contained in Section 432, where a sentence of imprisonment for life is imposed on conviction of a person for an offence for which death is one of the punishments provided by law or where a sentence of death imposed on a person has been commuted under Section 433 into one of imprisonment for life, such person shall not be released from prison unless he had served at least fourteen years of imprisonment.
" It may be recalled that in Jagmohan this Court had observed that, in practice, life imprisonment amounts to 12 years in prison.
Now, Section 433A restricts the power of remission and commutation conferred on the appropriate Government under Sections 432 and 433, so that a person who is sentenced to imprisonment for life or whose death sentence is commuted to imprisonment for life must serve actual imprisonment for a minimum of 14 years.
We may next notice other provisions of the extent Code (corresponding to Sections 374, 375, 376 and 377 of the repealed Code) bearing on capital punishment.
Section 366 (i) of the Code requires the Court passing a sentence of death to submit the proceedings to the High Court, and further mandates that such a sentence shall not be executed unless it is confirmed by the High Court.
On such a 232 reference for confirmation of death sentence, the High Court is required to proceed in accordance with Sections 367 and 368.
Section 367 gives power to the High Court to direct further inquiry to be made or additional evidence to be taken.
Section 368 empowers the High Court to confirm the sentence of death or pass any other sentence warranted by law or to annul or alter the conviction or order a new trial or acquit the accused.
Section 369 enjoins that in every case so submitted, the confirmation of the sentence, or any new sentence or order passed by the High Court, shall, when such court consists of two or more Judges, be made, passed and signed by at least two of them.
Section 370 provides that where any such case is heard before a Bench of Judges and such Judges are equally divided in opinion, the case shall be referred to a third Judge.
In this fasciculus of Sections relating to confirmation proceedings in the High Court, the Legislature has provided valuable safeguards of the life and liberty of the subject in cases of capital sentences.
These provisions seek to ensure that where in a capital case, the life of the convicted person is at stake, the entire evidential material bearing on the innocence or guilt of the accused and the question of sentence must be scrutinised with utmost caution and care by a superior Court.
The High Court has been given very wide powers under these provisions to prevent any possible miscarriage of justice.
In State of Maharashtra vs Sindhi, (1) this Court reiterated, with emphasis, that while dealing with a reference for confirmation of a sentence of death, the High Court must consider the proceedings in all their aspects reappraise, reassess and reconsider the entire facts and law and, if necessary, after taking additional evidence, come to its own conclusions on the material on record in regard to the conviction of the accused (and the sentence) independently of the view expressed by the Sessions Judge.
Similarly, where on appeal, the High Court reverses an acquittal, and convicts the accused person and sentences him to death, Section 379 of the Code of 1973, gives him a right of appeal to the Supreme Court.
Finally, there is Article 136 of the Constitution under which the Supreme Court is empowered, in its discretion, to __________ (1) ; 233 entertain an appeal on behalf of a person whose sentence of death awarded by the Sessions Judge is confirmed by the High Court.
In the light of the above conspectus, we will now consider the effect of the aforesaid legislative changes on the authority and efficacy of the propositions laid down by this Court in Jagmohan 's case.
These propositions may be summed up as under : (i) The general legislative policy that underlines the structure of our criminal law, principally contained in the Indian Penal Code and the Criminal Procedure Code, is to define an offence with sufficient clarity and to prescribe only the maximum punishment therefor, and to allow a very wide discretion to the Judge in the matter of fixing the degree of punishment.
With the solitary exception of Section 303, the same policy permeates Section 302 and some other sections of the Penal Code, where the maximum punishment is the death penalty.
(ii) (a) No exhaustive enumeration of aggravating or mitigating circumstances which should be considered when sentencing an offender, is possible.
"The infinite variety of cases and facts to each case would make general standards either meaningless 'boiler plate ' or a statement of the obvious that no Jury (Judge) would need." (Referred to McGauthe vs California(1) (b) The impossibility of laying down standards is at the very core of the criminal law as administered in India which invests the judges with a very wide discretion in the matter of fixing the degree of punishment.
(iii) The view taken by the plurality in Furman vs Georgia decided by the Supreme Court of the United States, to the effect, that a law which gives uncontrolled and un _____________________ (1) ; 234 guided discretion to the Jury (or the Judge) to choose arbitrarily between a sentence of death and imprisonment for a capital offence, violates the Eighth Amendment, is not applicable in India.
We do not have in our Constitution any provision like the Eighth Amendment, nor are we at liberty to apply the test of reasonableness with the freedom with which the Judges of the Supreme Court of America are accustomed to apply "the due process" clause.
There are grave doubts about the expediency of transplanting western experience in our country.
Social conditions are different and so also the general intellectual level.
Arguments which would be valid in respect of one area of the world may not hold good in respect of another area.
(iv) (a) This discretion in the matter of sentence is to be exercised by the Judge judicially, after balancing all the aggravating and mitigating circumstances of the crime.
(b) The discretion is liable to be corrected by superior courts.
The exercise of judicial discretion on well recognised principles is, in the final analysis, the safest possible safeguard for the accused.
In view of the above, it will be impossible to say that there would be at all any discrimination, since crime as crime may appear to be superficially the same but the facts and circumstances of a crime are widely different.
Thus considered the provision in Section 302, Penal Code is not violative of Article 14 of the Constitution on the ground that it confers on the judges an unguided and uncontrolled discretion in the matter of awarding capital punishment of imprisonment for life.
(v) (a) Relevant facts and circumstances impinging on the nature and circumstances of the crime can be brought before the Court at the preconviction 235 stage, notwithstanding the fact that no formal procedure for producing evidence regarding such facts and circumstances had been specifically provided.
Where counsel addresses the Court with regard to the character and standing of the accused, they are duly considered by the Court unless there is something in the evidence itself which belies him or the Public Prosecutor challenges the facts.
(b) It is to be emphasised that in exercising its discretion to choose either of the two alternative sentences provided in Section 302, Penal Code, "the Court is principally concerned with the facts and circumstances whether aggravating or mitigating, which are connected with the particular crime under inquiry.
All such facts and circumstances are capable of being proved in accordance with the provisions of the Indian Evidence Act in a trial regulated by the Cr.
P.C. The trial does not come to an end until all the relevant facts are proved and the counsel on both sides have an opportunity to address the Court.
The only thing that remains is for the Judge to decide on the guilt and punishment and that is what Sections 306(2) and 309(2) Cr.
P.C. purport to provide for.
These provisions are part of the procedure established by law and unless it is shown that they are invalid for any other reasons they must be regarded as valid.
No reasons are offered to show that they are constitutionally invalid and hence the death sentence imposed after trial in accordance with the procedure established by law is not unconstitutional under Article 21." (emphasis added) A study of the propositions set out above, will show that in substance, the authority of none of them has been affected by the legislative changes since the decision in Jagmohan 's case.
Of course, two of them require to be adjusted and attuned to the shift in the 236 legislative policy.
The first of those propositions is No. (iv) (a) which postulates, that according to the then extant Code of Criminal Procedure both the alternative sentences provided in Section 302, Penal Code are normal sentences, and the Court can, therefore, after weighing the aggravating and mitigating circumstances of the particular case, in its discretion, impose either of those sentences.
This postulate has now been modified by Section 354(3) which mandates the Court convicting a person for an offence punishable with death or, in the alternative with imprisonment for life or imprisonment for a term of years, not to impose the sentence of death on that person unless there are "special reasons" to be recorded for such sentence.
The expression "special reasons" in the context of this provision, obviously means "exceptional reasons" founded on the exceptionally grave circumstances of the particular case relating to the crime as well as the criminal.
Thus, the legislative policy now writ large and clear on the face of Section 354(3) is that on conviction for murder and other capital offences punishable in the alternative with death under the Penal Code, the extreme penalty should be imposed only in extreme cases.
In this view we are in accord with the dictum of this Court in Balwant Singh vs State of Punjab (1), wherein the interpretation of Section 354(3) first came up for consideration.
After surveying the legislative background, one of us (Untwalia, J,) speaking for the Court, summed up the scope and implications of Section 354 (3), thus : "Under this provision the Court is required to state the reasons for the sentence awarded and in the case of sentence of death, special reasons are required to be stated.
It would thus be noticed that awarding of the sentence other than the sentence of death is the general rule now and only special reasons that is to say, special facts and circumstances in a given case, will warrant the passing of the death sentence.
It is unnecessary nor is it possible to make a catalogue of the special reasons which may justify the passing of the death sentence in a case.
" While applying proposition (iv) (a), therefore, the Court has to bear _____________________ (1) A.I.R.1976 SC 231=[1976] 2 SCR 684. 237 in mind this fundamental principle of policy embodied in Section 354(3).
Another proposition, the application of which, to an extent, is affected by the legislative changes, is No. (v).
In portion (a) of that proposition, it is said that circumstances impinging on the nature and circumstances of the crime can be brought on record before the pre conviction stage.
In portion (b), it is emphasised that while making choice of the sentence under Section 302, Penal Code, the Court is principally concerned with the circumstances connected with the particular crime under inquiry.
Now, Section 235(2) provides for a bifurcated trial and specifically gives the accused person a right of pre sentence hearing, at which stage, he can bring on record material or evidence, which may not be strictly relevant to or connected with the particular crime under inquiry, but nevertheless, have, consistently with the policy underlined in Section 354(3), a bearing on the choice of sentence.
The present legislative policy discernible from Section 235(2) read with Section 354(3) is that in fixing the degree of punishment or making the choice of sentence for various offences, including one under Section 302, Penal Code, the Court should not confine its consideration principally" or merely to the circumstances connected with the particular crime, but also give due consideration to the circumstances of the criminal.
Attuned to the legislative policy delineated in Sections 354(3) and 235(2), propositions (iv) (a) and (v) (b) in Jagmohan, shall have to be recast and may be stated as below : (a) The normal rule is that the offence of muder shall be punished with the sentence of life imprisonment.
The court can depart from that rule and impose the sentence of death only if there are special reasons for doing so.
Such reasons must be recorded in writing before imposing the death sentence.
(b) While considering the question of sentence to be imposed for the offence of murder under Section 302 Penal Code, the court must have regard to every relevant circumstance relating to the crime as well as the criminal.
If the court finds, but not otherwise, that the 238 offence is of an exceptionally depraved and heinous character and constitutes, on account of its design and the manner of its execution, a source of grave danger to the society at large, the court may impose the death sentence.
The soundness or application of the other propositions in Jagmohan, and the premises on which they rest, are not affected in any way by the legislative changes since effected.
On the contrary these changes reinforce the reasons given in Jagmohan, for holding that the impugned provisions of the Penal Code and the Criminal Procedure Code do not offend Articles 14 and 21 of the Constitution.
Now, Parliament has in Section 354(3) given a broad and clear guideline which is to serve the purpose of lodestar to the court in the exercise of its sentencing discretion.
Parliament has advisedly not restricted this sentencing discretion further, as, in its legislative judgment, it is neither possible nor desirable to do so.
Parliament could not but be aware that since the Amending Act 26 of 1955, death penalty has been imposed by courts on an extremely small percentage of persons convicted of murder a fact which demonstrates that courts have generally exercised their discretion in inflicting this extreme penalty with great circumspection, caution and restraint.
Cognizant of the past experience of the administration of death penalty in India, Parliament, in its wisdom, thought it best and safe to leave the imposition of this gravest punishment in gravest cases of murder, to the judicial discretion of the courts which are manned by persons of reason, experience and standing in the profession.
The exercise of this sentencing discretion cannot be said to be untrammelled and unguided.
It is exercised judicially in accordance with well recognised principles crystalised by judicial decisions, directed along the broad contours of legislative policy towards the signposts enacted in Section 354(3).
The new Section 235 (2) adds to the number of several other safeguards which were embodied in the Criminal Procedure Code of 1898 and have been re enacted in the Code of 1973.
Then, the errors in the exercise of this guided judicial discretion are liable to be corrected by the superior courts.
The procedure provided in Criminal Procedure Code for imposing capital punishment for murder and some other capital crimes under the Penal Code cannot, by any reckoning, be said to be unfair unreasonable and unjust, 239 Nor can it be said that this sentencing discretion, with which the courts are invested, amounts to delegation of its power of legislation by Parliament.
The argument to that effect is entirely misconceived.
We would, therefore, re affirm the view taken by this Court in Jagmohan, and hold that the impgned provisions do not violate Articles 14, 19 and 21 of the Constitution.
Now, remains the question whether this Court can lay down standards or norms restricting the area of the imposition of death penalty to a narrow category of murders.
Dr. Chitale contends that the wide observations in Jagmohan as to the impossibility of laying down standards or norms in the matter of segtencing are too sweeping.
It is submitted that soon after the decision in Furman, several States in U.S.A. amended their penal statutes and brought them in conformity with the requirements of Furman.
Support has also been sought for this argument from Gregg vs Georgia, wherein the Supreme Court of the United States held that the concern expressed in Furman decision that death penalty may not be imposed in an arbitrary or capricious manner could be met by a carefully drafted statute ensuring that the sentencing authority was given adequate guidance and information for determining the appropriate sentence, a bifurcated sentencing proceeding being preferable as a general proposition.
If by "laying down standards", it is meant that 'murder ' should be categorised before hand according to the degrees of its culpability and all the aggravating and mitigating circumstances should be exhaustively and rigidly enumerated so as to exclude all free play of discretion, the argument merits rejection.
As pointed out in Jagmohan, such "standardisation" is well nigh impossible.
Firstly, there is little agreement among penologists and jurists as to what information about the crime and criminal is relevant and what is not relevant for fixing the dose of punishment for a person convicted of a particular offence.
According to Cessare Beccaria, who is supposed to be the intellectual progenitor of today 's fixed sentencing movement 'crimes are only to be measured by the injnry done to society '.
But the 20th Century sociologists do not wholly agree 240 with this view.
In the opinion of Von Hirsch, the "seriousness of a crime depends both on the harm done (or risked) by the act and degree of the actor 's culpability".
But how is the degree of that culpability to be measured.
Can any thermometer be devised to measure its degree ? This is a very baffling, difficult and intricate problem.
Secondly, criminal cases do not fall into set behavioristic patterns.
Even within a single category offence there are infinite, unpredictable and unforceable variations.
No two cases are exactly identical.
There are countless permutations and combinations which are beyond the anticipatory capacity of the human calculus.
Each case presents its own distinctive features, its peculiar combinations of events and its unique configuration of facts.
"Simply in terms of blame worthiness or dessert criminal cases are diferent from one another in ways that legislatures cannot anticipate, and limitations of language prevent the precise description of differences that can be anticipated.
"(1) This is particularly true of murder.
"There is probably no offence", observed Sir Ernest Growers, Chairman of the Royal Commission, "that varies so widely both in character and in moral guilt as that which falls within the legal definition of murder.
" The futility of attempting to lay down exhaustive standards was demonstrated by this Court in Jagmohan by citing the instance of the Model Penal Code which was presented to the American Supreme Court in McGoutha.
Thirdly, a standardisation of the sentencing process which leaves little room for judicial discretion to take account of variations in culpability within single offence category ceases to be judicial.
It tends to sacrifice justice at the alter of blind uniformity.
Indeed, there is a real danger of such mechanical standardisation degenerating into a bed of procrustean cruelty.
Fourthly, standardisation or sentencing discretion is a policy matter which belongs to the sphere of legislation.
When Parliament as a matter of sound legislative policy, did not deliberately restrict, control or standardise the sentencing discretion any further than that incompassed by the broad contours delineated in Section 354 (3), _____________ (1) Messinger and Bittner 's Crimonology Year Book (Ibid) Albert W, Alcherler 's article at page 421.
241 the Court would not by over leaping its bounds rush to do what Parliament, in its wisdom, varily did not do.
We must leave upto the Legislature, the things that are Legislature 'section "The highest judicial duty is to recognise the limits on judicial power and to permit the democratic processes to deal with matters falling outside of those limits".
As Judges, we have to resist the temptation to substitute our own value choices for the will of the people.
Since substituted judicial 'made to order ' standards, howsoever painstakingly made, do not bear the peoples imprimatur, they may not have the same authenticity and efficacy as the silent zones and green belts designedly marked out and left open by Parliament in its legislative planning for fair play of judicial discretion to take care of the variable, unpredictable circumstances of the individual cases, relevant to individualised sentencing.
When judges, acting individually or collectively, in their benign anxiety to do what they think is morally good for the people, take upon themselves, the responsibility of setting down social norms of conduct.
There is every danger, despite their effort to make a rational guess of the notions of right and wrong prevailing in the community at large and despite their intention to abide by the dictates of mere reason, that they might write their own peculiar view or personal pre dilection into the law, sincerely mistaking that changeling for what they perceive to be the community ethic.
The perception of 'community ' standards or ethics may vary from Judge to Judge.
In this sensitive, highly controversial area of death penalty, with all its complexity, vast implications and manifold ramifications, even all the Judges sitting cloistered in this Court and acting unanimously, cannot assume the role which properly belongs to the chosen representatives of the people in Parliament, particularly when Judges have no divining rod to divine accurately the will of the people.
In Furman, the Hon 'ble Judges claimed to articulate the contemporary standards of morality among the American people.
But speaking through public referenda, Gallup polls and the state legislatures, the American people sharply rebuffed them.
We must draw a lesson from the same.
What the learned Chief Justice, who is amongst us in this case has said recently in Gurbaksh Singh Sibbia and others vs State of Punjab(1) in the context of laying down standards in the discre ________________________ (1) Criminal Appeals Nos.
335 etc.
of 1977 and 81 and 82 of 1978.
242 tionary area of anticipatory bail, comes in as a timely reminder.
In principle, these observations aptly apply to the desirability and feasibility of laying down standards in the area of sentencing discretion, also.
Let us therefore, hark to the same: "Generalisations on matters which rest on discretion and the attempt to discover formulae of universal application when facts are bound to differ from case to case frustrate the very purpose of conferring discretion.
No two cases are alike on facts and, therefore, Courts have to be allowed a little free play in the joints if the conferment of discretionary power is to be meaningful.
There is no risk involved in entrusting a wide discretion to the Court of Session and the High Court in granting anticipatory bail because, firstly, these are higher courts manned by experienced persons, secondly, their orders are not final but are open to appellate or revisional scrutiny and above all because, discretion has always to be exercised by courts judicially and not according to whim, caprice or fancy.
On the other hand, there is a risk in foreclosing categories of cases in which anticipatory bail may be allowed because life throws up unforeseen possibilities and offers new challenges.
Judicial discretion has to be free enough to be able to take these possibilities in its stride and to meet these challenges.
While dealing with the necessity for preserving judicial discretion unhampered by rules of general application, Earl Loreburn L.C. said in Hyman and Anr.
vs Rose(1).
"I desire in the first instance to point out that the discretion given by the section is very wide.
Now it seems to me that when the Act is so express to provide a wide discretion. it is not advisable to lay down any rigid rules for guiding that discretion.
I do not doubt that the rules enunciated by the Master of the Rolls in the present case are useful maxims in general, and that in general they reflect the point of view from which judges would regard an application for relief.
But I think it ought to be distinctly understood that there may be cases in which any or all of them may be disregarded.
If it were otherwise, the free discretion given by the statute would be fettered by limitations which have nowhere been enacted.
It is one thing to decide what is the true meaning of the language contained ___________________________ (1) , 243 in an Act of Parliament.
It is quite a different thing to place conditions upon a free discretion entrusted by statute to the Court where the conditions are not based upon statutory enactment at all.
It is not safe.
I think, to say that the Court must and will always insist upon certain things when the Act does not require them, and the facts of some unforeseen case may make the Court wish it had kept a free hand." "Judges have to decide cases as they come before them, mindful of the need to keep passions and prejudices out of their decisions.
And it will be strange if, by employing judicial artifices and techniques, we cut down the discretion so wisely conferred upon the Courts, by devising a formula which will confine the power to grant anticipatory bail within a strait jacket.
While laying down cast iron rules in a matter like granting anticipatory bail, as the High Court has done, it is apt to be overlooked that even Judges can have but an imperfect awareness of the needs of new situations.
Life is never static and every situation has to be assessed in the context of emerging concerns as and when it arises.
Therefore, even if we were to frame a 'Code for the grant of anticipatory bail ', which really is the business of the legislature, it can at best furnish broad guidelines and cannot compel blind adherence.
" From what has been extracted above, it is clear that this Court should not venture to formulate rigid standards in an area in which the Legislature so warily treads.
Only broad guidelines consistent with the policy indicated by the Legislature in Section 354(3) can be laid down.
Before we come to this aspect of the matter, it will be fair to notice briefly the decisions of the Supreme Court of U.S.A. in Gregg vs Georgia and companion cases.
Soon after the decision in Furman, the Georgia Legislature amended its statutory scheme.
The amended statute retains the death penalty for six categories of crime: murder, kidnapping for ransom or where victim is harmed, armed robbery, rape, treason, and aircraft hijacking.
The statutory aggravating circumstances, the existence of any of which may justify the imposition of the extreme penalty of death, as provided in that statute, are: "(1) The offence of murder, rape, armed robbery, or 244 kidnapping was committed by a person with a prior record of conviction for a capital felony, (or the offence of murder was committed by a person who has a substantial history of serious assaultive criminal convictions).
(2) The offence of murder, rape, armed robbery, or kidnapping was committed while the offender was engaged in the commission of another capital felony, or aggravated battery, or the offence of murder was committed while the offender was engaged in the commission of burglary or arson in the first degree.
(3) The offender by his act of murder, armed robbery, or kidnapping knowingly created a great risk of death to more than one person in a public place by means of a weapon or device which would normally be hazaradous to the lives of more than one person.
(4) The offender committed the offence of murder for himself or another, for the purpose of receiving money or any other thing of monetary value.
(5) The murder of a judicial officer, former judicial officer, district attorney or solicitor or former district attorney or solicitor during or because of the exercise of his official duty.
(6) The offender caused or directed another to committed murder as an agent or employee of another person.
(7) The offence of murder, rape, armed robbery, or kidnapping was outrageiously or want only vile horrible or inhuman in that it involved torture, depravity of mind, or an aggravated battery to the victim.
(8) The offence of murder was committed against any peace officer, corrections employee or fireman while engaged in the performance or his official duties.
(9) The offence of murder was committed by a person in, or who has escaped from, the lawful custody of a peace officer or place of lawful confinement.
245 (10) The murder was committed for the purpose of avoiding, interfering with, or preventing a lawful arrest or custody in a place of lawful confinement, of himself or another.
" The Supreme Court of Georgia in Arnold vs State(1), held unconstitutional the portion (within brackets) of the first circumstances encompassing persons who have a "substantial history of serious assaultive criminal convictions" but did not set clear and objective standards.
The amended statute, also, provided for a bifurcated trial and a pre sentence hearing.
It also provides for an automatic appeal of death sentence to the Supreme Court of Georgia, which may or may not affirm the death sentence.
The appellate court is also required to include reference to similar cases that the court considered.
The defendant (accused) in that case was convicted of two counts of armed robbery and two counts of murder.
The accused had committed the murders for the purpose of receiving money and an automobile of one of the victims.
After reviewing the trial record, the Georgia Supreme Court affirmed the convictions and the imposition of death sentences for murder, only.
The constitutional validity of the amended statutory scheme of Georgia was challenged before the Supreme Court of U.S.A. on the ground that the imposition of the death penalty for the crime of murder under the Georgia statute violated the prohibition against the infliction of cruel and unusual punishment under the Eighth and Fourteenth Amendments.
Likewise in the companion case Proffitt vs Florida (2), the Florida Legislature adopted new statutes that authorised the imposition of the death penalty on those convicted of first degree murders.
Under the new Florida statutes, if a defendant (accused) is found guilty of first degree murder, a separate presentence hearing is held before the jury, where arguments may be presented and where any evidence deemed relevant to sentencing may be admitted and must include matters relating to eight aggravating and seven mitigating circumstances specified in the statutes, the jury is directed to weigh such circumstances and return an advisory verdict as to the sentence.
__________________ (1) , 540, , 391 (1976) (2) ; , (1976).
246 The actual sentence is, however, determined by the trial judge, who is also directed to weigh the statutory aggravating and mitigating circumstances.
If a death sentence is imposed, the trial court must set forth in writing its fact findings that sufficient statutory aggravating circumstances exist and are not outweighed by statutory mitigating circumstances.
Just as in the Georgia statute, a death sentence is to be automatically reviewed by the Supreme Court of Florida.
Under this new statutory scheme, the Florida Court found Proffitt (defendant) guilty of first degree murder and sentenced him to death on the finding that these aggravating circumstances were established : "(1) The murder was premeditated and occurred in the course of a felony (burglary); (2) the defendant had the propensity to commit murder; (3) the murder was especially heinous, atrocious, and cruel ; and (4) the defendant knowingly, through his intentional act, had created a great risk of serious bodily harm and death to many persons.
" The trial judge also found specifically that none of the statutory mitigating circumstances existed.
The Supreme Court of Florida affirmed the death sentence.
Before the Supreme Court of U.S.A. the constitutional validity of the imposition of death penalty for the crime of murder under the Florida statutes was challenged on the same ground as in Gregg vs Georgia.
The Supreme Court of U.S.A. in both the aforesaid cases negatived the challenge to the statutes and upheld their validity.
It may be recalled that in Furman, that Court had held that if clear, definite and articulate standards channeling the sentencing discretion for imposition of the death penalty are not laid down in a statute, it would violate the Eighth and Fourteenth Amendments.
It may be noted that the aggravating circumstance No. (7) is couched in a very wide and elastic language.
The expressions "outrageously or wantonly vile", "horrible or inhuman" employed therein are of the widest amplitude and give this aggravating circumstance the character of an omnibus clause.
Likewise, 247 in the Florida statute, the scope of the words "especially heinous, atrocious and cruel" was equally large and imprecise.
It can be seriously questioned whether these extremely elastic standards really exclude the uncontrolled exercise of sentencing discretion so as to meet the requirements of Furman.
In Gregg vs Georgia, the petitioner attacked the seventh statutory aggravating circumstance which authorises imposition of the death penalty if the murder was "outrageously, or wantonly vile, horrible or inhuman" on the ground that it was so broad that capital punishment could be imposed by its application in any murder case.
Stewart, J., speaking for himself and for Powell and Stevens, JJ., got over this attack, in three ways: Firstly, by reading down the concerns expressed in Furman.
In this connection, Stewart, J. said, all that Furman mandates is that discretion in so grave a matter must be suitably directed "so as to minimize the risk of wholly arbitrary and capricious action.
" This was, if we may say so with respect, an admission of the fact that a considerable range of sentencing discretion has perforce to be left with the sentencing body to be exercised by it according to its own good sense and reason, and that no standards howsoever meticulously drafted can totally exclude scope for arbitrary and capricious action.
The second reason given to parry this attack was of a general nature.
It was observed: "As a general proposition these concerns (expressed in Furman) are best met by a system that provides for a bifurcated proceeding at which the sentencing authority is apprised of the information relevant to the imposition of sentence and provided with standards to guide its use of the information.
" The third course adopted to foil the attack was: "It is, of course, arguable that any murder involves depravity of mind or an aggravated battery.
But this language need not be construed in this way, and there is no reason to assume that the Supreme Court of Georgia will adopt such an open ended construction," 248 White, J. with whom the Chief Justice and Rehnquist, J. joined, negatived the change of these standards being vague and incomplete, with these observations: "The argument is considerably overstated The Georgia Legislature has plainly made an effort to guide the jury in the exercise of its discretion, while at the same time permitting the jury to dispense mercy on the basis of factors too intangible to write into a statute, and I cannot accept the naked assertion that the effort is bound to fail.
As the types of murders for which the death penalty may be imposed became more narrowly defined and are limited to those which are particularly serious or for which the death penalty is particularly appropriate as they are in Georgia by reasons of the aggrvating circumstance requirement, it becomes reasonable to expect that Georgia 's current system would escape the infirmities which invalidated its previous system under Furman.
Indeed, if the Georgia Supreme Court properly performs the task assigned to it under the Georgia statutes, death sentences imposed wantonly or freakishly for any given category of crime will be set aside." Similarly, in Proffit vs Florida, it was contended that the enumerated aggravating and mitigating circumstances in the Florida statute are so vague and so broad that virtually "any capital defendant becomes a candidate for the death penalty".
In particular, the petitioner attacked the eighth and third statutory aggravating circumstances which authorise the death penalty to be imposed if the crime is "especially heinous, atrocious, or cruel" or if "the defendant knowingly created a great risk of death to many persons".
Agreeing with the Supreme Court of Florida, the Supreme Court of U.S.A. recognised that "while it is arguable that all killing are atrocious, still we believe that the Legislature intended something especially heinous, atrocious, of cruel" when it authorised the death penalty for first degree murder.
As a consequence, the Court has indicated that the eighth statutory provision is directed only at "the conscienceless or pitiless crime which is unnecessarily tortuous to the victim".
249 It appears to us that in Gregg vs Georgia and the companion cases, the Supreme Court of U.S.A. was obliged to read down the requirements of Furman and to accept these broadly worded, looseended and not all inclusive 'standards ' because in the area of sentencing discretion, if it was to retain its judicial character, exhaustive standardisation or perfect regulation was neither feasible nor desirable.
Moreover, over standardisation of the sentencing process tends to defeat its very purpose, and may actually produce opposite results.
Messinger and Bittner 's Criminology Year Book (ibid) Albert W. Alcherler 's article at page 421 highlights this danger, by taking, inter alia, the example of the guided discretion capital punishment statutes favoured by the Supreme Court in Gregg vs Georgia and its companion cases, as follows: A defendant convicted of capital murder might wish to make the following speech to the jury about to consider whether capital punishment should be imposed: "I am deeply sorry for my crime which I recognize was about as bad as any that can be imagined.
I did, in fact, go to the police station shortly after the killing to surrender and make a full confession.
Although I have done some terrible things in my life you may wish to know, before deciding whether I should live or die, that I have also done some good.
I once risked my life in combat to save five comrades an action for which I was awarded the Silver Star and for the last 10 years I have personally cared for my invalid mother while supporting 5 younger brothers and sisters.
"The mitigating factors listed in today 's capital punishment statutes are sometimes quite general, but none that I have seen in any statute would permit a jury to consider any of the circumstances mentioned in this defendant 's speech (or, for that matter any other evidence of pre crime virtue or past crime remorse).
Apparently the Florida statute 's upheld in Proffitt vs Florida would not; yet the Supreme Court plurality, seemingly oblivious to the 250 statutes limitations, declared in a companion case, 'A jury must be allowed to consider on the basis of all relevant evidence not only why a death sentence should be imposed, but also why it should not be imposed." (Jurek vs
Texas.(1) Critically examined, it is clear that the decisions in Gregg vs
Georgia and its companion cases demonstrate the truth of what we have said earlier, that it is neither practicable nor desirable to imprison the sentencing discretion of a judge or jury in the straitjacket of exhaustive and rigid standards, Nevertheless, these decisions do show that it is not impossible to lay down broad guidelines as distinguished from ironcased standards, which will minimise the risk of arbitrary imposition of death penalty for murder and some other offences under the Penal Code.
This takes us to the question of indicating the broad criteria which should guide the Courts in the matter of sentencing a person convicted of murder under Section 302, Penal Code.
Before we embark on this task, it will be proper to remind ourselves, again that "while we have an obligation to ensure that the constitutional bounds are not over reached, we may not act as judges as we might as legislatures.
"(2) In Jagmohan, this Court had held that this sentencing discretion is to be exercised judicially on well recognised principles, after balancing all the aggravating and mitigating circumstances of the crime.
By "well recognised principles" the Court obviously meant the principles crystallised by judicial decisions illustrating as to what were regarded as aggravating or mitigating circumstances in those eases.
The legislative changes since Jagmohan as we have discussed already do not have the effect of abrogating or nullifying those principles.
The only effect is that the application of those principles is now to be guided by the paramount beacons of legislative policy discernible from Sections 354 (3) and 235 (2), namely: (1) The extreme penalty can be inflicted only in gravest cases of extreme culpability; (2) In making choice of the sentence, in addition to the circumstances of the offence, due regard must be paid to the circumstances of the offences, also.
__________________________ (1) ; , 271(1976).
(2) Per Stewart.
J. in Gregg.
vs Georgia.
251 We will first notice some of the aggravating circumstances which, in the absence of any mitigating circumstances, have been regarded as an indication for imposition of the extreme penalty.
Pre planned, calculated, cold blooded murder has always been regarded as one of an aggravated kind.
In Jagmohan, it was reiterated by this Court that if a murder is "diabolically conceived and cruelly executed", it would justify the imposition of the death penalty on the murderer.
The same principle was substantially reiterated by V.R. Krishna Iyer, J., speaking for the Bench, in Ediga Anamma, in these terms: "The weapons used and the manner of their use, the horrendous features of the crime and hapless, helpless state of the victim, and the like, steel the heart of the law for a sterner sentence.
" It may be noted that this indicator for imposing the death sentence was crystallised in that case after paying due regard to the shift in legislative policy embodied in Section 354(3) of the Code of Criminal Procedure, 1973, although on the date of that decision (February 11, 1974), this provision had not come into force.
In Paras Ram 's case, also, to which a reference has been made earlier, it was emphatically stated that a person who in a fit of anti social piety commits "blood curdling butchery" of his child, fully deserves to be punished with death.
In Rajendra Prasad, however, the majority (of 2:1) has completely reversed the view that had been taken in Ediga Anamma, regarding the application of Section 354(3) on this point.
According to it, after the enactment of Section 354(3) 'murder most foul ' is not the test.
The shocking nature of the crime or the number of murders committed is also not the criterion.
It was said that the focus has now completely shifted from the crime to the criminal. "Special reasons" necessary for imposing death penalty "must relate not to the crime as such but to the criminal".
With great respect, we find ourselves unable to agree to this enunciation.
As we read Sections 354(3) and 235(2) and other related provisions of the Code of 1973, it is quite clear to us that for making the choice of punishment or for ascertaining the existence or absence of "special reasons" in that context, the Court must pay due regard both to the crime and the criminal.
What is the relative weight to be given to the aggravating and mitigating factors, 252 depends on the facts and circumstances of the particular case.
More often than not, these two aspects are so intertwined that it is difficult to give a separate treatment to each of them.
This is so because 'style is the man '.
In many cases, the extremely cruel or beastly manner of the commission of murder is itself a demonstrated index of the depraved character of the perpetrator.
That is why, it is not desirable to consider the circumstances of the crime and the circumstances of the criminal in two separate water tight compartments.
In a sense, to kill is to be cruel and, therefore, all murders are cruel.
But such cruelty may vary in its degree of culpability.
And it is only when the culpability assumes the proportion of extreme depravity that "special reasons" can legitimately be said to exist.
Drawing upon the penal statutes of the States in U.S.A. framed after Furman vs Georgia, in general, and clauses (2)(a), (b), (c) and (d) of the Indian Penal Code (Amendment) Bill passed in 1978 by the Rajya Sabha, in particular, Dr. Chitale has suggested these "aggravating circumstances".
"Aggravating circumstances: A Court may, however, in the following cases impose the penalty of death in its discretion: (a) if the murder has been committed after previous planning and involves extreme brutality; or (b) if the murder involves exceptional depravity; or (c) if the murder is of a member of any of the armed forces of the Union or of a member of any police force or of any public servant and was committed.
(i) while such member or public servant was on duty; or (ii) in consequence of anything done or attempted to be done by such member or public servant in the lawful discharge of his duty as such member or public servant whether at the time of murder he was such member or public 253 servant, as the case may be, or had ceased to be such member or public servant; or (d) if the murder is of a person who had acted in the lawful discharge of his duty under Section 43 of the Code of Criminal Procedure, 1973, or who had rendered assistance to a Magistrate or a police officer demanding his aid or requiring his assistance under Section 37 and Section 129 of the said Code.
" Stated broadly, there can be no objection to the acceptance of these indicators but as we have indicated already, we would prefer not to fetter judicial discretion by attempting to make an exhaustive enumeration one way or the other.
In Rajendra Prasad, the majority said: "It is constitutionally permissible to swing a criminal out of corporeal existence only if the security of State and society, public order and the interests of the general public compel that course as provided in Article 19(2) to (6).
" Our objection is only to the word "only".
While it may be conceded that a murder which directly threatens, or has an extreme potentiality to harm or endanger the security of State and society, public order and the interests of the general public, may provide "special reasons" to justify the imposition of the extreme penalty on the person convicted of such a heinous murder, it is not possible to agree that imposition of death penalty on murderers who do not fall within this narrow category is constitutionally impermissible.
We have discussed and held above that the impugned provisions in Section 302, Penal Code, being reasonable and in the general public interest, do not offend Article 19, or its 'ethos '; nor do they in any manner violate Articles 21 and 14.
All the reasons given by us for upholding the validity of Section 302, Penal Code, fully apply to the case of Section 354(3), Code of Criminal Procedure, also.
The same criticism applies to the view taken in Bishnu Deo Shaw vs State of West Bengal, (1) which follows the dictum in Rajendra Prasad (ibid).
In several countries which have retained death penalty, preplanned murder for monetary gain, or by an assassin hired for ___________________ (1) 254 monetary reward is, also, considered a capital offence of the first degree which, in the absence of any ameliorating circumstances, is punishable with death.
Such rigid categorisation would dangerously overlap the domain of legislative policy.
It may necessitate, as it were, a redefinition of 'murder ' or its further classification.
Then, in some decisions, murder by fire arm, or an automatic projectile or bomb, or like weapon, the use of which creates a high simultaneous risk of death or injury to more than one person, has also been treated as an aggravated type of offence.
No exhaustive enumeration of aggravating circumstances is possible.
But this much can be said that in order to qualify for inclusion in the category of "aggravating circumstances" which may form the basis of 'special reasons ' in Section 354(3), circumstances found on the facts of a particular case, must evidence aggravation of an abnormal or special degree.
Dr. Chitaley has suggested these mitigating factors: "Mitigating circumstances: In the exercise of its discretion in the above cases, the Court shall take into account the following circumstances: (1) That the offence was committed under the influence of extreme mental or emotional disturbance.
(2) The age of the accused.
If the accused is young or old, he shall not be sentenced to death.
(3) The probability that the accused would not commit criminal acts of violence as would constitute a continuing threat to society.
(4) The probability that the accused can be reformed and rehabilitated.
The State shall by evidence prove that the accused does not satisfy the conditions 3 and 4 above.
(5) That in the facts and circumstances of the case the accused believed that he was morally justified in committing the offence.
(6) That the accused acted under the duress or domination of another person.
255 (7) That the condition of the accused showed that he was mentally defective and that the said defect impaired his capacity to appreciate the criminality of his conduct.
" We will do no more than to say that these are undoubtedly relevant circumstances and must be given great weight in the determination of sentence.
Some of these factors like extreme youth can instead be of compelling importance.
In several States of India, there are in force special enactments, according to which a 'child ', that is, 'a person who at the date of murder was less than 16 years of age ', cannot be tried, convicted and sentenced to death or imprisonment for life for murder, nor dealt with according to the same procedure as an adult.
The special Acts provide for a reformatory procedure for such juvenile offenders or children.
According to some Indian decisions, the post murder remorse, penitance or repentence by the murderer is not a factor which may induce the Court to pass the lesser penalty (e.g. Mominaddi Sardar).
But those decisions can no longer be held to be good law in views of the current penological trends and the sentencing policy outlined in Section 235(2) and 354(3).
We have already extracted the view of A.W. Alchuler in Cr.
Y.E. by Messinger and Bittner (ibid), which are in point.
There are numerous other circumstances justifying the passing of the lighter sentence; as there are countervailing circumstances of aggravation.
"We cannot obviously feed into a judicial computer all such situations since they are astrological imponderables in an imperfect and undulating society." Nonetheless, it cannot be overemphasised that the scope and concept of mitigating factors in the area of death penalty must receive a liberal and expansive construction by the courts in accord with the sentencing policy writ large in Section 354(3).
Judges should never be blood thirsty.
Hedging of murderers has never been too good for them.
Facts and figures, albeit incomplete, furnished by the Union of India, show that in the past, Courts have inflicted the extreme penalty with extreme infrequency a fact which attests to the caution and compassion which they have always brought to bear on the exercise of their sentencing discretion in so grave a matter.
It is, therefore, imperative to voice the concern that courts, aided by the broad illustrative guidelines 256 indicated by us, will discharge the onerous function with evermore scrupulous care and humane concern, directed along the highroad of legislative policy outlined in Section 354(3), viz, that for persons convicted of murder, life imprisonment is the rule and death sentence an exception.
A real and abiding concern for the dignity of human life postulates resistance to taking a life through law 's instrumentality.
That ought not to be done save in the rarest of rare cases when the alternative option is unquestionably foreclosed.
For all the foregoing reasons, we reject the challenge to the constitutionality of the impugned provisions contained in Sections 302, Penal Code, and 354(3) of the Code of Criminal Procedure, 1973.
The writ petitions and the connected petitions can now be heard and disposed of, on their individual merits, in the light of the broad guidelines and principles enunciated in this judgment.
BHAGWATI, J.
These writ petitions challenge the constitutional validity of Section 302 of the Indian Penal Code read with Section 354, sub section (3) of the Code of Criminal Procedure in so far as it provides death sentence as an alternative punishment for the offence of murder.
There are several grounds on which the constitutional validity of the death penalty provided in Section 302 of the Indian Penal Code read with section 354 sub section (3) of the Code of Criminal Procedure is assailed before us, but it is not necessary to set them out at this stage, for I propose to deal with them when I examine the arguments advanced on behalf of the parties.
Suffice it to state for the present that I find, considerable force in some of these grounds and in my view, the constitutional validity of the death penalty provided as an alternative punishment in section 302 of the Indian Penal Code read with section 354 sub section (3) of the Code of Criminal Procedure cannot be sustained.
I am conscious that my learned brethren on the Bench who constitute the majority have taken a different view and upheld the constitutional validity of the death penalty but, with the greatest respect to them and in all humility, I cannot persuade myself to concur with the view taken by them.
Mine is unfortunately a solitary dissent and it is therefore, with a certain amount of hesitation that I speak but my initial diffidence is overcome by my deep and abiding faith in the dignity of man and worth of the human person and passionate 257 conviction about the true spiritual nature and dimension of man.
I agree with Bernard Shaw that "Criminals do not die by the hands of the law.
They die by the hands of other men.
Assassination on the scaffold is the worst form of assassination because there it is invested with the approval of the society. .Murder and capital punishment are not opposites that cancel one another but similars that breed their kind.
" It was the Father of the nation who said years ago, reaffirming what Prince Satyavan said on capital punishment in Shanti Parva of Mahabharata that "Destruction of individuals can never be a virtuous act" and this sentiment has been echoed by many eminent men such as Leonardo Da Vinci, John Bright, Victor Hugo and Berdyaev.
To quote again from Bernard Shaw from Act IV of his play "Caesar and Cleopatra: "And so to the end of history, murder shall breed murder, always in the name of right and honour and peace, until the Gods are tired of blood and create a race that can understand.
" I share this sentiment because I regard men as an embodiment of divinity and I am therefore morally against death penalty.
But my dissent is based not upon any ground of morality or ethics but is founded on constitutional issues, for as I shall presently show, death penalty does not serve any social purpose or advance any constitutional value and is totally arbitrary and unreasonable so as to be violative of Articles 14, 19 and 21 of the Constitution.
Before I proceed to consider the various constitutional issues arising out of the challenge to the validity of the death penalty, I must deal with a preliminary objection raised on behalf of the respondents against our competence to entertain this challenge.
The learned counsel appearing on behalf of the respondents urged that the question of constitutional validity of the death penalty stood concluded against the petitioners by the decision of a constitution bench of five Judges of this Court in Jagmohan vs State of U.P.(1) and it could not therefore be allowed to be reagitated before this Bench consisting of the same number of Judges.
This Bench, contended the respondents, was bound by the decision in Jagmohan 's case(supra) and the same issue, once decided in Jagmohan 's case (supra), could not be raised again and reconsidered by this Bench.
Now it is true that ______________ (1) ; 258 the question of constitutional validity of death penalty was raised in Jagmohan 's case (supra) and this Court by a unanimous judgment held it to be constitutionally valid and, therefore, ordinarily, on the principle of stare decisis, we would hold ourselves bound by the view taken in that case and resist any attempt at reconsideration of the same issue.
But there are several weighty considerations which compel us to depart from this precedential rule in the present case.
It may be pointed out that the rule of adherence to precedence is not a rigid and inflexible rule of law but it is a rule of practice adopted by the courts for the purpose of ensuring uniformity and stability in the law.
Otherwise, every Judge will decide an issue according to his own view and lay down a rule according to his own perception and there will be no certainty and predictability in the law, leading to chaos and confusion and in the process, destroying the rule of law.
The labour of the judges would also, as pointed out by Cardozo J. in his lectures of "Nature of Judicial Process" increase" almost to the breaking point if every past decision could be reopened in every case and one could not lay one 's own course of bricks on the secure foundation of the courses laid by others who had gone before him." But this rule of adherence to precedents, though a necessary tool in what Maitland called "the legal smithy", is only a useful servant and cannot be allowed to turn into a tyrannous master.
We would do well to recall what Brandies J. said in his dissenting judgment in State of Washington vs Dawson and company,(1) namely; "Stare decisis is ordinarily a wise rule of action.
But it is not a universal and inexorable command.
" If the Rule of stare decisis were followed blindly and mechanically, it would dwarf and stultify the growth of the law and affect its capacity to adjust itself to the changing needs of the society.
That is why Cardozo pointed out in his New York State Bar Address: "That was very well for a time, but now at last the precedents have turned upon us and are engulfing and annihilating us engulfing and annihilating the very devotees that worshipped at their shrine.
So the air is full of new cults that disavow the ancient faiths.
Some of them tell us that instead of seeking certainty in the word, the outward sign, we are to seek for something deeper, a certainty of ends and aims.
Some of them tell us that certainty is merely relative and temporary, a writing on the sands to _________ (1) : 68 Lawyers Edu.
219 259 be effected by the advancing tides.
Some of them even go so far as to adjure us to give over the vain quest, to purge ourselves of these yearnings for an unattainable ideal, and to be content with an empiricism that is untroubled by strivings for the absolute.
With all their diversities of form and doctrine, they are at one at least in their emphasis upon those aspects of truth that are fundamental and ultimate.
They exemplify the method approach, the attitude and outlook, the concern about the substance of things, which in all its phases and disguises is the essence of philosophy.
" We must therefore rid stare decisis of something of its petrifying rigidity and warn ourselves with Cardozo that "in many instances the principles and rules and concepts of our own creation are merely apercus and glimpses of reality" and remind oursevels "of the need of reformulating them or at times abandoning them altogether when they stand condemned as mischievous in the social consciousness of the hour,. the social consciousness which it is our business as Judges to interpret as best as we can.
" The question at issue in the present writ petitions is one of momentous significance namely, whether the state can take the life of an individual under the cover of judicial process and whether such an act of killing by the State is in accord with the constitutional norms and values and if, on an issue like this, a Judge feels strongly that it is not competent to the State to extinguish the flame of life in an individual by employing the instrumentality of the judicial process, it is his bounden duty, in all conscience, to express his dissent, even if such killing by the State is legitimized by a previous decision of the court.
There are certain issues which transcend technical considerations of stare decisis and if such an issue is brought before the court, it would be nothing short of abdication of its constitutional duty for the court to consider such issue by taking refuge under the doctrine of stare decisis.
The court may refuse to entertain such an issue like the constitutional validity of death penalty because it is satisfied that the previous decision is correct but it cannot decline to consider it on the ground that it is barred by the rule of adherence to precedents.
Moreover, in the present case, there are two other supervening circumstances which justify, nay compel, reconsideration of the decision in Jagmohan 's case (supra).
The first is the introduction of the new Code of Criminal Procedure in 1973 which by sec 260 tion 354 sub section (3) has made life sentence the rule in case of offences punishable with death or in the alternative imprisonment for life and provided for imposition of sentence of death only in exceptional cases for special reasons.
I shall presently refer to this section enacted in the new Code of Criminal Procedure and show how, in view of that provision, the imposition of death penalty has become still more indefensible from the constitutional point of view.
But the more important circumstance which has supervened since the decision in Jagmohan 's case (supra) is the new dimension of Articles 14 and 21 unfolded by this Court in Maneka Gandhi vs Union of India.(1) This new dimension of Articles 14 and 21 renders the death penalty provided in section 302 of the Indian Penal Code read with sec.
354 (3) of the Code of Criminal Procedure vulnerable to attack on a ground not available at the time when Jagmohan 's case (supra) was decided.
Furthermore, it may also be noted, and this too is a circumstance not entirely without significance, that since Jagmohan 's case (supra) was decided, India has ratified two international instruments on human rights and particularly the International Convenant on Civil and Political Rights.
We cannot therefore consider ourselves bound by the view taken in Jagmohan 's case (supra) and I must proceed to consider the issue as regards the constitutional validity of death penalty afresh, without being in any manner inhibited by the decision in Jagmohan 's case (supra).
It must be realised that the question of constitutional validity of death penalty is not just a simple question of application of constitutional standards by adopting a mechanistic approach.
It is a difficult problem of constitutional interpretation to which it is not possible to give an objectively correct legal anwer.
It is not a mere legalistic problem which can be answered definitively by the application of logical reasoning but it is a problem which raises profound social and moral issues and the answer must therefore necessarily depend on the judicial philosophy of the Judge.
This would be so in case of any problem of constitutional interpretation but much more so would it be in a case like the present where the constitutional conundrum is enmeshed in complex social and moral issues defying a formalistic judicial attitude.
That is the reason why in some countries like the United States and Canada where _________________ (1) [1978] 2 SCR 663.
261 there is power of judicial review, there has been judicial disagreement on the constitutionality of death penalty.
On an issue like this, as pointed out by David Pannick in his book on "Judicial Review of the Death Penalty" judicial conclusions emanate from the judicial philosophy of those who sit in judgment and not from the language of the Constitution.
" But even so, in their effort to resolve such an issue of great constitutional significance, the Judges must take care to see that they are guided by "objective factors to the maximum possible extent.
" The culture and ethos of the nation as gathered from its history, its tradition and its literature would clearly be relevant factors in adjudging the constitutionality of death penalty and so would the ideals and values embodied in the Constitution which lays down the basic frame work of the social and political structure of the country, and which sets out the objectives and goals to be pursued by the people in a common endeavour to secure happiness and welfare of every member of the society.
So also standards or norms set by International organisations and bodies have relevance in determining the constitutional validity of death penalty and equally important in construing and applying the equivocal formulae of the Constitution would be the "wealth of non legal learning and experience that encircles and illuminates" the topic of death penalty.
"Judicial dispensers", said Krishna Iyer, J. in Dalbir Singh and Others vs State of Punjab(1) "do not behave like cavemen but breathe the fresh air of finer culture.
" There is no reason why, in adjudicating upon the constitutional validity of death penalty.
Judges should not obtain assistance from the writings of men like Dickens, Tolstoy, Dostoyevsky, Koestter and Camus or from the investigations of social scientists or moral philosophers in deciding the circumstances in which and the reasons why the death penalty could be seen as arbitrary or a denial of equal protection.
It is necessary to bear in mind the wise and felicitous words of Judge Learned Hand in his "Spirit of Liberty" that while passing on question of constitutional interpretation, it is as important to a Judge: ". .to have atleast a bowing acquaintance with Acton and Maitland.
With Thucydides, Gibbon and Carlyle, with Homer, Dante Shakespeare and Milton, with Machiavelli, Montaigne and Rabelais, with Plato, Bacon, Hume 262 and Kant, as with the books which have been specifically written on the subject.
For in such matters everything turns upon the spirit in which he approaches the question before him.
The words he must construe are empty vessels into which he can pour nearly anything he will.
Men do not gather figs of thistles, nor supply institutions from judges whose outlook is limited by parish or class.
They must be aware that there are before them more than verbal problems; more than final solutions cast in generalisations of universal applicability.
" Constitutional law raises, in a legal context, problems of economic, social, moral and political theory and practice to which non lawyers have much to contribute.
Non lawyers have not reached unanimity on the answers to the problems posed; nor will they ever do so, But when judges are confronted by issues to which there is no legal answer, there is no reason (other than a desire to maintain a fiction that the law provides the answer) for judicial discretion to be exercised in a vacuum, immune from non legal learning and extra legal dispute.
"Quotations from noble minds are not for decoration (in hard constitutional cases) but for adaptation within the framework of the law.
" Vide: David Pannick on 'Judicial Review of the Death Penalty. ' The Judges must also consider while deciding an issue of constitutional adjudication as to what would be the moral, social and economic consequences of a decision either way.
The consequences of course do not alter the meaning of a constitutional or statutory provision but they certainly help to fix its meaning.
With these prefatory observations I shall now proceed to consider the question of constitutional validity of death penalty.
I shall presently refer to the constitutional provisions which bear on the question of constitutionality of death penalty, but before I do so, it would be more logical if I first examine what is the international trend of opinion in regard to death penalty.
There are quite a large number of countries which have abolished death penalty de jure or in any event, de facto The Addendum to the Report of the Amnesty International on "The Death Penalty" points out that as on 30th May 1979, the following countries have abolished death penalty for all offences : Australia, Brazil, Colombia, Costa Rica, Denmark, Dominican Republic, Ecuador, Fiji, Finland, Federal Republic of Germany, Honduras, Iceland, Luxembourg, Norway, Portugal, Sweden, Uruguay and Venezuela, and according 263 to this Report, Canada, Italy, Malta, Netherlands, Panama, Peru, Spain and Switzerland have abolished death penalty in time of peace, but retained it for specific offences committed in time of war.
The Report also states that Algeria, Belgium, Greece, Guyana, Ivory Coast, Seychelles and Upper Volta have retained the death penalty on their statute book but they did not conduct any executions for the period from 1973 to 30th May 1979.
Even in the United States of America there are several States which have abolished death penalty and so also in the United Kingdom, death penalty stands abolished from the year 1965 save and except for offences of treason and certain forms of piracy and offences committed by members of the armed forces during war time.
It may be pointed out that an attempt was made in the United Kingdom in December 1975 to reintroduce death penalty for terrorist offences involving murder but it was defeated in the House of Commons and once again a similar motion moved by a conservative member of Parliament that "the sentence of capital punishment should again be available to the courts" was defeated in the House of Commons in a free vote on 19th July 1979.
So also death penalty has been abolished either formally or in practice in several other countries such as Argentina, Bolivia, most of the federal States of Mexico and Nicaragua, Israel, Turkey and Australia do not use the death penalty in practice.
It will thus be seen that there is a definite trend in most of the countries of Europe and America towards abolition of death penalty.
It is significant to note that the United Nations has also taken great interest in the abolition of capital punishment.
In the Charter of the United Nations signed in 1945, the founding States emphasized the value of individuals 's life, stating their will to "achieve international co operation. in promoting and encouraging respect for human rights and for fundamental freedoms for all without distinction as to race, sex, language or religion." Though the San Francisco Conference did not address itself to the issue of death penalty specifically, the provisions of the charter paved the way for further action by United Nations bodies in the field of human rights, by establishing a Commission on Human Rights and, in effect, charged that body with formulating an International Bill of Human Rights.
Meanwhile the Universal Declaration of Human Rights was adopted by the General Assembly in its Resolution 217 A (III) of 10 December 1948.
Articles 3 and 5 of the Declaration provided: 264 3.
"Everyone has the right to life, liberty and security of person." 5. "No one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment.
The United Nations ' position on the question of death penalty was expected to be stated more specifically in the International Covenant on Civil and Political Rights, the drafting of which had been under way since the first session of the Commission on Human Rights in 1947.
But during the 11 year period of drafting of the relevant provision of the Covenant, two main approaches to the issue of capital punishment became evident: one stressed the need for barring the death penalty and the second placed emphasis on resstricting its application to certain cases.
The proponents of the first position suggested either the total abolition of the death penalty or its abolition in time of peace or for political offences.
This approach was however regarded as unfeasible, since many countries, including abolitionist ones, felt that the provision for an outright ban on the death penalty would prevent some States from ratifying the Covenant, but at the same time, it was insisted by many countries that the Covenant should not create the impression of supporting or perpetuating death penalty and hence a provision to this effect should be included.
The result was that the second approach stressing everyone 's right to life and emphasizing the need for restricting the application of capital punishment with a view to eventual abolition of the death penalty, won greater support and Article 6 of the Covenant as finally adopted by the General Assembly in its resolution 2000(XXX) of 16 December 1966 provided as follows : 1.
Every human being has the inherent right to life.
This right shall be protected by law.
No one shall be arbitrarily deprived of his life.
In countries which have not abolished the death penalty, sentence of death may be imposed only for the most serious crimes in accordance with the law in force at the time of the commission of the crime and not contrary to the provisions of the present Covenant and to the Convention on the Prevention and Punishment of the Crime of Genocide.
This 265 penalty can only be carried out pursuant to a final judgment rendered by a competent court.
When deprivation of life constitutes the crime of genocide, it is understood, that nothing in this article shall authorise any State Party to the present Covenant to derogate in any way from any obligatlon assumed under the provisions of the Convention on the Prevention and Punishment of the Crime of Genocide.
Anyone sentenced to death shall have the right to seek, pardon or commutation of the sentence.
Amnesty pardon or commutation of the sentence of death may be granted in all cases.
Sentence of death shall not be imposed for crimes committed by persons below eighteen years of age and shall not be carried out on pregnant women.
Nothing in this article shall be invoked to delay or prevent the abolition of capital punishment by any State Party to the present Covennt.
" Article 7 of the Covenant corresponding to Article 5 of the Universal Declaration of Human Rights reaffirmed that no one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment.
So deep and profound was the United Nation 's concern with the issue of death penalty that the General Assembly in its resolotion 1396 (XIV) of 20 November, 1959 invited the Economic and Social Council to initiate study of the question of capital punishment, of the laws and practices relating thereto, and of the effects of capital punishment and the abolition thereof on the rate of criminality.
Pursuant to this resolution, the Economic and Social Council activised itself on this issue and at its instance a substantive report report was prepared by the noted French jurist Marc Ancel.
The report entitled "Capital Punishment" was the first major survey of the problem from an international stand point on the deterrent aspect of the death penalty and in its third chapter, it contained a cautious statement "that the deterrent effect of the death penalty is, to say the least, not demons 266 trated".
This view had been expressed not only by abolitionists countries in their replies to the questionaires but also by some retentionist countries.
The Ancel report alongwith the Report of the ad hoc Advisory Committee of Experts on the Prevention of Crime and the Treatment of Offenders which examined it in January 1963 was presented to the Economic and Social Council at its 35th Session when its Resolution 934 (XXXV) of 9th April 1963 was adopted.
By this Resolution the Economic and Social Council urged member governments inter alia to keep under review the efficacy of capital punishment as a deterrent to crime in their countries and to conduct research into the subject and to remove this punishment from the criminal law concerning any crime to which it is, in fact, not applied or to which there is no intention to apply it.
This Resolution clearly shows that there was no evidence supporting the supposed deterrent effect of the death penalty and that is why the Economic and Social Council suggested further research on the topic.
Moreover, the urging of the de facto abolitionist countries by this Resolution to translate the position into de jure terms constituted an implicit acceptance of the principle of abolition.
The same year, by Resolution 1918 (XVIII) of 5th December 1963, the General Assembly endorsed this action of the Economic and Social Council and requested the Economic and Social Council to invite the Commission on human Rights to study and make recommendations on the Ancel Report and the comments of the ad hoc Advisory Committee of Experts.
The General Assembly also requested the Secretary General to present a report on new developments through the Economic and Social Council.
Norval Morris, an American professor of criminal law and criminology, accordingly prepared a Report entitled "Capital Punishment; Developments 1961 1965" and amongst other things, this Report pointed out that there was a steady movement towards legislative abolition of capital punishment and observed with regard to the deterrent effect of death penalty, that: "With respect to the influence of the abolition of capital punishment upon the incidence of murder, all of the available data suggest that where the murder rate is increasing, abolition does not appear to hasten the increase where the rate is decreasing abolition does not appear to interrupt the decrease; where the rate is stable, the presence or absence of capital punishment does not appear to affect it." 267 The Commission on Human Rights considered this Report and adopted a draft General Assembly Resolution which was submitted by the Economic and Social Council to the General Assembly and on 26th November 1968, the General Assembly adopted this draft with certain modifications as its Resolution 2393 (XXIII) inviting member governments to take various measures and requesting the Secretary General to invite member governments "to inform him of their present attitude to possible further restricting the use of the death penalty or to its total abolition" and to submit a report to the Economic and Social Council.
The Secretary General accordingly submitted his report to the Economic and Social Council at its 50th session in 1971.
This Report contained a finding that "most countries are gradually restricting the number of offences for which the death penalty is to be applied and a few have totally abolished capital offences even in war times".
The discussion in the Economic and Social Council led to the adoption of Resolution 1574 (L) of 20th May 1971 which was reaffirmed by General Assembly Resolution 2857 (XXVI) of 20th December 1971.
This latter resolution clearly affirmed that: "In order to guarantee fully the right to life, provided for in article 3 of the Universal Declaration of Human Rights, the main objective to be pursued is that of progressively restricting the number of offences for which capital punishment may be imposed, with a view to the desirability of abolishing this punishment in all countries".
(Emphasais supplied) In 1973 the Secretary General submitted to the Economic and Social Council at its 54th session his third report on capital punishment as requested by the Council and at this session, the Council adopted Resolution 1745 (LIV) in which, inter alia, it invited the Secretary General to submit to it periodic updated reports on capital punishment at five year intervals starting from 1975.
A fourth report on capital punishment was accordingly submitted in 1975 and a fifth one in 1980.
Meanwhile the General Assembly at its 32nd Session adopted Resolution 32/61 on 8th December 1977 and this Resolution re affirmed "the desirability of abolishing this" that is capital "punishment" in all countries.
268 It will thus be seen that the United Nations has gradually shifted from the position of a neutral observer concerned about but not committed on the question of death penalty, to a position favouring the eventual abolition of the death penalty.
The objective of the United Nations has been and that is the standard set by the world body that capital punishment should ultimately be abolished in all countries.
This normative standard set by the world body must be taken into account in determining whether the death penalty can be regarded as arbitrary, excessive and unreasonable so as to be constitutionally invalid.
I will now proceed to consider the relevant provisions of the Constitution bearing on the question of constitutional validity of death penalty.
It may be pointed out that our Constitution is a unique document.
It is not a mere pedantic legal text but it embodies certain human values cherished principles and spiritual norms and recognises and upholds the dignity of man.
It accepts the individual as the focal point of all development and regards his material, moral and spiritual development as the chief concern of its various provisions.
It does not treat the individual as a cog in the mighty all powerful machine of the State but places him at the centre of the constitutional scheme and focuses on the fullest development of his personality.
The Preamble makes it clear that the Constitution is intended to secure to every citizen social, economic and political justice and equality of status and opportunity and to promote fraternity assuring the dignity of the individual.
The Fundamental Rights lay down limitations on the power of the legislature and the executive with a view to protecting the citizen and confer certain basic human rights which are enforceable against the State in a court of law.
The Directive Principles of State Policy also emphasise the dignity of the individual and the worth of the human person by obligating the State to take various measures for the purpose of securing and protecting a social order in which justice social, economic and political, shall inform all the institutions of national life.
What is the concept of social and economic justice which the founding fathers had in mind is also elaborated in the various Articles setting out the Directive Principles of State Policy.
But all these provisions enacted for the purpose of ensuring the dignity of the individual and providing for his material, moral and spiritual development would be Meaningless and ineffectual unless there is rule of law to invest them with life and force.
269 Now if we look at the various constitutional provisions including the Chapters on Fundamental Rights and Directive Principles of State Policy, it is clear that the rule of law permeates the entire fabric of the Constitution and indeed forms one of its basic features.
The rule of law excludes arbitrariness; its postulate is 'intelligence without passion ' and 'reason freed from desire '.
Wherever we find arbitrariness or unreasonableness there is denial of the rule of law.
That is why Aristotle preferred a government of laws rather than of men. 'Law ', in the context of the rule of law, does not mean any law enacted by the legislative authority, howsoever arbitrary or despotic it may be.
Otherwise even under a dictatorship it would be possible to say that there is rule of law, because every law made by the dictator howsoever arbitrary and unreasonable has to be obeyed and every action has to be taken in conformity with such law.
In such a case too even where the political set up is dictatorial, it is law that governs the relationship between men and men and between men and the State.
But still it is not rule of law as understood in modern jurisprudence, because in jurisprudential terms, the law itself in such a case being an emanation from the absolute will of the dictator it is in effect and substance the rule of man and not of law which prevails in such a situation.
What is necessary element of the rule of law is that the law must not be arbitrary or irrational and it must satisfy the test of reason and the democratic form of polity seeks to ensure this element by making the framers of the law accountable to the people.
Of course, in a country like the United Kingdom, where there is no written constitution imposing fetters on legislative power and providing for judicial review of legislation, it may be difficult to hold a law to be invalid on the ground that it is arbitrary and irrational and hence violative of an essential element of the rule of law and the only remedy if at all would be an appeal to the electorate at the time when a fresh mandate is sought at the election.
But the situation is totally different in a country like India which has a written Constitution enacting Pundamental Rights and conferring power on the courts to enforce them not only against the executive but also against the legislature.
The Fundamental Rights erect a protective armour for the individual against arbitrary or unreasonable executive or legislative action.
There are three Fundamental Rights in the Constitution which are of prime importance and which breathe vitality in the concept 270 of the rule of law.
They are Articles 14, 19 and 21 which, in the words of Chandrachud, C.J. in Minverva Mills case(1) constitute a golden triangle.
It is now settled law as a result of the decision of this Court in Maneka Gandhi 's case (supra) that Article 14 enacts primarily a guarantee against arbitrariness and inhibits State action whether legislative or executive, which suffers from the vice of arbitrariness.
This interpretation placed on Article 14 by the Court in Maneka Gandhi 's case has opened up a new dimension of that Article which transcends the classificatory principle.
For a long time in the evolution of the constitutional law of our country, the courts had construed Article 14 to mean only this, namely, that you can classify persons and things for the application of a law but such classification must be based on intelligible differentia having rational relationship to the object sought to be achieved by the law.
But the court pointed out in Maneka Gandhi 's case that Article 14 was not to be equated with the principle of classification.
It was primarily a guarantee against arbitrariness in State action and the doctrine of classification was evolved only as a subsidiary rule for testing or determining whether a particular State action was arbitrary or not.
The Court said "Equality is antithetical to arbitrariness.
In fact, equality and arbitrariness are sworn enemies.
One belongs to the rule of law while the other to the whim and caprice of an absolute monarch.
Where an act is arbitrary, it is implicit in it that it is unequal both according to political logic and constitutional law and is, therefore, violative of Article 14." The Court thus laid down that every State action must be non arbitrary and reasonable; if it is not, the court would strike it down as invalid.
This view was reaffirmed by the Court in another outstanding decision in Ramana Dayaram Shetty International Airport Authority of India & Ors.
There tenders were invited by the Airport Authority for giving a contract for running a canteen at the Bombay Airport.
The invitation for tender included a condition that the applicant must have at least 5 years ' experience as a registered 2nd class hotelier.
Several persons tendered.
One was a person who had considerable experience in the catering business but he was not a registered 2nd class hotelier as required by the condition in the invitation to tender.
Yet his tender was accepted because it was the highest.
The contract given to him was challenged and the court held that the action of the Airport Authority was illegal.
The court pointed out that a ______________________ (1) ; 271 new form of property consisting of government largesse in the shape of jobs, cotracts licences, quotas, mineral rights and other benefits and services was emerging in the social welfare State that India was and it was necessary to develop new forms of protection in regard to this new kind of property.
The court held that in regard to government largesse, the discretion of the government is not unlimited in that the government cannot give or withhold largesse in its arbitrary discretion or at its sweet will.
The government action must be based on standards that are not arbitrary or irrational.
This requirement was spelt out from the application of Article 14 as a constitutional requirement, and it was held that having regard to the constitutional mandate of Article 14, the Airport Authority was not entitled to act arbitrarily in accepting the tender but was bound to conform to the standards or norms laid down by it.
The Court thus reiterated and reaffirmed its commitment against arbitrariness in State action.
It can, therefore, now be taken to be well settled that if a law is arbitrary or irrational, it would fall foul of Article 14 and would be liable to be struck down as invalid.
Now a law may contravene Article 14 because it enacts provisions which are arbitrary; as for example, they make discriminatory classification which is not founded on intelligible differentia having rational relation to the object sought to be achieved by the law or they arbitrarily select persons or things for discriminatory treatment.
But there is also another category of cases where without enactment of specific provisions which are arbitrary, a law may still offend Article 14 because it confers discretion on an authority to select persons or things for application of the law without laying down any policy or principle to guide the exercise of such discretion.
Where such unguided and unstructured discretion is conferred on an authority, the law would be violative of Article 14 because it would enable the authority to exercise such discretion arbitrarily and thus discriminate without reason.
Unfettered and uncharted discretion conferred on any authority, even if it be the judiciary, throws the door open for arbitrariness, for after all a judge does not cease to be a human being subject to human limitations when he puts on the judicial robe and the nature of the judicial process being what it is, it cannot be entirely free from judicial subjectivism.
Cardozo, J. has frankly pointed this out in his lectures on "Nature of the Judicial Process": 272 "There has been a certain lack of candor in much of the discussion of the theme, or rather perhaps in the refusal to discuss it, as if judges must lose respect and confidence by the reminder that they are subject to human limitations. if there is anything of reality in my analysis of the judicial process, they do not stand aloof on these chill and distant heights; and we shall not help the cause of truth by acting and speaking as if they do.
The great tides and currents which engulf the rest of men do not turn aside in their course and pass the judges by.
This facet of the judicial process has also been emphasized by Richard B. Brandt in his book on "Judicial Discretion" where he has said : "Much of law is designed to avoid the necessity for the judge to reach what Holmes called his 'can 't helps ', his ultimate convictions or values.
The force of precedent, the close applicability of statute law, the separation of powers, legal presumptions, statutes of limitations, rules of pleading and evidence, and above all the pragmatic assessments of fact that point to one result whichever ultimate values be assumed, all enable the judge in most cases to stop short of a resort to his personal standards.
When these prove unavailing, as is more likely in the case of courts of last resort at the frontiers of the law, and most likely in a supreme constitutional court, the judge necessarily resorts to his own scheme of values.
It may, therefore, be said that the most important thing about a judge is his philosophy; and if it be dangerous for him to have one, it is at all events less dangerous than the self deception of having none.
That is why Lord Camden described the discretion of a judge to be "the law of tyrants; it is always unknown; it is different in different men; it is casual and depends on Constitution,Tamper, and Passion.
In the best it is often times Caprice, in the worst it is every Vice, Folly and Passion to which human Nature is liable.
" Doe d. Hindson vs Kersey (1765) at p. 53 of the pamphlet published in London by J. Wilkes in 1971 entitled "Lord Camden 's Genuine Argument in giving Judgment on the Ejectment between Hindson, and others against Kersey".
Megarry J. also points out in his delightful book "Miscellany at Law" that "discretion is indeed a poor substitute for 273 principles, however, great the Judge".
Therefore, where discretion is conferred on an authority by a statute, the court always strains to find in the statute the policy or principle laid down by the legislature for the purpose of guiding the exercise of such discretion and, as pointed out by Subba Rao, J. as he then was, the court sometimes even tries to discover the policy or principle in the crevices of the statute in order to save the law from the challenge of Article 14 which would inevitably result in striking down of the law if the discretion conferred were unguided and unfettered.
But where after the utmost effort and intense search, no policy or principle to guide the exercise of discretion can be found, the discretion conferred by the law would be unguided and unstructured, like a tumultuous river overflowing its banks and that would render the law open to attack on ground of arbitrariness under Article 14.
So also Article 19 strikes against arbitrary legislation in so far as such legislation is violative of one or the other provision of clause (1) of that Article.
Sub clauses (a) to (g) of clause (1) of Article 19 enact various Fundamental freedoms; sub clause (1) guarantees freedom of speech and expression, sub clause (b), freedom to assemble peacefully and without arms; sub clause (c), freedom to form associations or unions; sub clause (d), freedom to move freely throughout the territory of India; sub clause (e) to reside and settle in any part of the territory of India and sub clause (g), freedom to practise any profession or to carry on any occupation, trade or business.
There was originally sub clause (f) in clause (1) of Article 19 which guaranteed freedom to acquire, hold and dispose of property but that sub clause was deleted by the Constitution (Forty Fourth Amendment) Act 1978.
Now the freedoms guaranteed under these various sub clauses of clause (1) of Article 19 are not absolute freedoms but they can be restricted by law, provided such law satisfies the requirement of the applicable provision in one or the other of clauses (2) to (6) of that Article.
The common basic requirement of the saving provision enacted in clauses (2) to (6) of Article 19 is that the restriction imposed by the law must be reasonable.
If, therefore, any law is enacted by the legislature which violates one or the other provision of clauses (1) of Article 19, it would not be protected by the saving provision enacted in clauses (2) to (6) of that Article, if it is arbitrary or irrational, because in that event the restriction imposed by it would a fortiorari be unreasonable.
274 The third Fundamental Right which strikes against arbitrariness in State action is that embodied in Article 21.
This Article is worded in simple language and it guarantees the right to life and personal liberty in the following terms.
No person shall be deprived of his life or personal liberty except according to procedure established by law.
" This Article also came up for interpretation in Maneka Gandhi 's case (supra).
Two questions arose before the Court in that case : one was as to what is the content of the expression "personal liberty" and the other was as to what is the meaning of the expression "except according to procedure established by law".
We are not concerned here with the first question and hence I shall not dwell upon it.
But so far as second question is concerned, it provoked a decision from the Court which was to mark the beginning of amost astonishing development of the law.
It is with this decision that the Court burst forth into un precedented creative activity and gave to the law a new dimenston and a new vitality.
Until this decision was given, the view held by this Court was that Article 21 merely embodied a facet of the Diceyian concept of the rule of law that no one can be deprived of his personal liberty by executive action unsupported by law.
It was intended to be no more than a protection against executive action which had no authority of law.
If there was a law which provided some sort of procedure, it was, enough to deprive a person of his life or personal liberty.
Even if, to take an example cited by S.R. Das, J, in his Judgment in A.K. Gopalan vs State of Madras(1) the law provided that the Bishop of Rochester be boiled in old, it would be valid under Article 21.
But in Maneka Gandhi 's case (supra) which marks a watershed in the history of development of constitutional law in our country, this Court for the first time took the view that Article 21 affords protection not only against executive action but also against legislation and any law which deprives a person of his life or personal liberty would be invalid unless it prescribes a procedure for such deprivation which is reasonable fair and just.
The concept of reasonableness, it was held, runs through the entire fabric of the Constitution and it is not enough for the law merely to provide some semblance of a procedure but the procedure for depriving a ___________ (1) ; 275 person of his life or personal liberty must be rasonable, fair and just.
It is for the court to determine whether in a particular case the procedure is reasonable, fair and just and if it is not, the court will strike down the law as invalid.
If therefore a law is enacted by the legislature which deprives a person of the life and 'life ' according to the decision of this Court in Francis Coralie Mullen 's vs Administrator, Union Territory of Delhi and Ors.,(1) would include not merely physical existence but also the use of any faculty or limb as also the right to live with human dignity or any aspect of his personal liberty, it would offend against Article 21 if the procedure prescribed for such deprivation is arbitrary and unreasonable.
The word 'procedure ' in Article 21 is wide enough to cover the entire process by which deprivation is effected and that would include not only the adjectival but also the substantive part of the law.
Take for example, a law of preventive detention which sets out the grounds on which a person may be preventively detained.
If a person is preventively detained on a ground other than those set out in the law, the preventive detention would obviously not be according to the procedure prescribed by the law, because the procedure set out in the law for preventively detaining a person prescribes certain specific grounds on which alone a person can be preventively detained, and if he is detained on any other ground, it would be violative of Article 21.
Every facet of the law which deprives a person of his life or personal liberty would therefore have to stand the test of reasonableness, fairness and justness in order to be outside the inhibition of Article 21.
It will thus be seen that the rule of law has much greater vitality under our Constitution that it has in other countries like the United Kingdom which has no constitutionally enacted Fundamental Rights.
The rule of law has really three basic and fundamental assumptions one is that law making must be essentially in the hands of a democratically elected legislature, subject of course to any power in the executive in an emergent situation to promulgate ordinances effective for a short duration while the legislature is not in session as also to enact delegated legislation in accordance with the guidelines laid down by the legislature; the other is that, even in the hands of a democratically elected legislature, there should not be unfettered legislative power, for, as Jefferson said: "Let no man be trusted with power but tie him down from making mischief by the _____________________ (1) ; 276 chains of the Constitution"; and lastly there must be an independent judicially to protect the citizen against excesses of executive and legislative power.
Fortunately, whatever uncharitable and irresponsible critics might say when they find a decision of the court going against the view held by them, we can confidently assert that we have in our country all these three elements essential to the rule of law.
It is plain and indisputable that under our Constitution law cannot be arbitrary or irrational and if it is, it would be clearly invalid, whether under Article 14 or Article 19 or Article 21 whichever be applicable.
It is in the light of these constitutional provisions that I must consider whether death penalty provided under Section 302 of the Indian Penal Code read with section 354 sub section (3) of the Code of Criminal Procedure is constitutionally valid.
Now one thing is certain that the Constitution does not in so many terms prohibit capital panishment.
In fact, it recognises death sentence as one of the penalties which may be imposed by law.
Article 21 provides inter alia that no one shall be deprived of his life except according to procedure established by law and this clearly postulates that a person may be deprived of his life in accordance with the procedure prescribed by law or in other words, law may provide a procedure, which of course according to the decision of this Court in Maneka Gandhi 's case (supra) must be reasonable, fair and just procedure, for inflicting death penalty on a person depriving him of his life.
Clause(c) of Article 72 also recognises the possibility of a sentence of death being imposed on a person convicted of an offence inasmuch as it provides that the President shall have the power to suspend, remit or commute the sentence of any person who is convicted of an offence and sentenced to death.
It is therefore not possible to contend that the imposition of death sentence for conviction of an offence is in all cases forbidden by the Constitution.
But that does not mean that the infliction of death penalty is blessed by the Constitution or that it has the imprimatur or seal of approval of the Constitution.
The Constitution is not a transient document but it is meant to endure for a long time to come and during its life, situations may arise where death penalty may be found to serve a social purpose and its prescription may not be liable to be regarded as arbitrary or unreasonable and therefore to meet such situations, the Constitution had to make a provision and this it did in Article 21 and clause (c) of Article 72 so that, even where death penalty is prescribed by any 277 law and it is otherwise not unconstitutional, it must still comply with the requirement of Article 21 and it would be subject to the clemency power of the President under clause (c) of Article 72.
The question would however still remain whether the prescription of death penalty by any particular law is violative of any provision of the Constitution and is therefore rendered unconstitutional.
This question has to be answered in the present case with reference to section 302 of the Indian Penal Code read with section 354 sub section (3) of the Code of Criminal Procedure.
Now in order to answer this question it is necessary first of all to examine the legislative trend in our country so far as the imposition of death penalty is concerned.
A "brief survey of the trend of legislative endeavours" will, as pointed out by Krishna Iyer, J. in Rajendra Prasad vs State of U.P.(1) "serve to indicate whether the people 's consciousness has been protected towards narrowing or widening the scope for infliction of death penalty.
" If we look at the legislative history of the relevant provisions of the Indian Penal Code and the Code of Criminal Procedure we find that in our country there has been a gradual shift against the imposition of death penalty.
"The legislative development, through several successive amendments had shifted the punitive centre of gravity from life taking to life sentence.
" Sub section (5) of section 367 of the Code of Criminal Procedure 1898 as it stood prior to its amendment by Act 26 of 1955 provided : "If the accused is convicted of an offence punishable with death, and the court sentences to any punishment other than death, the court shall in its judgment state the reasons why sentence of death was not passed." This provision laid down that if an accused was convicted of an offence punishable with death, the imposition of death sentence was the rule and the awarding of a lesser sentence was an exception and the court had to state the reasons for not passing the sentence of death.
In other words, the discretion was directed positively towards death penalty.
But, by the Amending Act 26 of 1955 which came into force with effect from 1st January 1956, this provision was deleted with the result that from and after that date, it was left to the discretion of the court on the facts of each case to pass a sen __________________ (1) ; 278 tence of death or to award a lesser sentence.
Where the court found in a given case that, on the facts and circumstances of the case, the death sentence was not called for or there were extenuating circumstances to justify the passing of the lesser sentence, the court would award the lesser sentence and not impose the death penalty.
Neither death penalty nor life sentence was the rule under the law as it stood after the abolition of sub section (5) of the section 367 by the Amending Act 26 of 1955 and the court was left "equally free to award either sentence".
But then again, there was a further shift against death penalty by reason of the abolitionist pressure and when the new Code of Criminal Procedure 1973 was enacted, section 354 sub section (3) provided ; "When the conviction is for a sentence punishable with death or, in the alternative, with imprisonment for life or imprisonment for a term of years, the judgment shall state the reasons for the sentence awarded and, in the case of sentence of death, special reasons for such sentence.
" The court is now required under this provision to state the reasons for the sentence awarded and in case of sentence of death, special reasons are required to be stated.
It will thus be seen that life sentence is now the rule and it is only in exceptional cases, for special reasons, that death sentence can be imposed.
The legislature has however not indicated what are the special reasons for which departure can be made from the normal rule and death penalty may be inflicted.
The legislature has not given any guidance as to what are those exceptional cases in which, deviating from the normal rule, death sentence may be imposed.
This is left entirely to the unguided discretion of the court, a feature, which, in my opinion, has lethal consequences so far as the constitutionality of death penalty is concerned.
But one thing is clear that through these legislative changes "the disturbed conscience of the State on the question of legal threat to life by way of death sentence has sought to express itself legislatively", the stream of tendency being towards cautions abolition.
It is also interesting to note that a further legislative attempt towards restricting and rationalising death penalty was made in the late seventies.
A Bill called Indian Penal Code (Amendment) Bill 1972 for amending section 302 was passed by the Rajya Sabha in 1978 and it was pending in the Lok Sabha at the time when Rajendra 279 Prasad 's case was decided and though it ultimately lapsed with the dissolution of the Lok Sabha, it shows how strongly were the minds of the elected representatives of the people agitated against "homicidal exercise of discretion" which is often an "obsession with retributive justice in disguise".
This Bill sought to narrow drastically the judicial discretion to impose death penalty and tried to formulate the guidelines which should control the exercise of judicial exercise in this punitive area.
But unfortunately the Bill though passed by the Rajya Sabha could not see its way through the Lok Sabha and was not enacted into law.
Otherwise perhaps the charge against the present section of 302 of the Indian Penal Code read with section 354 sub section (3) of the Code of Criminal Procedure that it does not indicate any policy or principle to guide the exercise of judicial discretion in awarding death penalty, would have been considerably diluted, though even then, I doubt very much whether that section could have survived the attack against its constitutionally on the ground that it still leaves the door open for arbitrary exercise of discretion in imposing death penalty.
Having traced the legislative history of the relevant provisions in regard to death penalty, I will now turn my attention to what great and eminent men have said in regard to death penalty, for their words serve to bring out in bold relief the utter barbarity and futility of the death penalty.
Jaiprakash Narain, the great humanist, said, while speaking on abolition of death penalty ; "To my mind, it is ultimately a question of respect for life and human approach to those who commit grievous hurts to others.
Death sentence is no remedy for such crimes.
A more humane and constructive remedy is to remove the culprit concerned from the normal milieu and treat him as a mental case.
I am sure a large proportion of the murderers could be weaned away from their path and their mental condition sufficiently improved to become useful citizens.
In a minority of cases, this may not be possible.
They may be kept in prison houses till they die a natural death.
This may cast a heavier economic burden on society than hanging.
But I have no doubt that a humane treatment even of a murderer will enhance man 's dignity and make society more human.
(emphasis added) 280 Andrei Sakharov in a message to the Stockholm Conference on Abolition of death Penalty organised by Amnesty International in 1978 expressed himself firmly against death penalty: "I regard the death penalty as a savage and immoral institution which undermines the moral and legal foundations of a society.
A state, in the person of its functionaries who like all people are inclined to making superficial conclusions, who like all people are subject to influence, connections, prejudices and egocentric motivations for their behaviour, takes upon itself the right to the most terrible and irreversible act the deprivation of life.
Such a State cannot expect an improvement of the moral atmosphere in its country.
I reject the notion that the death penalty has any essential deterrent effect on potential offenders.
I am convinced that the contrary is true that savagery begets only savagery.
I am convinced that society as a whole and each of its members individually, not just the person who comes before the courts, bears a responsibility for the occurrence of a crime.
I believe that the death penalty has no moral or practical justification and represents a survival of barbaric customs of revenge.
Blood thirsty and calculated revenge with no temporary insanity on the part of the judges, and therefore, shameful and disgusting.
" (emphasis added) Tolstoy also protested against death sentence in an article "I Cannot be Silent": "Twelve of those by whose labour we live, the very men whom we have depraved and are still depraving by every means in our power from the poison of vodka to the terrible falsehood of a creed we impose on them with all our might, but do not ourselves believe in twelve of those men strangled with cords by those whom we feed and clothe and house, and who have depraved and still continue to deprave them.
Twelve husbands, fathers, and sons, from among those upon whose kindness, industry and simplicity alone rests the whole of Russian life, are seized, imprisoned, and shackled.
Then their hands are tied 281 behind their backs lest they should seize the ropes by which they are to be hung, and they are led to the gallows.
" So also said Victor Hugo in the spirit of the Bishop created by him in his 'Les Miserables ' : "We shall look upon crime as a disease.
Evil will be treated in charity instead of anger.
The change will be simple and sublime.
The cross shall displace the scaffold, reason is on our side, feeling is on our side, and experience is on our side." Mahatma Gandhi also wrote to the same effect in his simple but inimitable style : "Destruction of individuals can never be a virtuous act.
The evil doers cannot be done to death.
Today there is a movement afoot for the abolition of capital punishment and attempts are being made to convert prisons into hospitals as if they are persons suffering from a disease." This Gandhian concept was translated into action with commendable success in the case of Chambal dacoits who laid down their arms in response to the call of Vinobha Bhave and Jaiprakash Narayan.
See "Crime and Non violence" by Vasant Nargolkar.
There is also the recent instance of surrender of Malkhan Singh, a notorious dacoit of Madhya Pradesh.
Have these dacoits not been reformed ? Have they not been redeemed and saved ? What social purpose would have been served by killing them ? I may also at this stage make a few observations in regard to the barbarity and cruelty of death penalty, for the problem of constitutional validity of death penalty cannot be appreciated in its proper perspective without an adequate understanding of the true nature of death penalty and what it involves in terms of human anguish and suffering.
In the first place, death penalty is irrevocable; it cannot be recalled.
It extinguishes the flame of life for ever and is plainly destructive of the right to life, the most precious right of all, a right without which enjoyment of no other rights is possible.
It silences for ever a living being and despatches him to that 'undiscovered country from whose bourn no traveller returns ' nor, 282 once executed, 'can stored urn or animated bust back to its mansion call the fleeting breath '.
It is by reason of its cold and cruel finality that death penalty is qualitatively different from all other forms of punishment.
If a person is sentenced to imprisonment, even if it be for life, and subsequently it is found that he was innocent and was wrongly convicted, he can be set free.
Of course the imprisonment that he has suffered till then cannot be undone and the time he has spent in the prison cannot be given back to him in specie but he can come back and be restored to normal life with his honour vindicated if he is found innocent.
But that is not possible where a person has been wrongly convited and sentencted to death and put out of existence in pursuance of the sentence of death.
In his case, even if any mistake is subsequently discovered, it will be too late; in every way and for every purpose it will be too late, for he cannot be brought back to life.
The execution of the sentence of death in such a case makes miscarriage of justice irrevocable.
On whose conscience will this death of an innocent man lie ? The State through its judicial instrumentality would have killed an innocent man.
How is it different from a private murder ? That is why Lafayatte said : "I shall ask for the abolition of the penalty of death until I have the infallibility of human judgment demonstrated me.
" It is argued on behalf of the retentionists that having regard to the elaborate procedural safeguards enacted by the law in cases involving capital punishment, the possibility of mistake is more imaginary than real and these procedural safeguards virtually make conviction of an innocent person impossible.
But I do not think this argument is well founded.
It is not supported by factual data.
Hugo Bedau in his well known book, "The Death Penalty in America" has individually documented seventy four cases since 1893 in which it has been responsibly charged and in most of them proved beyond doubt, that persons were wrongly convicted of criminal homicide in America.
Eight out of these seventy four, though innocent, were executed.
Redin, Gardener, Frank and others have specifically identified many more additional cases.
These are cases in which it has been possible to show from discovery of subsequent facts that the convictions were erroneous and innocent persons were put to death, but there may be many more cases where by reason of the difficulty of uncovering the facts after conviction, let alone after execution, it may not be possible to establish that there was miscarriage of justice.
The jurist Olivecroix, applying a calculus of probabilities to the chance of judicial error, concluded as far back 283 as in 1860 that approximately one innocent man was condemned out of every 257 cases.
The proportion seems low but only in relation to moderate punishment.
In relation to capital punishment, the proportion is infinitivelly high.
When Hugo wrote that he preferred to call the guillotine Lesurques (the name of an innocent man guillotined in the Carrier de Lyon case) he did not mean that every man who was decapitated was a Lesurques, but that one Lesurques was enough to wipe out the value of capital punishment for ever.
It is interesting to note that where cases of wrongful execution have come to public attention, they have been a major force responsible for bringing about abolition of death penalty.
The Evans case in England in which an innocent man was hanged in 1949 played a large role in the abolition of capital punishment in that country.
Belgium also abjured capital punishment on account of one such judicial error and so did Wisconsin, Rhode Island and Maine in the United States of America.
Howsoever careful may be the procedural safeguards erected by the law before death penalty can be imposed, it is impossible to eliminate the chance of judicial error.
No possible judicial safeguards can prevent conviction of the innocent.
Students of the criminal process have identified several reasons why innocent men may be convicted of crime.
In the first place, our methods of investigation are crude and archaic.
We are, by and large, ignorant of modern methods of investigation based on scientific and technological advances.
Our convictions are based largely on oral evidence of witnesses.
Often, witnesses perjure themselves as they are motivated by caste, communal and factional considerations.
Some times they are even got up by the police to prove what the police believes to be a true case.
Sometimes there is also mistaken eye witness identification and this evidence is almost always difficult to shake in cross examination.
Then there is also the possibility of a frame up of innocent men by their enemies.
There are also cases where an over zealous prosecutor may fail to disclose evidence of innocence known to him but not known to the defence.
The possibility of error in judgment cannot therefore be ruled out on any theoretical considerations.
It is indeed a very live possibility and it is not at all unlikely that so long as death penalty remains a constitutionally valid alternative, the court or the State acting through the instrumentality of the court may have on its conscience the blood of an innocent man.
284 Then again it is sometimes argued that, on this reasoning, every criminal trial must necessarily raise the possibility of wrongful conviction and if that be so, are we going to invalidate every form of punishment ? But this argument, I am afraid, is an argument of despair.
There is a qualitative difference between death penalty and other forms of punishment.
I have already pointed out that the former extinguishes the flame of life altogether and is irrevocable and beyond recall while the latter can, at least to some extent be set right, if found mistaken.
This vital difference between death penalty and imprisonment was emphasized by Mahatma Gandhi when he said in reply to a German writer : "I would draw distinction between killing and detention and even corporal punishment.
I think there is a difference not merely in quantity but also in quality.
I can recall the punishment of detention.
I can make reparation to the man upon whom I inflict corporal punishment.
But once a man is killed, the punishment is beyond recall or reparation.
" The same point was made by the distinguished criminologist Leon Radzinowicz when he said : "The likelihood of error in a capital sentence case stands on a different footing altogether.
" Judicial error in imposition of death penalty would indeed be a crime beyond punishment.
This is the drastic nature of death penalty, terrifying in its consequences, which has to be taken into account in determining in constitutional validity.
It is also necessary to point out that death penalty is barbaric and inhuman in its effect, mental and physical upon the condemned man and is positively cruel.
Its psychological effect on the prisoner in the Death Row is disastrous.
One Psychiatrist has described Death Row as a "grisly laboratory" "the ultimate experiment alstress in which the condemned prisoner 's personality is incredibly brutalised." He points out that "the strain of existence on Death Row is very likely to produce. . acute psychotic breaks." Vide the article of "West on Medicine and Capital Punishment.
" Some inmates are driven to ravings or delusions but the majority sink into a sort of catatonic numbness under the over whelming stress.
" Vide "The Case against Capital Punishment" by the Washington Research Project.
Intense mental suffering is inevitably associated with confinement under sentence of death.
Anticipation of approaching 285 death can and does produce stark terror.
Vide article on "Mental Suffering under Sentence of Death".
Justice Brennan in his opinion in Furman vs Georgia(1) gave it as a reason for holding the capital punishment to be unconstitutional that mental pain is an inseparable part of our practice of punishing criminals by death, for the prospect of pending execution exacts a frightful toll during the inevitable long wait between the imposition of sentence and the actual infliction of death.
" Krishna Iyer, J. also pointed out in Rajendra Prasad 's case (supra) that because the condemned prisoner had "the hanging agony hanging over his head since 1973 (i.e. for six years). "he must by now be more a vegetable than a person." He added that "the excruciation of long pendency of the death sentence with the prisoner languishing near solitary suffering all the time, may make the death sentence unconstitutionally cruel and agonising." The California Supreme Court also, in finding the death penalty per se unconstitutional remarked with a sense of poignancy : "The cruelty of capital punishment lies not only in the execution itself and the pain incident thereto, but also in the dehumanising effects of the lengthy imprisonment prior to execution during which the judicial and administrative procedures essential to due process of law are carried out.
Penologists and medical experts agree that the process of carrying out a verdict of death is often so degrading and brutalizing to the human spirit as to constitute psychological torture.
" In Re Kemmler(2) the Supreme Court of the United States accepted that "punishments are cruel when they involve a lingering death, something more than the mere extinguishment of life.
" Now a death would be as lingering if a man spends several years in a death cell avaiting execution as it would be if the method of execution takes an unacceptably long time to kill the victim.
The pain of mental lingering can be as intense as the agony of physical lingering.
See David Pannick on "Judicial Review of the Death Penalty." Justice Miller also pointed out in Re Medley(3) that "when a prisoner sentenced by a court to death is confined to the ______________ (1) ; (2) ; (3) ; 286 penitentiary awaiting the execution of the sentence, one of the most horrible feelings to which he can be subjected during that time is the uncertainty during the whole of it. . as to the precise time when his execution shall take place.
" We acknowledged that such uncertainty is inevitably 'accompanied by an immense mental anxiety amounting to a great increase of the offender 's punishment. ' But quite apart from this excruciating mental anguish and severe psychological strain which the condemned prisoner has to undergo on account of the long wait from the date when the sentence of death is initially passed by the sessions court until it is confirmed by the High Court and then the appeal against the death sentence is disposed of by the Supreme Court and if the appeal is dismissed, then until the clemency petition is considered by the Pesident and if it is turned down, then until the time appointed for actual execution of the sentence of death arrives, the worst time for most of the condemned prisoners would be the last few hours when all certainty is gone and the moment of death is known.
Dostoyevsky who actually faced a firing squad only to be reprieved at the last instant, described this experience in the following words : ". the chief and the worst pain is perhaps not inflicted by wounds, but by your certain knowledge that in an hour, in ten minutes, in half a minute, now this moment your soul will fly out of your body, and that you will be a human being no longer, and that that 's certain the main thing is that it is certain .
Take a soldier and put him in front of a cannon in battle and fire at him and he will still hope, but read the same soldier his death sentence for certain, and he will go mad or burst out crying.
Who says that human nature is capable of bearing this without madness ? Why this cruel, hideous, unnecessary and useless mockery ? Possibly there are men who have sentences of death read out to them and have been given time to go through this torture, and have then been told, You can go now, you 've been reprieved.
Such men could perhaps tell us.
It was of agony like this and of such horror that Christ spoke.
No you can 't treat a man like that.
" 287 We have also accounts of execution of several prisoners in the United States which show how in these last moment condemned prisoners often simply disintegrate.
Canns has in frank and brutal language bared the terrible psychological cruelty of capital punishment : "Execution is not simply death.
It is just as different in essence, from the privation of life as a concentration camp is from prison. .
It adds to death a rule, a public premeditation known to the future victim, an organisation, in short, which is in itself a source of moral sufferings more terrible than death.
For there to be equivalence, the death penalty would have to punish a criminal who had warned his victim of the date at which he would inflict a horrible death on him and who, from that moment onward, had confined him at his mercy for months.
Such a monster is not encountered in private life.
" There can be no stronger words to describe the utter depravity and inhumanity of death sentence.
The physical pain and suffering which the execution of the sentence of death involves is also no less cruel and inhuman.
In India, the method of execution followed is hanging by the rope.
Electrocution or application of lethal gas has not yet taken its place as in some of the western countries.
It is therefore with reference to execution by hanging that I must consider whether the sentence of death is barbaric and inhuman as entailing physical pain and agony.
It is no doubt true that the Royal Commission on Capital Punishment 1949 53 found that hanging is the most humane method of execution and so also in Ichikawa vs Japan,(1) the Japanese Supreme Court held that execution by hanging does not corrospond to 'cruel punishment ' inhibited by Article 36 of the Japanese Constituion.
But whether amongst all the methods of execution, hanging is the most humane or in the view of the Japanese Supreme Court, hanging is not cruel punishment within the meaning of Article 36, one thing is clear that hanging is undoubtedly accompanied by intense physical torture and pain.
Warden Duffy of San Quentin, a high security __________ (1) Vide : David Pannick on "Judicial Review of Death Penalty, page 73, 288 prison in the United States of America, describes the hanging process with brutal frankness in lurid details : "The day before an execution the prisoner goes through a harrowing experience of being weighed, measured for length of drop to assure breaking of the neck, the size of the neck, body measurement et cetera.
When the trap springs he dangles at the end of the rope.
There are times when the neck has not been broken and the prisoner strangles to death.
His eyes pop almost out of his head, his tongue swells and protrudes from his mouth, his neck may be broken, and the rope many times takes large portions of skin and flesh from the side of the face and that the noose is on.
He urinates, he defecates, and droppings fall to the floor while witnesses look on, and at almost all executions one or more faint or have to be helped out of the witness room.
The prisoner remains dangling from the end of the rope for from 8 to 14 minutes before the doctor, who has climbed up a small ladder and listens to his heart beat with a stethoscope, pronounces him dead.
A prison guard stands at the feet of the hanged person and holds the body steady, because during the first few minutes there is usually considerables struggling in an effort to breathe.
" If the drop is too short, there will be a slow and agonising death by strangulation.
On the other hand, if the drop is too long, the head will be torn off.
In England centuries of practice have produced a detailed chart relating a man 's weight and physical condition to the proper length of drop, but even there mistakes have been made.
In 1927, a surgeon who witnessed a double execution wrote : "The bodies were cut down after fifteen minutes and placed in an antechamber, when I was horrified to hear one of the supposed corpses give a gasp and find him making respiratory efforts, evidently a prelude to revival.
The two bodies were quickly suspended again for a quarter of an hour longer.
Dislocation of the neck is the ideal aimed at, but, out of all my post mortem findings, that has proved rather an exception, which in the majority of 289 instances the cause of death was strangulation and asphyxin.
" These passages clearly establish beyond doubt that the execution of sentence of death by hanging does involve intense physical pain and suffering, though it may be regarded by some as more humane than electrocution or application of lethal gas.
If this be the true mental and physical effect of death sentence on the condemned prisoner and if it causes such mental anguish, psychological strain and physical agony and suffering, it is difficult to see how it can be regarded as anything but cruel and inhuman.
The only answer which can be given for justifying this infliction of mental and physical pain and suffering is that the condemned prisoner having killed a human being does not merit any sympathy and must suffer this punishment because he 'deserves ' it.
No mercy can be shown to one who did not show any mercy to others.
But, as I shall presently point out, this justificatory reason cannot commend itself to any civilised society because it is based on the theory of retribution or retaliation and at the bottom of it lies the desire of the society to avenge itself against the wrong doer.
That is not a permissible penological goal.
It is in the context of this background that the question has to be considered whether death penalty provided under section 302 of the Indian Penal Code read with section 354 sub section (3) of the Code of Criminal Procedure is arbitrary and irrational for if it is, it would be clearly violative of Articles 14 and 21.
I am leaving aside for the moment challenge to death penalty under Article 19 and confining myself only to the challenge under Article 14 and 21.
So far as this challenge is concerned the learned counsel appearing on behalf of the petitioner contended that the imposition of death penalty under section 302 of the Indian Penal Code read with section 354 sub section (3) of the Code of Criminal Procedure was arbitrary and unreasonable, firstly because it was cruel and inhuman, disproportionate and excessive, secondly because it was totally unnecessary and did not serve any social purpose or advance any constitutional value and lastly because the discretion conferred on the court to award death penalty was not guided by any policy or principle laid down by the legislature but was wholly arbitrary.
The Union of India as also the States supporting it sought to counter this argu 290 ment of the petitioners by submitting first that death penalty is neither cruel nor inhuman, neither disproportionate nor excessive, secondly, that it does serve a social purpose inasmuch as it fulfils two penological goals namely, denunciation by the community and deterrence and lastly, that the judicial discretion in awarding death penalty is not arbitrary and the court can always evolve standards or norms for the purpose of guiding the exercise of its discretion in this punitive area.
These were broadly the rival contentions urged on behalf of the parties and I shall now proceed to examine them in the light of the observations made in the preceding paragraphs.
The first question that arises for consideration on these contentions is and that is a vital question which may well determine the fate of this challenge to the constitutional validity of death penalty on whom does the burden of proof lie in a case like this ? Does it lie on the petitioners to show that death penalty is arbitrary and unreasonable on the various grounds urged by them or does it rest on the State to show that death penalty is not arbitrary or unreasonable and serves a legitimate social purpose.
This question was debated before us at great length and various decisions were cited supporting one view or the other.
The earliest decision relied on was that of Saghir Ahmed vs State of Uttar Pradesh(1) where it was held by this Court that if the petitioner succeeds in showing that the impugned law ex facie abridges or transgresses the rights coming under any of the sub clauses of clause (1) of Article 19, the onus shifts on the respondent State to show that the legislation comes within the permissible limits authorised by any of clauses (2) to (6) as may be applicable to the case, and also to place material before the court in support of that contention.
If the State fails to discharge this burden, there is no obligation on the petitioner to prove negatively that the impugned law is not covered by any of the permissive clauses.
This view as to the onus of proof was reiterated by this Court in Khyerbari Tea Company vs State of Assam(2).
But contended the respondents, a contrary trend was noticeable in some of the subsequent decisions of this Court and the respondents relied principally on the decision in B. Banerjee vs Anita Pan(3) where Krishna Iyer, J. speaking on behalf of himself and Beg, J. as he then was, _________________________ (1) ; (2) ; (3) ; 291 recalled the following statement of the law from the Judgment of this Court in Ram Krishna Dalmia vs S.R. Tendolkar & others: (1) "there is always a presu mption in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles." and "that it must be presumed that the legislature understands and correctly appreciates the need of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds." and added that "if nothing is placed on record by the challengers, the verdict ordinarily goes against them.
" Relying inter alia on the decision of this Court in State of Bombay vs R.M.D. Chamarbaugwala(2) the learned Judge again emphasized: "Some courts have gone to the extent of holding that there is a presumption in favour of constitutionality, a law will not be declared unconstitutional unless the case is so clear as to be free from doubt." These observations of Krishna Iyer, J. undoubtedly seem to support the contention, of the respondents, but it may be pointed out that what was said by this Court in the passage quoted above from the judgment in Ram Krishna Dalmia 's case (supra) on which reliance was placed by Krishna Iyer, J. was only with reference to the challenge under Article 14 and the Court was not considering there the challenge under Articles 19 or 21.
This statement of the law contained in Ram Krishna Dalmia 's case (supra) could not therefore be applied straightaway without anything more in a case where a law was challenged under Articles 19 or 21.
The fact, however, remains that Krishna Iyer, J. relied on this statement of the law even though the case before him involved a challenge under Article 19(1) (f) and not under Article 14.
Unfortunately, it seems that the attention of the learned Judge was not invited to the decisions of this Court in Saghir Ahmed 's case and Khyerbari Tea Company 's case _______________________ (1) (2) ; 292 (supra) which were cases directly involving challenge under Article 19.
These decisions were binding on the learned Judge and if his attention had been drawn to them, I am sure that he would not have made the observations that he did casting on the petitioners the onus of establishing "excessiveness or perversity in the restrictions imposed by the statute" in a case alleging violation of Article 19.
These observations are clearly contrary to the law laid down in Saghir Ahmed and Khyerbari Tea Company cases (supra) The respondents also relied on the observations of Fazal Ali, J. in Pathumma vs State of Kerala (1).
There the constitutional validity of the Kerala Agriculturists ' Debt Relief Act 1970 was challenged on the ground of violation of both Articles 14 and 19(1) (f).
Before entering upon a discussion of the arguments bearing on the validity of this challenge, Fazal Ali.
J. speaking on behalf of himself, Beg, C.J., Krishna Iyer and Jaswant Singh.
observed that the court will interfere with a statute only "when the statute is clearly violative of the right conferred on the citizen under Part III of the Constitution" and proceeded to add that it is on account of this reason "that courts have recognised that there is always a presumption in favour of the constitutionality of a statute and the onus to prove its invalidity lies on the party which assails the same.
" The learned Judge then quoted with approval the following passage from the Judgment of S.R. Das, C.J. in Mohd. Hanif vs State of Bihar (2) "The pronouncements of this Court further establish, amongst other things, that there is always a presumption in favour of the constitutionality of an enactment and that the burden is upon him, who attacks it, to show that there has been a clear violation of the constitutional principles.
The Courts, it is accepted, must presume that the legislature understands and correctly appreciates the needs of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds.
" It is difficult to see how these observations can be pressed into service on behalf of the respondents.
The passage from the judgment of _______________________ (1) (2) ; 293 S.R. Das, C.J. in Mohd. Hanif 's case (supra) relied upon by Fazal Ali, J. occurs in the discussion relating to the challenge under Article 14 and obviously it was not intended to have any application in a case involving challenge under Article 19 or 21.
In fact, while discussing the challenge to the prevention of cow slaughter statutes under Article 19(1)(g), S.R. Das, C.J. proceeded to consider whether the restrictions imposed by the impugned statutes on the Fundamental Rights of the petitioners under Article 19(1)(g) were reasonable in the interest of the general public so as to be saved by clause (6) of Article 19.
Moreover, the observations made by Fazal Ali, J. were general in nature and they were not directed towards consideration of the question as to the burden of proof in cases involving violation of Article 19.
What the learned Judge said was that there is always a presumption in favour of the constitutionality of a statute and the court will not interfere unless the statute is clearly violative of the Fundamental Rights conferred by Part III of the Constitution.
This is a perfectly valid statement of the law and no exception can be taken to it.
There must obviously be a presumption in favour of the constitutionality of a statute and initially it would be for the petitioners to show that it violates a Fundamental Right conferred under one or the other sub clauses of clause (1) of Article 19 and is therefore unconstitutional, but when that is done, the question arises, on whom does the burden of showing whether the restrictions are permissible or not, lie? That was not a question dealt with by Fazal Ali, J. and I cannot therefore read the observations of the learned Judge as, in any manner, casting doubt on the validity of the statement of law contained in Saghir Ahmed and Khyerbari Tea Company 's cases (supra).
It is clear on first principle that subclauses (a) to (g) of clause (1) of Article 19 enact certain fundamental freedoms and if sub clauses (2) to (6) were not there, any law contravening one or more of these fundamental freedoms would have been unconstitutional.
But clauses (2) to (6) of Article 19 save laws restricting these fundamental freedoms, provided the restrictions imposed by them fall within certain permissible categories.
Obviously therefore, when a law is challenged on the ground that it imposes restrictions on the freedom guaranteed by one or the other subclause of clause (1) of Article 19 and the restrictions are shown to exist by the petitioner, the burden of establishing that the restrictions fall within any of the permissive clauses (2) to (6) which may be applicable, must rest upon the State.
The State would have to produce material for satisfying the court that the restrictions imposed 294 by the impugned law fall within the appropriate permissive clause from out of clauses (2) to (6) of Article 19.
Of course there may be cases where the nature of the legislation and the restrictions imposed by it may be such that the court may, without more, even in the absence of any positive material produced by the State, conclude that the restrictions fall within the permissible category, as for example, where a law is enacted by the legislature for giving effect to one of the Directive Principles of State Policy and prima facie, the restrictions imposed by it do not appear to be arbitrary or excessive.
Where such is the position, the burden would again shift and it would be for the petitioner to show that the restrictions are arbitrary or excessive and go beyond what is required in public interest.
But, once it is shown by the petitioner that the impugned law imposes restrictions which infringe one or the other sub clause of clause (1) of Article 19, the burden of showing that such restrictions are reasonable and fall within the permissible category must be on the State and this burden the State may discharge either by producing socio economic data before the court or on consideration of the provisions in the impugned law read in the light of the constitutional goals set out in the Directive Principles of State Policy.
The test to be applied for the purpose of determining whether the restrictions imposed by the impugned law are reasonable or not cannot be cast in a rigid formula of universal application, for, as pointed out by Patanjali Shastri, J. in State of Madras vs V.J. Row (1) "no abstract standard or general pattern of reasonableness can be laid down as applicable to all cases".
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, the value of human life, the disproportion of the imposition, the social philosophy of the Constitution and the prevailing conditions at the time would all enter into the judicial verdict.
And we would do well to bear in mind that in evaluating such elusive factors and forming his own conception of what is reasonable in all the circumstances of a given case, it is inevitable that the social philosophy and the scale of values of the judge participating in the decision would play a very important part.
Before I proceed to consider the question of burden of proof in case of challenge under Article 14, it would be convenient first to (1) ; 295 deal with the question as to where does the burden of proof lie when the challenge to a law enacted by the legislature is based on violation of Article 21.
The position in regard to onus of proof in a case where the challenge is under Article 21 is in my opinion much clearer and much more free from doubt or debate than in a case where the complaint is of violation of clause (1) of Article 19.
Wherever there is deprivation of life, and by life I mean not only physical existence, but also use of any faculty or limb through which life is enjoyed and basic human dignity, or of any aspect of personal liberty, the burden must rest on the State to establish by producing adequate material or otherwise that the procedure prescribed for such deprivation is not arbitrary but is reasonable, fair and just.
I have already discussed various circumstances bearing upon the true nature and character of death penalty and these circumstances clearly indicate that it is reasonable to place on the State the onus to prove that death penalty is not arbitrary or unreasonable and serves a compelling State interest.
In the first place, death penalty destroys the most fundamental right of all, namely, the right to life which is the foundation of all other fundamental rights.
The right to life stands on a higher footing than even personal liberty, because personal liberty too postulates a sentient human being who can enjoy it.
Where therefore a law authorises deprivation of the right to life the reasonableness, fairness and justness of the procedure prescribed by it for such deprivation must be established by the State.
Such a law would be 'suspect ' in the eyes of the court just as certain kinds of classification are regarded as 'suspect ' in the United States of America.
Throwing the burden of proof of reasonableness, fairness and justness on the State in such a case is a homage which the Constitution and the courts must pay to the righ to life.
It is significant to point out that even in case of State action depriving a person of his personal liberty, this Court has always cast the burden of proving the validity of such action on the State, when it has been challenged on behalf of the person deprived of his personal liberty.
It has been consistently held by this Court that when detention of a person is challenged in a habeas corpus petition, the burden of proving the legality of the detention always rests on the State and it is for the State to justify the legality of the detention.
This Court has shown the most zealous regard for personal liberty and treated even letters addressed by prisoners and detenus as writ petitions and taken action upon them and called upon the State to show how the detention is justified.
If this be the anxiety and concern shown by 296 the court for personal liberty, how much more should be the judicial anxiety and concern for the right to life which indisputably stands on a higher pedestal.
Moreover, as already pointed out above, the international standard or norm set by the United Nations is in favour of abolition of death penalty and that is the ultimate objective towards which the world body is moving.
The trend of our national legislation is also towards abolition and it is only in exceptional cases for special reasons that death sentence is permitted to be given.
There can be no doubt that even under our national legislation death penalty is looked upon with great disfavour.
The drastic nature of death penalty involving as it does the possibility of error resulting in judicial murder of an innocent man as also its brutality in inflicting excruciating mental anguish severe psychological strain and agonising physical pain and suffering on the condemned prisoner are strong circumstances which must compel the State to justify imposition of death penalty.
The burden must lie upon the State show that death penalty is not arbitrary and unreasonable and serves a legitimate social purpose, despite the possibility of judicial error in convicting and sentencing an innocent man and the brutality and pain, mental as well as physical, which death sentence invariably inflicts upon the condemned prisoner.
The State must place the necessary material on record for the purpose of discharging this burden which lies upon it and if it fails to show by presenting adequate evidence before the court or otherwise that death penalty is not arbitrary and unreasonable and does serve a legitimate social purpose, the imposition of death penalty under section 302 of the Indian Penal Code read with section 354 sub section (3) of the Code of Criminal Procedure would have to be struck down as violative of the protection of Article 21.
So far as the question of burden of proof in a case involving challenge under Article 14 is concerned, I must concede that the decisions in Ram Krishan Dalmia 's case (supra) and Mohd. Hannif Qureshi 's case (supra) and several other subsequent decisions of the Court have clearly laid down that there is a presumption in favour of constitutionality of a statute and the burden of showing that it is arbitrary or discriminary lies upon the petitioner, because it must be presumed "that the legislature understands and correctly appreciates the needs of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds.
" Sarkaria, J. has pointed out in the majority judgment that underlying this presumption of constitu 297 tionality "is the rationale of judicial restraint, a recognition of the limits of judicial review, a respect for the boundaries of legislative and judicial functions and the judicial responsibility to guard the tresspass from one side or the other." The learned Judge with a belief firmly rooted in the tenets of mechanical jurisprudence, has taken the view that "the primary function of the Courts is to interpret and apply the laws according to the will of those who made them and not to transgress into the legislative domain of policy making.
" Now there can be no doubt that in adjudicating upon the constitutional validity of a statute, the Judge should show deference to the legislative judgment and should not be anxious to strike it down as invalid.
He does owe to the legislature a margin of tolerance and he must constantly bear in mind that he is not the legislator nor is the court a representative body.
But I do not agree with Sarkaria, J. when he seems to suggest that the judicial role is, as it was for Francis Bacon, 'jus dicere and not jus dare; to interpret law and not to make law or give law. ' The function of the Court undoubtedly is to interpret the law but the interpretative process is highly creative function and in this process, the Judge, as pointed out by Justice Holmes, does and must legislate.
Lord Reid ridiculed as 'a fairytale ' the theory that in some Aladdin 's cave is hidden the key to correct judicial interpretation of the law 's demands and even Lord Diplock acknowledged that "The court may describe what it is doing in tax appeals as interpretation.
So did the priestess of the Delphic Oracle.
But whoever has final authority to explain what Parliament meant by the words that it used, makes law as if the explanation it has given were contained in a new Act of Parliament.
It will need a new Act of Parliament to reverse it.
" Unfortunately we are so much obsessed with the simplicities of judicial formalism which presents the judicial role as jus dicere, that, as pointed out by David Pannick in his "Judicial Review of the Death Penalty", "we have, to a substatial extent, ignored the Judge in administering the judicial process.
So heavy a preoccupation we have made with the law, its discovery and its agents who play no creative role, that we have paid little, if any, regard to the appointment, training, qualities, demeanour and performance of the individuals selected to act as the mouth of the legal oracle.
" It is now acknowledged by leading jurists all over the world that judges are not descusitized and passionless instruments which weigh on inanimate and impartial scales of legal judgment, the evidence and the arguments presented on each side of the case.
They are not political 298 and moral enuchs able and willing to avoid impregnating the law with their own ideas and judgment.
The judicial exercise in constitutional adjudication is bound to be influenced, consciously or subconsciouly, by the social philosophy and scale of values of those who sit in judgment.
However, I agree with Sarkaria, J. that ordinarily the judicial function must be characterised by deference to legislative judgment because the legislature represents the voice of the people and it might be dangerous for the court to trespass into the sphere demarcated by the Constitution for the legislature unless the legislative judgment suffers from a constitutional infirmity.
It is a trite saying that the Court has "neither force nor will but merely judgment" and in the exercise of this judgment, it would be a wise rule to adopt to presume the constitutionality of a statute unless it is shown to be invalid.
But even here it is necessary to point out that this rule is not a rigid inexorable rule applicable at all times and in all situations.
There may conceivably be cases where having regard to the nature and character of the legislation, the importance of the right affected and the gravity the injury caused by it and the moral and social issues involved in the determination, the court may refuse to proceed on the basis of presumption of constitutionality and demand from the State justification of the legislation with a view to establishing that it is not arbitrary or discriminatory.
There are times when commitment to the values of the Constitution and performance of the constitutional role as guardian of fundamental rights demands dismissal of the usual judicial deference to legislative judgment.
The death penalty, of which the constitutionality is assailed in the present writ petitions, is a fundamental issue to which ordinary standards of judicial review are inappropriate.
The question here is one of the most fundamental which has arisen under the Constitution, namely, whether the State is entitled to take the life of a citizen under cover of judicial authority.
It is a question so vital to the identity and culture of the society and so appropriate for judicial statement of the standards of a civilised community often because of legislative apathy that "passivity and activism become platitudes through which judicial articulation of moral and social values provides a light to guide an uncertain community.
" The same reasons which have weighed with me in holding that the burden must lie on the State to prove that the death penalty provided under section 302 of the Indian Penal Code read with section 354 sub section (3) of the Code of Criminal Procedure is not arbitrary and unreasonable and serves a legitimate penological purpose where 299 the challenge is under Article 21 must apply equally to cast the burden of the proof upon the State where the challenge is under Article 14.
Now it is an essential element of the rule of law that the sentence imposed must be proportionate to the offence.
If a law provides for imposition of a sentence which is disproportionate to the offence, it would be arbitrary and irrational, for it would not pass the test of reason and would be contrary to the rule of law and void under Articles 14, 19 and 21.
The principle of proportionality is implicit in these three Articles of the Constitution.
If, for example, death penalty was prescribed for the simple offence of theft as indeed it was at one time in the seventeenth century England it would be clearly excessive and wholly disproportionate to the offence and hence arbitrary and irrational by any standards of human decency and it would be impossible to sustain it against the challenge of these three Articles of the Constitution.
It must therefore be taken to be clear beyond doubt that the proportionality principle constitutes an important constitutional criterion for adjudging the validity of a sentence imposed by law.
The Courts in the United States have also recognised the validity of the proportionality principle.
In Gregg vs Goergia (1) Stewart, J. speaking for the plurality of the American Supreme Court said that "to satisfy constitutional requirements, the punishment must not be excessive. the punishment must not be out of proportion to the severity of the crime.
This constitutional criterion was also applied in Coker vs Georgia (2) to invalidate the death penalty for rape of an adult woman.
While, J. with whom Stewarts and Blackmun, JJ.
agreed, said, with regard to the offence of rape committed against an adult woman : "a sentence of death is grossly disproportionate and excessive punishment for the crime of rape and is therefore forbidden by the Eighth Amendment as cruel and unusual punishment".
Likewise in Lockette vs Ohio (3) where the defendant sat outside the scene of robbery waiting to drive her accomplices away and contrary to plan, the robbers murdered three victims in the course of their robbery and she was convicted and sentenced to death by resort to the doctrine of vicarious liability, 300 the Supreme Court of the United States applying the same principle of proportionality held the death sentence unconstitutional.
Marshall, J. pointed out that because the appellant was convicted under a theory of vicarious liability, the death penalty imposed on her "violates the principle of proportionality embodied in the Eighth Amendment 's prohibition" and White J. also subscribed to the same reasoning when he said, "the infliction of death upon those who had no intent to bring about the death of the victim is . .grossly out of proportion to the severity of the crime".
Of course, the Supreme Court of the United States relied upon the Eighth Amendment which prohibits cruel and unusual treatment or punishment and we have no such express prohibition in our Constitution, but this Court has held in Francis Mullen 's case (supra) that protection against torture or cruel and inhuman treatment or punishment is implicit in the guarantee of Article 21 and therefore even on the basic of the reasoning in these three American decisions, the principle of proportionallty would have relevance under our Constitution.
But, quite apart from this, it is clear and we need not reiterate what we have already said earlier, that the principle of proportionality flows directly as a necessary element from Articles 14, 19 and 21 of the Constitution.
We find that in Canada too, in the case of Rex vs Miller and Cockriell (1) the principle of proportionality has been recognised by Laskin C.J. speaking on behalf of Canadian Supreme Court as "one of the constitutional criteria of 'cruel and unusual treatment or punishment ' prohited under the Canadian Bill of Rights.
Laskin C.J. pointed out in that case "It would be patent to me, for example, that death as a mandatory penalty today for theft would be offensive to section 2(b).
That is because there are social and moral considerations that enter into the scope and application of section 2(b).
Harshness of punishment and its severity in consequences are relative to the offence involved but, that being said, there may still be a question (to which history too may be called in aid of its resolution) whether the punishment prescribed is so excessive as to outrage standards of decency.
That is not a precise formula for section 2(b) but I doubt whether a more precise one can be found.
" Similarly, as pointed out by Mr. David Pannick in his book on "Judicial Review of the Death Penalty" international charters of rights express or imply the principle of proportionality.
Article 7 of the International Covenant on Civil and Political Rights forbids torture and cruel 301 inhuman or degrading treatment or punishment and so does Article A 3 of the European Convention on Human Rights.
It has been suggested by Francis Jacobs, a commentator on the European Convention that "among the factors to be considered in deciding whether the death penalty, in particular circumstances, was contrary to Article 3, would be whether it was disproportionate to the offence.
It is necessary to point out at this stage that death penalty cannot be said to be proportionate to the offence merely because it may be or is believed to be an effective deterrent against the commission of the offence.
In Coker vs Georgia (supra) the Supreme Court of the United States held that capital punishment is disproportionate to rape "even though it may measurably serve the legitimate ends of punishment and therefore is not invalid for its failure to do so.
" The absence of any rational purpose to the punishment inflicted is a separate ground for attacking its constitutionality.
The existence of a rational legislative purpose for imposing the sentence of death is a necessary condition of its constitutionality but nota sufficient one.
The death penalty for theft would, for example, deter most potential thieves and may have a unique deterrent effect in preventing the commission of the offence; still it would be wholly disproportionate and excessive, for the social effect of the penalty is not decisive of the proportionality to the offence.
The European Court of Human Rights also observed in Tyrer vs United Kingdom (1) that "a punishment does not lose its degrading character just because it is believed to be, or actually is, an effective deterrent or aid to crime control.
Above all, as the court must emphasize, it is never permissible to have recourse to punishments which are contrary to Article 3, whatever their deterrent effect may be." The utilitarian value of the punishment has nothing to do with its proportionality to the offence.
It would therefore be no answer in the present case for the respondents to say that death penalty has a unique deterrent effect in preventing the crime of murder and therefore it is proportionate to the offence.
The proportionality between the offence and death penalty has to be judged by reference to objective factors such as international standards or norms or the climate of international opinion, modern penological theories and evolving standards of human decency.
I have already pointed out and I need not repeat that the international standard or norm which 302 is being evolved by the United Nations is against death penalty and so is the climate of opinion in most of the civilized countries of the world.
I will presently show that penological goals also do not justify the imposition of death penalty for the offence of murder.
The prevailing standards of human decency are also incompatible with death penalty.
The standards of human decency with reference to which the proportionality of the punishment to the offence is required to be judged vary from society to society depending on the cultural and spiritual tradition of the society, its history and philosophy and its sense of moral and ethical values.
To take an example, if a sentence of cutting off the arm for the offence of theft or a sentence of stoning to death for the offence of adultery were prescribed by law, there can be no doubt that such punishment would be condemned as barbaric and cruel in our country, even though it may be regarded as proportionate to the offence and hence reasonable and just in some other countries.
So also the standards of human decency vary from time to time even within the same society.
In an evolutionary society, the standards of human decency are progressively evolving to higher levels and what was regarded as legitimate and reasonable punishment proportionate to the offence at one time may now according to the envolving standards of human decency, be regarded as barbaric and inhuman punishment wholly disproportionate to the offence.
There was a time when in the United Kingdom a sentence of death for the offence of theft or shop lifting was regarded as proportionate to the offence and therefore quite legitimate and reasonable according to the standards of human decency then prevailing, but today such punishment would be regarded as totally disproportionate to the offence and hence arbitrary and unreasonable.
The question, therefore, is whether having regard to the international standard or norm set by the United Nations in favour of abolition of death penalty, the climate of opinion against death penalty in many civilized countries of the world and the prevailing standards of human decency, a sentence of death for the offence of murder can be regarded as satisfying the test of proportionality and hence reasonable and just.
I may make it clear that the question to which I am addressing myself is only in regard to the proportionality of death sentence to the offence of murder and nothing that I say here may be taken as an expression of opinion on the question whether a sentence of death can be said to be proportionate to the offence of treason or any other offence involving the security of the State.
303 Now in order to determine what are the prevailing standards of human decency, one cannot ignore the cultural ethos and spiritual tradition of the country.
To quote the words of Krishna Iyer, J. in Raiendra Prasad 's case "The values of a nation and ethos of a generation mould concepts of crime and punishment.
So viewed, the lode star of penal policy today, shining through the finer culture of former centuries, strengthens the plea against death penalty.
The Indian cultural current also counts and so does our spiritual chemistry, based on divinity in everyone, catalysed by the Buddha Gandhi compassion.
Many humane movements and sublime souls have cultured the higher consciousness of mankind.
" In this land of Buddha and Gandhi, where from times immemorial, since over 5000 years ago, every human being is regarded as embodiment of Brahman and where it is a firm conviction based not only on faith but also on experience that "every saint has a past and every sinner a future", the standards of human decency set by our ancient culture and nourished by our constitutional values and spiritual norms frown upon imposition of death penalty for the offence of murder.
It is indisputable that the Constitution of a nation reflects its culture and ethos and gives expression to its sense of moral and ethical values.
It affords the surest indication of the standards of human decency cherished by the people and sets out the socio cultural objectives and goals towards which the nation aspires to move.
There can be no better index of the ideals and aspirations of a nation than its Constitution.
When we turn to our Constitution, we find that it is a humane document which respects the dignity of the individual and The worth of the human person and directs every organ of the State to strive for the fullest development of the per sonality of every individual.
Undoubtedly, as already pointed out above, our Constitution does contemplate death penalty, and at the time when the Constitution came to be enacted, death penalty for the offence of murder was on the statute book, but the entire thrust of the Constitution is in the direction of development of the full potential of every citizen and the right to life alonggwith basic human dignity is highly prized and cherished and torture and cruel or in human treatment or punishment which would be degrading and destructive of human dignity are constitutionally forbidden.
Moreover, apart from the humanistic quintessence of the Constitution, the thoughts, deeds and words of the great men of this country provide the clearest indication of the prevailing standards of human 304 decency.
They represent the conscience of the nation and are the most authentic spokesmen of its culture and ethos.
Mahatma Gandhi, the Father of the Nation wrote long ago in the Harijan.
"God alone can take life because He alone gives it.
He also said and this I may be permitted to emphasize even at the cost of repetition: "Destruction of individuals can never be a virtuous act.
The evil doers cannot be done to death .
Therefore all crimes including murder will have to be treated as a disease.
" I have also quoted above what Jai Prakash Narain said in his message to the Delhi Conference against Death Penalty.
The same humanistic approach we find in the utterances of Vinoba Bhave.
His approach to the problem of dacoits in Chambal Valley and the manner in which he brought about their surrender through soulforce bear eloquent testimony to the futility of death penalty and shows how even dacoits who have committed countless murders can be reclaimed by the society.
But, the more important point is that this action of Vinoba Bhave was applauded by the whole nation and Dr. Rajendra Prasad who was then the President of India, sent the following telegram to Binoba Bhave when he came to know that about 20 dacoits from the Chambal region had responded to the Saint 's appeal to surrender .
"The whole nation looks with hope and admiration upon the manner in which you have been able to rouse the better instincts and moral sense, and thereby inspire faith in dacoits which has led to their voluntary surrender.
Your efforts, to most of us, come as a refreshing proof of the efficacy of the moral approach for reforming the misguided and drawing the best out of them.
I can only pray for the complete success of your mission and offer you my regards and best wishes.
" These words coming from the President of India who is the Head of the nation reflect not only his own admiration for the manner in which Vinoba Bhave redeemed the dacoits but also the admiration of the entire nation and that shows that what Vinoba Bhave did, had the approval of the people of the country and the standards of human decency prevailing amongst the people commended an approach favouring reformation and rehabilitation of the dacoits rather than their conviction for the various offences of murder com mitted by them and the imposition of death penalty on them.
More over, it is difficult to see bow death penalty can be regarded as pro 305 portionate to the offence of murder when legislatively it has been A ordained that life sentence shall be the rule and it is only in exceptional cases for special reasons that death penalty may be imposed.
It is obvious from the provision enacted in section 354(3) of the Code of Criminal Procedure that death sentence is legislatively regarded as disproportionate and excessive in most cases of murder and it is only in exceptional cases what Sarkaria, J. speaking on .
behalf of the majority, describes as "the rarest of rare" cases, that it can at all be contended that death sentence is proportionate to the offence of murder.
But, then the legislature does not indicate as to what are those exceptional cases in which death sentence may be regarded as proportionate to the offence and, therefore, reasonable and just.
Merely because a murder is heinous or horrifying, it cannot be said that death penalty is proportionate to the offence when it is not so for a simple murder.
How does it become proportionate to the offence merely because it is a 'murder most foul '.
I fail to appreciate how it should make any difference to the penalty whether the murder is a simple murder or a brutal one.
A murder is a murder all the same whether it is carried out quickly and inoffensively or in a gory and gruesome manner.
If death penalty is not proportionate to the offence in the former case, it is difficult to see how it can be so in the latter.
I may usefully quote in this connection the words of Krishna Iyer, J. in Rajendra Prasad 's case where the learned Judge said; "Speaking illustratively, is shocking crime, without more, good to justify the lethal verdict ? Most murders are horrifying, and an adjective adds but sentiment, not argument.
The personal story of an actor in a shocking murder, if considered, may bring tears and soften the sentence.
He P . might have been a tortured child, an ill treated orphan, a jobless starveling, a badgered brother, a wounded son, a tragic person hardened by societal cruelty or vengeful justice, even a Hemlet or Parasurarna.
He might have been an angelic boy but thrown into mafia company or inducted into dopes and drugs by parental neglect or morally ment ally retarded or disordered.
Imagine a harijan village hacked out of existence by the genocidal fury of a kulak ' group and one survivor, days later, cutting to pieces the villain of the earlier outrage.
Is the court in error in reckoning the prior provocative barbarity as a sentencing factor ? 306 Another facet.
May be, the convict 's poverty had disabled his presentation of the social milieu or other circumstances of extenuation in defence.
When life is at stake, can such frolics of fortune play with judicial , verdicts ? "The nature of the crime too terrible to contemplate has often been regarded a traditional peg on which to hang a death penalty.
Even Ediga Anamma (supra) has hardened here.
But 'murder most foul ' is not the test, speaking J scientifically.
The doer may be a patriot, a revolutionary, a weak victim of an overpowering passion who, given better a environment, may be a good citizen, a good administrator, a good husband, a great saint.
What was Valmiki once ? And that sublime spiritual star, Shri Aurobindo tried once for murder but by history 's fortune acquitted.
" I agree with these observations of the learned Judge which clearly show that death penalty cannot be regarded as proportionate to the offence of murder, merely because the murder is brutal, heinous or shocking.
The nature and magnitude of the offence or the motive and purposes underlying it or the manner and extent of its commission cannot have any relevance to the proportionality of death penalty to the offence.
It may be argued that though these factors may not of themselves be relevant,.
they may go to show that the murderer is such a social monster, a psychopath, that he cannot be reformed and he should therefore be regarded as human refuse, dangerous to society, and deserving to be hanged and in such a case death penalty may legitimately be regarded as proportionate to the offence.
But I do not think this is a valid argument.
It is for reasons which I shall presently state, wholly untenable and it has dangerous implications.
I do not think it is possible to hold that death penalty is, in any circumstances, proportionate to the offence of murder.
Moreover, when death penalty does not serve any legitimate social purpose, and this is a proportion which I shall proceed to establish in the succeeding paragraphs, infliction of mental and physical pain and suffering on the condemned prisoner by sentencing him to death penalty cannot but be regarded as cruel and inhuman and therefore arbitrary and unreasonable.
I will now examine whether death penalty for the offence of murder serves any legitimate social purpose.
There are three justi 307 fications traditionally advanced in support of punishment in general, namely, (1) reformation; (2) denunciation by the community or retribution and (3) deterrence.
These are the three ends of punishment, its three penological goals, with reference to which any punishment prescribed by law must be justified.
If it cannot be justified with reference to one or the other of these three penological purposes, it would have to be condemned as arbitrary and irrational, for in a civilised society governed by the rule of law, no punishment can be inflicted on an individual unless it serves some social purpose.
It is a condition of legality of a punishment that it should serve a rational legislative purpose or in other words, it should have a measurable social effect.
Let us therefore examine whether death penalty for the offence of murder serves any legitimate and of punishment.
It would be convenient first to examine the examine the constutionality of death penalty with reference to the reform tory end of punishment.
The civilised goal of criminal justice is the reformation of the criminal and death penalty means abandonment of this goal for those who suffer it.
Obviously death penalty cannot serve the reformatory goal because it extinguishes life and puts an end to any possibility of reformation.
In fact, it defeats the reformatory end of punishment.
But the answer given by the protagonists of death penalty to this argument is that though there may be a few murderers whom it may be possible to reform and rehabilitate, what about those killers who cannot be reformed and rehabilitated ? Why should the death penalty be not awarded to them ? But even in their cases, I am afraid, the argument cannot be sustained.
There is no way of accurately predicting or knowing with any degree of moral certainty that a murderer will not be reformed or is incapable of reformation.
All we know is that there have been many many successes even with the most vicious of cases.
Was Jean Valjean of Les Miserbles not reformed by the kindness and magnanimity of the Bishop ? Was Valmiki a sinner not reformed and did he not become the author of one of the world 's greatest epics ? Were the dacoits of Chambal not transformed by the saintliness of Vinoba Bhave and Jai Prakash Narain ? We have also the examples of Nathan Leopold, Paul Crump and Edger Smith who were guilty of the most terrible and gruesome murders but who, having escaped the gallows, became decent and productive human beings.
These and many other examples clearly 308 show that it is not possible to know before hand with any degree of cartainty that a murderer is beyond reformation.
Then would it be right to extinguish the life of a human being merely on the basis of speculation and it can only be speculation and not any definitive inference that he cannot be reformed.
There is divinity in every man and to my mind no one is beyond redemption.
It was Ramakrishna Paramhansa, one of the greatest saints of the last century, who said, "Each soul is potentially divine".
There is Brahman in every living being, serve khalu idan bramh, as the Upanishad says and to the same effect we find a remarkable utterance in the Brahmasukta of Atharvaveda where a sage exclaims: "Indeed these killers are Brahman; these servants (or slaves) are Brahmaa; these cheats and rogues are also manifestation of one and the same Brahman itself." Therefore once the dross of Tamas is removed and satva is brought forth by methods of rehabilitation such as community service, yoga, meditation and sat sang or holy influence, a change definitely takes place and the man is reformed.
This .
is not just a fancy or idealised view taken by Indian philosophical thought, but it also finds Support from the report of the Royal Commission on Capital Punishment set up in the United Kingdom where it has been said: "Not that murderers in general are incapable of reformation, the evidence plainly shows the contrary.
Indeed, as we shall see later" (in paragraphs 651 652) "the experience of countries without capital punishment indicates that the prospects of reformation are at least as favourable with murderers as with those who have committed other kinds of serious crimes.
" The hope of reforming even the worst killer is based on exeperience as well as faith and to legitimate the death penalty even in the so called exceptional cases where a killer is said to be beyond reformation, would be to destroy this hope by sacrificing it at the altar of superstition and irrationality.
I would not therefore, speaking for myself, be inclined to recognise any exception, though Justice Krishna Iyer has done so in Rajendra Prasad 's case, that death panalty may be legally permissible where it is found that a killer is such a monster or beast that he can never be reformed.
Moreover, it may be noted, as pointed out by Albert Camus, that in resorting to this philosophy of elimination of social monsters, we would be approaching some of the worst ideas of totalitarianism or the selective racism which the Hitler regime propounded.
Sir Ernest Gowers, Chairman of the Royal Commission on Capital Punishment also emphasized the disturbing implications of this argument favouring elimination of 309 a killer who is a social monster and uttered the following warning A "If it is right to eliminate useless and dangerous members of the community why should the accident of having committed a capital offence determine who should be selected.
These ar.
Only a tiny proportion and not necessarily the most dangerous.
It can lead to Nazism.
" This theory that a killer who is believed to be a social monster or beast should be eliminated in defence of the society cannot therefore be accepted and it cannot provide a justification for imposition of death penalty even in this narrow class of cases.
I will now turn to examine the constiutional validity of death penalty with reference to the second goal of punishment, namely, denunciation by the community or retribution.
The argument which is sometimes advanced in support of the death penalty is that every punishment is to some exetent intended to express the revulsion felt by the society against the wrong doer and the punishment must, therefore, be commensurate with the crime and since murder is one of the gravest crimes against society, death penalty is the only punishment which fits such crime and hence it must he held to be reasonable.
This argument is founded on the denunciatory theory of punishment which apparently claiming to justify punishment, as the expression of the moral indignation of the society against the wrong doer, represents in truth and reality an attempt to legitimise the feeling of revenge entertained by the society against him.
The denunciatory theory was put forward as an argument in favour of death penalty by Lord Denning before the Royal Commission on Capital Punishment: "The punishment inflicted for grave crimes should adequately reflect the revulsion felt by the great majority of citizens for them.
It is a mistake to consider the objects of punishment as being deterrent or reformative or preventive and nothing else.
The ultimate justification of any punishment is not that it is a deterrent but that it is the emphatic denunciation by the community of a crime, and from this point of view there are some murders which in the present state of opinion demand the most emphatic denunciation of all, namely, the death penalty.
The truth is that some crimes are so outrageous that it, irrespective of whether it is a deterrent or not." 310 The Royal Commission on Capital Punishment seemed to agree with Lord Denning 's view about this justification for the death penalty and observed.". the law cannot ignore the public demand for retribution which heinous crimes undoubtedly provoke; it would be generally agreed that, though reform of the criminal law ought sometimes, to give a lead to public opinion, it is dangerous to move too far in advance of it." Though garbed in highly euphemistic language by labelling the sentiment underlying this observation as reprobation and not revenge, its implication can hardly be disguised that the death penalty is considered necessary not because the preservation of the society demands it, but because the society wishes to avenge itself for the wrong done to it.
Despite its high moral tone and phrase, the denunciatory theory is nothing but an echo of what Stephen said in rather strong language: "The criminal law stands to the passion of revenge in much the same relation as marriage to the sexual appetite.
" The denunciatory theory is a remnant of a primitive society which has no respect for the dignity of man and the worth of the human person and seeks to assuage its injured conscience by taking revenge on the wrong doer.
Revenge is an elementary passion of a brute and betrays lack of culture and refinement.
The manner in which a society treats crime and criminals affords the surest index of its cultural growth and development.
Long ago in the year 1910 Sir Winston Churchill gave expression to this social truth when he said in his inimitable language: "The mood and temper of the public with regad to the treatment of crime and the criminals is one of the most unfailing tests of civilization of any country.
A calm dispassionate recognition of the right of accused, and even of the convicted, criminal against the State, a constant heart searching by all charged with the duty of punishment tireless efforts towards the discovery of curative and , regenerative processes, unfailing faith that there is a treasure if you can only find it in the heart of every man these are the symbols, which, in treatment of crime and the criminals, mark and measure the stored up strength of a nation and are sign and proof of the living virtue in it.
A society which is truly cultured a society which is reared on a spiritual foundation like the Indian society can never harbour a 311 feeling of revenge against a wrong doer.
On the contrary, it would A try to reclaim the wrong doer and find the treasure that is in his heart.
The wrong doer is as much as part of the society as anyone else and by exterminating him, would the society not injure itself ? If a limb of the human body becomes diseased, should we not try to cure it instead of amputating it ? Would the human body not be partially disabled: would it not be rendered imperfect by the . amputation ? Would the amputation not leave a scar on the human body ? Would the human body not cease to be what it was intended by its maker? But if the diseased limb can be cured, would it not be so much better that the human body remains intact in all its perfection.
Similarly the society also would benefit if one of its members who has gone astray and done some wrong can be reformed and regenerated.
It will strengthen the fabric of the society and increase its inner strength and vitality.
Let it not be forgotten that no human being is beyond redemption.
There is divinity in every human being, if only we can create conditions in which it can blossom forth in its full glory, and effulgence.
It can dissolve the dross of criminality and make God out of man.
"Each soul", said Shri Ramakrishna Paramhansa, "is potentially divine" and it should be the endeavour of the society to reclaim the wrong doer and bring out the divinity J in him and not to destroy him in a fit of anger or revenge.
Retaliation can have no place in a civilised society and particularly in the Land of Buddha and Gandhi.
The law of Jesus must prevail over the lex tallionis of Moses, "Thou shalt not kill" must penologically over power "eye for an eye and tooth for a tooth.
" The society has made tremendous advance in the last few decades and today the concept of human rights has taken firm root in our soil and there is a tremendous wave of consciousness in regard to the dignity and divinity of man.
To take human life even with the sanction of the law and under the cover of judicial authority, is retributive barbarity and violent futility: travesty of dignity and violation of the divinity of man.
So lang as the offender can be reformed through the rehabilitatory therapy which may be administered to him in the prison or other correctional institute and he can be reclaimed as a useful citizen and made conscious of the divinity within him by techniques such as meditation, how can there be any moral justification for liquidating him out of existence ? In such a case, it would be most unreasonable and arbitrary to extinguish the flame of life within him, for no social purpose would be served and no consti 312 tutional value advanced by doing so.
I have already pointed out that death penalty runs counter to the reformatory theory of punishment and I shall presently discuss the deterrent aspect of death penalty and show that death penalty has not greater deterrent effect than life imprisonment.
The only ground on which the death penalty may therefore be sought to be justified is reprobation which as already pointed out, is nothing but a different name for revenge and retaliation.
But in a civilised society which believes in the dignity and worth of the human person, which acknowledges and protects the right to life as the most precious possession of mankind, which recognises the divinity in man and describes a his kind as "Amaratsaya Putra" that is "children of Immortality", it is difficult to appreciate now retaliatory motivation can ever be countenanced as a justificatory reason.
This reason is wholly inadequate since it does not justify punishment by its results, but it merely satisfies the passion for revenge masquerading as righteousness.
I may point that in holding this view I am not alone, for I find that most philosophers have rejected retribution as a proper goal of punishment.
Plato wrote: "He who desires to inflict rational punishment does not retaliate for a past wrong which cannot be undone; he has regard to the future, and is desirous that the man who is punished, and he who sees him punished, may be deterred from doing wrong again.
He punishes for the sake of prevention. " Even in contemporary America, it is firmly settled that retribution has no proper place in our criminal system.
The New York Court of Appeals pointed out in a leading judgment in People vs Oliver: "The punishment or treatment of offenders is directed toward one or more of three ends: (I) to discourage and act as a deterrent upon future criminal activity.
(2) to confine the offender so that he may not harm society; and (3) to correct and rehabilitate the offender.
There is no 313 place in the scheme for punishment for its own sake, the product simply of vengeance or retribution.
" Similarly, the California Supreme Court has held that "to conclude that the Legislature was motivated by a desire for vengeance" would be "a conclusion not permitted in view of modern theories of penology." The same view has been adopted in official studies of capital punishment.
The British Royal Commission on Capital Punishment concluded that "modern penological thought discounts retribution in the sense of vengeance. "The Florida Special Commission on capital punishment, which recommended retention of the death penalty on other grounds, rejected "vengeance or retaliation" as justification for the official taking of life.
" The reason for the general rejection of retribution as a purpose of the criminal system has been stated concisely by Professors Michael and Wechsler: "Since punishment consists in the infliction of pain it is, apart from its consequence, an evil: consequently it is good and therefore just only if and to the degree that it serves the common good by advancing the welfare of the person punished or of the rest of the population Retribution is itself unjust since it requires some human beings to inflict pain upon others, regardless of its effect upon them or upon the social welfare.
" The Prime Minister of Canada Mr. Pierre Trudeaux, addressing the Canadian Parliament, pleading for abolition of death penalty, posed a question in the same strain: "Are we as a society so lacking in respect for ourselves, so lacking in hope for human betterment, so socially bankrupt that we are ready to accept state vengeance as our penal philosophy" It is difficult to appreciate how a feeling of vengeance whether on the individual wronged or the society can ever be regarded as a healthy sentiment which the State should foster.
It is true that when a heinous offence is committed not only the individual who suffers 314 as a result of the crime but the entire society is oppressed with a feeling of revulsion, but as Arthur Koestler has put it in his inimitable style in his "Reflections on Hanging": "Though easy to dismiss in reasoned argument on both moral and logical grounds, the desire for vengeance has deep, unconscious roots and is roused when we feel strong indignation or revulsion whether the reasoning mind approves or not.
This psychological fact is largely ignored in abolitionist propaganda yet it has to be accepted as a fact.
The admission that even confirmed abolitionists are not proof against occasional vindictive impulses does not mean that such impulses should be legally sanctioned by society, any more than we sanction some other unpalatable instincts of our biological inheritance.
Deep inside every civilized being there lurks a tiny Stone Age man, dangling a club to robe and rape, and screaming an eye for an eye.
But we would rather not have that little fur clad figure dictate the law of the land.
" I have no doubt in my mind that if the only justification for the death penalty is to be found in revenge and retaliation, it would be clearly arbitrary and unreasonable punishment falling foul of Articles 14 and 21.
I must then turn to consider the deterrent effect of death penalty, for deterrence is undoubtedly an important goal of punishment.
The common justification which has been put forward on behalf of the protagonists in support of capital punishment is that it acts as a deterrent against potential murderers.
This is, to my mind, a myth, which has been carefully nurtured by a society which is actuated not so much by logic or reason as by a sense of retribution.
It is really the belief in retributive justice that makes the death penalty attractive but those supporting it are not inclined to confess to their instinct for retribution but they try to bolster with reasons their unwillingness to abandon this retributive instinct and seek to justify the death penalty by attribution to it a deterrent effect.
The question whether the death penalty has really and truly 315 a deterrent effect is an important issue which has received careful attention over the last 40 years in several countries including the United States of America.
Probably no single subject in criminology has been studied more.
Obviously, no penalty will deter all murders and probably any severe penalty will deter many.
The key question therefore is not whether death penalty has a deterrent effect but whether death penalty has a greater deterrent effect than life sentence.
Does death penalty deter potential murderers better than life imprisonment ? I shall presently consider this question but before I do so let me repeat that the burden of showing that death penalty is not arbitrary and unreasonable and serves a legitimate penological goal is on the State.
I have already given my reasons for taking this view on principle but I find that the same view has also been taken by the Supreme Judicial Court of Massachusettes in "Commonwealth vs O 'Neal (No.2)(1) where it has been held that because death penalty impinges on the right to life itself, the onus lies on the State to show a compelling State interest to justify capital punishment and since in that case the State was unable to satisfy this onus, the Court ruled that death penalty for murder committed in the course of rape or attempted rape was unconstitutional.
The Supreme Judicial Court of Massachusttes also reiterated the same view in opinion of the Justices while giving its opinion whether a Bill before the House of Representatives was compatible with Article 26 of the Constitution which prohibits cruel or unusual punishment.
The majority Judges stated hat Article 26 "forbids the imposition of a death penalty in this Commonwealth in the absence of a showing on the part of the Commonwealth that the availability of that penalty contributes more to the achievement of a legitimate State purpose for example, the purpose of deterring criminal conduct than the availability in like cases of the penalty of life imprisonment.
" It is therefore clear that the burden rests on the State to establish by producing material before the Court or otherwise, that death penalty has greater deterrent effect than life sentence in order to justify its imposition under the law.
If the State fails to discharge this burden which rests upon it, the Court would have to hold that death penalty has not been shown to have greater deterrent effect and it does not therefore serve a rational legislative purpose.
316 The historical course through which death penalty has passed in the last 150 years shows that the theory that death penalty acts as a greater deterrent than life imprisonment is wholly unfounded.
Not more than a century and a half ago, in a civilised country like England, death penalty was awardable even for offences like shop lifting, cattle stealing and cutting down of trees.
It is interesting to note that when Sir Samuel Romully brought proposals for abolition of death penalty for such offences, there was a hue and cry from lawyers, judges, Parliamentarians and other so called protectors of social order and they opposed the proposals on the grounds that death penalty acted as a deterrent against commission of such offences and if this deterrent was removed, the consequences would be disastrous.
The Chief Justice said while opposing abolition of capital punishment for shop lifting: "Where terror of death which now, as the law stood, threatened the depredator to be removed, it was his opinion the consequence would be that shops would be liable to unavoidable losses from depredations and, in many instances, bankruptcy and ruin must become the lot of honest and laborious tradesmen.
After all that had been said in favour of this speculative humanity, they must all agree that the prevention of crime should be the chief object of the law; and terror alone would prevent the com mission of that crime under their consideration." and on a similar Bill, the Lord Chancellor remarked: "So long as human nature remained what it was, the apprehension of death would have the most powerful co operation in deterring from the commission of crimes; and he thought it unwise to withdraw the salutary influence of that terror.
" The Bill for abolition of death penalty for cutting down a tree was opposed by the Lord Chancellor in these terms: "It did undoubtedly seem a hardship that so heavy a punishment as that of death should be affixed to the cutting down of a single tree, or the killing or wounding of a cow.
317 But if the Bill passed in its present state a person might root up or cut down whole acres of plantations or destroy the whole of the stock of cattle of a farmer without being subject to capital punishment.
" Six times the House of Commons passed the Bill to abolish capital punishment for shop lifting and six times the House of Lords threw out the Bill, the majority of one occasion including all the judicial members, one Arch Bishop and six Bishops.
It was firmly believed by these opponents of abolition that death penalty acted as a deterrent and if it was abolished, offences of shop lifting etc would increase.
But it is a matter of common knowledge that this belief was wholly unjustified and the abolition of death penalty did not have any adverse effect on the incidence of such offences.
So also it is with death penalty for the offence of murder.
It is an irrational belief unsubstantiated by any factual data or empirical research that death penalty acts as a greater deterrent than life sentence and equally unfounded is the impression that the removal of death penalty will result in increase of homicide.
The argument that the rate of homicide will increase if death penalty is removed from the statute book has always been advanced by the established order out of fear psychosis, because the established order has always been apprehensive that if there is any change and death penalty is abolished, its existence would be imperilled.
This argument has in my opinion no validity because, beyond a superstitious belief for which there is no foundation in fact and which is based solely on unreason and fear, there is nothing at all to show that death penalty has any additionally deterrent effect not possessed by life sentence.
Arthur Koestler tells us an interesting story that in the period when pick pockets were punished by hanging in England, other thieves exercised their talents in the crowds sorrounding the scaffold where the convicted pick pocket was being hanged.
Statistics compiled during the last 50 years in England show that out of 250 men hanged, 170 had previously attended one or even two public executions and yet they were not deterred from committing the offence of murder which ultimately led to their conviction and hanging.
It is a myth nurtured by superstition and fear that death penalty has some special terror for the criminal which acts as a deterrent against the commission of the crime.
Even an eminent judge like Justice Frank Furter of the Supreme Court of the United States expressed the same opinion when he said in the course of his 318 examination before the Royal Commission on Capital Punishment: "I think scientifically the claim of deterrence is not worth much." The Royal Commission on Capital Punishment, after four years of investigation which took it throughout the continent and even to the United States, also came to the same conclusion: "Whether the death penalty is used or not and whether executions are frequent or not, both death penalty states and abolition states show rates which suggests that these rates are conditioned by other factors than the death penalty.
" and then again, it observed in support of this conclusion: "The general conclusion which we have reached is that there is no clear evidence in any of the figures we have examined that the abolition of capital punishment has led to an increasing homicide rate or that its reintroduction has led to a fall.
" Several studies have been carried out in the United States of America for the purpose of exploring the deterrent effect of death penalty and two different methods have been adopted.
The first and by far the more important method seeks to prove the case of the abolitionists by showing that the abolition of capital punishment in other countries has not led to an increase in the incidence of homicide.
This is attempted to be shown either by comparing the homicide statistics of countries where capital punishment has been abolished with the statistics for the same period of countries where it has been retained or by comparing statistics of a single country in which capital punishment has been abolished, for periods before and after abolition or where capital punishment has been reintroduced, then for the period before and after its reintroduction.
The second method relates to comparison of the number of executions in a country in particular years with the homicide rate in the years succeeding.
Now, so far as the comparison of homicide statistics of countries which have abolished capital punishment with the statistics of countries which have retained it, is concerned, it may not yield any definitive inference, because in most cases abolition or retention of death 319 penalty may not be the only differentiating factor but there may be other divergent social, cultural or economic factors which may affect the homicide rates.
It is only if all other factors are equal and the only variable is the existence or non existence of death penalty that a proper comparison can be made for the purpose of determining whether death penalty has an additional deterrent effect which life sentence does not possess, but that would be an almost impossible controlled experiment.
It may however be possible to find for comparison a small group of countries or States, preferably contiguous and closely similar in composition of population and social and economic conditions generally, in some of which capital punishment has been abolished and in others not.
Comparison of homicide rates in these countries or States may afford a fairly reliable indication whether death penalty has a unique deterrent effect greater than that of life sentence.
Such groups of States have been identified by Professor Sellin in the United States of America and similar conditions perhaps exist also in Newzealand and the Australian States.
The figures of homicide rate in these States do not show any higher incidence of homicide in States which have abolished death penalty than in those which have not.
Professor Sellin points out that the only conclusion which can be drawn from these figures is that there is no clear evidence .
Of any influence of death penalty on the homicide rates of these States.
In one of the best known studies conducted by him, Professor Sellin compared homicide rates between 1920 and 1963 in abolition States with the rates in neighboring and similar retention States.
He found that on the basis of the rates alone, it was impossible to identify the abolition States within each group.
A similar study comparing homicide rates in States recently abolishing the death penalty and neighboring retention States during the 1960 's reached the same results.
Michigan was the first State in the United States to abolish capital punishment and comparisons between Michigan and the bordering retention states of Ohio and Indiana States with comparable demographic characteristics did not show any significant differences in homicide rates.
Professor Sellin therefore concluded: "You cannot tell from . the homicide rates alone, in contiguous, which are abolition and which are retention states; this indicates that capital crimes are dependent upon factors other than the mode of punishment." Students of capital punishment have also studied the effect of abolition and reintroduction of death penalty upon the homicide 320 rate in a single state.
If death penalty has a significant deterrent effect? abolition should produce a rise in homicides apart from the general trend and reintroduction should produce a decline.
After examining statistics from 11 states, Professor Sellin concluded that "there is no evidence that the abolition of capital punishment generally causes an increase in criminal homicides, or that its reintroduction is followed by a decline.
The explanation of changes in homicide rates must be sought elsewhere.
" Some criminologists have also examined the short term deterrent effects of capital punishment.
One study compared the number of homicides during short periods before and after several well publicized executions during the twenties and thirties in Philadelphia.
It was found that there were significantly more homicides in the period after the executions than before the opposite of what the deterrence theory would suggest other studies have also shown that in those localities where capital punishment is carried out, the incidence of homicide does not show any decline in the period immediately following well publicized executions when, if death penalty had any special deterrent effect, such effect would be greatest.
Sometimes, as Bowers points out in his book on "Executions in America" the incidence of homicide is higher.
In short, there is no correlation between the ups and downs of the homicide rate on the one hand and the presence or absence of the death penalty on the other.
I may also refer to numerous other studies made by jurists and sociologists in regard to the deterrent effect of death penalty Barring only one study made by Ehrlich to which I shall presently refer, all the other studies are almost unanimous that death penalty has no greater deterrent effect than life imprisonment.
Dogan D. Akman, a Canadian Criminologist, in a study made by him on the basis of data obtained from the records of all Canadian penitentiaries for the years 1964 and 1965 observed that the threat of capital punishment has little influence on potential assaulters.
So also on the basis of comparison of homicide and execution rates between Queensland and other Australian States for the period 1860 1920, Barber and Wilson concluded that the suspension of capital punishment from 1915 and its abolition from 1922 in Qneensland did not have any significant effect on the murder rate.
Chambliss, another Criminologist, also reached the same conclusion in his Article on "Types of Deviance and the Effectiveness of Legal Sanctions" (1967) Wisconsin namely, that "given the preponderance of evi dence, it seems safe to conclude that capital punishment does not act as an effective deterrent to murder.
" Then we have the opinion of Fred J. Cook who says in his Article on "Capital Punishment: Does it Prevent Crime ?" that "abolition of the death penalty may actually reduce rather than encourage murder.
" The European Committee on Crime Problems of the Council of Europe gave its opinion on the basis of data obtained from various countries who are Members of the Council of Europe that these data did not give any "positive indication regarding the value of capital punishment as a deterrent".
I do not wish to burden this judgment with reference to all the studies which have been conducted at different times in different parts of the world but I may refer to a few of them, namely "Capital Punishment as a Deterrent to Crime in Georgia" by Frank Gibson, "The Death Penalty in Washington State" by Hayner and Crannor, Report of the Massachusett Special Commission Relative to the Abolition of the Death Penalty in Capital Cases, "The use of the Death Penalty Factual Statement" by Walter Reckless, "Why was Capital Punishment resorted in Delaware" by Glenn W. Samuelson, "A Study in Capital Punishment" by Leonard o. Savitz, "The Deterrent Influence of the Death Penalty" by Karl F. Schuessler, "Murder and the Death Penalty" by E.H. Sutherland, "Capital Punishment: A case for Abolition" by Tidmarsh, Halloran and Connolly, "Can the Death Penalty Prevent Crime" by George B. Vold and "Findings on Deterrence with Regard to Homicide" by Wilkens and Feyerherm.
Those studies, one and all, have taken the view that "statistical findings and case studies converge to disprove the claim that the death penalty has any special deterrent value" and that death penalty "fails as a deterrent measure".
Arthur Koestler also observes in his book on "Reflections on Hanging" that the figures obtained by him from various jurisdictions which have abolished capital punishment showed a decline in the homicide rate following abolition.
The Report made by the Department of Economic and Social Affairs of the United Nations also reaches the conclusion that "the information assembled confirms the now generally held opinion that the abolition or . suspension of death penalty does not have the immediate effect of appreciably increasing the incidence of crime." These various studies to which I have referred clearly establish beyond doubt that death penalty does not have any special deterrent effect which life sentence does not posses and that in any event there is no evidence at all to suggest that death penalty has any such special deterrent effect.
322 There is unfortunately no empirical study made in India to assess, howsoever imperfectly, the deterrent effect of death penalty.
But we have the statistics of the crime of murder in the former States of Travancore and Cochin during the period when the capital punishment was on the statute book as also during the period when it was kept in abeyance.
These figures have been taken by me from the Introduction of Shri Mohan Kumar Mangalam to the book entitled "Can the State Kill its Citizen" brought out by Shri Subramaniam: Statistics of murder cases during the period when Capi tal Punishment was kept in abeyance.
Year Travancore Cochin Total for Travan core & Cochin 1945 111 cases 22 133 1946 135 cases 13 148 1947 148 cases 26 174 1948 160 cases 43 203 1949 114 cases 26 140 1950 125 cases 39 164 Total 793 169 962 Statistics of murder cases during the period when capi tal punishment was in vogue.
1951 141 cases 47 188 1952 133 cases 32 165 1953 146 cases 54 200 1954 114 cases 57 171 1955 99 cases 30 129 1956 97 cases 17 114 Total 730 237 967 323 These figures show that the incidence of the crime murder did not A increase at all during the period of six years when the capital punishment was in abeyance.
This is in line with the experience of ether countries where death penalty has been abolished.
I must at this stage refer to the study carried out by Ehrlich on which the strongest reliance has been placed by Sarkaria, J. in the majority judgment.
Ehrlich was the first to introduce regression analysis in an effort to isolate the death penalty effect, if it should exist, uncontaminated by other influences on the capital crirme rate.
His paper was catapulated into the centre of legal attention even before it was published, when the Solicitor General of the United States cited it in laudatory terms in his brief in Fowler vs North Cerolina(l) and delivered copies of it to the court.
The Solicitor General called it an "important empirical support for the a priori logical belief that use of the death penalty decrease the number of murders.
" In view of the evidence available upto that time, Ehrlich 's claim was indeed formidable both in substance and precision.
The conclusion he reached was: "an additional execution per year. may have resulted in .
seven or eight fewer murders.
" The basic data from which he derived this conclusion were the executions and the homicide rates as recorded in the United States during the years 1933 to 1969, the former generally decreasing, the latter, especially during the sixties, sharply increasing.
Ehrlich considered simultaneously with the execution and homicide rates, other variables that could affect the capital crime rate and sought to isolate the effect of these variables through the process of regression analysis.
It is not necessary for the purpose of the present judgment to explain this process of mathematical purification or the various technical refinements of this process, but it is sufficient to point out that the conclusion reached by Ehrlich was that death penalty had a greater deterrent effect than the fear of life imprisonment.
Ehrlich 's study because it went against all the hitherto available evidence, received extra ordinary attention from the scholarly community.
First, Peter Passell and John Taylor attempted to replicate Ehrlich 's findings and found that they stood scrutiny only under an unusually restrictive set of circumstances.
They found, for example that the appearance of deterrence is produced only when 324 the regression equation is in logarathmic form and in the more conventional linear regression frame work, the deterrent effect disappeared.
They also found that no such effect emerged when data for the years after 1962 were omitted from the analysis and only the years 1953 61 were considered.
Kenneth Avio of the University of Victoria made an effort to replicate Ehrlich 's findings from Canadian experience but that effort also failed and the conclusion reached by the learned jurist was that "the evidence would appear to indicate that Canadian offenders over the period 1926 60 did not behave in a manner consistent with an effective deterrent effect of capital punishment.
" William Bowers and Glenn Pierce also made an attempt to replicate Ehrlich 's results and in replicating Ehrlich 's work they confirmed the Passel Taylor findings that Ehrlich 's results were extremely sensitive as to whether the logarithmic specification was used and whether the data for the latter part of 1960 's were included.
During 1975 the Yale Law Journal published a series of Articles reviewing the evidence on the deterrent effect of death penalty and in the course of an Article in this series, Ehrlich defended his work by addressing himself to some of the criticism raised against his study.
Hans Zeisel, Professor Emeritus of Law and Sociology in the University of Chicago points out in his article on The deterrent effect of death penalty; Facts vs Faith that in this article contributed by him to the Yale Law Journal, Ehrlich did refute some criticisms but the crucial ones were not met.
Ehrlich in this Article referred to a second study made by him, basing it this time on a comparison by States for the years 1940 and 1950.
He claimed that this study bolstered his original thesis but conceded that his findings were "tentative and inconclusive".
In the mean time Passell made a State by State comparison for the years 1950 and 1960 and as a result of his findings, concluded that "we know of no reasonable way of interpreting the cross sections (i.e. State by State) data that would lend support to the deterrence hypothesis." A particularly extensive review of Ehrlich 's time series analysis was made by a team led by Lawrence Klein, President of the American Economic Association.
The authors found serious methodological problems with Ehrlich 's analysis.
They raised questions about his failure to consider the feedback effect of crime on the economic variables in his model, although he did consider other feedback effects in his analysis.
They found some of Ehrlich 's technical manipulations to be superfluous and tending to obscure the accuracy of his estimates.
They, too, raised questions about 325 variables omitted from the analysis, and the effects of these omissions on the findings.
Like Passell Taylor and Bowers Pierce, Klein and his collaborators replicated Ehrlich 's results, using Ehrlich 's own data which by that time he had made available.
As in previous replications, Ehrlich 's results were found to be quite sensitive to the mathematical specification of the model and the inclusion of data at the recent end of the time series.
By this time, Ehrlich 's model had been demonstrated to be peculiar enough.
Klein went on to reveal further difficulties.
One was that Ehrlich 's deterrence finding disappeared after the introduction of a variable rejecting the factors that caused other crimes to increase during the latter part of the period of analysis.
The inclusion of such a variable would seem obligatory not only to substitute for the factors that had obviously been omitted but also to account for interactions between the crime rate and the demographic characteristics of the population.
Klein also found Ehrlich 's results to be affected by an unusual construction of the execution rate variable, the central determinant of the analysis.
Ehrlich constructed this variable by using three other variables that appeared elsewhere in his regression model: the estimated homicide arrest rate the estimated homicide conviction rate, and the estimated number of homicides.
Klein showed that with this construction of the execution rate, a very small error in the estimates of any of these three variables produced unusually strong spurious appearances of a deterrent effect.
He went on to show that the combined effect of such slight errors in all three variables was likely to be considerable, and that in view of all these considerations, Ehrlich 's estimates of the deterrent effect were so weak that they "could be regarded as evidence. (of) a counter deterrent effect of capital punishment.
" In view of these serious problems with Ehrlich 's analysis, Klein concluded: "We see too many plausible explanations for his finding a deterrent effect other than the theory that capital punishment deters murder" and further observed: "Ehrlich 's results cannot be used at this time to pass judgment on the use of the death penalty." This is the analysis of the subsequent studies of Passell and Taylor, Bowers and Pierce and Klein and his colleagues made by Hans 326 Zeisel in his Article on "The deterrent effect of the Death Penalty: Facts vs Faith".
These studies which were definitely more scientific and refined than Ehrlich 's demolish to a large extent the validity of the conclusion reached by Ehrlich and establish that death penalty does not possess an additional deterrent effect which life sentence does not.
But, according to Hans Zeisel, the final blow to the work of Ehrlich came from a study of Brian Forst, one of Klein 's collaborators on the earlier study.
Since it had been firmly established that the Ehrlich phenomenon, if it existed emerged from developments during the sixties, Forst concentrated on that decade.
He found a rigorous way of investigating whether the ending of executions and the sharp increase in homicides during this period was casual or coincidental.
The power of Forst 's study derives from his having analysed changes both over time and across jurisdictions.
The aggregate United States time series data Ehrlich used were unable to capture important regional differences.
Moreover, they did not vary as much as cross state observations, hence they did not provide as rich an opportunity to infer the effect of changes in executions on homicides.
Forst 's analysis, according to Hans Zeisel, was superior to Ehrlich 's and it led to a conclusion that went beyond that of Klein.
"The findings" observed Forst "give no support to the hypothesis that capital punishment deters homicide" and added: "our finding that capital punishment does not deter homicide is remarkably robust with respect to a wide range of alternative constructions.
" It will thus be seen that The validity of Ehrlich 's study which has been relied upon very strongly by Sarkaria J. in the majority judgment is considerably eroded by the studies carried out by leading criminologists such as Passell and Taylor, Bowers and Pierce, Klein and his colleagues and Forst and with the greatest respect, I do not think that Sarkaria, J. speaking on behalf of the majority was right in placing reliance on that study.
The validity, design and findings of that study have been thoroughly discredited by the subsequent studies made by these other econometricians and particularly by the very scientific and careful study carried out by Forst.
I may point out that apart from Ehrlich 's study there is not one published econometric analysis which supports Ehrlich 's results.
I may also at this stage refer once again to the opinion expressed ed by Professor Sellin.
The learned Professor after a serious and thorough study of the entire subject in the United States on behalf 327 of the American Law Institute stated his conclusion in these terms: "Any one who carefully examines the above data is bound to arrive at the conclusion that the death penalty as we use it exercises no influence on the extent or fluctuating rate of capital crime.
It has failed as a deterrent.
(Emphasis supplied.) So also in another part of the world very close to our country, a Commission of Inquiry on capital punishment was appointed by late Prime Minister Bhandarnaike of Shri Lanka and it reported: "If the experience of the many countries which have suspended or abolished capital punishment is taken into account, there is in our view cogent evidence of the unlikelihood of this 'hidden protection '.
It is, therefore, our view that the statistics of homicide in Ceylon when related to the social changes since the suspension of the death penalty in Ceylon and when related to the experience of other countries tend to disprove the assumption of the uniquely deterrent effect of the death penalty, and that in deciding on the question of reintroduction or abolition of the capital punishment reintroduction cannot be justified on the argument that it is a more effective deterrent to potential killers than the alternative or protracted imprisonment.
" It is a strange irony of fate that Prime Minister Bhandarnaike who suspended the death penalty in Sri Lanka was himself murdered by a fanatic and in the panic that ensued death penalty was reintroduced in Sri Lanka.
The evidence on whether the threat of death penalty has a deterrent effect beyond the threat of life sentence is therefore overwhelmingly on one side.
Whatever be the measurement yardstick adopted and howsoever sharpened may be the analytical instruments they have not been able to discover any special deterrent effect.
Even regression analysis, the most sophisticated of these instruments after careful application by the scholarly community, has failed to detect special deterrent effect in death penalty which is not to be found in life imprisonment.
One answer which the protagonists of 328 capital punishment try to offer to combat the inference arising from these studies is that one cannot prove that capital punishment does not deter murder because people who are deterred by it do not report good news to their police departments.
They argue that there are potential murderers in our midst who would be deterred from killing by the death penalty, but would not be deterred by life imprisonment and there is no possible way of knowing about them since these persons do not commit murder and hence are not identified.
Or to use the words of Sarkaria, J. "Statistics of deterred potential murderers are difficult to unravel as they remain hidden in the innermost recesses of their mind.
" But this argument is plainly a unsound and cannot be sustained.
It is like saying, for example, that we have no way of knowing about traffic safety because motorists do not report when they are saved from accidents by traffic safety programmes or devices.
That however cannot stop us from evaluating the effectiveness of those programmes and devices by studying their effect on the accident rates where they are used for a reasonable time.
Why use a different standard for evaluating the death penalty, especially when we can measure its effectiveness by comparing homicide rates between countries with similar social and economic conditions in some of which capital punishment has been abolished and in others not or homicide rates in the same country where death penalty has been abolished or subsequently reintroduced.
There is no doubt that if death penalty has a special deterrent effect not possessed by life imprisonment, the number of those deterred by capital punishment would appear statistically in the homicide rates of abolitionist jurisdictions but according to all the evidence gathered by different studies made by jurists and criminologists, this is just not to be found.
The majority speaking through Sarkaria, J. has observed that "in most of the countries of the world including India, a very large segment of the population including noteable penologists, Judges, jurists, legislators and other enlightened people believe that death penalty for murder and certain other capital offences does serve as a deterrent and a greater deterrent than life imprisonment.
" I do not think this statement represents the correct factual position.
It is of course true that there are some penologists, judges, jurists, legislators and other people who believe that death penalty acts as a greater deterrent but it would not be correct to say that they form a large segment of the population.
The enlightened opinion in the world, 329 as pointed out by me, is definitely veering round in favour of A abolition of death penalty.
Moreover, it is not a rational conviction but merely an unreasoned belief which is entertained by some people including a few penologists, judges, jurists and legislators that death penalty has a uniquely deterrent effect.
When you ask these persons as to what is the reason why they entertain this belief, they will not be able to give any convincing answer beyond stating that basically every human being dreads death and therefore death would naturally act as a greater deterrent than life imprisonment.
That is the same argument advanced by Sir James Fitz James Stephen, the draftsman of the Indian Penal Code in support of the deterrent effect of capital punishment.
That great Judge and author said in his Essay on Capital Punishment: "No other punishment deters men so effectually from committing crimes as the punishment of death.
This is one of those propositions which it is difficult to prove simply because they are in themselves more obvious than any proof can make them.
It is possible to display ingenuity in arguing against it, but that is all.
The whole experience of mankind is in the other direction.
The threat of instant death is the one to which resort has always been made when there was an absolute necessity of producing some results.
No one goes to certain inevitable death except by compulsion.
Put the matter the other way, was there ever yet a criminal who when sentenced to death and brought out to die would refuse the offer of a commutation of a sentence for a severest secondary punishment ? Surely not.
Why is this ? It can only be because 'all that a man has will be given for his life '.
In any secondary punishment, however terrible, there is hope, but death is death; its terrors cannot be described more forcibly.
" The Law Commission in its thirty fifth report also relied largely on this argument for taking the view that "capital punishment does act as a deterrent.
" It set out the main points that weighed with it in arriving at this conclusion and the first and foremost amongst them was that: "Basically every human being dreads death", suggesting that death penalty has therefore a greater deterrent effect than any other punishment.
But this argument is not valid and a little scrutiny will reveal that it is wholly unfounded.
In the first place, 330 even Sir James Fitz James Stephen concedes that the proposition that death penalty has a uniquely deterrent effect not possessed by any other punishment, is one which is difficult to prove, though according to him it is Self evident.
Secondly, there is a great fallacy underlying the argument of Sir James Stephen and the Law Commission.
This argument makes no distinction between a threat of certain and imminent punishment which faces the convicted murderer and the threat of a different problematic punishment which may or may not influence a potential murderer Murder may be unpremeditated under the stress of some sudden outburst of emotion or it may be premeditated after planning and deliberation.
Where the murder is unpremeditated, as for example, where it is the outcome of a sudden argument or quarrel or provocation leading to uncontrollable anger or temporary imbalance of the mind and most murders fall within this category any thought of possibility of punishment is obliterated by deep emotional disturbance and the penalty of death can no more deter than any other penalty.
Where murder is premeditated it may either be the result of lust, passion, jealousy hatred frenzy of frustration or it may be a cold calculated murder for monetary or other consideration.
The former category of murder would conclude any possibility of deliberation or a weighing of consequences, the thought of the likelihood of execution after capture, trial and sentence would hardly enter the mind of the killer.
So far as the latter category of murder is concerned, several considerations make it unlikely that the death penalty would play any significant part in his thought.
Since both the penalties for murder, death as well as life sentence, are so severe as to destroy the future of any one subjected to them, the crime would not be committed by a rational man unless he thinks that there is little chance of detection.
What would weigh with him in such a case is the uncertainty of detection and consequent punishment rather than the nature of punishment.
It is not the harshness or severity of death penalty which acts as a deterrent.
A life sentence of twenty years would act as an equally strong deterrent against crime as death penalty, provided the killer feels that the crime would not go unpunished.
More than the severity of the sentence, it is the certainty of detection and punishment that acts as a deterrent.
The Advisory Council on the Treatment of offenders appointed by the Government of Great Britain stated in its report in 1960 "We were impressed by the argument that the greatest deterrent to crime is not the fear of punishment but the 331 certainty Of detection." Professor Hart emphasized the same point, refuting the argument of Sir James Fitz James Stephen in these words: "This (Stephen 's) estimate of the paramount place in human motivation of the fear of death reads impressively but surely contains a suggestio falsi and once this is detected its cogency as an argument in favour of the death penalty for murder vanishes for there is really no parallel between the situation of a convicted murderer over the alternative of life imprisonment in the shadow of the gallows and the situation of the murderer contemplating his crime.
The certainty of death is one thing, perhaps for normal people nothing can be compared with it.
But the existence of the death penalty does not mean for the murderer certainty of death now.
It means not very high probability of death in the future.
And, futurity and uncertainty, the hope of an escape, rational or irrational, vastly diminishes the difference between death and imprisonment as , deterrent and may diminish to vanishing point.
The way in which the convicted murderer may view the immediate prospect of the gallows after he has been caught, must be a poor guide to the effect of this prospect upon him when he is contemplating committing his crime.
" It is also a circumstance of no less significance bearing on the question of detection effect of death penalty, that, even after detection and arrest, the likelihood of execution for the murderer is almost nil.
In the first place, the machinery of investigation of offences being what it is and the criminal law of our country having a tilt in favour of the accused, the killer and look forward to a chance of acquittal at the trial.
Secondly, even if the trial results in a conviction, it would not, in all probability, be followed by a sentence of . , death.
Whatever may have been the position prior to the enactment of the Code of Criminal Procedure, 1973, it is now clear that under section 354 sub section (3), life sentence is the rule and it is only in exceptional cases for special reasons that death sentence may be awarded.
The entire drift of the legislation is against infliction of death penalty and the courts are most reluctant to impose it save in the rarest of rare cases.
It is interesting to note that in the last 2 years, almost every case where death penalty is confirmed by the High Court has come up before this Court by way of petition for 332 special leave, and, barring the case of Ranga and Billa, I do not think there is a single case in which death penalty has been affirmed by this Court.
There have been numerous cases where even after special leave petitions against sentence of death were dismissed, review petitions have been entertained and death sentence commuted by this Court.
Then there is also the clemency power of the President under Article 72 and of the Governor under Article 161 of the Constitution and in exercise of this power, death sentence has been commuted by the President or the Governor, as the case may be, in a number of cases.
The chances of imposition of death sentence following upon a conviction for the offence of murder are therefore extremely slender.
This is also evident from the figures supplied to a us by the Government of India for the years 1974 to 1978 pursuant to the inquiry made by us.
During the course of the hearing, we called upon the Government of India to furnish us statistical information in regard to following three matters, namely, (i) the number of cases in which and the number of persons on whom death sentence was imposed and whose death sentence was confirmed by various High Courts in India; (ii) the number of cases in which death sentence was executed in the various States and the various Union Territories; and (iii) the number of cases in which death sentence was commuted by the President of India under Article 72 or by the Governors under Article 161 of the Constitution.
The statistical information sought by us was supplied by the Government of India and our attention was also drawn to the figures showing the total number of offences of murder committed inter alia during the years 1974 77.
These figures showed that on an average about 17,000 offences of murder were committed in India every year during the period 1974 to 1977, and if we calculate on the basis of this average, the total number of offences of murder during the period of five years from 1974 to 1978 would come to about 85,000.
Now, according to the statistical information supplied by the Government of India, out of these approximately 85,000 case of murder, there were only 288 in which death sentence was imposed by the sessions court and confirmed by the High Courts and out of them, in 12 cases death sentence was commuted by the President and in 40 cases, by the Governors and death sentence was executed in only 29 cases.
It will thus be seen that during the period of five years from 1974 to 1978, there was an infinitesingly small number of cases, only 29 out of an aggregate number of approximately 85,000 cases of murder, in which death sentence was executed.
Of course, the figures supplied by the 333 Government of India did not include the figures from the States of A Bihar, Jammu and Kashmir, West Bengal and Delhi Administration but the figures from these three States and from the Union Territory of Delhi would not make any appreciable difference.
It is obvious therefore that even after conviction in a trial, there is high degree of probability that death sentence may not be imposed by the sessions court and even If death sentence is imposed by the sessions court, it may not be confirmed by the High Court and even after confirmation by the High Court, it may not be affirmed by this Court and lastly, even if affirmed by this Court, it may be commuted by the President of India under Article 72 or by the Governor under Article 161 of the Constitution in exercise of the power of clemency.
The possibility of execution pursuant to a sentence of death is therefore almost negligible, particularly after the enactment of section 354 sub section (3) of the Code of Criminal Procedure 1973 and it is difficult to see how in these circumstances death penalty can ever act as a deterrent.
The knowledge that .
death penalty is rarely imposed and almost certainly, it will not be imposed takes away whatever deterrent value death penalty might otherwise have.
The expectation, bordering almost on certainty, that death sentence is, extremely unlikely to be imposed is a factor that would condition the behaviour of the offender and death penalty cannot in such a situation have any deterrent effect.
The risk of death penalty being remote and improvable, it cannot operate as a greater deterrent than the threat of life imprisonment.
Justice Brennan and Justice White have also expressed the same view in Furman vs Georgia (supra), namely, that, when infrequently and arbitrarily imposed, death penalty is not a greater deterrent to murder than is life imprisonment.
The majority speaking through Sarkaria, J. has referred to a few decisions of this Court in which, according to majority Judges, the deterrent value of death penalty has been judicially recognised.
But I do not think any reliance can be placed on the observations in these decisions in support of the view that death penalty has a uniquely deterrent effect.
The learned Judges who made these observations did not have any socio legal data before them on the basis of which they could logically come to the conclusion that death penalty serves as a deterrent.
They merely proceeded upon an impressionistic in view which is entertained by quite a few lawyers, judges and legislators without any scientific investigation or empiri 334 cal research to support it.
It appears to have been assumed by these learned judges that death penalty has an additional deterrent effect which life sentence does not possess.
In fact, the learned judges were not concerned in these decisions to enquire and determine whether death penalty has any special deterrent effect and therefore if they proceeded on any such assumption, it cannot be said that by doing so they judicially recognised the deterrent value of death penalty.
It is true that in Jagmohan 's case (supra) Palekar J. speaking on behalf of the court did take the view that death penalty has a uniquely deterrent effect but I do Dot think that beyond a mere traditional belief the validity of which cannot be demonstrated either by logic or by reason, there is any cogent and valid argument put forward by the learned Judge in support of the view that death sentence has greater deterrent effect than life sentence.
The majority judges have relied on some of the observations of Krishna Iyer, J. but it must not be forgotten that Krishna Iyer, J. has been one of the strongest opponents of death penalty and he has pleaded with passionate conviction for 'death sentence on death sentence '.
In Dalbir Singh & Ors.
vs State of Punjab (supra) he emphatically rejected the claim of deterrence in most unequivocal terms: ". the humanity of our Constitution historically viewed (does not) subscribe to the hysterical assumption or facile illusion that a crime free society will dawn if hangmen and firing squads were kept feverishly busy.
" It would not be right to rely on stray or casual observations of Krishna Iyer, J. in support of the thesis that death penalty has a uniquely deterrent effect.
It would be doing grave injustice to him and to the ideology for which he stands.
In fact, the entire basis of the judgment of Krishna Iyer, J. in Rajendra Prasad 's is that death penalty has not deterrent value and that is only where the killer is found to be a social monster or a beast incapable of reformation that he can be liquidated out of existence.
Chinnappa Reddy, J. has also in Bishnu Deo Shaw 's case (supra) taken the view that "there is no positive indication that the death penalty has been deterrent" or in other words, "the efficacy of the death penalty as a deterrent is unproven." Then reliance has been placed by Sarkaria, J. speaking on behalf of the majority on the observations of Stewart, J. in Furman vs Georgia (supra) where the learned Judge took the view that death penalty serves a deterrent as well as retributive purpose.
In his view, certain criminal conduct is so atrocious that society 's interest in deterrence and retribution wholly outweighs any considerations 335 of reform or rehabilitation of the perpetrator and that, despite the on conclusive empirical evidence, only penalty of death will provide maximum deterrence.
It has also been pointed out by Sarkaria, J. that in Gregg vs Georgia (supra) Stewart, J. reiterated the same view in regard to the deterrent and retributive effect of death penalty.
But the view taken by Stewart, J. cannot be regarded as decisive of the present question as to the deterrent effect of death penalty.
It is just one view like any other and its validity has to be tested on the touchstone of logic and reason.
It cannot be accepted merely because it is the view of an eminent judge, I find that as against the view taken by him, there is a contrary view taken by at least two judges of the United States Supreme Court, namely.
Brennan J. and Marshall J. who were convinced in Gregg vs Georgia (supra) that "capital punishment is not necessary as a deterrent to crime in our society.
" It is natural differing judicial observations supporting one view or the other that these should be particularly on a sensitive issue like this, but what is necessary is to examine objectively and critically the logic and rationale behind these observations and to determine for ourselves which observations represent the correct view that should find acceptance with us.
The majority Judges speaking through Sarkaria, J. have relied upon the observations of Stewart, J. as also on the observations made by various other Judges and authors for the purpose of concluding that when so many eminent persons have expressed the view that capital punishment is necessary for the protection of society, how can it be said that it is arbitrary and unreasonable and does not serve any rational penological purpose.
It has been observed by Sarkaria, J: "It is sufficient to say that the very fact that persons of reason, learning and light are rationally and deeply divided in their opinion on this issue, is a ground among others, for rejecting the petitioners ' argument that retention of death penalty in the impugned provision, is totally devoid of reason and purpose.
If, notwithstanding the view of the Abolitionists to the contrary, a very large segment of people, the world over, including sociologists legislators, jurists, judges and administrators still firmly believe in the worth and necessity of capital punishment for the protection of society. it is not possible to hold that the provision of death penalty as an alternative punishment for murder is unreasonable and not in the public interest.
I find it difficult to accept this argument which proceeds upon the hypothesis that merely because some lawyers, judges and jurists are of the opinion that death penalty 336 sub serves a penological goal and is therefore in public interest, the court must shut its eyes in respectful deference to the views expressed by these scholars and refuse to examine whether their views are correct or not.
It is difficult to understand how the court, when called upon to determine a vital issue of fact, can surrender its judgment to the views of a few lawyers, judges and jurists and hold that because such eminent persons have expressed these views, there must be some substance in what they say and the provision of death penalty as an alternative punishment for murder cannot therefore be regarded as arbitrary and unreasonable.
It is to my mind inconceivable that a properly informed judiciary concerned to uphold Fundamental Rights should decline to come to its own determination of a factual dispute relevant to the issue whether death penalty serves a legitimate penological purpose and rest its decision only on the circumstance that there are sociologists, legislators, judges and jurists who firmly believe in the worth and necessity of capital punishment.
The court must on the material before it find whether the views expressed by lawyers, judges, jurists and criminologists on one side or the other are well founded in logic and reason and accept those which appear to it to be correct and sound.
The Court must always remember that it is charged by the Constitution to act as a sentinel on the qui vive guarding the fundamental rights guaranteed by the Constitution and it cannot shirk its responsibility by observing that since there are strong divergent views on the subject, the court need not express any categorical opinion one way or the other as to which of these two views is correct.
Hence it is that, in the discharge of my constitutional duty of protecting and upholding the right to life which is perhaps the most basic of all human rights, I have examined the rival views and come to the p conclusion, for reasons which I have already discussed, that death penalty has no uniquely deterrent effect and does not serve a penological purpose.
But even if we proceed on the hypothesis that the opinion in regard to the deterrent effect of death penalty is divided and it is not possible to say which opinion is right and which opinion is wrong, it is obvious that, in this state of affairs, it cannot be said to be proved that death penalty has an additional deterrent effect not possessed by life sentence and if that be so, the legislative provision for imposition of death penalty as alternative punishment for murder fail, since, as already pointed out above, the burden of showing that death penalty has a uniquely deterrent effect and therefore serves a penological goal is on the State and 337 if the State fails to discharge this burden which lies upon it, death penalty as alternative punishment for murder must be held to be arbitrary and unreasonable.
The majority Judges have, in the Judgment of Sarkaria, J. placed considerable reliance on the 35th Report of the Law Commission and I must therefore briefly refer to that Report before I part with this point.
The Law Commission set out in their Report the following main points that weighed with them in arriving at the conclusion that capital punishment does act as a deterrent: (a) Basically, every human being dreads death.
(b) Death, as a penalty, stands on a totally different level from imprisonment for life or any other punishment.
The difference is one of quality, and not merely of degree.
(c) Those who are specifically qualified to express an opinion on the subject, including particularly the majority of the replies received from State Governments, Judges, Members of Parliament and legislatures and Members of the Bar and police officers are definitely of the view that the deterrent object of capital punishment is achieved in a fair measure in India.
(d) As to conduct of prisoners released from jail (after under going imprisonment for life), it would be difficult lo come to a conclusion, without studies extending over a long period of years.
(e) Whether any other punishment can possess all the advantages of capital punishment is a matter of doubt.
(f) Statistics of other countries are inconclusive on the subject.
If they are not regarded as proving the deterrent effect, neither can they be regarded as conclusively disproving it.
So far as the first argument set out in clause (a) is concerned, I have already shown that the circumstance that every human being dreads 338 death cannot lead to the inference that death penalty act as a deterrent.
The statement made in clause (b) is perfectly correct and I agree with they Law Commission that death as a penalty stands on a totally different level from life imprisonment and the difference between them is one of quality and not merely of degree, but I fail to see how from this circumstance an inference can necessarily follow that death penalty has a uniquely deterrent effect.
Clause (c) sets out that those who are specially qualified to express an opinion on the subject have in their replies to the questionnaire stated their definite view that the deterrent effect of capital punishment is achieved in a fair measure in India.
It may be that a large number of persons who sent replies to the questionnaire issued by the Law Commission might have expressed the view that death penalty does act as a deterrent in our country, but mere expression of opinion in reply to the questionnaire, unsupported by reasons, cannot have any evidenciary value.
There are quite a number of people in this country who still nurture the superstitions and irrational belief, ingrained in their minds by a century old practice of imposition of capital punishment and fostered, though not consciously, by the instinct for retribution, that death penalty alone can act as an effective deterrent against the crime of murder.
I have already demonstrated how this belief entertained by lawyers, judges, legislators and police officers is a myth and it has no basis in logic or reason.
In fact, the statistical research to which I have referred completely falsifies this belief.
Then, there are the arguments in clauses (d) and (e) but these arguments even according to the Law Commission itself are inconclusive and it is difficult to see how they can be relied upon to support the thesis that capital punishment acts as a deterrent.
The Law Commission states in clause (f) that statistics of other countries are inconclusive on the subject.
I do not agree.
I have already dealt with this argument and shown that the statistical studies carried out by various jurists and criminologists clearly disclose That there is no evidence at all to suggest that death penalty acts as a deterrent and it must therefore be held on the basis of the available material that death penalty does not act as a deterrent.
But even if we accept the proposition that the statistical studies are inconclusive and they cannot be regarded as proving that death penalty has no deterrent effect, it is clear that at the same time they also do not establish that death penalty has a uniquely deterrent effect and in this situation, the burden of establishing that death penalty has an additional deterrent effect which life sentence does not have and therefore serves a penological purpose 339 being on the State, it must held that the State has failed to discharge the burden which rests upon it and death penalty must therefore be held to be arbitrary and unreasonable.
There was also one other argument put forward by the Law Commission in its 35th Report and that argument was that having regard to the conditions in India to the variety of social up bringing of its inhabitants, to the disparity in the level of morality and education in the country, to the vastness of its area, to the diversity of its population and to the paramount Deed to maintain law and order in the country at the present juncture, India cannot risk the experiment of abolition of capital punishment.
This argument does not commend itself to me as it is based more on fear psychosis than on reason.
It is difficult to see how any of the factors referred to by the Law Commission, barring the factor relating to the need to maintain law and order, can have any relevance to the question of deterrent effect of capital punishment.
I cannot subscribe to the opinion that, because the social upbringing of the people varies from place to place or from class to class or there are demographic diversities and variations, they tend to increase the incidence of homicide and even if they do, I fail to see how death penalty can counter act the effect of these factors.
It is true that the level of education in our country is low, because our developmental process started only after we became politically free, but it would be grossly unjust to say that uneducated people are more prone to crime than the educated ones.
I also cannot agree that the level of morality which prevails amongst our people is low.
I firmly hold the view that the large bulk of the people in our country, barring only a few who occupy positions of political, administrative or economic power, are actuated by a high sense of moral and ethical values.
In fact, if we compare the rate of homicide in India with that in the United States, where there is greater homogeneity in population and the level of education is fairly high, we find that India compares very favourably with the United States.
The rate of homicide for the year 1952 was 4.7 in the United States as against the rate of only 2.9 in India per 1,00,000 population and the figures for the year 1960 show that the rate of homicide in the United States was 5.1 as against the rate of only 2.5 in India per 1,00,000 population.
The comparative figures for the year 1967 also confirm that the rate of homicide per 1,00,000 population in the United States was definitely higher than that in India because in the United States it was 6.1 340 while in India it was only 2.6.
It is therefore obvious that, despite the existence of the factors referred to by the Law Commission, the conditions in India, in so far as the rate of homicide is concerned, are definitely better than in the United States and I do not see how these factors can possibly justify an apprehension that it may be risky to abolish capital punishment.
There is in fact statistical evidence to show that the attenuation of the area in which death penalty may be imposed and the remoteness and infrequency of abolition of death penalty have not resulted in increase in the rate of homicide.
The figures which were placed before us on behalf of the Union clearly show that there was no increase in the rate of homicide even though death sentence was made awardable only in exceptional cases under section 354 sub section (3) of the new Code of Criminal Procedure 1973.
I must therefore express my respectful dissent from the view taken by the Law Commission that the experiment of abolition of capital punishment, would involve a certain element of risk to the law and order situation.
It will thus be seen that death penalty as provided under section 302 of the Indian Penal Code read with section 354 sub section (3) of the Code of Criminal Procedure, 1973 does not subserve any legitimate end of punishment, since by killing the murderer it totally rejects the reformative purpose and it has no additional deterrent effect which life sentence does not possess and it is therefore not justified by the deterrence theory of punishment.
Though retribution or denunciation is regarded by some as a proper end of punishment.
I do not think, for reasons I have already discussed, that it can have any legitimate place in an enlightened philosophy of punishment.
It must therefore be held that death penalty has no rational nexus with any legitimate penological goal or any rational penological purpose and it is arbitrary and irrational and hence violative of Articles 14 and 21 of the Constitution.
I must now turn to consider the attack against the constitutional validity of death penalty provided under section 302 of the Indian Penal Code read with section 354 sub section (3) of the Code of Criminal Procedure, 1973 on the ground that these sections confer an unguided and standardless discretion on the court whether to liquidate an accused out of existence or to let him continue to live and the vesting of such discretion in the court renders the death penalty arbitrary and freakish.
This ground of challenge is in my opinion well founded and it furnishes one additional reason 341 why the death penalty must be struck down as violative of Articles A 14 and 21.
It is obvious on a plain reading of section 302 of the Indian Penal Code which provides death penalty as alternative punishment for murder that it leaves it entirely to the discretion of Court whether to impose death sentence or to award only life imprisonment to an accused convicted of the offence of murder.
This section does not lay down any standards or principles to guide the discretion of the Court in the matter of imposition of death penalty.
The critical choice between physical liquidation and life long incarceration is left to the discretion of the court and no legislative light is shed as to how this deadly discretion is to be exercised.
The court is left free to navigate in an uncharted sea without any com pass or directional guidance.
The respondents sought to find some guidance in section 354 sub section (3) of the Code of Criminal Procedure 1973 but I fail to see how that section can be of any help at all in providing guidance in the exercise of discretion.
On the contrary it makes the exercise of discretion more difficult and uncertain.
Section 354 sub section (3) provides that in case of offence of murder, life sentence shall be the rule and it is only in exceptional cases for special reasons that death penalty may be awarded.
But what are the special reasons for which the court may award death penalty is a matter on which section 354 sub section (3) is silent nor is any guidance in that behalf provided by any other provision of law.
It is left to the Judge to grope in the dark for himself and in the exercise of his unguided and unfettered discretion decide what reasons may be considered as 'special reasons ' justifying award of death penalty and whether in a given case any such special reasons exist which should persuade the court to depart from the normal rule and inflict death penalty on the accused.
There being no legislative policy or principle to guide the court in exercising its discretion in this delicate and sensitive area of life and death, the exercise of discretion of the Court is bound to vary from judge to judge.
What may appear as special reasons to one judge may not so appear to another and the decision in a given case whether to impose the death sentence or to let off the offender only with life imprisonment would, to a large extent, depend upon who is the judge called upon to make the decision.
The reason for this uncertainty in the sentencing process is two fold.
Firstly, the nature of the sentencing process is such that it involves a highly delicate task calling for skills and talents very much different from those ordinarily expected of lawyers.
This was pointed out clearly 342 and emphatically by Mr. Justice Frankfurter in the course of the evidence he gave before the Royal Commission on Capital Punishment: "I myself think that the bench we lawyers who be come Judges are not very competent, are not qualified by experience, to impose sentence where any discretion is to be exercised.
I do not think it is in the domain of the training of lawyers to know what to do with a fellow after you find out he is a thief.
I do not think legal training has given you any special competence.
I, myself, hope that one of these days, and before long, we will divide the functions of criminal justice.
I think the lawyers are people who are competent to ascertain whether or not a crime has been committed.
The whole scheme of common law judicial machinery the rule of evidence, the ascertainment of what is relevant and what is irrelevant and what is fair, the whole question of whether you can introduce prior crimes in order to prove intent I think lawyers are peculiarly fitted for that task.
But all the questions that follow upon ascertainment of guilt, I think require very different and much more diversified talents than the lawyers and judges are normally likely to possess.
" Even if considerations relevant to capital sentencing were provided by the legislature, it would be a difficult exercise for the judges to decide whether to impose the death penalty or to award the life sentence.
But without any such guidelines given By the legislature, the task of the judges becomes much more arbitrary and the sentencing decision is bound to vary with each judge.
Secondly, when unguided discretion is conferred upon the Court to choose between life and death, by providing a totally vague and indefinite criterion of 'special reasons ' without laying down any principles or guidelines for determining what should be considered To be 'special reasons ', the choice is bound to be influenced by the subjective philosophy of the judge called upon to pass the sentence and on his value system and social philosophy will depend whether the accused shall live or die.
No doubt the judge will have to give 'special reasons ' if he opts in favour of inflicting the death penalty, H but that does not eliminate arbitrariness and caprice, firstly because there being no guidelines provided by the legislature, the reasons 343 which may appeal to one judge as 'special reasons ' may not appeal to another, and secondly, because reasons can always be found for a conclusion that the judge instinctively wishes to reach and the judge can bonafide and conscientiously find such reason to be 'special reasons '.
It is now recognised on all hands that judicial conscience is not a fixed conscience; it varies from judge to judge depen ding upon his attitudes and approaches, his predilections and prejudices, his habits of mind and thought and in short all that goes with the expression "social philosophy".
We lawyers and judges like to cling to the myth that every decision which we make in the exercise of our judicial discretion is guided exclusively by legal principles and we refuse to admit the subjective element in judicial decision making.
But that myth now stands exploded and it is acknowledged by jurists that the social philosophy of the judge plays a not inconsiderable part in moulding his judicial decision and particularly the exercise of judicial discretion.
There is nothing like complete objectivity in the decision making process and especially so, when this process involves making of decision in the exercise of judicial discretion.
Every judgment necessarily bears the impact of the attitude and approach of the judge and his social value system.
It would be pertinent here to quote Justice Cardozo 's analysis of the mind of a Judge in his famous lectures on "Nature of Judicial Process": "We are reminded by William James in a telling page of his lectures on Pragmatism that every one of us has in truth an underlying philosophy of life, even those of us to whom the names and the notions of philosophy are unknown or anathema.
There is in each of us a stream of y tendency, whether you choose to call it philosophy or not, which gives coherence and direction to thought and ' t action.
Judges cannot escape that current any more than other mortals.
All their lives, forces which they do not recognize and cannot name, have been tugging at them inherited instincts, traditional beliefs, acquired convictions; and the resultant is an outlook on life, a conception of ' social needs, a sense in Jame 's phrase of 'the total push and pressure of the cosmos, ' which when reasons are nicely balanced, must determine where choice shall fall.
In this mental background every problem finds its setting.
We l may try to see things as objectively as we please.
None 344 theless, we can never see them with any eyes except our own.
" It may be noted that the human mind, even at infancy, is no blank sheet of paper.
We are born with predisposition and the process of education, formal and informal, and, our own subjective experiences create attitudes which effect us in judging situations and coming to decisions.
Jerome Frank says in his book; "Law and the Modern Mind", in an observation with which I find myself in entire agreement: "Without acquired 'slants ' preconceptions, life could not go on.
Every habit constitutes a pre judgment; were those pre judgments which we call habits absent in any person, were he obliged to treat every event as an unprecedented crisis presenting a wholly new problem, he would go mad.
Interests, points of view, preferences, are the essence of living.
Only death yields complete dispassionateness, for such dispassionateness signifies utter indifference.
An 'open mind ' in the sense of a mind containing no pre conceptions whatever, would be a mind incapable of learning anything, would be that of an utterly emotion less human being.
" It must be remembered that "a Judge does not shed the attributes of common humanity when be assumes the ermine." The ordinary human mind is a mass of pre conceptions inherited and acquired, often unrecognised by their possessor.
"Few minds are as neutral as a sheet of plain glass and indeed a mind of that quality may actually fail in judicial efficiency, for the warmer tints of imagination and sympathy are needed to temper the cold light of reason, if human justice is to be done.
" It is, therefore, obvious that when a Judge is called upon to exercise his discretion as to whether the accused shall be killed or shall be permitted to live, his conclusion would depend to a large extent on his approach and attitude, his predilections and pre conceptions, his value system and social philosophy and his response to the evolving norms of decency and newly developing concepts and ideas in penological jurisprudence.
One Judge may have faith in the Upanishad doctrine that every human being is an embodiment of the Divine and he may believe with Mahatma Gandhi that every offender can be reclaimed 345 and transformed by love and it is immoral and unethical to kill him, while another Judge may believe that it is necessary for social defence that the offender should be put out of way and that no mercy should be shown to him who did not show mercy to another.
One Judge may feel that the Naxalites, though guilty of murders, .
are dedicated souls totally different from ordinary criminals as they are motivated not by any self interest but by a burning desire to bring about a revolution by eliminating vested interests and should not therefore be put out of corporeal existence while another Judge may take the view that the Naxalities being guilty of cold premeditated murders are a menace to the society and to innocent men and women and therefore deserve to be liquidated.
The views of Judges as to what may be regarded as 'special reasons ' are bound to differ from Judge to Judge depending upon his value system and social philosophy with the result that whether a person shall live or die depends very much upon the composition of the bench.
which tries his case and this renders the imposition of death penalty arbitrary and capricious.
Now this conclusion reached by me is not based merely on theoretical or a priori considerations.
On an analysis of decisions given over a period of years we find that in fact there is no uniform pattern of judicial behaviour in the imposition of death penalty and the judicial practice does not disclose any coherent guidelines for ' the award of capital punishment.
The Judges have been awarding death penalty or refusing to award it according to their own scale of values and social philosophy and it is not possible to discern any consistent approach to the problem in the judicial decisions.
It is p apparent from a study of the judicial decisions that some Judges are readily and regularly inclined to sustain death sentences, other are .
similarly disinclined and the remaining waver from case to case.
Even in the Supreme Court there are divergent attitudes and opinions in regard to the imposition of capital punishment.
If a case comes before one Bench consisting of Judges who believe in the social efficacy of capital punishment, the death sentence would in all probability be confirmed but if the same case comes before another Bench consisting of Judges who are morally and ethically against the death penalty, the death sentence would most likely be commuted to life imprisonment.
The former would find and I say this not in any derogatory or disparaging sense, but as a consequence of psychological and attitudinal factors operating on the 346 minds of the Judges constituting the Bench 'special reasons ' in the case to justify award of death penalty while the latter would reject any such reasons as special reasons.
It is also quite possible that one Bench may, having regard to its perceptions, think that there are special reasons in the case for which death penalty should be awarded while another Bench may bonafide and conscientiously take a different view and hold that there are no special reasons and that only life sentence should be imposed and it may not be possible to assert objectively and logically as to who is right and who is wrong, because the exercise of discretion in a case of this kind, where no broad standards or guidelines are supplied by the legislature, is bound to be influenced by the subjective attitude and approach of the Judges constituting the Bench, their value system, individual tone of their mind, the colour of their experience and the character and variety of their interests and their predispositions.
This arbitrariness in the imposition of death penalty is considerably accentuated by the fragmented bench structure of our Courts where benches are inevitably formed with different permutations and combinations from time to time and cases relating to the offence of murder come up for hearing sometimes before one Bench, sometimes before another sometimes before a third and so on.
Prof. Blackshield has in his Article on 'Capital Punishment in India ' published in Volume 21 of the Journal of the Indian Law Institute pointed out how the practice of bench formation contributes to arbitrariness in the imposition of death penalty.
It is well known that so far as the Supreme Court is concerned, while the number of Judges has increased over the years, the number of Judges on Benches which hear capital punishment cases has actually decreased.
Most cases are now heard by two judge Benches.
Prof. Blackshield has abstracted 70 cases in which the Supreme Court had to choose between life and death while sentencing an accused for the offence of murder and analysing these 70 cases he has pointed out that during the period 28th April 1972 to 8th March 1976 only eleven Judges of the Supreme Court participated in 10% or more of the cases.
He has listed these eleven Judges in an ascending order of leniency based on the proportion for each Judge of plus votes (i.e. votes for the death sentence) to total votes and pointed out that these statistics show how the judicial response to the question of life and death varies for judge to judge.
" It is significant to note that out of 70 cases analysed by Prof. Blackshield, 37 related to the period subsequent to the coming into force of section 354 sub section (3) of the Code of Criminal Procedure 1973.
If a similar 347 exercise is performed with reference to cases decided by the Supreme A Court after 8th March 1976, that being the date upto which the survey carried out by Prof. Blackshield was limited, the analysis will x reveal the same pattern of incoherence and arbitrariness, the decision to kill or not to kill being guided to a large extent by the com position of the Bench.
Take for example Rajendra Prasad 's case (supra) decided on 9th February 1979.
In this case, the death sentence imposed on Rajendra Prasad was commuted to life imprisonment by a majority consisting of Krishna Iyer, J. and Desai, J.A.P. Sen, J. dissented and was of the view that the death sentence should be confirmed.
Similarly in one of the cases before us, namely, Bachan Singh vs State of Punjab,(l) when it was first heard by a Bench consisting of Kailasam and Sarkaria, JJ., Kailasam, J. was definitely of the view that the majority decision in .
Rajendra Prasad 's case was wrong and that is why 'he referred that case to the Constitution Bench.
So also in Dalbir Singh vs State of Punjab (supra), the majority consisting of Krishna Iyer, J. and Desai, J. took the view that the death sentence imposed on Dalbir Singh should be commuted to life imprisonment while A.P. Sen, J. struck to the original view taken by him in Rajendra Prasad 's case and was inclined to confirm the death sentence.
It will thus be seen that the exercise of discretion whether to inflict death penalty or not depends to a considerable extent on the value system and social philosophy of the Judges constituting the Bench.
The most striking example of freakishness in imposition of death penalty is provided by a recent case which involved three accused, namely, Jeeta Singh, Kashmira Singh and Harbans Singh.
These three persons were sentenced to death by the Allahabad High Court by a judgment and order dated 20th October 1975 for playing an equal part in jointly murdering a family of four persons.
Each of these three persons preferred a separate petition in the Supreme Court for special leave to appeal against the common judgment sentencing them all to death penalty.
The special leave petition of Jeeta Singh came up for hearing before a bench consisting of Chandrachud, J. (as he then was) Krishna Iyer, J. and N.L. Untwalia, J. and it was dismissed on 15th April 1976.
Then came the special leave petition preferred by Kashmira Singh from jail and this petition was placed for hearing before another bench consisting of Fazal Ali, J. and myself.
We granted leave to Kashmira Singh limited to 348 the question of sentence and by an order dated 10th April 1977 we allowed his appeal and commuted his sentence of death into one of imprisonment for life.
The result was that while Kashmira Singh 's death sentence was commuted to life imprisonment by one Bench, the death sentence imposed on Jeeta Singh was confirmed by another bench and he was executed on 6th October 1981, though both had played equal part in the murder of the family and there was nothing to distinguish the case of one from that of the other.
The special leave petition of Harbans Singh then came up for hearing and this time, it was still another bench which heard his special leave petition.
The Bench consisted of Sarkaria and Singhal, JJ.
and they rejected the special leave petition of Harbans Singh on 1 6th October, 1978.
Harbans Singh applied for review of this decision, but the review petition was dismissed by Sarkaria, J. and A.P. Sen, J.
On 9th May 1980.
It appears that though the registry of this court had mentioned in its office report that Kashmira Singh 's death sentence was already commuted, that fact was not brought to the notice of the court specifically when the special leave petition of Harbans Singh and his review petition were dismissed.
Now since his special leave petition as also his review petition were dismissed by this Court, Harbans Singh would have been executed on 6th October 1981 along with Jeeta Singh, but fortunately for him he filed a writ petition in this Court and on that writ petition, the court passed an order staying the execution of his death sentence.
When this writ petition came up for hearing before a still another bench consisting of Chandrachud, C.J., D.A. Desai and AN.
Sen. JJ.
, it was pointed out to the court that the death sentence imposed on Kashmira Singh had been commuted by a bench consisting of Fazal Ali, J. and myself and when this fact was pointed out, the Bench directed that the case be sent back to the President for reconsideration of the clemency petition filed by Harbans Singh.
This is a classic case which illustrates the judicial vagaries in the imposition Of death penalty and demonstrates vividly, in all its cruel and stark reality, how the infliction of death penalty is influenced by the composition of the bench, even in cases governed by section 354 sub section (3) of the Code of Criminal Procedure 1973.
The question may well be asked by the accused: Am I to live or die depending upon the way in which the Benches are constituted from time to time ? Is that not clearly violative of the fundamental guarantees enshrined in Articles 14 and 21 ? 349 If we study the judicial decisions given by the courts over a number of years, we find Judges resorting to a wide variety of factors in justification of confirmation or commutation of death sentence and these factors when analysed fail to reveal any coherent pattern.
This is the inevitable consequence of the failure of the legislature to supply broad standards or guidelines which would structure and channelise the discretion of the court in the matter of imposition of death penalty.
Of course, I may make it clear that when I say this I do not wish to suggest that if broad standards or guidelines are supplied by the legislature, they would necessarily cure death penalty of the vice of arbitrariness or freakishness.
Mr. Justice Harlan pointed out in Mc Gautha vs California(l) the difficulty of formulating standards or guidelines for channelising or regulating the discretion of the court in these words ": "Those who have come to grips with the hard task of actually attempting to draft means of channeling capital sentencing discretion have confirmed the lesson taught by history.
To identify before the fact those characteristics of criminal homicides and their perpetrators which call for the death penalty, and to express these characteristics in language which can be fairly understood and applied by the sentencing authority, appear to be tasks which are beyond present human ability." But whether adequate standards or guidelines can be formulated or not which would cure the aspects of arbitrariness and capriciousness, the fact remains that no such standards or guidelines are provided by the legislature in the present case, with the result that the court has unguided and untrammelled discretion in choosing between death and life imprisonment as penalty for the crime of murder and this has led to considerable arbitrariness and uncertainty.
This is evident from a study of the decided cases which clearly shows that the reasons for confirmation or commutation of death sentence relied upon by the court in different cases defy coherent analysis.
Dr. Raizada has, in his monumental doctoral study entitled "Trends in sentencing; a study of the important penal statutes and judicial pronouncements of the High Courts and the Supreme Court" identified a large number of decisions of this Court where inconsis 350 tent awards of punishment have been made and the judges have frequently articulated their inability to prescribe or follow consistently any standards or guidelines.
He has classified cases upto 1976 in terms of the reasons given by the court for awarding or refusing to award death sentence.
The analysis made by him is quite rewarding and illuminating.
(i) one of the reasons given by the courts in a number of cases for imposing death penalty is that the murder is "brutal", "cold blooded", "deliberate", "unprovoked", "fatal", "gruesome", "wicked", "callous", "heinous" or "violent".
But the use of these labels for describing the nature of the murder is indicative only of the degree of the court 's aversion for the nature or the manner of commission of the crime and it is possible that different judges may react differently to these situations and moreover, some judges may not regard this factor as having any relevance to the imposition of death penalty and may therefore decline to accord to it the status of "special reasons".
In fact, there are numerous cases, where despite the murder being one falling within these categories, the court has refused to award death sentence.
For example, Janardharan whose appeal was decided along with the appeal of Rajendra Prasad had killed his innocent wife and children in the secrecy of night and the murder was deliberate and cold blooded, attended as it was with considerable brutality, and yet the majority consisting of Krishna Iyer, J. and D.A. Desai, J. commuted his death sentence to life imprisonment.
So also Dube had committed triple murder and still his death sentence was commuted to life imprisonment by the same two learned Judges, namely, Krishna Iyer, J. and D.A. Desai, J. It is therefore clear that the epithets mentioned above do not indicate any clearcut well defined categories but are merely expressive of the intensity of judicial reaction to the murder, which may not be uniform in all Judges and even if the murder falls within one of these categories, that factor has been regarded by some judges as relevant and by others, as irrelevant and it has not been uniformly applied as a salient factor in determining whether or not death penalty should be imposed.
351 (ii) There have been cases where death sentence has been A .
awarded on the basis of constructive or joint liability arising under sections 34 and 149.
Vide: Babu vs State of U.P.,(1) Mukhtiar Singh vs State of Punjab,(2) Masalt vs State of U.P.,(3) Gurcharan Singh vs State of Punjab.(4) But, there are equally a large number of cases whether death sentence has not been awarded because the criminal liability of the accused was only .
under section 34 or Section 149.
There are no establi shed criteria for awarding or refusing to award death sentence to an accused who himself did not give the fatal blow but was involved in the commission of murder along with other assailants under section 34 or section 149.
(iii)The position as regards mitigating factors also shows the same incoherence.
One mitigating factor which , has often been relied upon for the purpose of com muting the death sentence to life imprisonment is the youth of the offender.
But this too has been quite arbitrarily applied by the Supreme Court.
There are .
cases such as State of U.P. vs Suman Das,(5) Raghubir Singh vs Sate of Haryana(6) and Gurudas Singh vs State of Rajasthan(7) where the Supreme Court took into account the young age of the appellant and refused to award death sentence to him.
Equally there are cases such as Bhagwan Swarup vs State of U.P.( ') and Raghomani vs State of U.P.(9) where the Supreme Court took the view that youth is no ground for extenuation of sentence.
Moreover there is also divergence of opinion as to what should be the age at which an offender may be regarded as a young man deserving i of commutation.
The result is that as pointed out 352 by Dr. Raizada, in some situations young offenders who have committed multiple murders get reduction in life sentence whereas in others, "where neither the loss of as many human lives nor of higher valued properly" is involved, the accused are awarded death sentence.
(iv) one other mitigating factor which is often taken into account is delay in final sentencing.
This factor of delay after sentence received great emphasis in Ediga Annamma vs State of Andhra Pradesh,(1) Chawla vs State of Haryana,(2) Raghubir Singh vs State of Haryana (supra) Bhur Singh vs State of Punjab,(3) State of Punjab v Hari Singh(4) and Gurudas Singh vs State of Rajasthan(5) and in these cases delay was taken into account for the purpose of awarding the lesser punishment of life imprisonment.
In fact, in Raghubir Singh vs State of Haryana (supra) the fact that for 20 months the spectre of death penalty must have been tormenting his soul was held sufficient to entitle the accused to reduction in sentence.
But equally there are a large number of cases where death sentences have been confirmed, even when two or more years were taken in finally disposing of the appeal; Vide: Rishdeo vs State of U.P.,(6) Bharmal Mapa vs State of Bombay(7) and other cases given by Dr. Raizada in foot note 186 to chapter III.
These decided cases show that there is no way of predicting.
the exact period of prolonged proceeding which may favour an accused.
Whether any im portance should be given to the factor of delay and if so to what extent are matters entirely within the dis cretion of the court and it is not possible to assert with any definitiveness that a particular period of delay after sentencing will earn for the accused immunity 353 from death penalty.
It follows as a necessary corrolary from these vagaries in sentencing arising from the factor of delay, that the imposition of capital punishment becomes more or less a kind of cruel judicial lottery.
If the case of the accused is handled expeditiously by the prosecution, defence lawyer, sessions court, High Court and the Supreme Court, then this mitigating factor of delay is not available to him for reduction to life sentence.
If, on the other hand, there has been lack of despatch, engineered or natural, then the accused may escape the gallows, subject of course to the judicial vagaries arising from other causes.
In other words, the more efficient the proceeding, the more certain the death sentence and vice versa.
(v) The embroilment of the accused in an immoral relationship has been condoned and in effect, treated as an extenuating factor in Raghubir Singh vs State of Haryana (supra) and Basant Laxman More vs State of Maharashtra(l) while in Lajar Masih vs State of U.P.,(2) it has been condemed and in effect treated as an aggravating factor.
There is thus no uniformity l of approach even so far as this factor is concerned.
All these facors singly and cumulatively indicate not merely that there is an enormous potential of arbitrary award of .
death penalty by the High Courts and the Supreme Court but that, .; in fact, death sentences have been awarded arbitrarily and freakishly.
Vide: Dr. Upendra Baxi 's note on "Arbitrariness of Judicial Imposition of Capital Punishment.
Professor Blackshield has also in his article on "Capital Punishment in India" commented on the arbitrary and capricious nature of imposition of death penalty and demonstrated forcibly and almost conclusively, that arbitrariness and uneven incidence are inherent and inevitable in a system of capital punishment.
He has taken the decision of this Court in Ediga Anamma vs State of Andhra Pradesh (supra) as the dividing line and examined the judicial decisions given by this Court subsequent to the decision in Ediga 354 Anamma 's case, where this Court had to choose between life and death under section 302 of the Indian Renal Code.
The cases sub sequent to the decision in Ediga Anamma 's case have been chosen for study and analysis presumbly because that was the decision in which the court for the first time set down some working formula whereby a synthesis could be reached between death sentence and life imprisonment and Krishna Iyer, J. speaking on behalf of the court, formulated various grounds which in his opinion, might warrant death sentence as an exceptional measure.
But, despite this attempt made in Ediga Anamma 's case to evolve some broad standards or guidelines for imposition of death penalty, the subsequent decisions, as pointed out by Professor Blackshield, display the same pattern of confusion, contradictions and aberrations as the decisions before that case.
The learned author has taken 45 reported decisions given after Ediga Anamma 's case and shown that it is not possible to discern any coherent pattern in these decisions and they reveal con tradictions and inconsistencies in the matter of imposition of death penalty.
This is how the learned author has summed up his conclusion after an examination of these judicial decisions: "But where life and death are at stake, inconsistencies which are understandable may not be acceptable.
The hard evidence of the accompanying "kit of cases" compels the conclusion that, at least in contemporary India, Mr. Justice Douglas ' argument in Furman vs Georgia is correct: that arbitrariness and uneven incidence are inherent and inevitable in a system of capital punishment and that therefore in Indian constitutional terms, and in spite of Jagmohan Singh the retention of such a system necessarily violates Article 14 's guarantee of "equality before the law".
It is clear from a study of the decisions of the higher courts on the life or death choice that judicial adhocism or judicial impressionism dominates the sentencing exercise and the infliction of death penalty suffers from the vice of arbitrariness and caprice.
I may point out that Krishna Iyer, J. has also come to the the same conclusion on the basis of his long experience of the sentencing process.
He has analysed the different factors which have prevailed with the Judges from time to time in awarding or refusing 355 to award death penalty and shown how some factors have weighed A with one Judge, some with another, some with a third and so on, resulting in chaotic arbitrariness in the imposition of death penalty.
I can do no better than quote his own words in Rajendra Prasad 's case (supra): "Law must be honest to itself.
Is it not true that some judges count the number of fatal wounds, some the nature of the weapon used, others count the corpses or the degree of horror and yet others look into the age or sex of the offendar and even the lapse of time between the trial Court 's award of death sentence and the final disposal.
Of the appeal ? With some judges, motives, provocations, primary or constructive guilt, mental disturbance and old feuds, the savagery of the murderous moment or the plan which has preceded the killing; the social milieu, the sublimated class complex and other odd factors enter the sentencing calculas.
Stranger still, a good sentence of death by the trial Court is sometimes upset by the Supreme Court I; because of law 's delays.
Courts have been directed execution of murderers who are mental cases, who do not fall within the McNaghten rules, because of the insane fury of the slaughter.
A big margin of subjectivism, a preference for old English precedents, theories of modern penology, behavioral emphasis or social antecedents, judicial hubris or human rights perspectives, criminological literacy . or fanatical reverence for outworn social philosophers burried in the debris of time except as part of history this h plurality of forces plays a part in swinging the pendulum of sentencing justice erratically.
" This passage from the judgment of the learned Judge exposes, in language remarkable for its succinctness as well as eloquence, the vagarious nature of the imposition of death penalty and highlights a few of the causes responsible for its erratic operation.
I find myself totally in agreement with these observations of the learned Judge.
But when it was contended that sentencing discretion is inherent in our legal system, and, in fact, it is desirable, because no two cases or criminals are identical and if no discretion is left to the 356 court and sentencing is to be done according to a rigid predetermined formula leaving no room for judicial discretion, the sentencing process would cease to be judicial and would de generate into a bed of procrustean cruelty.
The argument was that having regard to the nature of the sentencing process, it is impossible to lay down any standards or guidelines which will provide for the endless and often unforeseeable variations in fact situations and sentencing discretion his necessarily to be left to the court and the vesting of such discretion in the court, even if no standards or guidelines are provided by the legislature for structuring or challenging such discretion, cannot be regarded as arbitrary or unreasonable.
This argument, plausible though it may seem, is in my opinion not well a founded and must be rejected.
It is true that criminal cases do not fall into set behaviouristic patterns and it is almost impossible to find two cases which are exactly identical.
There are, as pointed out by Sarkaria, J. in the majority judgment, "countless permutations and combinations which are beyond the anticipatory capacity of the human calculus".
Each case presents its own distinctive features, its peculiar combinations of events and its unique configuration of facts.
That is why, in the interest of individualised justice, it is necessary to vest sentencing discretion in the court so that appropriate sentence may be imposed by the court in the exercise of its judicial discretion, having regard to the peculiar facts and circumstances of a given case, or else the.
sentencing process would cease to be just and rational and justice would be sacrificed at the altar of blind uniformity.
But at the same time, the sentencing discretion conferred upon the court cannot be altogether uncontrolled or unfettered.
The strategem which is therefore followed by the legislatures while creating and defining offences is to prescribe the maximum punishment and in some cases, even the minimum and leave it to the discretion of the court to decide upon the actual term of imprisonment.
This cannot be regarded as arbitrary or unreasonable since the discretion that is left to the court is to choose an appropriate term of punishment between the limits laid down by the legislature, having regard to the distinctive features and the peculiar facts and circumstances of the case.
The conferment of such sentencing discretion is plainly and indubitably essential for rendering individualised justice.
But where the discretion granted to the court is to choose between life and death without any standards or guidelines provided by the legislature, the death penalty does become arbitrary and unreasonable.
The death penalty is 357 qualitatively different from a sentence of imprisonment.
Whether Ia sentence of imprisonment is for two years or five years or for life, it is qualitatively the same, namely, a sentence of imprisonment, but the death penalty is totally different.
It is irreversible; it is beyond recall or reparation; it extinguishes life.
It is the choice between life and death which the court is required to make and this is left to its sole discretion unaided and unguided by any legislative yardstick to determine the choice.
The only yardstick which may be said to have been provided by the legislature is that life sentence shall be the rule and it is only in exceptional cases for special reasons that death penalty may be awarded.
but it is nowhere indicated by legislature as to what should be regarded as f 'special reasons ' justifying imposition of death penalty.
The awesome and fearful discretion whether to kill a man or to let him live is vested in the court and the court is called upon to exercise .
this discretion guided only by its own perception of what may be regarded as 'special reasons ' without any light shed by the legislature.
It is difficult to appreciate how a law which confers such unguided discretion on the court without any standards or guidelines on so vital an issue as the choice between life and death can be regarded as constitutionally valid.
If I may quote the words of Harlan, J.: "our scheme of ordered liberty is based, like the common law, on enlightened and uniformly applied legal principles, not on ad hoc notions of what is right or wrong in a particular case" There must be standards or principles to guide the court in making the choice between life and death and it cannot be left to the court to decide upon the choice on an ad hoc notion of what it conceives to be "special reasons ' in a particular case.
That is exactly what we mean when we say that the government should be of laws and not y of men and it makes no difference in the application of this princi ple, whether 'men ' belong to the administration or to the judiciary.
It is a basic requirement of the equality clause contained in Article 14 that the exercise of discretion must always be guided by standards or norms so that it does not degenerate into arbitrariness and operate unequally on persons similarly situate.
Where unguided and unfettered discretion is conferred on any authority, whether it be the executive or the judiciary, it can be exercised arbitrarily or 358 capriciously by such authority, because there would be no standards k or principles provided by the legislature with reference to which the exercise of the discretion can be tested.
Every form of arbitrariness, whether it be executive waywardness or judicial adhocism is anathema in our constitutional scheme.
There can be no equal protection without equal principles in exercise of discretion.
Therefore.
the equality clause of the Constitution obligate that whenever death sentence is imposed it must be a principled sentence, a sentence based on some standard or principle and not arbitrary or indignant capital punishment It has been said that 'a Judge untethered by a text is a dangerous instrument, and I may well add that Judge power, uncanalised by clear principles, may be equally dangerous when the consequence of the exercise of discretion may result in the hanging of a human being It is obvious that if judicial discretion is not guided by any standard or norms, it would degenerate into judicial caprice, which, as is evident from the foregoing discussion, has in fact happened and in such a situation, unregulated and un principled sentencing discretion in a highly sensitive area involving a question of life and death would clearly be arbitrary and hence violative of the equal protection clause contained in Article 14.
It would also militate against Article 21 as interpreted in Maneka Gandhi 's case (supra) because no procedure for depriving a person of his life can be regarded as reasonable, fair and just, if it vests uncontrolled and unregulated discretion in the court whether to award death sentence or to inflict only the punishment of life im prisonment.
The need for well recognised principles to govern the 'deadly ' discretion is so interlaced with fair procedure that unregulated power not structured or guided by any standards or principles would fall foul of Article 21.
The respondents however contendent that the absence of any standards or guidelines in the legislation did not affect the constitutional validity of the death penalty, since the sentencing discretion being vested in the court, standards or principles for regulating the exercise of such discretion could always be evolved by the court and the court could by a judicial fiat lay down standards or norms which would guide the Judge in exercising his discretion to award the death penalty.
Now it is true that there are cases where the court lays down principles and standards for guidance in the exercise of the discretion conferred upon it by a statute, but that is done by the court only in those cases where 359 the principles or standards are gatherable from the provisions of the statute Where a statute confers discretion upon a court, the statute may lay down the broad standards or principles which should guide the court in the exercise of such discretion or such standards or principles may be discovered from the object and purpose of the statute, its underlying policy and the scheme of its provisions and some times, even from the surrounding circumstances.
When the court lays down standards or principles which should guide it in the exercise of its discretion, the court does not evolve any new standards or principles of its own but merely discovers them from the statute.
The standards or principles laid down by the court in such a case are not standards or principles created or evolved by l ' the court but they are standards or principles enunciated by the Iegislature in the statute and are merely discovered by the court as a matter of statutory interpretation.
It is not legitimate for the court to create or evolve any standards or principles which are not found in the statute, because enunciation of such standards or principles is a legislative function which belongs to the legislative and not to the judicial department.
Moreover, it is difficult to see how any standards or principles which would adequately guide the exercise of discretion in the matter of imposition of death penalty can be evolved by the court.
Sarkaria, J. himself has lamented the impossibility of formulating standards or guidelines in this highly ' sensitive area and pointed out in the majority judgment: ". there is little agreement among penologists and jurists as to what information about the crime and criminal is relevant and what is not relevant for fixing the dose of punishment for a person convicted of a particular offence.
According to Cessare Beccaria, who is supposed to be the intellectual progenitor of today 's fixed sentencing movement, 'crime are only to be measured by the injury done to society. ' But the 20th Century sociologists do not wholly agree with this view.
In the opinion of Von Hirsch, the "seriousness of a crime depends both on the harm done (or risked) by the act and degree of actor 's culpability.
" But how is the degree of that culpability to be measured.
Can any thermometer be devised to measure its degree ? This passage from the majority judgment provides a most complete and conclusive answer to the contention of the respon 360 dents that the court may evolve its own standards or principles for guiding the exercise of its discretion.
This is not a function which can be satisfactorily and adequately performed by the court more particularly when the judicial perception of what may be regarded as proper and relevant standards or guidelines is bound to vary from judge having regards to his attitude and approach, his predilections and prejudices and his scale of values and social philosophy.
I am fortified in this view by the decision of the Supreme Court of the United States in Furman vs Georgia (supra).
The question which was brought before the court for consideration in that Case was whether the imposition and execution of death penalty constituted "cruel and unusual punishment" within the meaning of the Eighth Amendment as applied to the States by the Fourteenth.
The court, by a majority of five against four, held that the death penalty as then administered in the United States was unconstitutional, because it was being used in an arbitrary manner and such arbitrariness in capital punishment was a violation of the Eighth Amendment prohibition against "cruel and unusual punishment" which was made applicable to the States by the Fourteenth Amendment.
Brennan J. and Marshall, J. took the view that the death penalty was per se unconstitutional as violative of the prohibition of the Eighth Amendment.
Brennan, J. held that the death penalty constituted cruel and unusual punishment as it did not comport with human dignity and it was a denial of human dignity for a State arbitrarily to subject a person to an unusually severe punishment which society indicated that it did not regard as acceptable and which could not be shown to serve any penal purpose more effectively than a significantly less drastic punishment.
Marshall, J. stated that the death penalty violated the Eighth Amendment because it was an excessive and unnecessary punishment and also because it was morally unacceptable to the people of the United States.
The other three learned Judges namely, Douglas, J. Stewart, J. and White, J. did not subscribe to the view that the death penalty was per se unconstitutional in all circumstances but rested their judgment on the limited ground that the death penalty as applied in the United States was unconstitutional.
Douglas, J. argued that "we deal with a system of law and of justice that leaves to the uncontrolled discretion of judges or juries the determination whether defendants committing these crimes should die or be imprisoned.
Under these laws no standards govern the selection of the penalty.
People live or die dependent on the whim of one man or of twelve," 361 Stewart, J. also voiced his concern about the unguided and unregulated discretion in the sentencing process and observed: ". the Eighth and Fourteenth Amendments cannot tolerate the infliction of a sentence of death under legal systems that permit this unique penalty to be so wantonly and so freakishly imposed.
" The remaining four Judges, namely, Burger, C.J. Blackmun, J. Powell, J. and Rehnquist, J. took the opposite view and upheld the constitutional validity of the death penalty in its entirety.
It will thus be seen that the view taken by the majority decision in this case was that a law which gives uncontrolled and unguided discretion to the Judge (or the jury) to choose arbitrarily between death sentence and life imprisonment for a capital offence violates the Eighth Amendment which inhibits cruel and unusual punishment.
Now Sarkaria, J. speaking on behalf of the majority, has brushed aside this decision as inapplicable in India on the ground that we "do not have in our Constitution any provision like the Eighth Amendment nor are we at liberty to apply the test of reasonableness with the freedom with which the Judges of the Supreme Court of America are accustomed to apply the 'due process ' clause.
" I am unable to agree with this reasoning put forward in the majority judgment.
I have already pointed out that though there is no explicit provision in our Constitution prohibiting cruel and unusual punishment, this Court has in Francis Mullin 's case (supra) held that immunity against torture or cruel and unusual punishment or treatment is implicit in Article 21 and therefore, if any punishment is cruel and unusual, it would be violative of basic human dignity which is guaranteed under Article 21.
Moreover, in Maneka Gandhi 's case (supra) this court has by a process of judicial interpretation brought in the procedural due process clause of the American Constitution by reading in Article 21 the requirement that the procedure by which a person may be deprived of his life or personal liberty must be reasonable, fair and just.
Douglas, J. has also pointed out in Furman 's case (supra) that "there is increasing recognition of the fact that the basic theme of equal protection is implicit in 'cruel and unusual ' punishment.
A penalty . should be considered 'unusually ' imposed.
if it is administered arbitrarily or discriminatorily" and thus brought in the equal protection clause for invalidating the death penalty.
It is also significant to note that despite the absence of provisions like the American Due Process Clause and the Eighth Amendment, this Court speaking through Desai, J. said in 362 Sunil Batra vs Delhi Administration.(1) "Treatment of a human being which offends human dignity, imposes avoidable torture and reduces the man to the level of a beast would certainly be arbitrary and can be questioned under Article 14. " Krishna Iyer, J. was more emphatic and he observed in the same case.
"True, our Constitution has no 'due process ' clause or the VIII Amendment; but, in this branch of law, after Cooper. and Maneka Gandhi. . . the consequence is the same.
For what is punitively outrageous, scandalizing unusual or cruel or rehabilitatively counter productive is unarguably unreasonable and arbitrary and is shot down by Article 14 and 19 " It should be clear from these observations in Sunil Batra 's case to which Cbandrachud, C.J. was also a party, that Sarkaria, J. speaking on behalf of the majority Judges, was in error in relying on the absence of the American due process clause and the Eighth Amendment for distinguishing the decision in Furman 's case (supra) and upholding death penalty.
The decision in Furman 's case cannot, therefore, be rejected as inapplicable in India.
This decision clearly supports the view that where uncontrolled and unregulated discretion is conferred on the court without any standards or guidelines provided by the legislature, so as to permit arbitrary and uneven imposition of death penalty, it would be violative of both Articles 14 and 21.
It may be pointed out that subsequent to the decision in Furman 's case (supra) and as a reaction to it the legislatures of several States in the United States passed statutes limiting or controlling the exercise of discretion by means of explicit standards to be followed in the sentencing process.
These 'guided discretion ' statutes provided standards typically in the form of specific aggravating and mitigating circumstances that must be taken into account before death sentence can be handed down.
They also provided for separate phases of the trial to determine guilt and punishment (I) A.l.
R. 363 and for automatic appellate review of death sentences.
The constitutional validity of some of these 'guided discretion ' statutes was challenged in Gregg vs Georgia (supra) and companion cases and the Supreme Court of the United States upheld these statutes on the ground that providing specific sentencing guidelines to be followed in a separate post conviction phase of the trial would free the sentencing decision of arbitrariness and discrimination.
There is considerable doubt expressed by leading jurists in the United States in regard to correctness of this decision, because in their view the guide lines provided by these statutes in the form of specific aggravating and/or mitigating circumstances are too broad and too vague to serve as an effective guide to discretion.
In fact, while dealing with the challenge to the constitutional validity of a 'guided discretion ' statute enacted by the Legislature of Massachusettes, the Supreme Court of Massachusettes by a majority held in District Attorney for the Suffolk District vs Watson (1) that the statute providing for imposition of death penalty was unconstitutional on the ground that it was violative of Article 26 of the Declaration of Rights of the Massachusettes Constitution which prohibits infliction of cruel or unusual punishment.
Henneseey, C.J. pointed out that in enacting the impugned statute the Legislature of Massachusettes had clearly attempted to follow the mandate of the Furman opinion and its progeny by promulgating a law of guided and channelled jury discretion, but even so it transgressed the prohibition of Article 26 of the Declaration of Rights of the State Constitution.
The learned Chief Justice observed: " . it follows that we accept the wisdom of Furman that arbitrary and capricious infliction of death penalty is unconstitutional.
However, we add that such arbitrariness and discrimination, which inevitably persists even under a statute which meets the demands of Furman, offends Article 26 of the Massachusettes Declaration of Rights.
" But we are not concerned here with the question as to whether the decision in Gregg 's case represents the correct law or the decision of the Massachusettes Supreme Court in Watson 's case.
That controversy does not arise here because admittedly neither the Indian Penal Code nor any other provision of law sets out any aggravating or mitigating circumstance or any other considerations which must be taken into account in determining whether death sentence should be 364 awarded or not.
Here the sentencing discretion conferred upon the court is totally uncontrolled and unregulated or if I may borrow an expression from Furman 's decision, it is 'standardless ' and unprincipled '.
It is true that there are certain safeguards provided in the Code of Criminal Procedure, 1973 which are designed to obviate errors in the exercise of judicial discretion in the matter of imposition of death penalty.
Section 235 sub section (2) bifurcates the trial by providing two hearings one at the pre conviction stage and another at the pre sentence stage so that at the second stage following upon conviction, the court can gather relevant information bearing on the question of punishment and decide, on the basis of such information, what would be the appropriate punishment to be imposed on the offender.
Section 366 sub section (1) requires the court passing a sentence of death to submit the proceedings to the High Court and when such reference is made to the High Court for confirmation of the death sentence, the High Court may under section 367 direct further inquiry to be made or additional evidence to be taken and under section 368, confirm the sentence of death or pass any other sentence warranted by law or annual or alter the conviction or order a new trial or acquit the accused.
Section 369 enjoins that in every reference so made, the confirmation of the sentence or any new sentence or order passed by the High Court, shall, when such court consists of two or more judges, be made, passed and signed by at least two of them.
Then there is also a proviso in section 379 which says that when the High Court on appeal reverses an order of acquittal and convicts the accused and sentences him to death, the accused shall have a right to appeal to the Supreme Court.
Lastly there is an over riding power conferred on the Supreme Court under Article 136 to grant, in its discretion, special leave to appeal to an accused who has been sentenced to death.
These are undoubtedly some safeguards provided by the legislature, but in the absence of any standards or principles provided by the legislature to guide the exercise of the sentencing discretion and in view of the fragmented bench structure of the High Courts and the Supreme Court, these safeguards cannot be of any help in eliminating arbitrariness and freakishness in imposition of death penalty.
Judicial ad hocism or waywardliness would continue to characterise the exercise of sentencing discretion whether the Bench be of two judges of the High Court or of two or three judges of the Supreme Court and arbitrary and uneven incidence of death 365 penalty would continue to afflict the sentencing process despite these procedural safeguards.
The reason is that these safeguards are merely peripheral and do not attack the main problem which stems from lack of standards or principles to guide the exercise of the sentencing discretion.
Stewart, J. pointed out in Gregg 's case (supra), ". the concerns expressed in Furman that the penalty of death not be imposed in an arbitrary or capricious manner can be met by a carefully drafted statute that ensures that the sentencing authority is given adequate information and guidance.
As a general proposition these concerns are best met by a system that provides for a bifurcated proceeding at which the sentencing authority is apprised of the information relevant to the imposition of sentence and provided with standards to guide its use of the information.
" The first requirement that there should be a bifurcated proceeding at which the sentencing authority is apprised of the information relevant to the imposition of sentence is met by the enactment of section 235 sub section (2), but the second requirement that the sentencing authority should be provided with standards to guide its use of the information is not satisfied and the imposition of death penalty under section 302 of the Indian Penal "ode read with section 354 sub section (3) of the Code of Criminal Procedure, 1973 must therefore be held to be arbitrary and capricious and hence violative of Articles 14 and 21.
There is also one other characteristic of death penalty that is revealed by a study of the decided cases and it is that death sentence has a certain class complexion or class bias in as much as it is largely the poor and the down trodden who are the victims of this extreme penalty.
We would hardly find a rich or affluent person going to the gallows.
Capital punishment, as pointed out by Warden Duffy is "a privilege of the poor." Justice Douglas also observed in a famous death penalty case "Former Attorney Pamsey Clark has said: 'it is the poor, the sick, the ignorant, the powerless and the hated who are executed '.
"So also Governor Disalle of Ohio State speaking from his personal experience with the death penalty said: "During my experience as Governor of Ohio, I found the men in death row had one thing in common; they were penniless.
There were other common denominators, low mental capacity, little or no education, few friends, broken 366 homes but the fact that they had no money was a principal factor in their being condemned to death. " The same point was stressed by Krishna Iyer, J. in Rajendra Prasad 's case (supra) with his usual punch and vigour and in hard hitting language distinctive of his inimitable style: "Who, by and large, are the men whom the gallows swallow.
The white collar criminals and the corporate criminals whose wilful economic and environmental crimes inflict mass deaths or who hire assassins and murder by remote control? Rarely.
With a few exceptions, they hardly fear the halter.
The feuding villager, heady with country liquor, the striking workers desperate with defeat, the political dissenter and sacrificing liberator intent on changing the social order from satanic misrule, the waifs and strays whom society has hardened by neglect into street toughs, or the poor householder husband or wife driven by dire necessity or burst of tantrums it is this person who is the morning meal of the macabre executioner." "Historically speaking, capital sentence perhaps has a class bias and colour bar, even as criminal law barks at both but bites the proletariat to defend the proprietariat a reason which, incidentally, explains why corporate criminals including top executives whom by subtle processes, account for slow or sudden killing of large members by adulteration, smuggling, cornering, pollution and other invisible operations, are not on the wanted list and their offending operations which directly derive profit from mafia and white collar crimes are not visited with death penalty, while relatively lesser delinquencies have, in statutory and forensic rhetoric, deserved the extreme penalty." There can be no doubt that death penalty in its actual operation is discriminatory, for it strikes mostly against the poor and deprived sections of the community and the rich and the affluent usually escape from its clutches.
This circumstance also adds to the arbitrary and capricious nature of the death penalty and renders it unconstitutional as being violative of Articles 14 and 21.
367 Before I part with this topic I may point out that only way in which the vice of arbitrariness in the imposition of death penalty can be removed is by the law providing that in every case where the death sentence is confirmed by the High Court there shall be an automatic review of the death sentence by the Supreme Court sitting as a whole and the death sentence shall not be affirmed or imposed by the Supreme Court unless it is approved unanimously by the entire court sitting enbanc and the only exceptional cases in which death sentence may be affirmed or imposed should be legislatively limited to those where the offender is found to be so depraved that it is not possible to reform him by any curative or rehabilitative therapy and even after his release he would be a serious menace to the society and therefore in the interest of the society he is required to be eliminated.
Of course, for reasons I have already discussed such exceptional cases would be practically nil because it is almost impossible to predicate of any person that he is beyond reformation or redemption and therefore, from a practical point of view death penalty would be almost nor existent But theoretically it may be possible to say that if the State is in a position to establish positively that the offender is such a social monster that even after suffering life imprisonment and undergoing reformative and rehabilitative therapy, he can never be reclaimed for the society, then he may be awarded death penalty.
If this test is legislatively adopted and applied by following the procedure mentioned above, the imposition of death penalty may be rescued from the vice of arbitrariness and caprice.
But that is not so under the law as it stands to day.
This view taken by me in regard to the constitutional validity of the death penalty under Articles 14 and 21 renders it unnecessary for me to consider the challenge under Article 19 and I do not therefore propose to express any opinion on that question.
But since certain observations have been made in the majority judgment of Sarkaria, J. which seem to run counter to the decisions of this Court in R.C Cooper vs Union of India (1) and Maneka Gandhi 's case (supra).
I am constrained to add a few words voicing my respectful dissent from those observations.
Sarkaria, J. speaking on behalf of the majority judges has observed in the present case that the 'form and object test or 'pith and substance rule ' adopted by 368 Kania, C.J. and Fazal Ali, J. in A.K. Gopalan vs State of Madras (supra) is the same as the 'test of direct and inevitable effect ' enunciated in R.C. Cooper 's case and Maneka Gandhi 's case and it has not been discarded or jettisoned by these two decisions.
I cannot look with equimanity on this attempt to resucitate the obsolute 'form and object test ' or 'pith and substance rule ' which was evolved in A.R. Gopalan 's case and which for a considerable number of years dwarfed the growth and development of fundamental rights and cut down their operational amplitude.
This view proceeded on the assumption that certain articles in the Constitution exclusively deal with specific matters and where the requirement of an Article dealing with a particular matter in question is satisfied and there is no infringement of the fundamental right guaranteed by that Article, no recourse can be had to a fundamental right conferred by another Article and furthermore, in order to determine which is the fundamental right violated, the court must consider the pith and substance of the legislation and ask the question: what is the object of the legislature in enacting the legislation; what is the subject matter of the legislation and to which fundamental right does it relate.
But this doctrine of exclusivity of fundamental rights was clearly and unequivocally over ruled in R.C. Cooper 's case by a majority of the Full Court, Ray, J. alone dissenting and so was the 'object and form test ' or 'pith and substance rule ' laid down in A.K. Gopalan 's case.
Shah, J. speaking on behalf of the majority Judges said in R.C. Copper 's case (supra) ". it is not the object of the authority making the law impairing the right of a citizen, nor the form of action that determines the protection he can claim; it is the effect of the law and of the action upon the right which attract the jurisdiction of the Court to grant relief.
If this be the true view, and we think it is, in determining the impact of State action upon constitutional guarantees which are fundamental, it follows that the extent of protection against impairment of a fundamental right is determined not by the object of the Legislature nor by the form of the action, but by its direct operation upon the individual 's rights." "We are of the view that the theory that the object and form of the State action determine the extent of pro 369 tection which the aggrieved party may claim is not consistent with the constitutional scheme. " "In our judgment, the assumption in A.K Gopalan 's case that certain articles in the Constitution exclusively deal with specific matters and in determining whether there is infringement of the individual 's guaranteed rights, the object and the form of the State action alone need be considered and effect of the laws on fundamental rights of the individuals in general will be ignored cannot be accepted as correct." This view taken in R.C. Cooper 's case has since then been consistently followed in several decisions of which I may mention only a few, namely, Shambhu Nath Sarkar vs State of West Bengal (1); Haradhan Saha vs State of West Bengal;(2) Khudiram Das vs State of West Bengal (3) and Maneka Gandhi 's case (supra).
I cannot therefore assent to the proposition in the majority judgment that R.C. Cooper 's case and Maneka Gandhi 's case have not given a complete go by to the test of direct and indirect effect, some times described as 'form and object test ' or 'pith and substance rule ' evolved by Kania, C.J. and Fazal Ali, J. in A.K. Gopalan 's case and that the 'pith and substance rule ' still remains a valid rule for resolving the question of the constitutionality of a law assailed on the ground of its being violative of a fundamental right.
Nor can I agree with the majority judgment when it says that it is Article 21 which deals with the right to life and not Article 19 and section 302 of the Indian Penal Code is therefore not required to be tested on the touchstone of any one or more of the clauses of Article 19.
This approach of the majority judgment not only runs counter to the decision in R.C. Cooper 's case and other subsequent decisions of this Court including Maneka Gandhi 's case but is also fraught with grave danger inasmuch as it seeks to put the clock back and reverse the direction in which the law is moving towards realisation of the full potential of fundamental rights as laid down in R.C. Cooper 's ease and Maneka Gandhi 's case.
It is significant to note that the doctrine of exclusi 370 vity enunciated in A.K. Gopalan 's case led to the property rights under Article 19(1)(f) and 31 being treated as distinct and different rights traversing separate grounds, but this view was over turned in Kochune 's case (1) where this Court by a majority held that a law seeking to deprive a person of his property under Article 31 must be a valid law and it must therefore meet the challenge of other fundamental rights including Article 19(1)(f).
This Court over ruled the proposition laid down in State of Bombay vs Bhanji Munji(2) that Article 19(1)(f) read with clause (5) postulates the existence of property which can be enjoyed and therefore if the owner is deprived of his property by a valid law under Article 31, there can be no question of exercising any rights ' under Article 19(1)(f) in respect of such property.
The court ruled that even io a law seeks to deprive a person of his property under Article 31, it must still, in order to be valid, satisfy the requirement of Article 19 (1)(f) read with clause (5).
If this be the true position in regard to the inter relation between Article 19 (1) (f) and Article 31, it is difficult to see why a law authorising deprivation of the right to life under Article 21 should not have to meet the test of other fundamental rights including those set out in the different clauses of Article 19.
But even if section 302 in so far as it provides for imposition of death penalty as alternative punishment has to meet the challenge of Article 19.
the question would still remain whether the 'direct and inevitable consequence ' of that provision is to affect any of the rights guaranteed under the Article.
That is a question on which I do not wish to express any definite opinion.
It is sufficient for me to state that the 'object and form test ' or the 'pith and substance rule ' has been completely discarded by the decision in R.C. Cooper 's case and Maneka Gandhi 's case and it is now settled law that in order to locate the fundamental right violated by a statute, the court must consider what is the direct and inevitable consequence of the statute.
The impugned statute may in its direct and inevitable effect invade more than one fundamental right and merely because it satisfies the requirement of one fundamental right, it is not freed from the obligation to meet the challenge of another applicable fundamental right.
These are the reasons for which I made my order dated May 9, 1980 declaring the death penalty provided under section 302 of the 371 Indian Penal Code read with section 354 sub section (3) of the Code of Criminal Procedure, 1973 is unconstitutional and void as being 5 violative of Articles 14 and 21.
I must express my profound regret at the long delay in delivering this judgment but.
the reason is that there was a considerable mass of material which had to be collected from various sources and then examined and analysed and this took a large amount of time.
B S.R. Appeal dismissed.
| The petitioner complained that the workmen employed in the two ferries, one at Bhagalpur and the other at Sultanganj, operated by respondent No. 5 were not being paid minimum wages as prescribed by the relevant notifications issued by the State of Bihar under the .
Respondent No. 5 contended that the was not applicable to these two ferries.
Allowing the writ petition, ^ HELD: The Schedule to the lists various employments in respect of which minimum rates of wages can be fixed by the appropriate Government.
Entry 27 of the Schedule which dealt with employment in shops and establishments registered under the Bihar Shops and Establishments Act, 1953, was amended on 25.11.1978 to enlarge its scope to cover employment in any shop or establishment other than that covered under any of the other entries in the Schedule.
It is clear from the Explanation to the amended Entry 27 that the word "establishment" in that entry has the same meaning which is assigned to it in the Bihar Shops and Establishments Act, 1953 and the court must, therefore, look at the definition of "establishment" as given in the Bihar Shops and Establishments Act, 1953 in order to determine as to whether the Bhagalpur and Sultanganj ferries could be said to be establishments within the meaning of the amended Entry 27.
The word "establishment" is defined in see.
2(6) of Bihar Shops and Establishments Act, 1953 to mean an establishment which carries on any business, trade or profession or any work in connection with, or incidental or ancillary to, any business, trade or profession.
Now it can hardly be disputed that the Bhagalpur and Sultanganj ferries are establishments which carry on business or trade of plying ferries across the Ganges and they are clearly within the meaning of the word "establishment" in sec.
2(6) of the Bihar Shops and Establishments Act, 1953 and consequently they would also be establishments within the meaning 1012 of that expression as used in the amended Entry 27.
The would, therefore, clearly be applicable to employment in the Bhagalpur, and Sultanganj ferries.
[1014 D, G H; 1015 A B G H; 1016A] The workmen employed in the Bhagalpur and Sultanganj ferries were entitled to receive minimum wage as set out in the Notification dated 25th June 1975 as amended by the Notification dated 20th January 1979 for the period from 20th January 1979 upto 25th November 1981 and thereafter at the rate fixed in the Notification dated 26th November 1981.
[1016 F G]
|
Civil Appeal Nos.
1144 1145 of 1969.
From the judgment and decree dated the 5th March, 1964 of the Madhya Pradesh High Court in First Appeal No. 14 of S.S. Ray, G.S. Solanki, section Kachwah and K.J. John for the Appellant in C.A. 1144/69 and for Respondent Nos. 2 and 3 in C.A. 1145/69.
G. L. Sanghi.
A.G. Ratnaparkhi and K.K. Gupta, for the Appellant in C.A. 1145/69 and for Respondent No. 2 in C.A. 1144 of 1969.
191 V.S. Desai and Dr. Y.S. Chitale.
Rameshwar Nath, K.A. Chitale and Mrs. section Ramachandran for Respondent No. 1 in both the Appeals.
The Judgment of the Court was delivered by DESAI, J.
What constitutes part performance within the meaning of the expression in Section 53 A of the Transfer of Property Act ( 'Act ' for short) so as to clothe a mortgagee in possession with the title of ownership which would defeat the suit of the erstwhile mortgagor for redemption, is the question canvassed in these two appeals by common certificate.
Facts first Sardar Govindrao Mahadik original plaintiff 1 (now deceased prosecuting these appeals through his legal representatives) and Gyarsilal original plaintiff 2 (appellant 2) filed Civil Suit No. 14151 in the Court of the District Judge, Indore, for redemption of a mortgage in respect of house No. 41 more particularly described in plaint paragraph 1, dated February 22, 1951.
A loan of Rs. 10,000 was secured by the mortgage.
The mortgage was mortgage with possession.
Plaintiff I was the mortgagor and the sole defendant Devi Sahai was the mortgagee.
Plaintiff 2 is a purchaser of the mortgaged property from plaintiff I under a registered sale deed exhibit P I, dated October 14, 1950.
Plaintiff I will be referred to as mortgagor Defendant Devi Sahai as a mortgagee and plaintiff 2 Gyarsilal as subsequent purchaser in this judgment.
Even though the mortgage was mortgage with possession, it was not a usufructuory mortgage but an anomalous mortgage in that the mortgagor had agreed to pay interest at the rate of 12% and the mortgagee was liable to account for the income of the property earned as rent and if the mortgagee himself occupied the same he was bound to account for the rent at the rate of Rs. 515 per annum.
Mortgagor served notice dated October 5, 1945, calling upon the mortgagee to render true and full account of the mortgage transaction.
The mortgagee failed to comply with the notice.
Subsequently it appears that there were some negotiations between the mortgagor and the mortgagee which according to the mortgagee, culminated in a sale of the mortgaged property in favour of mortgagee for Rs. 50,000.
Account of the mortgage transaction was made and the consideration of 192 Rs. 50,000 for the sale of the house which would mean sale of equity of redemption was worked out as under: Rs. 25,000 Principal mortgage money plus the amount found due as interest on taking accounts of mortgage.
Rs. 17,735 Given credit for the amounts taken from time to time by the mortgagor from the mortgagee s for domestic expenses.
This is disputed as incorrect and it was suggested that the entry be read as amount retained to pay off other creditors of the mortgagor.
Rs. 1,000 Taken in advance for purchasing stamps and incurring registration expenses.
Rs. 6,265 To be paid in cash at the time of registration before the Sub Registrar.
Rs. 50,000 Requisite stamps were purchased and the draft sale deed was drawn up on October 10, 1950, but it was never registered.
On October 14, 1950, Ist plaintiff mortgagor sold the suit house by a .
registered sale deed to plaintiff 2 Gyarsilal for Rs. 50,000 with an agreement for resale.
Thereafter the mortgagor and the subsequent purchaser as plaintiffs 1 and 2 respectively filed a suit on February 22, 1951 against mortgagee defendant Devi Sahai for taking accounts of the mortgage transaction and for a decree for redemption.
The mortgagee Devi Sahai defended the suit on diverse grounds but the principal and the only defence canvassed was one under section 53A of the Act, namely, that even though the sale deed purporting to sell equity of redemption having not been registered would not clothe the mortgagee with title of owner to the mortgaged property, yet he could defend his possession as transferee owner under the doctrine of part performance in as much as not only is the mortgagee in possession in part performance of the contract of sale but has continued in possession in part perfor 193 mance of the contract and has done several acts unequivocally referable or attributable to the contract and that the mortgage as transferee has not only performed but is willing to perform his part of the contract and, therefore, the mortgagor is debarred from enforcing against the mortgagee any right in respect of the mortgaged property.
As a necessary corollary, it was also contended that plaintiff 2 has acquired no right, title or interest in the mortgaged property under the alleged sale deed dated October 14, 1950, in view of the fact that the transferor, viz., original mortgagor had no subsisting title to the property on the date of the sale which he could have transferred to the 2nd plaintiff.
Arising from the pleadings of the parties, trial court framed five issues.
The trial court held that plaintiff I executed a sale deed of the mortgaged property in favour of the defendant mortgagee but as the sale deed was not registered the transaction of sale is riot complete on the issue of protection of section 53A claimed by the defendant mortgagee the trial court held against him.
It was held that the mortgage being mortgage with possession, continued possession of the mortgagee after the date of the contract dated October 10, 1950, would not be in part performance of the con tract.
The trial court further held that no payment was made could remotely be said to be in part performance of the contract.
With regard to the payment of Rs. 1,000 for purchase of stamps and expenses of registration, it was held that the same was paid before the execution of the contract, and therefore, could not be said to be in furtherance of the contract.
On these findings the trial court held that section 53A of the Act was not attracted and the mortgage was accordingly held to be subsisting and a preliminary decree for taking accounts was passed.
A Commissioner was appointed for taking accounts.
Defendant mortgagee Devi Sahai preferred Civil First Appeal No. 14/66 to the Indore Bench of the Madhya Pradesh High Court.
When this appeal was pending, appellant Motilal in cognate Civil No 1145/69 applied under order 22, rule 10, Code of Civil Procedure, for being joined as a party to the appeal claiming that under s the sale certificate dated March 25, 1953, issued by the Additional City Civil Judge First Class, Indore, he had purchased the equity of redemption in respect of the mortgaged property and that he has a subsisting interest in the property involved in the dispute and, therefore, he would contest the rights of the plaintiffs as well as of the mortgagee defendant to claim any right, title or interest in the 194 property.
In his application Motilal alleged that he had filed Civil Suit No. 243/47 dated November 3,1947 for recovering a certain amount against the 1st plaintiff mortgagor and had secured attachment before judgment of the mortgaged property on November 6, 1947.
His suit was decreed to the extent of Rs. 2500 by the trial court.
He filed execution application No. 216/51 and in this proceeding the mortgaged property was sold subject to mortgage and he purchased the same for Rs. 300.
The auction sale was confirmed on September 25, 1953.
It may also be mentioned that the mortgagor 1st plaintiff had preferred appeal against the decree of the trial court and the appellate court by its judgment dated March 27, 1953, allowed the appeal and dismissed the suit of Motilal in entirety.
Against the appellate decree Motilal filed Second Appeal No. 78/53 in the High Court and by its judgment dated September 4, 1958, Motilal 's claim to the tune of Rs. 500 against the Ist plaintiff mortgagor along with proportionate interest and costs was decreed.
The application of Motilal for being impleaded as a party was contested by the Ist and the 2nd plaintiffs as well as by the defendant mortgagee.
The High Court allowed the application of Motilal for being joined as party to the appeal and examined the contentions advanced on his behalf on merits.
The only contention canvassed by the mortgagee in his appeal in the High Court was that he is entitled to the protection conferred by Section 53A of the Act.
In order to attract section 53A it was urged that Rs. 1,000 advanced to mortgagor for purchase of stamps etc.
was in furtherance of the contract.
The only such act pleaded was payment of Rs. 1,000 and no other act or circumstance was relied upon.
The High Court was of the opinion that original mortgagee Devi Sahai was entitled to the benefit of the doctrine of part performance as against the Ist plaintiff mortgagor Govindrao Mahadik and his subsequent transferee Gyarsilal because he was in possession and continued to be in possession and paid Rs. 1,000 in furtherance of the contract.
While so holding the High Court imposed a condition that the mortgagee must pay or deposit in the court an amount of Rs. 24,000 with interest at the rate of 4% per annum from the date of delivery of possession to him as vendee till the date of payment or deposit on the footing that was the balance consideration promised but not paid by the mortgagee.
The deposit was directed to be made in the trial court within three months from the date of the judgment of the High Court for payment to the 2nd respondent which would enable 195 the mortgagee to retain possession of the mortgaged property.
The High Court gave a further direction that if the payment or deposit as directed in the judgment was not made, the appeal of the mortgagee would stand dismissed and if the amount directed in the judgment of the High Court was paid or deposited in the trial court within the stipulated time the appeal of the mortgagee would stand allowed and in that event the suit of the mortgagor would stand dismissed.
In respect of Motilal 's claim the High Court directed that in either event he shall be entitled to recover the balance of his decretal amount and interest at the rate of 4% per annum from the date of the auction sale till the date of realisation and to the extent of that amount there shall be a charge on the mortgaged property enforceable at the instance of Motilal.
In the circumstances of the case the High Court did not award costs to either side.
Both the original plaintiffs and Motilal made separate applications for certificate under Article 133 (l) (a) and (b) of the Constitution which were granted.
Hence these two appeals.
The Appeal (CA 1144/69) preferred by the original plaintiffs plaintiff 1 being the mortgagor, may be dealt with first.
In this appeal Ist defendant (mortgagee) seeks to non suit the plaintiff on the only ground that he is entitled to the benefit of equitable doctrine of part performance as enacted in section 53A of the Act.
According to the defendant mortgagee the mortgagor agreed to sell the mortgaged property to the mortgagee for consideration of Rs. 50,000 made up in the manner set out in the sale deed exhibit 1 dated October 10, 1950 and pursuant to the agreement he has given Rs. 1,000 being part of the consideration for purchasing stamps and for expenses of registration and after stamps were purchased, sale deed exhibit 1 was drawn up and executed and since then he being in possession retained the same as a vendee and accordingly he is entitled to the protection of section 53A of the Act.
This necessitates focussing of the attention on the requirements what constitutes part performance as enacted in section 53A.
Even though at the hearing of the appeals what was the state of law prior to the introduction of section 53A in the Act by the Transfer of Property (Amendment) Act, 1929, was canvassed at length, we would like to steer clear of this confusing mass of legal squabble and, proceed to analyse the contents of section 53A, subsequently referring to legislative cum legal history so far as it is 196 relevant for interpretation of the section.
Section 53A reads as under: "53A. Where any person contracts to transfer for consideration any immovable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part there of, or the transferee being already in possession continues in possession in part performance of the contract and has done some act in furtherance of the contract and the transferee has performed or is willing to perform his part of the contract.
then, not withstanding that the contract, though required to be registered, has not been registered, or, where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force the transferor or any per son claiming under him shall be debarred from enforcing against the transferred and persons claiming under him any right in respect of the property of which the transferee has taken or continues in possession, other than a right expressly provided by the terms of the contract; Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof.
" In order to qualify for the protection conferred by the equitable doctrine of part performance as enacted in section 53A, the following facts will have to be established: (1) That the transferor has contracted to transfer for consideration any immovable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty; (2) That the transferee has in part performance of the contract taken possession of the property or any part thereof.
Or the transferee.
being already in possession, 197 continues in possession in part performance of the contract: (3) That the transferee has done some act in furtherance of the contract: and (4) That the transferee has already or is willing to perform his part of the contract." (see Nathulal vs Phool Chand.
There was no dispute that the aforementioned conditions have to be satisfied to make good the defence of part performance.
The controversy is on their application to the facts of the case.
The High Court which accepted the defence of part performance as canvassed on behalf of the mortgagee who claimed to have purchased the property under a sale deed Ext.
D 1 dated October 10, 1950, found that payment of Rs. 1,000 for purchase of stamps was an unequivocal act in furtherance of the contract.
The defendant mortgagee did not invite the High Court to consider any other act as having been done by him under the contract or furtherance of the contract, or unequivocally referable to the contract.
However, when the matter was heard in this Court, Mr. V section Desai, learned counsel appearing for the respondent mortgagee urged the following acts as having been done by the mortgagee in furtherance of the contract which would constitute part performance; (a) payment of Rs. 1,000 as agreed to under the contract for purchase of stamps for drawing up and registering the sale deed; (b) discharge of a debt of Rs. 541 which was included in the amount of Rs. 17,735 retained by the mortgagee from the total consideration payable for discharging other debts; (c) mortgagee agreed to discharge the mortgage subsisting on the property in his favour on settlement of accounts; 198 (d) all dues owed by the mortgagor to the mortgagee may have to be taken as cleared on completion of the (e) nature and character of possession changed as recited in the contract; A few more circumstances were relied upon to show that the mortgagee was willing to perform his part of the contract and the omissions pointed out are not fatal to his case.
They are: (f) failure to offer the amount agreed to be paid before the Registrar and/or not discharging debts agreed to be discharged as having been given credit in the consideration for the sale would not detract from part performance because they have to be evaluated in the facts and circumstances of the case; (g) conduct of the 1st plaintiff mortgagor in executing and registering a sale deed in respect of the mortgaged property in favour of the 2nd plaintiff Gyarsilal and thereby frustrating the contract of sale in favour of the defendant mortgagee evidence that the 1st plaintiff mortgagor was aware of the contract in favour of the defendant mortgagee and he was retaining possession in furtherance of the contract: (h) defendant mortgagee made all attempts to get the deed registered by approaching the Sub Registrar; (i) the defendant mortgagee initiated criminal proceedings against the 1st plaintiff mortgagor for misusing the stamp papers.
Ordinarily this Court would be loath to examine contentions of facts based on evaluation of evidence advanced for the first time before this Court without any attempt at inviting the adjudication of the same by the High Court.
However, as all the contentions arise from the record and proceedings, we propose to examine them on merits more so because we do not propose to rest this judgment on a technical around and also because we are inclined to reverse the decision of The High Court which is in favour of 1st defendant mortgagee.
199 Section 4 of the Statute of Frauds, 1677 of United Kingdom provided that no person shall be charged upon any contract for sale of lands or any interest in land etc.
unless the agreement or some memorandum or some note thereof shall be in writing and signed by the party to be charged thereunder or some other person there unto by him lawfully authorised.
This provision has been substantially re enacted in section 40 (i) of the Law of Property Act, 1925 with this departure that sub section 2 specifically provides that the substantive provision in sub section I does not effect the law relating to part performance or sales by the court.
As no action could be brought on oral agreement the doctrine of part performance was devised by the Chancery Court with a view to mitigating the hardship arising out of an advantage taken by a person under an oral contract and failure to enforce it would permit such person to retain the undeserved advantage by the Equity Court enforcing the contract.
The situation must be such that not to enforce the contract in face of the defence of Statute of Frauds after taking advantage of oral contract would perpetuate the fraud which the statute sought to prevent The party who altered its position under the contract must have done some act under the contract and it would amount to fraud in the opposite party to take advantage of the contract not being in writing.
Such a situation arose where one of the parties to the oral agreement altered its position and when specific performance was sought after taking advantage under oral contract, set up the defence available under the Statute of Frauds.
The Chancery Court while granting relief of specific performance wanted to be wholly satisfied that the pleaded oral contract exists and is established to its utmost satisfaction and in order to ascertain the existence of the oral contract before granting a relief of specific performance the court wanted to be satisfied that some such act has been done which would be unequivocally referable to the oral contract as would prove the existence beyond suspicion, meaning part performance of the contract.
The departure under our law is that when giving its statutory form in section 53A of the Act the existence of a written contract has been made sine qua non and simultaneously the statute also insists upon proof of some act having been done in furtherance of the contract.
The act relied upon as evidencing part performance must be of such nature and character that its existence would establish the contract and its implantation.
Each and every act subsequent to contract by itself may not be sufficient to establish part performance.
The act must be of such a character as being 200 One unequivocally referable to the contract and having been per.
formed in performance of the contract.
In Lady Thynne vs Earl of Glengall it was observed that: "part performance to take the case out of the Statute of Frauds, always supposes a completed agreement.
There can be no part performance where there is no completed agreement in existence.
It must be obligatory, and what is done must be under the terms of the agreement and by force of the agreement.
" This approach would necessitate that the act relied upon as being in the part performance of the contract was such as by its own force would show the very same contract as is alleged by the person seeking the protection of part performance.
In the fact situation as it unfolds itself in this case, continued possession of the mortgagee hardly offers any clue to the question of part performance.
Defendant mortgagee was in possession of the mortgaged property.
Therefore, physical possession having not changed hands, it would be for the mortgagee to show that he continued to retain possession in part performance of the contract and has done some act in furtherance of the contract.
Where physical and actual possession was already with the person claiming the benefit of the doctrine of part performance its continued retention by itself without anything more would hardly be indicative of an act unequivocally referable to part performance of the contract.
He must further establish that he has done some act in furtherance of the contract.
This was not disputed and, therefore, the mortgagee defendant urged before the High Court and reiterated before us that, payment of Rs. 1,000 inter alia to the Ist plaintiff mortgagor for purchase of stamps and for expenses incidental to registration was an act unequivocally done in furtherance of the contract.
Before evaluating the submission a few relevant facts may be noticed.
By letter Ext.
P 3 dated October 9, 1950, Ist plaintiff wrote to defendant mortgagee portion of which may be extracted as it has some bearing on the question under consideration: ".
It is requested that we have entered into a contract with you for the sale condition of our house No. 12 situated in Kalai Mohalla.
Therefore to buy stamps etc.
for the sale you should pay Rs. 1,000 (Rupees one thousand 201 only) to our Mukhtiar Shri Madhavraoji Vishnu Joshi, 82, Ada Bazar, Indorewale, I agree for the same and shall deduct the amount at the time of registration." Pursuant to this letter defendant mortgagee paid Rs. 700 to the Muktiar and an endorsement to that effect is found as Ext.
On the next day that is October 10, 1950, a further amount of Rs. 300 was given and stamps were purchased and on the same day sale deed Ext.
1 was drawn up.
While reciting the consideration for the sale deed a credit was given for Rs. 1,000 paid by the mortgagee for purchase of stamp.
So far there is no dispute.
The grievance is that according to the Ist plaintiff mortgagor he had agreed to sell the house to the mortgagee but the sale was to be a conditional sale with a right to repurchase and that was agreed to between the parties.
Subsequently when the sale deed Ext.
D 1 was drawn up he found that it was an absolute sale in breach of the agreement and therefore he did not complete the transaction and sold the house subsequently on October 14, 1950 to the 2nd plaintiff, under Ext.
P 1 which is a conditional sale with a right to repurchase.
It would thus transpire that payment of Rs. 1,000 consisting of two separate payments one of Rs. 700 on October 9, 1950, and an amount of Rs. 300 on October 10, 1950, by the defendant mortgagee to Ist plaintiff mortgagor for purchasing stamps for execution of a sale deed is not in dispute.
What is in dispute is whether the payment was made towards some contract anterior to the letter Ext.
P 3 dated October 9,195, or it was in pursuance to the contract dated October 10, 1950, as reflected in the unregistered sale deed.
In this connection the stand taken by the mortgagee defendant is both equivocal and fluctuating.
In the written statement filed on his behalf on April 10, 1951, there is no specific, clear and unambiguous plea of part performance.
Under the heading 'additional plea ' in para 9 it is contended that the sale deed having been executed in favour of the mortgagee in settlement of mortgage transaction mutually between the parties and that the mortgaged property has been given to the mortgagee as an owner, the mortgage transaction does not subsist in law.
This has been understood to mean a plea for the protection of the doctrine of part performance.
Be that as it may, it is not suggested that there was any oral contract anterior to the one as found in the unregistered sale deed Ext.
Nor is there any suggestion of any draft agreement prior to the drawing up of the sale deed Ext.
What transpires from 202 the diverse recital is that there was some oral discussion between the parties prior to the letter Ext.
P 3 dated October 9, 1950, at which the understanding was that there was to be a conditional sale with a right of repurchase by the mortgagor and that becomes evident from the recital in Ext.
P 3, "sale condition" which is contemporaneous evidence having its intrinsic worth and a stamp of truthfulness because at that time no dispute had arisen and the mortgagor was seeking tc work out and implement the agreement by seeking a loan of Rs. 1,000 for purchase of stamps and for expenses incidental to registration so as to complete the transaction.
But there was no written contract.
It must be stated that there was dispute about the nature of transaction is also borne out by the parol evidence.
Mortgagee Devi Sahai DW 1 has deposed in para 6 that mortgagor in Chit exhibit P. 3 proposed a conditional sale to which he did not agree whereupon mortgagor agreed to give absolute sale.
This establishes that there was a dispute as to the nature of the transaction.
Section 53A postulates a written contract from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty.
There was no concluded contract prior to Ext.
The only written contract which is relied on is the unregistered sale deed exhibit D l of October 10, 1950.
On the admission of the mortgagee himself it is crystal clear that out of Rs. 1,000 an amount of Rs. 700 was paid on October 9, 1950, and that was prior to the agreement.
As for the payment of Rs. 300 it is not specifically claimed that was payment in furtherance of the contract.
In any event, stamps were purchased prior to the drawing up of Ext.
D l which is the contract relied upon for the purposes of section 53A.
And it must be shown that the act has been done in furtherance of the contract, i.e. subsequent to the contract or at best simultaneously with the contract but un equivocally attributable or referable to the contract.
It must follow that acts anterior to and done previous to the agreement cannot be presumed to be done in pursuance of it and cannot, therefore, be considered as acts of part performance (See Whiteread vs Brockhunt quoted by White and Tudor, leading cases on Equity at p. 416).
The High Court while evaluating the probative value of the circumstances of payment of Rs. 1,000 started on a wrong premise when it observed that the act envisaged by the phrase in furtherance of the contract" in section 53A should be in pursuance of the contract and not that it should either precede or follow the 203 agreement or the contract.
If a written contract is a sine qua non for seeking coverage of the umbrella of the equitable doctrine of part performance any act preceding the contract could conceivably never be in furtherance of that contract which was yet to materialise.
Negotiations for a contract and a concluded contract stand apart from each other.
Anything at the negotiating stage cannot be claimed as contract unless the contract is concluded between the parties, i.e. the parties are ad idem.
Coupled with this is the further requirement that it should be a written contract in that the contract which would purport to transfer for consideration the immovable property must be by writing and the writing must be such that the necessary ingredients constitute the transfer can be ascertained with reasonable certainty.
The High Court overlooking the very important fact situation that the only contract relied upon by the mortgagee defendant was one contained in the unregistered sale deed Ext.
D 1 dated October 10, 1950, committed an error in holding that the payment of Rs. 1,000 prior to October 10, 1950 would undoubtedly be an act in pursuance of the contract which is evidenced by the writing Ext.
D 1 duly signed by the Ist respondent.
This approach overlooks a vital dispute between the parties and the High Court could not have utilised this circumstance without resolving the dispute in as much as unquestionably there were some negotiations between the parties either on October 9, 1950, or some time prior thereto but there was no concluded contract because the very letter Ext.
P 3 which the Ist plaintiff mortgagor sought a loan of Rs. 1,000 for purchasing the stamps etc.
was pursuant to a conditional sale and that is totally denied and repudiated by the mortgagee as shown hereinabove.
Accordingly when the amount of Rs. 1,000 was paid it was the stage of negotiations and not a concluded contract.
And when the contract was drawn up as evidenced by Ext.
D 1 being the unregistered sale deed dated October 10, 1950, the parties were not ad idem.
because the mortgagor declined to agree to registration of the sale deed as it was contrary to the understanding arrived at between the parties though no doubt he had executed the sale deed.
The contention therefore that the amount of Rs. 1,000 was paid in furtherance of the contract does not bear scrutiny.
However, assuming that the finding of fact recorded by the High Court that the amount of Rs. 1,000 was paid in furtherance of the contract, is a finding of fact recorded on appreciation and evaluation of evidence and ordinarily not interfered with by this Court unless shown to be perverse, the alternative contention that 204 payment of part or even whole of the consideration could not be said to be in furtherance of the contract and, therefore, not sufficient to constitute part performance, may now be examined.
How far payment of part or even whole of the consideration would constitute part performance so as to take the case out of section 4 of the Statute of Frauds may now be examined with reference first to the English decisions because section 53A enacts with some modification the English equitable doctrine of part performance.
In order to mitigate the hardship arising out of the rigorous provisions of the Statute of Frauds equitable doctrine of part performance was divised by the Court of Chancery.
Commenting upon section 4 of the Statute of Frauds 1677, Lord Redesdale observed in Foxcroft vs Lester,(l) (quoted in White & Tudor 's Leading cases on Equity, 8th Edn., p. 413) as under: "The Statute of Frauds says that no action or suit shall be maintained on an agreement relating to lands, which is not in writing, signed by the party to be charged with it; and yet the Court is in the daily habit of relieving, where the party seeking relief has been put into a situation which makes it against conscience in the other party to insist on the want of writing so signed, as a bar to his relief.
The first case (apparently) of this kind was Foxcroft vs Lyster (1), which was decided on a principle acted upon in Courts of law, but not applicable to the particular case.
It was against conscience to suffer the party who had entered and expended his money on the faith of a parol agreement to be treated as a trespasser, and the other party to enjoy the advantage of the money he had laid out.
" The question often arises whether payment of part or even whole of the consideration can be unequivocally attributed to the contract.
At 416 the authors observe : "Payment of part or even of all the purchase money will not be considered an act of part performance to take 205 a parol contract out of the Statute of Frauds.
Nor will payment of the auction duty.
" The payment of a part or even a whole of the consideration was not treated unequivocal act of part performance because it was believed that money can be repaid or can be reclaimed and, therefore, it is not an unequivocal act evidencing an act in furtherance of the contract (See Hanbury & Maudsley, Modern Quity, 10th Edn., p. 37).
Similarly, Story 's Equity Jurisprudence 14th Edn., para 1045, p. 424, neatly sets out the history of the approach to payment of money as evidence of part performance.
It may be extracted: ".
It seems formerly to have been thought that a deposit, or security, or payment of the purchase money, or of a part of it, or at least of a considerable part of it, was such a part performance as took the case out of the statute.
But that doctrine was open to much controversy, and is now finally overthrown Indeed the distinction taken in some of the cases between the payment of a small part and the payment of a considerable part of the purchase money seems quite too refined and subtle, for independently of the difficulty of saying what shall be deemed a small and what a considerable part of the purchase money, each must, upon principle, stand upon the same reason, namely, that it is a part performance in both cases, or not in either.
One ground why part payment is not now deemed a part performance, sufficient to take a case out of the statute, is that the money can be recovered back again at law, and therefore the case admits of full and direct compensation." Equity by G.M. Keeton and L.A. Sheridan, 2nd Edn., p. 366 sets out chronologically the approach of the Court to payment of money as evidencing part performance.
Attitude to the payment of money as an act of part performance had varied from time to time.
In Elizabeth Meddison vs John Alderson,(1) Lord Selborne, L.C. pointed out: ". the payment of money is an equivocal act not (in 206 itself) unless connection is established by parol testimony indicative of a contract consisting of land." In Snell 's principles of Equity, 20th Edn., p. 587, under the heading 'Insufficient Acts to bring the case out of the doctrine of part performance ', it is noted that payment of a part of the purchase money, or even apparently the whole, is not sufficient for part performance of a contract for the sale of land for the payment of money is an equivocal act (not in itself), until the connection is established by parol testimony, indicative of a contract concerning land.
Maddison vs Alderson is relied upon in support of this statement.
A few cases to which our attention was drawn may now be referred to.
In Clinan and Anr.
vs Cooke and Ors.
,(1) Cooke inserted an advertisement in the public papers inviting offers to let a piece and parcel of land for the period set out in the advertisement.
In response to this advertisement the plaintiffs applied to Edmund Meagher to whom the application was to be addressed and entered into a treaty with him for lease of land.
A memorandum of agreement was entered into between the parties and the intending tenant deposited 50 guineas which the advertiser received in consideration of the lease on the recommendation of Meagher who also appeared to have received a sum of 20 guineas from the plaintiffs for which no receipt was given Subsequently Mr. Cooke refused to perform the agreement and he granted a new term of lease to the defendants who entered into the same with the knowledge of the agreement with the plaintiffs.
An action was brought by the plain tiffs for specific performance.
Declining to grant that relief Lord Redesdale held as under: "But I think this is not a case in which part performance appears.
The only circumstance that can be considered as amounting to part performance is the payment of the sum of fifty guineas to Mr. Cooke.
It has always been considered that the payment of money is not to be deemed part performance to take a case out of the statute.
" In Maddison 's case Earl of Selborne, L.C. in unequivocal terms observed that it may be taken as new settled that part payment of purchase money is not enough, and judges of high authority 207 have said the same even of payment in full.
Clinan vs Cooke, (supra) Hughes vs Morris(1) and Britain vs Rossiter(2) were relied upon in support of this.
Again at p. 484 Lord O 'Hagan taking note of the conflict of decisions pertinently observed as under: "I confess I have found it hard to follow the reasoning of the judges in some of the cases to which the Lord Chancellor has referred to reconcile the rulings, in others of them and to regard as entirely satisfactory the state of the law in which the taking of possession or receipts of rent is dealt with as an act of part performance, and the giving and acceptance of any amount of purchase money, confessedly in pursuance and affirmance of a contract of sale, is not.
As to some of the judgments prompted no doubt by a desire to defeat fraud and accomplish justice, I am inclined to concur with the present Master of the Rolls in Britain vs Rossiter (1), when he called them" bold decisions.
" It may be noted that in that case an intestate induced a woman to serve him as his house keeper without wages for many years and to give up other prospects of establishment in life by a verbal promise to make a will leaving her a life estate in land and afterwards signed a will, not duly attested, by which he left her the life estate.
lt was contended on behalf of the woman who worked as house keeper that she had wholly performed her part by serving the intestate as house keeper till the intestate 's death without wages yet the Court in its equity jurisdiction declined to hold such an act as referable to any contract and was not such a part performance as to take the case out of the operation of section 4 of the Statute of Frauds.
This case is being referred to show how firstly established and entrenched the view was that payment is not enough.
Offer to work without wages was treated as evidencing some payment not enough to sustain the plea of part performance.
The equity should take such a view of human service and sacrifice is difficult to appreciate.
Modern notions of equity, fairplay and just approach would stand rudely shaken by the view taken in that case & and quoting the case is not to be interpreted to mean sharing the view.
208 In Chaproniere vs Lambert,(1) the Court of Appeal reinforced the view which held the field till then that the mere payment of rent is not such part performance to take the case out of the statute and even payment of whole of the purchase money has been held not to be sufficient to take the case out of the statute.
In so doing it reiterated the view taken in Muddison vs Anderson, (supra).
In Enland the law took a sharp U turn in Steadman vs Steadman,(2) Lord Simon of Claisdale under the heading 'Payment of money ' observed as under: "It has sometimes been said that payment of money can never be a sufficient act of part performance to raise the required equity in favour of the plaintiff or, more narrowly, that payment of part or even the whole of the purchase price for an interest in land is not a sufficient act of part performance.
But neither of the reasons put forward for the rule justifies it as framed so absolutely.
The first was that a plaintiff seeking to enforce an oral agreement to which the statute relates needs the aid of equity; and equity would not lend its aid if there was an adequate remedy at law.
It was argued that a payment could be recovered at law, so there was no call for the intervention of equity.
But the payee might not be able to re pay the money (he might have gone bankrupt), or the land might have a particular significance for the plaintiff (of the equitable order for specific delivery of a chattel of particular value to the owner: (Duke of Somerset vs Cookson) or it might have greatly risen in value since the payment, or money may have lost some of its value.
So, it was sought to justify the rule, alternatively, on the ground that payment of money is always an equivocal act, it need not imply a pre existing contract, but is equally consistent with many other hypotheses.
This may be so in many cases, but it is not so in all cases.
Oral testimony may not be given to connect the payment with a contract; but circumstances established by admissible evidence (other acts of part performance, for case, for example, what was said (i.e. done) in the magistrates ' court in part 209 performance of the agreement makes it plain that the payment of the 108 was also in part performance of the agreement and not a spontaneous act of generosity or discharge of a legal obligation or attributable to any other hypothesis.
" To some extent, therefore the statement of law in Maddison 's case that it may be taken as well settled that payment of part of purchase money or even the whole of the consideration is not sufficient act of part performance can be taken to have been shaken considerably from its foundation.
While text book writers and English decisions may shed some light to illuminate the blurred areas as to whether part payment of purchase money or even the whole of the consideration would not be sufficient act of part performance, it is necessary that this aspect may be examined in the background of statutory requirement as enacted in section 53A.
To qualify for the protection of the doctrine of part performance it must be shown that there is a contract to transfer for consideration immovable property and the contract is evidenced by a writing signed by the person sought to be bound by r it and from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty.
These are pre requisites to invoke the equitable doctrine of part performance.
After establishing the aforementioned circumstances it must be further shown that a transferee had in part performance of the contract either taken possession of the property or any part thereof or the transferee being already in possession continues in possession in part performance of the contract and has done some act in furtherance of the contract.
The acts claimed to be in part performance must be unequivocally referable to the pre existing contract and the acts of part performance must unequivocally point in the direction of the existence of contract and evidencing implementation or performance of contract.
There must be a real nexus between the contract and the acts done in pursuance of the contract or in furtherance of tho contract and must be unequivocally referable to the contract.
When series of acts are done in part performance, one such may be payment of consideration.
Any one act by itself may or may not be of such a conclusive nature as to conclude the point one way or the other but when taken with many others payment of part of the consideration or the whole of the consideration may as well be shown to be in furtherance of contract.
The correct approach would be what Lord Reid said in Steadman 's case 210 that one must not first took at the oral contract and then see whether the alleged acts of part performance are consistent with it.
One must first look at the alleged acts of part performance and see whether they prove that there must have been a contract and it is only if they do so prove that one can bring in the oral contract.
This view may not be wholly applicable to the situation in India because an oral contract is not envisaged by section 53A.
Even for invoking the equitable doctrine of part performance there has to be a contract in writing from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty.
Therefore, the correct view in India would be, look at that writing that is offered as a contract for transfer for consideration of any immovable property and then examine the acts said to have been done in furtherance of the contract and find out whether there is a real nexus between the contract and the acts pleaded as in part performance so that to refuse relief would be perpetuating the fraud of the party who after having taken advantage or benefit of the contract backs out and pleads non registration as defence, a defence analogous to section 4 of the Statute of Frauds.
We may recall here that the acts preliminary to the contract would be hardly of any assistance in ascertaining whether they were in furtherance of the contract.
Anything done in furtherance of the contract postulates the pre existing contract and the acts done in furtherance thereof.
Therefore, the acts interior to the contract or merely incidental to the contract would hardly provide any evidence of part performance.
The contention of Mr. Desai that payment of Rs. 1,000 for purchase of stamps in an act of part performance unequivocally attributable to the contract dated October 10, 1950, cannot be accepted for two reasons, one being that Rs. 700 out of the amount of Rs. 1,000 was paid on October 9, 1950, that is prior to the date of contract.
Then there is a serious dispute as to the nature of contract which was negotiated on October 9, 1950, the day on which payment of Rs. 700 was made.
Mortgagor was insisting upon a conditional sale and defendant mortgagee declined to accept the conditional sale and that is borne out by his evidence also.
There was thus no concluded contract on October 9, 1950, and, therefore, the payment of Rs. 700 out of Rs. 1,000 in any case could not be said to be part performance and the same reasons would mutatis mutandis apply to the payment of Rs. 300 also.
In the facts of this case this payment would not be an act of part performance.
In 211 our opinion, therefore, the High Court recorded an utterly unsustainable finding without minutely examining the relevant evidence coupled with the requirements of law and erred in holding that the payment of Rs. 1,000 was in furtherance of the contract.
We would also add that in the facts and circumstances of the case payment of Rs. 1,000 was not such an act of part performance which would help defendant mortgagee in any manner.
Mr. Desai next contended that the mortgagee discharged a debt of Rs. 541 which was included in the amount of Rs. 17,735 retained by the mortgagee from the total consideration payable for discharging other debts and that this payment was in furtherance of the contract.
This contention is being put forward for the first time in this Court and should be negatived on that account alone.
Even apart from this there is no sufficient evidence to uphold this contention.
In fact, the defendant mortgagee himself has to some extent prevaricated on the question of retention of Rs. 17,735 out of the total consideration for the sale transaction agreed at Rs. 50,000.
Consideration of Rs. 50,000 was made up, inter alia, by retaining Rs. 17,735 in discharge of debts owed by mortgagor to mortgagee by borrowing loans on different occasions for domestic expenses.
It is so stated in Ext.
D l which had been extracted earlier.
Mortgagee in his evidence gave a go bye to this recital and deposed that the amount of Rs, 17,735 from the total consideration payable by him was retained by the mortgagee for payment of other creditors of the mortgagor.
Even apart from this he has not stated a word that out of the amount of Rs. 17,735 he paid Rs. 541 to any particular creditor.
In his written statement he has stated that the amount of Rs. 17,735 was kept in deposit for payment to other creditor of the mortgagor.
One such creditor was to be paid a sum of Rs. 541.
This creditor is none other than the mortgagee himself.
This would mean that he himself was creditor to whom he paid Rs. 541.
Assuming that he could have reimbursed himself, there is nothing to show that he gave a discharge or that he gave credit in his books of accounts.
Further, there is no statement in his evidence to that effect.
That aspect was never canvassed before the trial court as well as the High Court and we find no material evidence to substantiate this contention.
The contention, has, therefore, to be negatived.
The third act of part performance pleaded on behalf of the mortgagee is that the mortgagee agreed to discharge the mortgage 212 subsisting on the property in his favour on settlement of accounts.
The mortgage deed admittedly was not returned to the mortgagor even after the mortgagor executed Ext.
D 1 the sale deed which was not ultimately registered.
But that is not enough.
The mortgage admitted in his evidence that even after Ext.
D 1 was executed he maintained the accounts of mortgage and in that account he debited Rs. 1,000 paid to the mortgagor for purchase of stamps.
Could it be said that he had discharged or agreed to discharge the mortgage subsisting on the property? There is however a piece of evidence which completely belies the claim and demonstrably establishes that mortgagee never claimed to regard himself as owner from October 10, 1950 the date of contract but till a later date continued to regard himself as a mortgagee with subsisting mortgage.
Mortgagee made an application on June 23, 1952 nearly two years after the contract of sale in the execution proceedings filed by Motilal seeking to bring mortgage property to court auction for realising his decretal amount, which decree he had obtained against the mortgagor.
In this application dated June 23, 1952 mortgagee has stated that till that date Rs. 27792/2/3 were due under the mortgage from the mortgagor and that fact must be noted in the sale proclamation and thereafter property should be sold.
Now if on October 10, 1950 accounts were made, mortgage was satisfied and mortgage debt was discharged, how is it that on June 23, 1952 he retained the mortgage account, worked out the amount due and sought its mention in the sale proclamation.
This conduct of mortgagee is sufficient to negative this contention.
In any event mere oral agreement to discharge a mortgage could hardly be said to be an act of part performance unless in fact such an act was done and that could have been only done by a discharged mortgage deed being returned to the mortgagor.
The next act of part performance pleaded by the mortgagee is that all dues owed by the mortgagor to the mortgagee have be taken as cleared on completion of the contract Now, even here his stand is equivocal.
In the written statement it was stated that at the time of filing the written statement a sum of Rs. 29,000 was found to be due from the mortgagor.
If on October 10, 1950, all accounts were made up, how could he continue a mortgage account which mortgage according to him came to be satisfied when he took the sale deed and continued in possession in part performance of the contract ? Therefore, the submission is without merits.
213 The next act of part performance pleaded by the mortgagee is that the nature and character of possession changed as recited in the contract.
Mortgagee was in possession as mortgagee.
Now according to him since the date of execution of the sale deed the nature of possession changed.
For this he relies upon a statement in the sale deed Ext.
D 1 wherein it is stated that he is being put in possession as owner.
This mere recital is hardly indicative of the change in the nature of possession.
There is no evidence to show that he moved the authorities that he would be liable to pay taxes as owner.
There is no overt act on his part to so assert possession as owner.
A mere recital in the disputed sale deed is of dubious evidentary value and when it would be pointed out that he was never willing to perform his part of the contract which is a pre requisite for claiming protection of the doctrine of part performance it will be shown that he believed himself to be a mortgagee and acted as such even at a date much later than October 10, 1950, from which date he claims to be the owner.
Induction into possession of an immovable property for the first time subsequent to the contract touching the property, may be decisive of the plea of part performance.
Mere possession ceases to be of assistance when as in this case the person claiming benefit of part performance is already in possession, prior to the contract and continues to retain possession.
However a reference to a statement of law in Halsbury 's Laws of England, 3rd Edition, Vol.
36, para 418 would be instructive.
It reads as under: "Where possession is given to a "tenant" before a tenancy agreement has been concluded and the possession is retained after the conclusion of the agreement, the possession, if unequivocally referable to the agreement, is a sufficient part performance but subject to this, acts done prior to, or preparatory to, the contract will not suffice.
" If a person claiming benefit of part performance is inducted into possession for the first time pursuant to the contract it would be strong evidence of the contract and possession changing hands pursuant to the contract.
in Hedson vs Heuland (1) it was held that although the entry into possession was antecedent to the contract, yet the subsequent continuance in possession being, under the circumstances, unequivocally referable to the contract, constituted a 214 part performance sufficient to take the case out of the Statute of Frauds.
In Nathulal 's case, the fact that Nathulal parted with possession after receiving part payment of the sale consideration was held sufficient to constitute part performance.
This Court observed that j,, part performance of contract Phoolchand has taken possession of the property and he had in pursuance thereof paid a part of the consideration and thereby the first three conditions tor making good the defence of part performance had been satisfactorily shown to exist.
But greater emphasis was laid on the decision of Somnath Iyer, Acting C.J. in Babu Murlidhar vs Soudagar Mohammad Abdul Bashir and Anr.
(1) In that case an unregistered agreement of sale executed by the mortgagor in favour of the mortgagee in possession recited that after the date of the agreement the mortgagee who had been in possession as such would become the owner of the property and that he could get his name mutated into mutation register of the municipality and in implementation of this agreement of sale, the mortgagor himself made an application for mutation to the municipal authorities and the name of the mortgagee was mutated as owner of the property, it was held sufficient to clothe the mortgagee with the protection of section 53A in a suit for redemption of the mortgage and the mortgagor 's suit was dismissed.
The Court attached considerable importance to the provision in the unregistered agreement for mutation in favour of the mortgagee as owner and the subsequent conduct of the mortgagor in making an application for mutation was held to be the clearest indication which is essential for invoking the doctrine of part performance.
The decision can be said to depend more or less on the facts of the case.
However in this connection a reference was also made to Thota China Subba Rao and Ors.
vs Matapelli Raju and Ors(2) That decision is hardly of any importance because an extreme contention was advanced on behalf of the mortgagee resisting a suit for redemption that he continued to be in possession in part performance of the agreement which argument was repelled by the Court on the observation that the mortgagee had never been in possession and the contention that he was always in constructive possession could hardly assist him.
215 In Jahangir Begum vs Gulam Ali Ahmed,(1) the Court after holding that the defendant was in possession and had put up a structure on it, came to the conclusion that he was not entitled to the benefit of doctrine of part performance because he was already in possession before the contract to transfer the property, relied upon by him, was entered into, and, therefore, it was obligatory upon him to show that he had done some act in furtherance of the contract in order to constitute a part performance of the contract.
In Kukali vs Basantilal(2) the facts found were that A mortgaged with possession his house with B. Subsequently A sold the house to in consideration of the mortgage debt and the amount spent by A on improvements and repairs of the house.
The deed was not registered.
Subsequently A sold the same property to under a registered sale deed.
sued for redemption.
relied on the equitable doctrine of part performance in defence.
Negativing the defence of part performance the Court held that as was already in possession as a mortgagee, unless he shows that he did some act in furtherance of the contract, over and above being in possession, mere continuance in possession would not constitute part performance.
The case is very near to the facts disclosed in the case under discussion.
There is an understandable and noteworthy difference in the probative value of entering into possession for the first time and continuing in possession with a claim of change in character.
Where person claiming benefit of part performance of a contract was already in possession prior to the contract, the court would expect something independent of the mere retention of possession to evidence part performance.
Therefore mere retention of possession is not discharged, could hardly be said to be an act in part performance unequivocally referable to the contract of sale.
Section 53A requires that the person claiming the benefit of part performance must always be shown to be ready and willing to perform his part of the contract.
And if it is shown that he was not ready and willing to perform his part of the contract he will not qualify for the protection of the doctrine of part performance.
Reverting to the consideration recited in Ext.
D l the sale deed, even according to the mortgagee it was agreed that he had retained an amount of Rs. 17,735 out of the total consideration of Rs. 50,000 for payment to the other creditors of the mortgagor.
Barring a 216 claim made in the written statement that he paid himself Rs. 541 which was included in the amount of Rs. 17,735 which allegation itself is unconvincing, there has not been the slightest attempt on his part to pay up any of the creditors of the mortgagor.
There is nothing to show that he had the list of all the creditors of the mortgagor or that he made any attempt to procure the list or that he issued a public notice inviting the creditors of the mortgagor to claim payment from him to the extent of the consideration retained by him.
Not a single creditor has been paid is an admitted position.
But the more inequitous conduct of the mortgagee is that he had not made the slightest attempt to contact any of the creditors of the mortgagor or to pay even the smallest sum.
There is no such statement in the written statement but even in his evidence at the trial he has not been able to show that he has paid any creditor or made any attempt to pay any of the creditors including those whose names were admittedly known to him such as Ramkaran Ghasilal, Kajodimal, Motilal Bhagirath and Kanhaiyalal Chagganlal.
Further shifting stand of mortgagee to suit his convenience is discernible here.
In Ext.
D 1, the entry of Rs. 17,735 is described as 'have been taken from you from time to time for domestic expenses '.
In his evidence mortgagee states that this recital is incorrect and the correct position according to him is that the amount of Rs. 17,735 from total consideration payable by him was retained to pay to other creditors of mortgagor.
According to him the only amount due to him from mortgagor outside the mortgage transaction was a debt of Rs. 541 only.
Mortgagee neither paid himself nor other creditors and thereby did not perform his part of the contract.
He even did not pay a small decretal amount of Rs. 500 plus interest and costs to Motilal in 1952 but allowed the property to be sold.
Coupled with this is the fact according to the recital in Ext.
D 1 he had agreed to pay the balance of the consideration of Rs 6265 to the mortgagor at the time of registration of the sale deed.
Now, undoubtedly the mortgagor did not agree to get the sale deed registered because there was a dispute between the parties as to the nature of the transaction.
But the defendant mortgagee made unilateral attempt to get the sale deed registered by offering it for registration.
Thus while attempting to complete his title both legally and even in equity he was under an obligation to pay Rs 6265 to the mortgagor.
This liability is not disputed yet in this behalf he has not stated anything in his examination in chief that he made any attempt to pay that amount to the mortgagor.
Add to this his failure to return the discharged mortgage deed and his further averment that he used to maintain the mortgage account 217 even after October 10, 1950.
All this would conclusively show A that the mortgagor himself was not willing to perform his part of the contract.
In this view of the matter Mr. Desai 's contention that failure to pay the amount agreed to be paid before the Registrar and/or not discharging debts agreed to be discharged as having been given credit in the consideration for the sale would not detract from part performance because they have to be evaluated in the facts and circumstances of the case cannot be upheld.
It was next contended on behalf of the mortgagee that the conduct of the 1st plaintiff mortgagor in executing and registering a sale deed in respect of the mortgaged property in favour of 2nd plaintiff Gyarsilal and thereby frustrating the contract of sale in favour of the defendant mortgagee evidence that the Ist plaintiff was aware of the contract in favour of the defendant mortgagee and he was retaining possession in furtherance of the contract.
The submission does not constitute any independent act on the part of mortgagee but it is merely another facet of the fact of permission being retained by the defendant mortgagee.
Retention of possession is of no consequence in this case because the mortgage was not discharged and was subsisting and the mortgage being a mortgage with possession the mortgagee was entitled to retain possession.
The fact that immediately a sale deed was executed in favour of 2nd plaintiff by Ist plaintiff would show that he was unwilling to accept the contract as offered by the mortgagee.
The subsequent purchaser Gyarsilal has taken a conditional sale and this reinforce the stand of the mortgagor.
The existence of the dispute about the nature of the transaction, namely, according to the mortgagor he wanted an absolute sale and this dispute between the parties as on October 10, 1950, is not in dispute.
Therefore the conduct of the mortgagor is consistent with this case.
It was next contended that defendant mortgagee made all attempts to get the deed registered by approaching the Sub Registrar, and that the defendant mortgagee initiated criminal proceedings against the Ist plaintiff mortgagor for misusing the stamp papers need not detain us, as they have no probative value.
Having, therefore, examined all the contentions canvassed on behalf of the mortgagee we unhesitatingly reach the conclusion that the mortgagee has failed to prove that he did any act in furtherance of the contract, continued retention of possession being a circumstance of neutral character in the facts and circumstances of 218 the case and it being further established to our satisfaction that the mortgagee was not willing to perform his part of the contract, it is clear that the mortgagee is not entitled to the benefit of the equitable doctrine of Part Performance.
On the conclusions hereby indicated the appeal preferred by the plaintiffs (CA 1144/69) must be allowed and the judgment of the High Court has to be set aside and the one rendered by the trial court is restored with costs throughout.
That takes us to the second appeal preferred by Motilal being CA 1145/69.
First a synopsis of the facts relevant to the dispute raised by appellant Motilal.
Motilal filed Civil Suit No. 243/47 on November 3, 1947, for recovering his debt from mortgagor Govindrao Mahadik.
In this suit he obtained attachment before judgment of the suit property on November 6, 1947.
The suit of Motilal ended in a decree in the amount of Rs. 2,500 on March 15, 1951.
On March 27, 1951, execution application No 216 of 1951 was made by Motilal.
On April 3, 1951, the executing court made an order that as the suit property of the judgment debtor has already been attached by an order of attachment before judgment, steps should be taken for drawing up a proclamation of sale under order XXI, rule 66, Code of Civil Procedure.
The Court directed auction sale of the suit property to be held on December 9, 1951.
It appears that the auction sale was stayed.
There was some default on the part of the judgment debtor to comply with the conditional stay order and on his failure auction sale was directed to be held on March 23, 1952.
After correcting the amount due on the mortgage of mortgagee in the proclamation of sale, a fresh auction was held on August 23, 1952.
In the meantime, in the absence of any bidder at the auction Motilal the decree holder himself obtained permission of the court to bid at the auction and his bid in the amount of Rs. 300 was accepted and the sale in favour of Motilal was confirmed on September 23, 1952.
In the mean time mortgagor Govindrao Mahadik the judg ment debtor in Motilal 's suit filed Regular Appeal No. 125/51 which was allowed by the Additional District Judge as per his judgment dated March 27, 1953 and thereby the suit of Motilal was dismissed in entirety.
Motilal preferred Second Appeal No. 78/53 in the High Court of Madhya Bharat and by its judgment dated September 1, 1958, Motilal 's appeal was allowed and a decree in 219 his favour in the amount of Rs. 500 with interest and proportionate costs was passed.
Motilal made an application on April 2, 1962 purporting to be under order XXII, rule 10 of the Code of Civil Procedure alleging that he came to know about the suit filed by the mortgagor for redemption of the mortgage in December, 1961 and as the decision in the suit is likely to have an impact on his rights and that as he is the purchaser of the equity of redemption, the mortgagor and the subsequent purchaser from the mortgagor cannot now maintain the action for redemption of the suit property and he should be substituted in place of the plaintiffs and be permitted to prosecute; the suit for redemption against mortgagee.
This application was contested on behalf of the parties to the suit.
The High Court was not fully satisfied about the explanation of delay in making the application by Motilal and was not even inclined to accept the suggestion that he became aware of the suit in 1961 and that on the ground of gross delay the application was liable to be dismissed.
The High Court ultimately made on order as under: "Therefore, although ordinarily we might not be inclined to allow Motilal 's request to be impleaded in this Court at the appellate stage, we are of opinion that it would be desirable to have final decision about the various points of dispute between all the parties in order to avoid further unnecessary litigation.
From this point of view only, we would allow Motilal to be impleaded in the present litigation by addition of his name, and not by allowing him to replace both the plaintiffs." Having thus directed Motilal to be impleaded as a party respondent, the High Court proceeded to ascertain, evaluate and adjudicate the right claimed by Motilal and ultimately held that in any event the auction purchaser Motilal shall be entitled to recover the balance of his decretal amount and interest at the rate of 4% per annum from the date of his auction sale till the date of realisation or deposit as the case may be either from the appellant or from the mortgagor or subsequent purchaser, as the case may be, and that there shall be a charge on the suit property for the aforementioned amount which shall be enforceable at the 220 instance of Motilal by a sale of the property, Motilal was held disentitled to costs on account of the delay in filing the application.
Mr. Ray, learned counsel for the Ist plaintiff mortgagor contended that the High Court was in error in allowing the application of Motilal to be impleaded as a party because according to Mr. Ray Motilal could not be said to be claiming under the mortgagor and that, therefore, he could not maintain the application under order XXII, rule 10, Code of Civil Procedure.
Rule 10 of order XXII, provides for continuance by or against a person of any action who acquires any interest either by assignment, creation or devolution during the pendency of suit, with the leave of the court.
In ascertaining whether Motilal can maintain the application his averments in the application will have to be taken as the basis for invoking the Court 's jurisdiction under order XXII, rule 10.
The question that will have to be posed would be whether Motilal acquired any interest by assignment, creation or devolution during the pendency of the suit and would, therefore, be entitled to continue the suit.
The suit is primarily a suit for redemption of mortgage.
A suit for redemption of mortgage can be brought by a person holding the equity of redemption.
Motilal contends that the suit property was sold at a court auction with subsisting mortgage thereon and the right, title and interest of the mortgagor was sold at the court auction and on the sale being confirmed and the sale certificate being issued he acquired the interest either by assignment or devolution of the original mortgagor.
Now this assertion is controverted on behalf of the original mortgagor and the subsequent purchaser contending that much before the confirmation of the sale on September 23, 1952, the subsequent purchaser had purchased the equity of redemption by the sale deed Ext.
P 1 dated October 17, 1950, and that the original mortgagor had no subsisting right, title and interest in the suit property on August 23, 1952, being the date of the sale in favour of Motilal.
This was countered on behalf of Motilal by his learned counsel Mr. G.L. Sanghi asserting that Motilal had obtained an attachment before judgment of the suit property by order dated November 6, 1947, and that this was subsisting till March 5, 1951, when the trial court decreed the suit of Motilal against the mortgagor in the amount of Rs. 2500 and till the application for execution was filed on March 27, 1951, and no reattachment was necessary.
These facts are incontrovertible but one aspect of law has to be examined as to what is 221 the effect of the judgment of The appellate court in the appeal filed by original mortgagor Govindrao Mahadik, the decree obtained by Motilal, to wit, the appeal was allowed and Motilal 's suit was dismissed on March 27, 1953.
Between March 27, 1953, till the High Court allowed the appeal of Motilal on September 4, 1958, there was no subsisting attachment but it must be recalled that by September 23, 1952, the sale was confirmed and the sale certificate was issued on March 25, 1953, that the two days before the appeal of mortgagor preferred against the decree obtained by Motilal was allowed on March 27, 1953.
The averments of Motilal in his own application would prima facie be sufficient to sustain an application under order XXII, rule 10.
The question whether he has acquired an interest or not in the property either by assignment or devolution which is the subject matter of dispute in this appeal would have to be answered on merits but the narration of chronological events as delineated hereinabove would clearly show that Motilal has more than a mere semblance of title which this Court will have to investigate.
And even if stricto sensu the application would not fall under order XXII, rule 10, CPC, yet section 146 of the Code of Civil Procedure would certainly enable Motilal to maintain the application (See Smt.
Saila Bala Desai vs Smt.
Nirmala Sundai Dassai and another, at 1291, referred to with approval in Shew Bux Mohata & Ors.
vs Bengal Breweries Ltd & Ors.
Undoubtedly the High Court was reluctant to overlook the gross delay in preferring the application but even after this reluctance the High Court having granted the application, we would consider it imprudent to reject the application on the ground of delay.
Once Motilal becomes a party, two contentions advanced on his behalf will have to examined: (a) has he become, under the sale certificate obtained by him, a purchaser of equity of redemption so as to dissentitle the original mortgagor from bringing the present action; (b) What is the effect of the attachment before judgment secured by him on November 6, 1947, on the sale of equity of redeption in favour of the subsequent purcharser under the sale deed Ext.
P 1 dated October 14, 1950.
Looking to the proclamation of sale it is crystal clear that the property was sold subject to subsisting mortgage in favour of Devi 222 Sahai, mortgagee.
At a court auction what is sold is the right, title and interest of the judgment debtor.
The judgment debtor in the decree obtained by Motilal was original mortgagor Sardar Govindrao Mahadik.
Subject to other conditions, his right, title and interest would be one of a mortgagor, that is the right to redeem the mortgage style as equity of redemption.
According to Motilal this equity of redemption was sold at the court auction and it was purchased by him.
Subject to the decision on the second contention so as to the effect of attachment before judgment, there is no substance in this contention because much before even the proclamation of sale was issued the equity of redemption held by the mortgagor was sold by him under sale deed Ext.
P l dated October 14.
1950, in favour of 2nd plaintiff Gyarsilal.
Therefore, even on the date of the decree as also on the date of filing of the execution application mortgagor had no subsisting interest in the property which could be sold at the court auction.
On this short ground it can be held that Motilal did not acquire under the sale certificate equity of redemption of the mortgagee.
But Mr. Sanghi, learned counsel for Motilal contended that the transfer in favour of subsequent purchaser under the sale deed Ext.
P.1, dated October 14, 1950, by the mortgagor is void against Motilal because in the suit filed by Motilal he had obtained an order of attachment before judgment of the suit property and this attachment before judgment would cover the right, title and interest of the mortgagor defendants in that suit and that any private sale inter vivos of the attached property would under section 64 of the Code of Civil Procedure be void against the attaching creditor.
Proceeding further along this line it was contended that as a corollary if the sale in favour of subsequent purchaser is void against Motilal then the equity of redemption continued to remain vested in the original mortgagor and at the court auction the same was sold and purchaged by Motilal.
This necessitates examination of the effect of an order of attachment before judgment in a suit.
Order XXXVIII, rule 5, enables the Court to levy attachment before judgment at the instance of a plaintiff if the conditions therein prescribed are satisfied.
What is the nature of attachment levied in this case is not made known save and except saying that the suit property was attached and the sale proclamation mentioned therein the subsisting mortgage.
Taking the best view in favour of Motilal, 223 One can say that what was attached was the equity of redemption.
The attachment was levied and continued to subsist till the date of the decree.
It would, therefore, not be necessary to reattach the property.
What is the effect of attachment before judgment ? Attachment before judgment is levied where the court on an application of the plaintiff is satisfied that the defendant, with intent to obstruct or delay the execution of any decree that may be passed against him (a) is about to dispose of the whole or any part of his property.
Or (b) is about to remove the whole or any part of his property from the local limits of the jurisdiction of the Court.
The sole object behind the order levying attachment before judgment is to give an assurance to the plaintiff that his decree if made would be satisfied.
It is a sort of a guarantee against decree becoming infructuous for want of property available from which the plaintiff can satisfy the decree.
The provision in section 64 of the Code of Civil Procedure provides that where an attachment has been made, any private transfer or delivery of the property attached or of any interest therein and any payment to the judgment debtor of any debt, dividend or other monies contrary to.
such attachment, shall be void as against all claims enforceable under the attachment.
What is claimed enforceable is the claim for which the decree is made.
Motilal 's suit was for a money claim.
It finally ended in a decree for Rs. 500 by High Court and in between the 1st appellate court had dismissed Motilal 's suit in entirety.
There is nothing to show that the attachment which would come to an end on the suit being dismissed would get revived if a second appeal is filed which ultimately succeeds.
In fact, a dismissal of the suit may terminate the attachment and the same would not be revived even if the suit is restored and this becomes manifestly clear from the newly added provision in sub rule (2) of rule 11 A of order XXXIII, C.P.C. which provides that attachment before judgment in a suit which is dismissed for default shall not be revived merely because by reason of the fact that the order for the dismissal of the suit for default has been set aside and the suit has been restored.
As a corollary it would appear that if attachment before judgment is obtained in a suit which ends in a decree but if in appeal the decree is set aside the attachment of necessity must fail.
There should be no difficulty in reaching this conclusion.
The question, however, is what happens if at an intermediate state pursuant to the decree of the trial court the attached pro 224 perty is sold at a court auction ? How would the rights and obligations of the auction purchaser be adversely affected if the appeal is allowed and the suit is dismissed ? ordinarily where the appeal is preferred an attempt should be made to obtain stay of the execution of the decree of the trial court.
However, it is notorious that the appellate court is loath or reluctant to grant stay of a money decree and the judgment debtor may not be in a position to deposit the decretal amount and in this situation more often the execution proceeds and before the appeal is disposed of an equity in favour of a third person as auction purchaser who purchases the property at a court auction may come into existence.
If afterwards the appeal is allowed and the suit is dismissed, would the auction purchaser be adversely affected ? The emerging situation in this case clearly demonstrates the dilemma.
Ordinarily, if the aution purchaser is an outsider or a stranger and if the execution of the decree was not stayed of which he may have assured himself by appropriate enquiry, the court auction held and sale confirmed and resultant sale certificate having been issued would protect him even if the decree in execution of which the auction sale has been held is set aside.
This proceeds on the footing that the equity in favour of the stranger should be protected and the situation is occasionally reached on account of default on the part of the judgment debtor not obtaining stay of the execution of the decree during the pendency of the appeal.
But what happens if the auction purchaser is the decree holder himself ? In our opinion, the situation would materially alter and this decree holder auction purchaser should not be entitled to any protection.
At any rate when he proceeds with the execution he is aware of the fact that an appeal against the original decree is pending.
He is aware of the fact that the resultant situa may emerge where the appeal may be allowed and the decree which he seeks to execute may be set aside.
He cannot force the pace by executing the decree taking advantage of the economic disability of a judgment debtor in a money decree and make the situation irreversible to the utter disadvantage of the judgment debtor who wins the battle and loses the war.
Therefore, where the auction purchaser is none other than the decree holder who by pointing out that there is no bidder at the auction, for a nominal sum purchases the property, to wit, in this case for a final decree for Rs. 500, Motilal purchased the property for Rs. 300, an atrocious situation, and yet by a technicality he wants to protect himself.
To such an 225 auction purchaser who is not a stranger and who is none other than the decree holder, the court should not lend its assistance.
The view which we are taking is not unknown and to some extent it will be borne out by the observations of this Court in Janak Raj vs Gurdial Singh and Anr.
This Court made a pertinent observation which may be extracted: "The policy of the legislature seems to to be that unless a stranger auction purchaser is protected against the vicissitudes of the fortunes of the suit, sales in execution would not attract customers and it would be to the detriment of the interest of the borrower and the creditor alike if sales were allowed to be impugned merely because the decree was ultimately set aside or modified." Viewed from this angle, the order of the High Court that the auction purchaser decree holder Motilal would be entitled to recover the decretal amount of Rs. 500 with interest at the rate of 4% per annum and proportionate costs could be styled as manifestly equitable.
However the Court cannot overlook the conduct of the mortgagor Govindrao Mahadik, his subsequent purchaser Gyarsilal and even the original mortgagee Devi Sahai in not paying a small debt and allowing the property to be auctioned and forcing Motilal to the logical end of litigation and yet without the slightest recompense to go on investing into this bottomless pit of unending litigation.
And at best his attachment before judgment is a security that his decree would be satisfied from the property attached and sale to the extent of recovery of decretal amount from attached property would be, against attaching creditor void.
If we assure him payment of decretal amount and costs the sale in his favour is of no significance.
The logical course for us would have been to leave Motilal to his own remedy which we consider inequitous in the facts and circumstances of this case.
The order made by the High Court would hardly provide him Rs. 1,500 to recover which he must have spent at the inflated rate of litigation costs.
In our opinion, while not granting the substantial relief claimed by Motilal and looking to the conduct of all the parties, we direct that Motilal should be paid Rs. 7,500 inclusive of decretal amount, interest, proportionate costs and costs of the litigation till today, and for this amount there will be a charge on this property to be cleared by 226 Govindro Mahadik at the time of redemption of the property which amount will have to be paid by Gyarasilal 's heirs in view of the sale deed in favour of Gyarsilal.
Accordingly, Civil Appeal No. 1144/69 filed by Govindrao Mahadik is allowed and the judgment and decree of the High Court are set aside and those of the trial court are restored with costs throughout.
Civil Appeal No. 1145/69 preferred by Motilal is disposed of in accordance with direction herein above indicated with no order as to costs.
CMP 9004/80 and CMP 10593/80 for substitution are allowed.
P.B.R. Appeals allowed.
| The appellant mortgagor took a loan by mortgaging his house property to the respondent mortgagee.
The mortgage was a mortgage with possession.
According to the mortgagee sometime thereafter the mortgagor agreed to sell the property to him and that pursuant to this agreement requisite stamps were purchased and a draft sale deed was drawn up.
The sale deed was however not registered.
A few days later the mortgagor sold the property to another person and the mortgagor and the subsequent purchaser filed a suit against the mortgagee for a decree for redemption.
In the written statement the mortgagee claimed that even though the sale deed was not registered, since he was in possession of the property in part performance of the contract of sale and continued to be in possession and did several acts attributable to the contract, the mortgagor was debarred from enforcing any right against him in respect of the property.
It was also claimed that since the mortgagor himself had no subsisting title to the property on the date of sale, he could not have transferred the property to the subsequent purchaser.
The trial court held that though the sale deed was executed but since it was not registered the transaction of sale was not complete.
The Court further held that benefit of section 53 A is not available to the mortgagor defendant because the mortgage being a mortgage with possession, continued possession of the mortgagee after the date of contract would not be in part performance of the contract, and also the payment made for the purchase of stamps and for expenses of registration could not be said to be in furtherance of the contract because that amount was paid before the execution of the contract.
In the mortgagee 's appeal the High Court held that he was entitled to the benefit of section 53A against the mortgagor and the subsequent purchaser for the reason that he was in possession of the property and paid Rs. 1000 in furtherance of the contract.
The appellant in Civil Appeal No. 1145 of 1969 filed a suit against the mortgagor for recovery of a debt owed to him and obtained attachment of the 187 suit property before judgment.
The suit eventually ended in a decree in his favour, In the auction of the suit property since there were no bidders the decree holder 's bid was accepted with the permission of the Court.
The High Court allowed the decree holder to be impleaded as a respondent in the mortgagee 's appeal which was then pending in the High Court.
It was contended on behalf the mortgagor that the decree holder could not maintain an application under order XXII, Rule 10 of the Code of Civil Procedure because he could not be said to be claiming under the mortgagor.
(Rule 10 of order XXII CPC provides for continuance of any action by or against a person who acquires any interest either by assignment, creation or devolution during the pendency of the suit with the leave of the Court.) ^ HELD: To qualify for the protection of the doctrine of part performance it must be shown that there is a contract to transfer immovable property for consideration and the contract is evidenced by a writing signed by the person sought to be bound by it and from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty.
After establishing these circumstances, it must be further shown that a transferee had in part performance of the contract either taken possession of the property or any part thereof or the transferee being already in possession, continued in possession in part performance of the contract and had done some act in furtherance of the contract.
The acts claimed to be in part performance must be unequivocally referable to the pre existing contract and the acts of part performance must unequivocally point in the direction of the existence of contract and evidencing implementation or performance of contract.
There must be a real nexus between the contract and the acts done in pursuance of the contract or in furtherance of the contract and must be unequivocally referable to the contract.
When series of acts are done in part performance one such may be payment of consideration.
Any one act by itself may or may not be of such a conclusive nature as to conclude the point one way or the other but when taken with many others, payment or part of the consideration or the whole of the consideration may as well be shown to be in furtherance of the contract.
[209 D H] The view of the House of Lords that one must not first look at the oral contract and then see whether the alleged acts of part performance are consistent with it but that one must look at the alleged acts of part performance and see whether they prove that there must have been a contract and that it is only if they do so prove that one can bring in the oral contract may not be wholly applicable to the situation in India because an oral contract is not envisaged by section 53A.
Even for invoking the equitable doctrine of part performance there has to be a contract in writing from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty.
The correct view would be to look at that writing that is offered as a contract for transfer for consideration of any immovable property, examine the acts said to have been done in furtherance of the contract and find out wether there is a real nexus between the contract and the acts pleaded as in part performance so that to refuse relief would be perpetuating the fraud of the party who, after having taken advantage or benefit of the contract, backs out and pleads non registration as defence.
[210A D] Foxcroft vs Lester, 2 Vern.
P. 456; Elizabeth Meddison vs John Alderson, Lord Selborne ; Clinan & Anr.
vs Cooke & Ors.
1775 1802 188 All.
E.R. (Reprint) 16; Chapronierse vs Lambert 1916 17 All.
E.R. (Reprint) 1889; Steadman vs Steadman [1974] 2 All.
E.R. 977, referred to.
In short, acts preliminary to the contract would be hardly of any assistance in ascertaining whether they were in furtherance of the contract.
Anything done in furtherance of the contract postulates the pre existing contract and the acts done in furtherance thereof.
Therefore, the acts anterior to the contract or merely identical to the contract would hardly provide any evidence of part performance [210 E] Although the mortgagee 's claim regarding payment of Rs. 1000 to the mortgagor for the purchase of stamps and for expenses incidential to registration was not in dispute, there is no evidence on record to show that there was an oral contract anterior to the unregistered sale deed, nor was there a draft agreement prior to the drawing up of the sale deed.
Out of the sum of Rs. 1000 a sum of Rs. 700 was paid prior to the agreement.
It was not subsequently claimed that the balance of Rs. 300 was paid in furtherance of the contract.
The High Court was in error in holding that the act envisaged by the phrase "in furtherance of the contract" should be in pursuance of the contract and not that it should either precede or follow the agreement or the contract.
If a written contract is a sine qua non for the application of the equitable doctrine of part performance any act preceding the contract could never be in furtherance of that contract which was yet to materialise.
Negotiations for a contract and a concluded contract stand apart from each other.
Anything at the negotiating stage cannot be claimed as a contract unless the contract is concluded between the parties, that is the parties are ad idem.
The contract should be a written contract from which the necessary ingredients constituting the transfer could be ascertained with reasonable certainty.
[203 A B] There is no material on record to substantiate the mortgagee 's claim that out of the total consideration payable to the mortgagor he had retained in deposit with him a sum of Rs. 17000 odd for being paid to other creditors of the mortgagee and that out of this amount a sum of Rs. 541 due to him had been adjusted.
Assuming that he could reimburse himself there is no evidence to show that he gave discharge or gave credit in his books of account to this sum.
Also there is nothing to show that the mortgagor had in his possession a list of the mortgagees creditors or that he had made any attempt to procure the list or that he issued a public notice inviting the creditors of the mortgagor to claim payment from him to the extent of the consideration retained by him.
Neither did he pay any creditor nor did he make any attempt to pay any creditor including those whose names were known to him.
[211 G] Induction into possession of an immovable property for the first time subsequent to the contract touching the property, may be decisive of the plea of part performance.
But mere possession ceases to be of assistance when the person claiming benefit of part performance is already in possession prior to the contract and continues to retain possession.
There is an understandable and noteworthy difference in the probative value of entering into possession for the first time and continuing in possession coupled with a claim of change in character.
Where a person claiming benefit of part performance of a contract was already in posses 189 sion prior to the contract, the Court would expect something independent of the mere retention of possession to evidence part performance.
Mere retention of possession, quite legal and valid, if mortgage with possession is not discharged, could hardly be said to be an act in part performance unequivocally referable to the contract of sale.
[213 D E, 215 E F] In the instant case retention of possession is of no consequence because the mortgage was not discharged and was subsisting and the mortgage being a mortgage with possession, the mortgagee was entitled to retain possession.
The fact that immediately a sale deed was executed in favour of the subsequent purchaser by the mortgagor would show that he was not willing to accept the contract as offered by the mortgagor.
The subsequent purchaser had taken a conditional sale and this reinforces the stand of the mortgagor.
The existence of the dispute, about the nature of the transaction, is not in dispute.
Therefore the conduct of the mortgagor is consistent with his case.
[217 D F] The mortgagee had failed to prove that he did any act in furtherance of the contract, continued retention of possession being a circumstance of neutral character in the facts and circumstances of the case and it being further established that the mortgagee was not willing to perform his part of the contract, he is not entitled to the benefit of the equitable doctrine of part performance.
[217 H] (2) A perusal at the chronological events of the case would clearly show that the decree holder had more than a mere semblance of title.
Even if the application would not fall under order 22 Rule 10 CPC.
section 146 of the Code enables him to maintain the application.
Saila Bala Desai vs Smt.
Numala Sundari Dassi and another; , at 1291, referred to.
[221 D E] The decree holder did not acquire under the sale certificate the equity of redemption of the mortgage.
The suit property was sold subject to subsisting mortgage in favour of the mortgagee.
At a Court auction what is sold is right, title and interest of the judgment debtor who in this case was the mortgagor.
Subject to other conditions, his right is the right to redeem the mortgage.
Much before the proclamation of sale was issued the equity of redemption held by the mortgagor was sold by him to the subsequent purchaser.
Therefore, even on the date of decree as also on the date of filing of the execution application the mortgagor had no subsisting interest in the property which could be sold at the Court auction.
[222 A B] The object behind the order levying an attachment before judgment is to give an assurance to the plaintiff that his decree, if made, would be satisfied.
Where an attachment has been made, any private transfer or delivery of the property attached would be void as against all claims enforceable under the attachment.
What is claimed enforceable is claim for which the decree is made.
A dismissal of the suit may terminate the attachment and would not be revived even if the suit is restored As a corollary, if attachment before judgment is obtained in a suit which ends in a decree but if in appeal the decree is set aside, the attachment of necessity must fall.
It at an intermediate stage pursuant to the decree of the trial Court the attached property is sold at a Court auction and where an appeal is preferred, an attempt should be made to obtain stay of the execution of the decree of the trial court.
If the execution proceeds and the property is 190 sold at a court auction before the appeal is disposed of, the equity in favour of a person as a auction purchaser may come into existence.
In such a case if the auction purchaser is an outsider and if the execution of the decree was not stayed, the auction purchaser would be protected even if the decree in execution of which the auction sale had been held is set aside because the equity in favour of the stranger should be protected.
[223 C E] If on the other hand the auction purchaser is the decree holder himself, he should not be entitled to any protection because when he proceeds with the execution he was aware that an appeal against the original decree was pending and that if the appeal was allowed the decree which he sought to execute might be set aside.
He could force the place by executing the decree, taking advantage of the economic disability of the judgment debtor in a money decree by making the situation irreversible.
Therefore, where the auction purchaser was none other than the decree holder who purchased the property for a meagre sum, this results in an atrocious situation, but yet by a technicality he wants to protect himself.
To such an auction purchaser, who is not a stranger and who is none other than the decree holder, the Court should not lend its assistance.
[224 G H] Janak Raj vs Gurdial Singh & Anr. ; at 86, followed.
In the instant case the High Court was right in holding that the auction purchaser decree holder was entitled to recover only the decretal amount and proportionate costs.
[225 D] But yet the conduct of the mortgagor, the subsequent purchaser and the mortgagee in not paying a small debt and allowing the property to be auctioned and forcing the decree holder to fight a never ending litigation was iniquitous in the facts and circumstances of this case.
Taking into consideration the conduct of the parties the decree holder should be paid a sum of Rs. 7,000 inclusive of decretal amount, interest, proportionate costs and costs of litigation so far.
[225 E F]
|
terlocutory Application No. 1 of 1990.
IN Civil Appeal No. 4444 of 1991).
From the Judgment and Order dated 25.5.1991 of the Allahabad High Court in C.W.P. No. 5267 of 1990.
D.K. Garg and Pradip Misra for the Appellants.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
Leave is granted to the petitioners who were not parties before the High Court in Writ Petition No. 5267 of 1990 to file the special leave petition.
The Registry shall.
therefore.
consequently register this spe cial leave petition.
Special leave is granted.
On 25.5.1990.
a learned Single Judge of the Allahabad High Court is said to have made an order in Writ Petition No. 5267 of 1990.
That brief order for convenience is ex tracted below: has been brought to the notice of the Court that the opp.
parties have violated the time schedule framed by Hon 'ble Supreme Court in the case of Dr. Dinesh Kumar vs 132 M.L.N. Medical College, Allahabad; , in organising the competition to be held on 27.5.90 by Lucknow University for admissions in Post Graduate Medical Courses in the State Medical Colleges.
The Hon 'ble Supreme Court has recently warned in the case of State of Bihar vs Dr. Sanjay Kumar Sinha, AIR 1990) SC 749 that "Everyone including the States.
the Union territories and other authorities running Medical colleges with Post Graduate Courses are bound by our order and must strictly follow the same schedule".
For violating its orders, the Hon 'ble Supreme Court hoped that "there would be no recurrence of it but we would like to administer a warning to everyone that if it is brought to our notice at any time in future that there has been viola tion, a serious view of such default shall be taken.
Keeping in view the above observations the opposite parties are strictly directed not to hold the competitive examina tion scheduled on 27th May, 1990 and admit the petitioners in Post Graduate Medical Courses in the present session on the basis of marks obtained in MBBS Course as has been done for MDS Courses.
The Writ Petition is allowed with no order as to costs" On the basis of that order and relying upon the terms thereof, a learned Single Judge of the Lucknow Bench of the High Court made an order on 4.6.90) directing that steps be taken on the basis of the direction direction made in the order dated 25.5.90 for giving admission to candidates in P.G. Courses.
The net result of these two orders is that the Selection Examination for filling up of the seats in the Post Graduate Medical Courses of the seven medical colleges in U.P. has been cancelled and a direction has been issued to the State Government to grant admission on the basis of M.B.B.S. results.
This Court by order dated 21st August, 1990 directed the Registrar of the Allahabad High Court to transmit the record wherein order dated 25.5.90 is said to have been made.
The Registrar in his letter dated 22nd August, 1990, to this Court in response to the direction has stated that: "there is no such case as writ No. 5267 of 1990 Dr. B. Sheetal Nandwani vs State and Others, and no judgment 133 was delivered by Hon 'ble Mr. Justice Anshuman Singh on 25.5.90 in the said case.
The file is sent to you through special messenger and you are requested to kindly return the file after the Hon 'ble Court 's perusal.
It is further submitted that fake judgment was said to have been produced before different Medical Colleges purporting to have been delivered by Hon 'ble Mr. justice Anshuman Singh, J. on 25.5.1990 in Writ Petition No. 5267 of 1990 directing the opposite parties not to hold competitive examinations scheduled on 27.5.90 and admit the petitioners in Post Graduate Medical Course in the present session on the basis of the marks obtained in M.B.B.S. Course.
In 'Northern India Patrika ' (Allahabad Edition) dated 11.8.90 this matter was published with the heading 'Bogus Judgment aborts entrance Exam ' and only then it came to the notice of the Hon 'ble Court and the Hon 'ble the Chief Justice took up the matter and directed that a CID enquiry be instituted.
On the direction of Hon 'ble the Chief Justice the Government has been moved to get the matter investigated by CID.
" From the report it is manifest that a fake order in a non existent writ petition was produced before the Lucknow Bench of the Allahabad High Court for securing the order dated 4.6.90.
It also transpires that on the basis of al leged order dated 25.5.90 and the subsequent order of 4.6.90 some admissions have been secured in some of the medical colleges.
Those who have taken admission on the basis of such orders.
that is on the basis of the M.B.B.S. result without going through a selection examination cannot be allowed to continue in the Post Graduate Courses.
We are satisfied that there is a deep seated conspiracy which brought about the fake order from Allahabad.
the principal seat of the High Court and on the basis thereof a subsequent direction has been obtained from the Lucknow Bench of the same High Court.
The first order being non existent has to be declared to be a bogus one.
The second order made on the basis of the first order has to be set aside as having been made on the basis of misrepresentation.
We are alive to the situation that the persons who have taken admission on the basis of the M.B.B.S. results are not before us.
The circum stances in which such benefit has been taken by the candi dates concerned do not justify attraction of the application of rules of natural justice of being provided an opportunity to be heard.
At and rate now that we have at the instance of the U.P. Government ordered 134 the selection examination to be held, admission on the basis of M.B.B.S. results cannot stand.
We accordingly direct that admissions, if any on the basis of M.B.B.S. results granted after the impugned orders of the High Court shall stand vacated and the Principals of the medical colleges of U.P. are directed to implement the direction forthwith.
A copy of this order shall be communicated to each of the Principals of the seven medical colleges in the State of U.P. for compliance.
The report of the Registrar of the High Court of Allaha bad indicates that the Criminal Investigation Department of the State has been asked to investigate into the matter.
We are of the view that appropriate investigation should be done by the Central Bureau of Investigation and persons behind this deep seated fraud should be brought to book without any delay.
Purity of the judicial stream should not be allowed to be polluted by such a clandestine move and citizens should not be misled by actions of the conspira tors.
We, therefore, direct that the Central Bureau of Investigation shall step in forthwith and complete the investigation within two months and provide a copy of the report containing the result of the investigation to this Court.
A copy of the report shall simultaneously be submit ted to the learned Chief Justice of the Allahabad High Court.
The appeal is allowed with costs.
As and when the respondents who are said to be petitioners in writ petition No. 5267 of 1990 are identified shall be made to pay the costs of this appeal which we assess at Rs.10,000.
Out of the costs as and when recovered, the appellants shall be entitled to a sum of Rs.3,000 and the remaining sum of Rs.7,000 shall be paid to the Supreme Court Legal Aid Com mittee.
T.N.A. Appeal allowed.
| For the assessment year 1946 47 the appellant, a Hindu undivided family carrying on business, filed a petition before the income tax Officer, under section 25A of the Indian Income tax Act, 1922, claiming that there had been a partition in the family on April 24,1945.
As regards the income assessable under section 23 Of the Act, the appellant 's case regarding six sums aggregating to Rs. 2,30,346 shown in the accounts as the sale proceeds of ornaments, was that at the partition the jewels of the family were sold and that the price realised therefrom was invested in the business.
The Income tax Officer held that the partition was true and that the family had become divided into five groups, but as regards the amount of Rs. 2,30,346 aforesaid he rejected the explanation given by the appellant as to how the amount came to be received and held that the amount was not the proceeds of the family jewels sold but represented concealed profits of the business.
He accordingly included the said amount in the taxable income.
The appellant 's contentions, inter alia, before the Appellate Tribunal were (1) that the order passed under section 25A of the Act by the Income tax Officer must be held to have decided the factum of a partition in the family as well as the 'possession and division of the jewels, as set up by the appellant, and that it was not open to the Department to contend that the amount in question did not represent the value of the family jewels; and (2) that, in any case, there was no evidence to show that the amount represented undisclosed profits.
Held, that when a claim is made under section 25A of the Indian Income tax Act, 1922, the points to be decided by the Incometax Officer are whether there has been a partition in the family, and, if so, what the definite portions are in which the division had been made among the members or groups of members.
The question as to what the income of the family assessable to tax under section 23(3) was, would be foreign to the scope of an enquiry under section 25A, and any finding thereon would not be conclusive in assessment proceedings under section 23.
416 Held, further, that the assessee in the present case having failed to explain satisfactorily the truth of what is a credit in business accounts, the Income tax Officer was entitled to draw the inference that the amount credited represents in reality a receipt of an assessable nature.
|
Appeals Nos. 450 & 451 of 1957.
Appeals by special leave from the judgment and order dated July 31, 1956, of the Labour Appellate Tribunal of India, Calcutta, in Appeals Nos.
282/55 and 6/56.
C. K. Daphtary, Solicitor General of India, H. N. Sanyal, Additional Solicitor General of India, D. N. Mukherjee and B. N. Ghose, for the Appellant (In C.A. No. 450/57).
A. Roy Mukherjee and H. N. Hingorani, for the respondent (In C. A. No. 450/57.) M. C. Setalvad, Attorney General for India, C. K. Daphtary, Solicitor General for India and H. N. Sanyal, Additional Solicitor General of India, D. N. Mukherjee and B. N. Ghose, for the appellants (In C. A. No. 450/57).
Sadhan Chandra Gupta, Janardhan Sharma and M. K. Ramamurthi, for the respondents (In C. A. No. 451/57).
Sadhan Chandra Gupta, Janardhan Sharma and M. K. Ramamurthi, for the appellant (In C. A. No. 451/57).
1015 M. C. Setalvad, Attorney General for India, H. N. Sanyal, Additional Solicitor General of India, D. N. Mukherjee and B. N. Ghose, for the respondent (In C. A. No. 514/57).
G. D, Ambukar for the Secretary, for the Intervener No. 1.
Sadhan Chandra Gupta and Janardhan Sharma, for Intervener No. 2. 1959.
May 5.
The Judgment of the Court was delivered by WANCHOO, J.
These are three appeals by special leave from the same decision of the Labour Appellate Tribunal of India and will be dealt with together.
The first two appeals (Nos. 450 & 451) are by Messrs. Titaghur Paper Mills Co. Ltd., and the third (No. 514) by its workmen.
Titaghur Paper Mills Co., Ltd. (hereinafter called company) own two paper mills one at Titaghur (hereinafter called Mill No. 1) and the other at Kankinarah (hereinafter called Mill No. 2).
It appears that there had been a dispute between the company and its workmen in 1948, which was referred to the adjudication of a tribunal.
That was disposed of by the tribunal on November 5, 1949.
Among the matters then referred was the question of profit bonus for the years 1945 46 and 1946 47.
When that matter was under the consideration of the tribunal, the company put forward a scheme of production bonus on the basis of a minimum production of 30,000 tons of paper in a year in the two mills together.
The basis of the scheme was that the workmen would get 13 days ' basic wage (this being equivalent to half of one month 's basic wage) by way of bonus on a production of 30,000 tons for both mills.
Thereafter the workmen were to get an additional one day 's basic wage for every 460 tons produced upto a maximum of 36,000 tons when the production bonus would come up to 26 days ' basic wage (which would be equivalent to one month 's basic wage including weekly holidays).
The company in putting forward the scheme said that "as an admittedly rough basis for such a scheme something on the 1016 following lines might, we think, be equitable".
It then gave the scheme mentioned above.
The tribunal dealing with the question of profit bonus for the years 1945 46 and 1946 47 observed that the scheme of production bonus put forward by the company had been accepted by the union as satisfactory and for the purpose of that proceeding it accepted the scheme as a measure for awarding profit bonus for the years 194546 and 1946 47.
The actual bonus worked out to 17 days ' basic wage for 1945 46 and 19 days ' basic wage for 1946 47 ; (see award of Sri M. C. Banerji, in the publication of Government of West Bengal, Labour Department, I Awards made by the Tribunals for the quarter ending December, 1949 ", pp. 130_ 150).
It further appears that the detailed scheme was later communicated to the union in July 1950 and as the principle had already been accepted by the union before Sri Banerji the scheme was put in operation from April 1, 1949, and production bonus has all along been paid in accordance with it after that date.
Disputes, however, arose between the company and its workmen in 1953.
The workmen of Mill No. 2 were the first to raise a dispute in August 1953, in which inter alia they demanded profit bonus for the years 1950 51 and 1951 52 and also prayed for certain changes in the production bonus scheme.
The workmen of Mill No.
I also raised a dispute and presented a charter of demands to the company in October 1953.
They also demanded profit bonus for the two years mentioned above and revision of the production bonus scheme.
These disputes were referred by the Government of West Bengal to the Fifth Industrial Tribunal, West Bengal.
There were two references, one relating to each mill.
They were heard separately by the Industrial Tribunal which gave two separate awards rejecting all the demands made by the workmen.
Consequently, two appeals were preferred by the workmen before the Labour Appellate Tribunal.
There the two appeals were heard together at the request of the parties and disposed of by the Tribunal by the same judgment on July 31, 1956.
The Fifth Industrial Tribunal rejected the claim of 1017 the workmen for revision of the production bonus scheme and for grant of profit bonus for the years 1950 51 and 1951 52.
It was of opinion that the claim for profit bonus for the two years was not maintainable as the workmen had been given production bonus and that met the profit bonus claim of the workmen for the two years and all claims for profit bonus for these two years must be taken to have been fully satisfied.
The question of delay in making the profit bonus claim was also raised; but the Fifth Industrial Tribunal was of the view that the profit bonus claim could not be defeated merely on the ground of delay.
As to the revision of production bonus scheme, it held that scheme had been accepted by the union and no reason had been shown why the rate of one day 's basic wage as production bonus for every increase of 460 tons over 30,000 tons should be disturbed.
It was also of the view that increased production was not due to increased efforts on the part of the workmen but was due mainly to increase in labour strength as well as installation of new machinery.
On appeal the Labour Appellate Tribunal rejected the claim for profit bonus for the year 1950 51 on the ground that it was made too late.
It, however, disagreed with the view of the Fifth Industrial Tribunal that the production bonus scheme fully satisfied the claim of the workmen for profit bonus and therefore DO profit bonus should be given even for the year 1951 52, with regard to which it % as of opinion that the claim was not belated.
It, therefore, went into the figures of profits and arrived at the available surplus in accordance with the formula known as the Full Bench Formula evolved in The Mill Owners ' Association, Bombay vs The Rashtriya Mill Mazdoor Sangh, Bombay(1).
Having arrived at the available surplus it granted one month 's profit bonus in addition to what.
the workmen were entitled to under the production bonus scheme as revised by it.
As to the production bonus scheme, it was of the view that there were reasons for revising it and therefore revised (1) 128 1018 it, providing for 112 days ' basic wage for each increase of 460 tons over 30,000 tons up to the limit of 36,000 tons and two days ' basic wage for each increase of 460 tons in excess of 36,000 tons.
It may be mentioned, however, that the change in the production bonus scheme was not made retrospective and would therefore come into force from after the judgment of the Labour Appellate Tribunal.
The appeals of the workmen were therefore allowed in these two respects, which have led to the two appeals by the company be fore us.
The workmen through their union have also filed an appeal against those portions of the decision of the Labour Appellate Tribunal which rejected their demands.
In the two appeals by the company two matters relating to (i) production bonus and (ii) profit bonus have been raised before us.
We shall first take up these two matters and then come to the appeal by the workmen.
The main contentions on behalf of the company with respect to the production bonus scheme are threefold, namely, (1)The Industrial Tribunal has no jurisdiction to go into the question of production bonus scheme at all, for such a scheme by its very nature can only be a matter of agreement between the employer and the employees and cannot be imposed by a tribunal; (2)Even where a production bonus scheme is in force, its terms cannot be varied by a tribunal and any variation can only be the outcome of an agreement between the employer and the employees, because initiation or introduction of such a scheme is what may be called a I management function '; and (3) Even if an industrial tribunal has the power to vary the production bonus scheme, no material was placed on the record in this case on the basis of which the tribunal could order a variation in the scheme in force in the company.
As to the award of profit bonus for the year 1951 52 the attack was two fold, namely, (4)It was not open to a tribunal to award both production bonus and profit bonus and in any case it 1019 could not be done in the present case as the production bonus here was nothing more than profit bonus; and (5) Even if both production bonus and profit bonus could be awarded, there was no available surplus in this case out of which profit bonus for that year could be paid.
Before we go into the question of jurisdiction of a tribunal under the , (hereinafter called the Act), we should like to consider what production bonus essentially is.
The payment of production bonus depends upon production and is in addition to wages.
In effect, it is an incentive to higher 'production and is in the nature of an incentive wage.
There are various plans prevalent in other countries for this purpose known as Incentive Wage Plans worked out on various bases, for example, Halsey Premium Plan, Bedaux Point Premium Plan, Haynes Manit System and Emerson Efficiency Bonus Plan; (see Labour Law by Smith, Second Edition, P. 723).
The simplest of such plans is the straight piece rate plan where payment is made according to each piece produced, subject in some cases to a guaranteed minimum wage for so many hours ' work.
But the straight piece rate system cannot work where the finished product is the result of the co operative effort of a large number of workers each doing a small part which contributes to the result.
In such cases,, production bonus by tonnage produced, as in this case, is given.
There is a base or standard above which extra payment is made for extra production in addition to the basic wage.
Such a plan typically guarantees time wage up to the time represented by standard performance and gives workers a share in the savings represented by superior performance.
But whatever may be the nature of the plan the payment in effect is an extra emoluments for extra effort put in by workmen over the standard that may be fixed.
That is the reason why all these plans are known as Incentive Wage Plans and generally speaking have little to do with profits.
The extra payment depends not on 1020 extra profits but on extra production.
This extra payment calculated on the basis of extra production is in a case like the present where the payment is made after the annual production is known, in the nature of emoluments paid at the end of the year.
Therefore generally speaking, payment of production bonus is nothing more nor less than a payment of further emoluments depending upon production as an incentive to the workmen to put in more than the standard performance.
Production bonus in this case also is of this nature and is nothing more than additional emoluments paid as an incentive for higher production.
We shall later consider the argument whether in this case the production bonus is anything other than profit bonus.
It is enough to say at this stage that the bonus under the scheme in this case also depends essentially on production and therefore is in the nature of incentive wage.
Let us now turn to the question of jurisdiction of the tribunal under the Act to consider a production bonus scheme at all.
The argument is that the introduction of a production bonus scheme is purely discretionary with the employer and no tribunal can impose such a scheme.
Whether there should be increased production in a particular concern is a matter to be determined entirely by the employer and depends upon a consideration of so many complex factors, namely, the state of the market, the demand for the product, the range of prices, and so on.
It is, therefore, entirely for the employer to introduce a production bonus scheme or not.
There is good deal of force in the argument up to this point ; but the argument goes further and it is said that even after the scheme is introduced, it is for the same reasons in the discretion of the employer whether to continue it or not.
Therefore, it is urged that the tribunal cannot have jurisdiction to consider a production bonus scheme at all, for the tribunal would then be doing something which the employer can set at naught by withdrawing the scheme or by nullifying the effect of the tribunal 's order by so arranging that the production does not reach the level at which production bonus becomes payable, for 1021 example, by not providing enough raw material for the purpose.
It is further urged that if it is entirely in the discretion of the employer to introduce or not to introduce a production bonus scheme, the fact that the employer introduces a scheme will not give jurisdiction to the tribunal to interfere with it in any way, for otherwise the tribunal would be compelling the employer in the guise of a revision of the scheme to do something which the tribunal could not initially do.
Our attention in this connection was drawn to Shalimar Rope Works Mazdoor Union, Howrah vs Messrs; Shalimar Rope Works Ltd., Shalimar, Howrah (1), where it was observed that though a production bonus scheme may be desirable in the interest of harmonious relationship between the employer and employees, there is no obligation on the part of the management to give production bonus and no decision had been brought to the notice of the Labour Appellate Tribunal holding that a scheme of production bonus was obligatory on the part of the company ; (see p. 504).
We are , however, not called upon to decide in this case whether a demand for the introduction of a production bonus scheme where there was none before can be made a subject matter of industrial dispute as defined in section 2 (k) of the Act or whether a scheme of production bonus can for the first time be imposed on the employer by a tribunal under the Act.
The problem that is before us is whether the tribunal tinder the Act will have jurisdiction to deal with a production bonus scheme in a concern where it has been introduced.
The answer to this question depends upon the terms of the Act and not on the consideration whether the scheme can be initiated only by the employer in the first instance.
In order that the tribunal may have jurisdiction all that is necessary is that an industrial dispute within the meaning of section 2 (k) of the Act should exist or be apprehended and there should be a reference of such dispute by the appropriate government to the tribunal under section 10.
Now ' industrial dispute ' has been defined in very wide terms in section 2 (k) and for our purpose it means any (1). (1957) L.A.C. 496.
1022 dispute or difference between the employers and workmen which is connected with the employment or non employment or the terms of employment or with the conditions of labour, of any person.
We have already held that the production bonus scheme in this case is an incentive wage plan and what is paid under the scheme over and above the basic wage is supplementary emolument depending upon annual production.
A dispute arising about such an emolument clearly comes within the words " terms of employment ".
As soon therefore as an employer introduces a production bonus scheme and the same is put in operation and the workmen accept it becomes a term of employment of the workmen working under him and any dispute with respect to such a term of employment is an industrial dispute and if it is referred to a tribunal under section 10, as has been done in this case, it has jurisdiction under section 15 to deal with it.
The argument therefore on this head must be rejected and it must be held that the tribunal had jurisdiction under the Act to deal with the scheme of production bonus which had been introduced in this company and was in force at all material times.
This brings us to the second question, namely, where a scheme of this kind is in force and there is a dispute with regard to its terms, what is the extent of the powers of a tribunal to deal with it.
The argument is put in this way.
The introduction and continuance of a production bonus scheme is one of the functions of management.
Therefore, when a question of revision of such a scheme comes up before a tribunal, all that the tribunal should look into is whether this matter is an exclusive management function ? If it comes to the conclusion that it is an exclusive management function, it should not interfere with the details of the scheme, unless it also comes to the con clusion that the employer is guilty of mala fides, victimization, fraud or unfair labour practice through the introduction or continuance of the scheme.
It is said that even though the tribunal may have jurisdiction to consider such a scheme, it should refuse to interfere 1023 with it as soon as it comes to the conclusion that it is an exclusive management function and there is no question of mala fides, etc.
We think it unnecessary for present purposes to embark on a discussion of what is and what is not an exclusive management function.
Basically, everything connected with the management of an industrial concern is a management function, except the internal affairs of any union which may exist.
The Act has made no distinction between what may be called exclusive management functions and others.
It is also well settled that the tribunals tinder the Act have power to interfere with management functions falling within their purview in the interest of industrial peace and the Act was enacted with that object.
Therefore, once it is conceded, as is the case here, that the tribunal has jurisdiction to entertain such an industrial dispute which comes within the terms of section 2(k) we see no reason why the power of the tribunal to take into consideration an incentive wage plan like a production bonus scheme already introduced should be limited merely to the consideration of the question whether the employer 's action is mala fide, etc.
Where a production bonus scheme is in force and has become a term of employment, there is no reason why the tribunal should not have the power to vary its terms if circumstances justify it.
Nor can the power of revision be denied to the tribunal in respect of a scheme actually introduced on the ground that the introduction of such a scheme was an exclusive management function and therefore it should be immune from being touched at all.
Therefore, even assuming that the initiation of a production bonus scheme is an exclusive management function and the final decision with respect to its introduction rests initially with the manage ment, the right of the tribunal to take into consideration such an initiated scheme (which has become a term of employment) and to revise it cannot for a moment be doubted under the Act.
It is true that the tribunal will not lightly interfere with a scheme introduced by the management and accepted by the union.
It is also true that the tribunal would only 1024 make a change in the rates for good and sufficient reasons.
There can be no doubt, however, that the tribunal has jurisdiction under the Act to take into consideration a production bonus scheme which has been introduced and is in operation and in proper cases to revise it, and if necessary to change the rates and other conditions on which such bonus is payable.
Our attention in this connection was drawn to Indian Iron & Steel Co. Ltd. vs Their Workmen(1), where the limits of the power of a tribunal to interfere with an order of dismissal were considered.
That case is in our opinion of no help to the appellant.
It was laid down there that undoubtedly the management of a concern had power to direct its own internal administration and discipline; but the power was not unlimited and when a dispute arose, Industrial Tribunals had the power to see whether the termination of services of a workman was justified and to give appropriate relief It was further laid down under what conditions the Industrial Tribunal will interfere with the order of dismissal.
On a parity of reasoning, the Industrial Tribunal has the power under the Act to revise the production bonus scheme once it has been initiated.
It will do so only for good and cogent reasons, such as a material change in method, product, tools, material, design, or production Conditions, or a saving in labour cost and the like, maintaining as far as possible the established relationship between earnings and effort and avoiding rates which will give results out of all proportion to the basic wage.
We are therefore of opinion that the argument under this head must also be rejected.
The main contention under this head is that there was no material before the Appellate Tribunal to justify the increase in the rate which it ordered.
We have already pointed out that the scheme put forward by the company was to pay a production bonus of 13 days ' basic wage on a minimum production of 30,000 tons.
Thereafter one day 's basic wage was to (1). [1958] S.C.R. 667. 1025 be paid for every 460 tons produced up to the maximum of 36,000 tons, the rated capacity of the mills being then said to be over 36,000 tons.
The Appellate Tribunal has kept the minimum production at 30,000 tons with a bonus of 13 days ' basic wage.
Between 30,000 and 36,000 tons it has raised the rate to 1 1/2 days ' basic wage for each increase of 460 tons over 30,000 tons to the limit of 36,000 tons, and thereafter to two days ' basic wage for each increase of 460 tons in excess of 36,000 tons.
It gave,, two reasons in support of this increase, namely, (i) that the great increase in production since the introduction of the scheme was attributable to a very considerable extent to the increase of efforts on the, part of labour and therefore a reasonable proportion of the increased _income on account of increased production should go to labour, and (ii) that one day 's wage only as bonus for every 460 tons over 30,000 tons is not commensurate with the actual increase of income on that increased block of production.
It is not clear to us what exactly the Appellate Tribunal had in mind when it talked of the increase of income as a reason for increase in the rate.
The question of increase in the rate has to be considered in two stages, namely, (i) the increase between 30,000 and 36,000 tons and (ii) the increase when production goes beyond 36,000 tons.
It appears from what Mr. Banerji said in his award of 1949 that the basic principle of the scheme, as it was put forward before him, was accepted by the union as satisfactory, meaning thereby that the union considered that 13 days ' basic wage for a minimum production of 30,000 tons and one day 's basic wage for every 460 tons beyond that upto 36,000 was fair to labour.
It has been urged that there was no agreement between the workmen and the company in connection with this scheme.
It does appear that all the terms, which were incorporated in the scheme communicated to labour in July 1950, were not initially evolved with the agreement of the union ; but so far as the rate of bonus was concerned that was accepted by the union as satisfactory.
In the company 's appeals, we are 129 1026 concerned only with the rate.
The question therefore is whether the Appellate Tribunal was justified in changing this rate which was agreed to as satisfactory by the union up to a production of 36,000 tons.
We are of opinion that in view of the agreement between the parties up to a production of 36,000 'tons there was no such material before the Appellate Tribunal as would justify interference with the agreed rate.
The intensification of labour must have been taken into account when the union agreed to the rate up to 36,000 tons, and there is nothing to show that since then there has been any change in the conditions to call for a change in the rate.
The order of the Appellate Tribunal so far as it relates to production up to 36,000 tons cannot be sustained, as no material was placed before it to warrant a change in that agreed rate.
Then we come to the rate after 36,000 tons.
There the considerations in our view are different.
The scheme only provided for a production of 36,000 tons.
It is true that thereafter the production has gone up beyond 36,000, and the company has been paying the same flat rate of one day 's basic wage for every 460 tons for the extra production and the workmen have been accepting that payment.
At the same time there was no collective acceptance by the union on behalf of the workmen of this rate being satisfactory or fair for production above 36,000 tons.
Production went beyond 36,000 tons for the first time in 1951 52 and a dispute was raised in October 1953 by the workmen of Mill No. 1 not very long after production for that year was known.
There was no dispute as to the general revision of the rate by the workmen of Mill No. 2; but it was conceded on behalf of the company that the two mills must be treated on the same footing in this matter.
The company therefore cannot say that the Appellate Tribunal should not have interfered with the rate above 36,000 tons, because there was a collective agreement by the union on behalf of the Workmen and there was no material before it to change the rate even beyond 36,000 tons.
Two reasons were given by the Appellate Tribunan for the 1027 change it ordered.
Of these the second is difficult to understand as it is not clearly or happily expressed, though the first reason, (namely, increased effort on the part of labour) would certainly apply when we consider production beyond 36,000 tons.
It stands to reason that where the labour force is more or less the same, production beyond the original target of 36,000.
tons would mean more intensification of effort by labour, for it is not in dispute that the working hours have remained the same.
Other things being equal, the greater the production by the same labour force in the same space of time, there is bound to be more intensification of labour to achieve this result.
This is certainly a matter which the Appellate Tribunal could take into account in considering whether the rate after 36,000 tons should be raised.
A comparison of figures of production and labour force employed between 1948 and 1952 (assuming other factors to be the same) would show that there must have been intensification of labour effort to got the increased production.
In 1948, total labour force in the two mills was 5,860 (Exs. F & H).
In 1952, it went up to 6,213, an increase of just over 6 per cent.
Production on the other hand was 28,244 tons in 1948 49 while it was 37,738 tons in 1951 52, an increase of slightly above 33 per cent.
So it is obvious that the increase in production is much more than the increase in labour force.
It is true that in 1950 a new paper making machine was substituted in one of the mills, and some bamboo crushers and digesters were also added during this period and other large amounts spent on machinery, and that fact certainly accounts for a part of the increase.
It is, however, not possible to ascertain, with anything like mathematical accuracy, as to how much of the increase in production is attributable to improved machinery and how much of it is referable to intensification of labour of the workmen.
It may nevertheless be taken as fairly certain that the increase in production is referable to a great extent to intensification of the efforts of the workmen, for there has been no appreciable increase in the labour force.
We have not got the figures of labour force in the 1028 later years, though production has gone on increasing, till it is said it will reach 54,000 tons mark in 1958 59.
It is apparent, therefore, that there must have been progressive intensification of labour as the production rose beyond 36,000 tons, and in the premises that was a circumstance which the Appellate Tribunal was properly entitled to take into account when considering a change in the rate for production over 36,000 tons.
The second ground given by the Appellate Tribunal, as we have said above, is not quite clear to us.
Learned counsel for the workmen have, however, explained that what the Tribunal means is that as the production increases more and more the labour cost per ton goes down; and thus there is a saving in labour cost to the company and the workmen are entitled to share in this progressive saving of labour cost.
The principle which is inherent in this explanation is in fact the basis of progressive increase in production bonus rates as production increases.
This will be clear from an illustration, which we shall give just now.
This illus tration is based as nearly as possible on the conditions in these two mills with this difference that we have taken round figures for facility of multiplication ; the result will be more or ' less the same if actual figures are taken.
For the purposes of this illustration, we shall assume that the labour force and other relevant factors remain constant.
Let us start with a basic production of 30,000 tons with a labour force of 6,000 and an average wage of all kinds at Rs. 110/per menses (exhibit E).
The total labour cost on this basis for 30,000 tons per year comes to 79.2 lacs, giving labour cost per ton as Rs. 264/ .
Now, when production increases to 36,000 tons and a production bonus of Rs. 25/ per year (exhibit E) is added to the wage, labour cost for the extra production of 6000 tons comes to Rs. 1.5 lacs.
The total labour cost, therefore, for 36,000 tons is 80.7 lacs, which works out to slightly above Rs. 224/ per ton.
When production goes up to 42,000 tons, the labour cost increases by 3 lacs, giving a labour outlay of 82.2 lacs; this works out to just below Rs. 196 per ton.
When production increases 1029 to 48,000 tons, the extra labour cost is 4.5 lacs, making a total of 83.7 lacs for 48,000 tons; thus the cost per ton is slightly above Rs. 174/ .
When production goes up to 54,000 tons, labour cost increases by 6 lacs, giving a total cost of 85.2 lacs for 54,000 tons, which works out to just below Rs. 158/ per ton.
When production reaches 60,000 tons, which is double the basic production, the additional sum paid to labour in bonus is 7.5 lacs and the total cost 86.7 lacs for 60,000 tons which works out to Rs. 144.5 per ton.
This is on the basis of the production bonus above 36,000 tons being kept at the same rate at which it is provided in the scheme in this case.
It will be clear, therefore, that as production increases (if other factors are the same, namely, labour force and machinery), there is a progressive increase in the saving of labour cost.
This, in our opinion, makes out a clear case, where one is dealing with tonnage production bonus, for a progressive increase in the bonus.
We know that in this case there has been an increase, but of a small order, in the labour force during the period of increased production; we also know that a new paper making machine has been put in the place of an old one and new bamboo crushers and digesters have been added ; and we know that during the period from April 1, 1948, to April 1, 1959, there has been a total outlay on machinery and plant, worth 223.94 lacs including the above.
There is no doubt, therefore, that when production is expected to reach the figure of 54,000 tons in 1958.59, this outlay on machinery and plant must also have contributed to it.
The increase in labour force, if any, after April 1, 1952, may also have made its contribution.
But it appears to us that it is still valid to say that there is saving in labour cost which increases progressively as production goes up and labour can therefore legitimately claim a progressively higher rate.
Therefore, though the Appellate Tribunal 's second reason does not appear to have been clearly expressed, something like what we have said above must have been at the back of its mind when it decided to change the rate above 36,000 tons.
There can be no doubt that the consideration we have 1030 set out above, will be valid to support the view taken by the Appellate Tribunal that there should be a change in the rate, though it may not necessarily support the actual change ordered by it.
We must not forget that there was no collective bargaining resulting in an agreement between the union and the company so far as production above 36,000 tons is concerned as was the case so far as production upto 36,000 tons went.
A case has, therefore, been made out for a change in the rate when production goes above 36,000 tons.
The next question is whether the flat rate of two days ' basic wage for every 460 tons allowed by the Appellate Tribunal can be supported.
Usually, when tonnage production bonus is worked out, the rates progressively increase.
We may in this connection refer to the illustration given in " Payment by Results " published by the International Labour Office, Geneva, at p. 102.
We think, therefore, that though there is a case for increasing the rate when production goes above 36,000 tons, it should be on a progressively in creasing system.
The present scheme, as we have pointed out earlier, was evolved as an admittedly rough basis which was thought to be equitable.
Following the same rough basis and using the same block of 6,000 tons with slabs of 460 tons, we think that on the data available at present, it would be fair to give progressive rates for production from over 36,000 tons up to 60,000 tons.
We need not go beyond this for the present, and if production increases beyond 60,000 tons, the matter can be gone into again.
We consider, therefore, that the rate should be changed as follows for production over 36,000 tons: 1 1/4 days ' basic wage on the same scale as is provided in the sebeme from 30,000 to 36,000 tons.1 1/2 days ' basic wage on the same conditions as above.
1 3/4 days ' basic wage do (i) From over 36,000 tons to 42,000 tons.
(ii) From over 42,000 tons to 48,000 tons.
(iii) From over 48,000 tons to 54,000 tons.
1031 (iv) From over 54,000 tons to 2 days ' basic wage do 60,000 tons.
We therefore modify the change in the rate ordered by the Appellate Tribunal as above.
The contention under this head is that though this.
scheme is called a production bonus scheme, in reality it is no more than a profit bonus scheme; and therefore, the workmen are not entitled to any profit bonus worked out on the Full Bench formula referred to above in addition to what they get under this production bonus scheme.
In this connection reliance is placed particularly on clauses (14) and (18) of the scheme.
Let us therefore determine the true nature of the scheme.
The scheme is headed " Tonnage Production Bonus Scheme " and not a scheme for profit bonus based on the Full Bench formula.
It is true that this nomenclature is not decisive but is nevertheless a factor which may properly be taken into consideration.
The primary and basic object of the scheme, as given in el.
(2), is to stimulate the interests and endeavors of the clerks and workers of the company in increasing the production of saleable paper and to ensure that the workers will get by way of incentive an increased return for their labour contributing to the benefits which would accrue from such increased productivity.
This again shows that this is a production bonus scheme and nothing else.
Then comes cl.
(4), which lays down that upto a minimum of 30,000 tons the bonus would be 13 days ' basic wage; thereafter there is increase of one day 's basic wage for every 460 tons till the figure of 26 days ' basic wage is reached for a total production of 36,000 tons.
Here again there is no connection between profits and bonus that accrues under this clause.
If, for example, pro duction falls below the minimum of 30,000 tons, there will be no bonus at all under the scheme whatever may be the profits.
This one circumstance clearly brings out the true nature of this scheme, namely, that it is a scheme of production bonus and not of 1032 profit bonus under the Full Bench formula.
That formula had nothing to do with production.
Bonus tinder that formula depended entirely on the available surplus of profits worked out in the manner provided therein.
Then we come to clause (14).
That clause lays down that the scheme will be subject to one most important general exception, namely, that the profit earning capacity of the company, irrespective of the volume of production of saleable paper, remains satisfactory during the financial year.
Accordingly the clause prescribes that the directors may at their sole discretion either cancel altogether or reduce in scale of monetary payments the bonus in any one or more financial years in which the gross profit earned by the company over the whole financial year is not sufficient to meet fixed dividends and interest, depreciation charges and taxation and thereafter pay for the whole year dividend not less than 10 per cent.
to the ordinary shareholders of the company.
It is said that this makes the scheme a profit bonus scheme.
We are unable to agree with this contention.
It is true that the scale of payment is likely to go down or there may even be no payment of bonus at all in the circumstances mentioned in cl.
But the circumstances mentioned there are admittedly not the same which have to be taken into account in arriving at the available surplus according to the Full Bench Formula.
Clause (14) appears to us to be just one condition upon which the payment of production bonus would depend, like some other clauses in the scheme.
For example, cl.
(5) seems to provide that workers who work for less than half the total number of working days in the financial year for which bonus is being paid, shall not get any bonus, for it only makes those workers who work for more than half the total number of working days, worked out according to other rules, entitled to bonus.
Clause (6) says that certain kinds of workers will not be entitled to bonus, namely, Bungalow servants, Budli clerks or workers, temporary clerks or workers, casual workers or clerks.
It also provides that any person guilty of any major misdemeanour may at the sole discretion of the Mill Manager or the 1033 Cost Accountant not be given this bonus either in part or in whole as a punishment, and that this would be done after taking proceedings in writing for the purpose.
Clause (7) provides another condition as to what service will count towards earning bonus and what will not; for example, leave on full or part pay shall count as bonus service while leave without pay will not count as Qualifying service towards bonus.
Again cl.
(8) lays down that a worker will be entitled to the maximum bonus if he works for all the working days during the financial year, for which the bonus is declared.
Clause (9) then provides how the maximum bonus can be reduced, if a worker does not work for all the working days.
Clause (14) therefore is also another clause which may either lead to no payment of bonus or less payment than prescribed under cl.
Further the fact that this is not a profit bonus scheme but a production bonus scheme will also be clear from what cl.
(14) actually provides.
It says that if the conditions mentioned in it are not fulfilled, the workers would riot be entitled to bonus or may get less.
This means that if the conditions are fulfilled, workers would be entitled to bonus.
Now, suppose, that the gross profit in a year is sufficient to meet fixed dividends and interest, depreciation charges and taxation and 10 percent.
dividend to the ordinary shareholders.
Theereafter the balance of profit left is Only (let us say) Rs. 5/ .
But as the conditions of cl.
(14) are fulfilled, the workers would be entitled to production bonus, though the amount of Rs. 5/ which remains, cannot possibly meet the claim of bonus.
It is clear therefore that this bonus scheme is not the same as the profit bonus worked out under the Full Bench formula and it cannot be called a profit bonus scheme even other wise.
This is nothing more nor less than a pure production bonus scheme based on tonnage, depending on certain conditions one of which is related to profits also.
The nature of this bonus, therefore, in our opinion, is entirely different from the nature of profit bonus under the Fall Bench formula and we do not see why if there is an available surplus of profits 130 1034 according to the Pull Bench formula, the workmen should not get profit bonus in accordance with that formula.
The two things, in our opinion, are different.
Under the scheme what the workers get is a supplementary emolument worked out on certain basis.
Under the Full Bench formula, what they get is something out of the profits, if there is an available surplus on the ground that both capital and labour contribute to the accrual of profits and it is only fair that labour should get a part of it.
In this connection our attention was drawn to Mathuradas Kanji vs Labour Appellate Tribunal (1), where it was observed that " one of the categories of bonus is described as " incentive bonus ".
The name indicates that it is given as a cash incentive to greater effort on the part of the labour.
But the essential condition for the payment of incentive bonus just like any other kind of bonus, is that the industry concerned must earn profits part of which is due to the contribution which the workmen made in increasing production.
" That was not a case of production bonus at all.
The bonus dealt with there was included in an agreement between the government and its contractors in a contract relating to clearing and transporting of imported foodgrains.
It was provided that if the rate of discharge from a ship exceeded 1,500 tons per 24 hours and no shed demurrage was incurred, the government would pay to the contractors remuneration at the prescribed rates plus a bonus of annas four per ton.
The workmen employed by the contractors claimed that this bonus should be given to them.
That claim was negatived on the ground that the workers could not claim, on the terms of the contract, that the bonus of annas four per ton was payable to them.
These observations made in a different setting have therefore no relevance in the context of the production bonus scheme with which we are dealing here and which has become a term of employment of the workmen.
As for el.
(18), it provides that if during the currency of three years for which the scheme was to (1).
A.I.R. 1035 remain in force in the first instance, the government en forced by legislation any scheme or provision for bonus or profit sharing, the company may decide to cancel or modify the scheme in its entirety.
It is urged that this shows that the scheme was one for profit sharing or profit bonus, because it was likely to be cancelled or modified if legislation was introduced with respect to these.
It may be that the scheme might have been cancelled or modified if such legislation was passed.
But that does not mean that the scheme itself provided for profit sharing or profit bonus.
It is one thing to cancel or modify a scheme because the legislature steps in to provide for extra payment for workmen.
But the nature of the provision of law, which was then expected, cannot be imposed on this scheme, which must be judged on its own terms; these leave no doubt that it is not a profit bonus scheme but an incentive wage plan depending upon production in the main.
The contention therefore that the bonus under the scheme is a profit bonus and therefore the workmen are not entitled to the profit bonus under the Full Bench formula must fail.
The contention under this head is that even if profit bonus is payable in addition to production bonus, there was no available surplus of profits to justify the Appellate Tribunal in granting one month 's bonus.
The workmen had asked for two month 's bonus; but the Appellate Tribunal after working out the available surplus on the basis of the Full Bench formula granted them one month 's bonus.
The Full Bench formula was evolved in 1950 in connection with a case relating to the textile industry and has been since then generally applied to many other industries.
The necessity for evolving that formula arose in this way: When prices.
are stable or falling, there is no necessity of making further provision for rehabilitation for the usual depreciation, provided for the purposes of the Income tax Act, is sufficient to build up a fund for replacement of plant and machinery when they are worn out; but when prices are rising the usual depreciation fund is not enough to replace plant and 1036 machinery which become useless.
This was particularly so after the end of the last war, when the question of replacing machinery purchased before the war, i.e., before 1939, came up before the Full Bench of the Labour Appellate Tribunal in 1950.
In order, therefore, to meet this particular situation arising out of a steep rise in prices, the Full Bench formula was evolved to provide for a further sum for rehabilitation out of the profits besides the statutory depreciation.
This was on a notional basis and depended upon a multiplier which was used to find out the current prices of machinery to be replaced and a divisor based on the useful life of the machinery to find out what sum should be provided each year for what was called rehabilitation.
In order, however, that this sum nationally provided for rehabilitation each year has a realistic connection with the amount in fact necessary for the purpose, it is, in our opinion, necessary that what is known as the total block of a concern including land, buildings, plant and machinery, should be properly sub divided, as otherwise a flat multiplier at the same rate for the total block might not give an accurate amount to be provided for rehabilitation.
It is, therefore, necessary in order to arrive at an approximately realistic figure for rehabilitation that the total block should be divided into three heads, namely, (i) land, (ii) buildings, railway sidings and things of that nature which have a much longer life and where imports are not needed, and (iii) machinery.
In the case of land, no replacement is necessary and therefore nothing need be provided for rehabilitation under this head.
Even where land is leasehold and the lease is expiring, any payment for renewal of lease will be an expense and need not enter into calculations for rehabilitation.
Further if there are buildings belonging to the concern on leasehold land, their rehabilitation charge be will allowable under the head buildings.
In the case of building, ,, railway sidings etc.
, the multiplier will be smaller while the divisor will be larger.
As for machinery, there is again the necessity of further sub division, according to when the machinery was purchased.
The machinery purchased 1037 before the last war stands on one footing and thus there will be a block of machinery which may be know as pre 1939.
The second block of machinery may well be that purchased during the war and the last block that purchased after the war.
The last two are not rigid divisions; but they indicate that machinery has to be divided into blocks according to years of purchase to arrive at a correct multiplier and a correct divisor.
Bearing these principles in mind, let us see how the Full Bench formula works in this case.
We may mention that there is no dispute in this case as to the components of the formula, the only dispute being confined to its actual application.
The company claimed a multiplier of 4.5 and a divisor of 10, and on that basis gave a chart showing a deficit of 112 lacs in the amount required for rehabilitation for 1951 52.
Another chart was also filed by the company in which the multiplier was taken as 3.5 and the divisor as 10, and the deficit was worked out at 65 lacs.
What the company did was to take the total block consisting of land, buildings, railway sidings and machinery, valued at 468 lacs and multiply it by 4.5 or 3.5, making no distinction between land, buildings and railway sidings, and machinery.
The divisor was also taken as 10, making no distinction again between these three categories, and further making no distinction between the machinery purchased before 1939, during the last war and after the last war.
This, in our opinion, was a completely unrealistic way of working out the amount required for rehabilitation, and that is why the company was able to show in its charts such a large deficit.
The Appellate Tribunal did not accept these charts.
It left out of account land altogether, and rightly so.
As for buildings, it applied a different multiplier and a different divisor, and so far as that is concerned no dispute has been raised before us.
As for machinery, consisting of plant, machinery, bamboo forest block, furniture, flotilla and vehicles, it divided the block for this purpose into two parts, namely, the block as it existed on April 1, 1947, and the additions made 1038 between April 1, 1947, to March 31, 1951.
It applied a multiplier of 3 so far as the block upto April 1, 1947, was concerned and took the block of additions after 1 4 1947 at cost price, thus using one as multiplier.
It is not clear why the Appellate Tribunal did not include the additions made in 1951 52.
The Appellate Tribunal also accepted the divisor 10 for all this plant, machinery, etc., and made no difference between the useful life of the machinery purchased at different times.
Eventually, after making the relevant calculations, it came to the conclusion that there was an available surplus of profits amounting to 22 lacs.
It, therefore, awarded one month 's profit bonus on basic normal wage.
It is contended on behalf of the company that evidence had been produced on its behalf to show that the prices of machinery had appreciated 4 1/2 times as compared to the prices in 1939, and therefore, the multiplier of 4.5 should have been allowed at least on the block of machinery up to 1939.
Thereafter it is claimed that some multiplier above one should be given for the block 1939 1947 and also for the block 1947 51.
It is further contended that the additions made in 1951 52 should also have been taken into account.
It may be mentioned that the Labour Appellate Tribunal which evolved the Full Bench formula in 1950 had used the multiplier 2.7 in that case for prewar block and that multiplier has been used since then in many other cases.
it is, however, contended on behalf of the company that multiplier is not sacrosanct, and if in fact there has been a greater rise in price, there is no reason why a higher multiplier should not be used.
It may be accepted that if an employer is able to prove that in fact there has been a greater rise in price, he should be given a higher multiplier.
But there has to be good proof tendered by the employer for the multiplier which he claims.
Let us see, therefore, what proof the company has tendered in this case for a multipler of 4.5 for the block upto April 1, 1939.
In its written statement the company said that it was a known fact that the 1039 price of plant and machinery had increased by 300 per cent.
to 400 percent.
since before the war.
At that stage there was no claim that the price had increased 4 1/2 times after April 1, 1939.
The company 's claim, therefore, as put in the written statement, was for a maximum multiplier of 4 for the block upto April 1, 1939.
In the evidence of Mr. Taylor, who appeared as a witness for the company, however, claim was made that prices had gone up by 4 1/2 times.
This was based on exhibit D produced by the company which was compiled on the basis of inquiries about certain machinery from certain firms and copies of the correspondence with the firms were also produced.
Nineteen items were mentioned in exhibit D and the average multiplier was worked out as 4.56.
Among the items listed in exhibit D were motors, beaters, machine drive, paper making machine, turbo alternator, couch roll, bamboo crushers, bamboo digesters, boiler, circular tanks and three roaster smelter units.
The total price of these items was 19 lacs, (we have converted pounds into rupees for this purpose).
Besides these, there are other items, like steam piping.
, steam tee, galvanized bend and steam bends, which are probably required in large quantities and the price per foot or per piece has been mentioned.
The correspondence which was attached to exhibit D consists of four letters, one of September 1954 and three of June 1955, relating to one paper making machine similar to one installed in Mill No. 2, a turbo alternator similar to one installed in Mill No. 1, a machine drive similar to one installed in Mill No. I and a boiler similar to one installed in Mill No. 1.
Now, the cost of machinery block as at April 1, 1939, was of the order of 153 lacs while exhibit D only deals with machinery of the value of 19 lacs as mentioned above.
Mr. Taylor did not say in his evidence that exhibit D was a sample and that other machines were of the same type as mentioned in exhibit D or that the prices of other machinery bad gone up similarly or to the same extent.
D 1 to D 4 indicate that the price of one out of ten paper making machines was ascertained and nothing was ascertained about nine others.
Similarly prices of one 1040 turbo alternator, one machine drive and one boiler of Mill No.
I were ascertained.
We do not know how many more such machines are in the two mills; nor do we know that the increase in prices of these types of machines is also four and a half times.
In the circumstances, we feel that the company has failed to provide sufficient material on the basis of which it can claim 4.5 as the multiplier.
It is the company which is claiming that a certain multiplier be used for calculating rehabilitation reserve, and it was its duty to produce good and sufficient evidence as to the correct multiplier if it wants that multiplier to be used.
We cannot also forget that in its written statement the company only claimed a rise of 300 per cent.
to 400 per cent.
on prewar price.
In the circumstances, the tribunal was not unjustified in not giving the multiplier of 4.5.
We also feel that in these circumstances we shall not be justified in giving the company a multiplier higher than 4, for that was the maximum claim it had put forward in its written statement.
We should, however, like to make it clear that though we are using the multiplier 4 for the block as at April 1, 1939, this should not be taken to be a precedent for future years, even for this company, and it will be open to either party to adduce proper evidence to show what the exact multiplier should be for this block, whether more than 4 or less.
Then we come to the block from April 1, 1939 to March 31, 1947.
The Tribunal gave the multiplier 3 for this block also.
But that was because it gave the same multiplier for the entire block as at 1947, including the prewar block.
As, however, we are giving a multiplier of 4 for the prewar block, the multiplier 3 for the block April 1, 1939 to March 31, 1947, can only be justified, if the company has proved that was the rise in the prices after 1939.
So far as that is concerned, the company did not produce any evidence before the Industrial Tribunal.
It seems, however, that certain documents were produced before the Appellate Tribunal on June 12, 1956, when the appeals were ready for argument.
The order sheet of June 12, 1956, shows that the 1041 Appellate Tribunal allowed four statements regarding certain machines given by different, firms to be admitted into evidence.
Learned counsel for the workmen object to our looking into these statements on the ground that they never knew that any such statements had been filed at the last moment before the Appellate Tribunal and nobody seems to have relied on these statements before the Appellate Tribunal and the judgment also makes no mention of them.
There seems to be a good deal of force in these contentions.
However, looking at these statements, which have been taken on record, we find that they relate to ten items.
Four of them are of the years 1945 48 and the increase of price varies from 60 per cent.
to 75 per cent.
Two are of 1950 and the increase varies from 15 per cent.
to 50 per cent.
, three are of 1951 and the increase varies from 99.5 per cent.
to 116 per cent.
, and one is of 1954 and the increase is 60 per cent.
The increased price is as of 1956.
Even taking these documents into account, we feel that the company cannot ask for a multiplier higher than 2 for the block between 1939 1947.
But even this will not be taken as a precedent for future and it will be open to either party to give better evidence in order to vary this multiplier one way or the other.
As for the block after 1947, it appears that the company added machinery to the tune of 87 lacs between April 1, 1949 and March 31, 1952, while the prices quoted for the years 1950 and 1951 in these documents were only of machines worth 5 lacs.
We do not know whether this machinery is of the same kind as that mentioned in these documents.
They cannot, therefore, be a guide for arriving at any multiplier higher than one for this period relating to this block of 87 lacs.
Here again we should like to make it clear that if in future years better evidence is produced, the question of giving a multiplier higher than I for this block can be considered.
This disposes of the multipliers on the blocks of machines divided into three periods.
We now come to the divisor.
Both the Tribunals have accepted 10 131 1042 as the divisor on the evidence of Mr. Taylor.
We must say that it looks odd to us that there should be the same divisor for pre 1939 machinery, and post 1939 but pre 1947 machinery, and post 1947 but pre1952 machinery.
It stands to reason that newer the machinery the larger must be the divisor for the newer machinery would have a longer useful life.
However, as both the Tribunals have accepted to as the divisor for the entire machinery in this case, we shall also have to accept it; but we should like to make it clear that this should also not be taken as a precedent for future years and it will be open to either party to show that the divisor should be different, whether more or less than 10, for various blocks of machinery relating to the three periods.
Let us now work out the figures on the basis of the above considerations.
We have taken the basic figures as supplied to us by the learned counsel for the company : REHABILITATIONCOST In lacsIn lacs of.
Rs.of Rs. (a) Plant & machinery as153.43 x4 = 613.72 at 1 4 1939: Machinery added between22.41 x2 = 44.82 1 4 1939 and 31 3 1947: Additions between 87.27 x 1 = 87.27 1 4 1947 and 31 3 1952: Total745.81 Less 5% breakdown value. 13.15 Balance732.66 Less depreciation upto 31 3 1951176.03 Balance556.63 Less Reserves General Reserve25.49 Plant Replacement67.9893.47 Balance463.16 Dividing by 10.46.31 1043 (b) Buildings: Value of building 42.85 x 2.596.41 as at 31 3 47: Additions between 21.1921.19 1 4 47 and 31 3 52: Total 117.60 Less 5% breakdown 3.20 Balance 114.40 Less depreciation upto 47.21 31 3 1951: Balance 67.19 Dividing by 27 2.48 Rehabilitation for (a) Plant & Machinery 46.31 (b)Building 2.48 Total. 48.79 Less depreciation for 1951 52.
16.50 Balance 32.29 Rehabilitation Amount for 1951 52:32.29 Rehabilitation amount for 1951 52 thus comes to 32.29 lacs.
In the charts supplied by the company the net profits after deducting prior charges other than rehabilitation cost were worked out air 36.09 lacs.
We find, however, that there is one mistake in this calculation inasmuch as 76.3 lacs have been included in working capital, though this 'was merely a book entry and there was no cash corresponding to it.
4 per cent.
interest was allowed on working capital and this would mean that the net profits should increase by 3.05 lacs as that interest was allowed extra in the company 's chart before the Appellate Tribunal.
Thus the amount of net profits available, before the allowance of rehabilitation charges, comes to 39.14 lacs (36.09 + 3.05).
Deducting 32.29 lacs we arrive at the available surplus of profits amounting to 6.85 lacs (39.14 32.29), which is to be distributed equitably between the three sharers mentioned in the 1044 very decision of the Labour Appellate Tribunal which evolved the formula.
The total cost of one month 's bonus on basic wages allowed by the Appellate Tribunal is about 3 lacs.
Taking all the circumstances of this case into consideration we do not think that any case has been made out for interference with this order of the Appellate Tribunal.
We may point out that we have not taken into account bamboo mills and grass block for reasons given by the Appellate Tribunal, which commend themselves to us.
This brings us to the appeal by the workmen.
Only three points have been urged before us out of the many taken in the grounds of appeal, and we shall deal only with these three.
They are (i).
The minimum basic wage should have been raised from Rs. 30 to Rs. 35; (ii).Clerical staff as well as Buidl and temporary workers should have been included in the attendance bonus scheme; and (iii). .Profit bonus should have been allowed at two months ' basic wages for 1951 52 instead of one month 'section Re.
Both the Tribunals have rejected the claim for raising the basic wage on the principle of " Industrycum Region Rate of Basic Wages ".
The workmen relied on the wages paid in the Bengal Paper Mills Ltd. at Raniganj, which is also a paper making concern.
The minimum basic wage there is Rs. 38 3, dearness allowance Rs. 35 and the incentive wage is said to work out to Rs. 7 5 6 per mensem, making the total Rs. 80 8 6.
In the present company, minimum basic wave is Rs. 30; dearness allowance is Rs. 35; house allowance is Rs. 2; attendance bonus works out to Rs. 8 and production bonus is about Rs. 3, making a total of Rs. 78.
It will thus be seen that the difference is not great.
Further, if the production bonus and incentive wage are not taken into account, the present company pays Rs. 75 per mensem while the Raniganj company pays Rs. 73 3.
In the circumstances, we see no reason for interfering with the concurrent order of the two Tribunals.
1045 Re.
The Tribunals rejected the claim for extending the attendance bonus scheme to clerical staff, budli workers and temporary workers.
They were of the view that these workmen stand on a different footing.
For the clerical staff the reason given was that they enjoyed the advantage of the incremental scales which were till then denied to other categories of mill hands for whose benefit the attendance bonus scheme was introduced.
As for the budli and temporary workers, the Tribunals said that the scheme could not be applied to them on account of uncertainty of the tenure of their service.
So far as the budli and temporary workers are concerned, the reason given by the Tribunals for treating them differently appears to us to justify their being excluded.
As to clerical staff, it appears from the correspondence which ensued between the union and the company on the introduction of attendance bonus scheme that the scheme was introduced primarily in connection with the installation of a time keeping office.
The clerks are obviously in a different category from the workmen engaged in actual production.
In the circumstances, apart from the considerations which were considered by the two Tribunals, there is, in our opinion, justification for treating clerks in a different way from other workmen.
The company also told the union that so far as they knew no scheme of attendance bonus had ever been applied to clerks, probably because absenteeism among clerks is not so great as among other workmen.
We see no reason, therefore, to disturb the concurrent finding of the two Tribunals in this matter.
(iii).
We have already worked out above the available surplus of profits, from which profit bonus can be given, The amount of available surplus comes to 6.85 lacs and one month 's basic wages, which have been allowed as profit bonus, come to about 3 lacs.
The percentage therefore is already sufficiently high and if profit bonus is allowed at the rate of two months ' basic wages it will come to about 6 lacs and 1046 would be more or less equal to the entire available surplus.
It is well settled that the available surplus has to be divided in a fair manner between the industry, the shareholders and the workmen.
We cannot forget that the workmen have also got production bonus for this Year.
In the circumstances, there is no scope for grant of any further profit bonus beyond that allowed by the Appellate Tribunal.
We, therefore, partly allow the appeals of the company and vary the production bonus rate in the Manner indicated above.
We dismiss the appeals of the company with respect to profit bonus.
We also dismiss the appeal of the workmen.
In view of the fact that the parties have partly succeeded and partly failed, we order them to bear their own costs of this court in all the appeals.
Appeals Nos. 450 and 451 allowed in part.
Appeal No. 514 dismissed.
| A deed of trust was executed by the respondent on March II, 1938, when she was residing at D in the State of Bihar, in respect of the properties described in the Schedules referred to in the deed, some of which were situate outside the State of Bihar.
In the trust deed she described herself as the settlor, and it was recited therein that the settlor had installed a deity named Iswar Srigopal in her house and had since been regularly worshiping and performing the puja of the said deity; and that she had been erecting a Nat Mandir to be named in memory of her deceased son.
The recitals also showed that the settlor had provided for the construction of two temples (jugal Mandir), in one of which was to be installed the deity Srigopal and other deities, and in the other the marble image of, her preceptor and that the temple, committee shall consist of the, Jugal.
Mandir shebait for the time being and six pious Hindus who must be residents.
of D and of whom at least four shall be Begalis.
One 76 602 of the clauses of the trust deed recited : "The ' pronamis ' and perquisites to be offered to the deities and image in the jugal Mandir shall form part of the Srimati Charusila Trust Estate and neither the shebait nor any one else shall have interest or claim in or over same.
,, The provisions of the trust deed in regard to the ceremonials relating to free distribution of food and water and the festivals to be performed for the deity and the image, which were well known festivals in which members of the Hindu Community usually take part, contemplated that they were to be done on a large scale so as to enable a large number of persons to take part in them.
There was also a provision in the trust deed for the establishment of a hospital for Hindu females and a charitable dispensary for patients of any religion or creed.
After the coming into force of the Bihar Hindu Religious Trusts Act, 1950, the President of Bihar State Board of Religious Trusts started proceedings under sections 59 and 70 Of the Act against the respondent in respect of the trust on the footing that it was a public trust to which the Act applied.
The respondent made an application to the Patna High Court under article 226 of the Constitution in which she prayed that a writ or order be issued quashing the proceedings taken against her by the Bihar State Board of Religious Trusts on the grounds (I) that the trust deed dated March II, 1938, was a private endowment created for the worship of a family idol in which the public were not interested, (2) that the Act did not apply to private trusts, (3) that the Act was ultra vires the Constitution by reason of the circumstance that its several provisions interfered with her rights as a citizen guaranteed under Part III of the Constitution, and (4) that, in any case, the Act was not applicable to the trust deed in question as some of the properties were situate outside the State of Bihar.
Held (1) that on its true construction the deed of trust dated March 11, 1938, created a religious and charitable trust of a public nature.
Deoki Nandan vs Murlidar, ; , considered.
In re Charusila Dasi, I.L.R. [1946] I Cal. 473, explained.
One of the relevant considerations as to whether the trust was a public trust, will be if by the trust deed any right of worship has been given to the public or any, section of the public answering a particular description.
(2) that the Act does not apply to private endowments.
Mahant Ram Saroop Dasji vs section P. Sahi, [1959] SUPP.
2 S.C.R. 583, followed.
(3) that the provisions of the Act do not take away or abridge any of the rights conferred by Part III of the Constitution.
Mahant Moti Das vs section P. Sahi, [1959] Supp. 2 S.C.R. 563, followed.
603 (4) that section 3 of the Act makes the Act applicable to all public religious and charitable institutions within, the meaning of the definition clause in section 2(1) Of the Act, which are situate in the State of Bihar and any part of the property of which is in that State.
(5) that where the trust is situate in Bihar the State has legislative power over it and also over its trustees or their servants and agents who must be in Bihar to administer the trust, and as the object of the Act is to provide for the better administration of Hindu Religious Trusts in the State of Bihar and for the protection of properties appertaining thereto, in respect of the property belonging to the trust outside the State the aim is sought to be achieved by exercising control over the trustees in Personam, and there is really no question of the Act having extra territorial operation.
(6) that, in the present case, the circumstance that the temples where the deities were installed are situate in Bihar and that the hospital and charitable dispensary are to be established in Bihar for the benefit of the Hindu Public in Bihar, gives enough territorial connection to enable the legislature of Bihar to make a law with respect to such.
trust.
Tata Iron & Steel Co. Ltd. vs State of Bihar, [1958] S.C.R. 1355 and The State of Bombay vs R.M.D. Chamaybaugwala, (1957] S.C.R. 874, relied on.
Saydar Gurdyal Singh vs The Rajah of Faridkote, (1894) L.R. 21 I.A. I71, distinguished.
|
ivil Appeal No. 2483 of 1982.
From the Judgment and Order dated 5.2.
1982 of the Allahabad High Court in Civil Misc.
Writ Petition No. 1744 of 1982.
Gobind Mukhoty and U.S. Prasad for the Appellants.
Ms. Rachna Gupta, Ms. Rani Chhabra and M.C. Dhingra for the Respondents.
The following Judgment of the Court was delivered by Appellant is a Society registered under the , 21 of 1860.
Five persons of whom some are respondents before us instituted a suit in the Court of Civil Judge, Varanasi challenging the election of the Manag ing Committee and other elected officers of the appellant and asked for rendition of accounts.
This suit of 1981 is still pending.
We are now concerned with the correctness of the finding on the preliminary issue as to whether such a suit is maintainable in the Civil Court.
The defendants ' objection to the maintainability is grounded upon the provi sions contained in Sections 23 and 25 of the Registration Act.
The Courts below have taken the view that the suit is not barred.
That is why the defendants are here by special leave.
973 A litigant having a grievance of a civil nature has, independently of any statute, a right to institute a suit in the civil court unless its cognizance is either expressly or impliedly barred.
The position is well settled that exclu sion of jurisdiction of the civil court is not to be readily inferred and such exclusion must be either expressly or implied.
Reliance has been placed by Mr. Mukhoty before us on the ratio of the Constitution Bench decision of this Court in K.S. Venkataraman & Company vs State of Madras, ; where reference has been made to the Privy Coun cil case in Raleigh Investment Company Limited vs The Gover nor General in Council.
It has been laid down that the Civil Court 's jurisdiction would be presumed unless the contrary is indicated.
Mr. Mukhoty has also relied upon two other decisions being Ganga Bai vs Vijay Kumar and Others, ; and Dhula bhai and Others, vs The State of Madhya Pradesh and Another, [ ; The legal position thus seems to be clear and it is not necessary to quote further authorities.
What is really in dispute is the application of the rule to the facts of the case.
To ascertain whether the suit would be barred, the effect of the provisions of Sections 23 and 25 of the Registration Act with the U .P. amendments has to be considered.
These sections provide: "23.
Audit: (1) Without prejudice to the provisions of sub section (2) of Section 4 or of Section 22, where the Regis trar is of opinion that it is necessary or expedient so to do, he may, by written order, require any society to furnish its accounts or a copy of a statement of receipts and ex penditure for any particular year duly audited by a Char tered Accountant: Provided that the Registrar may, at the request of society permit it to have such accounts and statement audit ed by any other person by him.
(2) If the society fails to furnish the documents referred to in sub section (1) within the period specified in the order or with such extended period as the Registrar may from time to time allow, the Registrar may cause the accounts of such society audited for the said year and may recover the cost of such audit from that society.
(3) If the society neglects or refuses to make its account or 974 other documents available for audit under sub section (2) or, in the opinion of the Registrar, otherwise fails to provide requisite facilities to have the audit made with due expedition, the Registrar may proceed to take action under Section 24.
Disputes regarding election of office bearers: (1) The prescribed authority may, on a reference made to it by the Registrar or by at least one fourth of the members of a society registered in Uttar Pradesh, hear and decide in a summary manner any doubt or dispute in respect of the elec tion or continuance in office of an office bearer of such society, and may pass such orders in respect thereof as it deems fit: Provided that the election of an office bearer shall be set aside where the prescribed authority is satis fied: (a) that any corrupt practice has been committed by such office bearer; or (b) that the nomination of any candidate has been improperly rejected; or (c) that the result of the election in so far as it concerns such office bearer has been materially affected by the improper acceptance of any nomination or by the improper reception, refusal or rejection of any vote or the reception of any vote which is void or by any non compliance with the provisions of any rules of the society.
Explanation I. A person shall be deemed to have commit ted a corrupt practice who directly or indirectly, by him self or by any other person (i) induces, or attempts to induce, by fraud, intentional misrepresentation, coercion or threat of injury, any elector to give or to refrain from giving a vote in favour of any candidate, or any person to stand or not to stand as, or to withdraw or not to withdraw from being a candidate at the election; (ii) with a view to inducing any elector to give or to refrain from giving a vote in favour of any candidate, or to inducing any 975 person to stand or not to stand as, or to withdraw or not to withdraw from being, a candidate at the election, offers or gives any money, or valuable consideration, or any place of employment, or holds out any promise of individual advantage or profit to any person; (iii) abets (within the meaning of the Indian Penal Code) the doing of any of the acts specified in clause (i) and (ii); (iv) induces or attempts to induce a candidate or elector to believe that he, or any person in whom he is interested, will become or will be rendered an object of divine dis pleasure or spiritual censure; (v) canvasses on grounds of caste, community, sect or reli gion; (vi) commits such other practice as the Government may prescribe to be a corrupt practice.
Explanation II A 'promise of individual advantage or profit to a person ' includes a promise for the benefit of the person himself, or of any one in which he is interested.
Explanation III The State Government may prescribe the procedure for hearing and decision of doubts or disputes in respect of such elections and make provision in respect of any other matter relating to such elections for which insuf ficient provisions exists in this Act or in the rules of the society.
(2) Where by an order made under sub section (1), an election is set aside or an office bearer is held no longer entitled to continue in office or where the Registrar is satisfied that any election of office bearers of a society has not been held within the time specified in the rules of that society, he may call meeting of the general body of such society for electing such office bearer or office bearers, and such meeting shall be presided over and be conducted by the Registrar or by any officer authorised by him in this behalf, and the provisions in the rules of the society relating to meetings and elections shall apply to such meeting and election with necessary modifications.
(3) Where a meeting is called by the Registrar under sub section no other meeting shall be called for the purpose of election by any other authority or any person claiming to be an office bearer of the society.
976 Explanation For the purposes of this section, the expres sion 'prescribed authority ' means an officer or court autho rised in this behalf by the State Government by notification published in the Official Gazette.
We are of the view that provisions of Section 23 are con fined to audit and have nothing to do with the relief of rendition of accounts.
No more is necessary to be said about that relief.
Section 25 deals with disputes regarding chal lenge to the eviction of office bearers.
The maintainability of dispute within the purview of that Section is hedged with conditions and unless such requirement is fulfilled, a statutory dispute would not be maintainable.
The present action in the Civil Court is by some of the members who perhaps would not satisfy the requirements laid down in Section 25.
It cannot be contended that Section 25 having provided the pre conditions on the satisfaction of which a dispute within the purview of that Section would be main tainable before the Registrar takes away the right of Mem bers of the Society to claim relief otherwise outside the purview of Section 25 on the basis of their right to seek remedy for their grievance.
It is not the contention of Mr. Mukhoty that the relief claimed is not one which would come within the ambit of Section 9 of the Code of Civil Proce dure.
That being so, we are of the view that the bar of Section 25 is not applicable to the facts of the case.
Therefore, the conclusion reached in the Courts below is correct and the suit is maintainable.
We pointed out to Mr. Mukhoty that the relief against election of office bearers must have become infructuous with the passage of time as the election is annual.
It is for the trial Court now to dispose of the suit taking into consider ation the changes in the situations that may be brought before it.
We dismiss the appeal and direct the trial court to expedite the disposal of the suit.
No costs.
T.N.A. Appeal dismissed.
| A Selection Committee consisting of five Members was constituted to recommend names for appointment to the post of Reader in 'Linguistics ' in the Department of Hindi of the University of Lucknow.
The Selection Committee after inter viewing the candidates recommended the name of the appellant while respondent No. 1 was placed in the second position.
Respondent No. 1 filed a writ petition in the High Court challenging the recommendations of the Selection Committee on the ground that the Selection Committee was not legally constituted because three experts on the Committee were experts in Hindi Literature and not Linguistic experts.
The High Court allowed the petition and inter alia held that under Statute 171 of the University, the Chancellor was required to nominate experts out of the panel of experts in the subject of 'Linguistics ', which was a separate subject of study in the University; that the nomination of experts out of the panel drawn from the subject of Hindi suffered from a serious legal infirmity; and that Explanation II to sub section (5) of Section 31 of the U.P. State Universities Act, 1973 was wholly inapplicable to the instant case.
Before this Court it was contended on behalf of the appellant that in view of the fact that a Reader in 'Lin guistics ' was to be appointed in the Department of Hindi as such experts in Hindi Language and Literature were also qualified to act as experts for the selection of Reader in 'Linguistics '.
Respondent No. 1, while supporting the judgment Of the High Court, submitted that Linguistics was a separate sub ject of study for M.A. Part I and Part II and merely because the post of Reader in Linguistics was in the Department of Hindi, it would not make any difference and the experts of Hindi Language and Literature could not be 728 appointed as experts in the Selection Committee for the selection of Reader in Linguistics.
Dismissing the appeal, this Court, HELD: (1) The prospectus of the University makes it abundantly clear that separate courses of study are pre scribed for M.A. Part I or Part II in respect of Hindi on the one hand and Linguistics on the other.
[734B] (2) The subject of Hindi Language and Literature and the subject of Linguistics are entirely separate subjects of study.
This is clearly borne out from Explanation I to sub section (5)(a) of section 31 of the Universities Act.
[733H; 734A] (3) Explanation I lays down in a clear manner that for the purpose of this sub section, a branch of subject in which a separate course of study is prescribed for a post graduate degree, or for Part I or Part II thereof, shall be deemed to be a separate subject of study.
[734A] (4) It is an admitted position that separate Panels of Experts were drawn for the subjects of Hindi and Linguis tics.
[732E] (5) In the instant case, the advertisement no where provided that one Reader in Linguistics in the Department of Hindi was to be selected as common to more than one subject of study.
Merely because the post of Reader in Linguistics was required in the Department, it cannot be held that such Reader in Linguistics was to teach the subject of Linguis tics as well as the subject of Hindi Language and Litera ture.
[734G H] (6) Explanation II to sub section (5) of section 31 of the Universities Act can only apply in a case where one common teacher is to be selected for more than one subject of study and in that contingency it provides that the expert may belong to either of such subjects of study.
[735A B]
|
Civil Appeal No. 104 of 1975 Appeal by special leave from the judgment and order dated the 12th December, 1974 of the Allahabad High Court in Application Paper No. A 53 in Election Petition No. 30 of 1974.
Yogeshwar Prasad and Rani Arora, for the appellant K C. Agarwala and K. M. L. Srivastava, for respondent No. 1.
The Judgment of the Court was delivered by FAZAL ALI, J.
This appeal by special leave involves an interpretation of the scope and ambit of section 87 of the Representation of the People Act, 1951, as amended by Act 47 of 1966.
The short point that fails for determination in this appeal is as to whether or not the provision of O. XI of the Code of Civil Procedure can be applied to the trial of election petitions in the High Court by force section 87 of the said Act.
For the purpose of brevity, the Representation of the People Act, 1951 shall be referred to as the Act of 1951 shall the Representation of the People Act as amended by Act 47 of 1966 as 'the Act '.
The circumstances under which this appeal arises may be succinctly stated as follows.
An election for the U.P. Legislative Assembly for 275 Allahabad North Assembly Constituency was held on February 6, 1974 In this election the appellant was a candidate put up by the Congress Ruling party and his election was contested by the first respondent Ram Adhar Yadav who was set up by the Samukta Socialist party.
The appellant was declared duly elected in the said election and the respondent No. 1 was defeated.
The respondent No. 1 filed an election petition being Election Petition No. 30 of 1974 in the High Court of Allahabad some time in April 1974 challenging the election of the appellant on various grounds.
The appellant filed a detailed written statement denying all the allegations made by the first respondent in his petition.
The election petition was assigned to J. M. L,.
Sinha, J. who framed a number of issues on October 4, 1974.
In October 1974 respondent No. 1 filed all application being Paper No. A/53 under O. XI, r. 1 of the Code of Civil Procedure for grant of leave to respondent No. 1 to deliver interrogatories in writing for the examination of the appellant and filed certain interrogatories along with his application.
The appellant filed her objections being Paper No. A/54 to the said application contending, inter alia, that the procedure prescribed under O.XI relating to interrogatories was not applicable to the trial of election petitions in the High Court and was not covered by section 87 of the Act.
The application filed by the first respondent and the objections of the appellant came up for consideration before the learned Single Judge who by his order dated December 12, 1974, held that the provisions of O.XI fully applied to the election petitions and accordingly rejected the objections filed by the appellant.
Hence this appeal by special leave.
257 It appeals that under the Act of 1951 the power to try election petitions was conferred on the Tribunal and section 92 of that Act expressly conferred powers under O.XI of the Code of Civil Procedure on the Tribunal.
The relevant portions of section 92 of the Act of 1951 may be extracted thus: The Tribunal shall have the powers which are vested in a court under the Code of Civil Procedure, 1908 (Act V of 1908), when trying a suit in respect of the following matters: (a) discovery and inspection; x x x x (g) issuing commissions for the examination or witnesses, and may summon and examine suo motu any person whose evidence appears to it to be material; and shall be deemed to be a civil court within the meaning of sections 480 and 482 of the Code of Criminal Procedure, 1898 (Act V of 1898).
" By the Amendment Act 47 of 1966 this section was, however, deleted and section 90 of the Act of 1951 was replaced by section 87 of the Act which was the same as section 90 of the Act of 1951.
Mr. Yogeshwar Prasad counsel appearing for the appellant has submitted two points before us.
In the first place he contended that the provisions regarding inspection and discovery and interrogatories as contained in O.XI of the Code of Civil Procedure are not an integral part of the procedure in a civil suit but are special powers contained in the Code and cannot, therefore, be made applicable to election petitions which are proceedings of a special nature.
In simplification of this argument it was argued that the history of the English Law as also the Election Law of our country before independence would show that the procedure contained in O.XI of the Code of Civil Procedure was not made applicable to the trial of election petitions.
It is, however, not necessary for us to examine the history of this matter because the Act of 1951 settles the issue.
When the Parliament expressly conferred powers contained in O.XI on the Tribunal under the statutory provision of section 92 of the Act of 1951, it must he presumed to have made a drastic departure from the old law on the subject and particularly the English Law.
In view of this enactment, therefore, it cannot be said that the provisions of our Election Law, particularly in regard to section 92 of the Act of 1951 were in pari materia with the provisions of the English Law on the subject.
In fact section 92 incorporating the entire provisions of O.XI of the Code of Civil Procedure was expressly enacted so that the elected representatives also may be subjected to the same law of the land such as the Code of Civil Procedure as any other citizen.
In these circumstances, we are unable to apply the English Law to the Act in order to hold that the principles contained in O. XI of the Code of Civil Procedure are excluded from the trial of election petitions.
The first contention put forward by counsel for the appellant must, therefore, fail.
258 It was then contended that even though express powers for inspection and discovery were conferred on the Tribunal under section 92 of the Act of 1951, yet by virtue of the amendment under Act 47 of 1956 this express provision was deliberately deleted, which shows that the Parliament intended to give special protection to the elected representatives so as not to compel them to answer interrogatories.
This is no doubt an attractive argument, but on closer scrutiny it does not appear to be tenable.
The argument completely overlooks the object of the Amendment Act 47 of 1966.
By virtue of this enactment a basic change in the trial of election petitions was sought to be introduced.
Before 1966 the power to try election petitions was conferred on the Tribunal which was not a civil court and, therefore, special powers had to be conferred on it.
fact clause (g) of section 92 of the Act of 1951 extracted above clearly shows that the Tribunal was deemed to be a civil court hence there was the necessity of conferring special powers contained in O.XI of the Code of Civil Procedure on the Tribunal to avoid further doubts.
After the amendment of 1966 as the election petitions were to be tried by the High Court, section 87 of the Act which is based on section 90 of the Act of 1951 was considered sufficient to contain the entire procedure to be adopted by the High Court in trying the election petitions which were to be in accordance with the Code of Civil Procedure as far as applicable.
Since the High Court is a court of record and a civil court is not, it was not at all necessary for the Parliament to have enacted a separate section like section 92 of the Act of 1951 and that is why section 92 was considered to be unnecessary in view of the change of forum and was deleted under the amended Act.
From this it cannot be contended that the Parliament intended that the provisions of O. XI of the Code of Civil Procedure 1 should not apply to the election petitions tried by the High Court under the Act.
Counsel for the appellant was unable to cite any authority directly in point.
On the other hand, the view which we have taken in this case, is amply supported by number of authorities of this Court as well as other High Courts.
To begin with, this Court as far back as 1951, while considering sections 90 and 92 of the Act of 1951 observed in Harish Chandra Bajpai vs Triloki Singh(1) thus: "The second contention urged on behalf of the appellants is that if the provisions of the Civil Procedure Code are held to be applicable in their entirely to the trial of election petitions, then there was no need to provide under section 92 that the Tribunal was to have the powers of courts under the Code of Civil Procedure in respect of the matters mentioned therein, as those powers would pass to it under section 90(2).
But this argument overlooks that the scope of section 90(2) is in a material particular different from that of section 92.
While under section 90(2) the provisions of the Civil Procedure Code are applicable only subject to the provisions of the Act and the rules made thereunder, there is no such limitation as regards the powers conferred by section 92.
It was obviously the intention of the legislature to put the powers of the Tribunal in respect of 259 the matters mentioned in section 92 as distinguished from the other provisions of the Code on a higher pedestal, and as observed in Sitaram vs Yograjsingh (A.I.R. , they are the irreducible minimum which the Tribunal is to possess.
(3) It is then argued that section 92 confers powers on the Tribunal in respect of certain matters, while section 90(2) applies the Civil Procedure Code in respect of matters relating to procedure, that there is a distinction between power and procedure, and that the granting of amendment being a power and not a matter of procedure, it can be claimed only under section 92 and not under section 90(2).
We do not see any antithesis between 'procedure ' in section 90(2) and 'powers ' under section 92.
When the respondent applied to the Tribunal for amendment, he took a procedural step, and that, he was clearly entitled to do under section 90(2).
The question of power arises only with reference to the order to be passed on the petition by the Tribunal.
Is it to be held that the presentation of a petition is competent, but the passing of any order thereon is not ? We are of opinion that there is no substance in this contention either.
" The Court pointed out that the object of section 92 was merely to secure powers of the Court in respect of the matters mentioned therein and that there was no antithesis between sections 90(2) and section 92 of the Act of 1951.
Similarly in Sitaram Hirachand Birla vs Yograjsingh Shankarsingh Parihar and others,(1) Chagla, C.J., clearly pointed out that the distinction between the power and procedure was completely artificial and a distinction without any difference.
The learned Chief Justice speaking for the Court observed as follows: "In our opinion, Mr. Kotwal is right, because on principle it is difficult to make a distinction between procedure and the powers of a Court as suggested by Mr. Patwardhan.
The whole of the Civil Procedure Code, as its very name implies, deals with procedure.
In the course of procedure the Court always exercises powers and when the Court is exercising its powers, it is exercising them in order to carry out the procedure laid down in the Code.
Therefore procedure and powers in this sense are really interchangeable terms and it is difficult to draw a line between procedure and powers.
The powers conferred under section 92 is not any substantive power, it is procedural power, a power Intended for the purposes of carrying out the procedure before the Tribunal.
" In a recent decision of the Full Bench of the Allahabad High Court in Duryodhan vs Sitaram and others(2) the Court held that the matters mentioned in section 92 appertain to the procedure for trial, and are also attracted by virtue of section 90(l).
The Court observed as follows: 260 "In my opinion, the matters mentioned in Section 92 appertain to the procedure for trial, and are also attracted by virtue of Section 90(1).
They were separately stated in Section 92 to make them operate inspite of any provision to the contrary in the Act or the Rules, and not with a view to curtail the amplitude of Sec.
90(1).
The provisions of O.9, Rr. 8 and 9, Civil P.C. even if they deal with powers, would be procedural powers and be attracted by virtue of Section 90( 1 ) .
" While dealing with the scope and ambit of s.90 of the Act 1951 this Court in Dr. Jagjit Singh vs Giani Kartar Singh and others(1) observed as follows .
"The true legal position in this matter is no longer in doubt.
Section 92 of the Act which defines the powers of the Tribunal, in terms, confers on it, by Cl.
(a), the powers which are vested in a Court under the Code of Civil Procedure when trying a suit, inter alia, in respect of discovery and inspection.
" A Full in Bench of the Punjab High Court in Jugal Kishore vs Dr. Baldev Prakash,(2) while construing the provisions of section 87 of the Act clearly pointed out that the High Court was a Court of record and possessed all inherent powers of a Court while trying election petitions.
In this connection, Grover, J., observed as follows: "It is quite clear that there is no distinct provision in the Act laying down any particular or special procedure which is to be followed when the petitioner chooses to commit default either in appearance or in production of evidence or generally in prosecuting the petition.
The provisions of the Code of Civil Procedure would, therefore, be applicable under Section 87 of the Act.
I am further of the opinion that any argument which could be pressed and adopted for saying that the inherent powers of the Court could not be exercised in such circumstances would be of no avail now as the High Court is a Court of record and possesses all inherent powers of a Court while trying election petitions.
" We fuly approve of the line of reasoning adopted by the High Court in that case.
The Rajasthan High Court in Keshari Lal Kavi and another vs Narain Prakash and others(3) followed the Punjab case and has taken the same view.
Some reliance was placed by the learned counsel for the appellant on the decision in Inamati Mallappa Basappa vs Desai Basavarai Ayyappa and others,(4) where this Court held that the procedure contained in O. 23, r. 1 of the Code of Civil Procedure did not apply to election petitions and, therefore, on a parity of reasoning O. C.P.C. also could not be applicable to the trial of election petitions.
261 We are, however, unable to agree with this argument.
The provision contained in O. 23 r. 1 cannot be equated with the provisions of o. XI because the election petition being a matter of moment and concerning the entire costituency there could be no question of the election petition being withdrawn by the petitioner who had filed the same.
This was highlighted by this Court in that case when the Court observed as follows: "Order 23, r.1, sub rule (2), provides for liberty being given by the Court to a party withdrawing or abandoning a part of his claim to file a fresh suit on the same cause of action, if so advised.
in the very nature of things such liberty could not be reserved to a petitioner in an election petition.
x x x x x x On a due consideration of all these provisions, we are opinion that the provisions of o. 23, r. 1, do not apply to the election petitions and it would not be open to a petitioner to withdraw or abandon a part of his claim once an election petition was presented to the Election Commission.
" Having regard to the nature of the election Petition, the notion of abandonment of the claim or withdrawal is absolutely foreign to the scope of such proceedings and must, therefore, be held to be excluded by necessary intendment of section 87 of the Act itself.
This authority therefor, does not appear to be of any assistance to counsel for the appellant.
The matter, however, seams to be concluded by a recent decision of this Court in Virendra Kumar Saklecha vs Jagjivan and others(1) where the Chief Justice speaking for the Court interpreted section 87 of the Act and observed as follows: "Under Section 87 of the Act every election petition should be tried by the High Court as nearly as may be in accordance with the procedure applicable under the Code of Civil Procedure to the trial of suits.
Under Section 102 of the Code the High Court may make rules regulating their own procedure and the procedure of the Civil Courts subject to their super vision and may by such rules vary, alter or add to any of the rules in the First Schedule to the Code.
" The relevant part of section 87 runs thus : "(1) Subject to the provisions of this Act and of any rules made thereunder, every election petition shall be tried by the High Court, as nearly as may be, in accordance with the procedure applicable under the Code of Civil Procedure, 1908 to the trial of suits :" A bare perusal of this section leads to the irresistible conclusion that election petitions shall have to be tried in accordance with the proce 262 dure applicable under the code of Civil Procedure to the trial of suits.
In other words, election petitions would be tried like ordinary civil suits.
We are unable to agree with counsel for the appellant that O. XI does not form part of the trial of suits but is a special procedure.
This is repelled by a oreference to O. XI of the Code of Civil Procedure itself.
It will appear that O. X relates to the procedure for examination of parties by the Court and O. XI is a part of that procedure, because it provides that where witnesses are not able to appear before the Court personally they are examined through interrogatories.
In these circumstances, therefore, O. XI is as much a part of the procedure as O. X relating to trial of suits in matters regarding summoning of witnesses, documents etc.
In these circumstances it cannot be said that section 87 of the Act either expressly or impliedly excludes the application of O. XI of the Code of Civil Procedure.
In fact we are clearly of opinion that section 87 of the Act is of the widest amplitude so as to cover the entire procedure mentioned in the Code of Civil Procedure with only two exceptions (i) where the Act contains express provision for certain matters which are inconsistent with the procedure prescribed by the Code; and (ii) where a particular provision of the Code of Civil Procedure is either expressly or any necessary intendment excluded by the Act.
Subject to these two exceptions, section 87 is very wide in its connotation We, therefore, agree with the learned Single Judge who was trying the election petition that the application for interrogatories was one of the logical steps in aid of the prosecution of the petition and was fully covered by section 87 of the Act.
The second contention raised by counsel for the appellant thus fails.
For the reasons given above, there is no merit in this appeal which fails and is accordingly dismissed with costs.
V.P.S. Appeal Dismissed.
| An application for delivery of interrogatories is one of the logical steps in aid of the prosecution of an election petition and is fully covered by section 87 of the Representation of the People Act, 1951.
C(1) (1) Order XI, C.P.C., forms part of the trial of suits and is not a special procedure.
Order X relates to the procedure for examination of parties by the Court and o. XI, is a part of it, because, it provides for examination through interrogatories, when personal appearance is not possible.
[262A B] (2) Before Act 47 of 1966 amended the Representation of the People Act, 1951, the power to try election petitions was conferred on the Erection Tribunal.
That Tribunal was not a Civil Court but was deemed to be a Civil Court.
Though section 90, as it then stood, provided that every election petition shall be tried, as nearly as may be, in accordance with the procedure under the C.P.C., in order to avoid doubts, the special powers under O. Xl, C.P.C., were conferred on the Tribunal by section 92.
When Parliament has expressly conferred the powers contained in O.XI on the Tribunal, it could not be contended that the principles contained therein are excluded from the trial of election petitions, on the basis of English Law.
[257F H] (3) After the amendment of 1966, as election petitions are to be tried by the High Court, a Court of Record, section 87, which is based on the repealed section 90, is sufficient to contain the entire procedure to be adopted by the High Court in trying election petitions.
Section 87 is of widest amplitude so as to cover the entire procedure mentioned in the Code of Civil Procedure with only two exceptions, (a) when the Act contains express provision for certain matters which are inconsistent with the procedure prescribed by the Code; and (b) when a particular provision of the Code is either expressly or by necessary intendment excluded by the Act.
That is why a provision like the repealed section 92 is unnecessary; and it cannot be contended that since Parliament repealed that section, Parliament intended that the provisions of O. XI, C.P.C., should not apply to election petitions tried by the High Court.
[258A E; 269C D] Sitaram Hirachand Birla vs Yograisingh Shankarsingh Parihar and others, AIR 1953 Bom.
293, Durvodhan vs Sitaram and others AIR 1970 All. 1; Jugal Kishore vs Dr. Baldev Prakash AIR 1968 Punj. 152 (F.B.) and Keshari Lal Kavi and another vs Narain Prakash and others, AIR 1969 Raj. 75, referred to.
Dr. Jagjit Singh vs Giani Kartar Singh and others A.I.R. 1966 S.C. 773, and V. K. Sakleha vs Jagjiwan ; , followed.
(4) Merely because in Inamati Mallappa Basappa vs Desai Basavaraj Ayyappu and others ; it was held that the procedure contained in O. 23, r. 1 C.P.C. does not apply to election petitions it could not be contended that O. XI: C.P.C., would not also be applicable to election petitions.
Order 23, r. 1 cannot be equated with the provisions of O. XI.
Having regard to the nature of an election petition which is a matter of moment and concern to the entire constituency the notion of abandonment of the claim or withdrawal is absolutely foreign to the scope of such proceedings and must, therefore, be held to be excluded by the necessary intendment of section 87 itself.
[260H 261 B, D E] 256 ^
|
ivil Appeal No. 3395 of 1982.
From the Judgment and Order dated 4.6.1982 of the Punjab and 572 Haryana High Court in L.P.A. No. 936 of 1982 Shankar Das and H.K. Puri for the Appellant.
A.K. Ganguli, R.P. Srivastava, P. Parameshwaran, Ms. A. Subhashini and Dalip Sinha for the Respondents.
The Judgment of the Court was delivered by V. RAMASWAMI, J.
The appellants are a public limited company having a factory at Faridabad and engaged in manu facturing air conditioning and refrigeration equipment of various kinds and descriptions.
They are holding a L 4 Licence to manufacture goods falling under Tariff Item No. 29A of the Central Excise Tariff.
As per classification lists submitted from time to time under rule 173B of the Central Excise Rules, 1944, the company had declared in Form I that they are engaged in the manufacture of goods falling under sub items (2) and (3) of Tariff Item No. 29A. Against gate pass Nos. 111, 112 and 113 dated January 21, 1970 and gate pass No. 116 dated January 22, 1970 the appellants had cleared from the factory cooling coils, condensors and compressors and supplied the same for putting up a cold storage plant to one M/s Ravi Cold Storage, Ahmedabad.
These parts were manufactured by the appellants in their factory at Faridabad and were cleared by them against the above mentioned gate passes after payment of a duty of Rs. 13.547.20 P.
Against gate pass Nos. 95, 90, 97 and 98 dated January 21, 1969 the appellants had cleared from the factory various parts of refrigerating and air conditioning appli ances and machinery for an Ice factory plant to one M/s Gujarat Industrial Investment Corporation Limited, Ahmeda bad.
These parts also were manufactured by the appellants in their factory at Faridabad and were cleared by them against gate passes referred to above after payment of a duty of Rs. 19,336.87 P.
On the ground that parts of the refrigerating and air conditioning appliances which they have removed under the above said gate passes are not excisable goods falling under Tariff Item No. 29A(3), they filed two refund applications.
The Assistant Collector of Customs rejected both these applications holding that the assessment was made correctly.
The appellants preferred two appeals agianst these orders before the Collector of Customs and Central Excise, Chandi garh, who by his common order dated December 20, 1971 dis missed the appeals.
Thereafter, the appellants filed writ petition in the High Court of Punjab and Haryana at Chandi garh.
This writ petition was 573 dismissed by a learned Single Judge holding that the goods supplied are parts of a refrigerating and air conditioning appliances, that a complete cold storage plant was not supplied to M/s Ravi Cold Storage, Ahmedabad or M/s Gujarat Industrial Investment Corporation Ltd. Ahmedabad, and that they will fall clearly within the purview of Tariff sub item (3) of Tariff Item 29 A.
An appeal preferred against this judgment was dismissed in limine by a Division Bench.
In order to understand the argument of the learned counsel for the appellants, it is necessary to set out Tariff Item 29 A in full at the relevant period, which reads as follows: Item No. Tariff Description Rate of Duty 29A. REFRIGERATING AND AIR CONDITIONING APPLIANCES AND MACHINERY, ALL SORTS, AND PARTS THEREOF (1) Refrigerators and other refrigerat Thirty ing appliances, which are ordinarily per cent sold or offered for sale as ready ad valorem assembled units, such as ice markers, bottle collers, display cabinets and water coolers.
(2) Air conditioners and other air Thirty conditioning appliances, which per cent are ordinarily sold or offered ad valorem for sale as ready assembled units, including package type of air conditioners and evaporative type of coolers.
(3) Parts of refrigerating and Forty air conditioning appliances per cent and machinery, all sorts.
ad valorem The argument of the learned counsel for the appellants was that sub items (1) and (2) deal with refrigerators and other refrigerating appliances and air conditioners and other air conditioning appliances respectively which are ordinarily sold or offered for sale as a ready 4514 assembled unit.
Therefore, in order to bring it within sub items (1) and (2) such refrigerating and air conditioning appliances should be complete assembled units and they must also be ordinarily sold or offered for sale as such ready assembled units.
The illustrative examples referred to in the two sub items make this clear according to them.
The cold storage plant and ice factory plant supplied to the factories concerned in this case as such are not such com plete assembled units which are ordinarily sold or offered for sale within the meaning of sub items (1) and (2).
From this premise they sought to interpret sub item (3) as mean ing that the goods that are covered by that sub item are parts of those refrigerating or air conditioning appliances which in its assembled form would have come as a complete unit under Tariff sub items (1) and (2) of Item 29A and are manufactured for sale.
In other words, they want to restrict the content of sub item (3) with reference to the items that may fall under sub items (1) and (2).
The further submission was that though in its sweep sub item (3) may appear to cover all and every part of refrigerating and air condition ing appliances and machinery of all sorts, the words "and parts therefore" in the heading controlled the meaning and restrict it in the context only to parts of a completed unit which as such completed unit would have come under sub items (1) and (2) of Item 29A.
In this connection, learned counsel has referred to certain decisions of the High Courts which we will refer to later.
By Finance Act of 1961 Item 29A and 40 were introduced in the First Schedule to the and those two entries read as follows: "29A. AIR CONDITIONING MACHI Twenty NERY, ALL SORTS.
per cent ad valorem.
REFRIGERATORS AND PARTS Twenty THEREOF.
SUCH AS ARE per cent SPECIALLY DESIGNED FOR USE ad valorem." WITH REFRIGERATORS.
The Notes on Clauses relating to the relevant clause in the Finance Bill 10 of 1961 stated that Item 29A proposes to levy an excise duty on air conditioning machinery and Item 40 proposes to levy an excise duty on refrigerators and "parts thereof.
" By the Finance Act 2 of 1962 a combined tariff entry in the form 575 prevailing in 1969 and 1970 was introduced and the Notes on Clauses relating to this amendment stated that the proposal is "to combine into one item the present tariff items 29A and 40 relating to 'Air conditioning Machinery ' and 'Refrig erators ' respectively as well as to make it more comprehen sive.
" Under the Government of India, Ministry of Finance, Department of Revenue, Notification No. 80/62 Central Ex cises, dated 24th April, 1962 as subsequently amended by Notifications dated 29th December, 1962, 23rd March, 1968 and 14th June, 1969 all parts of refrigerating and air conditioning appliances and machinery other than the "parts" mentioned below were exempt from the payment of excise duty leviable thereon: "(i) Cooling coils or evaporator (ii) Compressor (iii) Condenser (iv) Thermostat (v) Cooling unit, and in the case of absorption types of refrigerators in which there is no compressor, heater including Burners and Baffles in a Kerosene Operated absorp tion type refrigerator.
(vi) Starting Relay, controls (including expansion value and solenoid valves) and pressure switches (vii) Overload Protection/Thermal Relay (viii) Cabinet.
" There are a number of other notifications also exempting parts of refrigerating and air conditioning appliances and machinery, intended to be used for various purposes speci fied in the notifications, such as, use in refrigerating and air conditioning appliances or machinery which are installed or to be installed in any of the following establishments: "1.
Computer rooms.
Research and test laboratories 3.
Animal houses 4.
Telephone exchanges 5.
Broadcasting studios 6.
Trawlers 7.
Dams 8.
Mines and tunnels 9.
Thermal and hydel power stations 10.
576 Technical buildings of Military Engineering Service 11.
Any Hospital run by the Central Government, a State Govt., a Local Authority or a Public Charitable Institution and 12.
Any factory.
" Vide the Notification No. 93/76 CE dated 16.3.1976 issued under subitem (3) of Item 29A of the First Schedule.
there are various other notifications also issued under the same sub item which covers installation of air condition and refrigerating equipments of almost all categories.
The legislative history and the notifications of the Government show that sub item (3) of Item 20A is a compre hensive provision encompassing within it parts of all sons of air conditioning and refrigerating appliances and machin ery and the Government of India was issuing notifications of exemptions on the understanding that such parts are covered by sub item (3).
The language used in sub item (3) is also wide and comprehensive in its application and could not be given a restricted meaning.
Sub items (1), (2) and (3) are independent of each other and mutually exclusive.
The scope of sub item (3) is neither restricted nor controlled by the provisions of sub items (1) and (2).
It is well settled that the headings prefixed to sec tions or entries cannot control the plain words of the provision; they cannot also be referred to for the purpose of construing the provision when the words used in the provision are clear and unambiguous; nor can they be used for cutting down the plain meaning of the words in the provision.
Only, in the case of ambiguity or doubt the heading or sub heading may be referred to as an aid in construing the provision but even in such a case it could not be used for cutting down the wide application of the clear words used in the provision.
Sub item (3) so construed is wide in its application and all parts of refrigerating and air conditioning appliances and machines whether they are covered or not covered under sub items (1) and (2) would be clearly covered under that sub item.
Therefore, whether the manufacturer supplied the refrigerating or air condi tioning appliances as a complete unit or not is not relevant for the levy of duty on the parts specified in sub item (3) of Item 29A.
Strong reliance was placed by the learned counsel for appellants on the decision of the Allahabad High Court in Mother India Refrigeration Industries (P) Ltd. vs Superin tendent of Central Excise & Ors., All.
In that case the writ petitioners were the owners 577 Of a old storage plant.
The writ petitioners themselves installed and assembled the cold storage plant.
Part of the plant consisted of erecting locally what are called cooling coils and condensers.
Generally cooling coils and condensers contain a very long length of pipes made in a particular shape.
The petitioners in that case, however, bought pipes of various lengths, erected them one after the other and joined one with the other with a 'U ' shape bend.
These bends were welded.
The result was that the various pipes consti tuted an unit indesigning the plant.
This part of the plant was necessary in order to pass the cooling gas through it and thereby cool the chambers of the storage.
The petition ers bought the pipes and the bends from the market and got them placed at the factory site and got them welded.
The department, in the view that the conglomeration of pipes manufactured by the petitioner, constituted manufacture of cooling coils which are parts of refrigerating and air conditioning appliances and machinery covered by Item 29A(3) called upon the petitioners to pay excise duty on its value.
All the authorities found that the erection and installation by the petitioners, by laying pipes and joining them by welded bends, amounted to the manufacture of cooling coils and condensers as known to refrigeration technology.
The High Court accepted these findings.
However, it held that parts of refrigerating and air conditioning appliances which answer the description given in sub items (1) and (2) alone are liable to duty under Entry 29A(3) and not all parts used in refrigeration technology.
The learned judges reached this conclusion on the grounds that: "The heading of Entry 29A makes it clear that only parts of such refrigerating and air conditioning appliances and machinery as are covered by sub entries (1) and (2) alone are liable to duty.
In other words, the parts in question should be such as are ordinarily sold or offered for sale as ready.
assembled units.
On any other interpretation the words 'thereof ' occurring in the heading 29A will be redun dant.
An interpretation which makes any part of a statute redundant has to be discarded." and that "When an entry in the schedule specifically refers to and re stricts the applicability of duty to goods which are assembled units and which are generally offered for sale, the concept of sale is necessarily brought in.
As already seen, sub entry (3) takes it colour from sub entries (1) and (2) because of the specific directive of the heading by using the words 'parts thereof '.
" 578 We are afraid that both these reasons are fallacious and not acceptable.
As already stated neither can sub entry (3) be said to take its colour from sub entries (1) and (2) nor could those sub entries or heading curtail the plain meaning of the words used in sub entry (3).
We, therefore, hold that the Mother India Refrigeration Industries (P) Ltd. vs Supdt.
of Central Excise & Ors. 's, case (supra), was wrongly decided and accordingly we overrule the same.
The learned Judges have also relied on a Tariff Advice dated September 30, 1969 given under the Customs Act for the purpose of levying countervailing duty.
We shall deal with this ques tion when we consider that Tariff Advice in a latter part of this judgment.
The decisions of the Bombay High Court in Blue Star Ltd. vs Union of India & Anr., Bom.
and Joy Ice Cream, Bombay vs Union of India, Bom., related to the scope of Tariff item 29A(1) and not Item 29A(3) with which we are concerned.
In the view we have taken that sub entries (1) and (2) of Entry 29A cannot control or restrict the meaning of such entry (3) it is not necessary for us to go into the scope of Entry 29A (1) and (2).
These decisions, therefore, are no relevance.
The decision of the Kerala High Court in Calicut Refrig eration Co. vs Collector of Customs & Central Excise, Cochin & Ors., Ker., also does not touch upon the question with which we are concerned.
The decision of the Allahabad High Court in Chhibramau Cold Storage vs CEGAT, All.
and Goptal Cold Storage & Ice Factory vs Union of India & Ors., All., simply followed the decision in Mother India Refrigeration Industries (P) Ltd. vs Supdt.
of Central Excise & Ors., (supra) and, there fore, they do not advance the case any further.
On the other hand, we have a decision of the Gujarat Court in Anil Ice Factory & Anr.
vs Union of India & Ors., Guj., wherein M.P. Thakkar, Chief Justice, as he then was, referred to the Allahabad High Court judgment and dissenting from it held: "On taking a close look at Item 29A it will be seen that what is printed at the top of the entry as "caption" indi cates the nature of the goods covered by the entry.
It does not more than indicate what is the nature of the goods which are specified in the said entry.
(1), (2) and (3) are independent of each other.
Clause (3) in terms refers to goods which fall within the description of the said entry, 579 namely, "Parts of refrigerating and air conditioning appli ances and machinery, all sorts".
It is not disputed that cooling coils and condensers would fall within the category of "appliances and machinery".
Counsel however argues that we must first read the scope of cl.
(1) and cl.
(2) and draw an inference therefrom that the goods covered by entry, will attract excise duty only provided they are manufactured for sale.
We see no valid reason for reading the entry in that manner.
Each of the three sub clauses referes to different entries and specifies different rates of duty for the goods falling within the respective entries." and that "As we indicated earlier, in the first place the purpose of the caption is to provide a clue to the nature of the goods which are covered by the entry.
But even otherwise if the caption is read in the manner in which it has been worded it does not justify or warrant an inference that it related to goods which are manufactured for the purpose of sale.
Entry 29A adverts to goods which would fall within one or the other of the three classifications specified therein.
The description of each category of goods if clearly mentioned in col.
So far as CI.
(3) is concerned the tariff description is "parts of refrigerating and air conditioning appliances and machinery".
We cannot read the words 'manufactured for sale ' in entry No. 3 by drawing upon the theory of "Taking colour" which has no application in a case like the present one.
If we inject these words we would be re writing this section and we would be legislating which we cannot do.
" The learned counsel for the appellants then relied on the Trade Advice dated 30th September, 1969 given by the Central Board of Excise and Customs, New Delhi, in respect of classification of refrigerating machinery and ice making plant which are not sold or offered for sale as ready assem bled unit for purposes of countervailing duty under the Customs Act.
After referring to sub items (1) and (2) of Item 29A as covering complete plant and equipment which a re ordinarily sold or offered for sale as ready assembled units, had stated as follows, with reference to sub item (3): "Sub item (3) of item 29A of the Central Excise Tariff 580 refers to parts or ' machinery and appliances and complete plants which cannot be considered as "parts of machinery" would not be classifiable under sub item (3) to item 29A C.E.T. also.
" As may be seen from this paragraph it consists of two parts, the first portion referring to parts of machinery and appli ances and the second portion referring to complete plants which cannot be considered as parts of machinery.
The whole argument arose because of the composite sentence used in this paragraph.
It only means complete plants which are covered by Items (1) and (2) cannot be considered as parts on machinery and such complete plants would not be classi fiable under sub item (3) of Item 29A.
The reliance placed by the learned counsel on this notification does not in any way advance the case of the appellants.
In the foregoing circumstances, the appeal fails and it is dismissed with costs.
Y. Lal Appeal dismissed.
| The appellant company was engaged in the manufacturing of airconditioning and refrigeration equipment under a proper licence.
On January 21, 1970 the appellant cleared from the factory cooling coils, condensers and compressors and supplied the same to M/s. Ravi Cold Storage, Ahmedabad for putting up a cold storage and paid duty of Rs.13,547.20 P in respect thereof.
Again on January 21, 1969, the appel lant cleared from the factory various parts of refrigerating and air conditioning appliances and machinery for an Ice factory plant to one M/s. Gujarat Industrial Investment Corporation Ltd., Ahmedabad and paid a duty of Rs. 19,336.87P.
Both the aforesaid goods were manufactured at the appellant 's factory.
Thereafter the appellant filed two refund applications of the said excise duty before the Assistant Collector of Customs, contending that the refrig erating and air conditioning appliances which they had removed on the aforesaid dates were not excisable goods failing under Tariff Item No. 29A(3).
The Assistant Collec tor of Customs rejected both the applications holding that the assessment was correctly made.
The appellant company preferred two appeals against these orders before the Col lector of Customs and Central Excise, Chandigarh, who dis missed both the appeals.
Thereupon the appellant filed a writ petition in the High Court.
The learned single Judge who heard the petition dismissed the same holding that the goods supplied are parts of a refrigerating and air condi tioning appliances, that a complete cold storage plant was not supplied to M/s. Ravi Cold Storage, Ahmedabad or M/s. Gujarat Industrial Investment Corporation Ltd., Ahmedabad and that they would fail clearly within the purview of Tariff sub item (3) of Tariff Item 29 A.
An appeal preferred against this judgment was dismissed by a Division Bench in limine.
Hence this appeal.
Before this Court also the appellant inter alia contended that 571 though in its sweep sub item (3) may appear to cover all and every part of refrigerating and air conditioning appliances and machinery of all sorts, the words "and parts thereof" in the heading controlled the meaning and restrict it in the context only to parts of a completed unit which as such completed unit would have come under sub items (1) and (2) of item 29 A. Dismissing the appeal, this Court, HELD: The legislative history and the notifications of the Government show that sub item (3) of item 29 A is a comprehensive provision encompassing within it all sorts of air conditioning and refrigerating appliances and machinery and the Government of India was issuing notifications of exemptions on the understanding that such parts are covered by sub item (3).
The language used in sub item (3) is also wide and comprehensive in its application and could not be given a restricted meaning.
Sub items (1), (2) and (3) are independent of each other and mutually exclusive.
The scope of sub item (3) is neither restricted nor controlled by the provisions of sub items (1) and (2).
[576C D] Whether the manufacturer supplies the refrigerating or airconditioning appliances as a complete unit or not is not relevant for the levy of duty on the parts specified in sub item (3) of item 29 A. [576F G] Complete plants which are covered by items (1) and (2) cannot be considered as parts of machinery and such complete plants would not be classifiable under sub item (3) of Item 29 A. [580B C] Mother India Refrigeration Industries Pvt. Ltd. vs Supdt.
of Central Excise and Ors., All, overruled.
Blue Star Ltd. vs Union of India and Anr., Bom.
; Joy Ice Cream, Bombay vs Union of India, Bom.; Calicut Refrigeration Co. vs Collector of Customs & Central Excise, Cochin and Ors.
, Ker.; Chhibramau Cold Storage vs CEGAT, ; Goptal Cold Storage & Ice Factory vs Union of India and Ors., and Anil Ice Factory & Anr.
vs Union of India and Ors., , referred to.
|
Appeal No. 714 of 1966.
Appeal by special leave from the judgment and order, dated September 17, 1964 of the Kerala High Court in Income tax Referred Case No. 62 of 1963.
R.N. Sachthey, T.A. Ramachandran and B.D. Sharma, for the appellant.
C.S. Venkateswara lyer, Sardar Bahadur Saharya and Yougindra Khusalani, for respondent No. 2.
The Judgment of the Court was delivered by Grover, J.
The sole question for determination in this appeal by special leave is whether on a true interpretation and construction of the second proviso to section 10(2)(vii) of the Income Tax Act 1922, sale of the assets of an assessee effected for the purpose of closing down the business would be covered by that proviso and would be assessable as profit.
The assessee was running the business of plying buses in the name of Kumar Motor Service.
During the assessee 's previous year which was the year ending August 16, 1959 the buses had been plied for part of the year but they were sold between August 16, 1958 and January 13, 1959.
Two of the buses had been sold for Rs. 78,000 and the other four for Rs. 35,000, the total consideration received being Rs. 1,13,000.
The assessee claimed a payment of Rs. 2,000 as brokerage.
The Income tax Officer fixed a sum of Rs. 25,000 as the route value and held this amount to be a capital gain assessable to tax.
On the balance of Rs. 86,000 he worked out the profits in the following manner : Sale price of 6 buses: .
Rs. 86,000 Written down value of six Rs. 36,712 buses .
Rs. 49,288 The Income Tax Officer consequently assessed the sum of Rs. 49,288 as profit under the second proviso to.
section 10(2)(vii).
Before the Appellate Assistant Commissioner in appeal the assessee contended that the business had been transferred as a whole and therefore no profit could be taxed under the aforesaid provision.
This contention was rejected by the Appellate Assistant Commissioner on the ground that the transaction was only of sale of buses, along with the route value and this constituted sale of major assets but the business as such was not transferred or handed over to any party.
Before the Income Tax Appellate 533 Tribunal the determination of Rs. 86,000 as the value of six buses was not disputed and the only point agitated related to the assessability of the amount of Rs. 49,288 as business profit under ' the second proviso.
The tribunal was of the opinion that the buses had been plied by the assessee for part of the previous year and the profit on the sale of these buses was taxable under the said provision.
The tribunal in its appellate order noticed the decision of this Court in Commissioner of Income Tax, Madras vs Express Newspapers Ltd., Madras(x) in which the question arose whether the second proviso would apply where the sale had been made in the process of winding up of a company but distinguished it on the ground that this Court in that case considered the second proviso as it stood before the amendment made by section 11 of the Taxation Laws (Extension to Merged States and Amendment) Act, 1949 (67 of 1949).
The decision of this Court in Commissioner of Income Tax, Kerala vs West Coast Chemicals and Industries Ltd.(2) was also held by the tribunal to be inapplicable to the facts .of the present case.
The assessee moved the tribunal for making a reference to.
the High Court and the following question was referred: "Whether on the facts and in the circumstances of the case, the sum of Rs. 49,288 was assessable as profit under the provisions of section 10(2)(vii) ?".
Although the tribunal had given no finding that the whole of the.
bus service business had been wound up during the relevant period, the High Court proceeded to answer the question on that assumption.
It is difficult to see how the High Court was justified in saying that the tribunal had apparently accepted the contention that the sale was a closing down or a realization sale.
In such a situation we might have followed the course which commended itself in Commissioner of Income Tax, Kerala vs
R.R. Ramakrishna Pillai(3); but we are of the opinion that even on the assumption that the sale of the buses was a closing down or a realization sale it would.
nonetheless be taxable since the sale was made after the amendment of the second proviso by Act 67 of 1949.
The High Court in the present case referred to the observations in the Commissioner of Income Tax vs Express Newspapers Ltd., Madras(1) and to the three conditions laid down therein for bringing the sale proceeds to charge under the second proviso.
The High Court thought that the third condition was not satisfied as the sale of the buses was a closing down or a realization sale which was a mere incident of the winding up process of the business.
It was consequently held that the question: (1) [19641 8 S.C.R. 189, 195.
(2) (3) 534 referred must be answered in favour of the assessee and against the Revenue.
Now the second proviso was in the following terms: "section 10 . . . . . (2). . . . . .
Proviso (1) . . . . . (2) Provided further that where the amount for which any such building, machinery or plant is sold (whether during the continuance of the business or after the cessation thereof), exceeds the written down value, so much of the excess as does not exceed the difference between the original cost and the written down value shall be deemed to be profits of the previous year in which the sale took place;" The words within brackets did not exist before the amendment made by Act 67 of 1949 and were inserted by that Act.
In The Liquidators of Pursa Limited vs Commissioner of Income Tax, Bihar(1) the controversy arose out of the proceedings relating to the assessment of Pursa Limited for the assessment year 1945 46.
Attempts had been made from 1942 onwards to sell the entire business of the company but without success.
In December 1943 an agreement was executed whereby the assessee agreed to sell all the lands, buildings, machinery, plant etc., used in connection with the sugar factory which was being run by the company.
On the date of the sale the company possessed sugar stocks valued at Rs. 6 lakhs which the company continued to sell up to June 1944.
The company went into voluntary liquidation on June 20, 1945.
The Income Tax Officer held that the profits of the sale of machinery and plant were liable to assessment under section 10(2)(vii).
The Appellate Asstt.
Commissioner and the Income Tax Appellate Tribunal affirmed that order.
After the matter had been taken to the High Court it came finally in appeal to this Court.
It was held that the intention of the company was to discontinue its business and the sale of the machinery and plant was a step in the process of the winding up of the business culminating in the voluntary liquidation of the company and even if the sale of the stock of sugar be regarded as carrying on of business of the company and not a realisation of its assets with a view to winding the machinery or plant not having been used at all, section 10(2) (vii) would have no application to the sale of any such machinery or plant.
The controversy in Commissioner of Income Tax, Kerala vs West Coast Chemicals and Industries Ltd.(2) arose out of the assessment of the company for the accounting year ending April 30, 1944.
The assessee company had entered into an agreement (1) ; (2) 535 in 1943 for the sale of the lands, buildings, plant and machinery of a match factory with a view to close down the business.
The purchaser made default in payment and a few months later a fresh agreement was entered into between the parties for the sale of the property mentioned in the first agreement and also chemicals and paper used for manufacture which had not been included in the first agreement.
The Department sought to assess the profits derived from the sale of the chemicals and paper as profits from the business.
The assessee contended that it was a realisation sale and this amount was not liable to tax.
It was held that on the facts of that sale the sale of chemicals and materials used in the manufacture of matches was only a winding up.
sale to close down the business and to realise all the assets.
Therefore the tax liability was not attracted.
In Commissioner of Income Tax, Madras vs Express Newspapers Ltd., Madras(1) a decision on which the High Court relied a great deal in the present case the question again arose out of the assessment made before the amendment made in 1949, the accounting year being 1946 47.
Reference was made by Subba Rao, J., (as he then was) delivering the judgment of this Court to the decision in the case of The Liquidators of Pursa Limited(2) as also to other decisions and after an examination of the relevant provisions the following three conditions were laid down for bringing the sale proceeds to charge under the second proviso to section 10(2)(vii): "( 1 ) During the entire previous year or a part of it the business shall have been carried on by the assessee; (2) the machinery shall have been used in the business; and (3) the machinery shall have been sold when the business was being carried on and not for the purpose of closing it down or winding it up.
" There can be no doubt that according to the law laid down by this Court the view of the High Court would have been sustainable if the sale in the present case had been effected during the assessment year prior to the amendment of the proviso by Act 67 of 1949.
The critical words which were inserted by that proviso namely, "whether during the continuance of the business or after the cessation thereof ', must be given their 'proper meaning.
It is quite plain that if the building, machinery or plant is sold during the continuance of the business or after the business ceases the sale proceeds would be liable to tax in accordance with that proviso.
The only question therefore is whether when a sale is made for the purpose of closing down the business or effecting its cessation the proviso would be inapplicable.
When the legislature clearly provided that the proviso would apply even if the sale (1) (2) ; 536 was made after the cessation of the business it is difficult to conceive that it was intended to exclude from the ambit of the proviso realisation sales of the nature contemplated in the previous decisions of this Court.
Such a result would be illogical.
Even logic is not necessarily to govern the interpretation of a taxing provision, the rule of reasonable interpretation cannot be ignored.
Indeed this Court in a recent judgment Commissioner of Income Tax vs Ajax Products Ltd.(1) clarified the position about the effect of the amendment made in 1949 in the proviso and reference was made to the three conditions for the applicability of the second proviso before the amendment which were laid down in the previous decision of this Court.
It was then observed: "the words whether during the continuance of the business or after the cessation thereof were not present in the unamended proviso.
In the two decisions cited earlier, in the absence of such words, this Court held that to attract the said proviso the machinery shall have been sold before the business was closed down.
This clause omits that condition for the exigibility of the tax".
The above observations clearly show that the amending words in the proviso eliminated the third condition which had been laid down for its applicability in the previous decision namely, that the machinery shall have been sold when the business was being carried on and not for the purpose of closing it down or winding it up.
Once that condition disappears as a result of the amendment only the first two conditions remain and all that has to be seen is whether during the entire previous year or a part of it the business has been carried on by the assessee and that the machinery has been used in the business.
Both these conditions, according to the finding given by the tribunal, exist in the present case.
The result would be that the profits.
arising out of the sale of buses in question as determined by the Income Tax Officer would be chargeable to tax in accordance with the second proviso to section 10(2) (vii).
The answer to the question referred in the present case has to be in the affirmative and against the assessee.
The appeal is consequently allowed with costs and the answer returned by the High Court is discharged.
We are informed at the Bar that K.B. Kalikutty one of the legal representatives of the assessee 'had died before Special Leave was granted.
It will be open to the Tribunal to decide the effect of death of the said legal representative and to non impleadment of the legal representatives of the deceased at the hearing under section 66(5) of the Act.
R.K.P.S. Appeal allowed.
| In a dispute between the appellant and its workmen relating to the computation of bonus under the , the Company contended that the available surplus came to Rs. 49.96 lakhs sixty pet cent of which, namely, Rs. 29.98 lakhs was the allocable surplus.
The employees disputed the computation claiming that the Company had wrongly reduced the gross profits and the available surplus and contended, inter alia, that certain amounts deducted on account of provisions for gratuity and for doubtful debts should be added back; they challenged a deduction of interest on reserves on the ground that the capital reserve was artificially arrived at by a mere revaluation of the company 's fixed assets as on April 1, 1956; and also disputed the figures of depreciation, development rebate and direct taxes deducted by the company while working out the available surplus.
The Unions disputed the amount of Rs. 28.82 lakhs worked out by the Company 's auditors as depreciation in accordance with the Income tax Act, 1961 on the ground (1) that there was no evidence that the amount of depreciation came to Rs. 28.82 lakhs; and (2) that since the profit and loss account mentioned Rs. 23.48 lakhs as depreciation, the Company could only claim that amount.
In its award the Tribunal allowed Rs. 23.48 lakhs instead of Its.
28.82 lakhs claimed by the company as depreciation.
Similarly it allowed only Rs. 7 lakhs instead of Rs. 8.8 lakhs claimed by the company as development rebate.
The Tribunal held that the amount of Rs. 18.38 lakhs claimed under the head of gratuity was not a reserve but a provision and therefore, was not liable to be added back, but it held that the company could deduct only about Rs. 10 lakhs as also Rs. 1.31 lakhs and Rs. 87,000/ actually paid during the year to employees who retired during that year and added back the balance of Rs. 6 lakhs to the gross profits.
Except for these amounts, the Tribunal accepted the rest of the company 's computation.
Both the Unions and the Company obtained special leave and fled appeals challenging the correctness of the Tribunal 's award.
In their appeal it was also contended by the Unions that the Tribunal had wrongly allowed a deduction of Rs. 145 lakhs as direct taxes under sec.
6(c); all that the employer could deduct was direct taxes which he "is liable to pay" for the accounting year in respect of "his income, profits and gains during that year", i.e., the employer is entitled to deduct only his actual tax liability.
Such liability.
therefore, has to be worked out in accordance with the provisions of the Income tax Act and other relevant Acts by first arriving at the actual taxable income, gains and profits under those Acts and then compute the taxes at rates provided by them for that particular accounting year.
751 HELD:The appellant.company contentions on the questions of development rebate and the provisions for gratuity must be upheld; the amount of depreciation must be ascertained afresh by the Tribunal after giving the parties opportunity to lead such evidence as they desired.
The ' workmen 's appeal must be dismissed.
(1) The depreciation deducted in the expenditure column in the Profit and Loss Account was the depreciation worked out under section 205(2) of the Companies Act, but under section 6 of the Bonus Act, the Company is entitled to deduct from its gross profits depreciation admissible under Section 32(1) of the.
Income tax Act, i.e., such percentage on the ' written down value as may, in the case of each of the classes of assets, be prescribed.
It was for this reason that Rs. 23.48 lakhs were shown as depreciation in the Profit and Loss Account by the Company while in the computation for bonus the company claimed Rs. 28.82 lakhs as.
depreciation.
[755 H 756 B] Since the Company claimed the deduction of depreciation, the burden of proof that the amount claimed was in accordance with the Income tax Act was on the Company and that burden the company must discharge once its figures were challenged.
It was not sufficient for it to produce its auditors ' certificates.
The question as to the correct amount of depreciation must therefore go back to the Tribunal for a further decision.
The Tribunal must give an opportunity to the Company to prove its claim for depreciation by reasonable proof and to the Unions to test such, evidence by cross examination or otherwise.
[757 D] Khandesh Spg.
& Wvg.
Mills Co. Ltd. vs The Rashtnya Girni Kamgar Sangh, ; , 847, Petlad Turkey Red Dye Works Ltd. vs Dyes & Chemical Workers ' Union ; , 909, referred to.
(2) Under section 6(b) of the Bonus Act the Company is entitled to deduct out of the gross profits arrived at under section 4 the whole of the development rebate admissible under the Income tax Act, i.e., the amount, 75 per cent of which comes to Rs. 7 lakhs in the present case.
The Tribunal was in error in mixing up the development rebate reserve to which the Company had to appropriate Rs. 7 lakhs in the Profit and Loss Account and the development rebate of Rs. 8.87 lakhs allowable to it under section 6.
of the Act.
There was therefore no justification for the Tribunal to allow ' Rs. 7 lakhs only instead of Rs. 8.87 lakhs as development rebate.
[759D F] (3) An estimated liability under gratuity schemes as in the present case, even if it amounts to a contingent liability and is not a debt under the Wealth Tax Act, if properly ascertainable and its present value is fairly discounted, is deductible from the gross receipts while preparing the Profit and Loss Account.
This is in accordance with accepted principles of commercial practice and is also the position under the Income tax Act.
There is no rule or direction in the Bonus Act which prohibits such a practice.
[766 C; 767 D] The Tribunal in allowing Rs. 10 lakhs out of the estimated liability of Rs. 16 lakhs impliedly accepted the same principle but allowed only Rs. 10 lakhs because it thought the estimate to be excessive.
This was not done on the ground that the estimate of Rs. 16 lakhs was not warranted on any valuation.
In the absence of any challenge as to the correctness of the valuation and in the absence of any challenge that such iiability cannot be estimated on any fair standard.
the Tribunal ought to have allowed the whole of Rs. 16 lakhs to be deducted while arriving at the net profits in the Profit and Loss Account.
[767 E] 752 Calcutta Company Ltd. vs
C.I.T.; , ; Commissioner Wealth Tax vs Standard Vacuum Oil Co. Ltd., ; Kesoram Industries and Cotton Mills Ltd.
C.W.T.; , ; Standard Mills Co. Ltd. vs Commissioner of Income Tax; , ; Southern Railway of Peru Ltd. vs Owen, ; and San Insurance Office vs Clark, ; ; referred to.
(4) There was no justification for the contention that revaluation of company 's assets in 1956 was fictitious and that the difference of Rs. 57 lakhs was a mere hook adjustment and did not add to the wealth of the company so that no deduction by way of interest was permissible on such an artificial amount.
[767 H] In the present case the revaluation was made as early as 1956 and did not appear to have been objected to at any time either by the Company 's auditors or by any one else concerned with the Company 's management.
It cannot, therefore, be legitimately said that it was done for any oblique purpose, much less with a view to defeat the labour 's claim to bonus.
It is true that such revaluation does not bring in any tangible additional amount into the company 's coffers which it can use for its business.
But under sec.
211 of the Companies Act, every balance sheet of a company must give a true and fair view of the state of affairs of the company as at the end of the financial year.
VI to the Companies Act also provides that where sums have been written off on a reduction of capital or a re valuation of assets, the balance sheet, subsequent to such reduction or revaluation must show the reduced or the increased figures as the case may be.
Apart from the provisions of the Companies Act, it is a recognised principle of accountancy to transfer the increased value of assets on revaluation to a capital reserve account.
Such an increased figure is an unrealised accretion in the value of a fixed asset.
The fact that such an increased figure does not actually bring in any additional amount to the company does not make the capital reserve any the less a reserve.
[768 C G] The Tribunal was therefore right in accepting the figure of Rs. 57 lakhs and deducting interest thereon from the gross profits.
(5) Bonus being payable within eight months after the close of the accounting year in cases where there is no dispute pending before an authority under section 22 of the Act as provided by section 19, it is hardly possible, except in rare cases, that assessment under the Income tax Act and other such Acts would be completed by the time bonus has to be paid.
Therefore, the Tribunal would not have before it the taxable income assessed by the Income tax and other such officers.
If the Union 's contention were to he right, there would be two or more parallel authorities working under the Bonus Act and the Income tax Act and other such Acts who would have to assess taxable income and the tax payable them, before all of whom the employer would have to prove his taxable income.
In each bonus dispute, the Tribunal, not equipped with the detailed knowledge of all such Acts, would have to undertake an enquiry into various deductions, rebates, reliefs, etc.
claimable by the employer under those Acts.
The fact that payment of bonus cannot broke delay without causing hardship to labour would seem to militate against the possibility of such prolonged enquiries.
[774 E 775 A] An examination of the provisions of the Bonus Act shows that the 'Tribunal must estimate the amount of direct taxes on the balance of gross profits as worked out under sections 4 and 6, but without deducting the bonus, then work out the quantum of taxes thereon at rates applicable ,during that year to the income, gains and profits of the employer and 753 after deducting the amount of taxes so worked out arrive at the available surplus.
Section 6(c) being subject to section 7 the computation has to be done without taking into account the items specified in section 7(a) and in the manner prescribed by the remaining clauses of that section.
This interpretation is commendable because; (1) it is consistent with the words "is liable to pay" in section 6(c), (2) it is in harmony with the provisions of sections 4 and 6 and Sch.
H, and (3) it is consistent with the intention of Parliament apparent from the scheme of computation of available surplus in the Act.
Furthermore, if Parliament intended to make a departure from the rule laid down by courts and tribunals that the bonus amount should be calculated after provision for tax was made and not before, it would have made an express provision to that effect either in the Act or in the Schedules.
[776 B D; F G] Associated Cement Companies Ltd. vs The Workmen, at 974; Crompton Parkinson (Works) Private Ltd. vs Its Workmen [1959] Supp.
2 S.C.R. 936; and Workmen o! India Explosives Ltd. India Explosives Ltd., [1966] 2 L.L.I. 313, referred to.
|
ivil Appeal No. 4879 of 1989.
From the Judgment and Order dated 12.11.1986 of the Andhra Pradesh High Court in W.P. No. 16535 of 1986 P. Rama Reddy and A.V.V. Nair for the Appellants.
C. Sitaramaiah, Jagan Rao, D.R.K. Reddy and T.V.S.N. Chari for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
Leave granted.
This is an appeal from the judgment and order of the High Court of Andhra Pradesh dated 12th November, 1986.
The appellants challenged the validity of an amendment to the Schedule to the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter called 'the Act ').
The appellants are dealers in tamarind in Parvathipuram in Srikakulam district, a border district in Andhra Pradesh.
They had purchased tama rind from the State of Orissa paying tax there and incurring expenditure in bringing the said goods to Andhra Pradesh for the purpose of sale.
Under the Act, tamarind was item 14 of Second Schedule and was subjected to sales tax at the point of first purchase in the State irrespective of whether it was purchased within the State or outside the State.
The subject matter of challenge in this application under article 226 of the Constitution before the Andhra Pradesh High Court, was the validity of an amendment to the Schedule to the Act modifying the point of taxability of tamarind in question.
Prior to the amendment tamarind was taxable as mentioned hereinbefore at the first purchase point, being item No. 14 in Schedule II to the Act.
The entry therein read as follows: "Description of Point of levy Rate of tax the goods 14.
Tamarind (2014) At the point of 4 paise in first purchase the rupee.
in the State.
" 425 By virtue of the amendment, the said entry was amended.
Tamarind which is purchased within the State, was retained in IInd Schedule while tamarind purchased outside the State was transferred to 1st Schedule.
After the amendment, item No. 14 in Schedule II and item 170 in Schedule I stood as follows: "SECOND SCHEDULE section No. Description of goods Point of levy Rate of tax 14.
Tamarind when put At the point of 4 paise in chased within the first purchase the rupee.
State.
in the State.
FIRST SCHEDULE section No. Description of Goods Point of levy Rate of tax 170 Tamarind when At the point 4 paise in obtained from out of first sale the rupee.
side the State.
in the State.
" It appears that the result of the said amendment was that tamarind purchased outside the State, was taxable at the point of first sale in the State.
It was contended before the High Court that the said amendment brought about a discrimination between tamarind purchased within the State i.e. one produced within the State, and the tamarind pur chased outside the State i.e. produced in other States; and that the incidence of tax was more on the tamarind purchased outside the State.
It was contended that it violated clause (a) of article 304 as also article 14 of the Constitution.
Clause (a) of article 304 states that notwithstanding anything contained in article 301 or article 303, the legislature of State may by law impose on goods imported from other States or the Union Territories any tax to which similar goods manufactured or produced in the State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced.
The question is whether as a result of the said amendment, there has been any infraction of clause (a) of article 304 of the Constitu tion.
We are unable to 426 accept the contention that there was any such discrimina tion.
The High Court in the judgment under appeal has so held.
We are of the opinion that the High Court was right.
Both the tamarind purchased within, and outside, the State is taxed uniformly.
On behalf of the appellants, reliance was placed on Firm A.T.B. Mehtao Majid and Co. vs The State of Madras, 14 STC 355, wherein on an analysis of the relevant provisions it was held that the provisions of rule 16(2) of the Madras General Sales Tax [Turnover and Assessment] Rules, 1939 (substituted in the place of the old rule w.e.f.
1st April, 1955) discriminate between hides and skins imported from outside the State and those manufactured or produced inside the State and as such contravened the provisions of article 304(a) of the Constitution, and therefore were invalid.
It was reiterated by this Court that taxing laws can be re strictions on trade, commerce and intercourse, if they hamper the flow of trade and if these are not compensatory taxes or regulatory measures.
It was further held that sales tax on hides and skins imposed under the Madras General Sales Tax Act, 1939 and the rules framed thereunder could not be said to be a measure regulating any trade or compen satory tax levied for the use of trading facilities.
The similarity contemplated by article 304(a) is in the nature of the quality and kind of the goods and not with respect to whether they were already the subject of tax or not.
There this Court was dealing with rule 16 of the relevant Madras rules.
Sub rule (a) of rule 16 provides that in case of untanned (raw) hides and/or skins, the tax u/s 3(1) of the Act was to be levied from the dealer who is the last pur chaser in the State.
Sub rule (2) which was in two parts, dealt with tanned hides and skins.
Clause (i) of sub rule (2) provided that in case of hides and skins tanned outside the State, tax shall be levied upon the dealer who in the State is the first dealer.
Clause (ii) provided that in case of tanned hides and skins which have been tanned within the State, the tax u/s 3(1) shall be levied upon a person who is the first dealer in such hides or skins.
The proviso, howev er, declared that if the dealer proved that he had already been taxed under sub rule (1) on the untanned hides and skins, he shall not be subjected to tax under sub rule (2).
It was held by this Court that this rule inevitably brought about a discrimination in the quantum of tax because while the tanned hides and skins which were imported from outside the State and were sold within the State, were taxed at a higher rate, the hides and skins tanned within the State and sold within the State, are taxed at a lower rate by virtue of the proviso.
It was, indeed, found that there was a substantial variation between the prices of tanned and untanned goods.
This Court pointed out that by virtue of the proviso, the tax on 427 the latter category was, in fact, on the purchase price of the untanned hides and skins though ostensibly the rate of tax under sub rule (2) was the same Hence, the mischief of discrimination was brought about by the proviso which said that if hides and skins are taxed within the State at raw (untanned) stage, they shall not be taxed again at the tanned stage.
But in view of the facts involved in the instant case, we are unable to accept that the principles of the said decision have any scope of application to the facts of instant case.
In the instant case the tamarind purchased within the State and outside the State, are taxed at the same rate.
But the point of taxability has necessarily to be different in both the cases.
In case of tamarind purchased within the State i.e. produced within the State, the tax is levied at the point of first purchase, and in case of im ported tamarind i.e. purchased outside the State, the tax is levied at the point of first sale in the State.
It was contended by Mr. P. Rama Reddy, learned advocate for the appellants, that tax in case of imported tamarind would be more because its price will include freight charge and other State taxes.
Hence, it was submitted that the sales tax will also be more.
That may be so but it cannot be said to be the effect of what law has amended.
Tamarind will be imported only when it can be sold in the market here at the same price as the tamarind produced within the State.
Only when after bearing the other ' State tax and freight charges, if it is able to compete with the locally produced tamarind, it will normally be imported from outside the State.
If there is any difference in prices because of market conditions and other factors, that cannot be said to be due to discrimination prohibited by clause (a) of article 304 of the Constitution.
In order to ensure this, it would be necessary that imported goods must always be taxed at a lower rate than the corresponding goods within the State because of freight and other charges.
That cannot be so.
The High Court observed that tamarind is an agricultural produce and that is why it was put in Second Schedule i.e. to say, purchase point, but where it was imported and sold within the State, there was no reason to tax it at the sale point.
We are of the opinion that the.
High Court was 'right.
It was contended on behalf of the appellants before the High Court that imported tamarind which had suffered tax at the first sale point, will again be taxed at the purchase point when purchased within the State, which would amount to double taxation.
Once the imported tamarind is taxed at the first sale point under the First Schedule, there is no occasion for taxing it over again at the sale point under the Second Schedule.
The idea of both the Schedules is to tax only at one point 428 though the point of taxability may be different under dif ferent Schedules.
Our attention was drawn on behalf of the appellants to a decision of this Court in Indian Cement Ltd. & Ors.
vs State of Andhra Pradesh & Ors., 69 STC 305.
There this Court was concerned with Andhra Pradesh General Sales Tax Act.
It appears that in exercise of its powers u/s 9(1) of the Act, the State Government had passed a notification on January 27, 1987 reducing the rate of sales tax on sale of cement from 13.75% to 4% in respect of cement manufactured by cement factories situated in the State and sold to manufac turing units situated within the State for the purpose of manufacture of cement products such as cement sheets, asbes tos sheets, cement flooring stones, cement concrete pipes, cement water and sanitary fittings, concrete poles etc.
On the same day the State Govt.
had passed another notification u/s 8(5) of the reducing the rate of tax on inter State sale of cement to 2% with or without Form C.
On February 28, 1987 the State of Karnataka passed a similar notification reducing the rate of tax on inter State sale of cement from 15% to 2%.
The petitioners, of whom some were manufacturers of cement having their manufacturing units in Tamil Nadu and others, were stockists having places of business in the States of Karnataka, Kerala and Tamil Nadu, filed writ petitions before this Court challenging the validity of these notifications on the ground that these created trade barriers and directly im pinged upon the freedom of trade, commerce and intercourse provided for in article 301 of the Constitution of India.
It was held that the variations in the rates of local and inter State sales tax affected free trade and commerce and created a local preference, which was contrary to the scheme of Part XIII of the Constitution of India; and as such the notification were bad.
This decision was rendered in the peculiar facts of that case.
While the principle enunciated by the Court in the said decision there can be no dispute that taxation was a deterrent in some cases, against free flow of trade, and as a result of favourable or unfavourable treatment by way of taxation, the course of flow of trade gets regulated either adversely or favourably, and that if the scheme of Part XIII guarantees has to be preserved in the national interest, it is imperative that the provisions of article 301 must be strictly complied with, we are of the opinion that the ratio of the said decision in the facts and circumstances of this case would not be relevant.
In our opinion, the provisions of the Constitution should be strictly complied with not only with the letter but also with their spirit.
Part XIII of the Constitution has to 429 be dealt with the other provisions of the Constitution.
Our attention was drawn to the observations of this Court in M/s Associated Tanners, Vizianagaram, A.P. vs C.T.O., Vizianaga ram.
A.P. & Ors., ; It was reiterated there that the effect of an imposition of tax may work differently upon different dealers, namely, those who import goods and those who purchase the goods locally.
That effect cannot be said to arise directly or as an immediate effect of the imposition of tax.
It cannot be said that there was any violation of clause (a) of article 304 of the Constitution.
We are of the opinion that in the instant case the difference, in rates, if any, between the imported tamarind and locally produced tamarind is not as an immediate or direct result of the imposition of tax.
The decision of this Court in Weston Electronics & Anr.
vs State of Gujarat & Anr.
, ; dealt, in our opinion, with an en tirely different situation and for the purpose of the in stant controversy, cannot be of any assistance.
Mr. C. Sitaramiah, appearing for the respondents, drew our attention to Rattan Lal & Co. & Anr.
vs The Assessing Authority & Anr., ; wherein this Court had reiterated that when a taxing State is not imposing rates of tax on imported goods different from rates of tax on goods manufactured or produced, article 304 has no application.
So long as the rate is the same article 304 is satisfied.
In the instant case the tax is at the same rate and, hence, tax cannot be said to be higher in the case of imported goods.
When the rate is applied the resulting tax may be somewhat higher but that does not contravene the equality contemplat ed by article 304 of the Constitution.
In the facts and the circumstances of the case, there is no ground to complain about the breach of article 14 of the Constitution.
In the aforesaid view of the matter, we are of the opinion that the High Court was right in the view it took and this appeal must fail.
The appeal is accordingly dis missed.
In the facts and the circumstances of the case, however, we make no order as to costs.
P.S.S. Appeal dismissed.
| Under item 14 of Second Schedule to the Andhra Pradesh General Sales Tax Act, 1957 tamarind was subjected to sales tax at the point of first purchase in the State irrespective of whether it was purchased within the State or outside the State.
However, by virtue of an amendment to the Act by Act 19 of 1986 tamarind which is purchased within the State was retained in Second Schedule, while tamarind purchased out side the State was transferred to First Schedule as item 170, making it taxable at the same rate at the point of first sale in the State.
The appellants had purchased tamarind from the State of Orissa paying tax there and incurred expenditure in bringing it to Andhra Pradesh for sale.
They challenged the said amendment modifying the point of taxability as discriminato ry between tamarind produced and purchased within the State and the tamarind produced and purchased outside the State and as such, violative of Articles 304(a) and 14 of the Constitution.
The submission was that imported tamarind which had suffered tax at the first sale point will again be taxed at the purchase point when purchased within the State, which would amount to double taxation, and that tax in case of imported tamarind would be more because its price will include freight charges and other State taxes.
The High Court found that there was no discrimination.
Dismissing the appeal by special leave, the Court, 423 HELD: When a taxing State is not imposing rates of tax on imported goods different from rates of tax on goods manufactured or produced, Article 304 of the Constitution has no application.
In the instant case, both tamarind purchased within, and outside, the State was taxed uniform ly.
There was.
therefore, no infraction of clause (a) of Article 304 of the Constitution.
[429D E; 426A; 425G H] Rattan Lal & Co. & Anr.
vs The Assessing Authority & Anr.
, ; , applied.
Firm A.T.B. Mehtao Majid & Co. vs The State of Madras, 14 STC 355 and Indian Cement Ltd. & Ors.
vs State of Andhra Pradesh & Ors., 69 STC 305, distinguished.
It may be that when the rate is applied the resulting tax in respect of imported tamarind may be somewhat higher because its price will include freight charges and other State taxes.
But that cannot be said to be the effect of what law has amended.
Tamarind will be imported only when it can be sold in the market at the same price as the tamarind produced within the State.
Only when after bearing the other State taxes and freight charges, if it is able to compete with the locally produced tamarind it will normally be imported from outside the State.
If there is any difference in prices because of market conditions and other factors, that cannot be said to be due to discrimination prohibited by clause (a) of Article 304.
[429E; 427D E] M/s Associated Tanners, Vizianagaram, A.P. vs C.T.O., Vizianagaram, A.P. & Ors., ; , referred to.
Weston Electroniks & Anr.
vs State of Gujarat & Ant.
, ; , distinguished.
Once the imported tamarind is taxed at the first sale point under the First Schedule there is no occasion for taxing it over again at the sale point under the Second Schedule.
The idea of both the Schedules is to tax only at one point, though the point of taxability is different in both the cases.
In case of tamarind purchased within the State, i.e., produced within the State, the tax is levied at the point of first purchase under the Second Schedule, and in case of imported tamarind i.e., purchased outside the State, the tax is levied at the point of first sale in the State under the First Schedule.
It could not therefore, be said that taxing the imported tamarind at the point of first sale in the State would amount to double taxation.
[427H; 428A; 427B C; 427G] 424 In the facts and circumstances of the case, there was, therefore, no ground to complain about the breach of Article 14 of the Constitution [429E F]
|
Appeal No. 375 of 1976.
(Appeal by Special Leave from the Judgment and Order dated 7.11.1975 of the High Court at New Delhi in Civil Writ No. 1123 of 1975) G.B. Pai, O.C. Mathur and D.N. Mishra, for the appellant.
M.K. Ramamurthi, S.C. Jain and Madan Mohan, for respond ent No. 1.
The Judgment of the Court was delivered by SARKARIA, J.
The principal question that arises in this appeal by special leave is: Whether an order of the Labour Court to the effect, that since no demand of the workmen had been served on the employer, no industrial dispute had come into existence in accordance with law, and as such the Reference was invalid and the Court had no jurisdiction to adjudicate the matter referred to it by the Government, is an "award" for the purposes of Section 19 of the , (for short, called the Act)? Cox & Kings (Agents) Ltd. (for short, the Management) dismissed from service three of their workmen after a domes tic enquiry conducted against them on certain charges.
In May 1967, the Lt. Governor of Delhi made a Refer ence under section 10 read with section 12(5) of the Act to the Labour Court, Delhi, to determine: "Whether the terminations of services of S/Shri H.S. Rawat, Bidhi Chand and Ram Sarup Gupta were unlawful and unjustified, and if so, to what relief are these workmen entitled?" By an amendment of their written statement in February, 1969, augmented by an application dated 17.8.1971; the Management raised a preliminary objection that since no demand notice had been ,served on the Management, no indus trial dispute had legally come into existence, and as such the Reference was invalid and the Labour 334 Court had no jurisdiction to adjudicate it.
By an order, dated September 27, 1972, the Labour Court accepted the objection, holding: ". that no industrial dispute came into existence before this reference as the workmen have failed to establish serving of demand on the management prior to this reference.
The effect of this finding is that the reference could not have been made for adjudication and the same is accordingly invalid and hence the question of deciding the issue as in the reference or other issues does not arise as the industrial dispute under reference did not come into existence in accordance with law before this reference.
This award is made accordingly.
" Thereafter, the workmen on 25.10.1972, raised a dispute by serving demand notices on the Management.
By his order dated 2.5.1973, the Lt. Governor, Delhi, again made a Refer ence to the Labour Court, under the Act for adjudication of the same matter relating to the termination of the services of the aforesaid workmen.
The Management raised, inter alia, a preliminary objec tion that a second Reference within one year of the first `award ', dated September 27, 1972, was not competent in view of what is contained in sec.
19 of the Act.
By an order dated 2.5.1973, the Labour Court dismissed the preliminary objections.
After recording the evidence produced by the parties, the Court held on merits, that the termination of the services of 3 workmen was illegal and unjustified.
The Court further found that Bidhi Chand work man had become gainfully employed elsewhere as a driver with better emoluments and it was therefore sufficient to award him compensation without any relief of reinstatement, at the rate of 50% of his wages for three years from 1966 to 1969 to the date of his getting employment elsewhere.
It further found that Ram Sarup Gupta had remained unemployed after his dismissal in 1966.
It therefore directed his reinstatement with full back wages and continuity of serv ice.
As regards H.S. Rawat, the Court found that he could not have remained unemployed throughout but was doing some work or the other for his living, may be with occasional spells.
The Court therefore held that Rawat was entitled to reinstatement and continuity of service with 50% back wages till the award Came into operation and he got his reinstate ment.
This award was made by the Labour Court on 1 5 1975.
The Management impugned this award by filing a writ petition under article 226 of the Constitution in the High Court of Delhi.
Only three contentions were canvassed by the Management at the preliminary heating before the High Court: (i) That the determination, dated 27.9.1972, by the Labour Court was an 'award ' as defined in section 2(b) of the Act, and in view of sub section
(3) of section 19, it had to be in operation for a period of one year.
It could be terminated only by a notice given under sub sections
(4) & (6) of section 19.
Since no such notice was given, the award continued to be in operation.
The second award, dated 1 5 1975, could not be validly made during the period, the 335 first award was in operation; (ii) The demand for reinstate ment was not made by the workmen till 1972 and the Labour Court was not justified in awarding them the relief of reinstatement together with compensation for back wages from 1966 onwards; (iii) The onus to show that the workmen had not obtained alternative employment, after their dismissal, was on the workmen and this onus has not been discharged.
On the other hand, the Labour Court wrongfully did not permit the Management to adduce additional evidence to show that the workmen had obtained alternative employment and, in consequence, were not entitled to back wages.
Regarding (i), the High Court held that since the `award ' dated 27.9.1972, was not one which imposed any continuing obligation on the parties, but had ended with its pronouncement, nothing in subsections (3) and (6) of sec.
19 was applicable to it.
As regards (ii), the High Court held that once the dismissal of the workmen was found illegal, it was inevita ble to award the compensation from the dates of dismissal till they found alternative employment or till the date of the award, as the case may be.
In regard to (iii), the High Court said that the ques tion of burden of proof as to who is to prove, whether the workmen did not get alternative employment for the period for which back wages have 'been awarded to them could arise only if no evidence was given by either party or if the evidence given by them was evenly balanced.
Neither of these circumstances was present before the Labour Court, and there was no good reason to disturb the finding of fact recorded by the Labour Court on this point.
The High Court thus rejected all the three contentions, and, in the result, dismissed the writ petition in limine, with a speaking order.
Hence this appeal.
Shri G.B. Pai has reagitated all the three points before us.
He assails the findings of the High Court, thereon.
Regarding point No. (i) Mr Pai 's argument is that the determination, dated 27.9.1972, also, was an `award ' within the second part of the definition of the term in a. 2(b) of the Act, inasmuch as it determined a question relating to an industrial dispute.
Emphasis has also been laid on the point that this `award ', dated 27.9.1972 was duly published by the Government under section 17(1) and had assumed finality under sub section
(2) of the same section.
This award dated 27.9.1972 proceeds the argument had to remain operative under sub section
(3) of section 19 for a period of one year from the date on which it became enforceable under section 17A i.e., a date one month after its publication.
It is submitted that no second Reference could be validly made by the Government during the period the first award remained operative, and since the second Reference, dated 2.5.1973 was made before the expiry of such period of the first award (which had not been terminated in the manner laid down in section 19), it was invalid and the consequential adjudication by the Labour Court on its basis, was null and void.
In this connection counsel has relied upon a 7 436SCI/77 336 judgment of this Court in Management of Bangalore Woollen, Cotton & Silk Mills Co. Ltd,.
vs The Workmen and ant.(1) wherein it was held that when there is a subsisting award binding on the parties, the Tribunal has no jurisdiction to consider the same points in a fresh reference.
In that case, the earlier award had not been terminated and the Reference was therefore held to be incompetent.
Reference has also been made to a single Bench Judgment of the Allaha bad High Court in Workmen of Swadeshi Cotton Mill, Co. Ltd. v Swadeshi Cotton Mills Co., Ltd., Kanpur and ors.
(2) As against this, Shri M.K. Ramamurthi maintains that the Labour Court 's order, dated May 1, 1972 was not an 'award ' within the definition of the term in s 2(b) inasmuch as it was not a determination, on merits, of any industrial dis pute or of any question relating to an industrial dispute.
In this connection reliance has been placed on a judgment of this Court in Civil Appeal No. 241 of 1964 (Technological Institute of Textiles vs Its Workmen and ors.(3).
Before dealing with the while to notice the relevant conten tions canvassed, it will be worthwhile to notice the rele vant statutory provisions.
The terms `award ' and `industrial dispute ' have been defined in the Act as follows: `Award ' means an interim or a final determination of any industrial dispute or of any question relating thereto by any Labour Court, Industrial Tribunal or National Indus trial Tribunal and includes an arbitration award made under section 10A".
[vide section 2 (b)].
"Industrial dispute" means "any dispute or difference between employers and employers, or between employers and workmen, or between workmen and workmen, which is connected with the employment or non employment or the terms of employment or with the conditions of la bour, of any person", [vide section 2 (k)].
Section 10 describes the matters which can be referred to Boards, Courts or Tribunals for adjudication.
Only clause (i) of subsection (1) is material for our purpose.
It provides; "Where the appropriate Government is of opin ion that any industrial dispute exists or is apprehended, it may at any time by order in writing (a). (b) . (c) refer the dispute or any matter appear ing to be connected with, or relevant to the dispute, if if relates to any (1) ; (2) 42 Indian Factories Journal p. 255.
(3) 337 matter specified in the Second Schedule to a Labour Court for adjudication".
Sub section (4) requires the Labour Court to confine its adjudication to those points of dispute and matters incidental thereto which the appropriate Government has referred to it for adjudication.
The material part of section 19 reads as under: "(1) . (2) . (3) An award shall, subject to the provi sions of this section remain in operation for a period of one year from the date on which the award becomes enforceable under section 17A; Provided that the appropriate Government may reduce the said period and fix such period as it thinks fit: "Provided further that the appropriate Govern ment may, before the expiry of the said peri od, extend the period of operation by any period not exceeding one year at a time as it thinks fit so, however, that the total period of operation of any award does not exceed three years from the date on which it came into operation.
(4) Where the appropriate.
Government, Whether of its own motion or on the application of any party bound by the award, considered that since the award was made, there has been a material change in the circumstances on which it was based, the appropriate Government may refer the award or a part of it to a Labour Court, if the award was that of a Labour Court or to a Tribunal, if the award was that of a Tribunal or of a National Tribunal for decision whether the period of operation should not, by reason of such change, be shortened and the decision of Labour Court or the Tribunal, as the case may be, on such reference shall be final.
(5) Nothing contained in sub section (3) shall apply to any award which by its nature, terms or other circumstances does not impose, after it has been given effect to, any continuing obligation on the parties bound by the award.
(6) Notwithstanding the expiry of the period of operation Under sub section (3), the award shall continue to be binding, on the parties until a period of two months has elapsed from the date on which notice is given by any party bound by the award to the other party or parties intimating its intention to terminate the award.
338 (7) No notice given under sub section (2) or sub section (6) shall have effect, unless it is given by a party representing the majority of persons bound by the settlement or award, as the case may be.
" There is no dispute that the order on the earlier Refer ence was made by the Labour Court on 27 9 1972, while the second Reference with the same terms of Reference to that Court was made by the Government on 2.5.1973, i.e., within one year of the earlier order.
It is common ground that the period of one year for which an award normally remains in operation under sub section
(3) was not reduced or curtailed by the Government under sec.
19 or under any other provision of the Act.
It is further admitted between the parties that no notice was given by any party of its intention to terminate the Order dated 27.9.1972.
The controversy with regard to the first point there fore narrows down into the issues whether the determination dated 27.9.1972, of the Labour Court was an award as defined in section 2(b) of the Act? The definition of award in section 2(b) falls in two parts.
The first part covers a determination, final or interim, of any industrial dispute.
The second part takes in a determi nation of any question relating to an industrial dispute.
But the basic postulate common to both the parts of the definition, is the existence of an industrial dispute, actual or apprehended.
The "determination" contemplated by the definition is of the industrial dispute or a question relating thereto, on merits.
It is to be noted further that Sec. 2, itself, expressly makes the definition subject to "anything repugnant in the subject or context".
We have therefore to consider this definition in the context of sec.
19 and other related provisions of the Act.
Mr. Pai concedes that the order dated 27.9.1972, is not a determination of any industrial dispute, as such, falling under the first part of the definition.
However, Iris argument is that the expression any question relating there to" in the second part of the definition is of wide ampli tude and should be spaciously construed.
It is main tained that a question, whether or not an industrial dispute exists, will itself be a question relating to an industrial dispute within the tendment of the second part of the defi nition.
The contention appears to be attractive but does not stand a close examination.
Sub section (1) of sec.
10 indicates when and what matters can be referred to the Labour Court for adjudica tion.
The sub section expressly makes formation of opinion by the appropriate Government, that any industrial dispute exists or is apprehended" a condition precedent to the exercise of the power of making a Reference.
Subsection (4) gives a mandate to the Labour Court to confine its adjudication to those points of dispute which have been specified in the Order of Reference, or are incidental thereto.
From a conjoint reading of cl.(b) of section 2 and sub section (1) and (4) of sec.
10, it is 339 clear that in order to be an `award ' within the second part of the definition, a determination must be (i) an adjudica tion of a question or point relating to an industrial dis pute, which has been specified in the Order of Reference or is incidental thereto: and (ii) such adjudication must be one on merits.
Now let us test the Labour Court 's order, dated 27.9.72 in the light of the above enunciation.
That Order did not satisfy any of the criteria indicated above.
It did not determine the questions or points specified in the Govern ment Order of Reference.
Nor was it an adjudication on merits of any industrial dispute or a question relating thereto.
The only question determined by the Order, dated 27.9.1972, was about the existence of a preliminary fact, viz., existence of an industrial dispute which in the Labour Court 's opinion was a sine qua non for the validity of the Reference and the exercise of further jurisdiction by the Court.
Rightly or wrongly, the Court found that this preliminary jurisdictional fact did not exist, because "no industrial dispute had come into existence in accordance with law", and, in consequence, the Reference was invalid and the Court was not competent to enter upon the Reference and determine the matter referred to it.
With this find ing, the Court refused to go into the merits of the question referred to it.
There was no determination on merits of an industrial dispute or a question relating thereto.
We are therefore of opinion that Labour Court 's determination dated 27.9.1972, did not possess the attributes essential to bring it within the definition of an award.
The mere fact that this order was published by the Government under section 17(1) of the Act did not confer that status on it.
In the view we take we are fortified by the principle laid down by this Court in Technological Institute of Tex tiles vs Its Workmen (supra).
In that case, there was a settlement which in the absence of necessary formalities, was not binding on the parties.
Certain items of dispute were not pressed and withdrawn under the terms of such settlement.
In the subsequent reference before the Indus trial Tribunal some of the items of dispute were withdrawn and no award was made in respect thereto.
Thereafter, these items were again referred for adjudication along with cer tain other matters to the Tribunal.
It was contended on behalf of the Management that subsequent reference with regard to the items which had been withdrawn and not pressed in the earlier reference, was barred under sec.
19, because the earlier award had not been terminated in full.
Ramaswa mi J., speaking for the Court, repelled this contention, with these observations: "It is manifest in the present case that there has been no adjudication on merits by the industrial tribunal in the previous reference with regard to the matters covered by items (1) and (3) of the present reference, because the workmen had withdrawn those mat ters from the purview of the dispute.
There was also no settlement in exhibit R. 4, because the demands in question had been withdrawn by the workmen and there was no agreement between the parties 340 in regard thereto.
Our conclusion, therefore, is that the bar of section 19 of the does not operate with regard to the matters covered by items (1) and (3) of the present reference and the argument put forward by the appellant on this aspect of the case must be rejected." Although the facts of the case before us are different, yet the principle enunciated therein viz., that the bar of sec.
19 operates only with regard to a determination made on merits, is fully applicable.
By any reckoning, the decision dated 27.9.1972 of the Labour Court by its very nature did not impose any continuing obligation on the parties bound by it.
This was an additional reason for holding that the earlier reference was not barred by anything contained in sub section (3) or other provisions of section 19.
We have gone through the single Bench decision of the Allahabad High Court in Workmen of Swadeshi Cotton Mills Co. Ltd. case (supra).
That decision is to the effect that the finding recorded by the Labour Court that the matter re ferred to it for adjudication was not an industrial dispute as defined in the Act is itself a determination of a ques tion relating to an industrial dispute, and would fall within the definition of the term "award" under the Act.
In our opinion.
this is not a correct statement of the law on the point.
The next submission of Mr. Pai is that since the demand for reinstatement was not duly made by the workmen before 28.10.
1972, the Courts below were not justified in award ing to the workmen, compensation for back wages from 1966 onwards.
On the other hand, Mr. Ramamurthi maintains that such a claim was presumably agitated by the workmen in proceedings before the Conciliation Officer, in 1966.
While conceding that technically, no demand notice for reinstatement was served by the workmen on the Management before 25.10.
1972, Counsel submits that the Management were aware of the work men 's claim to reinstatement, since 1966, and in these circumstances, the Management should not be allowed to take shelter behind this technical flaw, and deny just compensa tion to them from the date of wrongful dismissal.
We have carefully considered the contentions advanced on both sides.
After taking into consideration all the circum stances of the case, we are of opinion that the Labour Court was not justified in awarding compensation to the workmen, for wages relating to the period prior to 25.10.1972 i.e., the date on which the demand notices for reinstatement were served on the Management.
To this ex tent, we would accept the contention of the appellants.
341 The third contention of the appellants is that the onus of proving that they had not obtained alternative employment elsewhere after the termination of their services, was on the workmen, and they had failed to discharge that onus.
We find no merit in this contention.
The question of onus oft loses its importance when both the parties adduce whatever evidence they had to produce.
In the instant case, both the parties led their evidence and closed their respective cases.
Subsequently, at a late stage, the Management made an application for adducing additional evidence.
The Labour Court declined theft appli cation.
The High Court found and we think rightly, no good reason to interfere with the discretion of the Labour Court.
It may be remembered further, that this appeal arises out of a petition under article 226 of the Constitution, and in the exercise of that special jurisdiction, the High Court does not reopen a finding of fact based on legal evidence.
The findings of the Labour Court to the effect, that after their dismissal, Ram Swamp Gupta was unable to find any alternative employment elsewhere, while Rawat was able to find only intermittent employment elsewhere, were based on evidence produced by the parties.
The High Court was there fore right in not interfering with those findings of fact.
Lastly it was urged by Mr. Pai, that the employers had lost confidence in the employees, and therefore, compensa tion, without reinstatement, would have been adequate re lief.
It is submitted that the business of the employers is that of Travel Agents and such a sensitive business can be successfully carried on only with the aid of employees whose fidelity and integrity is beyond doubt.
It is stressed that the employees of the appellants, have to handle daily lot of cash received from their clients in the discharge of their duties.
It is pointed out that the charge against H.S. Rawat was one of misappropriation of such funds and this charge was established in the domestic enquiry.
The Labour Court, proceeds the argument, did not displace that finding of the domestic Tribunal, but ignored it on the ground that the charge was stale and had been condoned.
In short, the argument is that the employers had lost confidence in this employee who could no longer be entrusted to perform sensitive jobs on behalf of the Management, without detriment to its business.
We are unable to accept this contention.
Firstly, this point was not argued before the High Court.
Secondly, the observations of the Labour Court, read as a whole, show that, in its opinion, the charge of misap propriation of funds had not been proved against H.S. Rawat.
This is what the Labour Court said on the point: "I am therefore of opinion that the charges had been condoned and they could not be revived again and the act of reviving the charge on account of his Union activities was an act of unfair labour practice on the part of the Management and amounted to victimisation.
Even the 342 charges in the charge sheet exhibit M/5 have not been established before me, that the workman withdrew the funds from the company on false pretences for revenue stamps and misappropri ated the same.
" Thus there is no factual basis for this belated conten tion, and we repel the same.
For the foregoing reasons, we dismiss this appeal with the modification that in addition to the relief of rein statement with continuity of service, S/Shri H.S. Rawat and Ram Swarup Gupta shall be entitled to 50%, and full back wages, respectively, from 25.10.1972.
It may be recalled that the special leave to appeal in this case, was granted on the condition that the appellants shall pay the costs of this appeal to the respondents, in any event.
We order accordingly.
P.B.R. Appeal dismissed.
| The respondents in all these appeals are "extra depart mental agents" within the meaning of Rule 2(b) of the Posts and Telegraphs Extra Departmental Agents (Conduct of Service) Rules, 1964 issued under the authority of the Government of India.
They were either dismissed or removed from service during the period between January 1, 1966 and June 18, 1974, admittedly without complying with the provi sions of article 311(2) of the Constitution.
The question in each case is whether the respondent held a "civil post" as contemplated in article 311(2) of the Constitution.
The High Court of Kerala, Andhra Pradesh & Orissa held that the respondents held a civil post under the Union of India and the orders terminating their services in violation of article 31.1(2) of the Constitution were invalid.
Dismissing the appeals the Court, HELD: (1) An "extra departmental agent" held a "civil post" and his dismissal or removal would be invalid, if there was non compliance with article 311 (2) of the Constitu tion.
[680 B C. 682 E] (2) An extra departmental agent is not a casual worker, but he holds a post under the administrative control of the State.
It is apparent from the 1964 Rules that the em ployment of an extra departmental agent is in a post which exists "apart from" the person who happens to fill it at any particular time.
Though such a post is outside the regular civil service, there is no doubt it is a post under the State.
[681 E F] State of Assam & Ors.
vs Kanak Chandra Dutta ; @ 682 applied.
(3) The 1964 rules make it clear that these extra departmental agents work under the direct control and super vision of the authority who obviously have the right to control the manner in which they must carry out their du ties.
There can be no doubt, therefore, that the relation ship between the Postal Authorities and the extra departmen tal agents are of master and servant.
[662 C E] Venkataswamy vs Superintendent, Post Offices, AIR 1957 Orissa 112; V. Subbaravalu vs Superintendent of Post Offices, AIR 1961 Madras 166, held inapplicable.
|
il Appeal No. 431 of 1976.
(Appeal by Special Leave from the judgment and order dated 31 3 1975 of the Gujarat High Court in Special Civil Application No. 2355 of 1974).
G.L. Sanghi, K.J. John, S.R. Kureshi and D. N, Mishra, for the appellants.
I. N. Shroff and H.S. Parihar, for Respondent No. 1.
M.N. Shroff, for Respondent No. 2.
The Judgment of the Court was delivered by GOSWAMI, J.
The only question that arises in this appeal by special leave is whether the order of acquisition passed by the Municipal Commissioner under section 284J of the Bombay Provincial Municipal Corporations Act, 1949, as applicable to Gujarat, is invalid and void for non compli ance with section 5A of the Land Acquisition Act, 1894.
The Municipal Corporation of the city of Ahmedabad (briefly the Corporation) by its resolution of December 15, 1966, authorised its Commissioner under section 2841 of the Bombay Provincial Municipal Corporations Act 1949 (briefly the Bombay Act) to provide housing accommodation for the poorer classes.
In pursuance of this authority of the Corporation the Commissioner passed the impugned order of compulsory acquisition on October 9, 1967, under section 284J of the Bombay Act in respect of 33,357 sq.
of land final plots Nos. 11 to 25 of Town Planning Scheme No. V of Dariapur, Kazipur Ward.
Out of this area the land belonging to the appellants measures about 1694 sq.
It is averred by the appel lants that this area is "predominantly a commercial area and is almost fully built upon".
The aforesaid order of compulsory acquisition was pub lished in the official gazette of January 25, 1968 and in the local newspapers of February 10/11, 1968.
Individual notices were also served on the concerned parties in ac cordance with law inviting objections from the owners in cluding the appellants which were lodged in due course.
These objections were submitted to the Standing Committee by the Commissioner with his suggestions and the Committee by its resolution No. 1942 of January 21, 1969, approved the said order of compulsory acquisition.
The State Government thereafter confirmed the said order on January 6, 1972.
The appellants had requested for a personal hearing with regard to their objections and their grievance is that the same was denied to them.
It is common ground that no personal hearing was given to the appellants with regard to their objections by the Commissioner.
Even so a period of nearly five years was taken in the process of finalising the order.
After confirmation of the order of acquisition by the Government there is a provision for appeal under Schedule B to the Bombay Act.
7 1003 Sc1176 74 The appellants preferred an appeal to the City Civil Court at Ahmedabad and amongst several other grounds raised the question of the denial of personal hearing to them.
The learned Judge of the City Civil Court did not accede to the contention and by his order of April 10, 1974, held that the principles of natural justice were satisfied in this case inasmuch as they had been given an opportunity to submit their objections to the acquisition.
The appellants then took the matter to the High Court of Gujarat under article 227 of the Constitution where the same grievance as to the denial of personal hearing was reiterat ed.
The High Court by its order of March 31, 1975 refused to interfere with the order holding that section 5A of the Land Acquisition Act was duly complied with.
The High Court also held that the City Civil Court Judge was right in rejecting the submission since "no oral hearing was ever claimed in the objection".
Hence this appeal, by special leaye, which was ordered by this Court to be expedited.
From a perusal of the judgment of the City Civil Court as well as that of the High Court we are of opinion that there was no proper appraisal of the real issue in the matter.
It appears that both the City Civil Judge and the High Court were only concerned with whether the rules of natural justice were complied with in the matter of acquisi tion of the land in question.
We think, as will be shown below, that the City Civil Court and the High Court are not right in their approach.
We find that there is reference to section 5A of the Land Acquisition Act in the order of the High Court and it is apparently assumed by the High Court that the said sec tion is applicable.
All the same the High Court erroneously thinks that no personal hearing was necessary and the sec tion is fully completed with by mere submission.
of the written objection particularly because "no oral bearing was ever claimed".
Mr. Sanghi submits that so far as the appellants are concerned they did request for a personal hearing and that there is no denial by the respondents of their averment to that effect in their special leave petition.
The City Civil Judge also noted in his judgment that "some of the appel lants had in terms demanded a personal hearing in their objections memorandum".
Be that as it may section 5A of the Land Acquisition Act does not rest on a person 's demand for personal hearing.
The matter may be different if a person whose property is acquired abandons the right to a personal hearing with which aspect we are not concerned in this appeal.
Although the judgment of the High Court, as stated earlier apparently rests on the asumption that section 5A of the Land Acquisition Act is applicable Mr. Shroff appearing on behalf of the respondents submits that that section is unavailable in the case of acquisition under the Bombay Act, Mr. Sanghi also, fairly enough, has not taken advantage of the assumption in the judgment and has submitted by drawing our attention to the various provisions of the Act that section 5A is clearly attracted in a matter of acquisition under the Bombay Act.
75 We will, now, examine the rival contentions with regard to the applicability of section 5A of the Land Acquisition Act.
The title of Chapter XVI of the Act is "Improvement Schemes" and opens with section 270.
There are various sub headings in this Chapter and we are concerned in this appeal with only a few sections under the sub title "Provi sion of housing accommodation for the poorer classes", This sub title in the Chapter opens with section 2841: 2841 (1) "If the Corporation, upon considera tion of a representation from the Commissioner or other information in its possession, is satisfied that within any area in any part of the City it is expedient to provide housing accommodation for the poorer classes and that such accommodation can be conveniently provided without making an im provement scheme, it shall cause such area to be defined on a plan and pass a resolution authorising the Commission and the Commissioner shall there upon be empowered to provide such accommodation " * * * * * * Section 284J provides that "the Commissioner may for the purposes of the foregoing section on behalf of the Corporation (a) acquire any land including any buildings thereon as a site for the erection of buildings for the poorer classes".
* * * * Section 284K provides as follows : 284K. (1) "Land for the purposes of the foregoing section may be acquired by the Commis sioner by agreement upon obtaining the requisite sanction under section 77, or he may, with the sanction of the Standing Committee, be authorised to acquire land for those purposes by means of a compulsory acquisition order made and submtited to the State Government and confirmed by it in accord ance with the provisions of Schedule C to this Act.
* * * * * * (3) The provisions of Schedule B to this Act shall have effect with respect to the validity and date of operation of a compulsory acquisition order made under this section".
* * * * * * The next important section is section 284N which reads as under : 284N. "The Land Acquisition Act, 1894 (in this and the next succeeding sections referred to as 'the Land Acquisition Act ') shall to the extent set forth in Appendix I regulate and apply to the acquisition of land under this Chapter, otherwise than by agreement, and shall for that purpose be deemed to form part of this Chapter in the same manner as if enacted 76 in the body thereof, subject to the provisions of this Chapter and to the provisions following namely : " * * * * Thus, section 284N referentially incorporates in the Bombay Act certain provisions of the Land Acquisition Act as detailed in Appendix I to the Bombay Act.
Out of those provisions we are only concerned with Part 1I (Acquisition) of the Land Acquisition Act containing sections 4 to 17 including section 5A.
According to Appendix I all the sections in Part Il of the Land Acquisition Act except subsection (1) of section 4, section 6 and sub section (2) of section 17 are bodily incorporated in the Bombay Act.
Those provisions are deemed to be part and parcel of the Bombay Act.
Hence section 5A is clearly a part of the Bombay Act in terms of Appendix I.
It is true section 284 N provides that the incorporated provisions of the Land Acquisition Act are subject to the provisions of Chapter XVI and to those contained in section 284N itself.
That is to say, if there is any inconsistency between a provision in Chapter XVI of the Bombay Act or in section 284N itself and that in the Land Acquisition Act, the former will prevail over the grafted provisions of the.
Land Acquisition Act.
This is, however, not to say that where section 5A is deemed to be part of the Bombay Act, there is a further requirement to show in the Bombay Act an express provision for affording an opportunity of personal hearing.
This is the error into which, earlier, the City Civil Judge fell.
The heart of section 5A of the Land Acquisition Act is the hearing of objections and under sub section (2) of that section a personal hearing is mandato rily provided for.
When, therefore, section 5A of the Land Acquisition Act is applicable under Appendix I of the Bombay Act and there is nothing to show expressly or by necessary implication that the said section or any part of it is excluded under section 284N or under any other provi sion in Chapter XVI as a whole the right to personal hearing under the Bombay Act cannot vanish or be defeated.
Mr. Shroff fairly and, in our opinion, rightly concedes that there is no express ouster of section 5A of the Land Acquisition Act under the provisions of Chapter XVI of the Bombay Act.
He, however, submits that there is a special machinery under section 284K of the Act disclosed in Sched ule C and in Schedule B attached to the Bombay Act and since section 284N is subject to the provisions of Chapter XVI these Schedules form part of the Chapter.
Assuming that Schedule C and Schedule B are part of Chapter XVI we are unable to read in the provisions contained in these two Schedules any exemption from the right to personal hearing mandatorily required under section 5A of the Land Acquisi tion Act.
It is true that the mode of acquisition of land for housing accommodation is provided for under section 284K and that the order of compulsory acquisition made by the Commis sioner has to be confirmed by the State Government in ac cordance with the provisions of Schedule C to the Bombay Act.
Broadly, clause 2 of Schedule C provides that before submitting the order to the State Government the Commissioner, 77 inter alia, has to publish the order in the official gazette and in three or more newspapers.
The Commissioner has also to serve on persons specified in clause 2(b) notices calling for objections, etc.
Clause 3 provides that upon compliance with the provisions of clauses 1 and 2 the Commissioner shall submit to the Standing Committee any objections re ceived under clause 2 and any suggestions he may wish to make in that respect.
Under clause 4 the Standing Committee shall after consideration of any such objections and sugges tions make suCh modification in respect of such order as it may think fit and the Commissioner shall thereafter submit the order as modified by the Standing Committee to the State Government for confirmation.
It is manifest that the proce dure under the scheme of Schedule C will be breached if the Commissioner does not afford a personal hearing to the objectors even in order to be able to fortify his sugges tions which he has to submit to the Standing Committee along with the objections.
Since the Standing Committee is enti tled to have his properly considered suggestions which may enable it even to modify the order of acquisition it is necessary that the Commissioner gives a personal hearing to the objectors before he is able to make his suggestions worthy in the context of the objections lodged.
Otherwise it will be only an empty formality and the suggestions will be devoid of much of practical utility to the Committee.
Schedule C, therefore, does not even by necessary implica tion rule out a right to personal hearing.
Clause 2 of Schedule B provides for an appeal to a Judge of the City Civil Court .in
Ahmedabad and elsewhere to a Judge of the District Court whose decision shall be final.
Mr. Shroff submits that provision for an appeal against the acquisition order after confirmation by ' the State Govern ment provides for appropriate remedy before a judicial Tribunal.
This also, says Mr. Shroff, goes to indicate, by necessary implication, that personal hearing required under section 5A of the Land Acquisition Act is dispensed with and the remedy provided for under the provisions of the Bombay Act read with the two Schedules is exhaustive and necessari ly excludes the application of section 5A of the Land Acqui sition Act and with it the right of personal hearing provid ed thereunder.
We should make it clear that provision for appeal is not a complete substitute for a personal hearing which is pro vided for under section 5A of the Land Acquisition Act.
This will be evident from a perusal of clause 3 of Schedule B itself.
The character of the appeal contemplated under clause 3(ii) of Schedule B is only with regard to the examination of the following aspects : (1 ) whether the order or approval of the plan .is within the powers of the Bombay Act, and (2) whether the interests of the appellant have been substantially prejudiced by any requirement of this Act not having been complied with.
The appeal is confined under clause 3 of Schedule B to the examination of only the twin aspects referred to above.
There is no provision for entertainment of any other rele vant objection to the acquisition of 78 land.
For example a person whose land is acquired may object to the suitability of the land for the particular purpose acquired.
He may again show that he will be at an equal disadvantage if his land and house have to be acquired in order to provide accommodation for the poorer people as he himself belongs to the same class of the indigent.
He may further show that tbere is a good alternative land available and can be acquired without causing inconvenience to the occupants of the houses whose lands and houses are sought to be acquired.
There may be other relevant objections which a person may be entitled to take before the Commis sioner when the whole matter is at large.
The Commissioner will be in a better position to examine those objections and consider their.weight from all aspects and may even visit the locality before submitting his report to the Standing Committee with his suggestions.
For this purpose also a personal hearing is necessary.
The appeal court under the Schedule B to the Bombay Act, on the other hand, is not required under clause 3 to entertain all kinds of objections and it may even refuse to consider the objections mentioned earlier in view of the truncated scope of the hearing under clause 3(ii) as noted above.
We are, therefore, unable to accept the submission that the appeal provided for under Schedule B is a complete substitute for a right to personal hearing and as such by necessary implication ousts the applicability of Section 5A of the Land Acquisition Act.
Mr. Shroff further submits that under the Appendix I, inter alia, section 17(4) of the Land Acquisition Act is made applicale in an acquisition proceeding under the Bombay Act.
It is, therefore, submitted that under section 284N, sub section (4) any acquisition under the Bombay Act is treated as an acquisition under section 17 ( 1 ) of the Land Acquisition Act and since section 17(4) of the Land Acquisi tion Act is also brought in under the said Appendix, section 5A of the Land Acquisition Act, by necessary implication, should be held as excluded from the purview of the Bombay Act.
We are unable to accept this submission.
Even under section 17(4) of the Land Acquisition Act the appropriate Government has to direct, in a case of urgency, that the provisions of section 5A shall not apply.
There is no automatic exclusion of section 5A even under the Land Acqui sition Act.
That being the position there is no substance in the contention that because of subsection (4) of section 284N, section 5A should be held inapplicable in the case of an acquisition proceeding under the Bombay Act.
We are clearly.
of opinion that section 5A of the Land Acquisition Act is applicable in the matter of acquisition of land in this case and since no personal hearing had been given to the appellants by the Commissioner with regard to their written objections the order of acquisition and the resultant confirmation order of the State Government with respect to the land of the appellants are invalid under the law and the same are quashed.
It should be pointed out, it is not a case of failure of the rules of natural justice as such as appeared to be the only concern of the High Court and also of the City Civil Court.
It is a case of absolute non compliance with a mandatory provision under section 5A of the Land Acquisition Act which is clearly applicable in the matter of acquisition under the Bombay Act.
79 We should also point out that the acquisition order must be an order valid under the law and the question of appeal arises only after confirmation of the order by the State Government.
If the order is, at inception, invalid, its invalidity cannot be cured by its approval of the Standing Committee or by its confirmation of the State Government.
Besides, hearing of objections under section 5A of the Land Acquisition Act to be given by the Commissioner under the Bombay Act cannot be replaced by a kind of appeal hear ing by the City Civil Judge.
The Bombay Act having assigned the duty of hearing objections to the Commissioner, he alone can hear them and not the City Civil Judge even assuming that all objections could be entertained by him in appeal.
(See Shri Mandir Sita Ramji vs Lt. Governor of Delhi & Ors.(1)].
Beneficial schemes under welfare legislation have to be executed in accordance with law which creates the schemes.
The end does not always justify the means and it is no answer that the object of the scheme is such that it justi fies the implementer of the law to be absolutely oblivious of the manner of enforcement even though the manner is an integral part of the scheme, imposing under the law, re strictions on the rights of individuals.
Beneficial laws have to be simple and self contained.
To introduce provi sions of another Act referentially in vital matters creates avoidable difficulties and litigation highlighted by the case in hand.
It is refreshing that this Court disposed of this matter within about four months of granting of special leave.
In the result the appeal is allowed and the judgment of the High Court is set aside and with it the appellate order of the City Civil Judge also falls.
The Commissioner shall give a personal hearing to the appellants as required under sub section (2) of section 5A of the Land Acquisition Act and, thereafter, dispose of the matter in accordance with law.
In the circumstances of the case we will, however, make no order as to costs in this appeal.
V.P.S. Appeal al lowed.
S.C.R. 597.
| The respondent was the tenant of the suit premises and Dilip Narayan Roy Choudhury was his sub tenant.
The tenant instituted a suit against the subtenant when the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950 was in force seeking to evict the sub tenant on the ground that he was a defaulter in payment of rent.
After the suit was instituted.
West Bengal Premises Tenancy Act, 1956, was brought into operation.
Section 40 of the subsequent Act repealed the 1950 Act and further provided that not withstanding the repeal of the said Act any proceedings pending on the date of the repeal may be continued as if the said Act had been in force and had not been repealed or had not expired.
Section 16 of the 1956 Act confers on the sub tenant, on his complying with certain conditions the right to become a tenant directly under the landlord and authorise the Rent Controller to pass necessary orders directing that the sub tenant shall become tenant directly under the landlord from the date of the order.
The sub tenant adopted proceedings under section 16 of the Act against the superior landlord and in February, 1957, the Rent Controller held that the sub tenant was entitled to the declaration asked for over ruling the objections raised by the tenant.
An appeal filed by the tenant against the said order was dismissed.
Thereafter, the sub tenant amended his written statement in the suit for eviction filed by the tenant against him and pleaded that the relationship of the landlord and tenant between the tenant and the sub tenant no longer subsisted.
The Munsiff dismissed the application for eviction filed by the tenant on the ground that in view of he order passed under the 1956 Act declaring the sub tenant to be a direct tenant under the landlord the relationship of landlord and tenant between the parties ceased.
In a revision, the High Court maintained the order rejecting the application for eviction but set aside the finding that the relationship of the landlord and tenant between the tenant and the sub tenant ceased.
The High Court held that in spite of section 40 of the repealing Act, section 16(3) of the Repealing Act must be given effect to.
The High Court, however, took the view that the proceedings under section 16(3) having been initiated during the pendency of the suit the principle of lis pendens would apply and, accordingly, the order under section 16(3) would not govern the suit.
In an appeal by special leave by the heirs of the sub tenant, the counsel for the respondent did not rely on section 52 of the Transfer of Property Act but sought to support the decree on the ground that in view of section 40 of the Repealing Act the entire proceedings under section 16 was without jurisdiction.
Allowing the appeal, ^ HELD: (1) The doctrine of lis pendens can have no application to this case.
The doctrine of lis pendens means that no party to the litigation can alienate the property in dispute so as to affect the other party and rests upon the foundation that it would plainly be impossible that any action or suit could be brought to a successful termination after alienation pendente lite.
Section 596 5 of the Transfer of Property Act defines transfer of property as an act by which a living person conveys property to another.
When the Legislature in exercise of its sovereign powers regulates or alters the rights of landlord and tenant, what it does is not transfer of property attracting the doctrine of lis pendens.
[599B, C F] (2) It is true that in view of section 40 of the Repealing Act a pending proceeding may be continued as if the Repealing Act was not passed.
This, however, does not mean that even if the 1956 Act created a new right in favour of the tenant, he would be denied this right because a suit for ejectment was pending against him when the Act came into force.
The intention of the Legislature, which is paramount, is clear to upgrade the sub tenant and make him a tenant directly under the superior landlord.
A sub tenant is a tenant within the meaning of section 2(h) of the Repealing Act.
Thus, the suit must continue under the 1950 Act but the right acquired by the sub tenant under 1956 Act has to be given effect to and the suit decided accordingly.
Therefore, the relationship of landlord and tenant ceased between the parties on the date when the order under section 16 was made.
[599F H, 600B C]
|
Appeal No. 2314 of 1966.
Appeal from the judgment and order dated October 7, 1966 of the Punjab High Court in Circuit Bench at Delhi in Civil Writ Petition No. 790 D of 1966.
M. C. Setalvad, Ravinder Narain, J. B. Dadachanji, for the appellants.
section V. Gupte, Solicitor General, R. Ganapathy.
Iyer, R. N. Sachthey, and R. H. Dhebar, for the respondent.
The Judgment of the Court was delivered by Shah, J.
The Punjab Reorganisation Act, 1966 hereinafter called 'the Act ' was enacted with the object of reorganising the State of Punjab.
By the Act which came into force on November 1, 1966, the eastern hilly areas of the old State were transferred to the Union territory of Himachal Pradesh; the territory known as Chandigarh in Kharar tahsil was constituted into a Union territory; and the remaining territory was divided between the new State of Punjab and the Haryana State.
The old State of Punjab had a bi cameral Legislature with 154 members in the Legislative Assembly and 51 members in the Legislative Council.
Under section 13 of the Act as from November 1, 1966, the Legislative Assembly of the new State of Punjab consists of 87 members.
and the Haryana Legislative Assembly consists of 54 members.
The new State of Punjab has also a bi cameral Legislature.
Out of the original membership of 51.
16 members whose names are set out in the Seventh Schedule to the Act ceased to be members of the Legislative Council, and the remaining members continued to be members of the Legislative Council of the new State of Punjab.
Out of the 16 members who ceased to be members of the Legislative Council, 14 members, it is claimed by the appellants, belong to the Haryana area and 2 to the Himachal Pradesh Union territory.
The Act was challenged as "illegal and ultra vires of the Constitution" on diverse grounds in a writ petition filed by the two appellants in the High Court of Punjab.
The High Court rejected the petition.
111 In this Court two contentions were urged in support of the appeal: (1) Constitution of the Legislative Assembly of Haryana by section 1 3(1) of the , violates the mandatory provisions of article 170(1) of the Constitution; and (2) By enacting that.
8 members of the Legislative Council who are residents of the Union territory of Chandigarh shall continue to sit in the Legislative Council in the new State of Punjab, and by enacting that the members elected to the Legislative Council from the Haryana area shall be unseated, there is denial of equality.
By section 24 of the Act it is provided that the total number of seats in the Legislative Assembly of Haryana "to be constituted at any time after the appointed day i.e. November 1, 1966 to be filled by persons chosen by direct election from territorial constituencies, shall be eighty one.
" It is clear that section 13(1) which allocates fifty four sitting members out of the members elected to the Legislative Assembly of the old State of Punjab to the Haryana area Legislative Assembly on November 1, 1966, is a temporary provision.
Constitution of the Legislative Assembly of Haryana on November 1, 1966, is, it is contended, violative of article 170 of the Constitution.
In terms article 170 enacts that a Legislative Assembly shall be constituted by members chosen by direct elections from territorial constituencies, and that the Assembly shall consist of not more than five hundred and not less than sixty members.
But article 170 is not the only provision having a bearing on the constitution of a Legislative Assembly.
By article 2 the Parliament may by law admit into the Union or establish new States on such terms and conditions as it thinks fit; and article 3 provides that the Parliament may by law (a) form a new State by separation of territory from any State or by uniting two or more States or parts of States or by uniting any territory to a part of any State; (b) increase the area of any State; (c) diminish the area of any State; (d) alter the boundaries of any State; (e) alter the name of any State.
Any law referred to in article 2 or article 3 shall, it is provided by article 4(1), contain such provision for the amendment of the First Schedule and the Fourth Schedule as may be necessary to give effect to the 112 provisions of the law and may also contain such supplemental, incidental and consequential provisions (including Provisions as to representation in Parliament and in the Legislature or Legislatures ,of the State or States affected by such law) as Parliament may deem necessary.
BY cl.
(2) of article 4 it is provided: "No such law as aforesaid shall be deemed to be an amendment of this Constitution for the purposes of articles 368.
" The law referred to in articles 2 & 3 may therefore alter or amend the First Schedule to the Constitution which sets out the names of the States and description of territories thereof 'and the Fourth Schedule allotting seats to the States in the Council of States in the Union Parliament.
The law so made may also make supplemental, incidental and consequential provisions which would include provisions relating to the setting up of the legislative, executive and judicial organs of the State essential to the effective State administration under the Constitution, expenditure and distribution of revenue, apportionment of assets and liabilities, provisions as to services, application and adaptation of laws, transfer of proceedings and other related matters.
On the plain words of article 4, there is no warrant for the contention advanced by counsel for the appellants that the supplemental, incidental and consequential provisions, which by virtue of article 4 the Parliament is competent to make, must be supplemental, incidental or consequential to the amendment of the First or the Fourth Schedule.
The argument that if it be assumed that the Parliament is invested with this wide power it may conceivably exercise power to abolish the legislative and judicial organs of the State altogether is also without substance.
We do not think that any such power is contemplated by article 4.
Power with which the Parliament is invested by articles 2 and 3, is power to admit, establish, or form new States which conform to the democratic pattern envisaged by the Constitution; and the power which the Parliament may exercise by law is supplemental, incidental or consequential to the admission, establishment or for mation of a State as contemplated by the Constitution, and is not power to override the constitutional scheme.
No State can therefore be formed, admitted or set up by law under article 4 by the Parliament which has not effective legislative, executive and judicial organs.
Power to reduce the total number of members of the Legis lative Assembly below the minimum prescribed by article 170(1) is, in our judgment, implicit in the authority to make laws under article 4.
Such a provision is undoubtedly an amendment of the Constitution, but by the express provision contained in cl.
(2) of article 4, no such law Which amends the First and the Fourth Schedule or which makes supplemental, incidental and consequential provisions is to be 113 deemed an amendment of the Constitution for the purposes of Art.368.
Our attention was invited to article 371A(2)(h) of, the Constitution which makes an express provision in derogation to article 170(1) relating to the constitution of a Legislative Assembly for the State of Nagaland, and fixes"notwithstanding anything in this Constitution for a period of ten years from the date of the formation of the State of Nagaland or for such further period as the Governor may, on the recommendations of the regional Coun cil, by public notification specify in this behalf" the membership of the Legislative Assembly at 46.
Power of the Parliament to make amendments in the Constitution by express enactment so 'as to reduce the number of members of a Legislative Assembly below the minimum prescribed having regard to the exigency of a special case may not be denied.
But the Constitution also contemplates by article 4 that in the enactment of laws for giving effect to the admission, establishment or formation of new States, or alteration of areas and the boundaries of those States, power to modify provisions of the Constitution in order to tide over a temporary difficulty may be exercised by the Parliament.
The High Court was, therefore, right in holding that section 13(1) was not invalid merely because it departed from, the minimum prescribed as the total membership of the Legislative Assembly for a State.
Sections 20 & 22 of the Act deal with the constitution of the Legislative Council.
By section 20 the Legislative Council of the new State of Punjab is to consist of 40 representatives and the Third Schedule to the Representation of the People Act, 1950, is to stand modified accordingly.
By section 22 it is provided: "(1) On the appointed day, the sitting members of the Legislative Council of Punjab specified in the Seventh Schedule shall cease to be members of that Council.
(2) On and from the appointed day, all sitting members of the Legislative Council of Punjab, other than those referred to in subsection (1), shall continue to be members of that Council.
By the Seventh Schedule, 16 members, of whom it is claimed 14 are from the territory which is now in Haryana State, have been untreated.
It was claimed by the appellants in their petition before the High Court that those 14 members of the Old Punjab Legislative Council "would cease to be members of the new Council" from November 1, 1966, whereas 8 members belonging to the newly constituted area of the Union territory of Chandigarh still continue to be members of the new Punjab Legislative Council, and that such discriminatory treatment of members from the Haryana region 114 amounted to denial of equality.
In the affidavit on behalf of the Union of India it was submittedthat because Chandigarh is to be the capital of the existing Stateof Punjab and will continue to be the seat of new Government of the Punjab, the members from Chandigarh were admitted as members of the Legislative Council of the new State of Punjab,that the provision was consequential and incidental to the main provision constituting the State of Punjab, and that in theevent, the appellants were not persons aggrieved by the so called discriminatory treatment.
By article 171(3) of the Constitution membership of the Legis lative Council is not from territorial constituencies: it is by nomination, indirect election or by election from teachers ' and graduates '.
constituencies.
Of the total number of members of the Legislative Council of a State, one third are to be elected by electorates consisting of members of municipalities, district boards and such other local authorities in the State, one twelfth are to be elected by electorates consisting of persons residing in the State who have been for at least three years graduates of any university in India ox possess equivalent qualifications, one twelfth are to be elected by electorates consisting of persons who have been engaged in teaching in educational institutions within the State, one third are, to be elected by the members of the Legislative Assembly of the State from amongst persons who are not members of the Assembly, and "the remainder" are to be nominated by the Governor in accordance with the provisions of cl. 5.
These constituencies are not territorial constituencies.
On the reorganisation of the old State of Punjab, adjustments had to be made in the membership of the Legislative Council.
No such adjustment as would strictly conform to the requirements of article 171(3) could however be made without fresh elections.
The Parliament therefore adopted an ad hoc test, and unseated members who were residents in the territory of Haryana and Himachal Pradesh.
It is true, as admitted in the affidavit on behalf of the Union of India, that members belonging to the Union territory of Chandigarh will be members of the new Punjab Legislative Council, and members from the Haryana State territory will be unseated.
Whether in unseating the members from Haryana area and allowing the members from the Chandigarh area to continue, a valid classification is made on the ground that Chandigarh is the capital of the two States need not detain us, because we are of the view that no discrimination by unseating members from the Haryana area can be deemed to be practised against the appellants of which they can complain.
The appellants were not sitting members of the Legislative Council of the old State of Punjab and no personal right of the appellants is infringed by unseating the members whose names are set out in the Seventh Schedule.
Again the new State of Punjab is a bi cameral Legislature.
The new State of Haryana is uni cameral.
It is not claimed,, 115 and cannot be claimed, that a resident of the State of Haryana is,.
merely because of that character, entitled to sit in the Punjab Legislative Council.
By allowing the members from the Chandigarh area to continue to remain members of the Legislative Council of the new State of Punjab, no right of the residents of Haryana is therefore violated.
| By a notification in June 1949, the State Government, in exercise of a power under section 2(1)(a) of the Madras Commerical Crops Market Act, 1933, declared coconuts and copra to be 'commercial crops ' within the meaning of the Act.
The respondent Market Committee IL vied in respect of the declared commerical crops, a fee on the goods 'bought and sold ' within the notified area under section 11(1) of the Act, read with Rule 28(1) of the Rules made under the Act.
The appellants filed various suits contesting the levy on the ground that they sold coconuts and copra to customers outside the notified area and in some cases outside the State; consequently, they sought refund of the fees collected by the respondent committee.
The suits filed were tried together and the trial Judge held that the levy, though called a "fee", was really a "tax", and that the Committee was only empowered to impose such tax when the goods were bought and sold within the notified area.
He therefore passed decrees in all the suits .for refund of the fees collected.
The first appeal by the respondent Committee was dismissed by the Sub Judge who further held that the fee in substance being a tax, such tax on sales completed outside the State would also offend article 286 of the Constitution.
However, a second appeal to the High Court was allowed on the view that the transactions which were the subject matter of the levy under Section 11(1) were transactions consisting of the purchase of the goods by the appellants and the corresponding sales to them by the producers and not the subsequent sales effected by the appellants to their cus tomers outside the notified area or the States; therefore the transactions on which the said fee was levied were effected and completed inside the notified area and fell within the expression "bought and sold" in section 11(1).
In the appeal before this court it was contended on behalf of the appellants that the transactions effected by them consisted in their purchasing the goods and stopped at the stage of goods "bought" so that no fee could be levied in the absence of the other ingredient, i.e., sale within the notified area.
HELD : The construction placed on section II (1) by the High Court was correct and the respondent Committee had therefore rightly charged the fee.
[983 B] 975 The words "bought and sold" used in section 11(1) aim at those transactions where under a dealer buys from a producer who brings to the market his goods for sale.
The transaction aimed at must be viewed in the sense in which the legislature intended it to be viewed, that is, as one transaction resulting in buying on the one hand and selling on the other.
Such a construction is commendable because it is not only in consonance with the words used in section 11 (1) but is consistent with the object of the Act as expressed through its various provisions,, i.e., to prevent the mischief of exploitation of producers of commercial crops such as coconuts and copra and to see that such producers got a fair price for their goods.
[982 A B, E F] Kutti Koya vs State of Madras A.I.R. 1954 Mad. 621; Satyanarayana and Venkataraju Firm vs Godavari Market Committee A.I.R. 1959 Andh.
Pra. 398; M.C.V.S. Arunachala Nadar vs The State of Madras [1959] Suppl.
1 S.C.R. 92; Louis Drevfus & Co. vs South Arcot Groundnut Market Committee ; referred to.
|
iminal Appeal No.138 of 1966.
Appeal by special leave from the judgment and order dated March 22, 1966 of the Allahabad High Court, Lucknow Bench in Criminal Appeal No. 82 of 1965.
S.P. Sinha and M. I. Khowaja, for the appellant.
O.P. Rana, for the respondent.
The Judgment of the Court was delivered by Shah, J.
The appellant Healy was an employee of the NorthEastern Railway and was posted in March 1959 as a platform Inspector at Gorakhpur Railway Station.
The appellant told Ghammoo a sweeper working under him that unless he was paid a bribe of Rs. 15 Ghammoo would be marked absent.
Ghammoo 950 at first demurred but later agreed to pay the amount demanded and to give a bottle of liquor, and thereafter made a report to the R.S.O., Special Police Establishment at Gorakhpur about the demand made by the appellant.
Arrangements were made to set a trap.
On March 27, 1959, Ghammoo went.t to the office of the appellant and paid Rs. 15 in currency notes which had been duly marked by the Special Police Establishment Officers and half a bottle of liquor.
The appellant.
after receiving the currency notes assured Ghammoo that he "would not be harassed any more." Thereafter the police officers and the witnesses who were watching the appellant rushed into his office and recovered the currency notes and the bottle of liquor from him.
The appellant was prosecuted for offences under section 161 I.P. Code and section 5(1)(d) read with section 5(2) of the Prevention of Corruption Act, 1947, after obtaining the sanction of the Deputy Chief Commercial Superintendent.
It was discovered during the course of the trial that the Deputy Chief Commercial Superintendent was not competent to sanction the prosecution of the appellant.
The Special Judge, at the request of the public prosecutor, by order dated May 27, 1960, quashed the proceeding.
Thereafter a fresh sanction was obtained from the Chief Commercial Superintendent, North Eastern Railway, Gorakhpur and the proceeding was again started against the appellant on a charge for offences under section 161 I.P. Code and section 5(1)(d) read with s, 5(2) of the Prevention of Corruption Act, 1947.
The appellant was convicted by the Special Judge and was sentenced to suffer rigorous imprisonment for two years on each count, the sentences to run concurrently.
The order was confirmed in appeal by the High Court of Allahabad.
The appellant has appealed to this Court with special leave.
The evidence of Ghammoo, and J.K. Mehta and V.P. Chaturvedi officers of the Special Police Establishment, and two panchas Krishna Lal and Gandhi Singh was accepted by the Special Judge and by the High Court, the Special Judge held that the appellant had under a threat compelled Ghammoo to give him Rs. 15 and half a bottle of liquor.
The marked currency notes were found on the person of the appellant when the police officers rushed into his office immediately after he received the currency notes from Ghammoo.
The story of the appellant that Ghammoo had been instrumental in filing a false prosecution due to enmity was discarded.
His story that the currency notes and the bottle of liquor were brought by Ghammoo voluntarily and had been placed on his table without any demand by him was also rejected.
There is therefore clear evidence to establish the case for the prosecution that the appellant received a bribe from Ghammoo as a motive for forbearing to show in the exercise of his official functions disfavour against Ghammoo.
951 Counsel for the appellant, however, raised three contentions in support of the appeal: (1 ) The trial by the Special Judge was without jurisdiction because the appellant had been previously tried and had been acquitted in respect of the same offence.
In support of this contention counsel contended that the sanction given by the Deputy Chief Commercial Superintendent for prosecuting the appellant under the Prevention of Corruption Act was a valid sanction, and the order passed by the Special Judge on May 27, 1960, quashing the proceeding at the request of the public prosecutor amounted in law to an order of acquittal and the ,appellant could not again be tried for the same offence.
By virtue of section 6(c) of the Prevention of Corruption Act, 1947, a Court may take cognizance of an offence punishable under section 161 I.P. Code or under section 5 (2) of the Prevention of Corruption Act in the case of a public servant not employed in connection with the affairs of the Union or the affairs of a State, only with the previous sanction of the authority competent to remove him from office.
Cognizance was taken of the offences for which the appellant was tried at the first trial with the sanction of the Deputy Chief Commercial Superintendent, North Eastern Railway, Gorakhpur.
On May 27, 1960, the public prosecutor applied for withdrawal of the case of the prosecution on the ground that the sanction was ineffective.
The Special Judge granted the request and ordered that the proceeding be quashed.
Thereafter a fresh sanction was obtained from the Chief Commercial Superintendent, North Eastern Railway, Gorakhpur.
It is contended that the Deputy Chief Commercial Superintendent was competent to sanction the prosecution of the appellant and the order quashing the trial operated as an order of acquittal.
The appellant was appointed by the Traffic Manager of the O.T. Railway in 1947.
After the amalgamation of that Railway with the North Eastern Railway the office of Traffic Manager was abolished and the powers of that Office were thereafter exercisable by the Chief Commercial Superintendent of the North Eastern Railway.
Under r. 1705 cl.
(c) of the Indian Railway Establishment Code no railway servant is liable to be removed or dismissed by an authority lower than that by which he was appointed to the: post held by him substantively.
This rule in substance gives effect to article 311 (1 ) of the Constitution.
Since the appellant was appointed by the Traffic Manager of the O.T. Railway, after amalgamation of that Railway, the power to remove the appellant could be exercised by the Chief Commercial Superintendent.
Counsel for the appellant urged that under cl.
(i) of r. 1704 of the Indian Railway Establishment Code, the authorities specified in column 3 of Sch.
I appended to the Rules in Ch.
XVII of the State Railway Establishment Code Vol. 1, may impose the penalties specified in column 4 upon the classes of railway servants shown in column 952 2 of that Schedule, and Sch.
I which occurs in Appendix III confers upon the Deputy Heads of Department "full powers" of removal from service.
Consequently, it was said, the Deputy Chief Commercial Superintendent had the power to remove the appellant from service, and was competent to grant sanction under section 6 of the Prevention of Corruption Act for the prosecution of the appellant, and that the order passed by the Special Judge quashing the proceeding on May 27, 1960, amounted to an order of acquittal.
But r. 1704 is subject to the provisions of r. 1705, and by r. 1705 it is expressly provided that a railway servant shall not be removed or dismissed by an authority lower than that by which he was appointed to the post head by him substantively.
The powers exercisable under r. 1704(i) being subject to cl.
(c) of r. 1705, and also to the provisions of article 311 of the Constitution, the Deputy Chief Commercial Superintendent could not remove the appellant from service.
It follows therefore that the Deputy Chief Commercial Superintendent had no power to grant sanction for prosecution of the appellant, since he was an officer inferior in rank to the Officer who had appointed the appellant as a railway servant.
The Court may take cognizance of an offence against a public servant for the offences set out in section 6 of the Prevention of Corruption Act only after the previous sanction of the specified authority is obtained.
The Special Judge who had taken cognizance of the.case on a sanction given by the Deputy Chief Commercial Superintendent was incompetent to try the case, and an order of acquittal passed by a Court which had no jurisdiction does not bar a retrial for the same offence.
It is unnecessary, therefore, to consider whether the order quashing the proceeding amounted to an order of acquittal.
(2) The facts necessary to ,appreciate the second contention about the irregularity of the procedure followed by the Special Judge are these: J.K. Mehta and V.P. Chaturvedi were examined as witnesses for the prosecution before Mr. Fakhrul Hasan, Special Judge.
Their evidence was recorded in accordance with section 356 Code of Criminal Procedure under supervision of the Special Judge, and record of the evidence was made in Hindi and an English memorandum of the evidence was also maintained by the Special Judge.
The statements of the witnesses were read over to them 'and were signed by them in acknowledgment of their correctness.
But Mr. Fakhrul Hasan died before he could append his signature thereto.
Before the successor of Mr. Fakhrul Hasan, J.K. Mehta and V.P. Chaturvedi were recalled and their evidence which was previously recorded was read over to them.
They confirmed its correctness.
The Special Judge 'also offered to counsel for the appellant opportunity to cross examine the witnesses, but the offer was declined.
No objection was raised to the reading over of the evidence to the witnesses.
It was not suggested 953 that the witnesses should be re examined.
The Special Judge thereafter subscribed his signature to the record of the statements of the witnesses, and to the English memoranda of evidence.
There is no suggestion of injustice actual or possible arising from the failure to comply strictly with the statute: it is contended that failure to observe the letter of the law invalidated the trial.
Section 356( 1 ) of the Code of Criminal Procedure provides: "In all other trials before Courts of Session and Magistrate . the evidence of each witness shall be taken down in writing in the ,language of the Court, either by the Magistrate or Sessions Judge with his own hand or from his dictation in open Court or m his presence and hearing and under his personal direction and superintendence, and the evidence so taken down shall be signed by the Magistrate or Sessions Judge ,and shall form part of the record." Evidence of the witnesses was recorded in the presence and hearing and the personal direction and superintendence of Mr. Fakhrul Hasan.
Mr. Fakhrul Hasan died before he could subscribe his signature.
It is true that the Legislature has enacted that "the evidence so taken down shall be signed by the Magistrate or Sessions Judge".
As observed by Lord Campbell in the case of the Liverpool Borough Bank vs Turner(1): "No universal rule can be laid down for the construction of statutes, as to whether mandatory enactments shall be considered directory only or obligatory, with an implied nullification for disobedience.
It is the duty of Courts of Justice to try to get at the real intention of the legislature by carefully attending to the whole scope of the statute to be construed.
. . in each case you must look to the subject matter, consider the importance of the provision that has been disregarded, and the relation of that provision to the general object intended to be secured by the Act, and, upon a review of the case in that aspect, decide whether the matter is what is called imperative or only directory.
" Section 356 deals with the mode of recording evidence.
The object of the section is to maintain a correct record of the testimony of the witnesses.
The section occurs in Ch.
XXV of the Code, 'and deals with the mode of taking and recording evidence in inquiries and trials.
To ensure a fair trial it is provided that the evidence shall be recorded in the presence of the accused, or where his presence is dispensed with in the presence of his lawyer, (1) ; 954 (section 353 ): in cases tried before the Court of Session, or Magistrates other than Presidency Magistrates, the evidence shall be taken down in writing in the language of the Court either in his own hand by the presiding officer or under his direction in open Court, or in his presence and hearing and under his personal supervision, and shall be signed by him, (section 356): the evidence shall after it is completed be read over to each witness, in the presence of the accused or his lawyer, and it may, if necessary, be corrected, Is. [360(1)]: if the evidence is taken down in 'a language different from the language in which it is given, and the witness does not understand the language in which it is taken down, it shall be interpreted to him Is.[360(3)]: if the accused does not understand the language in which the evidence is given, it shall be interpreted in the language understood by him: and the statement of the accused shall be recorded in the form of questions and answers, Is.
[364(1)], whereas the evidence of witnesses shall unless otherwise directed be taken in narrative form.
Compliance with the provisions is insisted upon in the larger interest of justice, but every departure from the strict letter of the law will not affect the validity of the trial.
The object of the provisions being to ensure that a correct record is maintained of what is said in Court ' by witnesses, so that it may be available at a later stage of the trial and in 'appeal, if the Court is satisfied that in a given case the record notwithstanding any departure from the provisions is correct the irregularity may be ignored if no injustice has resulted therefrom.
A rule relating to.the appending of the signature of the Judge on the record of the evidence does not go to the root of the trial.
Section 537 Code of Criminal Procedure is intended to meet situations in which the strict letter of the law is not complied with.
The section, insofar as it is material, provides: "Subject to the provisions hereinbefore contained, no finding, sentence or order passed by a Court of competent jurisdiction, shall be reversed or altered under Ch.
XXVII or on appeal or revision on account (a) of any error, omission, or irregularity in the complaint, summons, warrant, proclamation, order, judgment or other proceeding before or during trial or in any inquiry or other proceeding under this Code, or Explanation.
In determining whether any error, omission or irregularity in any proceeding under this Code has occasioned a failure of justice.
the Court shall have regard to the fact whether the objection could and 955 should have been raised at an earlier stage in the proceedings.
" There was irregularity in maintaining the record of the evidence at the trial, because the evidence was recorded before one Judge and another Judge subscribed his signature to the record of that evidence.
There was, therefore, no strict compliance with the provisions of section 356(1) Code of Criminal Procedure.
But no ground for holding that the trial is vitiated is made out merely because instead of the Judge who heard the evidence, his successor had signed the record.
In Abdul Rahman vs King Emperor(1), at the trial of a person accused of a charge for abetment of forgery the deposition of witnesses were read over to them while the case otherwise proceeded, and the evidence of some other witnesses was handed over to them to read to themselves.
There was violation of section 360 Code of Criminal Procedure which provided that deposition of each witness should be read over to him in the ' presence of the accused or his pleader.
An objection was raised as to the validity of the order of conviction on the ground that the requirements of section 360 of the Code of Criminal Procedure were not complied with.
No inaccuracy in the deposition was suggested, but only failure to comply with the strict requirements of section 360 was made the ground on which the trial was contended to be vitiated.
The Judicial Committee observed that there had been no actual or possible failure of justice.
According to the Judicial Committee reading over of the depositions of the witnesses while the case was otherwise proceeding was not a violation of section 360 of the Code, and that giving of depositions to witnesses to read to themselves was rightly treated by the High Court as an irregularity curable under section 537 of the Code of Criminal Procedure.
Failure to record the evidence of witnesses J.K. Mehta and V.P. Chaturvedi again in the presence and under the superintendence of the Judge who signed may be a regrettable irregularity, but it does not vitiate the trial.
Counsel for the appellant, however, invited our attention to the judgment of the Privy Council in Nazir Ahmad vs The King Emperor(2), and contended that where the Legislature has prescribed a method in respect of a certain thing, it means that that is the only method in which the thing must be done or not at all.
Counsel said that the method of recording the evidence and of maintaining the record is prescribed by section 356 of the Code of Criminal Procedure and no substitute is permissible.
In our judgment, the principle of Nazir Ahmed 's case(2) has no application here.
That was a case in which the appellant who was charged with dacoity and murder was convicted on the strength (1) L.R. 54 I.A. 96.
(2) L.R. 63 I.A. 372.
956 of a confession said to have been made by him to a magistrate of the class entitled to proceed under the provisions of section 164 of the Code of Criminal Procedure relating to the recording of Confessions.
The confession was not recorded according to the procedure prescribed by section 164 of the Code of Criminal procedure and the record of the confession was not therefore available as evidence.
The Magistrate however appeared as 'a witness and gave oral evidence about the making of the confession.
The Judicial Committee held that the oral evidence of the Magistrate of the alleged confession was inadmissible.
According to the Judicial Committee the effect of sections 164 and 364 of the Code of Criminal Procedure, construed together, is to prescribe the mode in which confessions are to be dealt with by magistrates when made during an investigation.
The rule that where a power is given to do a certain thing in a certain way the thing must be done in that way, to the exclusion of all other methods of performance, or not at all, was applicable to a magistrate, who is a judicial officer, acting under section 164.
In that case, in the view of the Judicial Committee, the only manner in which a judicial confession could be recorded is the one prescribed by section 164 of the Code of Criminal Procedure and if it is not so corded no evidence of the making of that confession was admissible.
The reasons for that view were explained by the Judicial Committee.
A judicial confession in a trial is of greater sanctity because it is recorded before an independent Judicial Officer after taking full precautions to ensure that the accused making the confession is free from all police or other influence and after the accused has had sufficient opportunity of considering whether he should or should not make confession and that there is no compulsion upon the accused to make a confession.
The law requires that the accused must be explained that he is not bound to make the confession.
A confession obtained in such circumstances has great probative value in considering its voluntary character.
Section 164 prescribes stringent rules as to the manner in which the confession has to be recorded.
If the rules are not complied with, there is no guarantee that the confession has been voluntarily made.
It is in the context of these provisions that the Judicial Committee held that confession which is not recorded in the manner prescribed by section 164 of the Code of Criminal Procedure cannot be deposed to by a Magistrate as if it was an extra judicial confession.
The Judicial Committee observed that when the Legislature has prescribed the method of recording the confessions under section 164 and section 364 it would be an unnatural construction to hold that any other procedure was permitted than that which is laid down with such minute particularity in the sections themselves.
They further observed: "As 'a matter of good sense, the position of accused persons and the position of magistracy are both to be 957 considered.
An examination of the Code shows how carefully and precisely defined is the procedure regulating what may be asked of or done in the matter of examination of, accused persons, and as to how the results are to be recorded and what use is to be made of such records.
Nor is this surprising in a jurisdiction where it is not permissible for an accused person to give evidence on oath.
So with regard to the magistracy: it is for obvious reasons most undesirable that magistrates and judges should be in the position of witnesses in so ,far as it can be avoided.
Sometimes it cannot be avoided, as under section 533; but where matter can be made of record and therefore admissible as such there are the strongest reasons of policy for supposing that the Legislature designed that it should be made available in that form and no other.
In their Lordships ' view, it would be particularly unfortunate if magistrates were ,asked at all generally to act rather as police officers the as judicial persons, to be by reason of their position freed from the disability that attaches to police officers under section 162 of the Code; and to be at the same time freed, notwithstanding their position as magistrates, from any obligation to make records under section 164." No such considerations apply to the record of evidence of witnesses given in open court made in the presence and under the personal supervision of a Judge and in the presence of the accused, and his lawyer.
(3) It was then urged that the investigation was made by an officer who had no 'authority to investigate the offence.
After Ghammoo made his complaint sanction of the Additional District Magistrate (Judicial) was obtained for investigation of the case by a police officer below the rank of a Deputy Superintendent of Police.
Section 5A(1 )(d) of the Prevention of Corruption Act, 1947, provides: "No police officer below the rank of a Deputy Superintendent of Police shall investigate any offence punishable under section 161, section 165 or section 165A of the I.P.C. or under section 5 of this Act without order of a Presidency Magistrate or a Magistrate of the First Class, as the case may be, or to make any arrest therefore without a warrant . " The Legislature has provided that ordinarily investigation of a case against a public servant should be made by an officer not below the rank of a Deputy Superintendent of Police in connection with the charge of bribery and related offences.
But the Legis 958 lature has expressly provided that an Officer below the rank of a Deputy Superintendent of Police may investigate those offences with the order of a Presidency Magistrate or a Magistrate of the First Class.
In the present case the order of the Additional District Magistrate who held the office of a First Class Magistrate was obtained authorising an Officer below the rank of a Deputy Superintendent of Police to investigate the offence.
No objection is raised to the regularity of the proceeding before the Additional District Magistrate, nor is there any ground that for an oblique motive, services of an officer below the rank of a Deputy Superintendent of Police were used in making the investigation against the appellant.
The third contention must also fail.
The appeal fails and is dismissed.
R.K.P. section Appeal dismissed.
| Clause 3 of the Cotton Textile (Control of Movement) Order, 1948, promulgated by the Central Government under section 3 of the Essential Supplies (Temporary Powers) Act, 1946, does not deprive a citizen of the right to dispose of or transport cotton tex B tiles purchased by him.
It requires him to take a. permit from the Textile Commissioner to enable him to transport them.
The requirement of a permit in this respect cannot be regarded as an A unreasonable restriction on the citizen 's right under sub clauses (f) and (g) of article 19(1) of the Constitution.
The policy underlying the Control Order is to regulate the transport of cotton textiles in a manner that will ensure an even distribution of the commodity in the country and make it available at a fair price to all.
The grant or a refusal of a permit is to be governed by the policy and the discretion given to the Textile Commissioner is to be exercised in such a way as to effectuate this policy.
The conferment of such a discretion cannot be called invalid and if there is an abuse of power there is ample power in Courts to undo the mischief.
Messrs. Dwarka Prasad Laxmi Narain vs The State of Uttar Pradesh (([1954] S.C.R. 803) distinguished.
It was settled by the majority judgment in the Delhi Laws Act case ([1951] 'S.C.R. 747) that the essential powers of legislation cannot be delegated.
The Legislature must declare the policy of the law and the legal principles which are to control any given cases and must provide a standard to guide the officials or the body in power to execute the law.
The Legislature has laid down such a principle in the Act and that principle is the maintenance or increase in supply of essential commodities and of securing equitable distribution and availability at given prices.
The preamble and the body of the sections in the Essential Supplies (Temporary Powers) Act, 1946, sufficiently formulate the legislative policy and the ambit and the character of the Act is such that the details of that policy can only be worked out by delegating that power to a subordinate authority within the framework of that policy.
Therefore section 3 of the Act is not ultra vires the Legislature on the ground of delegation of legislative power.
Section 4 of the Act enumerates the classes of persons to whom the power could be delegated or sub delegated by the Central Government and it is not correct to say that the instrumentalities have not been selected by the Legislature itself.
Accordingly section 4 of the Act is not ultra vires on the ground of excessive delegation of legislative powers.
Shannon vs Lower Maintand Dairy Products Board ([1938] A.C. 708) applied.
382 The requirements of a permit by clause 3 and the provisions of clause 4 of the Central Order which empower the Textile Commissioner to direct a carrier to close booking or transport of cloth apparel, etc., are not in conflict with sections 27, 28 and 41 of the Railways Act.
These clauses merely supplement the relevant provisions of the Railways Act and do not supersede them. ' Section 6 of the Act does not either expressly or by implication repeal any of the provisions of the preexisting laws ; nor does it abrogate them.
Those laws remain untouched and unaffected so far as the statute book is concerned.
The repeal of a statute means that the repealed statute must be regarded as if it had never been on the statute book.
The effect of section 6 is not to repeal those laws or abrogate them but simply to by pass them where they are inconsistent with the provisions of the Essential Supplies (Temporary Powers) Act, 1946 or the orders made thereunder.
Even assuming that the existing law stands repealed by implication, such abrogation or repeal is by force of the legislative declaration contained in section 6 and is not by force of the order made by the delegate under section 3.
Accordingly there is no delegation involved in the provision of section 6 and it cannot be held uncon stitutional on that ground.
|
Appeals Nos. 105 and 106 of 1957.
Appeals from the judgment and decree dated April 8, 1954, of the Assam High Court in Appeal from Appellate Decree Nos. 41 and 54 of 1951.
L. K. Jha and D. N. Mukherjee, for the appellant.
Naunit Lal, for respondents Nos. 1 to 12.
February 23.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
These two appeals arise from a suit instituted by the appellant in the Court of the Special Subordinate Judge, Assam Valley Districts, in which he claimed a declaration that the sale deeds of lands described in detail in the various Schedules attached to the plaint were void and for possession of the lands covered by the said sale deeds.
His case was that Madhab Temple at Hajo is a very ancient temple and the Assam Rajahs had granted lands to the Bardeuries (temple officials) to enable them to render service to the deities installed in the said temple.
The lands thus granted to the temple officials were endowed lands and the same had been burdened with service to the temple; in other words, the grantees were entitled to enjoy the lands on condition that they rendered the requisite service to the temple.
As a corollary of the 949 burden imposed on the grantees by the said grant the lands were inalienable to strangers though they could be transferred to any of the Bardeuries of the temple.
According to the appellant the said lands had originally been granted to Hem Kanta Sarma and Uma Kanta Sarma who were then the worshippers at the temple.
The respondents who were impleaded to the" suit represented the heirs of the original grantees and assignees from those heirs.
The appellant has brought this suit on behalf of the Madhab Temple at Hajo, and his case is that the alienations made by the worshippers in favour of non worshippers were invalid and so the temple was entitled to claim a declaration as set out in the plaint and to ask for possession of the lands unauthorisedly transferred to the predecessors in title of the respondents.
The lands in suit have been described in detail and specified in three Schedules called Ka, Kha and Ga. The respondents denied this claim.
They urged that the original grants were not burdened with service and were alienable without any restriction whatever.
They also pleaded that they had purchased the lands bona fide for valuable consideration and without notice of any such burden or obligation subsisting on the lands.
Besides, they added a plea of limitation in respect of the lands specified in Schedules Kha and Ga. The trial court upheld the appellant 's contention and made a finding that the lands in suit were burdened with service with the result that the impugned alienations were void.
It also found that the purchasers had not shown that they had made adequate enquiries and so their plea that they were purchasers without notice could not be sustained.
On the question of limitation, however, it accepted the plea raised by the respondents in respect of the lands described in Schedules Kha and Ga. In regard to the lands described in Schedule Ka the trial Court directed that the appellant should obtain delivery of possession of the said lands through the transferor defendants or their heir if the latter were willing to render service to the temple; otherwise the appellant was held entitled to get independent possession and the said transferors 950 would be deemed to have relinquished their interest in the said lands.
This decree gave rise to cross appeals before the District Court.
The said appeals were heard together and the appellate court confirmed the decree passed by the trial court in respect of Kha and Ga lands.
In regard to the lands in Schedule Ka the appellate court maintained the declaration in favour of the appellant but discharged the conditional decree for possession because it held that in regard to the said lands the appellant must be left to move the sovereign authority to sue for resumption of the said lands.
This appellate decree became the subject matter of two appeals and cross objections before the High Court.
The High Court has held that the finding concurrently recorded by the courts below in regard to the burden subsisting on the lands in question was based on evidence most of which was hearsay and the whole of which taken together was meager and insufficient in law to sustain the said finding.
The High Court has also criticised the courts below for placing the onus of proof in regard to the character of the lands on the respondents.
According to the High Court it was for the appellant to prove his case in respect of the nature of the original grant.
The High Court has then taken into account the fact that the evidence shows that many of the lands were transferred to strangers and that was inconsistent with the case made out by the appellant.
Besides, the High Court has referred to the fact that the lands in question are described as Brahmottar lands in revenue papers and that clearly shows that the said lands are heritable and transferable without restriction.
On the question of limitation the High Court has accepted the plea of the respondents that Article 144 of the Limitation Act applied.
As to the declaration granted to the appellant by the District Court the High Court has observed that the said declaration was absolutely futile.
In the result the suit preferred by the appellant has been dismissed with costs throughout.
It is this decision which is challenged before us by the appellant with a certificate granted to the appellant by the High Court in that behalf 951 The principal point which has been urged before us by Mr. Jha for the appellant is that the High Court was in error in coming to the conclusion that lands in suit which are admittedly described as Brahmottar lands in the revenue records are transferable without, any restriction.
In support of its conclusion the High Court has referred to the history of the lands, the nature of the initial grant and the recognition of the title of the grantees by the British Government after it conquered Assam and of the several steps taken thereafter.
This history has been set out in detail in the Assam Land Revenue Manual(1).
From this introduction it appears that Nisf khiraj (half revenue paying) estates as distinguished from Khiraj (full.
revenue paying) estates form a class of tenure found only in Assam Proper and they have a special history of their own.
In 1834, shortly after Assam was annexed by the Government of India it ruled that " all rights to hold lands free of assessment founded on grants made by any former Government must be considered to have been cancelled by the British conquest.
All claims therefore for restoration to such tenure can rest only on the indulgence of the Government without any right.
" This ruling clearly and emphatically brought out the legal consequences of political conquest.
Grants made by the previous Governments came to an end and their continuance after the conquest would depend upon the indulgence of the succeeding Government.
It appears that prior to the conquest of Assam under the previous regime the predecessors in interest of the then owners of Nisf khiraj estates held their lands revenue frce and called themselves lakhirajdars.
They continued to describe themselves as such even after their lands were resumed and assessed at half rates.
Mr. Scott, the first British Commissioner of Assam, refused to recognise any claims to hold land revenue free.
Research made by him in that behalf showed that even prior to the Burmese conquest of Assam lakhiraj land had occasionally been assessed at five annas a pura (four bighas) in timer, of trouble by (1) Vol. 1, 6th Ed., p. lxvii.
952 the Assam Rajahs themselves.
Basing himself on this precedent Mr. Scott fixed the assessment of the said land at the said rates and subsequently increased it to seven or eight annas a pura.
This imposition war, known as Police Barangani.
Captain (afterwards General) Jenkins became the Commissioner of Assam in 1834.
The lakhirajdars objected to pay the tax imposed on their lands by Mr. Scott on the ground that Mr. Scott intended to levy the said tax temporarily and had promised Lo remit it.
This dispute was referred by General Jenkins to the Government of India who replied that they saw no reason to believe that the tax imposed by Mr. Scott was intended to be temporary, and they added that if it was Mr. Scott 's intention it would Dot be valid because Mr. Scott had not obtained the sanction of the Government in that behalf.
Even so, the Government of India directed that a full enquiry should be made into all claims to rent free lands on the part of Rajahs or as debotter or dharmottar or on any other plea throughout the districts of Assam and Captain Bogle was appointed Special Commissioner to make the said enquiry under Regulation III of 1818.
This enquiry had to be held subject to the control and orders of General Jenkins.
The Government prescribed certain principles to guide Captain Bogle in his enquiry.
One of these principles was that pending the lakhiraj enquiry Mr. Scott 's moderate rates were to be levied.
The orders issued by the Government in that behalf clearly declared the right of the Government to assess all lands held revenue free in Assam Proper, but subject to this right Government were prepared to grant the indulgence of restoring to the lakhirajdars all lands held by them and to confirm them in possession.
It appears that the instructions issued by the Government were not fully carried out by General Jenkins.
Instead of treating all lakhiraj lands as being on the same footing and liable to assessment the General drew a broad distinction between debotter lands which were appropriated to temples and lands known as brahmottar or dharmottar, that is to say, 953 lands devoted to some religious purpose not being temple lands.
In respect of the former he confirmed the grants revenue free.
In respect of the latter be simply confirmed the grantees in possession subject to the payment of Mr. Scott 's favourable rates until, Captain Bogle 's enquiry was terminated and final orders passed in that behalf It is curious that though the enquiry of Captain Bogle went on for many years it was not formally completed till the year 1860.
By that time the instructions issued by the Government of India at the commencement of the enquiry were lost sight of.
No report was submitted to the Government by the enquiring officer and final orders of the Government of India were not obtained on the question whether the holders of brahmottar and dharmottar lands were to hold their lands at the rates fixed by General Jenkins.
In consequence holders of these lands have ever since continued to hold at half rates without any formal decision by the Government of India having been reached in that behalf.
Subsequently the holders ' rights to continue to hold the lands at the said rates have been recognised and their holdings have been declared to be heritable and transferable by the Government of India in 1879.
This summary of the history of these lands which is to be found in the introduction to the Assam Land Revenue Manual shows that Nisf khirajdar of the present day " is ordinarily a person whose lands were claimed by his ancestors revenue free on the ground that they were granted by the Assam Rajas for some religious or charitable purpose".
It appears that the word " Nisf khiraj " was invented for the first time in 1871 and it applied to all estates which paid half the ordinary revenue rates.
This word was presumably invented to avoid confusion caused by the use of the word " lakhiraj which had been applied to them prior to 1871.
The history of this tenure is similarly stated in the Government Gazette relating to Assam as well as by Baden Power (Vol.
III, pp.
406 following).
954 At this stage it would be necessary to refer to the relevant provisions of Regulation 1 of 1886,.
It in called the Assam Land and Revenue Regulation of the said year.
Section 3(g) of this Regulation defines " land holder " as meaning any person deemed to have acquired the status of a land holder under section 8 ; while section 8 (1) provides, inter alia, that any person who has, before the commencement of this Regulation, held immediately under the Government for ten years continuously any land not included either in a permanently settled estate, or in a revenue free estate, and who has during that period paid to the Government the revenue due thereon or held the same under an express exemption from revenue, shall be deemed to have acquired the status of a land holder in respect of the land.
That takes us to section 9 which provides that a land holder shall have a permanent heritable and transferable right of use and occupancy in his land subject to the provisions contained in cls.
(a), (b) and (c) of the said section.
It is unnecessary to refer to the said exceptions.
It would thus be clear, and indeed it is not disputed, that the transferor Bardeuries who held the lands in suit fall under section 8 (1) (a) and became land holders under section 3 (g).
The inevitable consequence of this position is that section 9 applies to them and their rights in the lands in their occupation are statutorily recognised to be permanent, heritable and transferable.
This statutory position is consistent with the declaration made by the Government of India in 1879, and in view of this clear statutory position it would be difficult to sustain the plea that the lands in question are burdened with the special condition that they can be transferred only to Bardeuries and not to any strangers outside the group.
As the High Court has found.
and that is no longer in dispute, these lands are described as brahmottar lands in revenue records and to the said lands and their holders the statutory provisions of the Regulation to which we have just referred applied; therefore, it is impossible to escape the conclusion that by virtue of the relevant statutory provisions of the Regulation the lands must be deemed to be heritable and transferable without any restrictions 955 This aspect of the matter was completely ignored by the trial court and the appellate court, and so the High Court was right in correcting the error which had crept into the concurrent decisions of the courts below.
Besides, the High Court was also right in holding that in a case of this kind where the appellant urged that the lands could be alienated only to a specified class of persons, the onus 'Was on the appellant and not on the respondents to prove the contrary.
Failure to put the onus on the appellant introduced a serious infirmity in the approach adopted by the courts below in dealing with this question.
That was another infirmity in their decision.
It is also clear that the evidence adduced by the appellant in support of his case to which reference has been made by the first two courts is entirely unsatisfactory and, even if it is believed, in law it would be insufficient to sustain the plea that there was a limitation on the transferability of the lands in question.
We are also satisfied that the declaration granted by the District Court was futile.
Therefore, in our opinion, the view taken by the High Court is absolutely correct and the grievance made by the appellant against the validity of the said conclusion cannot be sustained.
In the result the appeals fail and are dismissed with Costs.
Appeals dismissed.
| The plaintiff appellant filed a suit alleging that the lands in suit were unauthorisedly transferred to the predecessors in title 121 948 of the respondents.
His contention was that the lands were granted to the Bardeuries (officials) of a certain ancient temple in Assam in order to enable them to render service to the deities installed in the temple and as such the lands were inalienable to strangers other than the Bardeuries.
Held, that in view of the history of land tenure in Assam and by virtue of the relevant statutory provisions of Assam Land and Revenue Regulation (Reg. 1 of 1886) the lands must.
be deemed to be heritable and transferable without any restriction.
The transferor Bardeuries, who held the lands described as brahmottar lands in revenue records, fell under section 8(1)(a) and became " land holders " under section 3(g) of the Regulation and consequently section 9 applied to them statutorily recognising their rights in the lands to be permanent, heritable and transferable.
To prove the plaintiff appellant 's contention that the lands could be alienated only to a specified class of persons, the onus was on the appellant and not on the respondents to prove the contrary.
|
Appeal No. 62 of 1990.
From the Judgment and Order dated 2.12.1989 of the Allahabad High Court in C.M.Appn.
No. 17984 (W) of 1989 in W.P. No. 5400 of 1989.
Mukul Mudgal for the Appellant.
Anil Dev Singh, G.L. Sanghi, Mrs. Shobha Dikshit, E.C. Agrawala, Atul Sharma and V.K. Pandita for the Respondents.
The Judgment of the Court was delivered by THOMMEN, J.
This appeal by special leave is against the Order of the Allahabad High Court, Lucknow Bench, in C.M. Application No. 17984 (W) of 1989 in Writ Petition No. 5400 of 1989.
The application for clarification and modification of the judgment in the Writ Petition was filed in the High Court by the appellant, though not a party to that proceed ing, on the ground that he was adversely affected by it.
The appellant was nominated by the State of Himachal Pradesh to undergo the B.D.S. course in the State of Uttar Pradesh.
The appellant successfully completed his course of studies in Uttar Pradesh and secured the B.D.S. degree.
For that purpose he had stayed in that State for over a period of five years.
He later applied for admission to 671 the M.D.S. course at King George Medical College, Lucknow.
He secured admission to the course, but in a subject other than that of his choice.
The subject of his choice was Oral Surgery, but what was offered to him was Periodontics.
The reason for denying the appellant the subject of his choice was that he had to step down in favour of others who had come within the rule of preference as per the Notification dated August 19, 1983 issued under section 28(5) of the U.P. State Universities Act, 1974 (U.P. Act No. 29 of 1974) providing for reservation of seats and prescribing a resi dence qualification for selection to the M.D.S. course.
By the impugned order, the High Court rejected the appellant 'S prayer for clarification and modification of its judgment in Writ Petition No. 5400 of 1989 and held that that judgment was rendered in accordance with the principle laid down in its earlier decision in Writ Petition No. 5325 of 1988 where the residence qualification prescribed by the Notification was so construed as to be applicable only to a person who was a resident in the State of Uttar Pradesh for reasons other than that of merely completing a course of studies.
In other words, the High Court refused to accept the appellant 's contention that the residence qualification should be so construed as to entitle to admission a person, like the appellant, who had come from outside the State strictly and solely for the purpose of undergoing a course of studies and returning to his own State upon completion of the course.
The High Court held that residence strictly for studies without more did not bring a person within the ambit of the Notification.
This is what the High Court stated in its judgment in Writ Petition No. 5400 of 1989, clarifica tion of which was sought by the appellant: "In other words those candidates who joined B.D.S. Course on the basis of nominations made by the Central Government or their own State and were not bona fide residents of the State of Uttar Pradesh prior to joining the B.D.S. Course will not be treated to be bona fide residents of Uttar Pradesh merely because they have stayed in the State of Uttar Pradesh for five years or more for completion of the B.D.S. Course or housemanship." The appellant does not challenge the validity of the notified provisions.
The sole question which arises for consideration is as regards the construction of clause 4 of the said Notification.
Before reading that clause, it may be noticed that clause 1 of the Notification provides for reservation of seats in favour of candidates belonging to the 672 categories specified therein.
Clause 2 then provides: "2.
The remaining seats shall be filled up on the basis of merit by the candidates who have passed the B.D.S. examina tion from the K.G. Medical College, Lucknow, obtaining a minimum of 55% marks in the aggregate and who are bona fide residents of Uttar Pradesh.
(emphasis supplied) The High Court notices that clause 2 stipulates two conditions, namely (i) institutional; and (ii) residential.
The High Court observes that the appellant satisfies the first requirement the institutional, but does not fulfill the second requirement, namely, bona fide residence.
A bona fide resident is one who comes within the meaning of that expression in clause 4, which reads: "4.
For the purpose of this order the expression 'bona fide resident of Uttar Pradesh ' shall mean (a) a citizen of India, the domicile of whose father is in Uttar Pradesh and who himself is domiciled in Uttar Pradesh; or (b) a citizen of India, the domicile of whose father was not in Uttar Pradesh but who himself has resided in Uttar Pra desh for not less than five years at the time of making the application." (emphasis supplied) It is not disputed that the appellant is a citizen of India and is domiciled in India.
The question is whether he is a 'bona fide resident of Uttar Pradesh '.
The contention of the appellant before the High Court was that he had stayed in the State of Uttar Pradesh for more than five years for the purpose of completing his studies and was, therefore, fully qualified as a bona fide resident of that State.
The High Court found that residence merely for the purpose of studies would not satisfy the requirement of clause 4.
The appellant was nominated by the State of Himachal Pradesh to undergo a course of studies in the State of Uttar Pradesh and he stayed in Uttar Pradesh for over five years solely for that purpose.
There is no evidence that he had any other object for staying for that length of time, as he did, in Uttar Pradesh.
There is no evidence that 673 he had any intention of indefinitely residing in that State.
A person is treated as a 'bona fide resident of Uttar Pradesh ' in terms of sub clauses (a) and (b) of Clause 4 by reason of either his 'domicile ' or 'residence ' in that State.
While sub clause (a) speaks of the domicile of the candidate and his father, sub clause (b) speaks of a person, whose father was not domiciled in the State and who himself has resided for not less than five years in the State.
The concept of 'domicile ' is irrelevant to the construction of sub clause (b) in respect of the residence qualification of the candidate.
All that it requires is his requisite resi dence.
Domicile which is a private international law or con flict of laws concept identifies a person, in cases having a foreign element, with a territory subject to a single system of law, which is regarded as his personal law.
A person is domiciled in the country in which he is considered to have his permanent home.
His domicile is of the whole country, being governed by common rules of law, and not confined to a part of it.
No one can be without a domicile and no one can have two domiciles.
A domicile of origin is attributed to every person at birth by operation of law.
This domicile is not decided by his place of birth, or by the place of residence of his father or mother, but by the domicile of the appropriate parent at the time of his birth, according as he is legiti mate or illegitimate.
It is possible for the domicile of origin to be "transmitted through several generations no member of which has ever resided for any length of time in the country of the domicile of origin." (See Dicey & Morris, The Conflict of Laws, 10th ed.
I, Rule 9, p. 108).
The domicile of origin continues until he acquires a domicile of choice in another country.
Upon abandonment of a domicile of choice, he may acquire a new domicile of choice, or his domicile of origin, which remained in abeyance, revives.
The burden of proving a change of domicile is on him who asserts it.
The domicile of origin is more tenacious.
"Its character is more enduring, its hold stronger and less easily shaken off." Per Lord Macnaghten, Winans vs A.G., , 290.
The burden of proving that a domicile of origin is abandoned is needed much heavier than in the case of a domicile of choice.
No domicile of choice can be acquired by entering a country illegally.
The domicile of choice is a combination of residence and intention.
Residence which is a physical fact means "bodily presence as an 674 inhabitant" (Re Newcomb, ; (1908).
See Dicey, op.
Such residence must be combined with intention to reside permanently or for an unlimited time in a country.
It is such intention coupled with residence that acquires him a new domicile.
It is immaterial for this purpose that the residence is for a short duration, provided it is coupled with the requisite state of the mind, namely the intention to reside there permanently.
"If a man intends to return to the land of his birth upon a clearly foreseen and reasonably anticipated contingency", Re Fuld 's Estate (No. 3) 1968 (P) 675.
such as, the end of his studies, he lacks the intention required by law.
His "tastes, habits, conduct, actions, ambitions, health, hopes, and projects" Casdagli vs Casdagli, , 178 are keys to his intention.
"That place is properly the domicile of a person in which he has voluntarily fixed the habitation of himself and his family, not for a mere special and temporary pur pose, but with a present intention of making it his perma nent home, unless and until something (which is unexpected or the happening of which is uncertain) shall occur to induce him to adopt some other permanent home".
Lord vs Colvin, [1859] 4 Drew 366 at 376.
We must, in this connection, hasten to add that 'domi cile ', being a private international law concept, is inappo site to the relevant provisions, having no foreign element, i.e., having no contact with any system of law other than Indian, unless that expression is understood in a less technical sense (see observations to this effect in Dr. Pradeep Jain and Others etc.
vs Union of India and Others etc.
, [1984] 3 SCC 654. 666 669).
An expression which has acquired a special and technical connotation, and developed as a rule of choice or connecting factor amongst the compet ing diverse legal systems as to the choice of law or forum, is, when employed out of context, in situations having no contact with any foreign system of law, apt to cloud the intended import of the statutory instrument.
When a person is referred to as domiciled in a country, the expression 'country ' is used in private international law as a term of art denoting, in the words of dicey, "the whole of a territory subject under one sovereign to one body of law".
See Dicey & Morris, The Conflict of Laws, Vol. 1, page 24.
But in a federation like the United States, Austra lia, or Canada, or in a composite State like the United Kingdom, different systems of law may prevail in different regions in respect of certain matters.
In such cases, each of the territories governed by a separate system of law is treated, for the purpose of private international law, as a 'country ', though in public international law or 675 constitutional law it is not a separate sovereign State.
As stated by Halsbury, "in federal states, some branches of law are within the competence of the federal authorities and for these purposes the whole federation will be subject to a single system of law, and an individual may be spoken of as domiciled in the federation as a whole; other branches of law are within the competence of the states or provinces of the federation, and the individual will be domiciled in one state or province only".
Halsbury 's Laws of England Vol. 8, para 422; See D.P. Joshi vs The state of Madhya Bharat and Another, 15.
This is, however, not the position in India.
Though a Union of States, and a federation in that sense, the whole country is governed by a single unified system of law, with a unified system of judicial administration, notwithstanding the constitutional distribution of legislative powers be tween the Centre and the States.
There is no State wise domicile within the territory of India.
A man who is domi ciled in India is domiciled in every State in India and is identified with a territorial system of legal rules pervad ing throughout the country.
He is 'domiciled ' in the whole of this country, even though his permanent home may be located in a particular spot within it.
Udny vs Udny, [1869] LR 1 Sc & Div 441, H.L.; Bell vs Kennedy, i18681 LR 1 Sc & Div 307, H.L. The expression, as understood in private international law, makes no sense in the context of Clause 4, for Indian domicile cannot be limited to any particular State within India.
The full import of 'domicile ' is, there fore, inapplicable to the construction of clause 4.
We would in this connection recall the words of this Court in Dr. Pradeep Jain & Ors.
vs Union of India & Ors.
, [1984] 3 SCC 654 at 668, See also D.P. Joshi vs The State of Madhya Bharat and Another, ; "It would be absurd to suggest that the legal system varies from State to State or that the legal system of a State is different from the legal system of the Union of India, merely because with respect to the subjects within their legislative competence, the States have power to make laws.
The concept of 'domicile ' has no relevance to the applica bility of municipal laws, whether made by the Union of India or by the States.
It would not, therefore, in our opinion be right to say that a citizen of India is domiciled in one State or another forming part of the Union of India.
The domicile which he has is only one domicile, namely, domicile in the territory of India." 676 'Domicile ' for the purpose of clause 4 must, neverthe less, be understood and applied in a limited sense and in contradistinction to 'residence ', for that clause uses both the expressions and demands compliance with either of them with reference to the State of Uttar Pradesh.
Unlike 'resi dence ' which is only bodily presence, 'domicile ' in this context must necessarily mean physical residence coupled with the intention to settle down in Uttar Pradesh, al though, being confined to a particular region rather than the whole area of operation of the territorial legal system and lacking in any foreign complexion or unconcerned with any foreign element, the animus manendi required for the purpose of clause 4 is much less in quality and contents than what is required in Private International Law.
Sub clause (a) of Clause 4 prescribes no minimum length of residence or minimum degree of intention, and, however short or insignificant the two elements may be, their combination, in whatever proportion, is sufficient to constitute 'domi cile ' for the purpose of clause 4(a).
In the present case, the appellant came to the State of Uttar Pradesh with a predetermined mind, namely, to complete the chosen course of studies and return to the State which had nominated him for the purpose.
Having regard to the time and duration, the object and obligation, and the uncontro verted facts, the appellant was undoubtedly a bona fide student who resided in Uttar Pradesh for over five years, but whose residence did not acquire the attributes of 'domicile ' within the meaning of clause 4(a).
The question then is whether the appellant is a 'bona fide resident of Uttar Pradesh ' within the meaning of clause 4(b).
Residence is a physical fact.
No volition is needed to establish it.
Unlike in the case of a domicile of choice, animus manendi is not an essential requirement of residence.
Any period of physical presence, however short, may consti tute residence provided it is not transitory, fleeting or casual.
Intention is not relevant to prove the physical fact of residence except to the extent of showing that it is not a mere fleeting or transitory existence To insist on an element of volition is to confuse the features of 'resi dence ' with those of 'domicile '.
For an interesting discus sion on The Meaning of Residence, see J.D. McClean, Interna tional & Comparative Law Quarterly [1962] Vol.
II PP.
1153 et seq.
A person is ordinarily resident in a country if his residence there is not casual or uncertain, but is in the ordinary course of his life.
Per Viscount Cave, Commissioner of Inland Revenue vs Lysaght, ; Levene vs Commissioners of Inland Revenue; , 677 at p. 222.
A man may be ordinarily resident or habitually resident m more than one place.
While 'ordinary residence ' is the physical residence in regard to which intention is irrelevant, except to show that the residence is not merely fleeting, 'habitual residence ' may denote a quality of endurance longer than ordinary residence, although duration, past or prospective, is only one of the many relevant fac tors, and there is no requirement of any particular minimum period.
See Dicey & Morris; The Conflict of Laws, 10th ed., PP.
145 & 200 202.
See also Cheshire & North; Private International Law, 11th ed., PP.
171173; Halsbury 's Laws of England, 4th ed., Vol. 18 330.
In Reg vs Barnet L.B.C., Ex p. Shah, , the House of Lords held that a person was ordinarily resi dent in the United Kingdom, if he normally resided lawfully in that country from choice and for a settled purpose.
If a person resided there for the specific and limited purpose of education, he was ordinarily resident in that country, even if his permanent residence or real home was outside that country or his future intention or expectation was to live outside that country.
Residence must be voluntary.
"Enforced presence by reason of kidnaping or imprisonment, or a Robins 'on Crusoe existence on a desert island with no opportunity of escape, may be so overwhelming a factor as to negative the will to be where one is".
Per Lord Scarman, Reg vs Barnet L.B.C., exhibit p. Shah, at 344.
Education, business, profession, employment, health, family, or merely love of the place are some of the reasons commonly regarded as sufficient for a choice of regular abode.
It is only lawful residence that can be taken into account.
If a man stays in a country in breach of immigration laws, his presence there does not constitute ordinary residence.
While residence and intention are the two essential elements constituting the 'domicile of choice ' residence in its own right is a connecting factor in a national legal system for purposes of taxation, jurisdiction, service of summons, voting etc.
To read into residence volition as a necessary element is, as stated above, to mistake residence for domicile of choice, and that is the error which the High Court appears to have committed.
Where residence is pre scribed within a unified legal system as a qualifying condi tion, it is essential that the expression is so understood as to have the widest room for the full enjoyment of the right of equality before the law.
Any construction which works to the disadvantage of the citizen lawfully seeking legitimate avenues of progress within the country will be out of harmony 678 with the guaranteed rights under the Constitution, and such a construction must necessarily be avoided.
Clause 2, which we have set out above, refers to a 'bonafide ' resident and such a person is defined under clause 4 to include a person who has resided in Uttar Pra desh for not less than five years at the time of making his application.
These two clauses indicate that a person should have resided in Uttar Pradesh for the requisite period lawfully and bona.fide.
The converse of bona.fide being mala fide, meaning lack of good faith, in the absence of any allegation that the appellant 's residence in that State was in any manner opposed to the law of the land, or tainted by lack of good faith, and in the light of the undisputed fact that his residence was neither casual nor fleeting, but in excess of the minimum period of five years, and for the definite purpose of education, he satisfies the definition of a 'bonafide resident '.
Any other construction of the clauses would, in our view, be unreasonably restrictive and thus conflict with the appellant 's constitutional rights.
Viewed in this light, we have no doubt that the con struction placed by the High Court upon sub clause (b) of clause 4 of the Notification is unsustainable.
In our opin ion, a person, such as the appellant, who resided in the State of Uttar Pradesh specifically for the purpose of undergoing a course of studies for not less than five years, albeit with the intention of finally returning to his home State, also comes within the meaning of the expression 'bona fide resident ' as defined in the said clause.
In the circumstances, we set aside the impugned order of the High Court, and allow the appeal with the costs of the appellant here and in the High Court.
N.V.K. Appeal allowed.
| 14 accused were tried for offences under section 148 and 302 read with Section 149 of I.P.C. for the murder of two persons named Mahendra Singh and Virendra Singh and injuries to 3 others named Vijay Narain Singh, P.W. 1, Uma Shankar Singh, P.W. 2 and Kailash Singh.
Accused No. 6 Chirkut Singh was further tried under Section 307 I.P.C. for attempting to murder P.W. 1 and all the remaining accused under section 307 read with Section 149 I.P.C. for causing injuries to Uma Shankar and Kailash Singh.
The trial court relying on the evidence of P.Ws 1 and 2 who were the main eye witnesses convicted all the 14 accused under section 302 I.P.C. read with Section 149 I.P.C. and awarded them life imprisonment.
The convicted accused preferred appeals to the High Court and the State filed appeals for enhancement of their sen tence.
A Division Bench of the Allahabad High Court consist ing of Justice Katju and Aggarwal heard the appeals.
While Justice Katju allowed the appeals by the accused and dis missed the State appeals, Justice Aggarwal disagreeing with him, dismissed all the appeals, both by the accused and by the State.
Consequently the matter was referred to a third judge.
Justice Seth who confirmed the conviction and sen tence awarded to accused Nos. 1, 3, 4 and 6 only and acquit ted all the rest of the accused on the view taken by him that the specific overt acts were attributable to only these four accused and the rest should be given the benefit,of doubt.
Criminal Appeals Nos.
375 377 of 1987 by special leave were preferred by the convicted accused Nos. 1, 3, 4 and 6 and Criminal Appeals Nos.
372 374 of 1987 preferred by the State against the acquittal of other accused.
Accepting the plea of the accused to the right of selfdefence but holding that they had definitely exceeded this right when they went to the extent of intentionally shooting the deceased to death and therefore the offence committed was one punishable under section 574 304 Part I I.P.C. and not under Section 302 read with Sec tion 149 I.P.C. Accordingly in partly allowing the Appeals filed by the convicted accused and dismissing the State appeals, this Court, HELD: A fact is said to be "proved" when, after consid ering the matters before R, the Court either believes it to exist or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists.
[596G H] A fact is said to be 'disproved ' when, after considering the matters before it, the Court either believes that it does not exist, or considers its non existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it does not exist.
A fact is said to be "not proved" when it is neither "proved" nor "disproved".
[596H; 597A] The maxim that the prosecution must prove its case beyond reasonable doubt is a rule of caution laid down by the Courts of Law in respect of assessing the evidence in criminal cases.
[601E] Section 105 places "burden of proof ' on the accused in the first part and in the second part there is a presumption which the Court can draw regarding the absence of the cir cumstances, which presumption is always rebuttable.
Taking the section as a whole the "burden of proof" and the pre sumption have to be considered together.
It is exiomatic when the evidence is sufficient as to prove the existence of a fact conclusively then no difficulty arises.
But where the accused introduces material to displace the presumption which may affect the prosecution,case or create a reasonable doubt about the existence of one or other ingredients of the offence and then it would amount to a case where prosecution failed to prove its own case beyond reasonable doubt.
[601F G] The initial obligatory presumption regarding circum stances gets lifted when a plea of exception is raised.
More so when there are circumstances on the record, gathered from the prosecution evidence, chief and cross examinations, probabilities and circumstances, if any, introduced by the accused, either by adducing evidence or otherwise creating a reasonable doubt about the existence of the ingredients of the offence.
In case of such a reasonable doubt, the Court has to give the benefit of the same to the accused.
[601H; 602A] The presumption regarding the absence of existence of circumstances regarding the exception can be rebutted by the accused by intro 575 ducing evidence.
If from such a rebuttal, a reasonable doubt arises regarding his guilt, the accused should get the benefit of the same.
Such a reasonable doubt consequently negatives one or more of the ingredients of the offence charged, for instance, from such a rebuttal evidence, a reasonable doubt arises about the right of private defence then it follows that the prosecution has not established the necessary ingredients of intention to commit the offence.
In that way the benefit of a reasonable doubt which arises from the legal and factual considerations even under Section 105 of the Evidence Act should necessarily go to the accused.
[602C E] Section 3 is so worded as to provide for two conditions of mind, first, that in which a man feels absolutely certain of fact, in other words, "believes it to exist" and secondly in which though he may not feel absolutely certain of a fact, he thinks it so extremely probable that a prudent man would under the circumstances act on the assumption of its existence.
[602G H; 603A] The Evidence Act while adopting the requirement of the prudent man as an appropriate concrete standard by which to measure proof at the same time contemplates of giving full effect to be given to circumstances or condition of proba bility or improbability.
It is this degree of certainty to be arrived where the circumstances before a fact can be said to be proved.
[603D] The general burden of establishing the guilt of accused is always on the prosecution and it never shifts.
Even in respect of the cases covered by Section 105 the prosecution is not absolved of its duty of discharging the burden.
The accused may raise a plea of exception either by pleading the same specifically or by relying on the probabilities and circumstances obtaining in the case.
[606F G] In the instant case, as per the evidence of the material witnesses, the two deceased were only proceeding alongwith the rasta towards the pump set for taking bath.
Even in the plea set up by accused No. 6 it is not stated specifically that deceased Nos. 1 and 2 were armed with any deadly weap ons.
Therefore, the assailants had definitely exceeded the right of private defence when they went to the extent of intentionally shooting them to death by inflicting bullet injuries.
Therefore, the offence committed by them would be one punishable under Section 304 Part I I.P.C.
The convic tion of accused No. 1, 3, 4 and 6 under Section 302 read with Section 149 I.P.C. and the sentence of rigorous impris onment for life awarded thereunder is set aside and instead they are 576 convicted under Section 304 Part I read with Section 34 I.P.C. and each of them sentenced to undergo rigorous im prisonment for 10 years.
Their other convictions/sentences are confirmed the sentences to run concurrently.
[608C E] Mohar Rai & Bharath Rai vs The State of Bihar, ; ; Lakshmi Singh & Ors.
vs State of Bihar, ; Pratap vs State of Uttar Pradesh, AIR 1976 S.C. 966; Woolmington vs The Director of Public Prosecutions, [1935] Appeal Cases 462; Emperor vs U. Damapala, AIR 1937 Rangcon 83; Parbhoo & Ors.
vs Emperor, AIR 1941 Allahabad 402; K.M. Nanavati vs State of Maharashtra, [1962] Suppl.
1 SCR 567; Dahyabhai Chhaganbhai Thakkar vs State of Gujarat, ; ; Rishi Kesh Singh & Ors.
vs The State, AIR 1970 Allahabad 51; Bhikari vs State of Uttar Pradesh, ; ; Behram Khurshed Pesikaka vs The State of Bombay, ; Government of Bombay vs Sakur, AIR 1947 Bombay 38; State of Uttar Pradesh vs Ram Swarup, ; ; Mohd. Ramzani vs State of Delhi, AIR 1980 S.C. 1341; State vs Bhima Devraj, AIR 1956 Sau. 77; Miller vs Minister of Pensions, ; C.S.D. Swami vs The State, ; ; V.D. Jhingan vs State of Uttar Pradesh, ; ; Harbhaian Singh vs State of Punjab, ; ; Amjad Khan vs The State, ; and Puran Singh & Ors.
vs State of Punjab, ; , referred to
|
s Nos. 114, 216, 223 and 252 of 1966 and 85 of 1967.
Petitions under Article 32 of the Constitution of India for the enforcement of fundamental rights.
C.B. Agarwala and K. P. Gupta, for the petitioners (in W.P.s Nos. 114, 216 and 252 of 1966 and 85 of 1967.) R.V. section Mani and K. P. Gupta for the petitioner (in W.P. No. 223 of 1966).
Niren De, Solicitor General, B. R. L. lyengar and R. N. Sachthey for the respondents (in W.Ps.
Nos. 114 and 216 of 1966).
Niren De, Solicitor General, R. H. Dhebar and R. N. Sach they, for respondents Nos. 1 to 5 (in W.P. No. 223 of 1966 and the respondents (in W. P. No. 85 of 1967).
R. N. Sachthey, for respondent No. 9 (in W. P. No. 223 of 1966).
M. K. Ramamurthi, Vineet Kumar and Shyamala Pappu for respondents Nos.
12(a) to 12(d) (in W.P. No. 223 of 1 966).
45 V. A .
Seyid Muhammad and R. H. Dhebar and R. N. Sachthey, for respondents Nos.
1 to 5 (in W. P. No. 252 of 1966).
P.C. Bhartari, for the intervener (in W.P. No. 114 of 1966).
The Judgment of WANCHOO, C.J., BACHAWAT and MITTER, JJ. was delivered by MITTER, J. The dissenting opinion of SHELAT and VAIDIALINGAM, JJ. was delivered by SHELAT, J. Mitter, J. Ms is a group of five Writ Petitions under article 32 of the Constitution challenging in four cases the validity of land acquisition proceedings started by a notification dated November 13, 1959 under section 4 of the Land Acquisition Act and declarations contained in other notifications dated March 18, 1966 onwards under section 6 of the said Act and for other incidental reliefs including the issue of appropriate writs for the purpose.
Various persons.
have joined as petitioners in three of the applications.
In Writ Petition No. 114 of 1966 the petitioners number 61.
They all own lands in village Mandawali Fazilpur, on Patparganj Road within the union territory of Delhi, the notification of the declaration under, section 6 having been made on March 18, 1966.
in Writ Petition No. 216 of 1966 there are 71 petitioners who also own lands in the same village.
Their complaint is based on the same notification under section 4 and a notification dated July 12, 1966 under section 6 of the Act.
In Writ Petition No. 223 of 1966 the single petitioner is Pandit Lila Ram who owned lands in villages Masjid Moth, Raipur Khurd and Shahpur Jat respectively within the union territory of Delhi.
His complaint is based on a section 4 notification dated September 3, 1957, a notification dated April 15, 1961 under section 6 of the Act and several awards of Land Acquisition Col lector, Delhi made in 1961.
In Writ Petition No. 252 of 1966, there are eight petitioners who owned lands in village Kotla at Patparganj Road within the union territory of Delhi.
Their grievance is against section 4 notification dated November 13, 1959 and a notification dated June 14, 1961 under section 6 of the Act.
In Writ Petition No. 85 of 1967 the sole petitioner is one Rai Bahadur Sohan Lal who owned land in village Kilokri on the Delhi Mathura Road within the union territory of Delhi.
His grievance is against section 4 notification dated November 13, 1959, a notification dated July 27, 1961 under section 6 of the Act and an award dated February 16, 1962.
Although there are some distinctive features in some of the petitions to be mentioned later, the common attack is based on the judgment of this Court delivered on February 9, 1966 in State .of
Madhya Pradesh vs V. P. Sharma(1).
That case arose out of proceedings for acquisition of land in eleven villages in Madhya Pradesh for the steel plant at Rourkela.
There a notification had been issued under section 4(1) of the Land Acquisition Act on May 16, (1) ; 46 1949 declaring that lands in eleven named villages were likely to be needed for a, public purpose i.e., the erection of an iron and steel plant.
Thereafter, notifications were issued under section 6 from time to time and some lands in village Chhawani were acquired in the year 1956.
In August 1960 a fresh notification under section 6 of the Act was issued proposing to acquire, Ac.
486 17 of land in the said village.
Some owners of the land in the village who were affected by the notification filed 'a writ petition challenging the validity of the notification under section 6.
The High Court accepted their contention whereupon the State of Madhya Pradesh came up to this Court in appeal.
It was held by this Court that sections 4, 5 A and 6 of the Land Acquisition Act were integrally connected and that acquisition always began with a notification under section 4(1) followed by consideration of all objections thereto under section 5 A and a declaration under section 6.
According to this Court, once a declaration under section 6 was made the notification under section 4(1) was exhausted and the latter section was not a reservoir from which the Government might from time to time draw out land and make declaration with respect to it successively.
The ultimate conclusion was that there could be no successive notifications under section 6 with respect to land in a locality specified in one notification under section 4(1) and in the result, the appeal of the State was dismissed.
The present Writ Petitions were all filed after the said judgment of this Court.
The omnibus notification under section 4 in four of these cases dated November 13, 1959 covered an area of Ac.
34,070 00 marked as blocks Nos.
A to T and X in a map enclosed with the notification excepting therefrom certain classes of lands, namely, (a) Government land and evacuee land, (b) land already notified either under section 4 or under section 6 of the Act for any Government scheme, (c) land already notified either under section 4 or under section 6 for house building co operative societies mentioned in annexure (iii) to the notification and the land under graveyards, tombs, shrine , and those attached to religious institutions and wakf property, The notification stated that land was required by the Government at the public expense for a public purpose, namely, the planned development of Delhi.
As already noted, there were several notifications under section 6 made from time to time, the earliest one in this series of petitions being dated June 14, 1961.
It is clear that on the basis of the judgment of this Court the validity of the notifications under section 6 of the Act after the first of the series could not be upheld in A court of law.
On January 20, 1967 an Ordinance was promulgated by the President of India styled The Land Acquisition (Amendment and Validation) Ordinance (1 of 1967).
The scheme of the Ordinance was that the Land Acquisition Act of 1894 was to have effect, subject to the amendments specified in sections 3 and 4 of the Ordin 47 ance.
Section 3 purported to amend section 5 A of the Land Acquisition Act (hereinafter referred to as the principal Act) by enabling different reports to be made in respect of different parcels of land under section 5 A of the Act.
Similarly, section 4 of the Ordinance purported to amend section 6 of the principal Act by enabling different declarations to be made from time to time in respect of different parcels of land covered by the same notification under section 4.
Section 5 of the Ordinance purported to validate all acquisitions of land made or purporting to have been made under the principal Act before the commencement of the Ordinance, notwithstanding any judgment, decree or order of any court to the contrary.
On April 12, 1967 Parliament passed an Act (Act 13 of 1967) styled The Land Acquisition (Amendment and Short Title Validation) Act, 1967.
Section 2 of this Act purported to amend section 5 A of the principal Act to allow the making of more than one report in respect of land which had been notified under section 4(1).
Section 3 similarly purported to amend section 6 of the principal Act by empowering different declarations to be made from time to time in respect of different parcels of land covered by the same notification under section 4(1) irrespective of whether one report or different reports had been made under section 5 A sub section
Clause (ii) of section 3 inserted a new proviso to section 6(1) reading.: "Provided that no declaration in respect of any particular land covered by a notification under section 4, sub section (1), published after the commencement of the Land Acquisition (Amendment and Validation) Ordinance, 1967, shall be made after the expiry of three years from the date of such publication." As a. good deal of argument turns on the interpretation of section 4 of the Amending Act, it is necessary to set the same out in extenso : "4.
(1) Notwithstanding any judgment, decree or order of any court to the contrary, (a) no acquisition of land made or purporting to have been made under the principal Act before the commencement of the Land Acquisition (Amendment and Validation) Ordinance, 1967, and no action taken or thing done (including any order made, agreement entered into, or notification published) in connection With such acquisition shall be deemed to be invalid or ever to have become invalid merely on the ground (i) that one or more Collectors have performed the functions of Collector under the principal Act in respect of the land covered by the same notification under sub section (1) of section 4 of the principal Act; (ii)that one or more reports have been made under sub section (2) of section 5 A of the principal Act, whe 48 ther in respect of the entire land, or different parcels thereof, covered by the same notification under sub section (1) of section 4 of the principal Act; (iii) that one or more declarations have been made under section 6 of the principal Act in respect of different parcels of land covered by the same notification under sub section (1) of section 4 of the principal Act; (b) any acquisition in pursuance of any notification published under sub section (1) of section 4 of the prin cipal Act before the commencement of the Land Acquisition (Amendment and Validation) Ordinance 1967, may be made after such commencement and no such acquisition and no action taken or thing done (including any order made, agreement entered into or notification published), whether before or after such commencement, in connection with such acquisition shall be deemed to be invalid merely on the grounds referred to in clause.
(a) or any of them.
(2) Notwithstanding anything contained in clause (b) of sub section (1), no declaration under section 6 of the principal Act in respect of any land which has been notified before the commencement of the Land Acquisition (Amendment and Validation) Ordinance, 1967, under sub section (1) of section 4 of the principal Act, shall be made after the expiry of two years from the commencement of the said Ordinance.
(3)Where acquisition of any particular land covered by a notification under sub section (1) of section 4 of the principal Act, published before the commencement of the Land Acquisition (Amendment and Validation) Ordinance, 1967, is or has been made in pursuance of any declaration under section 6 of the principal Act, whether made before or after such commencement, and such declaration is or has been made after the expiry of three years from the date of publication of such notification, there shall be paid simple interest, calculated at the rate of six per cent per annum on the market value of such land, as determined under section 23 of the principal Act, from the date of expiry of the said period of three years to the date of tender of payment of compensation awarded by the Collector for the acquisition of such land : Provided that no such interest shall be payable for any period during which the proceedings for the acquisition of any land were held up on account of stay or injunction by order of a court 49 Provided further that nothing in this sub section shall apply to the acquisition of any land where the amount of compensation has been paid to the persons interested before the commencement of this Act.
" Section 5 of the Amending Act repealed the Land Acquisition, (Amendment and Validation) Ordinance, 1967 and further pro vided that notwithstanding such repeal, anything done or any action taken under the principal Act as amended by the said Ordinance shall be deemed to have been done or taken under the principal Act as amended by,_this Act as it this Act had come into force on the 20th January, 1967.
The petitions before us were amended by leave of the Court so that the Validation Act of 1967 could.
be challenged.
Mr. C. B. Agarwala who appeared for the petitioners in Writ Petitions Nos. 114, 216, 252 of 1966 and 85 of 1967 raised the following points in support of the petitions : (1) The Validation Act does not revive the notification under section 4 which had become exhausted.
after the first declaration under section 6 and no acquisition could be made without a fresh notification under section 4.
(2) The Validation Act violated article 31( 2) of the Constitution inasmuch as it purported to authorise acquisitions without fresh notifications under section 4 thereby allowing compensation to be paid on the basis of the dead notification under section 4.
It was argued that once a notification under section 4 was exhausted Government had to make a fresh one under the said section; as a result thereof compensation had to be assessed on a different basis altogether.
(3) The Validation Act violated article 14 of the Constitution in various ways (a) It made discrimination inasmuch as a notification under section 4 made before the commencement of the Ordinance had to be followed by a declaration under section 6 within two years of the said ' date, whereas if a notification under section 4 was made after 20th January 1967 i.e. the date of the Ordinance, the declaration under section 6 could be made within a period of three years from the date of the notification under section 4.
The discrimination lay in the fact that whereas a declaration under section 6 had to be made in respect of a notification under section 4 bearing date subsequent to 20th January 1967 within three years, a much longer period of time might elapse between a date of declaration under section 6 and a notification under section 4 issued prior to the date of the Ordinance.
(b) If a notification under section 4 was made after the date of the Ordinance, compensation had to be paid on the basis of such notification but if a notification had been made under section 4 of the Act before the date of the Ordinance, compensation would be awarded on the basis, of the exhausted notification under section 4 however much time might have elapsed since the date of the dead notification.
50 (c)If compensation had not been paid before the Ordinance, interest at 6% had to be paid to the owner of the land on the ,amount of compensation fixed, but if the owner had received compensation before the date of the Ordinance, he had no claim to interest although the acquisition in both cases flowed from the same notification under section 4.
(d) It was open to Government to make a fresh notification under section 4 after the lapse of three years from the date of the Ordinance and such notification might be issued after every period of three years in any case where acquistion was not completed.
In such cases, owners of land would be substantially benefited by the new notification under section 4.
But if a notification had been made before the date of the Ordinance, the owner of the land would receive compensation based on the old notification although a period much longer than three years might elapse between the date of the notification under section 4 and a declaration under section 6, his only solatium being interest at 6% p.a. on the amount of the compensation.
This would result in discrimination inasmuch as a person affected by a section 4 notification prior to the date of the Ordinance would be treated.
very differently from another person whose land was acquired in terms of a notification made after the commencement of the Ordinance.
On the first point, it was argued by Mr. Agarwala that sections 2 :and 3 of the Amending Act had no retrospective operation, that there was no law which purported to validate retrospectively any but the first report made under section 5 A of the principal Act or any but the first declaration issued under section 6 of the Act and consequently there was no legal basis for the validation of such past acts by the operation of section 4 of the Amending Act.
It was therefore argued that the defect in the principal Act as pointed out by this Court in V. P. Sharma 's case(1) was not removed by section 4 of the Amending Act.
It was urged that Acts seeking to validate past transactions can only be effective if the amendment introduced had retrospective operation so as to cure the lacuna 'in the enactment from a date anterior to that of the impugned transactions.
If the Amending Act had no retrospective operation, it could not protect past transactions which would still have to be declared invalid inasmuch as the notification under section 4 made on November 13, 1959 having exhausted itself after the first declaration under section 6 was not resusciated by any provision ,of the Amending Act.
On the second point, the broad contention urged was that the amendment was hit by article 31(2) of the Constitution inasmuch as its whole purpose was to avoid payment of enhanced compensation which would be necessitated if a fresh notification had to be issued under section 4.
The notification dated November 13, 1959 (1) ; 51 having spent itself, a fresh one in the normal course would have to be issued and compensation be paid not on the basis of valuation on November 13, 1959 but on that prevailing at least 8 or 9 years afterwards which would be substantially higher.
It was argued that acquisition on the basis of any declaration under section 6 of the Act after the first one would in effect be providing for compensation on the basis of a notification under section 4 which had no relation to the acquisition.
In other words, the date of the earlier notification under section 4 must be treated to be an arbitrary date divorced, from and completely alien to the acquisition sought to be made by a subsequent declaration under section 6.
In such circumstances, the ratio of a number of decisions of this Court starting from that of The State of West Bengal vs Mrs. Bela Banerjee(1) to a recent judgment in Union of India vs
Kamalabai Harjivandas Parekh and others(2) would apply.
It is not necessary to examine all these decisions in detail.
The notable decisions to which reference was made at some length are P. V. Mudaliar vs Dy. Collector(3),, Jeejeebhoy vs Asstt.
Collector(4)and State of Madras vs D. Namasivaya Mudaliar(5).
It was argued that though the Land Acquisition Act was saved by article 31(5) (a) of the Constitution, any amendment thereto after the coming into force of the Constitution had to pass the test of article 13 and article 31(2) would apply with full force to any amendment of the Land Acquisition Act if as a result thereof a person expropriated was being deprived of compensation, i.e., the just equivalent of the property acquired.
The point sought to be made was that the notification of November 13, 1959, having exhausted itself, the value of the property at or about that date would be illusory com pensation in violation of article 31(2) in respect of a declaration under section 6 made after the first one of the series.
Reference was made to proceedings for compulsory acquisition of land in England under the Lands Clauses Acts under which "once the undertakers or authority are authorised to purchase, the next step in the normal course is to serve a notice to treat" see Halsbury 's Laws of England, third edition, Vol.
10, page 60, article 97.
It is pointed out in article 102 of the said book that "The effect of serving a notice to treat is to establish a relation analogous in some respects to that of a purchaser and vendor, a relation which binds the undertakers to take the land and binds the, land owner to give up the land subject to his being paid compensa tion, but until the price is ascertained the land remains the property of the l andowner.
Both parties have the (1) ; (2) C.A. 1564/1966 decided on 7 9 1967.
(3) ; (4) ; (5) ; 52 right to have the price ascertained and the purchase completed in manner provided by the Lands Clauses Acts.
" It was said that the English procedure ensured the payment of just equivalent of the property to the person who was deprived of it and that issue of a declaration under section 6 made years after the notification under section 4 the date of which alone was to be considered for fixing the value of the property, ignored the rights of the person to the lawful compensation aimed at by article 31(2) of the Constitution.
Reference was made to the judgment of the Judicial Committee of the Privy Council in Ezra vs Secretary of State for India(1) where on a reference to the sections of the Land Acquisition Act as they then stood, it was observed : "that the expert official charged with the duty of fixing a value should be possessed of all the information in the hands of the department, and should at the same time avail himself of all that is offered at the enquiry, his ultimate duty being not to conclude the owner by his so called award, but to fix the sum, which in Ms best judgment is the value and should be offered.
" On the question of violation of article 14 of the Constitution, besides the general argument already referred to, it was urged that in Writ Petition No. 85 of 1967 there was a further point as to discrimination.
The facts laid in this petition are as follows.
The petitioner was the owner of land measuring Ac.
10 62 in village Kilokri.
He wanted to develop the land by establishing a residential colony and selling the same out in plots.
For this purpose, he had spent a good deal of money and taken enormous trouble and divided the area after development into 78 residential plots.
In 1956 he had submitted a lay out plan of the land in question for necessary, sanction to the Delhi Development Provisional Authority.
On June 18, 1956 he was informed by the Delhi Development Provisional Authority that the, final lay out plan had been approved by the said authority.
In September 1957 the said authority demanded from the petitioner a security for Rs. 12,850 25 as a guarantee for carrying out the development of the colony in accordance with the approved standards and this sum was duly deposited by the petitioner.
On September 15, 1958 the petitioner submitted service plans in respect of his colony and these were duly checked and found to be in order : the case was ordered to be Placed before the Standing Committee of the Municipal Corporation for approval.
By December 24, 1958 the Standing Committee 'referred the case R. 32 Calcutta 605 at 629.
53 back to the Town Planner for a scrutiny of the ownership documents.
The question relating to the proof of ownership was settled on March 19, 1961.
In the meantime, the notification dated November 13, 1959 had been issued under section 4(1) of the Act.
The petitioner duly filed his objections under section 5 A of the Act.
By a notification dated July 1, 1960 published by the Delhi Administration the Chief Commissioner, Delhi, withdrew the land of 16 colonies from the acquisition out of the area covered by the notification of November 13, 1959 on the ground that their lay out plan had been sanctioned by the Delhi Municipal Corporation and as per general decision of the Standing Committee, Delhi Municipal Corporation, the petitioner was asked by the Town Planner by letter dated April 16, 1960 to submit a de notification certificate to the effect that the land comprising the proposed lay out of his colony was excluded from the purview of the notification issued under section 4 of the Act.
On June 14, 1961 the Deputy Housing Commissioner, Delhi Administration, issued the first notification under section 6 of the Act in respect of 97 bighas and 4 biswas of land in village Kilokri as required by the Government for a public purpose at the public expense, namely, the planned development of Delhi.
The petitioners land was not covered by this notification.
The Deputy Housing Commissioner, Delhi Administration, purported to issue another noti fication dated 26/27th July, 1961 under section 6 of the Act declaring that land specified therein in village Kilokri was required to be taken by the Government at public expense for a public purpose.
This notification covered the petitioners land in question in village Kilokri.
On January 9, 1962 the petitioner was informed by a letter issued by the office of the Town Planner, Municipal Corporation, Delhi, that the Standing Committee of the Municipal Corporation by its resolution No. 1190 dated December 18, 1961 had rejected the lay out plan of the petitioner 's colony.
According to the petitioner, this resolution went to show that his land was sought to be acquired because it had not been de notified along with the land of the other colonies on the ground that the Standing Committee had rejected the lay out plan of his colony.
Thereafter the Land Acquisition Collector, Delhi, made an award No. 1276 dated February 16, 1962 with respect to the petitioner 's said land.
In March 1965 the petitioner learnt about the notification issued by the Delhi Administration on July 1, 1960 under section 48(1) of the Act withdrawing the land of the 16 colonies mentioned therein from the acquisition out of the area covered by the notification dated November 13, 1959 on the ground that their lay out plan had been sanctioned by the Delhi Municipal Corporation.
By letter dated March 10, 1965 the petitioner asked the Deputy Housing Commissioner, Delhi Administration, for restoration of his land on the same basis because his lay out plan 54 had been sanctioned before the section 4 notification.
This request was however turned down by letter dated May 14, 1965 on the ground that the petitioner 's land had already been acquired and could not be released.
According to the petitioner, there was no basis for treating his land in a manner different from that of the 16 colonies.
This differential treatment has resulted in violation of article 14 of the Constitution so far as the petitioner 's colony is concerned.
Mr. Agarwala also tried to make a subsidiary point in this connection and urged that acquisition of petitioner 's land was a colourable exercise of the power under the Act inasmuch as the petitioner was out to do the same thing as was sought to be achieved by proceedings under Land Acquisition Act, the only difference being that whereas the sales effected by him were at reasonable rates, those fetched at auction of lands acquired under the Act were for much higher figures and the State was really making revenue out of such acquisitions.
Mr. R. V. section Mani who appeared for the petitioner in Writ Petition No. 223 of 1966 adopted the arguments of Mr. Agarwala in general but sought to make a special point of his own.
In substance the additional ground urged by him was that by the Validating Act the Legislature had sought to encroach into the domain of the Judiciary.
Mr. Mani contended that although there was no clear separation of legislative and judicial powers in our Constitution, nevertheless the Constitution did not confer unlimited powers on the legislature and it was for the Judiciary to declare the limits of the legislative powers enshrined in the Constitution.
To quote Mr. Mani 's words : "The Legislature exercises judicial power if its legislative action retroacts on past controversies and overrides or reverses the decisions of the Judiciary.
" Such an act, argued Mr. Mani, bad to be struck down in courts of law.
Mr. Mani 's main argument was that inasmuch as sections 2 and 3 of the Amending Act had not been given retrospective effect, the validation sought to be effected by section 4 with respect to the past transactions was of no avail as the impugned actions, i.e., the subsequent declarations under section 6 of the Act, had no legal basis.
In our opinion no useful purpose will be served by referring to the clear demarcation between the judicial powers and legislative powers in America and attempt to engraft the said principle in the working of our Constitution.
This development of the 55 law, as pointed out in A. K. Gopalan vs State(") was due to historical reasons.
In that case it was pointed out by Das, J. (see, at p. 286) that "the Supreme Court of the United States, under the leadership of Chief Justice Marshall, assumed the power to declare any law unconstitutional on the ground of its not being in "due process of law," It is thus that the Supreme Court established its own supremacy over the executive and the Congress.
In India the position of the Judiciary is somewhere in between the Courts in England and the United States.
While in the main leaving our Parliament and the State Legislatures supreme in their respective legislative fields, our Constitution has, by some of the articles, put upon the Legislature certain specified limitations. .
Our Constitution, unlike the English Constitution, recognises the Court 's supremacy over the legislative authority, but such supremacy is a very limited one, for it is confined to the field where the legislative power is circumscribed by limitations put upon it by the Constitution itself.
Within this restricted field the Court may, on a scrutiny of the law made by the Legislature, declare it void if it is found to have transgressed the constitutional limitations.
" It will not serve any useful purpose to note the decisions of this Court where reference has been made to the distinction between, the Indian Constitutional law and the American Constitutional law on this subject.
Mr. Mani sought to rely on a statement of the law made by Cooley in his Constitutional Limitations, 7th ed., p. 137, as quoted in Willoughby 's Constitution of the United States, second edition, Vol. 3, at page 1651 that "If the legislature would prescribe a different rule for the future from that which the courts enforce, it must be done by statute, and cannot be done by a mandate to the courts which leaves the law unchanged, but seeks to compel the courts to construe and apply it not according to the judicial, but according to the legislative judgment. .
If the legislature cannot thus indirectly control the action of the courts, by requiring of them a construction of the law according to its own views, it is very plain it cannot do so directly, by setting aside their judgments ' compelling them to grant new trials, ordering the discharge of offenders, or directing what particular steps shall be taken in the progress of a judicial.
inquiry.
(1) ; at 198.
56 According to Willoughby, "Retroactive legislation, which does not impair vested rights, or violate express constitutional prohibitions, is valid, and therefore, particular legal remedies, and, to a certain extent, rules of evidence may be changed and, as changed, made appli cable to past transactions,.
But substantial rights may not thus be interfered with.
" Willoughby seeks to fortify his statement quoting from Cooley again : "The legislature does, or may, prescribe the rules under which the judicial power is exercised by the courts; and in doing so it may dispense, with any of those formalities which are not essential to the jurisdiction of the court; and whatever it may dispense with by statute anterior to the proceedings, we believe it may also dispense with by statute after the proceedings have been taken, if the court has failed to observe any of those formalities.
But it would not be competent for the legislature to authorize a court to proceed and adjudicate upon the rights of parties, without giving them an opportunity to be heard before it and, for the same reason it would be incompetent for it, by retrospective legislation, to make valid any proceedings which had been had in the courts, but which were void for want of jurisdiction over the parties.
" Relying on the above Mr. Mani proceeded to argue that the wording of section 4 of the Amending Act was not a question of mere form and that it was a decree purporting to operate as such.
According to him unless section 3 was ' retrospective, section 4 would be meaningless and should be struck down.
Mr. Mani relied particularly on the decision of the Federal Court in Basanta Chandra Ghose vs King Emperor(1) where it was held by this Court that Ordinance No. III of 1944 did not take away the power of the court to investigate and interfere with orders of detention or deprive the court of its power to pass orders under section 491 of the Criminal Procedure Code and the court was still at liberty to investigate whether an order purporting to, have been made under r. 26 of the Defence of India Rules and deemed to be made under .the Ordinance or a new order purporting to be made under the ,Ordinance was in fact validly made, in exactly the same way as immediately before the promulgation of the Ordinance; and if on a consideration the Court came to the conclusion that it was not (1) 57 validly made on any ground other than the ground that r. 26 of the Defence of India Rules was ultra vires section 10 of the Ordinance would no more prevent it from so finding than section 16 of the Defence of India Act did.
We shall deal with the argument based on this case later on.
The learned Solicitor General first dealt with the question as to whether Parliament was competent to pass the Validating Act and whether section 4 of the Amending Act could be given effect to unless the legislature gave retrospective operation to section 3.
According to the Solicitor General and that is undoubtedly the position in law the legislative competence of Parliament is only circumscribed by the scope of the entries in the appropriate Lists under the Seventh Schedule and the fundamental rights enshrined in Part III of the Constitution.
The power of Parliament to make laws for the whole or any part of the territory of India is dealt with by the Constitution in articles 245 to 250, 252 and 253.
Acquisition and requisitioning of property is an entry in List III and Parliament is competent to make laws enumerated in that list under article 246(2) of the Constitution.
As early as in the year 1878 it was pointed out by the Judicial Committee of the Privy Council in The Queen vs Burah(1) that the Indian Legislature when acting within the limits prescribed (by the Act of the Imperial Parliament which created it) had plenary powers of legislation as much, and of the same nature as those of Parliament itself and "If what has been done is legislation, within the general scope of the affirmative words which give the power, and if it violates no express condition or restriction by which that power is limited (in which category would, of course, be included any Act of the Imperial Parliament at variance with it), it is not for any Court of Justice to inquire further, or to enlarge constructively those conditions and restrictions.
" In that case the question before the Judicial Committee was whether Act XXII of 1869 of the Indian Legislature which ex cluded the jurisdiction of the High Court within certain specified districts was not inconsistent with the Indian High Courts Act or with the Charter of the High Court and so in its general scope within the legislative power of the Governor General in Council.
Under section 4 of that Act the territory known as Garo Hills was removed from the jurisdiction of the Courts of Civil and Criminal Judicature and from the control of the officers of revenue, constituted by the regulations.
of the Bengal Code and the Acts passed by any Legislature established in British India as well ,is (1) L.R. 5 I.A. 178 at 194.
L4Sup.
C.I./68 5 58 from the law prescribed for such courts or officers by the Regulations and Acts aforesaid.
This section further provided that no Act thereafter passed by the Council of the Governor General for making laws and regulations shall be deemed to extend to any part of the said territory unless the same was specially named therein.
Under section 9 of the Act the Lieutenant Governor was authorised by notification in the Calcutta Gazette to extend mutatis mutandis all or any of the provisions contained in the other sections of the Act to the Jaintia Hills, the Naga Hills, and such portion of the Khasi Hills as might for the time being form part of British India.
The Lieutenant Governor of Bengal, acting under powers conferred by section 9, extended the provisions of Act XXII of 1869 to the territory of Khasi and Jaintia Hills and excluded therefrom the jurisdiction of the courts of civil and criminal judicature.
The High Court of Calcutta held that the 9th section was not legislation but was a delegation of 'legislative power.
This was not accepted by the Judicial Committee and it was observed (at p. 195) : ". it is a fallacy to speak of the powers thus conferred upon the Lieutenant Governor (large as they undoubtedly are) as if, when they were exercised, the efficacy of the acts done under them would be due to any other legislative authority than that of the GovernorGeneral in Council.
Their whole operation is, directly and immediately, under and by virtue of this Act (XXII of 1869) itself." Reference was made by counsel to the case of Abeyesekra vs Jayatilake(1).
The question there arose as to whether an Order in Council of 1928 amending another of 1923 making provision that the action of a common informer brought to recover penalties under the Order in Council of 1923 be dismissed and further amending the 1923 Order so as to except the office held by the respondent from its operation was valid and constituted all effective defence to the action although it was retrospective in operation.
In upholding the validity of 1928 Order, it was observed by the Judicial Committee that legislators "have certainly the right to prevent, alter or reverse the consequences of their own decrees.
" The effect and validity of retrospective legislation has had to be considered by the Federal Court of India and this Court on a number of occasions.
In the case of The United Provinces, V. Atiqa Begum(2) a question arose as to whether, the Regularisation of Remissions Act, 1938 of the United Provinces Legislature (1) (2) 59 was within its competence.
There was an Act in force, namely, the Agra Tenancy Act, 1926 the purpose whereof was to consolidate and amend the law relating to agricultural tenancy and certain other matters.
Section 73 of that Act provided that "when for any cause the Local Government or any authority empowered by it, remitted or suspended for any period the whole or any part of the revenue payable in respect of any land, a Collector might order that the rents of the tenants should be remitted or suspended to an amount which shall bear the same proportion to the whole of the amount payable in respect of the land as the revenue of which the payment has been so remitted or suspended bears to the whole of the revenue payable in respect of such land.
" In 1931 there was a catastrophic fall in agricultural prices followed by threats on the part of tenants to withhold rent on a large scale.
The Government of the United Provinces devised a scheme for the systematic reduction of rents, varying with the circumstances of the different districts, followed later by consequential adjustments in land revenue.
The Allahabad High Court had held in Muhammad Abdul Qaiyum vs Secretary of State for India(1)that remissions made in pursuance of the orders of Government had no legal effect.
In 1938 the Provincial Legislature passed the Regularisation of Remissions Act which precluded any question as to the validity of the orders of remission being raised in the courts of law.
The Allahabad High Court took the view that the Act was contrary to the provisions of section 292 of the Gov ernment of India Act, 1935 because it amounted to an attempt to legislate retrospectively.
Section 2 of the Act of 1938 provided that "notwithstanding anything in the Agra Tenancy Act, 1926. . . or in any other law for the time being in force where rent has been remitted on account of any fall in the price of agricultural produce which took place before the commencement of this Act, under the order of the Provincial Government or any authority empowered by it in that behalf, such order, whether passed before or after the commencement of this Act, shall not be called in question in any civil or revenue court.
" Referring to the case of Queen vs Burah(2) Gwyer, C.J., said that there was nothing in section 292 which suggested any intention on the part of Parliament to impose a fetter against retrospective legislation.
According to the learned Chief Justice, the impugned Act was an Act with respect to "remission of rents" although it might also be an act with respect to something else, that is to say, the validation of doubtful executive orders.
The learned Chief Justice said : (1) I.L.R. 1938 Allahabad , 114.
(2) L.R.I.A. 178.
60 "It is true that "Validation of executive orders" or any entry even remotely analogous to it is not to be found in any of the three Lists; but I am clear that legislation for that purpose must necessarily be regarded as subsidiary or ancillary to the power of legislating on the particular subjects in respect of which the executive orders may have been issued.
" His Lordship further opined that powers of the court were not affected merely because certain executive orders were not allowed to be questioned in any court.
In Piare Dusadh & others vs The Kink Emperor(1) one of the questions raised was whether it was competent for the Legislature by retrospective legislation to make valid any proceedings which had been had in the courts but which were void for want of jurisdiction over the parties.
In this case the facts were as follows.
The appellants had been convicted by courts functioning under the Special Criminal Courts Ordinance (Ordinance No. 11 of 1942).
On 4th June, 1943, the Federal Court held that the courts constituted under that Ordinance had not been duty invested with jurisdiction, in view of the nature of the provisions contained in sections 5, 10 and 16 of that Ordinance.
The next day, the Governor General made and promulgated another Ordi nance (Ordinance No XIX of 1943) whereby Ordinance No. 11 of 1942 was repealed and certain provisions were made in respect of sentences which had been passed by the special courts and in respect of cases which were pending before them on that date.
By sub section
(2) of section 3 of the new Ordinance, a right of appeal against sentences which had already been passed by the special courts was given and appeals were accordingly preferred to the High Court in some cases.
In certain other cases applications for a writ in the nature of habeas corpus were made.
In both sets of cases, it was contended on behalf of the accused that the new Ordinance did not, and in any event could not, give validity on the sentences which had been passed by the special courts, and it was claimed that the sentences should be treated as void or set aside.
Section 4 of the new Ordinance provided that "Where the trial of any case pending before a court constituted under the said Ordinance has not concluded before the date of the commencement of this Ordinance, the proceedings of such court in the case shall be void and the case shall be deemed to be transferred" to the ordinary criminal courts for enquiry or trial in accordance with the Code of Criminal Procedure.
Section 3 of the Ordinance provided as follows (1) 61 .lm15 "(a)Any sentence passed by a Special Judge, a Special Magistrate or a Summary Court in exercise of jurisdiction conferred or purporting to have been conferred by or under the said Ordinance shall have effect, and subject to the succeeding provisions of this section shall continue to have effect, as if the trial at which it was passed had been held in accordance with the Code of Criminal Procedure, 1898 by a Sessions Judge, an Assistant Sessions Judge or a Magistrate, of the first class respectively, exercising competent jurisdiction under the said Code.
(2)Notwithstanding anything contained in any other law, any such sentence as is referred to in sub section (1) shall, whether or not the proceedings in which the sentence was passed were submitted for review under section 8, and whether or not the sentence was the subject of an appeal under Section 13 or Section 19, of the said Ordinance, be subject to such rights of appeal as would have accrued, and to such powers of revision as would have been exercisable under the said Code if the sentence had at a trial so held been passed on the date of the commencement of this Ordinance.
(3)Where any such sentence as aforesaid has been altered in the course of review or on appeal under the said Ordinance, the sentence as so altered shall for the purpose of this section be deemed to have been passed by the Court which passed the original sentence.
" Learned counsel for the accused conceded that the principle of validation by subsequent legislation was quite applicable to judicial as to ministerial proceedings but relying on Cooley 's Constitutional Limitations, 8th ed., p. 205 and also pp.
773 776, they contended (a)that while such legislation might seek to aid and support judicial proceedings, the legislature could not under the guise of legislation be permitted to exercise judicial power, and (b) that it was not competent to the legislature by retrospectivelegislation to make valid any proceedings which had been held inthe courts, but which were void for want of jurisdiction over the parties.
Spens, C. J., observed (see at p. 100): "As a general proposition, it may be true enough to say that the legislative function belongs to the legisla 62 ture and the judicial function to the judiciary.
, Such differentiation of functions and distribution of powers are in a sense part of the Indian law as of the American law.
But an examination of the American authorities will show that the development of the results of this distribution in America has been influenced not merely by the simple fact of distribution of functions, but by the assumption that the Constitution was intended to reproduce the provision that had already existed in many of the State Constitutions positively forbidding the legislature from, exercising judicial powers .
One result of the application of this rule in the United States has been to hold that "legislative action cannot be made to retroact upon past controversies and to reverse decisions which the courts in the exercise of their undoubted authority have made.
" The reason given is that "this would not only be the exercise of judicial power, but it would be its exercise in the most objectionable and offensive form, since the legislature would in effect sit as a court of review to which parties might appeal when dissatisfied with the ruling of the courts. .
In India, however ', the legislature has more than once enacted laws providing that suits which had been dismissed on a particular view of the law must be restored and retried.
" The learned Chief Justice referred to the Australian case, Federal Commissioner of Taxation vs Munro(1) where a Board of Appeal constituted under an Act of 1922 had given certain decisions in appeals in income tax matters.
The law courts declared that the Australian Parliament had no power to invest this Board of Appeal with judicial power.
A later Act established what was described as a Board of Review and assigned to it functions which were held to be different in character from those assigned to the former Board of Appeal.
This Act however went on to provide that decisions which had already been pronounced by the Board of Appeal "should be deemed to be and at all times to have been decisions of a Board of Review given in pursuance of the provisions of the later Act.
" This later Act was challenged as vesting judicial power in the Board of Review, but this contention was overruled.
Reference may be made to the judgment of Starke, J. quoted by Spens, C.J. that "Parliament simply takes up certain determinations which exist in fact, though made without authority, and prescribes not that they shall be acts done by a Board (1) 63 of Review, but that they shall be treated as they would be treated if they were such acts.
The sections, no doubt, apply retrospectively but they do not constitute an exercise of the judicial power on the part of the Parliament.
" The learned Chief Justice observed that this aptly described what had happened in the case before the Federal Court and answered the argument that it was an impossible feat to convert what was not a trial under the Code of Criminal Procedure into a trial under the Code: According to the learned Chief Justice, the real question was, whether the Ordinance was covered by any of the entries in the Seventh Schedule to the Constitution Act. "It was not contended said the Chief Justice "that the mere absence of a specific provision about validating laws" was by itself of much significance.
" As observed by this Court in Atiqa Begum 's case(1), "the power of validation must be taken to be ancillary or subsidiary to the power to deal with the particular subjects specified in the Lists.
" There is nothing in Basanta Chandra Ghose 's case ( 2 ) which detracts from the propositions of law laid down in Atiqa Begum 's case(1) or Piare Dusadh 's case(3).
In Basant Chandra Ghose 's case(2) Cl.
(2) of section 10 provided : "If at the commencement of this Ordinance there is pending in any Court any proceeding by which the validity of an order having effect by virtue of section 6 as if it had been made under this Ordinance is called in question, that proceeding is hereby discharged.
Spens, C.J. said with regard to this clause that "here there has been no investigation or decision by any Tribunal which the legislating authority can be deemed to have given effect to.
It is a direct disposal of cases by the legislature itself." (see at p. 309).
It was pointed out that the nature of the provision considered in Piare Dusadh 's case(3) was essentially different from cl.
(2) of section 10 of the impugned Ordinance.
The question has engaged the attention of this Court in a number of cases and we may refer to the case of West Ramnad Electric Distribution Co. Ltd. vs State of Madras (4) by way of (1) (2) (3) (4) [1963] 2 S.C.R.747 64 illustration.
In that case, the Madras Legislature had passed an Act (43 of 1949) on January 24, 1950 for the acquisition of undertakings supplying electricity in the Province of Madras.
In pursuance of section 4(1) of the Act the State of Madras passed an order on May 17, 1951 declaring that the appellant undertaking shall vest in the respondent from September 21, 1951.
The Chief Electrical Inspector took over possession of the appellant and all its records etc.
The State paid to the appellant Rs. 8,34,000 and odd as compensation.
According to the appellant, about Rs. 1,00,000 still remained to be paid.
Some of the electrical undertakings in Madras which had ' been taken over filed writ petitions in the High Court which upheld the validity of the impugned Act in so far as it related to the licencees other than municipalities.
In Rajahmundry Electric Supply Corporation Ltd. vs The State of Madras(1) this Court had held that the impugned Act of 1949 was ultra vires on the ground that it went beyond the legislative competence of the Madras Legislature inasmuch as there was no entry in any of the three Lists of the Seventh Schedule of the Government of India Act, 1935 relating to compulsory acquisition of any commercial or industrial undertaking.
After the decision in this case, the Madras Legislature passed Act XXIX of 1954 which received the assent of the President on 9th October, 1954.
This Act incorporated the main provisions of the earlier Act and purported to validate action taken under the earlier Act.
The appellant then filed a writ petition alleging that to the extent to which the Act purported to validate acts done under the earlier Act of 1949 it was ultra vires.
It was further urged that the three bases of compensation as laid down by the Act were inconsistent with the requirement of article 31 of the Constitution.
Section 24 of the Act ran as follows "Orders made, decisions or directions given, notifications issued, proceedings taken and acts or things done, in relation to any undertaking taken over, if they would have been validly made, given, issued, taken or done, had the Madras Electricity Supply Undertakings (Acquisition) Act, 1949 (Madras Act XLIII of 1949), and the rules made thereunder been in force on the date on which the said orders, decisions or directions, notifications, proceedings, acts or things, were made, given, issued, taken or done are hereby declared to have been validly made, given, issued, taken or done, as the case may be, except to the extent to which the said orders, decisions, directions, notifications, proceedings, acts or things are repugnant to the provisions of this Act." (1) ; 65 It was held by this Court that this was "a saving and validating provision and it clearly intends to validate actions taken under the relevant provisions of the earlier Act which was invalid from the start.
The fact that section 24 does not use the usual phraseology that the notifications issued under the earlier Act shall be deemed to have been issued under the Act, does not alter the position that the second part of the section has and is intended to have the same effect.
" The contention that the impugned notification contravened article 31(1) because of want of existence of an antecedent law depriving the citizen of his property was turned down with the observation "In our opinion, this argument is not well founded.
If the Act is retrospective in operation and section 24 has been enacted for the purpose of retrospectively validating actions taken under the provisions of the earlier Act, it must follow by the very retrospective operation of the relevant provisions that at the time when the impugned notification was issued, these provisions were in existence.
That is the plain and obvious effect of the retrospective operation of the statute.
" Reference was made to the cast of the United Provinces vs Mst.
Atiqa Begum(1), Piare Dusadh vs The King Emperor(2) and also to the decision in Union of India vs Madan Gopal Kabra(3) and it was finally said (at p. 766) ". there is no doubt about the competence of the Legislature to enact a law and make it retrospective in operation in regard to topics included within the relevant Schedules of the Constitution.
" Reference may also be made to the case of Rai Ramkrishna vs
The State of Bihar(4).
All these decisions lay down that the power to legislate for validating actions taken under statute which were not sufficiently comprehensive for the purpose is only ancillary or subsidiary to legislate on any subject within the competence of the legislature and such Validating Acts cannot be struck down merely because courts of law have declared actions taken earlier to be invalid for want of jurisdiction.
Nor is there any reason to hold that in order to validate action without legislative support the Validat ing Act must enact provisions to cure the defect for the future (1) (2) (3) ; at 544.
(4) ; 66 and also provide that all actions taken or notifications issued must be deemed to have been taken or issued under the new provisions so as to give them full retrospective effect.
No doubt legislatures often resort to such practice but it is not absolutely necessary that they should do so so as to give full scope and effect to the Validating Acts.
By way of illustration reference may be made to the following Acts.
(1) The Professions Tax Limitation (Amendment and Validation) 'Act, 1949 where section 3(i) provided that "Notwithstanding anything to the contrary in any other law for the time being in force, (i) no tax on circumstances and property imposed before the commencement of this Act under clause (ix) of sub section (1) of section 128 of the United Provinces Municipalities Act, 1916, or, clause (b) of section 108 of the United Provinces District Boards Act, 1922, shall be deemed to be, or ever to have been invalid merely on the ground that the tax imposed exceeded the limit of Rs. 50/ per annum prescribed by the said Act, and the validity of the imposition of any such tax shall not be called in question in any Court;" (2)The (Act 19 of 1960) was passed to obviate the short comings in the Hindu Marriage Act pointed out by the Punjab High Court in Janak Dulari vs Narain Das (A.I.R. 1959 Punjab 50).
There the High Court held that the court of an additional Judge cannot be regarded as a principal court of civil jurisdiction within the meaning of the Hindu Marriage Act and that a District Judge to whom a petition under the Act is presented cannot transfer it to an additional Judge for trial.
The object of the Validation Act was to validate all proceedings taken and decrees and orders passed by any of the Courts specified in cl.
(2) exercising or purporting to exercise jurisdiction under the Hindu Marriage Act.
Section 2(1) ran as follows : "All proceedings taken and decrees and orders passed before the commencement of this Act by any of the Courts referred to in sub section (2) exercising or purporting to exercise jurisdiction under the shall, notwithstanding any judgment, decree or order of any court, be deemed to be as good and valid in law as if the court exercising or purporting to, exercise such jurisdiction had been a district court within the meaning of the said Act.
" The courts referred to in sub section (1) are : the court of an additional Judge, additional district Judge, etc.
67 In our opinion the contentions raised about the invalidity of the Amending Act on the ground that section 3 thereof was not made expressly retrospective or that it encroached upon the domain of the judiciary by seeking to nullify judicial decisions cannot be sustained.
The American doctrine of well defined separation of legislative and judicial powers has no application to India and it cannot be said that an Indian Statute which seeks to validate invalid actions is bad if the invalidity has already been pronounced upon by a court of law.
In view of the decisions of the Judicial Committee, the Federal Court and this Court referred to above, it must be held that the absence of a provision in the Amending Act to give retrospective operation to section 3 of the Act does not affect the validity of section 4 as contended for.
It was open to Parliament to adopt either course, e.g. (a) to provide expressly for the retrospective operation of section 3, or, (b) to lay down that no acquisition purporting to have been made and no action taken before the Land Acquisition (Amendment and Validation) Ordinance, 1967 shall be deemed to be invalid or ever to have become invalid because inter alia of the making of more than one report under section 5 A or more than one declaration under section 6 of the Land Acquisition Act, not withstanding any judgment, decree or order to the contrary.
Parliament was competent to validate such actions and transactions, its power in.
that behalf being only circumscribed by the appropriate entries in the Lists of the Seventh Schedule and the fundamental rights setforth in Part III of the Constitution.
As shown above, there have been instances where the latter course had been adopted by the Indian Parliament in the past.
Section 4 of the Amending Act being within the legislative competence of Parliament, the provisions thereof are binding on all courts of law notwithstanding judgments, orders or decrees to the contrary rendered or made in the past.
We find ourselves unable to accept the contention about the violation of article 31(2) of the Amending Act.
It is not suggested that the Validating Act in express words enacts.
any law which directly affects compensation payable in respect of the property acquired or lays down any principles different from those which were already in the Land Acquisition Act of 1894.
After the amendment of the Constitution in 1955 the question of adequacy of compensation is not justiciable and it is enough if the law provides that a person expropriated must be given compensation for his property or lays down the principles for the determination thereof.
There is not a word about "compensation" in section 4 of the Validating Act.
Indirectly however, it would affect a person 's right to compensation,, inasmuch as but for the Validating Act the notification under section 4 issued on 13th November 1959 could 68 not be resorted to for the purpose of making more than one declaration under section 6 of the Act.
Schemes of the magnitude of the plan for the development of Delhi or for the establishment of an iron and steel plant did not have to be considered in pre Constitution days.
The Land Acquisition Act of 1894 contained sufficient measures to allow acquisition of small parcels of property for the different schemes of the extent and magnitude which had to be considered in the past.
Even then, the law with regard to compensation did not remain static from the days of the Act of 1870 to 1923.
In the Act of 1894 the date of declaration under Is. 6 was made to take the place of the date in section 24 of the Act of 1870.
Under the Act of 1870 the market value of the land at the time of awarding compensation was the criterion.
The date for the assessment of compensation was further shifted to the date of the notification under section 4 only in 1923.
The Legilature might well have provided in the Act of 1894 that it would be open to the appropriate government after issuing a notification under section 4 to consider objections raised under section 5 with regard to different localities from time to time enabling different reports to be made under section 5 A with consequent adjustments in section 6 providing for declarations to be made as and when each report under section 5 A was considered.
By the validation of actions taken under section 6 more than once in respect of a single notification under section 4, the original scheme of acquisition is not altered.
The public purpose behind the notification under section 4 remains the same.
It is not as if a different public purpose and acquisition of land for such purpose were being interpolated by means of the Validating Act.
The principle of compensation remains the same under the Validating Act as it did under the principal Act of 1894.
Only the shortcomings in the Act as to want of provision to enable more than one declaration under section 6 are being removed.
In our opinion, the Validating Act does not fall within the mischief pointed out by this Court in various decisions starting from the State of West Bengal vs Mrs. Bela Baner jee(1) : Entry 42 in List III of the Seventh Schedule before its amendment read "Principles on which compensation for property acquired or requisitioned for the purposes of the Union or of a State or for any other public purpose is to be determined, and the forms and the manner in which such compensation is to be given.
" In Mrs. Bela Banerjee 's case(1) section 8 of the impugned West Bengal Land Development and Planning Act 1948 provided that the com (1) ; 69 pensation to be awarded for acquisition of land was not to exceed the market value thereof on December 31, 1946.
This provision was held to be arbitrary by this Court inasmuch as it fixed the ceiling on compensation by reference to the market value of the land on the above mentioned date no matter when and how long afterwards the acquisition took place.
Similarly in dismissing the appeal of the State in State of Madras vs D. Namasivaya Mudaliar (1) where the Madras Act XI of 1953 provided that compensation was payable on the basis of the valuation of the land on April 28, 1947 together with some improvements made thereon up to the date of notification under section 4(1) of the Land Acquisition Act because of the discovery of the presence of lignite in certain taluks in 1947 and the announcement by Government by a press note that it proposed to undertake legislation to compel persons purchasing such lands after a date to be prescribed in 1947, it was held that "a law which authorises acquisition of land not for its true, value, but for value frozen on some date anterior to the acquisition, on the assumption that all appreciation in its value since that date is attributable to purposes for which the State may use the land at some time in future, must be regarded as infringing the fundamental right" and "there was no true relation between the acquisition of the land. and the fixation of compensation based on their value on the market rate prevailing on April 28, 1947.
" Referring to the provision in the Land Acquisition Act for assessment of compensation on the basis of the market value of the land not on the date on which the interest of the owner was extinguished under section 16 but to the date of the notification under section 4(1) it was observed that "any princi ple for determination of compensation denying to the owner all increments in value between a fixed date and the date of issue of the notifications under section 4(1) must prima facie be regarded as denying to him the true equivalent of the land which is expropriated.
In our opinion, the Amending Act cannot be said to lay down any principle which suffers from the vice of the Act struck down in the above decisions.
The date of valuation is that of the issue of notification under section 4(1) a principle which has held the field since 1923.
It is true that the underlying principle of the Act of 1894 was that all increments due to the setting on foot of the acquisition proceedings were to be ignored whereas due to the ever spiralling of all prices all over India land values are mounting up all the time in all the States, specially round about big cities an occurrence quite unconnected with the issue of a notification under section 4(1) but it cannot be said that because owners of land are to be deprived of all the increments due to the latter phenomenon it must be held that there is a Violation of article 31(2).
Legislative competence to acquire land under the provisions of (1) ; 70 the Land Acquisition Act cannot be challenged because of constant appreciation of land values all over the country due to the prevalent abnormal inflation.
There must be some time lag between the start and conclusion of land acquisition proceedings and in principle there is nothing wrong in accepting the said start as the date for valuation.
Sections 4 and 23 of the Land Acquisition Act are protected by article 31(5) (a) of the Constitution.
Only sections 5 A and 6 of the Act have been amended.
The amendments do not alter the principle of compensation fixed by the Act nor contravene article 31 of the Constitution in any way.
The Amending Act does not really derogate from the principle that the valuation on the date of issue of notification affords the criterion for determining compensation of all lands to be acquired.
It only keeps alive the said notification for sustaining more than one declaration under section 6 to meet the exigencies of the situation where it was not possible to make one comprehensive declaration under section 6 and where the State has been obliged to validate actions which could not be supported under the principal Act.
It cannot be said of the Validating Act that it was fixing an arbitrary date for the valuation of the property which bore no relation to the acquisition proceedings.
At the same time when the notification under section 4 was issued on 13th November 1959, the State had considered that a very large area round about Delhi would have to be acquired so that the development of the city could proceed in an orderly manner step by step not only 'Lo meet the immediate needs of the then.
population of the city but with an eye to the ever increasing demands of the exploding population in all cities in India and specially in its capital.
It was before, November 1959 that the State had to consider the, acquisition of a large tract of land for the purposes of development of Delhi but it was not possible to take up simultaneously all schemes for the future development of the city.
It was also not practically possible to take up all schemes in all directions at the same time.
The resources of the State were not adequate to take up the schemes for improvement of the city by the acquisition of an area like Ac.
34,000,00, at the same time keeping in, mind not only the need of land for housing purposes but also for, other purposes like education, industry and manufacture not to speak of amenities for recreation, entertainment etc.
Of necessity,, the area under the proposed acquisition would have to be carved into blocks and the development of one or more blocks at a time could only be taken up in consonance with the resources available.
Even contiguous blocks could be developed gradually and systematically.
If a particular area, say block 'A ' was meant to provide lands for building houses for residential purposes only a block contiguous thereto, say block 'B ' might be set apart for industrial purposes.
There may be nothing common between 71 Block A and Block B to require their simultaneous development .although both the Blocks would form part of a composite whole to serve the needs of a growing city.
Can it be said that acquisition of lands for Block A and Block B must be made simultaneously and is the law to be struck down because it enables a declaration under section 6 with respect to Block B to be made some time after a similar declaration in respect of Block A ? In such a case, it would be incongruous to award compensation for lands acquired in Block B on a basis different from that in respect of lands in Block A covered by an earlier declaration under section 6.
The scope of article 31(2) as amended was considered by this Court in P. V. Mudaliar vs Deputy Collector(1).
It was there, pointed out that after the amendment "what is excluded from the courts ' jurisdiction is that the said law cannot be questioned on the ground, that the compensation provided by that law is not adequate;" and "if a law lays down principles which are not relevant to the property acquired or to the value of the property at or about the time it is acquired, it may be said that they are not principles contemplated by article 31(2) of the Constitution.
" In that case it was also observed by this Court that "in the context of continuous rise in land prices from year to year depending upon abnormal circumstances it cannot be said that fixation of average price of over five years is not a principle for ascertaining the price of the land in or about the date of acquisition.
" The decision is also an authority for the proposition that the omission of one of the elements that should properly be taken into account in fixing the compensation might result in the inadequacy of compensation but such omission in itself did not constitute fraud on power.
it is also to be noted that in this case this Court upheld the Land Acquisition (Madras Amendment) Act, 1961 although the said Act substituted a new clause for the first clause in section 23 ( 1 ) of the Land Acquisition Act.
The substituted clause provided for pay ment of compensation on the basis of the market value of the land at the date of the publication of the notification under section 4(1) or an amount equal to the average market value of the. land during the five years immediately preceding such date, whichever was less.
It is significant that the Act which was a postFourth Constitution Amendment Act, was upheld although by its own terms and independently of the Land Acquisition Act it provided for payment of compensation on the basis of the market value of the land at the date of the publication of the notification under section 4(1).
It may therefore be inferred that in upholding the Land Acquisition (Madras Amendment) Act, 1961, this Court was of the view that the principle of fixing compensation on the basis of the price prevailing on the date of the notification under section 4(1) of the Land Acquisition Act was a relevant principle.
In (1) ; 72 the result the court turned down the contention about the violation.
of article 31(2) because of the modification of some of the principles for assessing compensation laid down in section 23 of the Act.
In the present case, there has been no variation of the law formulated in section 23 of the Act.
As such, in our opinion, there has been no violation of article 31(2) merely because the actions already taken have been sought to be 'validated.
Nor are we satisfied that there has been any colourable or fraudulent exercise of legislative power.
With regard to the question as to discrimination violative of article 14, it goes without saying that whenever an Amending Act is passed, there is bound to be some difference in treatment between transactions which have already taken place and those which are to take place in the future.
That by itself will not attract the operation of article 14.
Again, even with respect to transactions which may be completed in the future, a reasonable classification will not be struck down as was held by this Court in Jalan Trading Co. vs Mazdoor Union(1).
"If the classification is not patently arbitrary, the Court will not rule it discriminatory merely because it involves hardship or inequality of burden.
With a view to secure a particular object a scheme may be selected by the Legislature wisdom whereof may be open to debate; it may even be demonstrated that the scheme is not the best in the circumstances and the choice of the Legislature may be shown to be erroneous, but unless the enactment fails to satisfy the dual test of intelligible classification and rationality of the relation with the object of the law, it will not be subject to judicial interference under article 14.
Invalidity of legislation is not established by merely finding faults with the scheme adopted by the Legislature to achieve the purpose it has in view.
" Before scrutinising the provisions of the Amending Act, we must examine the objects of the Act.
, They may be summed up as follows : (a) To amend the Act for the future by empowering the making of more than one declaration under section 6.
(b) To validate completed acquisitions on the basis of more than one declaration under that section.
(c) To authorise more than one declaration under the said section in cases where there is already in existence a notification under section 4.
(1)[1967] 1 S.C.R. 15 at 36.
73 (d)To prescribe a time limit for future acquisitions as also pending proceedings not yet completed; and (e) To provide additional compensation by way of interest in all cases where acquisition has not yet been completed and where a declaration under section 6 is issued more than three years after the notification under section 4.
There is nothing arbitrary or irrational about the said objects.
It is well known that in some cases there has been unusual delay in the issue of declaration under section 6 after a notification under section 4.
The Amending Act puts an end to this harsh treatment by providing that in respect of notifications under section 4 made before the date of the Ordinance i.e. 20th January 1967, a declaration under s ' 6 must be made within two years after that date.
If such a declaration is not made, then it will not be open to Government to make use of the old section 4 notification and the State would be obliged to issue a fresh notification under section 4.
The Act also limits the time within which a declaration under section 6 may be made when a notification under section 4 is issued after 20th January, 1967.
This period is limited to three years there having been no time limit in the past.
We are not impressed by the argument that a person whose land may be covered by a notification under section 4 issued more than one year before 20th January 1967 would seemingly be treated differently from a person whose land comes under the notification under section 4 after that date.
The Legislature has sought to improve upon the existing provisions of the Land Acquisition Act and there is no discriminatory treatment which should be struck down as violative of article 14.
The Legislature in its wisdom thought that some time limit should be fixed in respect of section 4 notifications issued before 20th January, 1967 and that a time limit should also be fixed for acquisition where such a notification is issued after that date.
No fault can be found with the Legislature because it has provided for a period of two years in one case and three years in the other.
As was pointed out in Jalan Trading Co. vs Mazdoors Union(1).
"Equal protection of the laws is denied if in achieving a certain object persons, objects or transactions similarly circumstanced are differently treated by law no rational relation to the object sought to be achieved by the law.
" It is not possible to say that because the legislature thought of improving upon the Act of 1894 by prescribing certain limits of time as from 20th January 1967 the difference in treatment in cases covered by notification before the said date and after the said date denies equal protection of laws because the transactions are not similarly circumstanced.
Some of the notifications (1) ; LA Sup.
C.I./68 6 74 issued under section 4 must have been made even more than 3 years before 20th January 1967 and such cases obviously could not be treated in the same manner as notifications issued after,that date.
article 14 does not strike at a differentiation caused by the enactment of a law between transactions governed thereby and those which are not so governed.
As was pointed out by this Court in Hatisingh Manufacturing Co. Ltd. vs Union of India(1).
"When Parliament enacts a law imposing a liability as flowing from certain transactions prospectively, it evidently makes a distinction between those transactions which are covered by the Act and those which are not covered by the Act, because they were completed before the date on which the Act was enacted.
" With respect, the dictum can also be applied as between cases where the transaction was in the course of completion and those which had to be started after a particular date.
On the whole the Amending Act seeks to improve the legislation which covered the field of acquisition of land.
The Legislature might have made more liberal provisions for improvement but it is not for this court to strike down a piece of legislation because the improvement falls short of the expectation of the litigants.
With regard to the provision for payment of interest, in addition to compensation or by way of additional compensation no grievance can be made in that interest is not allowed in respect of transactions which have been already completed and compensation taken.
The Legislature felt that because there has been unreasonable delay in the payment of compensation, interest should be, allowable where the period of three years has already expired or may expire between the date of section 4 notification and the date of declaration under section 6.
No grievance can be made because interest is denied to persons who have already taken the compensation.
Even here the classification is 'not unreasonable and cannot be said to be unrelated to the object of the Act.
As regards violation of Art.14, in the case of Sohan Lal who filed Writ Petition No. 85 of 1967 the learned solicitor drew our attention to a few facts which are not clearly brought out in the affidavit in opposition and will be referred to presently.
Here the attack is on an executive act, namely, the differential treatment meted out to 16 colonies whose lands were covered by the notification dated 13th November, 1959 but in respect of which de notification orders were issued subsequently.
It would appear that some of the letters which were received by Sohan Lal did not bring out the full facts and the policy underlying the ap parent discrimination in this case.
It is pointed out in paragraph 36 of the affidavit in opposition: (1) ; at 543.
75 "After the issue of the notification No.
F.15(111)/59LSG dated 13 11 1959, it was decided by the Government that the colonies in respect of which the layout and service plans had been sanction before the date of notification viz., 13 11 1959, may be released from the purview of acquisition. . .The petitioner 's colony known as Kanwal Park could not be released from the purview of acquisition because in its case only the layout plans had been sanctioned and not the service plans.
" This policy is corroborated by the records of the Land and Housing Department, Delhi Administration which were made available to us at the hearing.
It appears from that record that after the notification of 13th November 1959 private owners of land who wanted to lay out colonies and had taken steps in respect thereof by making some arrangement and spent money threon had approached the Administration for release of their lands from the notification and a proposal for de notification of the colonies was considered at a high level.
It appears that a meeting 'was held on 29th June 1960 at which were present a number of persons including the Chief Secretary, Vice Chairman, Delhi Development Authority, Engineer Member, Architect, Town Planning Organisation, Deputy Commissioner, Delhi Municipal Corporation, Architects of Delhi Municipal Corporation, Secretary, Local Self Government and Under Secretary to the State Government.
The records show that the case of each notified colony was considered separately and it was felt that cases in which the layout and service plans had been finally approved in all respects before 13th November, 1959 should be recommended for de notification.
On 1st of July, 1960, the Commission, Delhi Municipal Corporation went into the matter and recommended that "All those colonies in respect of which both lay out plans and service plans h ad been approved by the Delhi Development Provisional Authority the Delhi Development, Authority or the Delhi Municipal Corporation may be de notified irrespective of whether security was demanded or not and whether the time limit for completion of development was imposed or not and irrespective of whether security has been paid or not and ' whether development has been completed or not." According to this recommendation, 16 colonies named therein ' fell in this category.
Sohan Lal 's colony was not one of those sixteen.
It is unfortunate that the petitioner who submitted the lay out plan of the colony as early as June 18, 1956 had not the service plan approved before 13th November, 1959.
It is clear from 76 the annexures to the petition that the details of the lay out of the colony were submitted on 30th August, 1956.
The petitioner submitted service plans on 15th September, 1959.
There was nothing wrong with the plans intrinsically except that there were more than one small pocket of land within the colony to which the petitioner could not prove his, ownership statisfactorily.
Mr. Agarwala appearing for the petitioner submitted that the only difficulty was that in respect of the small pockets they were owned not by the petitioner alone but in co ownership with others and the petitioner subsequently excluded these pockets from the pur view of his lay out plan: but this was done only on March 19, 1961, The petitioner 's subsequent efforts to have his colony denotified were of no avail even though he had excluded these pockets on 20th January, 1960.
On these facts, we cannot hold that the petitioner was subjected to any discrimination.
There was a policy behind the de notification and it has not been suggested that the policy was vitiated by any malafides on the part of the authorities.
All the points urged by the petitioners, therefore, fail and the petitions will stand dismissed.
There Will be no order as to costs.
Shelat J.
The facts in these five writ petitions have been sufficiently set out by our learned brother Mitter J.in his judgment and therefore need not be repeated here.
Though they differ in some particulars, the contentions raised by Counsel for the petitioners are common except the additional contentions raised by Mr. Mani in Writ Petition 223 of 1966 and by Mr. Agarwala in Writ Petition 85 of 1967.
These writ petition arise as a result of and challenge inter alia the validity of the following notifications.
No November 13, 1959 the Chief Commissioner, Delhi, issued a notification under sec.
4 of the Land Acquisition Act 1, of 1894 (hereafter referred to as the Principal Act) notifying that land measuring 34070 acres marked in blocks A to T and X in the map enclosed there with was required by the Delhi Administration for the planned development of Delhi.
In pursuance of that notification, the Delhi Administration issued sec.
6 notification dated June 14, 1961 in respect of the land situate in village Kilkori measuring 97 bighas 14 biswas only from out of the said notified area.
The notification directed the Collector to take order for its acquisition under section 7 of the Act.
The Collector thereafter made his award on August 31, 1961 in respect of the said 97 bighas of land at Rs. 2500 a bigha, the total amount including the solatium awarded being Rs. 2,80,887.50.
Nothing thereafter was done till March 18; 1966 when another notification under sec.
6 was issued in 77 respect of 1752.2 bighas of land situated in Mandawali Fazilpur, Khuraj Khas and Shakarpur Khas.
On February 9, 1966 this Court delivered its judgment in M. P. State vs V. P. Sharma (1) where facts were similar to the facts in the present cases and where the land was required for the erection of a steel plant in public sector.
In that case the notification under sec. 4 covering land in eleven villages was issued in May 1949.
This was followed by several notifications under sec.
6, the last of them being in.
After examining the provisions of secs.
4, 5A and 6 of the Act, this Court declared as follows : "At the stage of sec.
4, the land is not particularised but only the locality is mentioned; at the stage of section 6 the land in the locality is.
particularised and thereafter the notification under section 4(1) having served its purpose exhausts itself.
The sequence of events from a notification of the intention to acquire under section 4 to the declaration under sec.
6, leads to the conclusion that once a declaration under section 6 particularising the area is issued, the remaining non particularised area in the notification under section 4(1) stands automatically released.
The intention of the legislature was that one notification under section 4(1) should be followed by survey under.
section 4(2), objections under section 5A heard, and thereafter, one declaration under sec.
6 issued.
If the Government requires more land in that locality, there is nothing to prevent it from issuing another notification under section 4(1) making a further survey if necessary, hearing objections and then making another declaration under section 6, whereas there is likely to be prejudice to the owner of the land if there is great delay between the notifications under section 4(1) and section 6.
" One of the contentions urged in that case was that where the land is required for a small project and the area is not large the government may be able to make up its mind once for all what land it needs but where, land is required for a large project requiring a large area of land, government may not be able to make up its mind at once.
This contention was rejected on the ground that even if it be so there is nothing to prevent the government from issuing another notification under sec.
4 followed by a notification under sec.
6, that the government 's power to acquire land in a particular locality is not exhausted by issuing one notification under sec.
4(1) followed by a notification under s.6 and that it can proceed to do so by a fresh notification under Section 4(1) and a fresh declaration under sec.
6 and that such a procedure would be fair to all concerned.
(1) ; 78 Sarkar J. who delivered a separate judgment also repelled the contention by observing that he could not "imagine a government which has vast resources not being able to make a complete plan of its project, at a time.
Indeed, I think, when a plan is made it is a complete plan.
I should suppose that before the government starts acquisition proceedings by the issue of a notification under sec.
4 it has made its plan for otherwise it cannot state in the notification, as it has to do, that the land is likely to be needed.
Even if it had not then completed its plan it would have enough time before the making of a declaration under section 6 to do so.
I think therefore that the difficulty of the government, even if there is one, does not lead to the conclusion that the Act contemplates the making of a number of dec larations under sec.
" In the view taken Sharma 's case(1) sec. 6 notification dated March 18, 1966 was invalid as sec.
4 notification dated Nov ember 13, 1959 on which it was founded ceased to be efficacious and became exhausted after sec.
6 notification dated June 14, 1961 wag issued and the rest of the land not covered by it became as a result released from acquisition.
Depending on the declaration of law made in this decision the petitioners filed these writ petition in April 1966 and thereafter.
Realising that if the view taken in Sharma 's case(1) were to stand the government would have to issue a fresh sec.
4 notification and would have to pay compensation on the basis of the market value of the land on the date of such new notification instead of on November 13, 1959, the government promulgated an Ordinance dated January 20, 1967 called the Land Acquisition (Amendment and Validation) Ordinance 1 of 1967.
It is not necessary to set out the provisions of the Ordinance as it has been substituted by Land Acquisition (Amendment and Validation) Act, 13 of 1967 (hereafter referred to as the Amendment Act) passed on April 12, 1967.
There can be no manner of doubt that the Ordinance and the Amendment Act were enacted with the object of setting at naught the decision in Sharma 's case(1).
Section 2 of the Amendment Act substituted the following words in sec.
5A (2), viz., "Submit the case for the decision of an appropriate government together with the record of the proceedings held by him and a report containing his recommendations on the objections." by the following words viz., (1) 79 "either make a report in respect of the land which has been notified under sec.
4 sub sec.
(1) or make different reports in respect of different parcels of such land.
" Section 3 added the following words in sec.
6(1) after the words 'certify its orders ', viz., "and different declaration may be made from time to time in respect of different parcels of any land covered by the same notification under sec.
4 sub sec.
(1) irrespective of whether one report or different reports has or have been made (wherever required) under sec.
5A sub section (2).
" Section 3 also substituted the existing proviso to sec.
6(1) by the following : " provided that no declaration in respect of any particular land covered by a notification under sec.
4(1) published after the commencement of the said ordinance (after 20 1 1967) shall be made after the expiry of three years from the date of such publication.
" Sec. 4(1) of the Amendment Act is a validating provision.
By clause (a) it provides that no acquisition purporting to have been made before the commencement of the said Ordinance (i.e., before 20 1 67) and no action taken or thing done including any notification published in connection with such acquisition shall be deemed to be invalid or ever to have become invalid on the ground that (i)one or more collectors have performed the functions of collector in respect of the entire land covered by section 4 notification.
(ii) one or more reports have been made under s.5A(2) whether in respect of the entire land or different parcels thereof covered by the same notification, and (iii) that more than one declaration are made under sec .
6 in respect of different parcels of land covered by the same notification under sec.
Clause (b) of sec.
4(1) provides that any acquisition in pursuance ,of a sec.
4 notification published before 20 1 67 may be made after that date and no such acquisition and no action taken or thing done including any order, agreement or notification made or published whether before or after 20 1 67 in connection with such acquisition shall be deemed to be invalid merely on the said grounds mentioned in clause (a).
Sub sec.
(2) of, sec.
4. provides that no declaration under sec.
6 shall be made in respect of land covered by sec.
4 notification published before 20 1 67 after the expiry of two years from that 80 date, that is, 20 1 69.
4(3) provides for payment of interest in the circumstances set out therein.
The result of the Amendment Act clearly is that an area of land notified under sec.
4(1) can be acquired piecemeal at any time the only restriction being that under sec.
3 in the case of land covered by a sec.
4 notification published after 20 1 67, sec.
6 notification can be issued within 3 years from the date of such notification and in respect of land notified under sec.
4(.1) before 20 1 67 within two years after 20 1 67.
The direct consequence of the Amendment Act is that the unitary character of acquisition by a single inquiry, a single report, ' a single declaration and a single award under the Principal Act is done away with.
The government can freeze an area by issuing a sec.
4 notification and can, subject to the limitations in sec.
3 and sec.
4 (2) of the Amendment Act, go on acquiring parcels of such area at its convenience irrespective of the time when it makes up its mind to acquire and pay, compensation on the basis of the 'Value at the date of sec.
4 notification.
In the case of land notified under sec.
4(1) after 20 1 67 the owner is deprived of appreciation in the value of his land during three years by reason of limitation prescribed in sec.
3 but in the case of land notified before 20 1 67 such deprivation ' can be for an uncertain period from the date of sec.
4 notification up to two years from 20 1 67 i.e., up to 20 1 69 depending upon when its acquisition is made.
As has happened in the instant cases the entire area of 34070 acres was frozen for the purpose of computation of compensation as from Nov. 13, 1959 portons of that area were acquired as late as 1966 and the remaining area can still be acquired until 20 1 769, each owner being thus deprived of the appreciation in value of his land depending upon when during all this long period the government decides to acquire it.
Thus, if the land is notified in 1959 and is acquired in 1960, the loss of appreciation in value is only of one year.
But the owner of another plot even if it is contiguous to it, if the government decides to acquire it in 1969, would be deprived of the appreciation in value which has taken place right from 1959 to 1969.
The entire area is in the meantime frozen both for the purpose of compensation and as pointed out in Sharma 'section Case(1) from its full beneficial enjoyment, the owner not knowing until government chooses to make sec.
6 declaration Whether it will ultimately be acquired or not.
Under the Principal Act as construed in Sharma 's Case(1) once a sec.
6 notification is issued sec.
, 4 notification would become exhausted and the land not declared as needed thereunder would be relieved from acquisition.
If government then desires to acquire any land in addition to.
the one so declared it would have to be notified a fresh and the government would be obliged to pay compen (1)[1966] 3 S.C.R. 557. 81 sation at the market rate prevailing on such date.
The practical effect of the Amendment Act is that by keeping alive sec.
4 notification and by declaring the declarations made after the first declaration valid, the legislature dated back the basis of compensation which would have been, put for this validation, the rate prevailing at the date of sec.
4 notification howsoever belatedcessary.
The real purpose of enacting sec.4 is thus to enable government to freeze an unlimited area by first notifying it under sec.
4 and then to acquire bit by bit and pay compensation at the rate prevailing at the date of sec.
4 notification howsoever belatedly it may choose to acquire such bits, provided it does so before 20 1 69 where the land is notified before 20 1 67 and before the expiry of three years where section 4 notification is issued after 20 1 67 and thus avoid compensating the appreciation in value in the meantime to which the owner would have been entitled to.
Though in form the Amendment Act purports to validate acquisitions in cluding orders and declarations made therefor, the real purpose of enacting the Amendment Act is to, avoid having otherwise to compensate for the appreciation in the land value during the intervening period.
It is a well settled principle that in determining the constitutionality of a provision impugned, on the ground of its being.
an invasion on a fundamental right the court must weigh not its form which may apparently look innocuous but its real effect and impact on such fundamental right.
Re Kerala Education Bill(1); Gajapati Deo vs State of Orissa (2) It will be seen that.
2 and 3 which enable piecemeal and multiple inquiries and reports of a Collector or Collectors under s, 5A. diverse declarations, and awards in respect of different 'Parcels of land covered by sec.
4 notification are prospective.
It is only sec.
4 which is made retrospective.
But it merely seeks to nullify the decision in Sharma 's Case(3) and purports to keep alive sec.
4 notifications which would have otherwise lost their efficacy and validates acquisitions including orders and see.
6 declarations purported to have been made on the basis of such sec.
4 notifications.
Section 4, however, does not contain any provision retrospectively amending sec.
4 or sec.
5A or sec.
6 and merely seeks to revitalise sec.
4 notifications already exhausted.
The section does not also provide that an acquisition or an order or declaration under sec.
6 made on the basis of such exhausted notification will be deemed to have been made or issued under secs.
2 and 3 of the Amendment Act and as if the Amendment Act was in force at that date as, is usually done in such validating Acts.
A notification under sec.
4 having exhausted itself after a declaration under sec.
6 in respect of a part of the land covered by it and the rest of the land being relieved from acquisition, (1) [1959] S.C.R. 995.
(2) (3) ; 82 there would be prima facie no basis for a sec.
6 declaration or acquisition unless such notification is retrospectively validated by a supporting amendment of sec.
4 of the Principal Act or by making secs.
2 and 3 of the Amendment Act retrospective.
and by a fiction deeming it to have been made under such amending provision.
Counsel for the petitioners raised the following conten tions: (1) that Act 13 of 1967 does not revive sec.
4 notification dated November 13, 1959 which became exhausted after the first sec.
6 declaration in 1961 was made and therefore no acquisition in respect of the rest of the land could be made without a fresh sec.
4 notification.
The contention was that secs.
2 and 3 being prospective they did not resuscitate the sec.
4 notification though subsequent acquisitions including orders and declarations under sec.
6 are validated and that such validation has no efficacy as there would be no basis by way of a sec.
4 notification for such acquisition or order or declaration.
(2) that Act 13 of 1967 is in derogation of the requirements of article 31(2) as it purports to authorise acquisition without a fresh sec.
4 notification thereby allowing compensation to be paid on the basis of an exhausted sec.
4 notification and on the value of the land prevailing on the date of such exhausted notification.
(3) that the Amendment Act is in violation of article 14 in that (a) where a sec.
4 notification is made before 20 1 1967, sec.
6 declaration can be made within 2 years from the said date, i.e., on or before 20 1 69.
But where the land is notified after 20 1 67 sec.
6 declaration would have to be made within 3 years from the date of such notification.
In the former case a much longer period is provided for a sec.
6 declaration than in the latter case; (b) where a sec.
4 notification is made after 20 1 67 compensation would be fixed on the basis of the value on that date but where a sec.
4 notification is made before 20 1 67 compensation would be on the basis of the value on the date of the exhausted notification howsoever long a period has elapsed since such notification; (c)if compensation has not been paid before 20 1 67 interest has to be paid on the compensation amount, but if compensa tion has been paid before 20 1 67 no interest is payable though acquisition in both the cases springs from the same sec.
4 notification; 83 (d)in the case of sec.
4 notification issued after 20 1 67 if Sec.
6 declaration is not made within three years a fresh sec.
4notification is necessary and compensation would be on the basis of the value on the date of such fresh notification but where a section 4 notification is issued before 20 1 67 there is no defined period and sec.
6 declaration can be made until 20 1 69.
Therefore the owner gets compensation on the value at the date of section 4 notification howsoever long the intervening period may be.
A person affected by see.
4 notification issued after 20 1 67 is thus differently treated than the one who is affected by such a notification issued ' before 20 1 67.
In Writ Petition No. 85 of 1967 an additional point was raised, viz., that though 16 colonies in village Kilkori were denotified under section 48, the land of the petitioner though, situate within the same notified area was not denotified thus.wrongly discriminating him.
In Writ Petition No. 223 of 1966,Mr.
Mani contended that the Amendment Act merely seeks to reverse the decision of this Court, that the Act is not a legislative but a judicial act and that though the Constitution has not brought about separation of powers nonetheless it does not confer unlimited powers on the legislature to encroach upon the judicial power.
In other words, the legislature seeks to control the courts 'function by requiring of them a construction of law according to its views.
The legislative action cannot be made to retroact upon past transactions and controversies and reverse decisions which the courts in exercise of their undoubted authority have made,.for, that would mean not only exercise of a judicial function but in effect to sit as a court of review to which the past transactions and controversies are referred to.
The question as formulated by him is whether a statute which simply validates acts and orders pronounced upon by a court as invalid is sustainable without a retrospective law providing that such acts and orders are deemed to have been made under the validating Act and as, if such validating Act was in existence at the date of such acts and orders.
On the question whether the Amendment Act is in derogation of the requirements of article 31(2), the contention of the Solicitor General was that it is not the law contemplated by Art.31(2) as it merely amends sections 5A and 6 of the Principal Act and does not touch either section 4 or section 23 which deal with compensation,.that it amends only the procedural provisions and that sec.
4 thereof merely validates acquisitions including orders and notifications purported to have been made or passed to get over the difficulty create by Sharma 's Case(1).The impugned Act does not frankly deal with compensation.
But as already stated it is not the form of a statute under (1) [19661 3 S.C.R. 557.
84 challenge which matters but its substance, and the direct impact it has on the constitutional requirements.
Though sees.
2 and 3 amend sections 5A and 6 of the Principal Act enabling multiple inquiries, reports and declarations in respect of different parcels of land notified under section 4, the validating provisions of section 4 have a direct, impact on the question of compensation payable under the Act.
Where a sec.
4 notification has been issued at any time before 20 1 67, as has happened in the instant cases, a large area can be notified under sec.
4, say, in 1959, and yet sec.
6 declarations can be made by reason of section 4 of the impugned Act at different times and as late as 1969.
Yet, the compensation would be on the value in 1959 irrespective of the fact that such value has appreciated in the meantime due to the general spiralling of prices and not as a consequence of its having been notified under sec.
It is manifest that but for the validating provisions of section 4 of the Amendment Act government would have had either to proceed with the acquisition of the whole of the notified land or to proceed with part of it and thus exhaust the sec.
4 notification and release the rest of the land from acquisition.
If further land is subsequently needed a fresh notification under section 4 would have been necessary and compensation would have to be paid on the basis of the value on that date.
The impugned Act enables government to acquire the land once it is notified under sec.
4 in different parcels and if the notification is of a date prior to 20 1 67 pay the same compensation depriving the owner of the appreciation of value during the intervening period.
Such appreciation would have had to be compensated for but for sec.
4 of the impugned Act .
Each parcel of land in an area notified under sec.
4 would thus be dealt with differently depending on at what point of time it is acquired.
A piece of land would fetch compensation at X amount even though its market value has doubled by the time sec.
6 declaration in respect of it is made.
Another piece of the very same land would be awarded the same compensation even if the appreciation "in its value is four fold only because government can now acquire it at a subsequent date.
The deprivation of the appreciated value to different owners or to the same owner if both the parcels of land belong to the same would vary depending upon when government chooses to acquire each of such parcels.
Therefore, from the mere fact that the impugned Act does not amend sec.
4 or sec. 23 it is not possible to say that it is not an Act dealing with or affecting compensation.
Besides, by amending sees.
5A and 6 and validating acquisitions, orders and declarations the Amendment Act brings about changes of a fundamental character in the Act by converting the unitary character of an acquisition into a diversified one, in that instead of one inquiry and one report by the same officer,.
one declaration under sec.
6 and one award, it permits several inquiries and several reports by different officers, several declarations and even 85 several awards thus altering the very structure of the Principal Act.
It is thus impossible to say that the impugned Act is not the law of acquisition contemplated by article 31(2).
, It was, however, contended that even so, (1) the impugned Act does not alter the principle in section 23 of the Act that compensation is to be fixed on the basis of market value at the date of section 4 notification and that such mode of compensation is based on a long standing principle that the owner is not entitled to any increase in value as a result of the land having, been notified; and (2) that the basis of compensation emerging from the Amendment Act has a bearing on the adequacy of compensation and hence the court is barred under the amended article 31(2) from making any scrutiny.
The principle on which compensation is to be ascertained has., undergone changes from time to time.
In the Act of 1870, section 24 provided that it should be fixed on the basis of the value at the time of paying compensation.
That was changed in the Act of 1894 under which the date of section 6 notification was made,.the crucial date for ascertaining compensation.
This was changed in 1923 when the market value on the date of section 4 notification was made the measure of compensation.
This was done as section 5A was then introduced for the first time in the Act.
It was felt that the insertion of section 5A would create, a time.
gap between the notification under section 4 and the actual acquisition.
The date of section 4 notification was accepted as the crucial date on the principle that in calculating compensation it was fair to exclude appreciation due, to the land having been notified for a scheme for which 'it was sought to be acquired.
The, principle on which appreciation in value after the issuance of section 4 notification was.
excluded is no longer valid or in accord with the present day realities for it is a notorious fact that prices of properties have, been continuously rising for reasons into which it is neither ne cessary nor relevant to go into.
The principle excluding appreciation as a result of section 4 notification has been there for a long time.
But the argument that section 23 is not altered by the Amendment Act does not lead us any further, for, the inquiry is what is the impact of the impugned Act on the question of compensation payable to the expropriated owner.
If the impugned Act had not nullified the decision in Sharma 's Case(1) and had not ruled that section 4 notification would not become exhausted, fresh notification under section 4 Would have become necessary and higher compensation would have become payable than now.
The fact that neither section 4 nor section 23 is altered therefore does not make any difference.
(1) ; 86 The impugned Act being a legislation after the 4th Consti tution amendment of 1955 the question as to the adequacy of compensation is no longer amenable to judicial scrutiny but the amendment of article 31(2) in 1955 has not affected the constitutional requirement that no property can be compulsorily acquired except under a law providing for compensation or which provides principles fixing such compensation.
As to what the term "compensation" in article 31 means has been the subject matter of several decisions of this Court and the term has as a result acquired a well settled interpretation.
In Bela Banerjee 's Case(1) Patanjali Sastri C.J. in repelling the contention that compensation 'in Entry 42 of List III could not mean full cash equivalent laid stress on the distinction between the word "compensation ' in article 31 and the said Entry and the words "the acquisition of property on just terms" in section 51 (XXXI) of the Australian Constitution Act and held that compensation meant just equivalent and the principles which should govern the determination of compensation amount to be given to the expropriated owner must ensure that what is determined must be such compensation, i.e., just equivalent.
In striking down the proviso to section 8 of the West Bengal Land Development and Planning Act, XXI of 1948 he observed that the fixing of an anterior date which has no relation to the value of the land when it is acquired, may be many years later, cannot but be regarded as arbitrary.
Similarly in Namasivaya Mudaliar 's Case (2) this Court held, following Bela Banerjee 's Case(1), that any principle for determination of compensation denying the owner all increments in ' value between a fixed date and the date of section 4 notification must be regarded as denying to the owner the true equivalent of the land which is ,expropriated and that it is for the State to show that fixation of compensation on the market value on an anterior date does not constitute violation of the constitutional guarantee.
This decision was in respect of a law before the 1955 amendment and the court expressed no opinion on the question whether it was possible by enacting legislation after the 1955 amendment to provide that compensation may be fixed on the basis of value prevailing on a certain anterior date.
Jeejeebhai vs Assist.
Collector(3).
It was thus well settled before the amendment of article 31(2) in 1955 that there could not be a valid acquisition unless the law authorising it provided.
compensation, i.e., just equivalent or principles fixing such compensation, i.e., just equivalent of what the owner is deprived of., The question as to the impact of the 1955 amendment of article 31(2) on this principle arose in (1) ; at p. 563 64.
(3) ; (2) ; 87 P. Vajravelu Mudaliar vs Deputy Collector(1).
This decision laid down the following propositions : (i) whether the principles laid down in an impugned Act take into account all the elements to make up the true value of the property and exclude matters which are to be included is a justiciable issue; (ii) that the law fixing compensation or laying down princi ples governing its fixation cannot be questioned on the ground of inadequacy; (iii)that the connotation of "compensation" and the question of justiciability are distinct concepts and should be kept apart while considering the validity of the impugned provision; (iv) that the fact that the amended Article uses the same words, viz., "compensation" and "principles" shows that Parliament used them in the sense in which they were construed by this Court, and (v) that the legislature must provide for a just equivalent or lay down principles fixing such just equivalent and if that is done, such a law cannot be questioned on the ground of inadequacy of compensation.
As to how and in what manner the question of adequacy would arise was illustrated by giving various examples.
Article 31(2) as amended means therefore that if the impugned Act either fixes just equivalent as compensation or lays down principles for fixing such just equivalent it cannot be impeached on the ground that such compensation is inadequate or that when working out those principles the resultant compensation is inadequate.
But this does not mean that the amendment permitted the legislature, to fix inadequate compensation or to lay down principles fixing compensation which is not just equivalent.
Such a theory attributes an intention to the legislature to enact a law in terms of.
contradiction, for, compensation which, is not just equivalent is no compensation as interpreted by this Court and understood when article 31(2) was amended and giving any such meaning to that Article would be contrary to the well settled principle of construction that where the legislature uses in an Act a legal term which has received judicial interpretation it must be assumed that it is used in the sense in which it has been judicially interpreted unless a ' contrary intention appears.
At p. 629 of the report it has clearly been laid down that "If the legislature though ex facie purports to provide for compensation or indicates the principles for ascertaining the same but in effect and substance takes (1) ; 88 away a property without paying compensation for it, it will be exercising power which it does not possess.
If the legislature makes a law for acquiring a property by ,providing for an illusory compensation or by indicating the principles for ascertaining the compensation which do not relate to the property acquired or to the value of such property at or within a reasonable proximity Of the date of acquisition or the principles are so designed and so arbitrary that they do not provide for compensation at all one can easily hold that the legislature made the law in fraud of its powers.
" Following this decision this Court held in the Union of India vs Metal Corporation of India(1) that the principles laid down in the impugned Act were not in accord with article 31(2) and that an acquisition law "to justify itself has to provide for the payment of a just equivalent to the property acquired or lay down principles which are not arbitrary but which are relevant to the fixation of compensation.
It is only when the principles stand this test that the adequacy of the resultant compensation falls outside the judicial scrutiny under the second limb of article 31(2).
" It is true that in Vajravelu 's Case(2) it was held that in the context of the continuous rise in land prices, fixation of an average price over 5 years amounted to ascertaining the price of the land in or about the date of acquisition and that omission of one of the elements which should properly be taken into account for fixing compensation though resulting in inadequacy of compensation would not constitute fraud on power.
But there is no analogy between the provisions of the impugned Act in that case and ' the instant cases.
Though that Act varied the method of ascertainment of compensation provided by section 23 of the Principal Act it provided for taking the average of prices prevailing during the 5 years in or about the date of acquisition.
By striking the average of prices during those 5 years the Act actually took into account the appreciation in value during the 5 years preceding the acquisition for fixing the compensation.
The position in the instant cases is quite different.
The impugned Act does not provide for any such average price as was done in Vajravelu 's Case.(2) Though section 4 apparently validates ' acquisitions, orders and notifications made on the basis of section 4 notification issued before 20 1 67, in effect and substance it seeks to treat such a notification under section 4 which had lost its efficacy and had become exhausted where section 6 declaration has been made (1) ; , (2) ; 89 for a part of the land covered by such section 4 notification as still outstanding.
This is sought to be done without any legislative provision in the impugned Act revitalising the notification which had become dead and inefficacious.
Such a thing could not be done by merely validating acquisitions, orders and declarations without revitalising by some provision the notifications under section 4 which had become exhausted and on which such acquisitions including orders and declarations are founded.
Nor could it validate inquiries and reports under section 5A and declarations under section 6, all of which are made on the basis of a notification which was no longer alive except by retrospectively amending section 4 and declaring such section 4 notification as having been made under such amended section 4.
Not having so done, the direct result of the validating provisions of section 4 of the impugned Act is to fix compensation on the basis of the market value existing on the date of section 4 notification which had exhausted itself.
By validating the acquisitions, orders and declarations made on the basis of such an exhausted notification the impugned Act saves government from having to issue a fresh section 4 notification and having to pay compensation calculated on the market value as on the date of such fresh notification and depriving the expropriated owner the benefit of the appreciated value in the meantime.
The real object of section 4 of the impugned Act is thus to save the State from having to compensate for such appreciation under the device of validating all that is done under an exhausted section 4 notification and thus in reality fixing an anterior date, i.e., the date of such a dead s.4 notification for fixing the compensation.
We apprehend that section 4 of the impugned Act suffers from a two told vice : (i) that it purports to validate acquisitions, orders and notifications without resuscitating the notification under section 4 by any legislative provision on the basis of which alone the validated acquisitions, orders and declarations can properly be sustained and (2) that its provisions are in derogation of article 31(2) as interpreted by this Court by fixing compensation on the basis of value on the date of notifications under section 4 which had become exhausted and for keeping them alive no legislative provision is to be found in the impugned Act.
It is therefore not possible to agree with the view that the purpose of section 4 is to fill in the lacuna pointed out in Sharma 's Case(1) nor with the view that it raises a question of adequacy of compensation.
The section under the guise of validating the acquisitions, orders and notifications camouflages the real object of enabling acquisitions by paying compensation on the basis of values frozen by notifications under section 4 which by part acquisitions thereunder had lost their efficacy and therefore required the Test of the land to be notified afresh and paying compensation on the date of such fresh notifications.
(1) ; L4Sup.
C.I/68 7 90 In this view, it is not necessary to go into the other questions raised by the petitioners and we refrain from expressing any opinion on them.
We would declare section 4 as invalid and allow the petitions with costs.
ORDER In accordance with the opinion of the majority the petitions are dismissed.
No order as to costs.
| The appellant was a jute mill.
The Industrial Tribunal framed a gratuity scheme for its workers.
It was challenged by the appellant before this Court in an appeal under article 136 of the Constitution.
Two contentions were urged, namely : (i) that the wage board was unable to recommend a gratuity scheme for the jute industry and hence there was no justi fication to frame the impugned scheme; (ii) in view of the losses incurred by the appellant during the years 1960 65, no additional burden should have been cast on it by introducing a gratuity scheme.
HELD : (i) The Wage Board 's recommendation pertained to the jute industry as a whole and not to any individual industrial unit.
It cannot be understood as recommending that there should be no gratuity scheme for the employees in any particular unit in that industry.
What was relevant to find out was whether the appellant could bear the additional burden.
[10 B] (ii) The Tribunal recommended the gratuity scheme after taking into consideration the financial position of the appellant as well as the fact that in a sister concern such a scheme was in existence.
The losses suffered by the appellant were considered by the Tribunal to be a passing phase.
What is of essence is the profit making capacity of the concern.
In determining that question one has to take into consideration the paid up capital of the company, its reserves, its earnings in the past and its future prospects.
A practical view of the question has to be taken.
[10 D, G] In the light of these principles and on the material placed before the Tribunal it was not possible to hold that the Tribunal 's conclusion was without any just basis.
[12 A] National Iron & Steel Co. Led. & Ors.
vs State of West Bengal & Anr.
; and Calcutta Insurance Co. Ltd. vs Their Workmen, ; , relied on.
|
ivil Appeal No. 1043 of 1990.
From the Judgment and Order dated 10.8.1989 of the Bombay High Court in C.R.A. NO.
521 of 1985.
V.A. Bobde, S.D. Mudaliar.
Mrs. Ranjana Bobde and C.K. Ratnaparkhi for the Appellants.
V.P. Salve, and Ms. Bina Gupta for the Respondent.
The Judgment of the Court was delivered by VERMA, J.
Special Leave granted.
The short question involved is the maintainability of the suit which gives rise to this appeal.
The appellants contend mat the Suit is not maintainable even on the plaint averments.
The Trial Court held the suit to be maintainable and the High Court has dismissed the appellants ' revision affirming that view.
Hence this appeal by special leave.
The appellants are the legal representatives of Motilal who purchased the disputed property, namely, 'Goyal Talkies ' at Kamptee in the year 1946.
The said Motilal entered into a partnership on 31.12.1953 with respondent Ratanlal repre senting the joint family firm "M,s.
Ratanlal Damdoolal and Bros." for the purpose of running the cinema business in 'Goyal Talkies '.
Some disputes having arisen between the parties, the said Motilal together with his wife and chil dren filed Civil Suit No. 19A of 1955 on 4.8.1955 in the Court of Civil Judge, Class I, Nagput, against respondent Ratanlal as defendant No. 1, the firm "M/s. Damdoolal and Bros." as defendant No. 2 and one Puranmal as defendant No. 3.
The suit was for the dissolution of partnership, rendi tion of accounts and ancillary reliefs.
On discovery of the misdescription of defendant No. 2 firm, an application was made by the plaintiff for correction of that misdescription.
The misdescription being obvious, the Trial Court allowed the plaintiff 's application on 19.8.1955 permitting defend ant No. 2 firm to be correctly described as "M/s. Ratanlal Damdoolal and Bros." instead of "M/s. Damdoolal and Bros." It appears that the correction even though permitted was 175 not actually incorporated in the plaint.
However, the par ties were not misled in any manner by the misdescription of defendant No. 2 made initially in the plaint which is evi dent from the fact that defendant No. I Ratanlal who filed the separate written statement in the suit on behalf of defendant No. 2 also correctly described defendant No. 2 as "Ratanlal Damdoolal and Bros." This suit was compromised between the parties and a compromise petition dated February 20, 1956 signed by the plaintiff, Motilal, Ratanlal for himself as defendant No. 1 and also on behalf of defendant No. 2 firm, and the counsel for defendant Nos. 1 and 2 was filed in the Trial Court.
This compromise was recorded by the Court on 5.3.1956 after the statements of defendant No.1 Ratanlal and the counsel for defendant No. 2 firm were recorded accepting the compromise.
One of the agreed terms was that defendant No. 3 Puranmal should be discharged from the suit apparently because he had no interest in the suit.
According to the terms of the compromise, plaintiff was to pay to defendant Nos. 1 and 2 a sum of Rs.15,700 in full satisfaction of their claim subject to final accounting, which included the sum of Rs.2,600 paid to Puranmal by defendant Nos. 1 and 2.
It was also agreed that on payment of this amount by the plaintiff to defendant Nos. 1 and 2 within the specified period, the partnership would be deemed to be dissolved and that defendant Nos. 1 and 2 gave up all their rights including the interest acquired by them from defendant No. 3, Puranmal under the sale deed executed in their favour.
It was agreed that the plaintiff would be entitled to possession of the talkies immediately on payment of the amount due to defendant Nos. 1 and 2.
The Receiver Shri K.S. Mishra Advocate, was required to act in terms of the compromise between the parties which required confirma tion of accounts from the accountbooks of the partnership and thereafter distribution of the surplus between the plaintiff and defendant Nos. 1 and 2.
The plaintiff paid this sum of Rs.15,700 on 5.3.1956 well within the specified period; the receiver rendered accounts on 19.3.1956 and an application for correction was made on 3.4.1956.
It may be mentioned that full compliance having been made by the plaintiff on 5.3.
1956, the receiver gave possession of the Talkies to the plaintiff on 5.3.
1956 according to the compromise since the Only thing remaining to be done thereafter was to refund to the plaintiff the amount of Rs.5,470 paid in excess by plaintiff to defendant Nos. 1 and 2.
Accordingly, on 16.11.1959 the Court passed the final decree in the suit stating that the partnership stood dissolved with effect from 27.4.1959 and the defendant Nos. 1 and 2 were directed to refund to the plaintiff the amount of Rs.5,470 which was the excess amount paid by the plaintiff to them.
176 Notwithstanding the above facts, defendant Nos. 1 and 2 filed an appeal against the final decree dated 16.11.1959 in the Court of the Extra Assistant Judge, Nagpur which was C.A. No. 413 of 1962 decided on 27.12.
Thereafter, a second appeal No. 293 of 1963 was also filed by these de fendants in the High Court which too was dismissed on 2.12.1972.
The final decree dated 16.11.1959 based on the compromise which was fully satisfied become final inasmuch as the defendants did not challenge the same by a further appeal to this Court.
Thereafter, Civil Suit No. 1699 of 1980 in the Court of Civil Judge, Senior Division, Nagpur, was filed by respond ent Ratanlal against the petitioners who are the legal representatives of the aforesaid Motilal assailing the above consent decree after taking the entire benefit thereunder.
The reliefs claimed in this suit are for a declaration that the aforesaid final decree dated 16.11.
1959 passed on the basis of the order dated 5.3.1956 in Civil Suit No. 19A of 1955 by the Civil Judge, Senior Division, Nagpur, is a nullity; that the partnership under the partnership deed dated 31.12.1953 between the said Ratanlal and Motilal continues to subsist; that Ratanlal is entitled to posses sion of the said Goyal Talkies; and the other ancillary reliefs.
This suit was contested by the petitioners, inter alia on the ground that it was barred by res judicata by the earlier adjudication between the parties and also that it was not maintainable.
It would suffice to say that as a result of the High Court 's direction, the Trial Court framed preliminary issue regarding maintainability of the suit and by its order dated 15.4.1985, it held the suit to be main tainable.
On behalf of the petitioners the suit was claimed to be barred also by virtue of Rule 3A of Order 23, C.P.C. The Trial Court rejected these contentions and held the suit to be maintainable.
The petitioners then preferred a Civil Revision in the High Court which has been dismissed by the Order dated 10.8.1989.
Hence this appeal by special leave.
The contention of Shri V.A. Bobde, learned counsel for the appellant is that the suit is barred by virtue of Rule 3A of Order 23, C.P.C. and even otherwise the plaint aver ments do not disclose any cause of action in order to raise a triable issue.
He also contended that even if Rule 3A inserted in Order 23, C.P.C. by the C.P.C. Amendment Act, 1976 with effect from 1.2.1977 does not apply to the present suit challenging the decree passed prior to the amendment, this suit is barred also in accordance with the unamended provision existing earlier.
In reply, Shri V.P. Salve, learned counsel for the respondent contended that Rule 3A of Order 23, C.P.C. has no application since the decree as sailed in the suit is of a date much prior to insertion of 177 Rule 3A by amendment with effect from 1.2.
He also contended that the question of examining the frame of the suit to determine its maintainability on any other ground does not arise since the petitioners case was based on the bar under Order 23, Rule 3A, C.P.C., which too was an objec tion raised after the filing of the written statement in which the plea of res judicata had been taken.
However, in all fairness Shri Salve made no attempt to contend that the suit as framed raises any triable issue on the basis of the only grounds on which the decree dated 16.11.1959 is alleged to be a nullity.
He urged only two additional grounds, not pleaded in the existing plaint, which were raised unsuccess fully on behalf of the present respondent in the First Appeal and the Second Appeal against the compromise decree to contend that the suit is triable.
He also urged that no specific objection for rejection of the plaint under Order 7 Rule 11 C.P.C. was taken earlier and, therefore, the matter be remanded for a fresh consideration on this basis.
To avoid protracting this litigation any longer, we gave opportunity to learned counsel for the respondent to prepare the case on this point.
Shri Salve then filed an application for amendment of the plaint on the next day in any attempt to plead the additional grounds on which alone he claimed the suit to be triable.
We may first dispose of the application for amendment to the plaint filed by Shri Salve on January 12, 1990 during the course of hearing of the appeal.
We do not find any ground to allow this application which apart from being highly belated, is clearly an after thought for the obvious purpose of averting the inevitable consequence of rejection of the plaint on the ground that it does not disclose any cause of action or raise any triable issue.
Moreover, the proposed amendments in the plaint, as summarised by Shri Salve, are to raise two grounds which are concluded by the earlier adjudication ending with dismissal of Ratanlal 's Second Appeal against the impugned decree.
The first is the consequence of rejection of the plaint under Order 7, Rule 11, C.P.C. in the earlier suit on 26.3.1959 and its revival on payment of court fee by plaintiff, Motilal, in terms of that order itself.
It is sufficient to mention that the High Court 's order dismissing the Second Appeal arising out of that decree considers and rejects this argument and that order has become final between the parties since it was not challenged thereafter.
The second point relates to delivery of possession of the Talkies on 5.3.1956 to plaintiff, Motilal, which is alleged to have been made under a wrong procedure.
The facts narrated above clearly indicate that delivery of possession by the 178 Receiver, Shri K.S. Mishra, Advocate, to plaintiff, Motilal, was in pursuance of the Court 's order dated 5.3.1956 after plaintiff Motilal had already deposited the sum of Rs.15,700 which was really in excess of the amount required to be paid by the plaintiff, Motilal, to.
defendant Nos. 1 and 2 re sulting in subsequent refund of Rs.5,470 to plaintiff and the express compromise between parties which was accepted by Ratanlal in his statement recorded by court on 22.2.
This contention also was rejected in the earlier adjudica tion ending with the High Court 's dismissal of the Second Appeal which has become final.
Moreover, this appeal is not against that decision of the High Court.
There is no ground to allow the belated attempt to amend the plaint for taking these grounds.
The application for amendment is, therefore, rejected.
We do not consider it necessary to decide the applica bility of Rule 3A of Order 23, C.P.C. to the present suit since the matter can be disposed of even otherwise.
The plaint averments specify the grounds on which the decree dated 16.11.
1959 is alleged to be nullity.
The question is: whether any of these grounds raises a triable issue in the suit or in other words does the plaint disclose any cause of action? The specific case of the respondent as clearly mentioned in Para 3 of the impunged order dated 10.8.
1989 of the High Court is as under: "The plaintiff has never claimed that some fraud, coercion or misrepresentation is played.
On the other hand, he says that due to the lapses while deciding the matter, decree passed by the Court below has become a nullity.
It is, therefore, clear that the respondent/plaintiff does not challenge validity of the decree dated 16.11.1959 on the ground of fraud, coercion or misrepresentation but merely on the basis of lapses in deciding the earlier suit which have been specifically mentioned in para 6 of the plaint.
It is, therefore, only on these limited grounds that the question of maintainability of the present suit has to be decided.
We shall, therefore, now refer to the grounds mentioned in para 6 of the plaint which alone are relied on to dis close a cause of action for the suit.
The first ground of nullity averred in para 6 of the plaint is that the decree was passed against a non existent person "M/s.
Damdoolal and Bros." It is not the respondent 's case that "M/s. Dam doolal and Bros." is a legal entity distinct from "M/s. Ratanla Damdoolal and Bros." so that the decree was against another person As earlier stated, in the written statement filed by respondent Ratan 179 lal, the description of defendant No. 2 was correctly given by respondent Ratanlal himself as "M/s. Ratanlal Damdoolal and Bros." and not "M/s. Damdoolal and Bros." Moreover, an order dated 19.8.
1955 was made by the trial court permit ting the correction to be made even though it was not duly incorporated in the plaint thereafter.
It is significant that the first appeal and the second appeal filed against the compromise decree made by the respondent in which the firm as one of the appellants was correctly described as "M/s. Ratanlal Damdoolal and Bros." and not "M/s. Damdoolal and Bros".
The decree was, therefore, against "M/s. RatanIal Damdoolal and Bros." and this is how it was admittedly understood throughout by the respondent himself who repre sented the firm at every stage of the earlier suit till the final decision by the High Court, describing the firm cor rectly as "M/s. Ratanlal Damdoolal and Bros." Obviously this ground is non existent.
The next ground of nullity pleaded is that the decree does not direct discharge of defendant No. 3, Puranmal.
Admittedly, no relief was claimed or granted against defend ant No. 3, Puranmal who was treated by all to be only a formal party.
This ground also is, therefore, non existent.
The next ground is that there is no consideration for aban donment of the interest of Puranmal which renders the corre sponding term void.
Admittedly, the terms of compromise show payment of Rs.2,600 to Puranmal and execution of a sale deed by Puranmal in favour of defendant Nos. 1 and 2 who alone thereafter remained the interested parties.
This is how Shri Salve, learned counsel for the respondent summarised the entire grounds of nullity pleaded in the plaint.
On the admitted facts appearing from the record itself, learned counsel for the respondent, was unable to show that all or any of these averments in the plaint disclose a cause of action giving rise to a triable issue.
In fact, Shri Salve was unable to dispute the inevitable consequence that the plaint was liable to be rejected under Order 7 Rule 11, C.P.C. on these averments.
All that Shri Salve contended was that the Court did not in fact reject the plaint under Order 7 Rule 11, C.P.C. and summons having been issued, the trial must proceed.
In our opinion, it makes no difference that the Trial Court failed to perform its duty and proceeded to issue summons without carefully reading the plaint and the High Court also overlooked this fatal defect.
Since the plaint suffers from this fatal defect, the mere issuance of summons by the Trial Court does not require that the trial should proceed even when no triable issue is shown to arise.
Permitting the continuance of such a suit is tantamount to licensing frivolous and vexatious litigation.
This cannot be done.
180 It being beyond dispute that the plaint averments do no disclose a cause of action, the plaint is liable to be rejected under Order 7 Rule 11, C.P.C. without going into the applicability of Order 23 Rule 3A, C.P.C. to the present suit.
Having reached this conclusion, it is unnecessary to adopt the technical course of directing the Trial Court to make the consequential order of rejecting the plaint and, instead, we adopt the practical course of making that order in this proceeding itself to avoid any needless delay in conclusion of this futile litigation.
Consequently, the appeal is allowed.
The impugned orders of the Trial Court and the High Court holding the suit to be maintainable are set aside and the plaint is rejected under Order 7 Rule 11, C.P.C. The respondent shall pay the appel lants ' costs throughout.
R.S.S. Appeal allowed.
| The respondent, a Sub Inspector of police, was convicted under section 376 of I.P.C. for having committed rape on a young newly married girl of 19 or 20 years of age, by the Additional Sessions Judge, Nagpur.
The respondent challenged his conviction in appeal to the High Court.
The High Court set aside the order of conviction and sentence imposed by the trial court and acquitted him.
The State feeling ag grieved came up in appeal by special leave.
While allowing the appeal setting aside the order of the High Court and restoring that of the Trial Court, the Court, HELD: A prosecutrix of a sex offence cannot be put on par with an accomplice.
She is in fact a victim of the crime.
The Evidence Act nowhere says that her evidence cannot be accepted unless it is corroborated in material particulars.
She is undoubtedly a competent witness under section 118 and her evidence must receive the same weight as is attached to an injured in cases of physical violence.
The same degree of care and caution must attache in the evalua tion of her evidence as in the case of any injured complain ant or witness and no more.
[123B C] What is more necessary is that the Court must be alive to and conscious of the fact that it is dealing with the evidence of a person who is interested in the outcome of charge levelled by her.
Having regard to the increase in the number of sex violation cases in the recent past, particu larly cases of molestation and rape in custody, it is proper to remove the notion, if it persists, that the testimony of a woman who is a 116 victim of sexual violence must ordinarily be corroborated in material particulars except in the rarest of rare cases.
[123C D; 124B C] Ours is a conservative society where it concerns sexual behaviour.
Ours is not a permissive society as in some of the Western and European countries.
Our standard of decency and morality in public life is not the same as in those countries.
It is, however, unfortunate that respect for womanhood in our country is on the decline and cases of molestation and rape are steadily growing.
An Indian Woman is now required to suffer indignities in different forms, from lewd remark to eve teasing, from molestation to rape.
Decency and morality in public life can be promoted and protected only if we deal strictly with those who violate the social norms.
The standard of proof to be expected by the Court in such cases must take into account the tact that such crimes are generally committed on the sly and very rarely direct evidence of a person other than the prosecu trix is available.
[124D F] Courts must also realise that ordinarily a woman, more so a young girl, will not stake her reputation by leveling a false charge concerning her chastity.
By our criminal laws vide powers are conferred on police officers investigating cognizable offences.
The infrastructure of our criminal 'investigation system recognises and indeed protects the right of a woman to decent and dignified treatment at the hands of the investigating agency.
[124F H] The purpose and setting, the person and his position, the misuse or abuse of office and the despair of the victim which led to her surrender are all relevant factors which must be present in the mind of the Court while evaluating the conduct evidence of the prosecutrix.
A person in author ity, such as a police officer carries with him the awe of office which is bound to condition the behaviour of his victim [125C D] The Court must not be oblivious of the emotional turmoil and the psychological injury that a prosecutrix suffers on being molested or raped.
She suffers a tremendous sense of shame and the fear of being shunned by society and her near relatives including her husband.
Instead of treating her with compassion and understanding as one who is an injured victim of a crime, she is, more often than not, treated as a sinner and shunned.
It must, therefore be realised that a woman who is subjected to sex violence would always be slow and hesitant about disclosing her plight.
The Court must, therefore, evaluate her evidence in the above background.
117 Bharwada Bhognibhai Hirjibhai vs State of Gujarat, ; upon.
|
ivil Appeal No. 1319 of 1990.
717 From the Judgment and Order dated 7.9.1987 of Delhi High Court in S.A.O. No. 99/1987.
Dr. L.M. Singhvi and Dalveer Bhandari for the Appellant.
Dr. Y.S. Chitale and A.K. Sangal for the Respondent.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
Special Leave granted.
This is an appeal by the landlady whose application for being put in possession of the premises on the expiry of a limited tenancy of two years under section 21 of the Delhi Rent Control Act (hereinafter referred to as 'the Act ') has been dismissed by the Rent Controller, the Rent Control Tribunal and the High Court.
On 30th September, 1976, the appellant landlady and the respondent tenant appeared before Shri M.A. Khan, Additional Rent Controller for creation of a tenancy under section 21 of the Act.
The Additional Rent Controller recorded the statements of both the landlady and the prospective tenant and made the following order: "Having regard to the facts stated in the petition and the statement of the parties made above permission under section 21 of the Delhi Rent Control Act is granted to Yamuna Maloo applicant to let out ground floor of her premises No. B 2/104, Safderjung Enclave, New Delhi comprising of drawing cum dining hall, two bed rooms with attached bath room, kitchen, parking place and a small ' lawn delineated in the enclosed plan exhibit AI, to Mr.
Anand Swarup respondent for residential purposes for a limited period of two years with effect from 1.10.76.
" After the expiry of the two year period, when the re spondent did not vacate the premises, the landlady moved the Rent controller for issuance of warrant of possession to which the tenant filed his objection.
The Additional Rent Controller entertained the objection and dismissed the landlady 's petition for being put into possession.
There upon the landlady moved the Rent Control Tribunal in appeal and when she failed before it, a second appeal was filed before the High Court which was dismissed in limine.
718 The Controller relied upon the judgment of this Court in S.B.Noronah vs
Prem Kumari Khanna[1980] 1 SCR 281 and came to hold: "I have carefully gone through the execution appli cation, the objections, the evidence on record, the original file in which the permission was granted and have heard the learned counsel for parties.
I am of the view that the order dated 30.9.75 granting permission was not in accordance with law and that the applicant/petitioner is not entitled to obtain possession of the premises in dispute under section 21 of the Delhi Rent Control Act.
" Noronah 's case had stated: "Of course, there will be presumption in favour of the sanction being regular, but it will Still be open to a party to make out his case that in fact and in truth the conditions which make for a valid sanction were not present.
" It is interesting to note that by the time the appel lant 's appeal came up for hearing before the Tribunal, Shri M.A. Khan who as an Additional Rent Controller had approved the tenancy by his order dated 30th September, 1976, on being judicially satisfied that the tenancy under section 21 of the Act could be created had become the Rent Control Tribu nal.
He noticed this fact in his appellate order dated 11th April, 1986, by stating "In this appeal, the validity and executability of the order dr. 30.9.76 is disputed which was passed by me as Addl.
Rent Controller.
Since there is no other Rent Control Tribunal, therefore, in exigency of the situation I have no option but to proceed to decide this appeal.
" He concluded "The appellant in the application and in her statement did not give the reason for letting out the premises for two years only.
She even did not give the reason in application for recovery or ' possession.
In reply to the objection of the respondent, she states that she was residing in Vasant Vihar at a house which was allotted to her husband by the employer.
There was no possibility of her vacating the said 719 house and shifting to the disputed premises.
The first floor of the disputed premises was also let out by her to another tenant for a limited period.
She did not disclose that she intended to create a limited tenancy in respect of the first floor also.
Further the premises were let after an adver tisement of 'to let ' in Hindustan Times dt.
25.9.76.
It is conceded that in the advertisement it was not specified that the premises were available for letting for two years only.
All these facts proved that the appellant did not require the premises for occupation after two years and that these premises could have been let out for an indefinite period.
She made a wrong statement before the court.
She also con cealed the material facts from the court.
She obtained the permission from the court under section 21 by playing fraud.
The order passed under section 21 is therefore invalid and in execution thereof, the respondent cannot be evicted.
" We have already said that the second appeal was dis missed in limine.
Lengthy arguments were advanced at the hearing in support of the respective stands.
Counsel for the landlady argued that the Additional Rent Controller should not have entertained the objection of the tenant to the execution of the eviction order as the same had not been filed during the currency of the tenancy; it was further argued that some of the considerations which weighed with the Rent Control Tribunal were ) not at all relevant for judging the bona fides and genu ineness of actions taken on 30th of September, 1976, at the time of creation of the tenancy.
On the/side of the tenant, the contentions which had prevailed with the 'Additional Rent Controller and the Rent Control Tribunal were reiterated.
Section 14 of the Act deals with a normal tenancy and protects the tenant against unreasonable eviction.
Section 21 of the Act, on the other hand, places tile tenant outside the purview of section 14 and provides for an order of eviction at the time of creation of the tenancy.
There is a purpose behind enacting section 21 of the Act.
The Legislature considered it appropriate that should a landlord not need his residen tial premises for a period, instead of keeping the same vacant the same could be available for a tenant 's use on being let out for a limited period condi 720 tional upon the tenant 's surrendering possession as soon as the tenancy terminates by efflux of time and the need of the landlord revives.
The conditions to be fulfilled at the time of creation of such a tenancy are three, namely, (i) the landlord would not require the premises for a particular period, (ii) the Controller must be satisfied about that position, and (iii) the tenant agrees to vacate at the end of the period.
In Noronah 's case supra two Judge Bench dealt with this question.
This Court then said.
"We must notice that section 21 runs counter to the general scheme and, therefore, must be restricted severely to its narrow sphere.
Secondly, we must place accent on every condition which attracts the section and if any one of them is absent the section cannot apply and, therefore, cannot arm the landlord with a resistless eviction process.
Third ly, we must realise that the whole effect of section 14 can be subverted by ritualistic enforcement of the conditions of sanction under section 21 or mechanical grant of sanction therein.
Section 21 overrides section 14 precisely because it is otherwise hedged in with drastic limitations and safeguards itself against landlords ' abuses.
It is true that the judgment of this Court which is dated August 16, 1979, was not in existence when Sri Khan sanctioned the tenancy but the law then in force was not different.
In fact, the orders out of which that appeal arose had also taken the same view.
This Court Noronah 's case further said: "When an application under section 21 is filed by the land lord and/or tenant, the Controller must satisfy himself by such inquiry as he may make, about the compulsive require ments of that provision.
If he makes a mindless order, the Court, when challenged at the time of execution, will go into the question as to whether the twin conditions for sanction have really been fulfilled.
" A three Judge Bench of this Court in J.R. Vohra vs India Export House Pvt. Ltd. & Anr., ; was examin ing the requirement of notice to the tenant when at the expiry of the period of tenancy the landlord had applied for being put in possession.
While so examining that question this Court approved the following observations in Noronah 's case: 721 "Parliament was presumably keen on maximising accommodation available for letting, realising the scarcity crises.
One source of such spare accommodation which is usually shy is potentially vacant building or part thereof which the land lord is able to let out for a strictly limited period pro vided he has some credible assurance that when he needs he will get it back.
If an officer is going on other assignment for a particular period, or the owner has official quarters so that he can let out if he is confident that on his re tirement he will be able to re occupy, such accommodation may add to the total lease worthy houses.
The problem is felt most for residential uses.
But no one will part with possession because the lessee will become a statutory tenant and, even if bona fide requirement is made out, the litiga tive tiers are so many and the law 's delays so tantalising that no realist in his sense will trust the sweet promises of a tenant that he will return the building after the stipulated period.
So the law has to make itself credit worthy.
The long distance between institution of recovery proceedings and actual dispossession runs often into a decade or more a factor of despair which can be obviated only by a special procedure.
Section 21 is the answer.
The law seeks to persuade the owner of premises available for letting for a particular or limited period by giving him the special assurance that at the expiry of that period the appointed agency will place the landlord in vacant possession.
" Noronah 's judgment was approved to this extent.
In the three succeeding paragraphs in Vohra 's decision.
Noronah 's case was also referred to.
Dealing with the contentions relied upon in Noronah 's case, Tulzapurkar, J. who delivered the judgment of the Court, observed: "At the outset we would like to observe that in Noronah 's case the question whether a prior notice is required to be served upon the tenant before issuance of warrant of posses sion in favour of the landlord under section 21 did not arise for consideration.
It was a case where upon receipt of landlord 's application for recovery of possession under the section the tenant raised pleas that the premises had been let out for non residential purposes and that the sanction or permission granted for the creation of the limited tenan cy was vitiated by fraud and collusion and the question that 722 arose for consideration was whether at that stage the Rent Controller could go into and consider such pleas and this court has ruled that the Controller should consider those pleas even when raised at that stage.
" A little later Justice Tulzapurkar further observed: "In fact even in Noronah 's case this Court has observed,that there will be a presumption in favour of the sanction or permission being regular and if that be so, we fail to appreciate as to why the Rent Controller should invite such pleas of fraud, collusion etc.
at the instance of the tenant by being required to serve a notice upon him before issuing the warrant of possession in favour of the landlord espe cially when the scheme of sec.
21 and the connected relevant provisions do not require it.
" The three Judge Bench thereafter went to consider the remedy available to the tenant in a case where the objec tions were as in the present case: "What then is the remedy available to the tenant in a case where there was in fact a mere ritualistic observance of the procedure while granting permission for the creation of a limited tenancy or where such permission was procured by fraud practised by the landlord or was a result of collusion between the strong and the weak? Must the tenant in such cases be unceremoniously evicted without his plea being inquired into? The answer is obviously in the negative.
At the same time must he be permitted to protract the delivery of possession of the leased premises to the landlord on a false plea of fraud or collusion or that there was a mechan ical grant of permission and thus defeat the very subject of the special procedure provided for the benefit of the land lord in section 217 The answer must again be in the nega tive.
In our view these two competing claims must be harmo nised and the solution lies not in insisting upon service of a prior notice on the tenant before the issuance of the warrant of possession to evict him but by insisting upon his approach the Rent Controller during the currency of the limited tenancy for adjudication of his pleas no sooner he discovers facts and circumstances that tend to vitiate ab initio the initial grant of permission.
Either it is a 723 mechancial grant of permission or it is procured by fraud practised by the landlord or it is the result of collusion between two unequals but in each case there is no reason for the tenant to wait till the landlord makes his application for recovery of possession after the expiry of the fixed period under section 21 but there is every reason why the tenant should make an immediate approach to the Rent Con troller to have his pleas adjudicated by him as soon facts and circumstances giving rise to such pleas come to knowledge or are discovered by him with the diligence.
The special procedure provided for the benefit of the landlord in section 21 warrants such immediate approach on the part of the tenant.
" What followed thereafter perhaps is more in the nature of an obiter than a part of the decision proper, namely: "Of course if the tenant alliunde comes to know about land lord 's application for recovery of possession and puts forth his plea of fraud or collusion etc.
at that stage the Rent Controller would inquire into such plea but he may run the risk of getting it rejected as an afterthought.
" It may be pointed out that in Vohra 's case the objec tions on the ground of fraud and collusion were raised after the claim by the landlord for being put in possession but were rejected as belated.
The question that came for consid eration before the three Judge Bench was whether notice was necessary when the landlord applied to be put in possession after the termination of the tenancy.
In that context, the observation that tenant 's objections could be enquired into if the tenant aliunde came to know of the landlord 's move and objected was not relevant for the decision.
There are certain observations in Inder Mohan Lal vs Ramesh Khanna; , which are relevant: "An analysis of this judgment (Noronah 's case) which has been applied in the various cases would indicate that sec tion 21 only gives sanction if the landlord makes a state ment to the satisfaction of the court and the tenant accepts that the landlord does not require the premises for a limit ed period; this statement of the landlord must be bona fide.
The purpose must be residence.
There must not be 724 any fraud or collusion.
There is a presumption of regulari ty.
But it is open in particular facts and circumstances of the case to prove to the satisfaction of the executing court that there was no collusion or conspiracy between the land lord and the tenant and the landlord did not mean what he said or that it was a fraud or that the tenant agreed be cause the tenant was wholly unequal to the landlord.
In the instant case none of these conditions were fulfilled.
There is no evidence in this case that when the landlord stated that he did not require the premises in question for a particular period, he did not mean what he stated or that he made a false statement.
There was no evidence in this case at any stage that the tenant did not understand what the landlord was stating or that he did not accept what the landlord stated.
There was no evidence that either the tenant was in collusion or perpetrating any fraud with the landlord or the tenant was unequal to the landlord in bar gaining powers.
It is manifest that there is no evidence to show that the Controller did not apply his mind.
If that is so then on the principle enunciated by this Court in Noro nah 's case, this sanction cannot be challenged.
It is not necessary to state under section 21 the reasons why the landlord did not require the premises in question for any particular period.
Nor is there any presumption that in all cases the tenants are the weaker sections.
The presumption is, on the contrary, in favour of sanction, it is he who challenges the statement and the admission of the landlord or the tenant who has to establish facts as indicated in Nagindas case.
" In paragraph 22 of the judgment Mukharji, J. (as he then was) speaking for the Court held out a caution that the residue must be understood in its proper perspective.
We may point out that the respondent apart from being highly quali fied held the position of a Deputy Secretary to Government and, therefore, was not a tenant of the type in Noronah 's case.
As has been stated in Inder Mohan Lal 's case, the rule in Noronah 's case has to be confined to a particular set of facts and should not be freely extended so as to take away the effect of section 21.
Fraud is an allegation which can easily be made but unless the allegations are clearly pleaded and some evidence, either direct or circumstantial, is avail able, a charge of fraud would not succeed.
We may refer to another judgment of this Court in the case of Shiv Chander Kapoor.
vs Amar Bose, JT where the 725 validity of the permission under section 21 of the Act came up for consideration.
Noronah 's case was also referred to.
In paragraph 15 of the judgment this Court pointed out that there is nothing in this decision to support the respondent tenant 's contention in that appeal that the scope of enquiry is wider permitting determination of the land lord 's bona fide need of the premises as if such a ground for eviction specified in section 14 of the Act was required to be proved.
Extending the enquiry to that field would indeed be against the express prohibition enacted in section 21 of the Act.
Referring to Vohra 's case, the latest judgment indi cates: "It is obvious from the decision in J.R. Vohra 's case that the tenant is expected to raise such a plea during currency of the limited tenancy and on such a plea being raised by the tenant enquiry into it is contemplated.
Even though it is not expressly said in Vohra 's case, it is implicit that on such an application being made by the tenant requiting adjudication by the Controller, it is the Controller 's obligation to issue notice of the same to the landlord and then to make the adjudication with opportunity to both sides to prove their respective contentions.
Both in Vohra 's case and in Shiv Chander Kapoor 's case though not arising for determination in either, it has been stated while laying down the rule that proceeding to chal lenge limited tenancy has to be taken during the cunency of the tenancy, an objection filed by the tenant could be looked into is indeed an obiter.
We would like to make it clear that the rule having been stated to the contrary in Vohra 's case, there was indeed no warrant to indicate the contra situation.
Perhaps to meet the eventuality which might arise in a particular case, neither of the two Benches of this Court wanted to close the avenue of enquiry totally, and that is why in both the cases decided by coordinate Benches the exception has also been indicated.
It must be understood on the authority of the said two decisions and our judgment now that if the tenant has objection to raise to the validity of the limited tenancy it has to be done prior to the lapse of the lease and not as a defence to the landlord 's application for being put into possession.
We would like to reiterate that even if such an exercise is available that must be taken to be very limited and made applicable to exceptional situations.
Unless the tenant is able to satisfy the Controller that he had no opportunity at all to know the facts earlier and had come to be aware of them only then, should such an objection be entertained.
726 On the application of those tests to the present facts we must hold that the belated objections of the tenant should not have been entertained and prayer for possession made by the landlady after the limited tenancy ran out should have been granted.
The appeal is allowed; the decisions of the Controller, Rent Control Tribunal and the High Court are reversed and the landlady is directed to be put into possession of the premises by 31st of March, 1990.
The appellant would be entitled to her costs in the proceedings throughout.
Hearing fee is assessed at Rs.2,000.
G.N. Appeal al lowed.
| The appellant landlady and the respendent tenant ap peared before the Rent Controller for creation of a tenancy under Section 21 of the Delhi Rent Control Act, 1958.
Ac cordingly, the authority passed an order creating tenancy for a limited period of two years.
Since the respondent did not vacate the premises on the expiry of two years, the appellant moved the Rent Controller for issuance of warrant of possession.
The Respondent filed his objection.
Enter taining the objection the Rent Controller dismissed the petition, holding that the order granting permission for the tenancy under section 21 of the Act was not in accordance with law.
The appellant 's first appeal before the Rent Control Tribunal, as also her second appeal before the High Court met the same fate.
This appeal, by special leave, is against the High Court 's order dismissing the second appeal in limine.
On behalf of the appellant, it was contended that the Rent Controller should not have entertained the objection of the respondent as the same has not been filed during the currency of the tenancy.
It was also contended that some of the considerations which weighed with the Rent Control Tribunal were not relevant for judging the bona fides and genuineness of actions taken at the time of creating the tenancy.
Allowing the appeal, this Court, HELD: 1.
Section 14 of the Delhi Rent Control Act, 1958 deals with a normal tenancy and protects the tenant against unreasonable eviction.
Section 21 of the Act, on the other hand, places the tenant outside the purview of section 14 and provides for an order of eviction at the time of creation of the tenancy.
There is a purpose behind enacting section 21 of the Act.
The Legislature considered it appropriate that should a 716 landlord not need his residential premises for a period, instead of keeping it vacant the same could be available for a tenant 's use on being let out for a limited period condi tional upon the tenant 's surrendering possession as soon as the tenancy terminates by efflux of time and the need of the landlord revives.
[719G H; 720A] 2.1.
The rule in Noronah 's case has to be confined to a particular set of facts and should not be freely extended so as to take away the effect ors.
[724F G] 2.2.
In Vohra 's case and in Shiv Chander Kapoor 's case, though not arising for determination in either, it has been stated while laying down the rule that proceeding to chal lenge limited tenancy has to be taken during the currency of the tenancy, an objection filed by the tenant could be looked into, is indeed an obiter.
The rule having been stated to the contrary in Vohra 's case, there was indeed no warrant to indicate the contra situation.
Perhaps to meet the eventuality which might arise in a particular case, the exception has also been indicated.
If, the tenant has an objection to raise to the validity of the limited tenancy it has to be done prior to the lapse of the lease and not as a defence to the landlord 's application for being put into possession.
Even if such an exercise is available that must be taken to be very limited and made applicable to excep tional situations.
Unless the tenant is able to satisfy the Controller that he had no opportunity at all to know the facts earlier and had come to be aware of them only then, should such an objection be entertained.
[725E H] 2.3.
In the facts and circumstances of the present case the belated objections of the tenant should not have been entertained and prayer for possession made by the landlady after the limited tenancy ran out should have been granted.
[726A] S.B. Noronah vs Prem Kumari Khanna, ; ; J.R. Vohra vs India Export House Pvt. Ltd. & Anr., ; ; Inder Mohan Lal vs Ramesh Khanna, ; and Shiv Chander Kapoor vs Amar Bose, JT , referred to.
[This Court directed that the landlady be put into possession of the premises by 31st March, 1990.]
|
ivil Appeal No. 134 of 1956.
Appeal under articles 132 (1) and 133 (I) (c) of the Constitution of India from the Judgment and Order dated January 12, 1955, of the Bombay High Court in Appeal No. 72 of 1954 arising out of the Judgment and Order dated April 22, 1954, of the Bombay High Court in its Original Civil Jurisdiction in Miscellaneous Application No. 365 of 1952.
C. K. Daphtary, Solicitor General of India, H. M. Seervai, Porus A. Mehta and R. H. Dhebar, for the appellant.
877 M. C. Setalvad, Attorney General for India, Sir N. P. Engineer, N. A. Palkhivala, R. A. Gagrat, section V. Subramanian, and G. Gopal Krishnan, for the respondents.
G. R. Ethirajulu Naidu, Advocate General, Mysore, Porus A. Mehta and T. M. Sen, for the intervener.
April 9.
The Judgment of the Court was delivered by DAS C.J.
This is an appeal by the State of Bombay from the judgment and order passed on January 12, 1955, by the Court of Appeal of.
the High Court of Judicature of Bombay confirming, though on somewhat different grounds, the judgment and order passed on April 22, 1954, by a single Judge of the said High Court allowing with costs the present respondents ' petition under article 226 of the Constitution of India.
The said petition was presented before the High Court of Judicature at Bombay on December 18, 1952.
In the said petition there were two petitioners who are now the two respondents to this appeal.
The first petitioner is an individual who claims to be a citizen of India and the founder and Managing Director of the second petitioner, which is a company incorporated in the State of Mysore and having its registered head office at 2, Residency Road, Bangalore in that State.
That petition was further supported by an affidavit sworn by the first petitioner on the same day.
The allegations appearing in the said petition and affidavit may now be shortly stated.
In July, 1946 the first petitioner applied for and obtained from the then Collector of Bombay a licence, being Licence No. 84 of 1946, for the period ending March 31, 1947, to conduct what was known as the Littlewood 's Football Pool Competitions in India.
That licence was granted to the first petitioner under the provisions of the Bombay Prize Competitions Tax Act, (Bom.
XI of 1939) (hereinafter referred to as the 1939 Act), which was then in force.
The said licence was renewed for a period of one year from April 1, 1947 to March 31, 1948.
During that period the first petitioner paid, by way of competition tax, to the Bombay Provincial 113 878 Government a sum of rupees one lakh per annum.
The Government of Bombay having declined to renew the first petitioner 's licence for a further period, the first petitioner filed a petition under section 45 of the Specific Relief Act in the High Court of Bombay, which was eventually, after various proceedings, dismissed by the court of appeal on or about March 28, 1949.
In the meantime, in view of the delay and difficulty in obtaining a renewal of the licence in Bombay, the first petitioner in or about August, 1948, shifted his activities from Bombay to the State of Mysore, where he promoted and on February 26,1949, got incorporated a company under the name of R.M.D.C. (Mysore) Limited, which was the second petitioner in the High Court and is the second respondent before us.
The first petitioner, who was the promoter of the second petitioner became the Managing Director of the second petitioner.
All the shareholders and Directors of the second petitioner are said to be nationals and citizens of India.
The second petitioner also owns and runs a weekly newspaper called " Sporting Star ", which was and is still printed and published at Bangalore in a Press also owned by the second petitioner.
It is through this newspaper that the second petitioner conducts and runs a Prize Competition called the R.M.D.C. Crosswords for which entries are received from various parts of India including the State of Bombay through agents and depots established in those places to collect entry forms and fees for being forwarded to the head office at Bangalore.
The 1939 Act was replaced by the Bombay Lotteries and Prize Competition Control and Tax Act (Bom.
LIV of 1948), (hereinafter referred to as the 1948 Act) which came into force on December 1, 1948.
The 1939 Act as well as the 1948 Act, as originally enacted, did not apply to prize competitions contained in a newspaper printed and published outside the Province of Bombay.
So the Prize Competition called the R.M.D.C. Crosswords was not affected by either of those two Acts.
On June 21, 1951, the State of Mysore, however, enacted the Mysore Lotteries and Prize Competition 879 Control and Tax Act, 195 1, which was based upon the lines of the said 1948 Act.
That Mysore Act having come into force on February 1, 1952, the second petitioner applied for and obtained a licence under that Act and paid the requisite licence fees and also paid and is still paying to the State of Mysore the tax at the rate of 15% (latterly reduced to 121%) of the gross receipts in respect of the R.M.D.C. Crosswords Prize Competition and continued and is still continuing the said Prize Competition through the said weekly newspaper "The Sporting Star" and to receive entry forms with fees from all parts of the territory of India including the State of Bombay.
It is said, on the strength of the audited books of account, that after distribution of prizes to the extent of about 33% of the receipts and after payment of taxes in Mysore amounting to about 15% and meeting the other expenses aggregating to about 47%, the net profit of the second petitioner works out to about 5% only.
On November 20, 1952, the State of Bombay passed The Bombay Lotteries and Prize Competitions Control and Tax (Amendment) Act (Bom.
XXX of 1952).
This Act amended the provisions of the 1948 Act in several particulars.
Thus, the words " but does not include a prize competition contained in a newspaper printed and published outside the Province of Bombay", which occurred in the definition of Prize Competition in section 2 (1) (d) of the 1948 Act, were deleted and the effect of this deletion was that the scope and the application of the 1948 Act so amended became enlarged and extended so as to cover prize competitions contained in newspapers printed and published outside the State of Bombay.
After cl.
(d) of section 2 (1) the Amending Act inserted a new cl.
(dd) which defined the word "Promoter ".
A new section was substituted for the old section 12 and another new section was inserted after section 12 and numbered as a. 12A.
By this new section 12A provision was made for the levy in respect of every prize competition contained in a newspaper or a publication printed outside the State of Bombay for which a licence was obtained under the Act of a tax at such rates as might be specified not exceeding the 880 rates specified in section 12 or in a lump sum having regard to the circulation or distribution of the newspaper or publication in the State of Bombay.
It is pointed out that the margin of net profit being only 5%, if tax has to be paid to the State of Bombay under the 1948 Act, as amended, (hereinafter referred to as the impugned Act) the second petitioner will be unable to carry on its prize competition except at a loss.
Reference is also made to the rules framed by the State of Bombay called the Bombay Lotteries and Prize Competition Control and Tax Rules, 1952 (herein ' after called the said Rules), which came into force on and from December 8, 1952.
The said Rules require the petitioner to apply for and obtain a licence in Form " H " which imposes certain onerous conditions.
The petitioners point out that it would be impossible for them, in a commercial sense and from a practical point of view, to run the prize competitions in the territory of India if they are required to comply not only with the restrictions and conditions imposed by the Mysore State where the newspaper is printed and published but also with the varying and different restrictions, conditions and taxes imposed by the State of Bombay and other States in the territory of India where the said newspaper containing the advertisements; of the said prize competitions are circulated.
The petitioners submit that the provisions of the impugned Act and the Rules, in so far as they apply to prize competitions contained in newspapers and other publications printed and published outside the State of Bombay, are ultra vires void and inoperative in law.
Upon the presentation of the petition a Rule was issued calling upon the State of Bombay to appear and show cause, if any it had, why the writ or orders prayed for should not be issued or made.
The State of Bombay filed an affidavit raising several technical legal objections to the maintainability of the petition and refuting the allegations and submissions contained therein and in the supporting affidavit.
It submitted that, as the second petitioner was a corporation , and the first petitioner, who was a Managing Director 881 thereof, had no rights independent of the second petitioner, neither of them could lay any claim to any fundamental right under article 19(1) (g) and no question could arise of any violation of the petitioner 's alleged fundamental rights.
It further submitted that, having.
Regard to the fact that lotteries and prize competitions were opposed to public policy, there could be no " business " in promoting a lottery or a prize competition and the question of the violation of the petitioners ' alleged rights under article 19(1) (g) of the Constitution did not arise.
It was also contended that if the provisions of the Act and the Rules operated as restrictions, then the same were reasonable and in the interest of the general public.
Likewise it was submitted that, having regard to the fact that lotteries and prize competitions are opposed to public policy, there could be no "business " in promoting a lottery or a prize competition and the question of the violation of the provisions of article 301 of the Constitution did not arise.
It was denied that sections 10 and 12 of the Act violated the equal protection clause of the Constitution.
An affidavit in reply was filed by the first petitioner traversing the allegations, submissions and contentions set forth in the affidavit in opposition filed on behalf of the State of Bombay.
The main contentions of the present respondents before the trial Judge were: (a)The impugned Act and particularly its taxing provisions were beyond the competence of the State Legislature and invalid inasmuch as they were not legislation with respect to betting and gambling under Entry 34 or with respect to entertainments and amusements under Entry 33 or with respect to taxation on entertainments and amusements, betting.
and gambling under Entry 62 of the State List.
The legislation was with respect to trade and commerce and the tax levied by the Impugned Act was a tax on the trade or calling of conducting prize competitions and fell within Entry 60 of the State List.
(b) The respondents ' prize competition was not a lottery and could not be regarded as gambling 882 inasmuch as it was a competition in which skill, knowledge and judgment had real and effective play.
(c) The impugned Act itself contained distinct provisions in respect of prize competitions and lotteries , thereby recognising that prize competitions were not lotteries.
(d) The said tax being in substance and fact a tax on the trade or business of carrying on prize competitions it offended against section 142A (2) of the Government of India Act, 1935 and article 276 (2) of the Constitution which respectively provide that such a tax shall not exceed fifty rupees and two hundred and fifty rupees per annum.
(e) The impugned Act was beyond the legislative competence of the Bombay Legislature and invalid as it was legislation with respect to trade and commerce not within but outside the State.
(f) The impugned Act operated extra territorially inasmuch as it affected the trade or business of conducting prize competitions ' outside the State and was, therefore, beyond the competence of the State Legislature and invalid.
(g) The impugned Act offended against article 301 of the Constitution inasmuch as it imposed restrictions on trade, commerce and intercourse between the States and was not saved by article 304 (b) of the Constitution.
(h) The restrictions imposed by the impugned Act on the trade or business of the petitioners were not reasonable restrictions in the interests of the general public and, therefore, contravened the fundamental right of the petitioners, who were citizens of India, to carry on their trade or business under article 19 (1) (g) of the Constitution.
(i) That sections 10, 12 and 12A of the said Act offended against article 14 of the Constitution inasmuch as they empowered discrimination between prize competitions contained in newspapers or publications printed and published within the State and those printed and published outside the State.
The State of Bombay, which is now the appellant before us, on the other hand, maintained that 883 (a) The prize competitions conducted by the petitioners were a lottery.
(b) The provisions of the impugned Act were valid and competent legislation under Entries 33, 34 and 62 of the State List.
(c)The impugned Act was not extra territorial in its operation.
(d)The prize competitions conducted by the petitioners were opposed to public policy and there could therefore be no trade or business of promoting such prize competitions.
(e)As the petitioners were not carrying on a trade or business, no question of offending their fundamental rights under article 19 (1) (g) or of a violation of article 301 of the Constitution could arise.
(f)The second petitioner being a Corporation was not a citizen and could not claim to be entitled to the fundamental right under article 19 (1) (g) of the Constitution.
(g)In any event the restrictions on the alleged trade or business of the petitioners imposed by the Act were reasonable restrictions in the public interest with in the meaning of article 19 (6) and article 304 (b) of the Constitution.
The trial Judge held: (a)The tax levied under sections 12 and 12A of the Act was not a tax on entertainment, amusement, betting or gambling but that it was a tax on the trade or calling of the respondents and fell under Entry 60 and not under Entry 62 of the State List.
(b)The prize competition conducted by the petitioners was not a lottery and it could not be said to be either betting or gambling inasmuch as it was a competition in which skill, knowledge and judgment on the part of the competitors were essential ingredients.
(c)The levy of the tax under the said sections was void as offending against article 276 (2) of the Constitution.
(d)The restrictions imposed by the impugned Act and the Rules thereunder offended against article 301 of the Constitution and were not saved by Art, 884 304(b) inasmuch as the restrictions imposed were neither reasonable nor in the public interest.
(e)The second petitioner, although it was a company, was a citizen of India and was entitled to the protection of article 19 of the Constitution.
(f)The restrictions imposed by the impugned Act and the Rules made thereunder were neither reasonable nor in the interests of the general public and were void as offending against article 19 (1) (g) of the Constitution.
In the result the rule nisi was made absolute and it was further ordered that the State of Bombay, its servants and agents, do forbear from enforcing or taking any steps in enforcement, implementation, furtherance or pursuance of any of the provisions of the impugned Act and the 1952 Rules made thereunder and particularly from enforcing any of the penal provisions against the petitioners, their Directors, officers, servants or agents and that the State of Bombay, its servants and agents, do allow the petitioners to carry on their trade and business of running the Prize Competition mentioned in the petition and do forbear from demanding, collecting or recovering from the petitioners any tax as provided in the impugned Act or the said Rules in respect of the said Prize Competition and that the State of Bombay do pay to the petitioners their costs of the said applications.
Being aggrieved by the decision of the trial Judge, the State of Bombay preferred an appeal on June 8, 1954.
The Court of Appeal dismissed the appeal and confirmed the order of the trial Judge, though on somewhat different grounds.
It differed from the learned trial Judge on the view that he had taken that there was no legislative competence in the Legislature to enact the legislation.
It held that the topic of legislation was I gambling ' and the Legislature was competent to enact it under Entry 34 of the State List.
It, however, agreed with the learned trial Judge that the tax levied under section 12A was not a tax on gambling but that it was a tax which fell under Entry 60.
It held that there was 885 legislative competence in the Legislature to impose that tax but that the tax was invalid because it did not comply with the restriction contained in article 276 (2) of the Constitution.
It also took the view that the tax, even assuming it was a tax on betting or gambling, could not be justified because it did not fall under article 304 (b).
It differed from the learned trial Judge when he found as a fact that the scheme underlying the prize competitions was not a lottery and came to the conclusion that the Act applied to the prize competitions of the respondents.
It held that the challenge of the petitioners to the impugned provisions succeeded because the restrictions contained in the impugned Act controlling the business of the petitioners could not be justified as the requirements of the provisions of article 304 (b) had not been complied with.
The High Court agreed with the learned trial Judge that the petitioners ' prize competitions were their "business " which was entitled to the protection guaranteed under the Constitution.
It took the view that although the activity of the petitioners was a lottery, it was not an activity which was against public interest and, therefore, the provisions of Part XIII of the Constitution applied to the respondents ' business.
Being aggrieved by the said judgment of the Court of Appeal, the appellant applied for and obtained under articles 132(1) and 133(1) of the Constitution a certificate of fitness for appeal to this Court and hence this appeal before us.
The principal question canvassed before us relates to the validity or otherwise of the impugned Act.
The Court of Appeal has rightly pointed out that when the validity of an Act is called in question, the first thing for the court to do is to examine whether the Act is a law with respect to a topic assigned to the particular Legislature which enacted it.
If it Is, then the court is next to consider whether, in the case of an Act passed by the Legislature of a Province (now a State), its operation extends beyond the boundaries of the Province or the State, for under the provisions conferring legislative powers on it such Legislature can only make a law for its territories or any part thereof 114 886 and its laws cannot, in the absence of a territorial nexus, have any extra territorial operation.
If the impugned law satisfies both these tests, then finally the court has to ascertain if there is anything in any other part of the Constitution which places any fetter on the legislative powers of such Legislature.
The impugned law has to pass all these three tests.
Taking the first test first, it will be recalled that the 1948 Act was enacted by the Provincial Legislature of Bombay when the Government of India Act, 1935, was in force.
Under sections 99 and 100 of that Act the Provincial Legislature of Bombay had power to make laws for the Province of Bombay or any part thereof with respect to any of the matters enumerated in List 11 in the Seventh Schedule to that Act.
It will also be remembered that the 1948 Act was amended by Bombay Act XXX of 1952 after the Constitution of India had come into operation.
Under articles 245 and 246, subject to the provisions of the Constitution, the Legislature of the State of Bombay has power to make laws for the whole or any part of the State of Bombay with respect to any of the matters enumerated in List II of the Seventh Schedule to the Constitution.
The State of Bombay, which is the appellant before us, claims that the impugned Act including section 12A is a law made with respect to topics covered by Entries 34 and 62 of List II in the Seventh Schedule to the Constitution which reproduce Entries 36 and 50 of List II in the Seventh Schedule to the Government of India Act, 1935.
On the other hand, the petitioners, who are respondents before us, maintain that the impugned Act is legislation under Entries 26 and 60 in List 11 of the Seventh Schedule to the Constitution corresponding to Entries 27 and 46 of List II in the Schedule to the Government of India Act, 1935, and that, in any event, section 12A of the impugned Act, in so far as it imposes a tax, comes under Entry 60 of List II in the Seventh Schedule to the Constitution corresponding to Entry 46 of List II in the Seventh Schedule to the Government of India Act, 1935, and not under Entry 62 of List 11 in the Seventh Schedule to the Constitution corresponding to Entry 50 of List 11 in the Seventh Schedule to the 887 Government of India Act, 1935, and that as the tax imposed exceeds Rs. 250/ it is void under article 276 (2) which reproduces section 142A of the Government of India Act, 1935.
Reference will hereafter be made only to the relevant Entries of List II in the Seventh Schedule r, to the Constitution, for they are substantially in the same terms as the corresponding Entries of List 11 in the Seventh Schedule to the Government of India Act, 1935.
For easy reference, the relevant Entries in List II in the Seventh Schedule to the Constitution are set out below: " 26.
Trade and commerce within the State subject to the provisions of Entry 33 of List III.
Betting and gambling.
Taxes on professions, trades, callings, and employments.
Taxes on luxuries, including taxes on entertainments, amusements, betting and gambling.
" In order to correctly appreciate the rival contentions and to come to a decision as to the particular Entry or Entries under which the impugned Act including section 12A thereof has been enacted, it is necessary to examine and to ascertain the purpose and scope of the impugned legislation.
It may be mentioned that the 1939 Act was enacted to regulate and levy a tax on prize competitions in the Province of Bombay.
It did not deal with lotteries at all.
That Act was repealed by the 1948 Act which was enacted to control and to levy a tax not only on prize competitions but on lotteries also.
It is not unreasonable to conclude that the clubbing together of lotteries and prize competitions in the 1948 Act indicates that in the view of the Legislature the two topics were, in a way, allied to each other.
As already indicated, the 1948 Act was amended in 1952 by Bombay Act XXX of 1952 so as to extend its operation to prize competitions contained in newspapers printed and published outside the State of Bombay.
In section 2(1) (d) of the impugned Act will be found the definition of " prize competition " to which reference will be made hereafter in greater detail.
Clause (dd) was inserted in section 2(1) in 1952 defining "promoter".
Section 3 declares that subject to the 888 provisions of the Act, all lotteries and all prize com petitions are unlawful.
This is a clear indication that the legislature regarded lotteries and prize competitions as on the same footing and declared both of them to be unlawful, subject, of course, to the provisions of the Act.
Section 4 creates certain offences in connection with lotteries and competitions punishable, as therein mentioned.
We may skip over sections 5 and 6 which deal exclusively with lotteries and pass on to section 7.
Section 7 provides that a prize competition shall be deemed to be an unlawful prize competition unless a licence in respect of such competition has been obtained by the promoter thereof.
There are two provisos to the section which are not material for our present purpose.
Section 8 imposes certain a additional penalty for contravention of the provisions of section 7.
Section 9 regulates the granting of licences on such fees and conditions and in such form as may be prescribed, that is to say prescribed by rules.
Section 10 makes it lawful for the Government, by general or special order, to, inter alia, prohibit the grant of licences in respect of a lottery or prize competition or class of lotteries or prize competitions throughout the State or in any area.
Section II empowers the Collector to suspend or cancel a licence granted under this Act in certain circumstances therein specified.
Section 12 authorises the levy of a tax on lotteries and prize competitions at the rate of 25% of the total sum received Or due in respect of such lottery or prize competition.
This section directs that the tax shall be collected from the promoter of such lottery or prize competition as the case may be.
Sub section (2) of section 12 empowers the State Government by a Notification in the official Gazette, to enhance the rate of tax up to 50% of the total sum received or due in respect of such prize competition as may be specified in the Notification.
Section 12A, which is of great importance for the purpose of this appeal, runs as follows: " 12A.
Notwithstanding anything contained in section 12, there shall be levied in respect of every lottery or prize competition contained in a newspaper or publication printed and published outside the State, 889 for which a licence has been obtained under section 5, 6 or 7 , a tax at such rates as may be specified by the State Government in a notification in the Official Gazette not exceeding the rates specified in section 12 on the sums specified in the declaration made under section 15 by the promoter of the lottery or prize competition as having been received or due in respect of such lottery or prize competition or in a lump sum having regard to the circulation or distribution of the newspaper or publication in the State.
" Section 15 requires every person promoting a lottery or prize competition of any kind to keep and maintain accounts relating to such lottery or prize competition and to submit to the Collector statements in such form and at such period as may be prescribed.
It is not necessary for the purpose of this appeal to refer to the remaining sections which are designed to facilitate the main purpose of the Act and deal with procedural matters except to section 31 which confers power on the State Government to make rules for the purpose of carrying out the provisions of the Act.
In exercise of powers so conferred on it, the State Government has, by Notification in the Official Gazette, made certain rules called the Bombay Lotteries and Prize Competitions Control and Tax Rules, 1952, to which reference will be made hereafter.
The petitioners contend that the object of the impugned Act is to control and to tax lotteries and prize competitions.
It is not the purpose of the Act to prohibit either the lotteries or the prize competitions.
They urge that the impugned Act deals alike with prize competitions which may partake of the nature of gambling and also prize competitions which call for knowledge and skill for winning success and in support of this contention reliance is placed on the definition of "prize competition" in section 2(1)(d) of the impugned Act.
We are pressed to hold that the impugned Act in its entirety or at any rate in so far as it covers legitimate and innocent prize competition is a law with respect to trade and commerce under Entry 26 and not with respect to betting and gambling under Entry 34.
They also urge that in any event the taxing provisions, 890 namely sections 12 and 12A, are taxes on the trade of running prize competitions under Entry 60 and not taxes on betting and gambling under Entry 62.
We are unable to accept the correctness of the aforesaid contentions for reasons which we proceed immediately to state.
As it has already been mentioned, the impugned Act replaced the 1939 Act which dealt only with prize competitions.
Section 2(2) of the 1939 Act defined "prize competition" in the terms following: 2(2) "Prize Competition " includes (a) crossword prize competition, missing words competition, picture prize competition, number prize competition, or any other competition, for which the solution is prepared beforehand by the promoters of the competition or for which the solution is determined by lot; (b)any competition in which prizes are offered for forecasts of the results either of a future event or of a past event the result of which is not yet ascertained or not yet generally known; and (c) any other competition success in which does not depend to a substantial degree upon the exercise of skill, but does not include a prize competition contained in a newspaper or periodical printed and published outside the Province of Bombay.
" The 1948 Act section 2(1)(d), as originally enacted, sub stantially reproduced the definition of " prize competition " as given in section 2(2) of the 1939 Act.
Section 2(1)(d) of the 1948 Act, as originally enacted, ran as follows: 2(1)(d) "Prize Competition " includes (i) cross word prize competition, missing words prize competition, picture prize competition, number prize competition, or any other competition for which the solution is, prepared beforehand by the promoters of the competition or for which the solution is determined by lot; (ii)any competition in which prizes are offered for forecasts of the results either of a future event or of a past event the result of which is not yet ascertained or not yet generally known; And 891 (iii)any other competition success in which does not depend to a substantial degree upon the exercise of skill, but does not include a prize competition contained in a newspaper printed and published outside the Province of Bombay; " The collocation of words in the first category of the definitions in both the 1939 Act and the 1948 Act as originally enacted made it quite clear that the qualifying clause "for which the solution is prepared beforehand by the promoters of the competition or for which the solution is determined by lot " applied equally to each of the five kinds of prize competitions included in that category and set out one after another in a continuous sentence.
It should also be noted that the qualifying clause consisted of two parts separated from each other by the disjunctive word "or".
Both parts of the qualifying clause indicated that each of the five kinds of prize competitions which they qualified were of a gambling nature.
Thus a prize competition for which a solution was prepared beforehand was clearly a gambling prize competition, for the competitors were only invited to guess what the solution prepared beforehand by the promoters might be, or in other words, as Lord Hewart C. J. observed in Coles vs Odhams Press Ltd. (1), " the competitors are invited to pay certain number of pence to have the opportunity of taking blind shots at a hidden target." Prize competitions to which the second part of the qualifying clause applied, that is to say, the prize competitions for which the solution was determined by lot, was necessarily a gambling adventure.
On the language used in the definition section of the 1939 Act as well as in the 1948 Act, as originally enacted, there could be no doubt that each of the five kinds of prize competitions included in the first category to each of which the qualifying clause applied was of a gambling nature.
Nor has it been questioned that the third category, which comprised " any other competition success in which does not depend to a substantial degree upon the exercise of skill constituted a (1) L.R. (1936) 1 K.B. 416. 892 gambling competition.
At one time the notion was that in order to be branded as gambling the competition must be one success in which depended entirely on chance.
If even a scintilla of skill was required for success the competition could not be regarded as of a gambling nature.
The Court of Appeal in the judgment under appeal has shown how opinions have changed since the earlier decisions were given and it is not necessary for us to discuss the matter again.
It will suffice to say that we agree with the Court of Appeal that a competition in order to avoid the stigma of gambling must depend to a substantial degree upon the exercise of skill.
Therefore, a competition success wherein does not depend to a substantial degree upon the exercise of skill is now recognised to be of a gambling nature.
From the above discussion it follows that according to the definition of prize competition given in the 1939 Act as in the 1948 Act as originally enacted, the five kinds of prize competitions comprised in the first category and the competition in the third category were all of a gambling nature.
In between those two categories of gambling competitions were squeezed in, as the second category, "competitions in which prizes were offered for forecasts of the results either of a future event or of a past event the result of which is not yet ascertained or is not yet generally known." This juxtaposition is important and significant and will hereafter be discussed in greater detail.
As already stated the 1948 Act was amended in 1952 by Bombay Act XXX of 1952.
Section 2(1)(d) as amended runs as follows: Prize competition " includes (i) (1) cross word prize competition, (2) missing word prize competition, (3) picture prize competition, (4) number prize competition, or (5) any other prize competition, for which the solution is or is not prepared beforehand by the promoters or for which the solution is determined by lot or chance; (ii) any competition in which prizes are offered for forecasts of the results either of a future event or of 893 a past event the result of which is not yet ascertained or not yet generally known; and (iii) any other competition success in which does not depend to a substantial degree upon the exercise of skill; It will be noticed that the concluding sentence " but does not include a prize competition contained in a newspaper printed and published outside the Province of Bombay" has been deleted.
This deletion has very far reaching effect, for it has done away with the exclusion of prize competitions contained in a newspaper printed and published outside the State of Bombay from the scope of the definition.
In the next place, it should be noted that the definition of prize competition still comprises three categories as before.
The second and the third categories are couched in exactly the same language as were their counterparts in the earlier definitions.
It is only in the first category that certain changes are noticeable.
The five kinds of prize competitions that were included in the first category of the old definitions are still there but instead of their being set out one after another in a continuous sentence, they have been set out one below another with a separate number assigned to each of them.
The qualifying clause has been amended by inserting the words "or is not" after the word "is" and before the word "prepared" and by adding the words "or chain ce" after the word "lot".
The qualifying clause appears, as before, after the fifth item in the first category.
It will be noticed that there is a comma after each of the five items including the fifth item.
The mere assigning a separate number to the five items of prize competitions included in the first category does not, in our judgment, affect or alter the meaning, scope and effect of this part of the definition.
The numbering of the five items has not dissociated any of them from the qualifying clause.
If the qualifying clause were intended to apply only to the fifth item, then there would have been no comma after the fifth item.
In our opinion, therefore, the qualifying clause continues to apply to each of the five items as before the amendment.
There is grammatically no difficulty in reading 115 894 the qualifying clause as lending colour to each of those items.
Accepting that the qualifying clause applies to each of the five kinds of prize competitions included in the first category, it is urged that the qualifying clause as amended indicates that the Legislature intended to include innocent prize competitions within the definition so as to bring all prize competitions, legitimate or otherwise, within the operation of the regulatory provisions of the Act including the taxing sections.
The argument is thus formulated.
As a result of the amendment the qualifying clause has been broken up into three parts separated from each other by the disjunctive word " or ".
The, three parts are (1) for which the solution is prepared beforehand by the promoters, (2) for which the solution is not prepared beforehand by the promoters and (3) for which the solution is determined by lot or chance.
The first and the third parts of the qualifying clause, it is conceded, will, when applied to the preceding five kinds of prize cometitions, make each of them gambling a ventures; gut it is contended that prize competitions to which the second part of the qualifying clause may apply, that is to say prize competitions for which the solution is not prepared beforehand, need not be of a gambling nature at all and at any rate many of them may well be of an innocent type.
This argument hangs on the frail peg of unskilful draftsmanship.
It has been seen that in the old definitions all the five kinds of prize competitions included in the first categorv were of a gambling nature.
We find no cogent reason and none has been suggested why the Legislature_which treated lotteries and prize competitions on the same footing should suddenly enlarge the first category so as to include innocent prize competitions.
To hold that the first category of prize competitions include innocent prize competitions will go against the obvious tenor of the impugned Act.
The 1939 Act dealt with prize competitions only and the first category in the definition given there comprised only gambling competitions.
The 1948 Act clubbed together lotteries and prize competitions and the first category of the prize competitions 895 included in the definition 'as originally enacted was purely gambling as both parts of the qualifying clause clearly indicated.
Section 3 of the Act declared all lotteries and all prize competitions unlawful.
There could be no reason for declaring innocent prize competitions unlawful.
The regulatory provisions for licensing and taxing apply to all prize competitions.
If it were intended to include.
innocent prize competitions in the first category, one would have expected the Legislature to have made separate provisions for the legitimate prize competitions imposing less rigorous regulations than what had been imposed on illegitimate prize competitions.
It will become difficult to apply the same taxing sections to legitimate as well as to illegitimate competitions.
Tax on legitimate competitions may well be a tax under Entry 60 on the trader who carries on the trade of innocent and legitimate competition.
It may be and indeed it has been the subject of serious controversy whether an illegitimate competition can be regarded A a trade at all and in one view of the matter the tax may have to be justified as a tax on betting and gambling under Entry 62.
Considering the nature, scope and effect of the impugned Act we entertain no doubt whatever that the first category of prizecompetitions does not include any innocent prize competition.
Such is what we conceive to be the clear intention of the Legislature as expressed in the impugned Act read as a whole and to give effect to this obvious intention, as we are bound to do, we have perforce to read the word "or" appearing in the qualifying clause after the word "promoter" and before the word "for" as "and".
Well known canons of construction of Statutes permit us to do so.
(See Maxwell on the Interpretation of Statutes, 10th edition, page 238).
A similar argument was sought to be raised on a construction of cl.
(ii) of section 2(1) (d).
As already stated, in between the first and the third categories of prize competitions which, as already seen, are of a gambling nature the definition has included a second category of competitions in which prizes are offered for forecasts of the results either of a future event or of a past event 896 the result of which is not yet ascertained or not yet generally known.
It is said that forecasts of such events as are specified in the section need not necessarily depend on chance, for it may be accurately done by the exercise of knowledge and skill derived from a close study of the statistics of similar events of the past.
It may be that expert statisticians may form some idea of the result of an uncertain future event but it is difficult to treat the invitation to the general public to participate in these competitions as an invitation to a game of skill.
The ordinary common people who usually join in these competitions can hardly be credited with such abundance of statistical skill as will enable them, by the application of their skill, to attain success.
For most, if not all, of them the forecast is nothing better than a shot at a hidden target.
Apart from the unlikelihood that the Legislature in enacting a statute tarring both lotteries and prize competitions with the same brush as indicated by s ' 3 would squeeze in innocent prize competitions in between two categories of purely gambling varieties of them, all the considerations and difficulties we have adverted to in connection with the construction of the ,first category and the qualifying clause therein will apply mutatis mutandis to the interpretation of this second clause.
Reliance is placed on section 26 of the English Betting and Lotteries Act, 1934 (24 and 25 Geo.
V c. 58) in aid of the construction of the second category of prize competitions included in the definition given in the impugned Act.
The relevant portion of section 26 of the aforesaid Act runs thus: " 26.
(1) It shall be unlawful to conduct in or through any newspaper, or in connection with any trade or business or the sale of any article to the public (a) any competition in which prizes are offered for forecasts of the result either of a future event, or of a past event the result of which is not yet ascertained or not yet generally known; (b) any other competition success in which does not depend to a substantial degree upon the exercise of skill.
897 It will be noticed that this section is not a definition section at all but is a penal section which makes certain competitions mentioned in the two clauses unlawful.
Clause (a) of that section which corresponds to our second category is not sandwiched between two categories of gambling prize competitions.
In Elderton vs Totalisator Co. Ltd. (1) on which the petitioners rely the question was whether the football pool advertised in newspapers by the appellant company came within the wide language of cl.
(a) of that section which was in Part II of the Act.
Whether the appellant company 's football pool called for any skill on the part of the "investors" or whether it was of a gambling nature was not directly relevant to the discussion whether it fell within cl.
The penal provisions of the English Act and the decision of the Court of Appeal throw no light on the construction of our definition clause.
Seeing that prize competitions have been clubbed together with lotteries and dealt with in the same Act and seeing that the second category of the definition of " prize competition " is sandwiched in between the other two categories which are clearly of a gambling nature and in view of the other provisions of the impugned Act and in particular section 3 and the taxing sections, we are clearly of opinion that the definition of " prize competition " on a proper construction of the language of section 2(1) (d )in the light of the other provisions of the Act read as a whole comprises only prize competitions which are of the nature of a lottery in the wider sense, that is to say, of the nature of gambling.
The Court of Appeal took the view that although as a matter of construction the definition did include innocent prize competitions, yet by the application of another principle, namely, that a literal construction will make the law invalid because of its overstepping the limits of Entry 26, which comprises only trade and commerce within the State, the definition should be read as limited only to gambling prize competitions so as to make it a law with respect to betting and gambling under Entry 34.
It is not necessary for us in this case to consider whether the (1) 898 principle laid down by Sir Maurice Gwyer C. J. in the Hindu Women 's Right to Property Act case (1) can be called in aid to cut down the scope of a section by omitting one of two things when the section on a proper construction includes two things, for we are unable, with great respect, to agree with the Court of Appeal that on a proper construction the definition covers both gambling and innocent competitions.
In our view, the section, on a true construction, covers only gambling prize competitions and the Act is a law with respect to betting and gambling under Entry 34.
As, for the foregoing reasons, we have already arrived at the conclusion just stated, it is unnecessary for us to refer to the language used in the third category and to invoke the rule of construction which goes by the name of noscitur a sociis relied on by learned counsel for the appellant.
The next point urged is that, although the Act may come under Entry 34, the taxing provisions of section 12A cannot be said to impose a tax on betting and gambling under Entry 62 but imposes a tax on trade under Entry 60.
Once it is held that the impugned Act is on the topic of betting and gambling under Entry 34, the tax imposed 'by such a statute, one would think, would be a tax on betting and gambling under Entry 62.
The Appeal Court has expressed the view that section 12A does not fall within Entry 62, for it does not impose a tax on the gambler but imposes a tax on the peti tioners who do not themselves gamble but who only promote the prize competitions.
So far as the promoters are concerned, the tax levied from them can only be regarded as tax on the trade of prize competitions carried on by them.
This. ' with respect, is taking a very narrow view of the matter.
Entry 62 talks of taxes on betting and gambling and not of taxes on the men who bet or gamble.
It is necessary,, therefore, to bear in mind the real nature of the tax.
The tax imposed by section 12A is, in terms, a percentage of the sums specified in the declaration made under a. 15 by the promoter or a lump sum having regard to the circulation and distribution of the newspaper, or (1) 899 publication in the State.
Under section 15 the promoter of a prize competition carried on in a newspaper or publication printed and published outside the State is to make a declaration in such form and at such period as may be prescribed.
Form 'J ' prescribed by r. 11 (c) requires the promoter to declare, among other things, the total number of tickets/coupons received for the competition from the State of Bombay and the total receipts out of the sale of the tickets/coupons from the State of Bombay.
The percentage under a. 12A is to be calculated on the total sums specified in the declaration.
It is clear, therefore, that the tax sought to be imposed by the impugned Act is a percentage of the aggregate of the entry fees received from the State of Bombay.
On ultimate analysis it is a tax on each entry fee received from each individual competitor who remits it from the State of Bombay.
In gigantic prize competitions which the prize competitions run by the petitioners undoubtedly are, it is extremely difficult and indeed well nigh impossible for the State to get at each individual competitor and the provision for collecting the tax from the promoters after the entry fees come into their hands is nothing but a convenient method of collecting the tax.
In other words, the taxing authority finds it convenient in the course of administration to collect the duty in respect of the gambling activities represented by each of the entries when the same reaches the hands of the promoters.
The tax on gambling is a well recognised group of indirect taxes as stated by Findlay Shirras in his Science of Public Finance, vol.
II p. 680.
It is a kind of tax which, in the language of J. section Mill quoted by Lord Hobhouse in Bank of Toronto vs Lambe (1), is demanded from the promoter in the expectation and intention that he shall indemnify himself at the expense of the gamblers who sent entrance fees to him.
That, we think, is the general tendency of the tax according to the common understanding of men.
It is not difficult for the promoters to pass on the tax to the gamblers, for they may charge the proportionate percentage on the amount of (1) 900 each entry as the seller of goods charges the sales tax or he may increase the entrance fee from 4 annas to 5 annas 6 pies to cover the tax.
If in particular circumstances it is economically undesirable or practically impossible to pass on the tax to the gamblers, that circumstance is not a decisive or even a relevant consideration for ascertaining the true nature of the tax, for it does not affect the general tendency of the tax which remains.
If taxation on betting and gambling is to be regarded as a means of controlling betting and gambling activities, then the easiest and surest way of doing so is to get at the promoters who encourage and promote the unsocial activities and who hold the gamblers ' money in their hands.
To collect the tax from the promoters is not to tax the promoters but is a convenient way of imposing the tax on betting and gambling and indirectly taxing the gamblers themselves.
It is to be noted that the tax here is not on the profits made by the petitioners but it is a percentage of the total sum received by them from the State of Bombay as entrance fees without the deduction of any expense.
This circumstance also indicates that it is not a tax on a trade.
According to the general understanding of men, as stated by Lord Warrington of Clyffe in Rex vs Caledonian Collieries Ltd. (1), there are marked distinctions between a tax on gross collection and a tax on income which for taxation purposes means gains and profits.
Similar considerations may apply to tax on trade.
There is yet another cogent reason for holding that the tax imposed by section 12A is a tax on betting and gambling.
In enacting the statute the Legislature was undoubtedly making a law with respect to betting and gambling under Entry 34 as here in before mentioned.
By the amending Act XXX of 1952 the Legislature by deleting the concluding words of the definition of 'prize competition ', namely, " but does not include etc., etc., " extended the operation of the Act to prize competitions carried on in newspapers printed and published outside the State of Bombay.
They knew that under article 276 which reproduced section 142A of the Government of India Act, (1) 901 1935, they could not impose a tax exceeding the sum of Rs. 250 on any trade or calling under Entry 60.
If the tax can be referable either to Entry 60 or to Entry 62, then in view of the fact that section 12A will become at least partially, if not wholly, invalid as a tax on trade or calling under Entry 60 by reason of article 276(2), the court must, in order to uphold the section, follow the well established principle of construction laid down by the Federal Court of India and hold that the Legislature must have been contemplating to make a law with respect to betting and gambling under Entry 62, for there is no constitutional limit to the quantum of tax which can be imposed by a law made under that Entry.
For reasons stated above, we are satisfied that section 12A is supportable as a valid piece of legislation under Entry 62.
The next point urged by the petitioners is that under articles 245 and 246 the Legislature of a State can only make a law for the State or any part thereof and, consequently, the Legislature overstepped the limits of its legislative field when by the impugned Act it purported to affect men residing and carrying on business outside the State.
It is submitted that there is no sufficient territorial nexus between the State and the activities of the petitioners who are not in the State.
The doctrine of territorial nexus is well established and there is no dispute as to the principles.
As enunciated by learned counsel for the petitioners, if there is a territorial nexus between the person sought to be charged and the State seeking to tax him the taxing statute may be upheld.
Sufficiency of the territorial connection involves a consideration of two elements, namely (a) the connection must be real and not illusory and (b) the liability sought to be imposed must be pertinent to that connection.
It is conceded that it is of no importance on the question of validity that the liability imposed is or may be altogether disproportionate to the territorial connection.
In other words, if the connection is sufficient in the sense mentioned above, the extent of such connection affects merely the policy and not the validity of the legislation.
Keeping these principles in mind we have to ascertain if in the case before us there 116 902 was sufficient territorial nexus to entitle the Bombay.
Legislature to make the impugned law.
The question whether in a given case there is sufficient territorial nexus is essentially one of fact.
The trial court took the ' view that the territorial nexus was not sufficient to uphold the validity of the law under debate.
The Court of Appeal took a different view of the facts and upheld the law.
We find ourselves in agreement with the Court of Appeal.
The newspaper "Sporting Star" printed and published in Bangalore is widely circulated in the State of Bombay.
The petitioners have set up collection depots within the State to receive entry forms and the fees.
They have appointed local collectors.
Besides the circulation of the copies of the " Sporting Star ", the petitioners print over 40,000 extra coupons for distribution which no doubt are available from their local collectors.
The most important circumstance in these competitions is the alluring invitation to participate in the competition where very large prizes amounting to thousands of rupees and sometimes running into a lakh of rupees may be won at and for a paltry entrance fee of say 4 annas per entry.
These advertisements reach a large number of people resident within the Stat.
The gamblers, euphemistically called, the competitors, fill up the entry forms and either leave it along with the entry fees at the collection depots set up in the State of Bombay or send the same by poet from Bombay.
All the activities that the gambler is ordinarily expected to undertake take place, mostly if not entirely, in the State of Bombay and after sending the entry forms and the fees the gamblers hold their soul in patience in great expectations that fortune may smile on them.
In our judgment the standing invita tions, the filling up of the forms and the payment of money take place within the State which is seeking to tax only the amount received by the petitioners from the State of Bombay.
The tax is on gambling although it is collected from the promoters.
All these, we think, constitute sufficient territorial nexus which entitles the State of Bombay to impose a tax on the gambling that takes place within its boundaries and the law cannot be struck down on the ground of extra territoriality.
903 Assuming that the impugned Act is well within the legislative competence of the Bombay Legislature and that it is not invalid on the ground of extra territorial operation, we have next to examine and see if there is anything else in the Constitution which renders it invalid.
The petitioners contend that even if the prize competitions constitute gambling transactions, they are nevertheless trade or business activities and that that being so the impugned Act infringes the petitioners ' fundamental right under article 19(1)(g) 'of the Constitution to carry on their trade or business and that the restrictions imposed by the Act cannot possibly be supported as reasonable restrictions in the interests of the general public permissible under article 19(6).
The petitioners also point out that the trade or business carried on by them is not confined within the limits of the State of Mysore but extends across the State boundaries into other States within the territories of India and even into lands beyond the Union of India and they urge that in view of the inter State nature of their trade or business the restrictions imposed by the impugned Act offend against article 301 which declares that, subject to the other provisions of Part XIII of the Constitution, trade, commerce and intercourse throughout the territory of India shall be free and cannot be supported under article 304(b), for the restrictions cannot be said to be reasonable or required in the public interest and because the procedural requirements of the proviso thereto had not been complied with.
The State of Bombay repudiates these contentions and submits that as prize competitions are opposed to public policy there can be no "trade" or "business"" in promoting a prize competition and the question of infraction of the petitioner 's fundamental right to carry on trade or business guaranteed by article 19(1)(g) or of the violation of the freedom of trade, commerce or intercourse declared by article 301 does not arise at all and that in any event if article 19(1)(g) or article 301 applies at all, the restrictions imposed by the impugned Act are reasonable restrictions necessary in the interest of the general public and saved by article 19(6) and by article 304(b),of the Constitution.
It is 904 conceded that the bill which became Act XXX of 1952 and amended the 1948 Act in the manner here in before stated was introduced in the Legislature of the State without the previous sanction of the President and, consequently, the condition precedent to the validity of the resulting Act as laid down in the proviso had not been complied with but it is submitted, we think correctly, that the defect was cured, under article 255, by the assent given subsequently by the President to the impugned Act.
It is, however, admitted by learned counsel appearing for the appellant State that under article 255 the subsequent assent of the President will save the Act if the other condition embodied in article 304(b) as to the restrictions imposed by it being reasonable in the public interest is held to be satisfied but it will not save the rules framed under a. 31 of the impugned Act which had never been placed before the President or assented to or approved by him.
We now proceed to examine and deal with these rival, contentions.
The first branch of the argument on this part of the appeal raises a question of a very far reaching nature.
The question posed before us is: Can the promotion of prize competitions, which are opposed to public policy, be characterised as a " trade or business " within the meaning of article 19(1)(g) or "trade, commerce and intercourse" within article 301 ? The learned trial Judge has expressed the view that if he were able to hold that the prize competitions conducted by the petitioners were of a gambling nature, he would have had no difficulty in concluding that they were outside the protection of the Constitution.
The Court of Appeal, however, took a different view.
What weighed with the Court of Appeal was the fact that the legislature had not prohibited gambling outright but only made provisions for regulating the same and further that the State was making a profit out of these prize competitions by levying taxes thereon.
It is necessary to consider the arguments that have been adduced before us by learned counsel for the parties in support of their respective contentions.
905 It will be noted that article 19(1) (g) in very general terms guarantees to all citizens the right to carry on any occupation, trade or business and el.
(6) of article 19 protects legislation which may, in the interest of the general public, impose reasonable restrictions on the exercise of the right conferred by article 19(1) (g).
Likewise article 301 declares that trade, commerce and intercourse throughout the territory of India shall be free but makes such declaration subject to the other provisions of Part XIII of the Constitution.
articles 302305, which are in that Part, lay down certain restrictions subject to which the declaration contained in article 301 is to operate.
Article 302 empowers Parliament by law to impose restrictions on the freedom of trade, commerce or intercourse not only between one State and another but also within the State, provided in either case such restrictions are required in the public interest.
Article 304 (b) authorises the State Legislatures to impose reasonable restrictions on the freedom of trade, commerce or intercourse with or within the States as may be required in the public interest, provided the formalities of procedure are complied with articles 19(1) (g) and 301, it is pointed out are two facets of the same thing the freedom of trade article 19(1)(g) looks at the matter from the point of view of the individual citizens and protects their individual right to carry on their trade or business, article 301 looks at the matter from the point of view of the country 's trade and commerce as a whole, as distinct from the individual interests of the citizens and it relates to trade, commerce or intercourse both with and within the States.
The question which calls for our decision is as to the true meaning, import and scope of the freedom so guaranteed and declared by our Constitution.
We have been referred to a large number of decisions bearing on the Australian and American Constitutions in aid of the construction of the relevant articles of our Constitution.
In the Commonwealth of Australia Constitution Act (63 and 64 Vic. c. 12) there is section 92 from which our article 301 appears to have been taken.
The material part of a. 92 runs thus: 906 On the imposition of uniform duties of customs, trade, commerce and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free.
It has been held in James vs Commonwealth of Australia (1) that the word" ' absolutely " adds nothing but emphasis to the width of the section.
In the same case it has also been stated and decided that the section imposes a fetter on the legislative power not only of the Commonwealth Parliament but also of the Parliament of the States.
It has been equally authoritatively held that the words " whether by means of internal carriage or ocean navigation " occurring in the section do not restrict its operation to such things and persons as are carried by land or sea but that the section extends to all activities carried on by means of interState transactions (Commonwealth of Australia vs Bank of New South Wales (2) ).
The Privy Council in the last mentioned case has also said at p. 299 that it is no longer arguable that freedom from customs or other monetary charges alone is secured by the section.
The idea underlying the section was that the Federation in Australia should abolish the frontiers between the different States and create one Australia and that conception involved freedom from customs duties, import&, border prohibitions and restrictions of every kind, so that the people of Australia would be free to trade with each other and to pass to and fro from one State to another without any let or hindrance, or without any burden or restriction based merely on the fact that they were not members of the same State (James vs Commonwealth of Australia(1)).
One cannot but be struck by the sweeping generality of language used in the section.
Such a wide enunciation of the freedom of inter State trade, commerce and intercourse was bound to lead to difficulties.
The full import and true meaning of the general words had to be considered, as years went past, in relation to the vicissitudes of altering facts and circumstances which from time to time emerged.
The changing circumstances and the necessities compelled the court (1) , 627.
(2) , 302$ 303.
907 to reach the conclusion that the conception of freedom of trade, commerce and intercourse in a community regulated by law presupposed some degree of restriction on the individual.
Cases arose out of statutes enacted for restricting competition of privately owned motor vehicles with publicly owned railways, or to compel users of motor to contribute to the upkeep of the roads e.g. Willard vs Rawson (1); R. vs Vizzard(2) and O. Gilpin Ltd. vs Commissioner of Road Transport and Tramways(1).
In each of these three cases the State law was upheld as not offending against section 92.
Cases arose under statutes which were sought to be supported on the ground of health.
In Ex parte Nelson (No. 1) (4) a New South Wales statute prohibited entry of cattle from tick infected area until dipped.
Applying the principle of pith and substance, it was held that the restrictions looked at in their true light, were aids to and not restrictions upon the freedom of inter State trade, commerce and intercourse.
In Tasmania vs Victoria (5).
the absolute prohibition of imports of potatoes from Tasmania to Victoria could not on facts be supported as a health measure and consequently was struck down as a violation of section 92.
In James vs Commonwealth of Australia(6) came up for consideration the Dried Fruits Act 1928 35 which prohibited the carrying of any dried fruit from one State to another except under a licence and which provided for penalty for its contravention.
The regulations authorised the Minister to direct the licensee to export a certain percentage of dried fruits from Australia.
The Minister by an order determined that it would be a condition of the licence.
that the licensee should export a percentage of the dried fruits as therein mentioned.
The appellant having refused to apply for a licence, his consignments of dried fruits shipped from Aide for delivery at Sydney in performance of contracts for sale were seized.
The appellant brought an action for damages for what he alleged to be a wrongful seizure.
After holding that the section bound the Parliament of (1) (1933) 48 C.L.R.316.
(4) (1928) 42.C.L.R. 209.
(2) ; (5)(1935) ; (3) ; (6) , 627. 908 Commonwealth equally with those of the States the Judicial Committee proceeded to say that the freedom declared in section 92 must be somehow limited and the only limitation which emerged from the context and which could logically and realistically apply was freedom at what was the crucial point in inter State trade, namely at the State barrier (p. 631).
In the later case of Commonwealth of Australia vs Bank of New South Wales (1) it has been said that those words were to be read secundum subjectam materiam and could not be interpreted as a decision either that it was only the passage of goods which is protected by section 92 or that it is only at the frontier that the stipulated freedom might be impaired (p. 308).
Learned counsel for the State has strongly relied on two decisions of the Australian High Court in both of which the validity of a New South Wales Statute called the Lotteries and Art Unions Act 1901 1929 was called in question.
Section 21 of that Act provided: "Whoever sells or offers for sale or accepts any money in respect of the purchase of any ticket or share in a foreign lottery shall be liable to a penalty." In the first of those two cases The King vs Connare(2) the appellant offered for sale in Sydney a ticket in a lottery lawfully conducted in Tasmania and was convicted of an offence under section 21.
He challenged the validity of the law on the ground that it interfered with the freedom of trade, commerce and intercourse among the States and consequently violated the provisions of section 92.
It was held by Starke, Dixon, Evatt and McTiernan JJ.
(Latham C.J. and Rich J. dissenting) that the provisions of section 21 did not contravene section 92 and the appellant was properly convicted.
Starke J. discussed the question as to whether the sale in question was an 'inter State or intra state transaction but did not think it necessary to decide that question.
After referring to the observations of Lord Wright in James vs The Commonwealth (3) that the freedom declared by section 92 meant freedom at the frontier, the learned Judge observed that the question (1) , 302 303: (2) (1939) 51 C.L.R.596.
(3) ,627. 909 whether that freedom had been restricted or burdened depended upon the true character and effect of the Act.
He took the view (at p. 616) that the main purpose of the Act was to prevent or suppress lotteries and particularly, in sections 19, 20 and 21, foreign lotteries and that it was aimed at preventing what he graphically described as "illegitimate methods of trading", if sales of lottery tickets were regarded as trading.
The learned Judge took note of the fact that New South Wales law allowed State lotteries and concluded that the true character of the impugned Act was to suppress gambling in foreign lottery tickets and examined from the historical point of view, from, the character of the Act, its function and its effect upon the flow of commerce, the Act did not, in his view, restrict or hinder the freedom of any trade across the frontier of the States.
Dixon J., as he then was, gave two reasons for his opinion, namely that the transaction was not in itself a transaction of inter State trade ' commerce or intercourse but was a sale in New South Wales of a ticket then in New South Wales and that, apart from the State lottery and permitted charitable raffles, the Act suppressed uniformly the sale of all lottery tickets in New South Wales.
Adverting to the argument which, in substance, asked the Court to declare that section 92 had created an overriding constitutional right to traffic or invest in lotteries so long as the trafficker or investor could succeed in placing some boundary or other between himself and the conductor of the lottery Evatt J. said at pp.
619 20: it in my opinion such a proposition cannot be supported in principle or by reference to authority.
For it is obvious that the appellant 's argument also involves the assertion of the constitutional right of a citizen, so long as he can rely upon, or if necessary artificially create, some inter State connection in his business, to sell indecent and obscene publications, diseased cattle, impure foods, unbranded poisons, unstamped silver, ungraded fruit and so forth.
" The obvious inconvenience and undesirability of the effects to be produced if such extravagant arguments 117 910 were to prevail led the learned Judge to think (at p. 620) that in the interpretation of section 92 it was permissible to accept some postulates or axioms demanded alike by the dictates of common sense and by some knowledge of what was being attempted by the founders of the Australian Commonwealth.
Making these assumptions and concessions Evatt J. opined (at p. 621) that the guarantee contained in section 92 had nothing whatever,/ to say on the topic of inter State lotteries and could not be invoked to prevent either the suppression or the restriction in the public interest of the practice of gambling or investing in such lotteries.
The learned Judge did not think that lottery tickets could be regarded as goods or commodities which were entitled to the protection of section 92 and concluded thus at p. 628: " If they are goods or commodities they belong to a very special category, so special that in the interests of its citizens the State may legitimately exile them from the realm of trade, commerce or business.
The indiscriminate sale of such tickets may be regarded as causing business disturbance and loss which, on general grounds of policy, the State is entitled to prevent or at least minimize." McTiernan J. was even more forthright in placing gambling outside the pale of trade, commerce and intercourse.
At p. 631 he said: " Some trades are more adventurous or speculative than others, but trade or commerce as a branch of human activity belongs to an order entirely different from gaming or gambling.
Whether a particular activity falls within the one or the other order is a matter of social opinion rather than jurisprudence. . . . .
It is gambling, to buy a ticket or shard in a lottery.
Such a transaction does not belong to the commercial business of the country.
The purchaser stakes money in a scheme for distributing prizes by chance.
He is a gamester.
" A little further down the learned Judge observed: "It is not a commercial arrangement to sell a lottery ticket; for it is merely the acceptance of money 911 or the promise of money for a chance.
In this case the purchase of a lottery ticket merely founds a hope that something will happen in Tasmania to benefit the purchaser.
" Naturally enough learned counsel for the appellant State seeks to fasten upon the observations quoted or referred to above in support of his thesis that gambling is not trade, commerce or intercourse within the meaning alike of section 92 of the Australian Constitution and our article 19(1)(g) and article 301.
In the second case The King vs Martin (1) the same question came up for reconsideration.
The only difference in fact was that there was no actual sale by delivery of a lottery ticket in New South Wales but money was received by the agent of the Tasmania promoter in New South Wales and transmitted to Tasmania from where the lottery ticket was to be sent.
The State law was again upheld.
Latham C.J., Rich, Starke, Evatt and Mctiernan JJ.
adhered to their respective opinions expressed in the earlier case of The King vs Connare (2 ).
Dixon J., as he then was, gave a new reason for his opinion that notwithstanding the inter State character of the transaction section 21 of the impugned Act was valid.
Said the learned Judge at pp.
461 462: " The reason for my opinion is that the application of the law does not depend upon any characteristics of lotteries or lottery transactions in virtue of which they are trade or commerce or intercourse nor upon any inter State element in their nature.
The only criterion of its operation is the aleatory description of the acts which it forbids.
There is no prohibition or restraint placed upon any act in connection with a lottery because either the act or the lottery is or involves commerce or trade or intercourse or movement into or out of New South Wales or communication between that State and another State. . . . . .
To say that inter State trade, commerce and intercourse shall be free, means,, I think, that no restraint or burden shall be placed upon an act falling under that description because it is trade or commerce or (1) ; (2) ; 912 intercourse or involves inter State movement or communication.
" In this view of the matter Dixon J. now upheld section 21 of the impugned Act on the ground that the criterion of its application was the specific gambling nature of the transactions which it penalised and not anything which brought the transactions under the description of trade, commerce or intercourse or made them interState in their nature.
Then came the case of Commonwealth of Australia vs Bank of New South Wales(1) commonly called the Bank case where it was held that section 46 of the Banking Act, 1947, was invalid as offending against section 92 of the Australian Constitution.
Sub section (1) of section 46 provided that a private bank should not, after the commencement of the Act, carry on banking business in Australia except as required by the section.
Subsection (2) laid down that each private bank should carry on banking business in Australia and should not, except on appropriate grounds, cease to provide any facility or service provided by it in the course of its banking business on the fifteenth day of August one thousand nine hundred and forty seven.
Sub section (4) authorised that the Treasurer might, by notice published in the gazette and given in writing to a private bank, require that private bank to cease, upon a date specified in the notice, carrying on business in Australia.
Sub section (8) provided that upon and after the date specified in a notice under sub section
(4) the private bank to which that notice was given should not carry on banking business in Australia.
It also provided a penalty of pound 10,000 for each day on which the contra vention occurred.
The question was: Whether this section interfered with the freedom of trade, commerce or intercourse among the States declared by section 92 of the Australian Constitution ? It was held that the business of banking which consisted of the creation and transfer of credit, the making of loans, the purchase and disposal of investments and other kindred transactions was included among those activities described as trade, commerce and intercourse in section 92 (1) 913 and, accordingly, the impugned section 46 which while leaving untouched the Commonwealth and State Banks,, prohibited the carrying on in Australia of the business of banking by private banks, was invalid as contravening section 92.
Lord Porter delivering the judgment of the Judicial Committee pointed out that it was no longer arguable that freedom from customs or other monetary charges alone was secured by the section.
Then after reviewing and explaining at some length the two cases of James V. Cowan (1) and James vs The Common wealth(2), his Lordships proceeded to make certain observations on the distinction between restrictions which are regulatory and do not offend against section 92 and those which are something more than regulatory and do so offend.
His Lordship deduced two general propositions from the decided cases, namely (1) that regulation of trade, commerce and intercourse among the States was compatible with absolute freedom and (2) that section 92 was violated only when a legislative or executive act operated to restrict trade, commerce and intercourse directly and immediately as distinct from creating some indirect or consequential impediment which might fairly be regarded as remote.
The problem whether an enactment was regulatory or something more or whether a restriction was direct or only remote or only incidental involved, his Lordship pointed out, not so much legal as political, social or economic considerations.
Referring to the case of Australian National Airways Proprietory Ltd. vs The Commonwealth (3) his Lordship expressed his agreement with the view that simple prohibition was not regulation.
A little further down, however, his Lordship made a reservation that he did not intend to lay down that in no circumstances could the exclusion of competition so as to create a monopoly, either in a State or Commonwealth agency, or in some body, be justified and that every case must be judged on its own facts and in its own setting of time and circumstances, and that it might be that in regard to some economic activities and at some stage of social development it might be (1) (3) ; (2)L.R. , 627. 914 maintained that prohibition with a view to State monopoly was the only practical and reasonable manner of regulation, and that inter State trade, commerce and intercourse thus prohibited and thus monopolised remained absolutely free.
His Lordship further added that, regulation of trade might clearly take the form of denying certain activities to persons by age or circumstances unfit to perform them or of excluding from passage across the frontier of a State creatures or things calculated to injure its citizens.
Referring to the doctrine of "pith and substance" his Lordship observed that it, no doubt, raised in convenient form an appropriate question in cases where the real issue was one of subject matter as when the point was whether a particular piece of legislation was a law in respect of some subject within the permitted field, but it might also serve a useful purpose in the process of deciding whether an enactment which worked some interference with trade, commerce and intercourse among the States was, nevertheless, untouched by section 92 as being essentially regulatory in character.
The last Australian case on the point cited before us is Mansell vs Beck(1).
In this case also the provisions of the Lotteries and Art Unions Act of New South Wales came up for consideration and the decisions in the King vs Connare (11) and the King vs Martin(1).
were considered and approved.
Dixon C.J. and Webb J. observed that the true content of the State law must be ascertained to see whether the law that resulted from the whole impaired the freedom which section 92 protected.
Their Lordships pointed out that lotteries not conducted under the authority of Government were suppressed as pernicious.
The impugned legislation was, in their Lordships ' view, of a traditional kind directed against lotteries as such independently altogether of trade, commerce and intercourse between States.
McTiernan J. reiterated the views he had expressed in the case of the King vs Connare (2) in the following words: (1) (Australian Law journal, Vol.
No. (2) ; (3) ; 915 It is important to observe the distinction that gambling is not trade, commerce and intercourse within the meaning of section 92 otherwise the control of gambling in Australia would be attended with constitutional difficulties.
" Williams J. did not consider it necessary to express any final opinion on the question whether there could be inter State commerce in respect of lottery tickets.
He took the view that sections 20 and 21 of the New South Wales Act were on their face concerned and concerned only with intra State transactions and that their provisions did not directly hinder, burden or delay any inter State trade, commerce or intercourse.
His Lordship observed that there was nothing in the reasoning in the judgment in the Bank case or in subsequent decisions to indicate that the King vs Connare(1) and ' King vs Martin(2) were not rightly decided.
He quoted, with approval, the observations of Dixon J. in Martin 's case.
Fullagar J. also took the view that the previous decisions of the High Court in Connare 's case (1) and Martin 's case(2) were rightly decided for the reasons given by Dixon J. Kitto J. dissented from the majority view.
Taylor J. who was also in favour of the validity of the impugned law, observed: " No simple legislative expedient purporting to transmute trade and commerce into something else will remove it from the ambit of section 92.
But whilst asserting the width of the field in which section 92 may operate it is necessary to observe that not every transaction which employs the forms of trade and commerce will, as trade and commerce, invoke its protection.
The sale of stolen goods, when the transaction is juristically analysed, is no different from the sale of any other goods but can it be doubted that the Parliament of any State may prohibit the sale of stolen goods without infringing section 92 of the Constitution ? The only feature which distinguishes such a transaction from trade and commerce as generally understood is to be found in the subject of the transaction; there is no difference in the means adopted for carrying it out.
Yet it may be said that in essence such a transaction (1) (193) ; (2) ; 916 constitutes no part of trade and commerce as that expression is generally understood.
Numerous examples of other transactions may be given, such as the sale of a forged passport, or, the sale of counterfeit money, which provoke the same comment and, although legislation prohibiting such transactions may, possibly, be thought to be legally justifiable pursuant to what has, on occasions, been referred to as a "Police power", I prefer to think that the subjects of such transactions are not, on any view, the subjects of trade and commerce as that expression is used in section 92 and that the protection afforded by that section has nothing to do with such transactions even though they may require, for their consummation, the employment of instru ments, whereby inter State trade and commerce is commonly carried on.
" After referring to the history of lotteries in England the learned Judge concluded: " The foregoing observations give some indication of the attitude of the law for over two and a half centuries towards the carrying on of lotteries.
But they show also that, in this country, lotteries were, from the moment of its first settlement, common and public nuisances and that, in general, it was impossible to conduct them except in violation of the law.
Indeed it was impracticable for any person to conduct a lottery without achieving the status of a rogue and a vagabond.
" In the Constitution of the United States of America there is no counterpart to article 301 of our Constitution or section 92 of the Australian Constitution.
The problem of gambling came up before the courts in America in quite different setting.
Article 1, section 8, sub section
(3) of the Constitution of the United States compendiously called the commerce clause gives power to the Congress to regulate commerce with foreign nations and among the several States and with the Indian tribes.
Congress having made law regulating gambling activities which extended across the State borders, the question arose whether the making of the law was within the legislative competence of the Congress, that is to say whether it could be brought within the commerce 917 clause.
The question depended for its answer on the further question whether the gambling activities could be said to be commerce amongst the States.
If it could, then it was open to Congress to make the law in exercise of its legislative powers under the commerce clause.
More often than not gambling activities extend from State to State and, in view of the commerce clause, no State Legislature can make a law for regulating inter State activities in the nature of trade.
If betting and gambling does not fall within the ambit of the commerce clause, then neither the Congress nor the State Legislature can in any way control the same.
In such circumstances, the Supreme Court of America thought it right to give a wide meaning to the word "commerce" so as to include gambling within the commerce clause and thereby enable the Congress to regulate and control the same.
Thus in Champion vs Ames(1) the carriage of lottery tickets from 'one State to another by an express company was held to be inter State commerce and the court upheld the law made by Congress which made such carriage an offence.
In Hipolite Egg Co. vs United States(2) the Pure Food Act which prohibited the importation of adulterated food was upheld as an exercise of the power of the Congress to regulate commerce.
The prohibition of transportation of women for immoral purposes from one State to another or to a foreign, land has also been held to be within the commerce clause (see Hoke vs United States (3) ).
SO has the prohibition of obscene literature and articles for immoral use.
Reference has also been made to the cases of United States vs Kahriger(4) and Lewis V. United States(5) to support the contention of the appellant State that the Supreme Court of the United States looked with great disfavour on gambling activities.
In the last mentioned case it was roundly stated at p. 480 that "there is no constitutional right to gamble ".
(1) ; ; (2) ; ; (3) ; ; (4) ; ; (5) ; ; 918 In construing the provisions of our Constitution the decisions of the American Supreme Court on the commerce clause and the decisions of the Australian High Court and of the Privy Council on section 92 of the Australian Constitution should, for reasons pointed out by this Court in State of Travancore Cochin 1.
The Bombay Co. Ltd. (1), be used with caution and circumspection.
Our Constitution differs from both American and Australian Constitutions.
There is nothing in the American Constitution corresponding to our article 19(1) (g) or article 301.
In the United States the problem was that if gambling did not come within the commerce clause, then neither the Congress nor any State Legislature could interfere with or regulate inter State gambling.
Our Constitution, however, has provided adequate safeguards in cl.
(6) of article 19 and in articles 302 305.
The scheme of the Australian Constitution also is different from that of ours, for in the Australian Constitution there is no such provision as we have in article 19(6) or articles 302 304 of our Constitution.
The provision of section 92 of the Australian Constitution being in terms unlimited and unqualified the judicial authorities interpreting the same had to import certain restrictions and limitations dictated by common sense and the exigencies of modern society.
This they did, in some cases, by holding that certain activities did not amount to trade, commerce or intercourse and, in other cases, by applying the doctrine of pith and substance and holding that the impugned law was not a law with respect to trade, commerce or intercourse.
The difficulty which faced the judicial authorities interpreting section 92 of the Australian Constitution cannot arise under our Constitution, for our Constitution did not stop at declaring by article 19(1) (g) a fundamental right to carry on trade or business or at declaring by article 301 the freedom of trade, commerce and inter.
course but proceeded to make provision by article 19(6) and articles 302 305 for imposing in the interest of the general public reasonable restrictions on the exercise of the rights guaranteed and declared by article 19 (1) (g) and article 301.
As one of us said in P. P. Kutti Keya (1) ; at p. 1121 919 vs The State of Madras(1) the framers of our Constitution, being aware of the problems with which the Australian Government had been confronted by reason of section 92, sought to solve them by enacting limitations in Part XIII itself on the freedom guaranteed in article 301.
Our task, therefore, will be to interpret our Constitution and ascertain whether the prize competitions falling within the definition of the impugned Act, all of which are of a gambling nature, can be said to be a "trade or business" within the meaning of article 19(1) (g) or "trade, commerce and intercourse " within the meaning of article 301 of our Constitution.
The scheme of our Constitution, as already indicated, is to protect the freedom of each individual citizen to carry on his trade or business.
This it does by article 19(1)(g).
This guaranteed right is, however, subject to article 19(6) which protects a law which imposes, in the interest of the general public, reasonable restrictions on the exercise of the fundamental right guaranteed by article 19(1) (g).
Our Constitution also proclaims by article 301 the freedom of trade, commerce and intercourse throughout the territory of India ' subject to the provisions of articles 302 305 which permit the imposition of reasonable restriction by Parliament and the State Legislatures.
The 'underlying idea in making trade, commerce and intercourse with, as well as within, the States free undoubtedly was to emphasise the unity of India and to ensure that no barriers might be set up to break up the national unity.
One important point to note is that the language used in article 19(1) (g) and article 301 is quite general and that the provisions for restricting the exercise of the fundamental right and the declared freedom of the country 's trade, commerce and intercourse are made separately, e.g., by article 19(6) and articles 302 305.
This circumstance is fastened upon by learned counsel for the petitioners for contending that the right guaranteed by article 19(1)(g) and the freedom declared by article 301 should, in the first instance and to start with, be widely and liberally construed and then reasonable restrictions may be superimposed on that right under article 19(6) or articles 302 305 in the interest of the general public.
According (1) A.I.R. (1954) mad.
920 to him the words "trade" or "business" or "commerce" should be read in their widest amplitude as meaning any activity which is undertaken or carried on with a view to earning profit.
There is nothing in those two articles 19(1)(g) and 301, which, he says, may qualify or cut down the meaning of the critical words.
He contends that there is no justification for excluding from the meaning of those words activities which may be looked upon with disfavour by the State or the Court as injurious to public morality or public interest.
The argument is that if the trade or business is of the last mentioned character, then the appropriate Legislature may impose restrictions which will be justiciable by the courts and this restriction may, in appropriate cases, even extend to total prohibition.
Our attention has been drawn to article 25 where the limiting words " subject to public order, morality and health " are used and it is pointed out that no such limiting words are to be found in article 19(1)(g) or article 301.
In short the argument is that article 19(1) (g) and article 301 guarantee and declare the freedom of all activities undertaken and carried on with a view to earning profit and the safeguard is provided in article 19(6) and articles 302 305.
The proper approach to the task of construction of these provisions of our Constitution*, it is urged, is to start with absolute freedom and then to permit the State to cut it down, if necessary, by restrictions which may even extend to total prohibition.
On this argument it will follow that criminal activities undertaken and carried on with a view to earning profit will be protected as fundamental rights until they are restricted by law.
Thus there will be a guaranteed right to carry on a business of hiring out goondas to commit assault or even murder, of housebreaking, of selling obscene pictures, of trafficking in women and so on until the law curbs or stops such activities.
This appears to us to be completely unrealistic and incongruous.
We have no doubt that there are certainactivities which can under no circumstance be regarded as trade or business or commerce although the usual forms and instruments are employed therein.
To exclude those activities from the meaning of those words is not to cut down their meaning at all 921 but to say only that they are not within the true meaning of those words.
Learned counsel has to concede that there can be no "trade" or "business" in crime but submits that this principle should not be extended and that in any event there is no reason to hold that gambling does not fall within the words "trade" or "business" or "commerce" as used in the Articles under consideration.
The question arises whether our Constitution makers ever intended that gambling should be a fundamental right within the meaning of article 19(1)(g) or within the protected freedom declared by article 301.
The avowed purpose of our Constitution is to create a welfare State.
The directive principles of State policy set forth in Part IV of our Constitution enjoin upon the State the duty to strive to promote the welfare of the people by securing and protecting, as effectively as it may, a social order in which justice, social, economic and political, shall inform all the institutions of the national life.
It is the duty of the State to secure to every citizen, men and women, the right to an adequate means of livelihood and to see that the health and strength of workers, men and women, and the tender age of children are not abused, to protect children and youths against exploitation and against moral and material abandonment.
It is to be the endeavour of the State to secure a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities, to protect the weaker sections of the people from social injustice and all forms of exploitation, to raise the standard of living of its people and the improvement of public health.
The question canvassed before us is whether the Constitution makers who set up such an ideal of a welfare State could possibly have intended to elevate betting and gambling on the level of country 's trade or business or commerce and to guarantee to its citizens, the right to carry on the same.
There can be only one answer to the question.
From ancient times seers and law givers of India looked upon gambling as a sinful and pernicious vice and deprecated its practice.
Hymn XXXIV of the 922 Rigveda proclaims the demerit of gambling.
Verses 7, 10 and 13 say: " 7 Dice verily are armed with goads and driving hooks, deceiving and tormenting, causing grievous woe.
They give frail gifts and then destroy the man who wins, thickly anointed with the player 's fairest good.
10 The gambler 's wife is left forlorn and wretched: the mother mourns the son who wanders homeless.
In constant fear, in debt, and seeking riches, he goes by night unto the home of others.
11 Play not with dice: no, cultivate thy corn land.
Enjoy the gain, and deem that wealth sufficient.
There are thy cattle, there thy wife, O gambler.
So this good Savitar himself hath told me.
" The Mahabharata deprecates gambling by depicting the woeful conditions of the Pandavas who had gambled away their kingdom.
Manu forbade gambling altogether.
Verse 221 advises the king to exclude from his realm gambling and betting, for those two vices cause the destruction of the kingdom of princes.
Verse 224 enjoins upon the king the duty to corporally punish all those persons who either gamble or bet or provide an opportunity for it.
Verse 225 calls upon the king to instantly banish all gamblers from his town.
In verse 226 the gamblers are described as secret thieves who constantly harass the good subjects by their forbidden practices.
Verse 227 calls gambling a vice causing great enmity and advises wise men not to practise it even for amusement.
The concluding verse 228 provides that on every man who addicts himself to that vice either secretly or openly the king may inflict punishment according to his discretion.
While Manu condemned gambling outright, Yajnavalkya sought to bring it under State control but he too in verse 202(2) provided that persons gambling with false dice or other instruments should be branded and punished by the king.
Kautilya also advocated State control of gambling and, as a practical person that he was, was 923 not averse to the State earning some revenue therefrom.
Vrihaspati dealing with gambling in chapter XXVI, verse 199, recognises that gambling had been totally prohibited by Manu because it destroyed truth, honesty and wealth, while other law givers permitted it when conducted under the control of the State so as to allow the king a share of every stake.
Such was the notion of Hindu law givers regarding the vice of gambling.
Hamilton in his Hedaya, vol.
IV, book XLIV, includes gambling as a kiraheeat or abomination.
He says: "It is an abomination to play at chess, dice or any other game; for if anything is staked it is gambling, which is expressly prohibited in the Koran; or if, on the other band, nothing be hazarded it is useless and vain." The wagering con.
tracts of the type which formed the subject matter of the case of Ramloll vs Soojumnull (1) and was upheld by the Privy Council as not repugnant to the English Common Law were subsequently prohibited by Act XXI of 1948 which was enacted on the suggestion of Lord Campbell made in that case and introduced in India provisions similar to those of the English Gaming Act (8 & 9 Vict. c. 109).
Bengal Gambling Act (Ben.
II of 1867) provided for the punishment of public gambling and the keeping of common gaming house in the territories subject to the Lieutenant Governor of Bengal.
Lottery has been, since 1870, made an offence, under section 294A of the Indian Penal Code.
Gambling agreements have been declared to be void under the (section 30).
This in short is how gambling is viewed in India.
Before the Legislature intervened, gambling and wagering were not prohibited by the English Common Law although the English courts looked upon it with disfavour and discouraged it on grounds of public policy by denying procedural facilities which were granted to other litigants.
The Scottish courts, however, have always refused to recognise the validity of wagering contracts and have held that sponsiones ludicroe, as they style such contracts, are void by the Common Law of Scotland.
Gambling and Betting Act, (1) (1848) 4 M.I.A. 339.
924 , c. 7) was directed against fraudulent and excessive gambling and betting at games or sports.
This was followed by the Gaming Act of 1710 (9 Anne.c.
The Marine Insurance Act 1745 (19 Geo.
11 C. 37) for the first time prohibited wagering policies on risks connected with British shipping.
This was supplemented by the Marine Insurance Act 1788 (28 Geo.
III c. 56).
The Life Insurance Act, 1774 (14 Geo.
III c. 48) though not intended to prohibit wagering in general, prohibited wagering under the cloak of a mercantile document which purported to be a contract of insurance.
Then came the Gaming Act of 1845 (8 and 9 Vict.
c. 109) which for the first time declared all contracts made by way of gaming or wagering void irrespective of their form or subject matter.
The provisions of this Act were adopted by our Act XXI of 1948 as here in before mentioned.
The Gaming Act of 1892 (55 and 56 Viet.
c. 9) further tightened up the law.
As far back as 1850 the Supreme Court of America in Phalen vs Virginia(1) observed: " Experience has shown that the common forms of gambling are comparatively innocuous when placed in contrast with widespread pestilence of lotteries.
The former are confined to a few persons and places, but the latter infests the whole community; it enters every dwelling; it reaches every class; it preys upon the hard earnings of the poor; it plunders the ignorant and the simple.
The observations were quoted, with approval, in Douglas vs Kentucky (2 ).
After quoting the passage from Phalen vs Virginia (1) the judgment proceeded: "Is the state forbidden by the supreme law 'of the land from protecting its people at all times from practices which it conceives to be attended by such ruinous results? Can the Legislature of a State contract away its power to establish such regulations as are reasonably necessary from time to time to protect the public morals against the, evils of lotteries ?" (1) ; [1850] 49 U.S. 163; ,1033.
(2) ; ; , 555. 925 It will be abundantly clear from the foregoing observations that the activities which have been condemned in this country from ancient times appear to have been equally discouraged and looked upon with disfavour in England, Scotland, the United States of America and in Australia in the cases referred to above.
We find it difficult to accept the contention that those activities which encourage a spirit of reckless propensity for making easy gain by lot or chance, which lead to the loss of the hard earned money of the undiscerning and improvident common man and thereby lower his standard of living and drive him into a chronic state of indebtedness and eventually disrupt the peace and happiness of his humble home could possibly have been intended by our Constitution makers to be raised to the status of trade, commerce or intercourse and to be made the subject matter of ' a fundamental right guaranteed by article 19(1) (g).
We find it difficult to persuade ourselves that gambling was ever intended to form any part of this ancient country 's trade, commerce or intercourse to be declared as free under article 301.
It is not our purpose nor is it neces sary for us in deciding this case to attempt an exhaustive definition of the word "trade", "business", or "intercourse".
We are, however, clearly of opinion that whatever else may or may not be regarded as falling within the meaning of these words, gambling cannot certainly be taken as one of them.
We are convinced and satisfied that the real purpose of articles 19(1) (g) and 301 could not possibly have been to guarantee or declare the freedom of gambling.
Gambling activities from their very nature and in essence are extra commercium although the external forms, formalities and instruments of trade may be employed and they are not protected either by article 19 (1) (g) or article 301 of our Constitution.
The Court of Appeal; we have already said, took the view that it was not open to the State, which had not thought fit to prohibit these prize competitions but had sought to make a profit out of them by levying a tax, to contend at the same time that it was illegal or was not a "trade" at all.
But as pointed out in United 119 926 States vs Kahrigar (1), the fact of issuing a licence or imposing a tax means nothing except that the licensee shall be subject to no penalties under the law if he pays it.
Lewis vs United States of America (2) also recognises that the Federal Government may tax what it also forbids and that nobody has a constitutional right to gamble but that if he elects to do, so, though it be unlawful, he must pay the tax.
In this connection reference may be made to the observation of Rowlatt J. in Mann vs Nash (3) : " The revenue authorities, representing the State, are merely looking at an accomplished fact.
It is not condoning it or taking part in it.
Further down he said: " It is merely taxing the individual with reference to certain facts.
It is not a partner or a sharer in the illegality.
" That crime is not a business is also recognised in F. A. Lindsay, A. E. Woodward and W. Hiscox vs The Commissioners of Inland Revenue (4)(per Lord President Clyde and per Lord Sands) and in Southern (H. M. Inspector of Taxes) vs A. B.
The fact that regulatory provisions have been enacted to control gambling by issuing licences and by imposing taxes does not in any way alter the nature of gambling which is inherently vicious and pernicious.
We also arrive at the same result by applying the doctrine of 'pith and substance '.
As Lord Porter pointed out: " The phrase raised in a convenient form an appropriate question in cases where the real issue is one of subject matter and it may also serve a useful purpose in the process of deciding whether a particular enactment is a law with respect to trade, commerce or intercourse as such or whether it is a law with respect to some other subject which incidentally trenches upon trade, commerce and intercourse.
" Reference has already been made to the observations (1) ; ; (2) ; 99 L. Ed 475.
(3) L. R.(1932) 1 K.B.D. 752 at P. 757.
(4) (5) ; 927 of Dixon J., as he then was, in King vs Martin (1).
Adapt ing his language, we may say that when article 19(1)(g) guarantees or article 301 declares the freedom of trade they describe human activities in a specific aspect.
They single out attributes which the act or transaction may wear and make the freedom, which they confer, depend upon those attributes.
The freedom secured by the two Articles, we think, implies that no unreasonable restraint or burden shall be placed upon an act falling under that description because it is trade or commerce or intercourse.
We have analysed the provisions of the impugned Act and it is quite clear that the Act does not purport directly to interfere with trade, commerce or intercourse as such, for the criterion of its application is the specific gambling nature of the transaction which it restricts.
The purpose of the Act is not to restrict anything which brings the transactions under the description of trade, commerce or intercourse.
In other words, the Act is in pith and substance an Act with respect to betting and gambling.
To control and restrict betting and gambling is not to interfere with trade, commerce or intercourse as such but to keep the flow of trade, commerce and intercourse free and unpolluted and to save it from anti social activities.
In our opinion, therefore, the impugned Act deals with gambling which is not trade, commerce or business and, therefore, the validity of the Act has not to be decided by the yardstick of reasonableness and public interest laid down in articles 19(6) and 304.
The appeal against the stringency and harshness, if any, of the law does not lie to a court of law.
In the view we have taken, it is not necessary for us to consider or express any opinion on this occasion as to the vexed question whether restriction, as con.
templated in articles 19(6) and 304(b), may extend to total prohibition and this is so because we cannot persuade ourselves to hold that article 19(1)(g) or article 301 comprises all activities undertaken with a view to profit as "trade" within the meaning of those Articles.
Nor is it necessary for us on this occasion to consider (1) ; 928 whether a company is a citizen within the meaning of Art ' 19 and indeed the point has not been argued before us.
The last point urged by the petitioners is that assuming that the impugned Act deals only with gambling and that gambling is not "trade" or "business" or "commerce" and is, therefore, not entitled to the protection of our Constitution, the prize competitions run by them are in fact not of a gambling nature.
The trial court accepted this contention while the Court of Appeal rejected it.
We have examined the scheme and the rules and the official solutions and the explanations in support thereof and we have come to the conclusion that the competition at present run by the petitioners under the name of R.M.D.C. Crosswords are of a gambling nature.
Our view so closely accords with that of the Court of Appeal that we find it unnecessary to go into the details of the scheme.
To start with, we find that the Board of Adjudicators pick up nine of the clues and select only those competitors whose answers correspond with 'the official solution of those nine clues.
Those nine clues may be from the top, may be from the bottom or may be selected at random.
It is said that they are like nine compulsory questions in a school examination but then in a school examination, the students are told which are the nine compulsory questions and they can take particular care with regard to those; but in this scheme there is no knowing which nine will be selected and those competitors whose answers do not accord with the official solution are debarred from being considered for the first prize.
A competitor may have given correct answers to eight of the nine selected clues and may have given correct answers to the remaining eight so that he has sent in sixteen correct answers but he will, nevertheless, not be considered for the first prize because his answers to the nine selected questions did not agree with the official solutions of those nine clues.
This is a chance element to start with.
We have then seen that the competing words out of which one is to be selected are in some cases equally apt.
We are not satisfied that the word selected by the Board is the 929 more apt word in many.
cases.
The reasons given by them appear to us to be laboured and artificial and even arbitrary in some cases.
On the whole, we have come to the conclusion that the Court of Appeal was right in its conclusion that in point of fact the prize competitions run by the petitioners partake of a gambling nature and, therefore, fall within the definition and are to be governed by the regulatory and taxing provisions of the Act.
For the reasons stated above, we have come to the conclusion that the impugned law is a law with respect to betting and gambling under Entry 34 and the impugned taxing section is a law with respect to tax on betting and gambling under Entry 62 and that it was within the legislative competence of the State Legislature to have enacted it.
There is sufficient territorial nexus to entitle the State Legislature to collect the tax from the petitioners who carry on the prize competitions through the medium of a newspaper printed and published outside the State of Bombay.
The prize competitions being of a gambling nature, they cannot be regarded as trade or commerce and as such the petitioners cannot claim any fundamental right under article 19(1)(g) in respect of such competitions, nor are they entitled to the protection of article 301.
The result, therefore, is that this appeal must be allowed and the order of the lower court set aside and the petition dismissed and we do so with costs throughout.
Appeal allowed.
| The assessee company went into liquidation on August 8, 1960.
The Income tax officer, while determining the taxable income of the assessee company at Rs. 5,79,978 for the assessment year 1963 64, was of the opinion that this amount would attract liability for super profits tax also and therefore asked the assessee company to file its return.
The assessee company submitted its return showing the chargeable profits as 'nil ', contending that there could be no liability to super profits tax in respect of a company in liquidation since the formula laid down in the Second Schedule to the for calculation of the 'standard deduction ' was inapplicable on account of the fact that a company in liquidation could not be said to have paid up share capital as on the first day of the previous year relevant to the assessment year which was long subsequent to the winding up.
The Income Tax officer however overruled the aforesaid contention and worked out the chargeable profits at Rs. 2,04,740 after adopting a minimum amount of Rs. 50,000 mentioned in s.2 (9) of tho Act as a "standard deduction".
The said order was confirmed in appeal by the Appellate Assistant Commissioner.
But, on further appeal by the assessee company the Income tax Appellate Tribunal while allowing the appeal held: (1) that in the hands of the liquidator there is only one integral fund which could not be split up into share capital, reserve profits and therefore s.27 of the Act was clearly attracted to the case; and (ii) that no assessment to super profits could be made on a company in liquidation since section 4 of the Act would not apply to the assessee company in liquidation as the standard deduction was incapable of ascertainment.
The High Court, rejected the reference made at the instance of the Revenue.
972 Dismissing the appeal by the Revenue, ^ HELD: (1) After a company has gone into liquidation it cannot be said that as on the first day in any subsequent year forming the previous year relevant to the assessment year, there exists in the hands of the liquidator any amount distinctly forming the paid up share capital of the company or any sum that can be characterized as "reserve.
" The distinction between capital, reserve and tho accumulated profits disappears in respect of a company in liquidation after the date of its winding up and there is only one integrated or consolidated fund in the hands of the liquidator.
The concept of a fluctuating share capital or reserve which is the basic premise necessary to attract the applicability of rule 1 of the Second Schedule is wholly foreign in respect of a company in liquidation.
[977H; 978E F] (2) It is clear from the definition of "standard deduction" that for the purpose of calculation of "standard deduction" one has to ascertain the capital of the company as computed in the manner specified in Second Schedule.
But, it is important to notice from the terms of Rule I of Second Schedule that unless the company can be said to have a paid up share capital as on the first day of the previous year relevant to the assessment year the formula laid down in the rule for computation of capital of the company cannot have any application and the calculation of "standard deduction" being based wholly on the capital of the company, it becomes wholly incapable of ascertainment.
[976B; 977F G] Commissioner of Inland Revenue vs George Burrell, 1924 2 [K.B.] 52, 63 and Birch vs Cropper [1889] L.R. 14 App.
525, 546 referred to.
Commissioner of Income tax vs Girdhars and Co. Private Ltd, ; followed.
(3) Under the scheme of the Income tax Act 1961, charge of tax will not get attracted unless the case or transaction falls under the governance of the relevant computation provisions.
The character of the computation provisions in each case bears a relationship to the nature of the charge.
Thus, the charging section and the computation provisions together constitute an integrated code.
When there is a case to which the computation provisions cannot apply at all.
it is evident that such a case was not intended to fall Within the charging section.
The scheme of the being similar to that of the Income tax Act 1961, it has to be held that inasmuch as the provisions contained in the Act for computing the capital of the company and its reserves and cannot have any application in respect of a company in liquidation and consequently the 'standard deduction ' is incapable of ascertainment, the charge of super profits tax under section 4 of the Act is not attracted to such a cases.
[978G H ; 979A C] Commissioners of Income tax, Bangalore vs B.C. Srinivasa Setty; , ; referred to.
|
Civil Appeal No. 1562 of 1970.
Appeal by special leave from the Judgment and Order dated the 29th July, 1970 of the Rajasthan High Court in D.B. Civil Special Appeal No. 172 of 1970.
D. V. Patel, section M. Jain, for the appellant.
Miss Maya Rao for the respondent.
The Judgment of the Court was delivered by GOSWAMI, J.
This appeal by special leave is against the judgment of the Division Bench of the Rajasthan High Court by which an appeal against the judgment of a single Bench was summarily rejected.
In answer to a notification of March 29, 1950, issued by the State of Rajasthan inviting tenders for mining rights for mica on certain terms and conditions, the appellant submitted its tender which was accepted on December 30, 1950 and a notification in that behalf was made by the State Government on February 6, 1951, granting the mining lease for mica for block No. 6 (except sidries mine) in Bhilwara District on payment of the tendered amount of Rs. 1,55,000.
223 The lease was for a period of 20 years with an option of renewal of the lease for another 20 years as per conditions prescribed in the Mineral Concession Rules, 1949 (briefly the Rules).
A premium of Rs. 1,55,000 was deposited by the appellant and possession was also handed over to it on March 15, 1951.
The area originally was 6021 acres but later on a dam, by the name of Meza Dam, was constructed over some parts of the original area and the appellant was left to work on 2924 acres.
It is stated that the appellant spent Rs. 5,65,000 between 1951 and 1955.
It is also common case that no lease was executed within six months of the acceptance of the tender as required.
On June 19, 1955, the Director of Mines and Geology, Rajasthan, sent a notice to the appellant intimating that the orders sanctioning the lease stood revoked with effect from June 6, 1955.
The appellant was asked by this notice to show cause why further action to take immediate possession of the area should not be taken.
It may be noted that in this notice exception was taken for the appellant not executing the lease within the requisite period of six months which, it was mentioned, expired on August 27, 1953.
The appellant submitted a review application against the order of the State Government cancelling the mine lease on February 23, 1957.
It appears, meanwhile, the State Government proposed to grant a lease to the appellant and the latter did not press the review application.
Thereafter some correspondence took place between the appellant and the State Government regarding execution of the lease, its terms and conditions and the like.
A reference was also made by the appellant to the Central Government on March 12, 1963, to direct the State Government to sanction the lease.
On May 15, 1965, the Mining Engineer, Rajasthan, sent a notice to the appellant to deposit the dead rent amounting to Rs. 1,27,616.36 for the period 1 4 1960 to 14 9 1965 on pain of legal action.
The appellant preferred a revision application to the Government of India against this order.
The Government of India by its order of March 19, 1966, set aside the order of May 15, 1965, demanding Rs. 1,27,616.36 as dead rent for block No. 6.
This order is significant in more than one way.
It is clearly stated in the order that the conditions under the Mineral Concession Rules 1949 under which mining or prospecting operation is allowed to be undertaken do not provide for payment of premium by the lessee except with the prior approval of the Central Government.
It was also pointed out in the order that no such approval was secured by the State Government before accepting the premium of Rs. 1,55,000 from the appellant.
It was, therefore, pointed out that the acceptance of the premium was illegal.
It was further held that the State Government was entitled to charge only royalty in the present case and it could charge dead rent or royalty, whichever was higher, only after execution of a formal lease.
Then came the State Government 's impugned order of November 9, 1967, addressed to the appellant.
There was reference in the above order to the fact that the appellant "approached the Central Government in revision.
The Central Government have held that the permissive permission 224 of this block to you is not even as a licensee under the Mineral Concession Rules 1949.
Government, therefore, do not want that the possession of this area should remain with you any longer.
Government is, therefore, pleased to order that you should vacate the aforesaid block No. 6 with in a month from the date of the receipt of this note, failing which such action shall be taken as may be deemed proper".
It may be mentioned that the Central Government in the order referred to above in the extract also observed "this licence was not within the meaning of Mineral Concession Rules 1949 but was governed by the General law, e.g. the Easement Act".
(See Central Government letter dated March 19, 1966.) The appellant after receipt of the order of November 9, 1967, instituted an application under article 226 of the Constitution in the High Court of Rajasthan (being Writ Petition No. 691 of 1967) praying for a writ of certiorari to quash the aforesaid order, to restrain the State from revoking the licence and dispossessing the appellant from the mining area absolutely or in the alternative, till compensation along with refund of the premium of Rs. 1,55,000 and the dead rent realised in excess of royalty were paid by the State.
As a last alternative it prayed for a direction to the State to grant the lease of the balance area of 3628 acres or such other area to which the appellant was entitled in law.
The learned single Judge of the High Court dismissed the writ application as infructuous in view of the offer made by the State in its application of April 20, 1970, repeated through the learned Advocate General.
The learned Advocate General submitted before the High Court that the State Government "was still prepared to pay them compensation in order to revoke the licence granted in favour of the petitioner".
In the aforesaid application of April 20, 1970, the State Government was prepared to pay compensation to the appellant at the rate of Rs. 7750 per annum for the unexpired period of 20 years ending on March 14, 1971.
The learned single Judge while dismissing the application observed that if the petitioner thought that the compensation was inadequate he could agitate the matter in court.
The appellant 's appeal thereafter to the Division Bench was summarily dismissed and leave to appeal to this Court was also rejected.
Hence this appeal by special leave.
We have heard the learned counsel for both the parties.
In view of the fact that the period of the purported lease already expired on March 14, 1971, there is no question of a writ for granting the lease.
Since a proper lease had not been executed, for whatever reasons, there was no question also of exercise of an option of renewal 225 of lease.
The only question that survives is whether the State Government could realise premium in a lawful manner under the Mineral Concession Rules.
We do not find any provision in the Rules authorising realisation of premium as done in this case.
Rule 41 of the Rules of 1949 applicable at the relevant time provides for conditions of the lease.
These conditions specifically mention royalty, dead rent and surface rent, but not premium.
Again proviso to rule 41(1)(iii) states that the lessee shall be liable to pay the dead rent or royalty in respect of each mineral whichever be higher in amount, but not both.
Under subsection (3) of section 41, a mining lease may contain any other special conditions, subject to the prior approval of the Central Government.
The Central Government, is, therefore, right in holding that the realisation of the premium of Rs. 1,55,000 was illegal, particularly because there was no prior approval under sub section (3) of rule 41 of the Rules.
When in this case grant of the mining lease was envisaged under definite statutory rules made in exercise of power, conferred under section 5 of the Mines & Minerals (Regulation and Development) Act, 1948, the State Government was under legal obligation to act in accordance with these rules.
It could not exercise a power in the matter of grant of mining lease unknown to these Rules.
The State Government could not impose terms and conditions according to its own whims ignoring or disregarding the statutory rules which are binding on it.
The appellant is, therefore, entitled to a refund of Rs. 1,21,930.71 which is due to the appellant out of the illegally realised premium of Rs. 1,55,000 allowing the sum of Rs. 33,069.29 already received by the appellant from the Government on account of compensation.
The appellant 's counsel made a statement in court that since the appellant had already vacated the area it will not of its own make any further claim for compensation or under any other heads but reserves its right to raise all possible defences against any action that may be instituted by the State against the appellant in the matter of the grant of mining for mica in the area.
Subject to the reservation of the above right, the appeal is partly allowed to the extent that the State Government is directed to refund Rs. 1,21,930.71 as mentioned above.
The appellant is entitled to its costs in this Court.
V.P.S. Appeal allowed in part.
| The respondent, a displaced person from Pakistan was allotted 55 80 Standard Acres of land in lieu of the land left by him in Pakistan.
While determining the surplus area, the appellant State interpreting the phrase "as the case may be" in proviso (ii)(a) to Section 2(3) of the Punjab Security of Land Tenures Act, 1953, left with the respondent 100 ordinary acres equivalent to 29.81 Standard Acres and treated 25.99 standard acres equivalent to 78.57 ordinary acres as surplus.
The respondent preferred an appeal contending that the surplus should be 5.80 standard acres on a true interpretation of the proviso, which failed.
The revision before the Financial Commissioner met with the same fate.
The contention of the respondent was upheld by the High Court while allowing the Writ Petition filed by him.
The Letters Patent Appeal filed by the State was dismissed.
On an appeal by special leave, the Court, while dismissing it, ^ HELD: (i) The contention that the words "as the case may be" in proviso (ii)(a) to section 2(3), gives a discretion to the authorities to determine the permissible area either in standard or in ordinary acres is not correct.
[212 B C] (ii) On a plain reading, proviso (ii)(a) indicates that where the land allotted to a displaced person was in standard acres and its area exceeded 50 standard acres, the permissible area would be 50 standard acres, and where the land was allotted not in standard acres, the permissible area would be 100 ordinary acres.
The nature of the original allotment whether it was in standard acres or in ordinary acres is the determinating factor.
[212 C D] (iii) The meaning given to proviso (ii)(a) by the Full Bench of the Punjab & Haryana High Court, in Khan Chand vs State of Punjab A.I.R. 1966 Punjab 423, is correct It is only construed this way that the words "as the case may be" acquire a significance, otherwise they would be mere surplusage.
[212 D E] Khan Chand vs State of Punjab, A.I.R. 1966 Punjab 423, approved.
|
ivil Appeal No. 269 of 1962.
Appeal by special leave from the judgment and decree dated October 5, 1959 of the Bombay High Court in First Appeal No. 712 of 1955.
212 section G. Patwardhan and B.R.G.K. Achar, for the appellant.
G. section Pathak and Naunit Lal, for the respondents.
The Judgment of the Court was delivered by Gajendragadkar C. J.
What is the scope and effect of the provisions contained in section 65 read with section 83 of the Bombay Tenancy and Agricultural Lands Act, 1948 (No. 67 of 1948) (hereinafter called the Act), that is the short question which arises for our decision in this appeal.
The four respondents are the owner of certain agricultural lands in Deokhope in Taluka Palghar in Maharashtra.
On the 23rd June, 1951, a notice was served by the appellant, State of Bombay (now Maharashtra), inviting the attention of the respondents to the fact that the agricultural lands of which they were the owners had remained fallow since 1948 49, and intimating to them that the appellant State would resume management of the said lands under section 65 of the Act unless the respondents took steps to bring them under cultivation in the following agricultural season.
The respondents were told that in case they wanted to bring the said lands into cultivation, they should send intimation of their intention to do so within 15 days from the date of the receipt of the notice.
It appears that later, an enquiry was made under the orders of the Dy.
Collector as a result of which on the 30th December, 1951, he passed an order under section 65 directing that the lands should be resumed by the Government for cultivation.
Thereafter, representations were made by the respondents to the Dy.
Collector as a result of which about 8 acres and 30 ghunthas of land were released on the ground that the owners had taken steps to cultivate that portion of the lands in pursuance of the direction given to them by the earlier notice.
The order passed 'by the Dy.
Collector in respect of other lands remained unaffected.
Thereafter, respondent No. 1 approached the Collector by his application dated 24th March, 1952.
This application was, however, rejected.
The respondents then moved the Revenue Department, but that effort also failed.
That is why the present suit was filed by them on the 23rd December, 1953 for a declaration that the order passed by the Dy.
Collector on the 30th December, 1951 was illegal and void, and that it could not dispossess them of the lands which belonged to them.
As a consequence of the declaration thus claimed by them, the respondents, asked for a decree for possession and mesne profits against the appellant.
The appellant disputed the respondents ' claim.
It urged that the suit as framed was barred under section 63 (I ) and section 85 of 213 the Act.
On the merits, the appellant challenged the correctness of the allegations made by the respondents.
It was averred by the appellant that the requisite enquiry had been duly and properly made and the impunged order was passed in accordance with the relevant provisions of the Act.
According to the appellant, civil court has no jurisdiction to consider the propriety or reasonableness of the conclusion reached by the Dy.
Collector before he passed the impunged order.
The learned trial Judge who framed appropriate issues on these pleadings, in the main upheld the contentions raised by the appellant.
In his opinion, the present suit was barred by sections 65 (1) and 85 of the Act.
He also held that the declaration made by the Dy.
Collector was not null and void.
The plea raised by the respondents against the validity of the statutory provisions contained in sections 65 & 66 of the Act was rejected by him, because he thought that the said sections did not contravene the provisions of Articles 19 and 31 of the Constitution.
The learned Judge also found that the grievance made by the respondents against the propriety or reasonableness of the enquiry made prior to the passing of the impunged order was not justified.
In the result, the respondent 's suit was dismissed.
The respondents then carried the matter before the High Court by an appeal, and on their behalf three contentions were raised before the High Court.
It was first argued that the lands in respect of which the impunged declaration was made were not lands as defined by the Act, and so, the relevant provisions of the Act were inapplicable.
It was then urged that before the Government could exercise its powers under section 65 of the Act, a duty was cast on it to be satisfied that the lands had remained uncultivated for a period of two years before their management was assumed; and this condition had not been satisfied, because delegation by the State Government to subordinate officers of its duty to satisfy itself, or its power to make the declaration, was not justified in law.
It was also contended that since the satisfaction had to be by the authority who was competent to make the declaration, he could not delegate any part of his function and duty in that behalf and the said authority had to hold the enquiry himself.
The High Court has upheld the second of these contentions.
It has found that on a fair and reasonable construction of section 65(1) read with section 83, the appellant could delegate its powers prescribed by section 65(1), but could not delegate its duty incidental to the exercise of the said power.
That is why the decree passed 214 by the trial Court has been reversed on this ground and the respondents ' suit 'has been decreed.
Consistently with this decision, an appropriate order has been passed in regard to the delivery of possession and the payment of mesne profits as claimed by the respondents.
It is against this decree that the appellant has come to this Court by special leave; and the only point which is raised on its behalf by Mr. Patwardhan is that the view taken by the High Court in regard to the scope and effect of the provisions contained in section 65(1) read with section 83 is not well founded.
Section 65(l) reads thus "If it appears to the State Government that for any two consecutive years, any land has remained uncultivated or the full and efficient use of the land has not been made for the purpose of agriculture, through the default of the holder or any other cause whatsoever not beyond his control the State Government may, after making such enquiry as it thinks fit, declare that the management of such land shall be assumed.
The declaration so made shall be conclusive.
" Along with this section, it is necessary to refer to section 83 which reads thus: "The State subject to such restrictions and conditions as it may impose, by notification in the Official Gazette, delegate to any of its officers not below the rank of an Assistant or Deputy Collector, all or any of the powers conferred on it by this Act." The High Court appears to have taken the view that though it was competent to the State Government to delegate its powers under section 65(l), it could not delegate its duty or obligation to make an enquiry as a result of which the declaration in question can be made.
The State Government, says the High Court, can exercise its authority to make a declaration and this authority or power can be delegated under 9. 83; but before such authority or power can be exercised, there is an obligation imposed on the State Government to make an enquiry as to whether the agricultural land in question has remained uncultivated or fallow for the period prescribed by the statute, and the obligation or duty to hold such an enquiry which is distinct and separate from the power or authority to make a declaration consequent upon the enquiry, cannot be 215 delegated under section 83.
It is common ground that the enquiry was not made by the State Government and if the view taken by the High Court is right that the obligation or duty to hold the enquiry cannot be delegated, then the impugned declaration would be open to attack because it had not been preceded by a proper enquiry.
Mr. Patwardhan contends that the view taken by the High Court is plainly erroneous and we are satisfied that this contention is well founded.
Section 83 in terms authorises delegation by the State Government to any of its officers of the specified status and the delegation can be in respect of all or any of the powers conferred on the State Government by the provisions of the Act.
Now, it seems to us that the authority to delegate all or any of the powers which is expressly conferred on the State Government by section 83 would be rendered almost meaningless if the duty to hold an enquiry as a condition precedent for the exercise of the said authority cannot be delegated.
In the context, the power which can be delegated is inseparable from the enquiry which must precede the exercise of the power, and so, in order to make section 83 effective it is necessary to hold that the delegation of the power authorised by the said section must necessarily involve the delegation of the discharge of obligations or functions which are necessary for the exercise of the said power.
If the view taken by the High Court is right it would mean that whereas the State Government can authorise any of the officers belonging to the specified class to exercise its powers under section 65(l), it must hold the preliminary enquiry itself without delegating the authority to ' hold such an enquiry to any officer.
It is hardly necessary to emphasise that this position is so plainly illogical that it would be unreasonable to recognise the validity of the authority to confer powers while insisting that the conditions precedent for the exercise of the powers are of such a separate and distinct character that in order to satisfy the said conditions, the required enquiry must be held not by any delegate of the State Government but by the State Government itself.
In coming to the conclusion that the duty, as distinct from the power, cannot be delegated, the High Court was apparently influenced by the fact that there would be no appeal against the enquiry and the conclusion reached at such an enquiry.
We do not propose to express any opinion on this part of the reasoning adopted by the High Court; that will depend upon the construction of section 86 of the Act.
But whatever may be the position in respect of the competence of an appeal, we are satisfied that on 216 a fair and reasonable construction of section 83 it must be held to authorise the delegation not only of the powers mentioned by it, but also of duties or functions which are incidental to the ,exercise of the powers and are integrally connected with them.
In this connection, we may usefully refer to the decision of the Privy Council in Edward Liso Mungoni vs Attorney General of Northern Rhodesia(1).
In that case, in dealing with a similar question under regulation 16(1) of the Emergency Powers Regulations, 1956 of Northern Rhodesia, made by the Acting Governor of Northern Rhodesia under his statutory powers, the Privy Council has held that the power and the duty under reg.
16(1) were so interwoven that it was not possible to split the one from the other so as to put the duty on one person and the power in another; the regulation contained not so much a duty, but rather a power coupled with a duty, and he who exercised the power bad to carry out the duty.
In the result, the Privy Council took the view that in delegating his functions under reg. 16(41) the Governor could delegate both the power and duty together to ,one and the same person he could not delegate the power to another and keep the duty to himself.
It is not difficult to realise what anomalous consequences would follow if it is held that the power can be delegated, but not the duty to hold the incidental enquiry which alone can lead to the exercise of the power.
In substance, the view taken by the High Court would make the authority to delegate the power wholly meaningless.
In fairness, we ought to add that Mr. Pathak who appeared for the respondents did not seek to support this part of the High Court 's decision.
It appears that a result of the decision of the High Court in the present case, the Maharashtra Legislature thought it prudent to make the necessary amendment in section 83 of the Act.
Section 29(a) of the Amending Act provides that for the words "powers conferred the words "Powers conferred or duties impose& ' shall be and shall be deemed to have been substituted ,on the 31st day of October, 1949; and accordingly, the delegation or the purported delegation by the State Government under section 83 of any duty imposed shall (notwithstanding the judgment, decree or order of any Court) be deemed always to have been valid, and the discharge of any such duty by any officer shall for all purposes be valid and effective and shall not be called in question in any Court on the ground only that the State Government had no power to delegate the duty; and clause (b) provide that (1) 217 to the marginal note the words "and duties" shall be added.
It is not surprising that in view of the serious consequences which would have inevitably followed if the judgment under appeal had remained unchanged, the legislature thought it necessary to make a suitable amendment in order to avoid any interruption in the peaceful and smooth working of the,, relevant provisions of the Act.
Realising the infirmity in the view taken by the High Court, Mr. Pathak attempted to support the decision of the High Court on another ground.
He argued that since the enquiry was made by the Talathi and the Mamlatdar under section 65 and not by the Dy.
Collector, the declaration made by the Dy.
Collector was invalid.
In other words, the argument is that the State Government may have validly delegated its powers under section 65(l) to the Dy.
Collector, but the Dy.
Collector who is a delegate of the State Government cannot, in turn, delegate a part of his power or authority to a subordinate of his own, and that is what he has done in the present case.
This argument proceeds on the basis that in exercising his powers under section 65 ( 1 ), the Dy.
Collector must himself hold the enquiry and cannot delegate the function of holding such an enquiry to any other subordinate revenue officer.
There is no doubt that a delegate who has received the authority from the principal cannot, in turn, delegate his own authority to a delegate of his own, but there is hardly any question of delegation by a delegate in the present case.
All that section 65(l) requires is that the State Government and therefore its delegate may after making such enquiry as it think,; fit, declare that the management of the land shall be resumed.
In other words, in what form the enquiry should be held is a matter left entirely in the discretion of the State Government or its delegate.
All that the Dy.
Collector has done in the present case is to direct his subordinate officers to collect material relevant to the purpose of the enquiry.
The Talathi went on the spot and ascertained as to whether the respondents ' lands were lying fallow for the requisite period.
He submitted his report to the Mamlatdar.
The Mamlatdar in turn made his report to the Dy.
Collector.
In other words, all that the Dy.
Collector has done is to collect the relevant material, so that he can enquire into the question as to whether the lands are lying fallow or not.
This procedure does not, in our opinion, involve the question of any delegation at all.
The form of the enquiry and its mode are entirely in the discretion of the Dy. Collector.
Section 65(l) does not require that the Dy.
Collector must himself go to the agricultural fields and enquire on the spot whether they are lying fallow.
He may, if 218 he so desires, record evidence himself, or the recording of the evidence and the actual inspection on the spot can be left to some subordinate officer.
The report of such local inspection and the record of the evidence collected in that behalf would be forwarded to the Dy.
Collector, and that would be the material on which he would hold the enquiry himself.
The enquiry is thus hold by the Dy.
Collector, though the mechanical work of collecting material has been entrusted to a subordinate revenue officer.
In such a case, we do not see how the principle that a delegate cannot delegate comes into operation.
In support of his argument, Mr. Pathak has relied on a decision of the Kings Bench Division in Allingham and anr.
vs Minister of Agriculture and Fisheries(1).
In that case, the Court held that on the principle of delegatus non potest delegare, the Committee exercising its powers under reg.
62(1) could not delegate its powers to determine the land to be cultivated to its officers and, therefore, the notice issued in that behalf was ineffective and noncompliance with it was not an offence.
It, however, appears that the War Agricultural Committee for the County did appoint the Biggleswade district Committee as a sub committee to Act under the instructions of the executive committee and to make recommendations to the executive committee.
Apparently, they made some recommendations to the executive officer and the executive officer accordingly made the order.
On these facts, Lord Goddard, C.J., observed that he could find nothing in the regulations or the statute which enabled the executive officer to make the order.
The appellants had contended before the Court that they were entitled to have the decision of the executive committee and no one else on the matter, and this contention was upheld on the facts of that case.
We do not see how this case can assist Mr. Pathak 's argument in the appeal before us, because there has been no delegation to hold an enquiry as such.
What the Dy.
Collector has done in the present proceedings is not to delegate his authority to hold an enquiry, but to get the material necessary for the enquiry collected by his subordinate officers.
After the material was thus collected, he examined the material himself, held the enquiry and came to conclusion that the lands had remained fallow and uncultivated for the requisite period.
We are, therefore, satisfied that the English decision on which Mr. Pathak relies does not assist him in the present case.
This contention appears to have been raised before the High (1) 219 Court and has been rejected by it and, we think, rightly.
In fact, in Nathubhai Gandabhai Desai vs The State of Bombay and Ors.(1), a similar contention was raised before the High Court and had been rejected by it.
In that case, the High Court has field that inasmuch as the Legislature has left it entirely to the discretion of the State Government or the delegated authority to hold such enquiry as it thinks proper, if an enquiry Is held the Court cannot consider as to whether the enquiry was a proper one or whether a better enquiry would not have yielded better results.
This view has been consistently followed in the Bombay High Court and we see no reason to doubt its correctness.
In the result, the appeal succeeds, the decree passed by the High Court is set aside and that of the trial Court restored.
There would be no order as to costs throughout.
Appeal allowed.
| A banking company executed a deed whereby it purported to create a trust for the payment of pensions to the retiring members of its staff.
A certain sum of money was made over to three persons who were called trustees and the deed provided that the company may make further contributions to the fund.
Under the terms of the deed, however, the company was not bound to pay any pension to any of the members of the staff, the payment itself and the amount payable being entirely at the discretion of the company, and the company had also the power to withdraw or modify any pension and to alter the rules relating to the granting of the pension at its will.
In the accounting year the company paid a further contribution of Rs. 2 lacs to the fund and claimed deduction of this amount under section 10 (2) (xv) of the Income tax Act as expenditure laid out wholly and exclusively for the purposes of the business: Held, that, as the deed did not impose any obligation on the bank or the trustees to grant any pension to any employee, and the pension, even if granted, could be withdrawn and even the rules could be completely altered at will by the company, no valid trust was created even though moneys had been transferred to the trustees, and the sum in question could not be said to have been spent for the purposes of the business and allowed as a deduction under section 10 (2) (xv).
Brown vs Higgs and Burrough vs Philcox (41 E.R. 299) distinguished.
|
Civil Appeal No. 2630 of 1987.
516 From the Judgment and order dated 3.?.1986 of the Patna High Court in C.W.J.C. No. 2823 of 1986.
R.N. Sinha, M.M. Prasad Sinha and P.C. Kapur for the Appellant.
B. Datta, Additional Solicitor General, M.S. Rao, C. Ramesh and C.V.S. Rao for the Respondents.
The Judgment of the Court was delivered by VENKATACHALIAH, J.
This appeal, by special leave, preferred against the order dated July 3, 1986, of the Division Bench of the Patna High Court in C.W.J.C. No. 2823 of 1986 raises a substantial question as to the scope and content of the procedural safe guards in Section 130 of the Indian ( 'Act ') in the conduct of the Courts Martial.
The High Court dismissed, in limine, the appellant 's writ petition, under Article 226, challenging the proceedings dated March 30, 1985, of the Summary Court Martial imposing the punishment of dismissal from service and a sentence of an year 's rigorous imprisonment on the appellant.
Appellant, Ranjit Thakur, joined the Armed Services on September 7, 1972, and was, at the relevant time, a Signal Man in "4, Corps operating Signal Regiment." Apparently, appellant had not commended himself well to respondent No. 4, who was the commanding officer of the regiment.
On March 29, 1985, appellant was already serving out a sentence of 28 days ' rigorous imprisonment imposed on him for violating the norms for presenting representations to higher officers.
Appellant is stated to have sent representation complaining of ill treatment at the hands of Respondent 4 directly to the higher officers.
Appellant was punished for that by Respondent 4.
Appellant was held in the Quarter guard Cell in handcuffs to serve that sentence of rigorous imprisonment.
While so serving the sentence appellant is stated to have committed another offence on March 29, 1985, for which the punishment now impugned was handed down by Respondent 4.
The nature of this offence had better be excerpted from the charge sheet itself: "The accused No. 1429055 M Signalman Ranjit Thakur of 517 4 Corps operating Signal Regiment is charged with Section 41(2) Disobeying a lawful command given by his superior officer Section 41(2) In that he at 15.30 hrs.
On 29.5.1985 when ordered by JC 10625 lP Sub Ram Singh, the orderly officer of the same Regiment to eat his food, did not do so.
" To try this offence a Summary Court Martial was assembled the very next day i.e. March 30, 1985.
Respondent 4 and 2 others were on the Court Martial.
Some witnesses were examined.
Appellant is stated to have pleaded guilty.
A sentence of rigorous imprisonment for one year was imposed, in pursuance of which appellant was removed immediately to the civil prison at Tejpur to serve out the sentence.
Appellant has served out the sentence.
He was also dismissed from service, with the added disqualification of being declared unfit for any future civil employment.
The representation of the appellant to the confirming authority under Section 164 of the was rejected by General of ficer Commanding on 24.5.1985.
The High Court, however, persuaded itself to dismiss, in limine, appellant 's writ petition challenging the proceedings of the Summary Court Martial.
We have heard learned counsel on both sides.
The matter was adjourned on two earlier occasions on the submission of the learned Additional Solicitor General, that the question whether a lesser punishment was warranted was engaging the attention of the appropriate authorities.
Apparently, nothing came out of it.
F The submissions of Shri Sinha, in support of the appeal, admit of being formulated thus: (a) (i) The proceedings of the Court Martial are vitiated by non compliance with the mandate of Section 130(1) of the in that the Summary Court Martial did not afford to the appellant an opportunity to challenge its constitution as required by that section; (ii) The proceedings of the Court Martial were vitiated by bias on the part of Respondent 4 who participated in and dominated the proceedings; H 518 (b) In as much as the appellant was then serving a sentence of rigorous imprisonment, he was not in "active service" and that no question of disobeying any lawful command could at all arise; (c) Appellant 's refusal, while serving a sentence to accept food did not amount to disobedience, under Section 41, of any lawful command of a superior officer in such manner as to show a wilful defiance of authority; (d) At all events, the punishment handed down is so disproportionate to the offence as to amount, in itself to conclusive evidence of bias and vindictiveness.
Re: contention (a): The records of the proceedings of the Special Summary Court Martial do not indicate that the procedural safeguard against bias contained in Section 130 of the was complied with.
Section 130 provides: "130(1) At all trials by general district or summary general court martial, as soon as the court is assembled, the names of the presiding officer and members shall be read over to the accused, who shall thereupon be asked whether he objects to being tried by any officer sitting on the court.
(2)If the accused objects to any such officer, his objection, and also the reply thereto of the officer objected to, shall be heard and recorded, and the remaining officers of the Court shall, in the absence of the challenged officer decide on the objection.
" The proceedings do not indicate this was not disputed at the hearing that appellant was asked whether he objects to be tried by any officer, sitting at the Court Martial.
This, in our opinion, imparts a basic infirmity to the proceedings and militates against and detracts from the concept of a fair trial.
The "" constitutes a special law in force conferring a special jurisdiction on the Court Martial prescribing a special procedure for the trial of the offences under the ' '.
Chapter VI of the ' ' comprising of sections 34 to 68 specify and define the various offences under the ' '.
Sections 7] to 89 of Chapter VII specify the various 519 punishments.
Rules 106 to 133 of the Army Rules 1954 prescribe the procedure of, and before, the Summary Court Martial.
The and A the Rules constitute a self contained Code, specifying offences and the procedure for detention, custody and trial of the offenders by the Courts Martial.
The procedural safe guards contemplated in the must be considered in the context of and corresponding to the plenitude of the Summary jurisdiction of the Court Martial and the severity of the consequences that visit the person subject to that jurisdiction.
The procedural safe guards should be commensurate with the sweep of the powers.
The wider the power, the greater the need for the restraint in its exercise and correspondingly, more liberal the construction of the procedural safeguards envisaged by the Statute.
The oft quoted words of Frankfurter, J. in Vitarelli vs Seaton, 359 U.S.535 are again worth re calling; ". if dismissal from employment is based on a defined procedure, even though generous beyond the requirements that bind such agency, that procedure must be scrupulously observed . . . . . . . .
This judicially evolved rule of administrative law is now firmly established and, if I may add, rightly so.
He that takes the procedural sword shall perish with that sword.
E "The history of liberty" said the same learned Judge "has largely been the history of observance of procedural safeguards.
" ; We are afraid, the non compliance of the mandate of section 130 is an infirmity which goes to the root of the jurisdiction and without more, vitiates the proceedings.
lndeed it has been so held by this Court in Prithvi Pal Singh vs Union of India, AIR 1982 SC 1413 where Desai, J referring to the purpose of section 130 observed: ". .Whenever an objection is taken it has to be recorded.
In order to ensure that anyone objected to does not participate in disposing of the objection . . . .
This is a mandatory requirement because the officer objected to cannot participate in the decision disposing of the objection.
H 520 . .
The provision conferring a right on the accused to object to a member of the Court Martial sitting as a member and participating in the trial ensures that a charge of bias can be made and investigated against individual members composing the Court Martial.
This is pre eminently a rational provision which goes a long way to ensure a fair trial.
" What emerges, therefore, is that in the present case there is a non compliance with the mandate of section 130 with the attendant consequence that the proceedings of the Summary Court Martial are rendered infirm in law.
This disposes of the first limb of the contention (a).
The second limb of the contention is as to the effect of the alleged bias on the part of respondent 4.
The test of real likelihood of bias is whether a reasonable person, in possession of relevant information, would have thought that bias was likely and is whether respondent 4 was likely to be disposed to decide the matter only in a particular way.
It is the essence of a judgment that it is made after due observance of the judicial process; that the Court or Tribunal passing it observes, at least the minimal requirements of natural justice, is composed of impartial persons acting fairly and without bias and in good faith.
A judgment which is the result of bias or want of impartiality is a nullity and the trial "coram non judice".
(See Vassiliadas vs Vassiliades AIR 7.
As to the tests of the likelihood of bias what is relevant is the reasonableness of the apprehension in that regard in the mind of the party.
The proper approach for the judge is not to look at his own mind and ask himself, however, honestly.
"Am I biased? "but to look at the mind of the party before him.
Lord Esher in Allinson vs General Council of Medical Education and Registration, l at 758 said: "The question is not, whether in fact he was or was not biased.
The Court cannot inquire into that . . . . .
In the administration of justice, whether by a recognised legal court or by persons who, although not a legal public court, are acting in a similar capacity, public 521 policy requires that, in order that there should be no doubt about the purity of the administration any person who is to A take part in it should not be in such a position that he might be suspected of being biased.
" In Metropolitan Properties Co. (F.G.C.) Ltd. vs Lannon, ; , at 599, Lord Denning M.R. Observed: B ". in considering whether there was a real likelihood of bias, the court does not look at the mind of the justice himself or at the mind of the chairman of the tribunal, or whoever it may be, who sits in a judicial capacity.
It does not look to see if there was a real likelihood that he would, or did, in fact favour one side at the expense of the other.
The court looks at the impression which would be given to other people.
Even if he was as impartial as could be never theless if right minded persons would think that in the circumstances there was a real likelihood of bias on his part, then he should not sit . . ".
D Frankfurter J in Public Utilities Commission of the District of Columbia vs Pollack ; at 466) said: "The judicial process demands that a judge move within the frame work of relevant legal rules and the court covenanted modes of thought for ascertaining them.
He must think dispassionately and submerge private feeling on every aspect of a case.
There is a good deal of shallow talk that the judicial robe does not change the man within it.
It does.
The fact is that on the whole judges do lay aside private views in discharging their judicial functions.
This is achieved through training, professional habits, self discipline and that fortunate alchemy by which men are loyal to the obligation with which they are interested.
But it is also true that reason cannot control the subconscious influence of feelings of which it is unaware.
When there is ground for believing that such unconscious feelings may operate in the ultimate judgment or may not unfairly lead others to believe they are operating, judges refuse themselves.
They do not sit in judgment . ".
Referring to the proper test, Ackner LJ in Regina vs Liverpool City Justices, Ex parte Topping [1983] I WLR 119 said: H 522 "Assuming therefore, that the justices had applied the test advised by Mr. Pearson Do I feel prejudiced? then they would have applied the wrong test, exercised their discretion on the wrong principle and the same result, namely, the quashing of the conviction would follow." Thus tested the conclusion becomes inescapable that, having regard to the antecedent events, the participation of Respondent 4 in the Courts Martial rendered the proceedings coram non judice.
Re: contention (b): The mere circumstance that the appellant was, at the relevant point of time, serving a sentence of imprisonment and could not therefore, be said to be in 'active service ' does not detract from the fact that he was still "a person subject to this .
" This is clear from the second clause of Section 41(2) which refers to offences committed when not in 'active service '.
The difference is in the lesser punishment contemplated.
We are, therefore, unable to appreciate the appositeness of this contention of Shri Sinha.
Re: contention (c): The submission that a disregard of an order to eat food does not by itself amount to a disobedience to a lawful command for purposes of section 41 has to be examined in the context of the imperatives of the high and rigorous discipline to be maintained in the Armed Forces.
Every aspect of life of a soldier is regulated by discipline.
Rejection of food might, under circumstances, amount to an indirect expression of remonstrance and resentment against the higher authority.
To say that, a mere refusal to eat food is an innocent, neutral act might be an over simplification of the matter.
Mere in action need not always necessarily be neutral.
Serious acts of calumny could be done in silence.
A disregard of a direction to accept food might assume the complexion of disrespect to, and even defiance of authority.
But an unduly harsh and cruel reaction to the expression of the injured feelings may be counter productive and even by itself be subversive of discipline.
Appellant was perhaps expressing his anguish at, what he considered, an unjust and disproportionate punishment for airing his grievances before his superior officers.
However, it is not necessary in this case to decide contention (c) in view of our finding on the other contentions.
Re: contention (d): Judicial review generally speaking, is not directed against a decision, but is directed against the "decision making process".
The question of the choice and quantum of punishment is within the jurisdiction and discretion of the Court Martial.
But the 523 sentence has to suit the offence and the offender.
It should not be A vindictive or unduly harsh.
It should not be so disproportionate to the offence as to shock the conscience and amount in itself to conclusive evidence of bias.
The doctrine of proportionality, as part of the concept of judicial review, would ensure that even on an aspect which is, otherwise, within the exclusive province of the Court Martial, if the decision of the Court even as to sentence is an outrageous defiance of B logic, then the sentence would not be immune from correction.
Irrationality and perversity are recognised grounds of judicial review.
In Council of Civil Service Unions vs Minister for the Civil Service, [1984] 3 Weekly Law Reports 1174 (HL) Lord Deplock said: ".
Judicial Review has I think developed to a stage today when without reiterating any analysis of the steps by which the development has come about, one can conveniently classify under three heads the grounds upon which administrative action is subject to control by judicial review.
The first ground l would call 'illegality '.
the second irrationality ' and the third 'procedural impropriety '.
That is not to say that further development on a case by case basis may not in course of time add further grounds.
I have in mind particularly the possible adoption in the future of the principle of 'proportionality ' which is recognised in the administrative law of several of our fellow members of the European Economic Community . . . . .
E In BhagatRam vs State of Himachal Pradesh, A.I.R. 1983 SC 454 this Court held: "It is equally true that the penalty imposed must be commensurate with the gravity of the misconduct and that any penalty disproportionate to the gravity of the misconduct would be violative of Article 14 of the Constitution.
The point to note, and emphasise is that all powers have legal limits.
In the present case the punishment is so strikingly disproportionate as to call for and justify interference.
It cannot be allowed to remain uncorrected in judicial review.
In the result, for the foregoing reasons, the appeal is allowed, the order of the High Court set aside, the writ petition preferred in the High Court allowed and the impugned proceedings of the 524 Summary Court Martial dated March 30, 1985, and the consequent order and sentence are quashed.
The appellant is entitled to and shall be reinstated with all monetary and service benefits.
There will, however, be no order as to costs.
N.P.V. Appeal allowed.
| % The appellant, a Signal Man in a Signal Regiment of the Armed Services, while serving out a sentence of 28 days ' rigorous imprisonment imposed on him by the Commanding officer of the Regiment respondent No. 4, for violating norms for presenting representations to higher officers, was alleged to have committed another offence by refusing to eat his food on March 29, 1985 when ordered to do so.
He was charged under section 41(2) of the for disobeying a lawful command given by his superior officer.
A sentence of rigorous imprisonment for one year was imposed by a Summary Court Martial consisting of respondent No. 4 and others.
He was removed to the civil prison and he served out the sentence.
The appellant 's representation to the confirming authority under section 164 of the Act was rejected by the General officer Commanding on May 24,1985.
The appellant 's writ petition challenging proceedings of the Summary Court Martial was dismissed in limine by the High Court.
513 In the appeal by special leave, it was contended on behalf of the appellant that the proceedings of the Court Martial were vitiated (i) by a non affording of an opportunity to challenge the constitution of the Summary Court Martial under section 130(1); (ii) by bias on the part of the respondent No. 4 who participated in and dominated the proceedings; (iii) by awarding a punishment so disproportionate to the offence as to amount in itself to conclusive evidence of bias and vindictiveness; and (iv) by ignoring that as the appellant was then serving out an earlier sentence he could not be need to be in active service so as to be amenable to disciplinary jurisdiction and that the appellant 's refusal, while already serving a sentence, to accept food did not amount to disobedience under section 41, of any lawful command of a Superior officer.
Allowing the appeal, ^ HELD: 1.1 The Indian constitutes a special law in force conferring a special jurisdiction on.
the Court Martial prescribing a special procedure for the trial of the offences under the Act.
The Act and Rules constitute a self contained Code specifying offences and the procedure for detention, custody and trial of the offenders by the Court Martial.
[518G H; 519A] 1.2 The procedural safeguards contemplated in the Act must be considered in the context of and corresponding to the plenitude of the Summary jurisdiction of the Court Martial and the severity of the consequences that visit the person subject to that jurisdiction.
The procedural safeguards should be commensurate with the sweep of the powers.
The wider the power, the greater the need for the restraint in its exercise ad correspondingly, more liberal the construction of the procedural safeguards envisaged by the Statute.
[519B C I 1.3 Non compliance with the mandate of section 130 is an infirmity which goes to the root of jurisdiction and without more, vitiates the proceedings.
[519F] Prithvi Pal Singh vs Union of India, AIR 1982 SC 1413 relied on.
Vitarelli vs Seaton, ; referred to.
514 2.1 It is the essence of a judgment that it is made after due observance of the judicial process; that the Court or Tribunal passing it observes, at least the minimal requirements of natural justice, is composed of impartial persons.
acting fairly and without bias and in good faith.
A judgment which is the result of bias or want of impartiality is a nullity and the trial 'coram non judice '.
[520D E] Vassiliades vs Vassiliades, AIR 1945 PC 38 referred to.
2.2 As to the tests of the likelihood of bias what is relevant is the reasonableness of the apprehension in that regard in the mind of the party.
The proper approach for the Judge is not to look at his own mind and ask himself, however, honestly, "Am I biased"? but to look at the mind of the party before him.
[520F] Allinson vs General Council of Medical Education and Registration, at 758; Metropolitan Properties Co. (F.G.C.) Ltd. vs Lannon, ; d 599; Public Utilities Commission of the District of Columbia vs Pollack, ; at 466 and Regina vs Liverpool City Justices, Ex parte Topping, referred to.
Having regard to the antecedent events, the participation of respondent No. 4 in the Courts Martial rendered the proceedings Coram non judice.
[522B] 3.
The mere circumstance 'that the appellant was at the relevant point of time, serving a sentence of imprisonment and could not, therefore, be said to be in 'active service ' does not detract from the fact that he was still a person subject to the Act, as is clear from the second clause of section 41(2) which refers to offences committed when not in 'active service ', the difference being in the lesser punishment contemplated.
[522C D] 4.
Every aspect of life of a soldier is regulated by discipline.
Rejection of food might, under circumstances, amount to an indirect expression of remonstrance and resentment against the higher authority.
To say that a mere refusal to eat food is an innocent, neutral act might be an over simplification of the matter.
Mere in action need not always necessarily be neutral.
Serious acts of calumny could be done in silence.
A disregard of a direction to accept food might assume the 515 complexion of disrespect to, and even defiance of authority.
But an unduly harsh and cruel reaction to the expression of the injured feelings may he counter productive and even by itself be subversive of discipline.
[522E F] In the instant case, appellant was perhaps expressing his anguish at, what he considered, an unjust and disproportionate punishment for airing his grievances before his superior officers.
[522G] 5.
Judicial review generally speaking, is not directed against a decision, but is directed against the "decision making process".
The question of the choice and quantum of punishment is within the jurisdiction and discretion of the Court Martial.
But the sentence has to suit the offence and the offender.
It should not be vindictive or unduly harsh.
It should not be so disproportionate to the offence as to shock the conscience and amount in itself to conclusive evidence of bias.
The doctrine of proportionality, as part of the concept of judicial review, would ensure that even on an aspect which is, otherwise, within the exclusive province of the Court Martial, if the decision of the Court even as to sentence is an outrageous defiance of logic, then the sentence would not be immune from correction.
Irrationality and perversity are recognised grounds of judicial review.
All powers have legal limits.
[522G H; 523A C] Council of Civil Service Unions vs Minister for the Civil Service, [1984] 3 Weekly Law Reports 1174 HL and Bhagat Ram vs State of Himachal Pradesh, A.I.R. 1983 SC 454 referred to.
In the instant case, the punishment is so strikingly disproportionate as to call for and justify interference.
[523G] The Court order set aside.
The writ petition in the High Court allowed, and the impugned proceedings of Summary Court Martial and the consequent order and sentence quashed.
Appellant entitled to be reinstated with all monetary and service benefits.
[523H, 524A] (Note: on point 1.3 the finding is to be read with and subject to the subsequent order dated 10.8.88).
|
ION: Civil Appeal No. 779 of 1980 etc From the Judgment and Order dated 7.3.1980 of the Rajasthan High Court in D.B. Civil Spl.
Appln.
No. 131 of 1974.
S.T. Desai, T.S. Krishnamurthi Iyer, F.S. Nariman, Mr B.P. Beri, S.S. Hussain, M.N. Tandon, Mrs. M. Qamaruddin, B.D. Sharma, Qamaruddin R.S. Yadav, H. section Parihar, B. Kanta Rao, Ms. Sarda Devi, Shakeel Ahmed Syed, Ali Ahmad, Tanweer Ahmad, Mrs. Jayshree Ahmad and Mohan Pandey for the appearing parties.
The Judgment of the Court was delivered by JAGANNATHA SHETTY, J.
The appeal and two Special Leave Petitions concern the right to succeed to the office of Sajadanashin to "Durgah Khawaja Saheb Ajmer".
It is venerable Shrine of universal recognition.
It is also called the Durgah Moinuddin Chisti Saheb.
Moinuddin Chisti was a Persian born Saint who later migrated to India.
He settled down at Ajmer and died there at the age of 90 in the year 1233 A.D. Eversince then, his tomb has had been the centre of attraction for the people of all faiths.
For Muslims in particular, "It is admitted to be one of the most famous, if not the most famous, Mohammedan Shrine in India.
" There are two important offices in the Shrine: (i) Sajadanashin 56 the spiritual head and (ii) Mutwalli the secular head.
The hereditary descendants of the Saint often laid claim to these two offices.
The disputes as to the latter was taken even upto the Privy Council.
In Asrar Ahmed vs Durgah Committee, A.I.R. 1947 P.C. 1 the Privy Council said that the office of Mutwalli was not hereditary.
We are not concerned with the office of Mutwalli.
We are concerned with two questions relating to the spiritual head of the Shrine.
Who is entitled to succeed to the office of Sajadanashin? And what is the right of Durgah Committee in the matter? The dispute relating to the office of Sajadanashin started in 1947, when the last office holder Syed Ali Rasool Khan migrated to Pakistan.
Consequently, the need to appoint a new Sajadanashin arose.
On April 5, 1948, the Chief Commissioner of Ajmer appointed Hakim Inayat Hussain as Sajadanashin.
That appointment was challenged by a person called Syed Ilamuddin.
He claimed that the succession to the office of Sajadanashin is governed by the rule of primogeniture.
He was the rightful person entitled to hold the office.
Hakim Inayat Hussain had no such right or title.
With these and other allegations, Syed Ilamuddin instituted Civil Suit No. 211/1948 for declaration of his right to succeed to the said office.
The suit was instituted on May 18, 1948.
Civil Appeal No. 779 of 1980 by certificate, arises out of the above said suit.
The suit had a chequered carreer.
It was first instituted in the Court of Sub Judge First Class, Ajmer.
Since then, it went up and down from Court to Court.
In fact it is coming for the second time before this Court.
The trial court dismissed the Suit on the preliminary ground that it was not maintainable.
The bar of Section 119 of the Ajmer Land Revenue Regulations was the reason given.
The plaintiff appealed to the District Judge who by judgment dated August 20, 1952 held that the suit was maintainable.
The defendant challenged that decision in second appeal before the Judicial Commissioner, Ajmer.
The Judicial Commissioner took a different view.
By judgment dated November 17, 1953 he upheld the view taken by the trial court and dismissed the suit.
It was then the turn of plaintiff to appeal.
He appealed to the Supreme Court.
On March 7, 1961 the Supreme Court allowed the appeal and remitted the case to the trial court for disposal on the merits.
Meanwhile, the Court of Sub Judge had been abolished and the Munsiff, Ajmer City acquired the territorial jurisdiction to try the suit.
Interrupting the narration, we have to refer to some other 57 intervening facts.
There were allegations of mismanagement of the affairs of the Durgah and its endowments.
There was a clamour from devotees all over for appointment of a Committee to review the administration of the Durgah.
On January 14, 1949 the Government of India found the need to appoint a High Power Committee for the purpose.
The Committee was appointed with Justice Gulam Hussain, Judge of the Allahabad High Court as Chairman.
The Committee was authorised to inquire into and report about the administration of Durgah.
The Committee was also authorised to recommend such measures as may be necessary to protect the interests of devotees.
The Committee after a detailed enquiry submitted a report of the Government.
Accepting the report, the Government of India brought forward a legislation called the Durgah Khawaja Saheb Act, 1955 (Act No. 36 of 1955) which we may term it as the DKS Act.
As required under that Act the Durgah Committee was constituted for the administrative control and management of Durgah endowments.
The said Committee filed an application in the aforesaid suit to be impleaded as a party thereto.
On September 30, 1964, the trial court allowed that application.
The Durgah Committee was thus impleaded as party defendant in the suit.
The Durgah Committee resisted the suit, inter alia, contending that the suit had become infructuous and should be dismissed as such.
It would be the responsibility of the Durgah Committee to make interim or permanent arrangement for the office of Sajadanashin.
That power is derived under Section 13 and 21 of the DKS Act.
The Durgah Committee also said that after the death of Hakim Inayat Hussain, his son Syed Saulet Hussain was appointed as interim Sajadanashin.
The trial court, overruled the objections raised by the Durgah Committee.
Then followed the dispute as to valuation of the suit and the court fees paid thereon.
That dispute was taken upto the High Court where by consent of parties the valuation was agreed upon.
The plaintiff amended the plaint revising the valuation to Rs. 11,000.
Consequently, the suit was withdrawn from the Munsiff Court and brought before the Court of Civil Judge, Ajmer.
The suit was resisted by Hakim Inayat Hussain on the ground among others that the plaintiff has no legitimate right to succeed to the office of Sajadanashin.
He was not the nearest male heir to Syed Rasool Ali Khan.
The right to appoint Sajadanashin by established usage, custom and tradition vests exclusively in the local representa 58 tive of the Government of the day.
The Court of law has no power to interfere with such appointment in any way whatsoever.
On December 14, 1970 the trial court non suited the plaintiff on the merits of the matter.
The plaintiff took up the matter before the High Court.
The learned single judge of the High Court accepted the appeal and reversed the judgment of the trial court.
He gave a declaration to the plaintiff that he was the nearest male heir to the last office holder, and, therefore, entitled to succeed as Sajadanashin.
He, however, observed that the plaintiff has failed to prove that he was qualified to occupy the office of Sajadanashin.
He left the question of qualification for determination by the Governor of Rajasthan who is the competent authority under the DKS Act, to appoint Sajadanashin.
The judgment of learned single judge was rendered on August 9, 1974.
Challenging that judgment, the defendant preferred Special Appeal before a Division Bench of the High Court under Section 18 of the Rajasthan High Court Ordinance.
Pursuant to the observations in the judgment of learned single judge, the Governor of Rajasthan examined the qualifications of the plaintiff.
The Governor was apparently satisfied with his qualifications and approved his appointment as Sajadanashin.
The Government notification dated July 7, 1975 was issued recognising the plaintiff as such.
On October 23, 1975, the plaintiff died.
His son Syed Zainul Abedin Ali Khan was brought on record in the pending Special Appeal before the Division Bench of the High Court.
On March 7, 1980 Division Bench dismissed the Special Appeal affirming the judgment of learned single judge.
Following that judgment, the Government again issued a communication dated January 24, 1981 recognising Syed Zainul Abedin Khan as Sajadanashin.
The litigation has thus descended on the second generation.
The sons of the original parties to the suit continued the litigation.
Syed Saulat Hussain challenging the judgment of Division Bench of the High Court preferred Civil Appeal No. 779 of 1980 with which we are now concerned.
SLP 8794/80 and SLP 292/1980: These two petitions arise out of the order of the High Court in Civil Reference No. 2 of 1978.
It was a reference made by the Durgah 59 Committee under Sub Section (3) of Section 13 of the DKS Act.
The events leading to the reference are these: We have earlier noticed that the plaintiff, Syed Illamuddin died on October 23, 1975.
Thereafter his son, Syed Zainul Abedin Ali Khan appears to have approached the Durgah Committee for recongnition as Sajadanashin.
Durgah Committee did not accede to his request.
It decided to invite applications from persons who want to be appointed as Sajadanashin.
A public notice was accordingly issued under Sub Section (1) of Section 13 of the DKS Act.
In response to the said notice, as many as eleven applications were received by the Durgah Committee.
Those applicants were not related to the plaintiff, or to the last office holder.
The Durgah Committee, however, forwarded those applications to the Governor for making a reference to the High Court for decision.
But the Governor did not make a reference to the High Court.
He took a firm decision that Syed Zainul Abedin Ali Khan, being the son of the last office holder (that is the plaintiff), was alone entitled to succeed to the office of Sajadanashin and other applicants had no right to the said office.
So stating, the Governor conveyed his decision to Durgah Committee.
The Durgah Committee, after much deliberations over the matter, preferred to disagree with the Governor.
It referred all the applications to the High Court for determination of rival claims of the candidates.
The High Court took up the reference for disposal after the dismissal of the aforesaid special appeal.
The task of the High Court then became easier since there was little choice in the matter.
Accepting the view taken in the Special Appeal, the High Court rejected the reference as not maintainable.
The High Court made that order on July 4, 1980.
The Durgah Committee and one of the applicants for the office have preferred the said two Special Leave Petitions for appeal to this Court.
We may first consider the contention urged by Mr. Krishnamurthy Iyer, learned counsel for Durgah Committee.
He urged that the decision of the High Court as to succession to the office of Sajadanashin was based on the concession made by parties and is therefore not binding on the Durgah Committee.
Counsel next contended that in view of Sections 13 and 21 of the DKS Act, the Durgah Committee has power to appoint a proper person as Sajadanashin.
It is not bound to follow the customary rules of succession to the office.
The selection of a suitable person need not be made only among the heirs of the last office holder.
The selection could be made from the public as well, to better serve the devotees.
60 We do not think that we could accept these contentions.
The Durgah Committee was a party to the suit.
There the plaintiff and defendant in the first place, admitted that the office of Sajadanashin is a hereditary office.
Secondly, they proceeded with a common contention that the succession to the office is governed by the rule of primogeniture.
The counsel for the Durgah Committee did not dispute this aspect either in the trial court or before the High Court.
Nor suggested any other mode of succession to the office.
This is what the learned Single Judge of the High Court observed: "The counsel for the legal representatives of Hakim Inayat Hussain admitted that the office of the Sajadanashin attached to the Durgah is a hereditary office.
The learned counsel for the Durgah Committee did not argue on this point.
Issue No. 1 was therefore decided in favour of the plaintiff.
Issue No. 3 was not pressed by the parties.
Dealing with issue Nos. 2 and 3, the learned Civil Judge observed that it was admitted that succession to the office of the Sajadanashin was governed by the Rule of primogeniture." xxx xxx xxx xxx xxx xxx I now turn to the merits of the case.
It may be mentioned at the outset that it is not disputed before me that the office of Sajadanashin or Dewan attached to the Durgah is a here ditary office and successor to that office is governed by the rule of primogeniture.
It is further not in dispute that the last Sajadanashin Syed Aley Rasool Ali Khan was in the line of Syed Abdul Fateh and the plaintiff is in the line of Syed Abdul Fateh 's brother Hisammuddin." Apart from that, it was never in dispute in the long history of the shrine about the nature of the office and the rule of succession.
Lord Simonds while tracing the history of the shrine in Asrar Ahmed, case (supra) said: "It is not disputed that for many years from 1567 onwards (that is from the Farman of Akbar the Great) with certain intervals the hereditary descendant of the Saint, variously called the Sajadanashin or later Dewan, combined in his own person the two leading offices of the Shrine, that of Sajadanashin or spiritual head and Mutwalli or secular 61 head and manager.
These alternative expressions are used to convey as nearly as possible the meaning of the original words.
Nor is it disputed that in the reign of the Emperor Shah Jehan (1627 1658) the post of Mutwalli was separated from that of Sajadanashin and had become a Government appointment whereas the Sajadanashin remained and continued to be a hereditary descendant of the Saint.
" These observations have been approved by the Supreme Court in The Durgah Committee, Ajmer & Anr.
vs Syed Hussain Ali & Ors., ; It is clear, therefore, that the nature of the office and the rule of succession to it always remained undisputed.
It was occupied by a hereditary descendant of the Saint.
That was perhaps the reason, for not asking the High Power Committee constituted by the Government of India in 1948 to inquire into it.
The said Committee was constituted only to enquire into the mal administration of the Durgah and suggest remedies in the interests of devotees.
The question of succession to the office of Sajadanashin was expressly kept outside its purview.
It would be evident if one peruses the terms of reference made to the High Power Committee.
The Government of India had also recognised that Sajadanashin has always been a descendant of the Saint and that position should not be disturbed.
This has been reflected from the speech of the Home Minister in the Parliament while piloting the Khawaja Saheb Bill which later became the DKS Act.
This is what the Home Minister stated: Lok Sabha Debate Pt.
II Vol.
V 25th July 13 Aug, 1985, p. 9391.
"So far as Sajadanashin is concerned he is a religious office.
He is the descendant of the Khawaja Sahib and therefore his position should be kept as it is and that position is not affected at all.
Because he deals with the rituals he deals with the spiritual side of management and so far as that is concerned, it is entirely left to him" Against this background, it was not illogical or improper for parties to the suit to proceed on the basis that the hereditary office of Sajadanashin is entitled to be claimed by descendants of the Saint by the rule of primogeniture.
They have stated the obvious which appears to have been recognised over the generations.
If there was no such rule 62 or principle, the Durgah Committee ought to have stated so.
Or it could have stated that it was not bound to follow the customary rule of succession.
It could have asserted its right to make a choice of its own.
It did not state anything of the kind in the Courts below.
It maintained a golden rule of silence.
It is, therefore, now not open to the Durgah Committee to contend before us that it is not bound by the decision of the Courts.
The Durgah Committee is as much a party to the suit as others.
It is as much bound by the decision as others.
It is immaterial for our purpose whether the decision has been reached by concession of parties or by determination of the dispute.
This takes us to the second contention urged by Shri Krishnamurthy Iyer.
He urged that Sections 13 and 21 of the DKS Act confer power on the Durgah Committee to appoint a suitable person as Sajadanashin.
We do not think that that there is anything in the said sections to support the contention urged by the learned counsel.
Section 13 provides: "Succession to the office of Sajadanashin 13(1) As soon as the office of the Sajadanashin falls vacant, the Committee shall, with the previous approval of the Chief Commissioner, make such interim arrangements for the performance of the functions of the Sajadanashin as it may think fit, and immediately thereafter publish a notice in such form and manner as may be determined by the Committee, inviting applications within one month of such publication from persons claiming to succeed to that office.
(2) Where only one person claims to succeed to the office of the Sajadanashin and the Committee is satisfied as to his right to succeed, it shall, with the previous approval of the Chief Commissioner, pass an order in writing according recognition as Sajadanashin to such person.
(3) Where more persons than one claim to succeed to the office of the Sajadanashin the Committee shall, after consultation with the Chief Commissioner, refer the dispute to the Judicial Commissioner of Ajmer for a decision regarding the claim to succeed to that office, and the Judicial Commissioner after taking such evidence as he considers necessary and after giving an opportunity to the claimants to be heard in respect of their claims, shall communicate his decision to the Committee.
63 (4) The Committee, on the receipt of the decision, shall, with the previous approval of the Chief Commissioner, pass an order in writing in accordance with such decision declaring the person found entitled to succeed to the office of the Sajadanashin and according recognition as Sajadanashin to such person.
(5) An order passed by the Committee under sub section (2) or Sub Section (4) shall be final and shall not be questioned in any Court.
" Section 21 reads: "Transitional provisions 21.
The person holding the office of Sajadanashin immediately before the commencement of his act shall, on and from such commencement, continue to hold that office subject to other provisions of this Act and to the final decision in the suit relating to that office which is pending on such commencement and to which the said person is a party.
" Section 21 was intended to provide transitional arrangement to hold the office of Sajadanashin.
It enables the Sajadanashin who was holding the office immediately before the commencement of the DKS Act to continue to hold that office.
His right, however, was made subject to other provisions of the Act and to the final decision of the suit relating to that office.
The suit referred to under Section 21 must be the suit out of which the present appeal arises.
It was pending on the date of coming into force of the DKS Act.
Hakim Inayat Hussain who was then acting as Sajadanashin was the defendant in the suit.
His continuance or otherwise was expressly made subject to the decision in the suit.
Durgah Committee being also a party is no less bound by the decision therein.
Section 13 of the DKS Act does not confer unlimited or absolute power to Durgah Committee.
Sub Section (1) of Section 13 comes into operation when the office of Sajadanashin falls vacant.
It enables the Durgah Committee to make interim arrangement for the performance of functions of Sajadanashin, pending recognising the legitimate successor to the office.
It must, therefore, invite applications from persons claiming to succeed to that office.
If there is only one person to succeed to the office, the Committee shall with the previous approval of the Governor recognise him as Sajadanashin.
That is the mandate of Sub Section (2) of Section 13.
If there are more persons than one claiming to succeed to the office, the Durgah Com 64 mittee shall follow the procedure provided under Sub Section (3) of Section 13.
The Committee after consultation with the Governor must refer the applications to the High Court for decision.
On receipt of the decision of the High Court and with the previous approval of the Governor, the Durgah Committee under Sub Section (4) shall accord recognition as Sajadanashin to the person found entitled to succeed to the office.
The scope of provisions of Section 13 appears to be limited.
The Durgah Committee is only entitled to accord recognition as Sajadanashin to the person legitimately entitled to succeed to the office.
The Durgah Committee cannot enlarge the scope of this power to invite applications from the public and select any person for appointment as Sajadanashin.
The power conferred under Section 13 is only to locate the legitimate heir to the office by the accepted rule of succession and recognise him as Sajadanashin and not beyond that.
This takes us to the contention urged by Shir S.T. Desai, learned counsel for the appellant in C.A. No. 779 of 1980.
He urged that plaintiff cannot be considered as the nearest male heir to the last holder of the office.
According to the counsel, there are two other persons Bashiruddin (P.W. 2) and Abdul Aziz (P.W. 3) who were nearer to the last holder of the office than the plaintiff.
Suffice it to state that it has not escaped the attention of the High Court.
The claim of these two persons were also examined.
The High Court has observed that Bashiruddin has himself stated that he did not consider himself nearest to the last office holder.
It was further stated that he died issueless during the pendency of the suit.
So far as Abdul Aziz is concerned, the position is no better.
He was illiterate and did not want to become Sajadanashin.
He appears to have relinquished his right in favour of the plaintiff.
It is said that he also died during the pendency of the suit leaving behind none to succeed.
In the circumstances, it cannot be said that the plaintiff is not the legitimate person to succeed as Sajadanashin.
In the result, the appeal and Special Leave Petitions fail and are dismissed with costs.
N.P.V. Appeal and Petitions dismissed.
| This was an appeal by the trustees of the ancient and renowned temple of Sri Venkataramana of Moolky Petta, who were managing the temple on behalf of the Gowda Saraswath Brahmins in accordance with a Scheme framed in a suit under section 92 of the Code of Civil Procedure.
After the passing of the Madras Temple Entry Authorisation Act (Madras V of 1947) which had for its object the removal of the disability of Harijans from entering into Hindu public temples, the trustees made a representation to the Government that the temple was a private one, and, therefore, outside the operation of the Act.
But the Government did not accept that position and held that the Act applied to the temple.
Thereupon the trustees brought the suit, out of which the appeal arises ' for a declaration that the temple was not one as defined by section 2(2) of the Act but was a denominational one having been founded exclusively for the Gowda Saraswath Brahmins.
It was contended that section 3 of the Act was void as being repugnant to article 26(b) of the Constitution which vouchsafed to a religious denomination the right to manage its own affairs in matters of religion.
The trial court found against the appellants.
It held that matters of religion did not include rituals and ceremonies.
But on appeal the High Court while holding that the public were entitled to worship in the temple, passed a limited decree in favour of the appellants by reserving to the latter the right to exclude the general public during certain ceremonies in which the members of the denomination alone were entitled to participate.
The question for decision was whether the rights of a religious denomination to manage its own affairs in matters of religion under article 26(b) can be subjected to, and controlled by, a law protected by article 25(2)(b) of the Constitution.
Held, that the expression " religious institutions of a public character " occurring in article 25(2) (b) of the Constitution contemplates not merely temples dedicated to the public as a whole but also those founded for the benefit of sections thereof and includes 114 896 denominational temples as well.
While article 25(1) deals with the rights of individuals and article 26(b) with those of religious 2 denominations, article 25(2) covers a much wider ground and controls both.
Article 26(b) must, therefore, be read subject to article 25(2) (b) of the Constitution.
Although the right to enter a temple for purposes of worship protected by article 25(2) (b) must be construed liberally in favour of the public, that does not mean that that right is absolute and unlimited in character.
It must necessarily be subject to such limitation or regulation as arises in the process of harmonising it with the right protected by article 26(b).
Where the denominational rights claimed are not such as can nullify or substantially reduce the right conferred by article 25(2) (b), that Article should be so construed as to give effect to them, leaving the rights of the public in other respects unaffected.
The expression 'matters of religion ' occurring in article 26(b) of the Constitution includes practices which are regarded by the community as part of its religion and under the ceremonial law pertaining to temples, who are entitled to enter into them for worship and where they are entitled to stand for worship and how the worship is to be conducted are all matters of religion.
The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshimindra Thirtha Swamiar of Sri Shirur Mutt, ; ; Gopala Muppanar vs Subramania Aiyar, (1094) and Sankaralinga Nadan vs Raja Rajeswara Dorai, (1908) L.R. 35 I.A. 176, referred to.
Held further, that it is well settled that where the original dedication is proved to have been for the benefit of a particular community the fact that members of other communities were allowed to worship cannot lead to the inference that the dedication was also for their benefit.
Babu Bhagwan Din vs Gir Hay Saroop, (1939) L.R. 67 I.A. referred to.
|
Civil Appeal No. 1308 of 1973.
From the order dated the 30th June, 1973 of the Central Government, Ministry of Law, Justice and Company Affairs, Department of Company Affairs.
section V. Gupte and Vinoo Bhagat, for the appellant.
P. P. Rao and section P. Nayar, for respondent.
Shri Narain, for interveners.
The Judgment of A. N, Ray, C.J., and K. K. Mathew, J. was delivered by Mathew, J. V. R. Krishna Iyer, J. and section Murtaza Fazal Ali, J. gave separate Opinions.
MATHEW, J.
This appeal is from an order dated 30 6 1973 passed by the Government of India dismissing an application filed by the appellant on 5 5 1972 under section 23(4) of the (hereinafter referred to as the 'Act ') for acquiring 100 per cent share capital of Shahjahanpur Sugar Private Ltd. The appellant is a public limited company and is a subsidiary of United Breweries Ltd. and other companies interconnected with it.
The appellant 's undertaking consists of a sugar factory and a distillery for manufacture of liquor at Rosa, Shahjahanpur and another distillery at Asansol The appellant 's sugar factory at Rosa had been facing difficulties for some years on account of inadequate supply of sugarcane and to ensure regular and adequate supply of sugarcane, the appellant proposed to float a company with a share capital of Rs. 50 lakhs for the purpose of taking over the sugar unit of the appellant and for working it as an undertaking of the company to he formed.
The proposal was that the appellant would be entitled to an allotment of 100 per cent shares in the new company and a further sum of Rs. 15 ,77,093/ as consideration for transfer of the sugar unit.
According to the appellant, its object in getting 100 per cent shares in the new company was to offer the shares to cane growers later on.
11 L839 Sup CI/75 382 The appellant wrote a letter to the Secretary of the Company Law A Board on 15 10 1971 stating that since the new company would be a subsidiary of the appellant, the approval of the Company Law Board under section 372 of the Companies Act would not be necessary, in view of the provisions of clause (d) of sub section 14 of the said section.
The Central Government in the Ministry of Industry and Company Affairs .
3, replied by a letter dated November 1, 1971, that the provisions of f section 372(2) of the Companies Act would be applicable to the acquisition of the shares by the appellant in the company proposed to be formed.
The appellant, therefore, applied for permission under section 372 of the Companies Act to acquire the 100 per cent shares of the new company upon its incorporation.
The appellant was also told by the Central Government in its letter dated 5 1 1972 that sections 22 and 23 of the Act would prima facie be attracted and that the appellant should file a separate application under the relevant section.
The appellant had already intimated the Central Government, Department of Company Affairs on 17 11 1971 that the provisions of sections 21, 22 and 23 of the Act would not apply to its proposal to acquire the shares of the company proposed to be formed for taking over the sugar unit of the appellant.
However, the appellant filed an application dated 5 5 1972 purporting to be under section 23 (4) of the Act.
The new company proposed to be set up by the appellant was incorporated on June 15, 1973 under the name of Shahjahanpur Sugar Private Limited.
By order dated July 2, 1973, the Central Government, in the Department of Company Affairs rejected the appellant 's application under section 372(4) of the Companies Act for investing Rs. 50 lakhs in the equity shares of the capital of Shahjahanpur Sugar Private Limited.
By another order dated 30 6 1973, the Central Government, in the Department of Company Affairs also rejected the appellant 's application under section 23(4) of the Act.
As already stated, this appeal is against the latter order, Under section 55 of the Act.
The point for consideration in this appeal lies in a narrow compass viz., whether section 23(4) was attracted to the facts of the case.
To decide the question it is necessary to refer to certain provisions of the Act.
The object of the Act as is clear from the preamble is that the operation of the economic system should not result in the concentration of economic power to the common detriment, for prohibition of monopolistic and restrictive trade practices and for matters connected therewith or incidental thereto.
"Undertaking" is defined under section 2(v): "undertaking" means an undertaking which is engaged in the production, supply, distribution or control of goods of any description or the provision of service of any kind".
Chapter IlI is concerned with concentration of economic power and section 20 occurring in Part A of that chapter states that this part shall apply to an undertaking if the total value of (i) its own assets, or 383 (ii) its own assets together with the assets of its inter connected undertaking is not less than twenty crores of rupees; and, to a dominant undertaking (i) where it is a single undertaking, the value of its assets, or (ii) where it consists of more than one undertaking, the sum total of the value of the assets of all the inter connected undertakings constituting the dominating undertaking, is not less than one crore of rupees.
Section 21 deals with expansion of undertakings.
It provides that where an undertaking to which this Part applies proposes to substantially expand its activities by the issue of fresh capital or by the installation of new machinery or other equipment or in any other manner, it shall, before taking any action to give effect to the proposal for such expansion, give to the Central Government notice of its intention to make such expansion stating therein the scheme of finance with regard to the proposed expansion, whether it is connected with any other under taking Of undertakings and, if so, giving particulars relating to all the inter connected undertakings and such other information as may be prescribed.
Section 22 provides for the establishment of new undertakings.
It says that no person or authority, other than government, shall, after the commencement of this Act, establish any new under taking which, when established would become an inter connected undertaking of an undertaking to which clause (a) of section 20 applies, except under, and in accordance with the previous permission of the Central Government.
Sub section (2) of that section provides for an application for that purpose to the Central Government.
Section 23 provides: "23.
Merger, amalgamation and take over (1) Not withstanding anything contained in any other law for the time being in force, (a) no scheme of merger or amalgamation of an under taking to which this Part applies with any other undertaking, (b) no scheme of merger or amalgamation of two or more undertakings which would have the effect of bringing into existence an undertaking to which clause (a) or clause (b) of section 20 would apply.
shall be sanctioned by any Court or be recognised for any purpose or be given effect to unless the scheme for such merger or amalgamation has been approved by the Central Government under this Act.
(2) If any undertaking to which this Part applies frames a scheme of merger of amalgamation with any other under taking or a scheme of merger or amalgamation is proposed 384 between two or more undertakings, and, if as a result of such merger or amalgamation, an undertaking would come into existence to which clause (a) or clause (b) of section 20 would apply, it shall, before taking any action to give effect to the proposed scheme, make an application to the Central Government in the prescribed form with a copy of the scheme annexed thereto, for the approval of the scheme.
(3) Nothing in sub section (1) of sub section (2) shall apply to the scheme of merger or amalgamation of such interconnected undertakings as are not dominant undertakings and as produce the same goods.
(4) If an undertaking to which this Part applies proposes to acquire by purchase, take over or otherwise the whole or part of an undertaking which will or may result either (a) in the creation of an undertaking to which this Part would apply; or (b) in the undertaking becoming an inter connected undertaking of an undertaking to which this Part applies, it shall, before giving any effect to its proposals, make an application in writing to the Central Government in the prescribed form of its intention to make such acquisition, stating therein information regarding its inter connection with other undertakings the scheme of finance with regard to the proposed acquisition and such other information as may be prescribed.
(5) No proposal referred to in sub section (4) which has been approved by the Central Government and no scheme of finance with regard to such proposal shall be modified except with the previous approval of the Central Government.
(6) on receipt of an application under sub section (2) or sub section (4), the Central Government may, if it thinks fit, refer the matter to the Commission for an inquiry and the Commission may, after such hearing as it thinks fit, report to the Central Government its opinion thereon.
(7) on receipt of the Commission 's report the Central Government may pass such orders as it may think fit.
(8) Notwithstanding anything contained in any other law for the time being in force, no proposal to acquire by purchase, take over or otherwise of an undertaking to which this part applies shall be given effect to unless tho Central Government has made an order according its approval to the proposal.
(9) Nothing in sub section (4) shall apply to the acqusition.
by undertaking which is not a dominant under 385 taking, of another undertaking which is not also a dominant undertaking, if both such undertakings produce the same goods: Provided that nothing in this sub section shall apply, if, as a result of such acquisition, an undertaking comes into existence to which clause (a) or clause (b) of section 20 would apply.
Section 28 states that the Central Government before according approval in the exercise of its powers under Part A or Part of Chapter III shall take into account all matters which appear in the particular circumstances to be relevant and enjoins that regard shall be had to the need consistently with the general economic position of the country to achieve the production, supply and distribution, by most efficient and economical means, of goods of such types and qualities and several other considerations specified therein.
The submission of the counsel for the appellant was that in order that an enterprise may become an 'undertaking ' within the definition of the word 'undertaking ' in section 2(v) of the Act, it is necessary that the enterprise must be engaged in production, supply, distribution or control of goods of any description or the provision of service of any kind and that when the appellant proposed to form the new company for taking over the sugar unit of the appellant in consideration of 100 per cent shares in the new company, that company had not acquired the sugar unit of the appellant nor was it engaged in the production, supply, distribution or control of goods, etc.
as an enterprise of Shahjahanpur Sugar Private Limited and so there was no proposal to acquire by purchased take over or otherwise of the whole or part of any undertaking within the meaning of section 23(4).
According to counsel, it is only when an 'undertaking ' to which Part III applied proposes to acquire by purchase, take over or otherwise, the whole or part of an undertaking which would result in the creation of an undertaking to which that Part applies that section 23 (4) would be attracted.
In other words, the argument was that as the proposal was only for acquirising 100 per cent shares in Shahjahanpur Sugar Private Limited, the proposal was not to acquire the whole or any part of an undertaking since neither Shahjahanpur Sugar Private Limited had become the owner of the sugar unit of the appellant as there was only a proposal to transfer it to it, nor was that unit engaged in production, supply.
distribution or control of goods as an enterprise owned by Shahjahanpur Sugar Private Limited.
The further submission was that in any event the proposal to acquire 100 per cent shares in Shahjahanpur Sugar Private Limited by the appellant would not involve a proposal to acquire an undertaking to be owned or even owned by Shahjahanpur Sugar Private Limited, as the acquisition of 100 per cent shares would only vest in the appellant, the right to control and manage the affairs of Shahjahanpur Sugar Private Limited.
Section 2 of the Act makes it clear that the definitions ,given in that section will be attracted only if the context so requires.
The word 386 undertaking ' is a coat of many colours, as it has been used in different A sections of the Act to convey different ideas.
In some of the sections, the word has been used to denote the enterprise itself while in many other sections it has been used to denote the person who owns it.
the definition of the word 'undertaking ' in section 2(v) of the Act would indicate that 'undertaking ' means an enterprise which is engaged in production, sale or control of goods, etc.
We think that the question to be asked and answered in this case in terms of section 23 (4) is: Did the appellant make a proposal to acquire any undertaking of Shahjahanpur Sugar Private Limited by purchase, take over or otherwise? To answer this question, it is necessary to see whether the sugar unit which was proposed to be transferred to Shahjahanpur Sugar Private Limited had been engaged in the production of goods, etc., as an enterprise of that company; It is clear that on the date of the proposal the sugar unit of the appellant had not become an undertaking of Shahjahanpur Sugar Private Limited as it had not been engaged in the production of goods, etc., as an enterprise owned by that company.
It is only possible to visualize two possibilities when the proposal was made: either the sugar unit remained an undertaking of the appellant, although it was proposed to be transferred to Shahjahanpur Sugar Private Limited or that the sugar unit became an enterprise of Shahjahanpur Sugar Private Limited.
If the sugar unit remained part of the undertaking of the appellant when the proposed was made to take the 100 per cent shares, the proposal cannot be one to acquire an undertaking, as ex hypothesi the undertaking had not been transferred to Shahjahanpur Sugar Private Limited.
But, if the proposal to take 100 per cent shares involved an acquisition in future by the appellant of the sugar unit after it has been transferred to the new company, there was no proposal to acquire by transfer, take over or otherwise of an 'undertaking ' as the sugar unit was not at the time of the proposal engaged in production of goods, etc.
as an enterprise of Shahjahanpur Sugar Private Limited.
An enterprise can be characterized as an undertaking,, within the definition of the term only when it is engaged in the production supply, distribution or control of goods of any description or the provision of service of any kind.
In The Union of India v Tata Engineering and Locomotive Co. Ltd.(1), the Court held that a mere capacity or a mere intention by an undertaking to carry on an activity as referred to in clause (v) of section 2 of the Act in future alone without its being so done in the present, i.e., at the material date, or some time in the past i.e., before the material date, cannot mean that the undertaking is engaged in an activity as contemplated in section 2(v) of the Act.
No doubt, a temporary cessation of the activity will not detract an enterprise from its character as an undertaking, if the animus to resume the activity as soon as possible is there.
If a factory has had to close Down its operations on account of a strike, lock out, shortage of raw materials, shortage of power, or even want of finance, it cannot be said (1) [19721 Bombay Law Reporter 1. 387 that it is not engaged in the production of goods, if the intention of the owner is to resume its activities.
The view taken in In re Canara Bank Ltd. (l) is much the same.
There the Court followed the decision of the Bombay High Court referred to above and said that until a concern goes into the actual production, it cannot be said to be an 'Undertaking '.
The sugar unit of the appellant was no doubt engaged in production of goods, etc., when the proposal was made and was, therefore, an undertaking; but it was only an undertaking of the appellant as the sugar unit had not been transferred and had not become an enterprise of Shahjahanpur Sugar Private Limited.
The sugar unit did not become an undertaking of Shahjahanpur Sugar Private Limited as it was not and could not be engaged in the production of goods, etc., on its behalf before it was transferred to it.
Sub section (4) of section 23 is confined to the case of a proposal to acquire an undertaking by purchase, take over or otherwise but, to become an undertaking, it must presently be engaged in the production of goods, etc.
The more fact that the Memorandum of Association of Shahjahanpur Sugar Private Limited contained an object clause which provided for production of sugar would not necessarily mean that the company would go into production and thus become the owner of an undertaking as defined in section 2(v) of the Act.
Take for instance the case of an individual or a firm.
Does he or it become an 'undertaking ' merely because he or it entertains an object to produce goods unless he or it is actually engaged in production of goods, etc.? Certainly not.
If that is so in case of an individual or a firm, we see no reason why a different standard should be applied in the case of a company merely because the object or one of the objects of the company is to produce goods, etc.
, if it is not actually engaged in production of goods.
Reference was made to Stroud 's Judicial Dictionary, 4th edition, Vol. 1, p. 909 where it is stated that the phrase "engaged in any business" is apt to include employment at a salary as well as embarking on a business or in partnership.
We do not think that even if the phrase 'engaged in business` conveys the idea of embarking on it, Shahjahanpur Sugar Private Limited had embarked on the business of production of sugar merely because its memorandum of association provided that the object of the company was to produce sugar.
It is therefore difficult to imagine how when the proposal was made there was an enterprise engaged in the production or sugar and owned by Shahjahanpur Sugar Private Limited which could be acquired.
To put the matter in a nutshell: The sugar unit.
Of the appellant was an undertaking of the appellant.
Even if the proposal to acquire 100 per cent shares in Shahjahanpur Sugar Private Limited is considered to be a proposal to acquire either Shahjahanpur Sugar Private Limited or its sugar unit, since neither Shahjahanpur Sugar Private Limited nor its sugar unit as an enterprise owned by it had gone into production of goods, the proposal did not involve the acquisition if an undertaking.
Until the object in the memorandum of association (1) A. 1.
R. 388 Of Shahajahanpur Sugar Private Limited was realized by the sugar A unit going into production on behalf of the new company, it cannot be said that either Shahjahanpur Sugar Private Limited or the sugar unit transferred to it was an 'undertaking '.
An entity which is not engaged in actual production of goods or supply of services is of no economic significance and has to be excluded from the purview of the Act.
Hence, what may be done by an individual, firm or company in future has no ppresent economic significance. 'therefore, even if it be assumed that acquisition of 100 per cent shares could result in the acquisition of the new company or of an undertaking, the appellant was not acquiring an 'undertaking ' as defined in the Act as the new company would not be engaged in production of goods etc.
at the the of the acquisition of the shares by the appellant and section 23 (4) of the Act would not be attracted.
We also think that by the proposal to acquire the 100 per cent shares in Shahjahanpur Sugar Private Limited or by the actual acquisition of the shares, the appellant acquired only the control and the right to manage the company.
The word 'undertaking ' in the latter part of section 23(4) denotes an enterprise which is considered as an entity engaged in the production of goods, etc.
By setting 100 per cent shares in Shahjahanpur Sugar Private Limited, the appellant never acquired that undertaking owned by the new company by purchase take over or otherwise.
The undertaking remained the undertaking of` Shahjahanpur Sugar Private Limited.
In other words, the purchase of 100 per cent shares in Shahjahanpur Sugar Private Limited cannot be equated to the purchase of the undertaking owned by Shahjahanpur Sugar Private Limited.
What section 23(4) requires is the acquisition by purchase, take over or otherwise of an undertaking.
As we said, by getting the 100 per cent shares in Shahjahanpur Sugar Private Limited, the appellant only acquired the control and the right of management of Shahjahanpur Sugar Private Limited; but that will not amount to a purchase of the undertaking owned by that company It is well settled that a company has separate legal personality apart from its shareholders and it is only the company as a juristic person that could own the, undertaking.
Beyond obtaining control and the right of management of Shahjahanpur Sugar Private Limited, the purchase of 100 per cent shares had not the effect of an acquisition of the undertaking owned by it.
No doubt, on a dissolution of the company, the shareholders would be entitled to a distributive share of the assets of the company.
But it does not follow that while the company is a going concern, the shareholders are the owners of its assets including any undertaking.
It is the company as a separate entity which alone can own the undertaking and the purchase by the appellant of 100 per cent shares did not make it the owner of the undertaking.
We are aware that we are dealing with an economic legislation calculated to give effect to the Directive Principles of State Policy set out in clauses (b) and (c) of Article 39 of the Constitution and that the purpose of the legislation should be kept in mind in interpreting its provisions; but we are not prepared to assume that the legislature has, by a sidewind, swept away the well established fundamental legal concepts of the law of corporation in making the legislation.
We do not pause 389 to consider whether the circumstances which the Central Government took into account in passing the order were germane in the light of the provisions of section 28 of the Act as we hold that section 23 (4) has no application at all to the facts of the case.
No arguments were addressed at the bar as to whether the facts of the case would attract the provisions of section 22.
We, therefore, think it not proper to express any definite opinion about the applicability of that section and we refrain from doing so.
If, however, the facts of the case attract the provisions of section 22, it goes without saying that the appellant will have to apply and obtain the approval as visualized in that section.
We allow the appeal but make no order as to costs.
KRISHNA IYER, J.
I have had the advantage of perusing the judgment of my learned brother, Mathew J. but, while concurring in the conclusion, desire to append a separate opinion since the strands of my reasoning differ.
Mathew, J. 's judgment presents the necessary facts in the simplest form, sets out the scheme and the object of the (for short, the Act) whose construction falls for decision, but perhaps tends to petrify the pivotal concepts of 'undertaking ' defined in section 2(v) and acquisition in the context of Part A of Chapter III of the Act, if I may say so with respect.
Perhaps we are hearing the first case in this Court under this 'economic ' legislation, although three rulings from two High Courts, having some bearing on the controversy before us, were cited at the bar Shri Gupte, appearing for the appellant, posed the issue in a neatly simplistic way when he assailed the order of the Central Government under section 23(4) of the Act on the score that, absent acquisition of an 'undertaking ' in terms of section 2(v), the order was devoid of jurisdiction.
This provision deals with concentration of economic power whose inhibition is one of the paramount purposes of the statute.
Section 23 falls within Chapter III, Part A, of the Act.
Section 20 states that that Part shall apply only to certain types of undertakings.
Admittedly, the appellant is a big, plural undertaking falling within this Part and proposes to make over the sugar unit (which is one of the enterprises of this large multi production concern) to a new company to be floated.
This latter company is to have 100% of its shares owned by the appellant and, what is more, by a process of inflated valuation of the assets of the sugar unit the appellant will also appear to be advancing a loan of several lakhs of rupees to it.
According to the respondent (the Union of India) and the State of U. P., this new scheme is dubious in many ways and more sinister than seems on the surface.
We need not go into the details except to state that if the facts urged by counsel for the respondent were true, it is a high risk to the community to approve of the proposed scheme from the point of view of the purposes of the Act and the Directive Principle enshrined in article 39(c) of the Constitution.
390 It is unfortunate that in cases where the economic object and A impact of special types or legislation call for judicial interpretation, the necessity for a detailed statement of the background facts and supportive data, apart from some sort of a Brandeis brief illuminating the social purpose of the statute, is not being fully realised by the State.
In the present appeal materials were read out from the files which disturbed me but no comprehensive affidavit marshalling the social and economic facts relevant to the case and the statute was filed.
(At least copies of the Monopolies Inquiry Commission 's Report, extracts from the draft Bill, Notes on Clauses and the objects and Reasons of the Act were made available while arguments started).
Even so, the Court should hesitate to upset the Central Government 's order without a strong case of glaring error on the merits and clear excess or absence of jurisdiction being made out by the appellant.
Shri Gupte, has, however, by passed the controversial area of facts by a line of legal reasoning which is attractive but specious.
He contents that section 23(4) cannot apply save where the dominant undertaking (in this case, the appellant) proposed to acquire 'the whole or part of an undertaking which will or may result either in the creation of a undertaking to which Part A will apply or in the undertaking becoming an inter connected undertaking of an undertaking to which Part A applies '.
Therefore, runs the argument, what is sought to be acquired must be an undertaking.
In the present case the sugar unit is already an asset of the appellant 's concern and what is proposed is nothing more than to float a new company whose shares will be acquired in toto by the appellant.
Only when that company goes into production it becomes an 'undertaking ' and only then can s 23(4) possibly cover the case, the reason being that an 'undertaking ', by definition in section 2(v). 'means an undertaking which is engaged in the production.
Of goods. '.
The accent placed by counsel is upon 'is engaged in the production '.
He submits that the new company does not become an 'undertaking ' until is 'engaged in the production of goods '.
What is not in esse but only in posse is not an undertaking.
So much so the application of section 23(4) is premature and the Central Government 's order is illegal.
Moreover, no acquisition of the new company is contemplated, the owning of 100% shares thereof not being in law an acquisition of the undertaking as such by the appellant.
I concede there is force in this argument.
The crucial submissions of counsel for the appellant, however, stand exposed to the criticism made by Shri P. P. Rao for the respondent that they turn more or less on a play of words in the definition of undertaking ill section 2(v) and legal ingenuity about acquisition thereof.
Is there substance in these contentions or are they legal subterfuges to escape from the statutory meshes ? The law is not 'a brooding omnipotence in the sky ' but a pragmatic instrument of social order.
It is an operational art controlling economic life, and interpretative effort must be imbued with the statutory purpose No doubt, grammar is a good guide to meaning but a bad 391 master to dictate.
Notwithstanding the traditional view that grammatical construction is the golden rule, Justice Frankfurter used words of practical wisdom when he observed:(1) "There is no surer way to misread a document than to read it literally".
Indeed, this case really turns on the Court 's choice of the correct canon of construction as between two alternatives.
Is an 'undertaking ' an economic enterprise which is actually producing goods ? Here we over stress the 'in praesenti ' aspect and thereby undermine the legislative object.
On the contrary, is an 'undertaking ' used in its economic sense and in its wider connotation of embracing not merely factories which have been commissioned but projects which are embryonic and designed to go into production immediately formal legal personality is acquired and statutory approval under the Act secured ? In the present case there is already a sugar unit which is working and this mill is being transferred as the asset of the new company.
The new company, immediately it is registered and the Central Governments approval under section 23(4) obtained, will go on stream since the mill 's wheels will continue to turn regardless of the legal metempsychosis of ownership.
In such a case it would be abandoning commonsense and economic realty to treat the proposed undertaking as anything less than an 'undertaking ' (as defined in the Act) because it is only in immediate prospect.
For certain purposes, even a child in the womb is regarded as in existence by the law and I cannot bring myself to an understanding of the definition which will clearly defeat the anti concentration of economic power objective of the legislation.
Moreover, 'to undertake ' is to set about; to attempt to take upon oneself solemnly or expressly; to enter upon; to endeavour to perform (see Black 's Law Dictionary).
If what the appellant intends to acquire or establish is as undertaking in fact and therefore in law, the transformation device and the refuge in grammar cannot help him, the expression being capable of taking in not merely what is, but what is about to be.
An 'undertaking ' is defined as an undertaking. which itself discloses the difficulty felt by the draftsmen in delineating the precise content.
Obviously, a dynamic economic concept cannot be imprisoned into ineffectualness by a static strict construction. 'Is engaged in production ', in the context, takes in not merely projects which have been completed and gone into production but also blueprint stages, preparatory moves and like ante production points.
It is descriptive of the series of steps culminating in production.
You are engaged in an undertaking for production of certain goods when you seriously set about the job of getting everything essential to enable production.
Economists, administrators and industrialists understand the expression in that sense and oftentimes projects in immediate prospect are legitimately set down as undertakings engaged in the particular line.
Not the tense used but the integration of the steps is what is decisive.
What will materialise as a productive enterprise in futuro can be regarded currently as an undertaking, in the industrial sense.
It is not distant astrology but imminent futurology, and the phrases 392 of the statute are amenable to service of the purposes of the law, liberally understood.
Likewise, acquisition of an undertaking is to be viewed not in a narrow sense but as a broad business operation.
Surely, the new company is an undertaking which, by the vesting of 100% of its share holding in the appellant, is going to belong to the latter.
It is either acquiring or establishing the new adventure.
That is the plain truth and law must accord with it.
After all, a broadened, sophisticated and spectral sense must be given to these words of economic connotation without being hide bound by lexicography or legalism.
Of course, any infant in law knows that holding shares is not acquiring the company with its distinctive personality.
But any adult in corporate economics knows that controlling the operations of an industrial unit is to acquire or establish it for all economic purposes depending on whether that one is new or pre existing.
The word 'undertaking ' takes in also enterprises attempted (See Webster 's Dictionary on 'undertaking ', the meaning having received judicial approval in AIR 1960 Bom.
22 at p. 24, paragraph 4).
This Court in Gymkhana Club(1) has accepted the meaning, given in Webster.
Similarly, 'engaged in ' takes within its wings 'embarking on ' (Vide: Stroud 's Judicial Dictionary, 4th Edn.
Vol. 2, p. 909).
If the language used in a statute can be construed widely so as to salvage the remedial intendment, the Court must adopt it.
Of course, if the language of the statute does not admit of the construction sought, wishful thinking is no substitute and then, not the Court but the Legislature is to blame for enacting a damp squib statute.
In my view, minor definitional disability, divorced from the realities of industrial economics, if stressed as the sole touchstone, is sure to prove disastrous when we handle special types of legislation like the one in this case.
I admit that viewed from one standpoint the logic of Shri Gupte is flawless, but it also makes the law lifeless, since the appellant is thereby enabled neatly to nullify the whole object of Chapter III which is to inhibit concentration of economic power.
To repeat for emphasis, when two interpretations are feasible, that which advances the remedy and suppresses the evil, as the legislature envisioned, must find favour with the Court.
Are there two interpretations possible ? There are, as I have tried to show and I opt for that which gives the law its claws.
I am alive to and have kept within the limitations of judicial options indicated by Cardozo in a different context: "The Judge, even when he is free, is still not wholly free.
He is not to innovate at pleasure.
He is not a knight errant roaming at will in pursuit of his own ideal of beauty or of goodness.
He is to draw his inspiration from consecrated principles.
He is not to yield to spasmodic sentiment, to vague and unregulated benevolence.
He is to exercise a discretion informed by tradition, methodized by 393 analogy, disciplined by system, and subordinated to 'the primordial necessity of order in the social life '.
Wide enough in all conscience is the field of discretion that remains." (Benjamin Cardozo 's 'The Nature of the Judicial Process ' Yale University Press (1921).
While judicial review, at least on processual issues, is the hallmark of fair dealing with rights of persons in a Republic, there are expanding areas of economic and technological codes where the adjudicator has to trend warily and pause circumspectly, especially because the expertise needed to unlock the statute is ordinarily unavailable to the judicial process and the subject matter is too sensitive and fundamental for the uninstructed in the special field to handle with confidence.
The Constitution, in its essay in building up a just society, interdicting concentration of economic power to the detriment of the community, has mandated the State to direct its policy towards securing that end.
Monopolistic hold on the nation 's economy takes many forms and to checkmate these manoeuvres, the administration has to be astute enough.
Pursuant to this policy and need for flexible action, the Act was enacted.
A variety of considerations (set out in section 28) amenable to subtle administrative perception and expert handling but falling beyond the formalised processes unaided by research and study that the Court is prone to adopt, may have to be examined before reaching a right decision to allow or disallow seemingly innocuous but really or potentially anti social moves of dominant undertakings.
It is well known that backdoor techniques, and corporate conspiracies in the economic sense but with innocent legal veneer, have been used by oligopolistic organisations and mere juridical verbalism cannot give the Court the clue unless there is insightful understanding of the subject which, in specialised fields like industrial economics, is beyond the normal ken or investigation of the Court or the area of traditional jurisprudence.
I must however emphasize that Court supervision and correction, within well recognised limits, is not an expendable item since the rule of law is our way of constitutional life.
In our jural order, 'the ethos of adjudication ' on independent court scrutiny is too quintessential to be jettisoned without peril to those founding values of liberty, equality and justice, even though Judges considering complex and technical legislations, may often leave the Executive and other specialised bodies as the 'untouchable ' Controllerate.
There is power for the Court to interfere, but it will be exercised only when strong circumstances exist, or other basic guidelines for control come into play.
Even so, this function, so vital to cry a halt when executive powers exceed their bounds or are obliquely, oppressively or illegally used, has meaningful dimensions and creative directions when disputes dealing with intricate economic legislation fall for consideration.
The absence of research or assessor assistance with special skill, knowledge and experience in fields unfamiliar for jurists is a handicap which demands attention for the sake of competent justice being administered by superior Courts.
After all, law must grow with life, if it is to do justice to Development, especially in developing countries.
394 Here we come upon one of the basic deficiencies of our law studies which do not yet take within their sweep, apart from jurisprudence, economics, politics and sociology.
These are distinct enough at the core but shade off into each other.
As Roscoe Pound observed: "All the social sciences must be co workers, and emphatically all must be co workers with jurisprudence".
Georges Gurvitch supplemented the statement by observing: "A little law leads away from sociology but much law leads back to it".
The desiderata are neither novel nor detractory but a recognition of the new status of Law vis a vis Development in the context of the Court 's high function of keeping the Executive and allied instrumentalities wisely within the leading strings and formidable grip of the law.
Anthony Dickey, in a University of London Public Lecture in Laws, advocates the need for making judicial review of administrative action more of a reality than it is as present and adverts to the court having to possess 'adequate background training ' and 'first class research assistance '.
In another article,(1) the same author explains the permissibility in English Courts of the practice of seeking assessor assistance where specialist knowledge and expert advice are called for in complex case situations.
These observations are made by me to clear the ground for approaching an 'economic ' lis of a complex nature in a socio legal way and not in the traditional litigative style.
So viewed, what does an 'undertaking ' mean in section 23(4) of the Act ? Surely, 'definitions in the Act are a sort of statutory dictionary to be departed from when the context strongly suggests it.
The central problem on which Shri Gupte, appearing for the appellant, staked his whole case largely is as to whether an undertaking covers only a going concern, a running industry and not one in the offing or process of unfolding.
The decisions of the High Courts cited before us do not convince me.
On the other hand, the reasoning based on the present tense is faulty as already elaborated.
If this Court accepts the legalistic connotation of 'undertaking ' a disingenuous crop of new companies with ulterior designs may well be floated taking the cue a consequence which this Court should thwart because thereby the law will be condemned to a pathetic futility.
But in the view I take, may be section 22 though not section 23(4) is possibly attracted.
I have already indicated my view on this issue.
In the instant case, the move is to delink the sugar unit and re incarnate it as the Shahjahanpur Sugar (P) Ltd. We have two provisions which come up for consideration in this expansionist and acquisitive situation.
Section 22 reads: "22(1) No person or authority, other than Government, shall, after the commencement of this Act, establish any new undertaking which, when established, would become an interconnected undertaking of an undertaking to which clause (a) of section 20 applies, except under, and in accordance with, the previous permission of the Central Government.
395 (2) Any person or authority intending to establish a new undertaking referred to in sub section (1) shall, before taking any action for the establishment of such undertaking, make an application to the Central Government in the prescribed form for that Government 's approval to the proposal of establishing any undertaking and shall set out in such application information with regard to the inter connection, if any, of the new undertaking (which is intended to be established) with every other undertaking, the scheme of finance for the establishment of the new undertaking and such other information as may be prescribed.
(emphasis, mine) x x x x Section 23 (4) runs: "If an undertaking to which this Part applies proposes to acquire by purchase, take over or otherwise the whole or part of an undertaking which will or may result either (a) in the creation of an undertaking to which this Part would apply; or (b) in the undertaking becoming an inter connected undertaking of an undertaking to which this Part applies, it shall, before giving any effect to its proposals, make an application in writing to the Central Government in the prescribed form of its intention to make such acquisition, stating therein information regarding its interconnection with other undertakings, the scheme of finance with regard to the proposed acquisition and other information as may be prescribed." (emphasis, mine) The sections when placed in juxtaposition, suggest that the appellant 's operation is to establish a new undertaking (out of its old sugar unit, though) which, in view of the share holding, will inevitably become an inter connected undertaking of Carew & Co. (the original undertaking, i.e., the appellant).
Not so much to acquire an existing undertaking as to establish, by a concealed expansionist objective, a new undertaking with sugar manufacture is the core of the operation.
Therefore, it is not section 23(4) that magnetizes the appellant 's proposal but, prima facie, Sec. 22.
The special provision must exclude the general and, in this view, the acquisition of an existing undertaking stands repelled.
The scheme of the Act deals both with establishing a new undertaking and acquiring (by contrast) an existing undertaking.
So I agree with my learned brother Mathew J. that the order under section 23 (4) is beyond its pale but add that this looks like a case for the application of section 22.
If the appellant intends to go ahead with the new adventure, he is trying to establish, he may, prima facie have to apply for and get the previous permission of the Central Government under section 22.
I am not pursuing this aspect of the application of Sec. 22 as that will be decided, if found necessary, after fuller investigation from the angle of that provision.
396 The problem of interpretation of statutes raised in this case is far too important for me to ignore the manner in which jurists have been viewing the question in Anglo Saxon jurisprudence.
I therefore extract relevant excerpts from Harry Bloom who wrote on this topic in the Modern Law Review, p. 197, Vol. 33, March 1970: "The Law Commission (of England) and the Scottish Law Commission have dealt with one aspect of this problem, but on the whole they have prudently steered clear of wider issues.
Their White Paper is a trenchant essay on the short comings of the present techniques & rules of interpretation, and a mild rebuke of judges who are still too faithful to the Literal Rule.
Its main burden, however is to make the case for the use of extraneous documentary aids to interpretation, and it does so, I should think, in a way that puts the answer to this long debated question beyond doubt.
Among the recommendations (summed up in draft clauses at the end of the Report) are that courts when interpreting statutes, should be allowed to consider the following: (a) all indications provided by the Act as printed by authority including punctuation and side notes, and the short title of the Act; (b) any relevant report of a Royal Commission, Committee or other body which has been presented or made to or laid before Parliament or either House before the time when the Act was passed; (c) any relevant treaty or other international agreement which is referred to in the Act or of which copies had been presented to Parliament by command of Her Majesty before that time, whether or not the United Kingdom were bound by it at that time; (d) any other document bearing upon the subject matter of the legislation which had been presented to Parliament by command of Her Majesty before that time; (e) any document (whether falling within the foregoing paragraphs or not) which is declared by the Act to be a relevant document for the purpose of this section.
" x x x x "In time, however, somebody will have to tackle the basic question how long can we sustain the fiction that when the legislature prescribes for a problem, the court, when confronted with a difficult statute, merely uses the techniques of construction to wring an innate meaning out of the words? One cannot, these days, approach the problem of statutory interpretation in isolation from the legislative process.
And I do not think the proposal to allow the court to consult parliamentary documents meets this objection.
As long as the fiction persist that the courts merely 'interpret ' statutes, Parliament will continue to put out legislation of ever increasing 397 detail and complexity in the belief that it must provide a complete set of answers.
This is a self defeating ambition.
Where does one look for the intention of the legislature in today 's monster Acts, with their flotillas of statutory instruments and schedules, the plethora of boards, tribunals and committees, with delegated powers, which they set up, the myriad of subjects they deal with, their confusing cross references to other statutes, and their often opaque and tortured language that defies translation into intelligible ideas?" x x x x x "What exactly are the respective roles of Parliament and the courts as regards legislation ? Since it is a fiction that the courts merely seek out the legislative intent, there must be a margin in which they would or 'creatively ' interpret legislation.
The courts are 'finishers, refiners and polishers of legislation which comes to them in a state requiring varying degrees of further processing, ' said Donaldson J. in Corocraft Ltd. vs Pan American Airways, Inc., , 732) and indeed it is no secret that courts constantly give their own shape to enactments.
" x x x x x "How do the present rules help, when a statute passed ad hoc, to deal with a situation clearly envisaged by the legislature, is then applied to a whole new state of affairs that were never originally contemplated ?" To conclude on the point with which I began, 'undertaking ' is an expression of flexible sementics and variable connotation, used in this very statute in different senses and defined in legal dictionaries widely enough.
In sum, what the appellant proposed to the Central Government was to establish a new undertaking, if we throw aside legal camouflages built around a verb and pierce the corporate veil.
Therefore, while jurisdiction in the respondent to apply section 23(4) of the Act is absent, the appellant may caught within the spider 's web of section 22 I do not express myself finally.
The appeal must now succeed, but the legal drama may still have its fifth Act for the appellant I cannot be futuristic as the full facts will first be examined by Government for that purpose in case he chooses to apply.
For these reasons I allow the appeal but, in the circumstances, make no order as to costs.
FAZAL ALI, J.
I agree with my brother Mathew, J., that section 23 of the Monopolies and Restrictive Trade Practices Act, 1969 hereafter to be referred to as 'the Act ' has absolutely no application to the facts and circumstances of the present case.
In this view of the matter the impugned order of the Central Government must, therefore, be quashed.
Section 23 of the Act would apply only if the undertaking sought to be acquired is in actual and physical existence and has gone into actual production.
The scheme which is the subject matter of this case is merely a proposal and unless the undertaking is in existence and doing business it will not fall within the meaning of section 2(v) of the Act which defines an "undertaking".
398 I, however, entirely agree with my brother Krishna Iyer, J., that on the facts disclosed in the appeal the Scheme propounded by the appellant may prima facie fall within the four corners of section 22 of the Act.
The resolution passed by the appellant for setting up a new Company may be extracted thus: "RESOLVED that the Board of Directors be and is hereby authorised to form a separate Company to be called "SHAHJAHANPUR SUGAR (PRIVATE) LIMITED", as a wholly owned subsidiary of this Company, to ultimately take over and operate the Sugar Factory undertaking of this Company at Rosa (Uttar Pradesh) as a going concern.
FURTHER RESOLVED that the transfer of the assets of the Sugar Factory undertaking to the newly formed subsidiary, viz. "SHAHJAHANPUR SUGAR (PRIVATE) LIMITED", be made on the basis of the valuation of the respective assets made by Messrs. LEES & DHAWAN, Chartered Surveyors on May 29, 1970.
" This resolution unmistakably reveals the following essential features: (1) that the appellant intended to establish a new Company and this proposal was approved by virtue of the resolution quoted above; (2) that the new Company was to be floated by transferring 100 per cent shares from the Sugar Unit of the Company so that the appellant could retain effective control over the new Company; (3) that the new Company after being established was to be known as "SHAHJAHANPUR SUGAR (PRIVATE) LIMITED"; and (4) that after the establishment of the new Company the appellant would become the owner of the new Company as well as Carew Company Ltd. and thus the proposed new Company would be an inter connected undertaking of the appellant.
These facts, therefore, may attract the essential ingredients of section 22 of the Act and, if so, the appellant cannot be allowed to float a new Company without complying with the statutory requirements of section 22 of the Act in which case fuller facts may have to be investigated for that purpose.
The object of the Act in my opinion appears to be to prevent concentration of wealth in the hands of a few and to curb monopolistic tendencies or expansionist industrial endeavours.
This objective is sought to be achieved by placing three tier curb on industrial activities to which the Act applies, namely: (1) By providing that if it is proposed to substantially expand the activities of a Company by issue of fresh capi 399 tal or by installation of new machinery, then notice to the Central Government and its approval must be taken under section 21 of the Act.
(2) In the case of establishment of a new Company by insisting on the previous permission of the Central Government under section 22 of the Act.
(3) In the case of acquisition of an existing Company by another Company by requiring the sanction of the Central Government to be taken by such Company under section 23 of the Act.
The present case, in my opinion, may fall within the second category mentioned above.
V.M.K. Appeal allowed.
| The appellant was granted a stage carriage permit by the Regional Transport Authority in May, 1963.
Appeals against the grant to the State Transport Appellate Tribunal and further appeals to the Mysore Revenue Appellate Tribunal were dismissed.
Thereafter, in April, 1967, the Secretary of the Regional Transport Authority after calling upon the appellant to produce the relevant documents, issued the permit.
Appeals by the respondents of the State Transport Appellate Tribunal against the issue of the permit to the appellant were allowed on the ground of limitation.
The appeal of the appellant to the Revenue Appellate Tribunal was dismissed.
The appellant 's writ petition to the High Court was also dismissed.
Allowing the appeal to this Court, ^ HELD: There was a clear error of jurisdiction on the part of the State Transport Appellate Tribunal and the Revenue Appellate Tribunal in interfering with the issue of permit to the appellant.
The High Court was, therefore, not right in dismissing the writ application.
[190D E] Appeal is a creature of the statute.
Section 64 of the , is the only section creating rights of appeal against the grant of permit and other matters.
But there is no appeal provided against an order issuing a permit in pursuance of an order granting the permit.
Issuance of the permit is only a ministerial act necessarily following the grant of the permit.
Hence, the appeal to the State Transport Appellate Tribunal and the further appeal are not competent under the section.
[190B D]
|
Appeal No. 166 of 1951.
Appeal from the Judgment and Decree dated September 15, 1948, of the High Court of Judicature for the State of Punjab at Simla (Mahajan and Teja Singh JJ.) in Regular Second Appeal No. 1844 of 1945 from the Judgment and Decree dated June 5, 1945, of the Court of the District Judge, Gurgaon, in Civil Appeal No. 171 of 1943, arising out of the Judgment and Decree dated August 27, 1943, of the Court of the Subordinate Judge, Gurgaon, in Civil Suit No. 11 of 1943.
Tarachand Brijmohanlal for the appellant.
Gurubachan Singh (Radha Krishan Aggarwal, with him) for the respondent.
1952, November 7.
The Judgment of the Court was delivered by CHANDRASEKHARA AIYAR J.
The plaintiffs, Joti Prasad and Sat Narain, sued for partition and possession of their two fifths share in the suit properties alleging that the first defendant wag alone in possesSion of the same, having redeemed a mortgage executed by the joint family of which the plaintiffs and defendants were members, in favour of one Raghumal in the year 1896 on paying Rs. 5,800.
Defendants 2 to 5 were impleaded as co sharers.
Out of them, defendants 2 and 3 admitted the claims of the plaintiffs.
Defendant 4 died pending suit, and her name was struck off.
Defendant 5 supported the first defendant.
On the date of the trial court 's decree, the two plaintiffs were held entitled to one sixth share each.
The first defendant resisted the plaintiffs ' claim.
He contended that the redemption by him in 1920 was not on behalf of the joint family as alleged by the plaintiffs but on his own account as there had been a disruption of the joint family status much earlier, and that before the plaintiffs could get arty relief, they were bound to pay him not merely a proportionate share in the sum of Rs. 5,800 which he paid to the mortgagee for redemption but their share in the original mortgage debt of Rs. 11,200.
He also denied that the original mortgage was executed on behalf of the joint family.
The Subordinate Judge, and on appeal, the High Court found that the original mortgage was a mortgage transaction of the joint family, and that the first defendant, Ganeshi Lal, redeemed the mortgage on his own account and for his own benefit at a time when there was no longer any joint family in existence.
It was further held by the trial court that the plaintiffs and other co sharers were bound to pay their proportionate share of the amount paid by the first defendant to redeem the mortgage, namely, Rs. 5,800.
But from this a sum of Rs. 1,200 which he had already received by way of redemption of certain mortgage rights had to be deducted.
The District Judge enhanced this sum of RS.
4,600 to 245 Rs. 5,000, as the first defendant had paid taxes due on the property up to 1940, but he confirmed the main findings of the Subordinate Judge.
A second appeal preferred by the first defendant was dismissed by the High Court at Simla (Mehr Chand Mahajan and Teja Singh JJ.).
They repelled the contention of the first defendant that a suit for partition and possession was not maintainable without bringing a suit for redemption.
They also negatived his right to get a proportionate share in the amount of Rs. 11,200 due on the mortgage.
Two other learned Judges gave leave to appeal under section 109 (c) of the Civil Procedure Code, as a substantial question of law was involved.
Three points were argued before us by learned counsel for the appellant; firstly, there was an assignment of the mortgage in favour of the appellant with the result that the entire rights of the mortgagee vested in him; secondly, even viewing the question as one of legal subrogation, he was entitled, under the principles of justice, equity and good conscience which governed the State of Punjab, as the has not been applied to the State, to recover from the co mortgagors not merely their shares in the sum of Rs. 5,800 which he had paid for redemption but their shares in the full amount of Rs. 11,200 due under the mortgage; and thirdly, that the suit for partition without asking for redemption was not maintainable.
Points Nos. 1 and.
3 have no force whatever.
The registered deed of redemption does not contain any words of assignment.
To say that Ganeshi Lal shall be the owner of the entire amount due from the mortgaged property is something different from stating that the security has been assigned in his favour.
On the other hand, the endorsement of receipt of payment on the back of the mortgage deed itself and the statement of the mortgagee that he has released the mortgaged property from his mortgage go to show that there was no assignment.
246 The non maintainability of the suit does not seem to have been in issue either before the trial court or before the District Judge, and it appears to have been raised for the first time before the High Court.
It was pointed out by the learned Judges, and quite rightly, that so long as no question of limitation was involved, there was no objection to a claim for redemption and one for possession and partition being joined together in the same suit.
Only the second point remains for consideration, and this raises an interesting question of law.
It is not denied that Ganeshi Lal who redeemed the prior mortgage is subrogated to the mortgagee 's rights, but the controversy is about the extent of his rights as subrogee.
By virtue of the redemption, does he get all the rights of the mortgagee and hold the mortgage as a shield against the co mortgagors for the full amount due on the mortgage on the date of redemption whatever he may have himself paid to get it discharged, or does he stand in the mortgagee 's shoes only to the extent of getting reimbursed from the comortgagors for their shares in the amount actually paid by him? The lower courts have held that the latter is the correct position in law, but the appellant has challenged it as unsound.
The first two clauses of the present section 92 of the run in these terms: " Any of the persons referred to in section 91 (other than the, mortgagor) and any co mortgagor shall, on redeeming property subject to the mortgage, have, so far as regards redemption, foreclosure or sale of such property, the same rights as the mortgagee whose mortgage he redeems may have against the mortgagor or any other mortgagee.
The right conferred by this section is called the right of subrogation, and a person acquiring the same is said to be subrogated to the rights of the mortgagee whose mortgage he redeems.
" It is a new section and was inserted by the amending Act XX of 1929.
The original sections 74 and 247 75 conferred the right to redeem in express terms only on second or other subsequent mortgagees, though the co mortgagor 's right to subrogation on redemption was recognised even before the Act.
As the has not been extended to the State of East Punjab, it is unnecessary to decide whether section 92 is retrospective in its operation, on which point there has been a conflict of opinion between the several High Courts.
Section 95 of the Act which removed the confusion caused by the old section which, conferring on the co mortgagor what was called a charge, and thus seeming to negative the application of the doctrine of subrogation, is also inapplicable to the present case.
We therefore steer clear of sections 74 and 75 of the old Act and sections 92 and 95 of the present Act, and we are free to decide the question on principles of justice, equity and good conscience.
If we remember that the doctrine of subrogation which means substitution of one person in place of another and giving him the rights of the latter is essentially an equitable doctrine in its origin and application, and if we examine the reason behind it, the answer to the question which we have to decide in this appeal is not difficult.
Equity insists on the ultimate payment of a debt by one who in justice and good conscience is bound to pay it, and it is well recognised that where there are several joint debtors, the person making the payment is a principal debtor as regards the part of the liability he is to discharge and a surety in respect of the shares of the rest of the debtors.
Such being the legal position as among the co mortgagors, if one of them redeems a mortgage over the property which belongs jointly to himself and the rest, equity confers on him a right to reimburse himself for the amount spent in excess by him in the matter of redemption; he can call upon the co mortgagors to contribute towards the excess which he has paid over his own share.
This proposition is postulated in several authorities.
In the early case of Hodgson vs Shaw (1) Lord Brougham said: (1) ; ; 248 "The rule is undoubted, and it is one founded on the plainest principles of natural reason and justice, that the surety paying off a debt shall stand in the place of the creditor, and have all the rights which he has, for the purpose of obtaining his reimbursement.
" I have italicised the word " reimbursement Sheldon in his well known treatise on Subrogation has got the following passage in section 13 of the Second Edition: " There is another class of cases in which he who has paid money due upon a mortgage of land to which he had some title which might be affected or defeated by the mortgage, and who was thus entitled to redeem, has the right to consider the mortgage as subsisting in himself, and to hold the land as if it subsisted, until others interested in the redemption, or who held also the right to redeem, have paid a contribution.
" Be it noted that what is spoken of here is a contribution.
Dealing with the subject of subrogation of a, surety by payment of a promissory note and citing the observations of the Alabama Court, Harris says in his work on Subrogation (1889 Edition) at page 125: " The rule is, that a surety paying a debt, shall stand in the place of the creditor; and is entitled to the benefit of all the securities which the creditor had for the payment of the debt, from the principal debtors; in a word, he is subrogated to all the rights of the creditor; the surety, however, cannot avail himself of the instrument on which he is surety, by its payment.
By payment it is discharged and ceases to exist, and the payment will not, even in equity, be considered an assignment; the surety merely becomes the creditor of the principal to the amount paid for him.
" To compel the co debtors or co mortgagors to pay more than their share of what was paid to the creditor or mortgagee would be to perpetrate an inequity or 249 injustice, as it would mean that the debtor who is in a position to pay and pays up can obtain an advantage for himself over the other joint debtors.
Such a result will not be countenanced by equity; the favouritism shown by law to a surety, high as it is, does not extend so far.
The surety can ask to be indemnified for his loss: he can invoke the doctrine of subrogation as an aid to his right of contribution.
Sheldon says in section 105 of his book : " The subrogation of a surety will not be carried further than is necessary for his indemnity; if he buys up the security at a discount, or makes his payment in a depreciated currency, he can enforce it only for what it cost him.
He cannot speculate at the expense of his principal ; his only right is to be repaid.
" In section 178, Harris is still stronger. " Since subrogation is founded on principles of equity, the surety who would avail himself of the doctrine and invoke equity must do equity ; and while ' he is entitled to a reimbursement in all that he pays out properly for his principal, debt, interest and cost, he is not entitled, in any way to recover more than he has paid.
For instance, if he pays the debt of his principal, in depreciated currency, the rule would seem to be that he could demand from the principal only the value of that currency at the time he made the payment.
Nor would he upon principles of equity be permitted to purchase the debt at a discount and then be subrogated to collect the whole face value of the debt, and especially if he held securities, or if the creditor held securities which would fall into his hands, out of which to pay the debt; because the securities are trust funds for the purpose, and set aside for the payment of that debt and an assignee of trustee cannot speculate in the purchase of claims against the fund in his hands.
It would not be equality; it would not be equity.
" While it can be readily conceded that the joint debtor who pays up and discharges the mortgage 250 stands in the shoes of the mortgagee, and secures to himself the benefit of the security by such payment, the extent to which he can enforce his right as against the other joint debtors is a different matter altogether.
In his monumental work on Equity Jurisprudence, Pomeroy points out that he will be subrogated to the rights of the mortgagee only to the extent necessary for his own equitable protection.
(See page 632 of Volume IV of the Fifth Edition by Symons).
Clearer still is the passage found at page 640 of the same book: " The mortgagor himself who has conveyed the premises to a grantee in such manner that the latter has assumed payment of the mortgage debt becomes an equitable assignee on payment, and is subrogated to the mortgagee, so far as is necessary to enforce his equity of reimbursement or exoneration from such grantee.
" It is as regards the excess of the payment over his own share that the right can be said to exist.
Pomeroy says this at pages 660 and 661: "In general, whenever redemption by one of the above mentioned persons operates as an equitable assignment of the mortgage to himself, he can keep the lien of it alive as security against others who are also interested in the premises, and who are bound to contribute their proportionate shares of the sum advanced by him, or are bound, it may be, to wholly exonerate him from and reimburse him for the entire payment. .
The doctrine of contribution among all those who are interested in having the mortgage redeemed, in order to refund the redemptor the excess of his payment over and above his own proportionate share, and the doctrine of equitable assignment in order to secure such contribution, are the efficient means by which equity completely and most beautifully works out perfect justice and equality of burden, under these circumstances. . . . " Whatever the difference might be between the English law and the Indian law as regards the right 251 to enforce decrees and securities for the due payment of a debt in the case of a surety who discharges a simple money debt and a surety who pays up a mortgage, it is still noteworthy that Section V of the Mercantile Law Amendment Act of 1856 (England) provided for indemnification by the principal debtor( for the advances made and loss sustained by the surety.
There is a distinction in this respect between a third party who claims subrogation and a co mortgagor who claims the right, and this is brought out by Sir Rashbehary Ghose in his Law of Mortgage in India, Volume I, 5th Edition.
He says at page 354, pointing out that co mortgagors stand in a fiduciary relation : " I should add that an assignee of a mortgage is entitled, as a rule, to recover whatever may be due on the security.
But if he stands in a fiduciary relation, he can only claim the price which he has actually paid together with incidental expenses.
" The right of the co mortgagor who redeems the mortgage is spoken of as the right of reimbursement at page 372 in the following passage : "Strictly speaking, therefore, when one of several mortgagors redeems a mortgage, he is entitled to be treated as an assignee of the security which be may enforce in the usual way for the purpose of re imbursing himself.
" The redeeming co mortgagor being only a surety for the other co mortgagors, his right is, strictly speaking, a right of reimbursement or contribution, and in law, when we have regard to the principles of equity and justice, there should be no difference( between a case where he discharges an unsecured debt and a case where he discharges a secured debt.
It is unnecessary for us to decide in this appeal whether section 92 of the was intended to strike a departure from this position when it states that the co mortgagor shall have the same 252 rights as the mortgagee whose mortgage he redeems, and whether it was intended to abrogate the rule of equity as between co debtors, and provide for the enforcement of the liability on the basis of the amount due under the mortgage ; and this is because, as has been already stated, we are governed not by the statute but by general principles of equity and justice.
If it is equitable that the redeeming co mortgagor should be substituted in the mortgagee 's place, it is equally equitable that the other co mortgagors should not be called upon to pay more than he paid in discharge of the encumbrance.
In this connection, reference may be made with advantage to the decision of Sir Asutosh Mookerjoe and Teunon JJ.
in DigambarDas vs Harendra Narayan Panday (1) where the question arose as regards the the rate of interest and the period for which the redeeming co mortgagor would be entitled.
There is an elaborate examination of the nature of the right of subrogation obtained by one of several joint comortgagors who redeems the mortgaged property, and in the course of the discussion the following observations occur: " In so far as the amount of money which he is entitled to recover from his co mortgagors is concerned, he can claim contribution only with reference to the amount actually and properly paid to effect redemption to which sum he can add his legitimate expenses . .
The substitution, therefore, of the new creditor in place of the original one, does not place the former precisely in the position of the latter for all purposes. .
If therefore one of several mortgagors satisfies the entire mortgage debt, though upon redemption he is subrogated to the right and remedies of the creditor, the principle has to be so administered as to attain the ends of substantial justice regardless of form ; in other words, the fictitious cession in favour of the person who effects the redemption, operates only to the extent to which it is necessary to apply it for his indemnity and protection." (1) 258 There is a definite expression of opinion by the Madras High Court on the point in the decision reported in Suryanarayana vs Sriramulu(1).
In that case, a purchaser of a half share of the equity of redemption claimed to recover half of the amount of the mortgage on the security of the other share in the hands of the defendant, and it was held that as his purchase of the decree on the mortgage was prior to his purchase of the equity of redemption, he was entitled to the full amount claimed by him.
The learned Judges distinguish the case from one where one of two mortgagors discharges an encumbrance binding on both, and say that in such a case the mortgagor doing so could not recover from his comortgagors more than a proportionate share of the amount actually paid by him.
After this rather lengthy discussion of the subject, we consider it unnecessary to notice and comment on the several decisions cited for the appellant.
It may be said generally that they only lay down that in cases where the , as it stood originally or as amended in 1929, is not applicable, we are governed by the principles of equity, justice and good conscience, and that sections 92 and 95 embody such principles.
None of the cases deals with the extent or degree of subrogation, and there is nothing in them which runs counter to the view that the doctrine must be applied along with other rules of equity, so that the person who discharges the mortgage is amply protected, and at the same time there is no injustice done to the other joint debtors.
He who seeks equity must do equity, and we shall be violating this rule if we give effect to the appellant 's contention.
The High Court, in our opinion, reached the correct conclusion.
The parties are not agreed on the shares to which the plaintiffs are entitled, and this is because after the date of the final decree some of the branches have become extinct by the deaths of their representatives.
Whether under customary law in the Punjab, uncles (1) 254 exclude nephews or they take jointly, and whether succession is per stirpes or per capita, was the subject of disagreement at the Bar before us.
This question must therefore be left over for determination by the trial court, and the case will have to go back to that court for effecting partition and delivery of possession according to the shares to which the plaintiffs may be found entitled.
Subject to what is contained in the foregoing paragraph, the appeal will stand dismissed with costs.
Appeal dismissed.
| On principles of equity, justice and good conscience, which apply to the Punjab (where the , is not in force) if one of several joint mortgagors redeems the entire Mortgage by paying a s less than the full amount due under the mortgage, he is entitled to receive from his co mortgagors, only their proportionate shares on the amount actually paid by him.
He is not entitled to claim their proportionate shares on the amount which was due to the mortgagee under the terms of the mortgage on the date of redemption.
Hodgson vs Shaw ; , Digambar Das vs Harendra Narayan Panday [(1910) and Suryanarayana vs Sriramulu [(1913) referred to.
Judgment of the High Court of Punjab at Simla affirmed.
|
Civil Appeal No. 936 of 1977.
From the Judgement and Order dated 16.9.1976 of the Bombay High Court in S.C.A. No. 2741 of 1971.
Shishir Sharma and P.H. Parekh for the Appellant.
Dr. N.M. Ghatate, S.V. Deshpande for the Respondent.
83 The Judgement of the Court was delivered by K.N. SAIKIA, J.
This appeal by Special Leave is from the Judgement of the High Court of Bombay, dated 16th September, 1976, in Special Civil Application N. 2741 of 1971 upholding the Judgement of the Maharashtra Revenue Tribunal.
The suit land bearing Survey No. 182, owned by Shankarlal Kunjilal, was taken under Government management as per order of the Assistant Collector, Jalgaon bearing No. TEN.
WS 946 dated 14.12.1950 as the land was lying fallow for two consecutive years.
The Mallatdar, Raver was appointed as a Manager thereof under Section 45 of the Bombay Tenancy and Agricultural Lands Act, 1948, hereinafter referred to as "the Act. ' After assuming the management the land was leased out to the appellant Dhondu Choudhary by the Mamlatdar for a period of 10 years by an agreement of lease dated 7.12.1951.
The period of lease accordingly expired on 6.12.1951.
The period of lease accordingly expired on 6.12.1961.
However, the management of the land was terminated by the Government by the Assistant Collector 's order dated 27.7.1963, and the possession thereof was ordered to be restored to the respondent landlord.
There was nothing on the record to show that the lease which expired on 6.12.1961 was extended by the Manager thereafter till the termination of management by order dated 27.7.1963.
The appellant claimed that he was paying rent to the Mamlatdar during the period of 7.12.1961 to 27.7.1963 and thus continued to a be tenant in respect of the land.
He filed a Civil Suit against the respondent in the Court of Civil Judge, Raver, who made a reference to the Mamlatdar, Raver who held that the appellant continued to be tenant.
The respondent 's appeal to the Assistant Collector having failed, he moved a revision application before the Maharashtra Revenue Tribunal, hereinafter referred to as `the Tribunal ' wherein the question arose whether the appellant 's tenancy was subsisting on 27.7.1963, and whether he had become the tenant in respect of the land since that date under the Act.
Relying on a bench decision of the Bombay High Court in Special Civil Application No. 1077 of 1961 Ghambhir Lal Laxman Das vs Collector of Jalgaon, (decided on 20.12.1962) wherein it was held that the person to whom lease was granted by the Manager of the land which was taken under Government management, could not continue to be the tenant after the expiry of the period of 10 years without a fresh lease, and that after the management was terminated by the 84 Government on expiration of the lease, the tenancy under the lease could not be said to be subsisting on the date on which the management was terminated.
The Tribunal held that the appellant could not continue as tenant since termination of the lease on 27.7.1963.
The Tribunal further held that since the land was taken under the Government management by the order of the Assistant Collector under Section 88(1) of the Act the provision s of Sections 1 to 87 were not applicable and the appellant, therefore, could not continue to be tenant after expiration of the period of lease on 6.12.1961.
The High Court in the Special Application under Article 227 of the Constitution of India having upheld the above finding of the Tribunal, the appellant obtained Special Leave.
The only submission of the learned counsel for the appellant Mr. Shishir Sharma is that the appellant having continued payment of rent to Mamlatdar even after expiry of lease till the termination of management, he continued to be a tenant which the landlord could not avoid on resumption of the land.
Dr. N.M. Ghatate, the learned counsel for the respondent, submits that the appellant could by no means continue to be a tenant after his lease expired and no fresh lease was granted to him and more so after the management was terminated on 27.7.1963.
We find force in Dr. Ghatate 's submission.
Admittedly the management of the land was assumed by the State Government under Section 65 of the Act.
Section 65 deals with assumption of management of lands which remained unclutivated, and says: "65.
(1) If it appears to the State Government that for any two consecutive years, any land has remained uncultivated or the full and efficient use of the land has not been made for the purpose of agriculture, through the default of the holder or any other cause whatsoever not beyond his control the State Government may, after making such inquiry as it thinks fit, declare that the management of such land shall be assumed.
The declaration so made shall be conclusive.
(2) On the assumption of the management, such land shall vest in the State Government during the continuance of the management and the provision of Chapter IV shall mutatis mutandis apply to the said land: 85 Provided that the manager may in suitable cases give such land on lease at rent even equal to the amount of its assessment: Provided further that, if the management of the land has been assumed under sub section (1) on account of the default of the tenant, such tenant shall cease to have any right or privilege under Chapter II or III, as the case may be, in respect of such land, with effect from the date on and from which such management has been assumed.
" Admittedly, the Manager was appointed under Section 45 of the Act, Section 45 deals with vesting of estate in management, and says: "45.
(1) On the publication of the notification under section 44, estate the in respect of which the notification has been published shall, so long as the management continues, vest in the State Government.
Such management shall be deemed to commence from the date on which the notification is published and the State Government shall appoint a Manager to be in charge of such estate.
(2) Notwithstanding the vesting of the estate in the State Government under sub section (1), the tenant holding the lands on lease comprised in the estate shall, save as otherwise provided in this Chapter, continue to have the same right and shall be subject to the same obligations, as they have or are subject under the proceeding Chapters in respect of the lands held by them on lease.
" Section 61 deals with termination of management, and says: "61.
The State Government, when it is of opinion that it is not necessary to continue the management of the estate, by order published in the Official Gazette, direct that the said management shall be terminated.
On the termination of the said management, the estate shall be delivered into the possession of the holder, or, if he is dead, of any person entitled to the said estate together with any balances which may be due to the credit of the said holder.
All acts done or purporting to be done by the Manager during the continuance of the management of the estate shall be binding on the holder or to any person to whom the possession of the estate has been delivered.
" 86 Thus on termination of the management the suit land in the instant case was to be delivered into the possession of the respondent holder and all acts done or purporting to be done by the Manager during the continuance of the management of the estate should be binding on the holder or on any person to whom the possession of the estate had been delivered.
In the instant case the finding of the Courts below is that after expiry of the lease no fresh lease was granted by the Manager.
In view of this finding, the appellant 's claim to have continued as the tenant even after expiry of the lease on 6.12.1961 and till 27.7.1963, the date of termination, by paying rent for the period to the Mamlatdar would be of no avail, in the absence of fresh lease after expiry of the 10 years lease on 6.12.1961.
The Tribunal followed the binding decision of the Bombay High Court holding that there was no lease in favour of the appellant and that by mere holding over he could not have continued the status of a tenant.
This would be so because the Act does not envisage the Government as a landholder but only as Manager.
While delivering back the land into the possession of the landholder, it could not be burdened with any tenancy created or resulting while under management.
Besides, there could be no privacy between the landlord and the erstwhile tenant under Government in the matter of tenancy.
Between the appellant and the respondent landlord, therefore, no question of the former continuing as tenant of the latter could arise after the land was reverted to the landholder.
Mr. Sharma 's submission that the appellant was a deemed tenant is also not tenable.
The appellant could not have been a deemed tenant under Section 4 or 4B of the Act inasmuch as Section 88 of the Act grants exemption inter alia to lands held on lease from the Government.
It says: "88.
(1) Save as otherwise provided in sub section(2), nothing in the forging provisions of this Act shall apply (a) to lands belonging to, or held on lease from, the Government; xxx xxx xxx xxx xxx xxx xxx xxx (d) to an estate or land taken under management by the State Government under Chapter IV or section 65 except as provided in the said Chapter IV or section 65, as the case may be, and in sections 66, 80A, 82, 83, 84, 85, 86 and 87: 87 Provided that from the date on which the land is released from management, all the foregoing provisions of this Act shall apply thereto; but subject to the modification that in the case of a tenancy, not being a permanent tenancy, which on that date subsists in the land. xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx" In Keshav Vithal Mahatre vs Arbid Ranchhod Parekh, [1973] Bom.
L.R. LXXXV 694, a learned Single Judge has held that a lease of land granted by a Manager under section 47 of the Bombay Tenancy and Agricultural Lands Act, 1948, comes to an end with the termination of the management of the land by virtue of section 61 of the Act.
If the tenant continues to remain on the land thereafter, he would be cultivating it unlawfully as a trespasser and he cannot, therefore, claim to be a deemed tenant under section 4 of the Act.
This is consistent with the decision in Ghambhir Lal 's case(supra) relied on by the Tribunal.
Thus, Sections 4 and 4B were not applicable during the period from expiry of the lease to the termination of management.
In the result, we find no merit in this appeal and it is dismissed, but without any order as to costs.
V.P.R Appeal dismissed.
| The suit land was taken under Government management as it was lying fallow for two consecutive years.
The Mamlatdar, appointed as a Manager thereof under Section 45, of the Bombay Tenancy and Agricultural Lands Act, 1948, after assuming management, leased out the said land to the appellant for a period of 10 years by an agreement of lease dated 7.12.1951.
The period of lease expired on 6.12.1961.
However, the management of the land was terminated by Government by the Assistant Collector 's order dated 27.7.63 and possession thereof was ordered to be restored to the respondent landlord.
The appellant filed a Civil Suit against the respondent contending that he was paying rent to the Mamlatdar during the period 7.12.1961 to 27.7.1963 and thus continued to be a tenant in respect of the land.
The Civil Judge made a reference to the Mamlatdar, who held that the appellant continued to be tenant.
The respondent 's appeal to the Assistant Collector having failed, a revision application was moved before the Revenue Tribunal wherein the question arose whether the appellant 's tenancy was subsisting on 27.7.1963, the date of termination of the management.
The Tribunal held that the appellant could not continue as tenant on the termination of the management, since the land was taken under the Government management under Section 88(1) of the Act.
82 The High Court in the Application under Article 227 of the Constitution of India having upheld this finding of the Tribunal, the appellant filed Special Leave petition to this Court.
The appellant contended that having continued payment of rent to the Mamlatdar even after expiry of the lease till the termination of management, he continued to be a tenant which the landlord could not avoid on resumption of the land, while the respondent submitted that the appellant could by no means continue to be a tenant after the expiry of lease, and that no fresh lease was granted to him after the management was terminated.
Dismissing the appeal, this Court, HELD: 1.
On the finding of the courts below that after the expiry of the lease, no fresh lease was granted by the Manager, the appellant 's claim to have continued as the tenant even after expiry of the lease on 6.12.1961 and till 27.7.1963, the date of termination, by paying rent for the period to the Mamlatdar would be of no avail, in the absence of fresh lease after expiry of the 10 years lease on 6.12.1961.
This would be so because the Act does not envisage the Government as a landholder but only as Manager.
While delivering back the land into the possession of the landholder, it could not be burdened with any tenancy created or resulting while under management.
Besides, there could be no privacy between the landlord and the erstwhile tenant under Government in the matter of tenancy.
Between the appellant and the respondent landlord, therefore, no question of the former continuing as tenant of the latter could arise after the land was reverted to the landholder.
[86B D] 2.
The appellant could not have been a deemed tenant either under Section 4 or 4B of the Act inasmuch as Section 88 of the Act grants exemption inter alia to lands held on lease from the Government.[86E]
|
ON: Criminal Appeal No. 170 of 1956.
Appeal by special leave from the judgment and order dated June 14, 1954, of the Calcutta High Court in Criminal Appeal No. 13 of 1954, arising out of the Judgment and order dated January 13, 1954, of the said High Court in Case No. 55 of 1953.
Purshottam Tricumdas, H. J. Umrigar and B. P. Maheshwari, for the appellants.
N. C. Chatterjee, R. L. Anand and D. N. Mukherjee, for respondent No. 1. A. C. Mitra, A. M. Pal and P. K. Bose, for respondent No. 2. 1960.
February 12.
The Judgment of section K. Das and Sarkar, JJ., was delivered by section K. Das, J. Hidayatullah, J., delivered a separate Judgment.
section K. DAS J.
This is an unfortunate case in more than one sense.
So far back as August 11, 1950, there was some incident in premises No. 18, Bondel Road in Calcutta in the course of which one Col. section C. Mitra, a Gynaecologist and Surgeon, lost his life.
Mitra was the husband of petitioner No. 1 and father of petitioner No. 2.
In connection with the Colonel 's death, Sunil Chandra Roy, at present respondent No. 1, and his two brothers were placed on their trial for offences under sections 302, 323 and 447 of the Indian Penal 3 Code.
Very shortly put, the case against them was that they had trepassed into 18, Bondel Road, following upon a quarrel regarding the supply of water to premises No. 17, Bondel Road which belonged to petitioner No. 2 and consisted of several flats one of which on the second floor was in occupation of Sunil as a tenant; that they had attacked Col. Mitra and petitioner No. 2; that Sunil had inflicted a blow or blows on the Colonel which caused his death and that one of his brothers Satyen had inflicted some minor injuries on the person of petitioner No. 2.
There was also a charge against Sunil for an assault alleged to have been committed on Mrs. Sati Mitra, Wife of petitioner No. 2.
The accused persons were, in the first instance, tried by the Additional Sessions Judge of Alipur with the result that Sunil was convicted under sections 325 and 447 and Satyen under sections 323 and 447, Indian Penal Code.
So far as the third brother Amalesh was concerned, his case was referred to the High Court as the learned Judge did not agree with the jury 's verdict of not guilty.
Sunil and Satyen appealed to the High Court against their convictions and sentences; the State of west Bengal obtained a Rule for enhancement of the sentences passed on Sunil and Satyen.
The appeal, the Rule and Reference were heard together.
The appeal was allowed, and the High Court of Calcutta directed that Sunil and Satyen be retried at the Criminal Sessions of the High Court.
The Reference in respect of Amalesh was rejected and the Rule for enhancement of the sentences passed necessarily fell through.
Sunil and Satyen were then tried at the Criminal Sessions of the High Court by Mitter, J., with the aid of a special jury.
The jury unanimously found Sunil guilty under sections 325 and 447, and Satyen under sections 323 and 447, Indian Penal Code.
The learned Judge accepted the verdict and sentenced both Sunil and Satyen to various terms of imprisonment and fines.
An appeal was then preferred by Sunil and Satyen.
This appeal was again allowed, and another retrial was directed at the Criminal Sessions of the High Court.
4 The retrial was held by P. B. Mukherjee, J. Before the commencement of the trial, the State withdrew the case against Satyen on the ground of the state of his health.
Therefore, Sunil alone was tried, and the charges against him at the third trial were two in number: one under section 325 Indian Penal Code for vountarily causing grievous hurt to Col. Mitra and the other under section 447 Indian Penal Code for criminal trespass into premises No. 18, Bondel Road with intent to intimidate, insult or annoy Col. Mitra or his son Nirmal, petitioner No. 2 herein.
This time the jury, by a majorit verdict of 7 to 2, found Sunil not guilty of the charge under section 325 Indian Penal Code ' and, by a majority of 6 to 3, found him not guilty of the other charge also.
The learned Judge accepted the verdicts and acquitted Sunil.
Then, the State of West Bengal preferred an appeal to the High Court against the order of acquittal, but the High Court summarily dismissed it on June 14, 1954, on the ground that no case had been made out for the admission of the appeal under the provisions of section 411A(2) of the Code of Criminal Procedure.
Then, on July 22, 1954, the petitioners herein made an application to the High Court for a certificate under Article 134(1) (c) of the Constitution that the case is a fit one for appeal to the Supreme Court, and the grounds alleged in support of the application substantially were (1) that in his charge to the jury, the learned Judge had failed to marshall and sift the evidence properly so as to give such assistance as the jury were entitled to receive ; (2) that the learned Judge had misdirected the jury on several points, both with regard to the evidence of the eye witnesses and the evidence of medical experts; (3) that the learned Judge did not properly explain the law relating to the charges; (4) that he admitted inadmissible evidence and shut out evidence which was admissible and this had vitiated the verdict of the jury; and (5) that the learned Judge had not dealt with the prosecution and defence versions in the same way and by the same standard and bad been guilty of various non directions which resulted in a manifestly erroneous verdict.
This application was dismissed by the 5 High Court on July 26, 1954, mainly on two grounds: (1) the petitioner had no locus stand to maintain an application for leave to appeal to the Supreme Court, and (2) no appeal lay under Article 134 of the Constitution from an order of acquittal.
The High Court then said: " In view of the opinion we have formed as regards the competence of the present application, it is not necessary for us to say anything on the merits, but for the sake of completeness we shall observe that the grounds which have been set out in the petition are all grounds which had been taken in the appeal preferred by the State and we did not think then and do not think now that those grounds would justify us in either admitting the appeal from the order of acquittal or giving leave to appeal from our order to the Supreme Court.
" The petitioners then applied for special leave from this Court under Article 136 of the Constitution and substantially pleaded the same grounds some of which were elaborated by examples given which they had pleaded when asking for a certificate from the High Court.
This Court granted special leave on February 20, 1956, and the present appeal has come to us in pursuance of the special leave granted by us.
In view of the special leave granted, the two questions dealt with by the High Court in its order dated July 26, 1954, no longer require any consideration.
The principal question for consideration now is whether the charge to the jury at the third trial is so defective that it has led to a manifestly erroneous verdict, resulting in a failure of justice.
Therefore we intimated to learned counsel for the parties that the arguments should be confined at this stage to that question, and if counsel for the petitioners satisfied us that the charge was so defective on the grounds alleged, then the further question as to whether the case should be remitted to the High Court or dealt with in this Court on the evidence already recorded, would arise.
We proceed now to consider the principal question before us.
But before we do so, it is necessary perhaps to give a few more details of the prosecution case and the defence.
6 Col.
Mitra was the owner of 18, Bondel Road, but he did not live in that house.
He had his chambers on the ground floor of 18, Bondel Road.
His son Nirmal lived at 18, Bondel Road with his wife.
Just by the side of 18, Bondel Road and west of it was No. 17, Bondel Road one of the flats of which was in occupation of Sunil as a tenant.
It was alleged that the relation between landlord and tenant was not good and there were proceedings between the two before the Rent Controller.
An order made in these proceedings reduced the rent payable by the tenants and fixed certain specific hours during which the pump for water supply was to be worked.
The prosecution case was that on August 10, 1950.
Mitra came to spend the night with Nirmal and was put up in the easternmost bed room on the first floor.
The building had three rooms on the first floor all facing south, and the westernmost room was used by Nirmal as his bed room.
The intermediate room was a drawing room and had a telephone in it.
According to the prosecution case, in the early morning on the 11th August, 1950, Nirmal was still in bed when he was roused by the noise of a row and recognising the voice of Sunil, he slightly opened the leaves of one of the windows to see what was happening.
He found that Sunil amongst others, was standing at the window, shouting abuse at Purna Mali (the gardener who was in charge of the pump) for not getting water which was followed up by further abuse of Nirmal.
After that Sunil disappeared from the window.
Nirmal 's wife had been up before Nirmal, and already served tea to Colonel Mitra and she came into the room when Nirmal was listening to the abuses.
She came to call him, that is, Nirmal, to join his father at tea, and went back to the Colonel.
Nirmal was greatly alarmed at what he had seen and heard, and passing into the drawing room sent a telephone message to the Karaya Police Station asking for help.
While Nirmal was still speaking on the telephone, his wife Mrs. Sati Mitra ran into the room and said that Sunil and his two brothers who were also tenants at 17, Bondel Road, had already entered the compound of 18, Bondel Road and his father, the Colonel, had gone down.
Nirmal 7 who was telephoning the police hurriedly added a request to the police to come soon.
Nirmal coming down found Purna Mali in the grasp of Amalesh, and Colonel Mitra was standing underneath the porch at 18 Bondel Road and remonstrating with Sunil and his brother.
Nirmal immediately ordered accused Sunil and his brothers to get out of the house whereupon Satyen and Amalesh, fell upon Nirmal.
This led the Colonel to remonstrate again whereupon the Colonel was attacked by Sunil who caught hold of the Colonel by the neck of his vest and began to drag him towards the Bondel Road, along the passage to the gate at 18, Bendel Road.
The building at l8, Bondel Road faces south, has a lawn to its south alongside which runs a passage to the gate, and near the western pillar of the gate there is a masonry letter box built in the compound wall.
To the south of the lawn there is a row of tube roses through which there is an opening leading into the lawn.
According to the prosecution case, as Sunil started dragging the Colonel towards the road and the gate, Nirmal ordered the Mali to close the gate.
Accused Sunil dragged the Colonel, according to the prosecution case, and while near the Durwan 's room Sunil dealt a fist blow on the left temple of the Colonel.
The prosecution case further was that Sunil proceeded to drag the Colonel past the western pillar of the gate and then through the opening among the plants in the lawn and there he struck a blow on the left forehead of the Colonel with a rod like object.
On receiving the blow, the Colonel dropped down and fell on his back on the lawn.
Thereupon Sunil stepped on to the letter box, scaled the wall and hurriedly made his escape.
Two neighbours, Jiban Krishna Das and Suku Sen, then came by scaling into the compound of No. 18, and with their help and with the help of the servants of the family, the Colonel 's body was removed to the verandah on the ground floor of 18, Bondel Road and placed on a " charpoi".
Nirmal was one of the persons who carried the body of his father, the Colonel.
Jiban had a car with him and was asked to.
rush for a doctor which he.
did and within a few minutes brought Dr.
Sachin Bose who examined the 8 Colonel and found him already dead.
On receipt of the telephone message from Nirmal, Pushpa Pal, Officer in charge, Karaya Police Station, deputed a, Head constable named Mathura Singh, to go to No. 18 but when the constable arrived, the incident was over.
The Officer in charge, Pushpa Pal, soon followed and after obtaining from Nirmal a brief oral statement as to his version of the incident, proceeded to No. 17, Bondel Road.
On the staircase of the house at No. 17, Bondel Road, Puspha Pal met one Sarat Banerji, said to be a priest of a neighbourhood called Shitalatala.
Pushpa Pal then went up and arrested the accused Sunil.
The postmortem examination of the Colonel 's body revealed that he had sustained a linear fracture of his left temporal bone, vertical in character, an abrasion laid obliquely across the middle of the left half of his forehead, a lacerated wound bone deep laid vertically across the middle of the eye brow, an abrasion on the left cheek and one small lacerated wound near the left ear.
There was some clotted blood on the top of the membrane over the fracture of the bone and some on the inner surface of the scalp.
In the opinion of Dr. Majumdar who carried out the postmortem examination as recorded in his report, the death of the Colonel was due to shock caused by the head injury, on top of senile changes, and the head injury, which was ante mortem must have been caused by a fall on some hard substance.
The postmortem report was not signed till the 2nd September, 1950, and not until the pathological report and the chemical report had been obtained.
The defence of Sunil was that he did not strike or assault the Colonel, either by a fist blow or a blow with a rod like substance.
The defence further was that the fist blow on the left temple of the Colonel was not specifically mentioned by any material witness until after the postmortem report showed a linear fracture of the left temporal bone and it was suggested by the defence that the fist blow was invented to make a case that such blow fractured the left temporal bone of the Colonel.
The main suggestion on behalf of the defence was that the Colonel 9 was an old man with heart trouble and his pathological condition was such that he was excited at the time of the incident and fell down on a rough surface, either on the passage or on the masonry letter box, and hurt himself.
The injury was such that it could s not be caused by one blow of a rod or rod like substance.
The defence against the charge of criminal trespass was that Sunil entered the compound of No. 18, Bondel Road at the invitation of Purna Mali, who asked Sunil to come and see if the pump was working, the pump being within the compound of No. 18, Bondel Road.
Sunil did not, however, assault the Colonel in any way.
It is in the context of the aforesaid two versions that we have to consider the charge to the jury and examine the criticisms made thereto.
We must make it clear that we are not called upon at this stage to give our findings on any of the disputed questions of fact.
That was the function of the jury, and the jury had given their verdict.
The limited question before us is whether that verdict is vitiated by reason of any serious misdirection by the Judge or of any misunderstanding on the part of the jury of the law laid down by him, which in fact has occasioned a failure of justice.
This Court said in Mushtak Hussein vs The State of Bombay (1) : "Unless therefore it is established in a case that there has been a serious misdirection by the Judge in charging the jury which has occasioned a failure of justice and has misled the jury in giving its verdict, the verdict of the jury cannot be set aside." In a subsequent decision, Ramkishan Mithanlal Sharma vs The State of Bombay (2) this Court observed that section 297, Criminal Procedure Code, imposed a duty on the Judge in charging the jury to sum up the evidence for the prosecution and defence and to lay down the law by which the jury were to be guided; but summing up for the prosecution and defence did not mean that the Judge should give merely a summary of the evidence; he must marshall the evidence so as to give proper assistance to the jury who are required to decide which view of the facts is true.
This Court (1) ; at 815.
(2) ; at 930.
10 referred with approval to the following observations made by the Privy Council in Arnold vs King Emperor " A charge to a jury must be read as a whole.
If there are salient propositions of law in it, these will, of course, be the subject of separate analysis.
But in a protracted narrative of facts the determination of which is ultimately left to the jury, it must needs be that the view of the Judge may not coincide with the view of others who look upon the whole proceedings in black type.
It would, however, not be in accordance with usual or good practice to treat such cases as cases of misdirection, if, upon the general view taken, the case has been fairly left within the jury 's province.
But in any case in the region of fact their Lordships of the Judicial Committee would not inter fere unless something gross amounting to a complete misdescription of the whole bearing of the evidence has occurred.
" Bearing the aforesaid principles in mind, we proceed now to consider the criticisms made on behalf of the petitioners against the learned Judge 's charge to the jury.
We had earlier classified the criticisms under five different heads, and we shall deal with them one by one.
We shall refer to the main points urged under each head, avoiding a detailed reference to the evidence on minor points which do not advance the case of the petitioners any further.
The first criticism is that the charge to the jury, read as a whole, is nothing but a summary of the evidence witness by witness and a summary of the arguments of counsel which the jury had already heard;.
that the learned Judge did not state the points for decision under separate heads, nor did he collate and marshall the evidence topic wise so as to assist the jury to come to their conclusion one way or the other, but left the jury with a mass of unnecessary details which was more likely to confuse than to help them.
Learned counsel for the petitioners has pointed out that in the appeal from the judgment of Mitter, J., in an earlier stage of this very case, (1) [1914] L.R. 41 I.A. 149.
11 Chakravarti, C. J., had said in Sunil Chandra Roy and Another vs The State (1): " But I feel bound to say that the function of a charge is to put the jury in a position to weigh and assess the evidence properly in order that they may come to a right decision on questions of fact which, under the law, is their responsibility.
The charge must therefore address itself primarily to pointing out what the questions of fact are, what the totality of the evidence on each of the questions is, how the different portions of that evidence, lying scattered in the depositions of several witnesses, fit with one another, what issues or subsidiary questions they raise for decision and what the effect will be according as one part or another of the evidence is believed or disbelieved.
" It was argued that what was condemned in an earlier stage of this case has happened again.
We are unable to accept this line of criticisms as substantially correct.
It is indeed, true that the learned Judge followed the method of placing the evidence witness wise rather than topic wise.
He started his summing up by stating: " I now propose to take up the prosecution witnesses individually with a view to sum up the evidence of each witness and the suggestions made to each by the counsel for the accused." But the real point for consideration is not whether the learned Judge followed one method rather than another: the real point is did he properly discharge his duty under section 297, Criminal Procedure Code by giving the jury the help and guidance to which they were entitled ? Did he marshall the evidence in such a way as to bring out the essential points for decision and the probabilities and improbabilities bearing on the disputed questions of fact on which the jury had to come to their conclusion ? The learned Judge gave a lengthy charge to the jury; and in summing up the evidence of each witness, he did state the disputed points arising therefrom and their bearing on the main questions at issue, viz. whether Sunil had trespassed into 18 Bondel Road and had assaulted the Colonel in the manner alleged by the prosecution.
(1) at 10001.
12 The length of the charge was due in part to a protracted narrative of facts and the many disputed questions of fact to which the attention of the jury had to be drawn.
The principle laid down by the Privy Council in Arnold 's case (3) and accepted by this Court as correct is that it would not be in accordance with good practice to treat a case as a case of misdirection if, upon the general view taken, the case has been fairly left within the jury 's province, and this Court will not interfere unless something gross amounting to a complete misdescription of the whole bearing of the evidence has occurred.
Learned counsel for the petitioners has taken us through the entire charge to the jury and while we may agree that some unnecessary details (e.g. how the spectacles of Mrs. Sati Mitra fell down) could have been avoided by the learned Judge, we are unable to say that the method followed by the learned Judge did not focus attention of the jury to the questions of fact which they had to decide or did not give help and guidance to the jury to arrive at their conclusion oes and as the accounts were kept on a mercantile basis, the amount of commission accrued as and when the sales took place and paragraph 5 of agreement was only a machinery for quantifying the amount.
It was also argued that the Managing Agents by entering into an agreement with the Mills had voluntarily relinquished a portion of the amount of commission which had accrued to them and therefore the whole of the income from commission which had already accrued was liable to 55 income tax; and reference was made to the cases reported as Commissioner of lncome tax, Madras vs K. R. M. T. T. Thiagaraja Chetty and Co. (1), E. D. Sassoon & Company Ltd. vs The Commissioner of Income tax, Bombay City (2) and to an English case Commissioners of Inland Revenue vs Gardner Mountain & D ' Ambrumnil Ltd. (3).
But these cases have no application to the facts of the present case.
In the Commissioner of Income tax, Madras vs K. R. M. T. T. Thiagaraja Chetty & Co. (1), the assesses firm was, under the terms of the Managing Agency Agreement, entitled to a certain percentage of profits and in the books of the Company a certain sum was shown as commission due to the assessee firm and that sum was also adopted as an item of business expenditure and credited to the Managing Agents ' commission account but subsequently it was carried to suspense account by a resolution of the Company passed at the request of the assessee firm in order that the debt due by the Firm might be written off.
The accounts were kept on mercantile basis and it was held that on that basis the commission accrued to the assessee when the commission was credited to the assessee 's account and subsequent dealing with it would not affect the liability of the assessee to income tax.
It was also held that the quantification of the commission could not affect the question as it was not a condition precedent to the accrual of the commission.
At page 267 Ghulam Hassan J., observed: " Lastly it was urged that the commission could not be said to have accrued, as the profit of the business could be computed only after the 31st March, and therefore the commission could not be subject to tax when it is no more than a mere right to receive.
This argument involves the fallacy that profits do not accrue unless and until they are actually computed.
The computation of the profits whenever it may take place cannot possibly be allowed to suspend their accrual.
In the case of income where there is a condition that the commission will not be payable until the expiry of a definite period or the making up of the account, it might be (1) ; at 267.
(2) ; , 344.
(3) , 96.
56 said with some justification, though we do not decide it, that the income has not accrued but there is no such condition in the present case ".
This passage does not help the appellant 's case.
The question there decided was that the accrual of the commission was not dependent upon the computation of the profits although the question whether it would make any difference where the commission was so payable or was payable after the expiry of a definite period for the making of the account was left undecided .
In the case before us the agreement is of a different nature and the above observations are not applicable to the facts of the present case.
The next case is E. D. Sasoon & Co., Ltd. vs The Commissioner of Income tax, Bombay City (1).
But it is difficult to see how it helps the case of the appellant.
If anything it goes against his contention.
In that case the assessee Company was the Managing Agent of several Companies and was entitled to receive remuneration calculated on each year 's profits.
Before the end of the year it assigned its rights to another person and received from him a proportionate share of the commission for the portion of the year during which it worked as Managing Agent.
On the construction of the Managing Agency Contract it was held that unless and until the Managing Agent had carried out one year 's completed service, which was a condition precedent to its being entitled to receive any remuneration or commission it was not entitled to receive any commission.
The facts in that case were different and the question for decision was whether the contract of service was such that the commission was only payable if the service was for a completed year or the assessee Company was entitled to receive even for a portion of the year for which it had acted as a Managing Agent.
It was held that it was the former.
As was observed by Lord Wright in Commissioners of Inland Revenue V. Gardner, Mountain & D Ambrumenil Ltd. (2), " It is on the provisions of the contract that it must be decided, as a question of construction and therefore of law, when the commission was earned The contract in, the present case in para (1) ; , 344.
(2) , 96.
57, graph 2 shows that (1) the company was to pay each year; (2) that the Managing Agents were to be paid 5 per cent.
commission on the proceeds of the total sales of yarn and of all cloth sold by the Company or three pies per pound ' avoirdupois on the sale, whichever the Managing Agents chose; thus there was an ' option to be exercised at the end of the year; (3) they were also to be paid at 10 per cent.
on the proceeds of sales of all, other materials; and (4) the Mills were to pay to the Managing Agents each year after December 31, or such other dale which the Directors of the Company may choon those questions.
We are far less satisfied that anything amounting to a complete misdescription of the whole bearing of the evidence has occurred in this case.
As to the observations which Chakravarti, C.J., had made, it is well to remember that they were made in respect of an earlier charge to the jury which, to use the words of the learned Chief Justice, was " all comment or mere comment in the main." Having carefully perused the present charge to the jury, we think, on a general view, that the case has been fairly left within the jury 's provinces in spite of the criticism so strenuously made that the charge to the jury contained a mass of details which need not have been placed before the jury.
In a protracted narrative full of details, it is perhaps easy to find fault with a charge to the jury on the ground of prolixity.
The question before us is not whether the charge to the jury is perfect in all respect: the question is has something gross occurred amounting to a complete misdescription of the whole bearing of the evidence ? We are unable to say that there has been any such gross misdirec tion by the learned Judge.
(1) (1954] L.R. 41 I.A. 149 13 The second criticism relates to certain misdirections alleged to have been committed by the learned Judge in placing the evidence of the eye witnesses as also of medical witnesses.
No useful purpose will be served by referring to each and every example given before us; we shall confine ourselves to some of the salient points and state the general impression we have formed.
In placing the evidence of each eyewitness, the learned Judge referred to the suggestions made by the defence.
The comment is that he placed the suggestions in such a way as to create the impression in the minds of the jury that they were true, even though they had been repudiated or explained by the witness.
We may give some examples.
Nirmal telephoned to his brother Dr. Lalit Mitra immediately after Col. Mitra was pronounced to be dead.
The suggestion to Nirmal was that he had not told his doctor brother then that his father had been beaten, but had said only that his father had "fainted ".
This suggestion was placed before the jury with reference to Nirmal 's deposition before the committing Magistrate.
Nirmal said before the committing Magistrate that he did not use the English word I fainted ' but had said in Bengali that 'father has become unconscious '.
The complaint of the petitioners is that Nirmal 's explanation has not been properly placed before the jury.
But the learned Judge says in his charge that the jury had seen the earlier deposition of Nirmal, and if that is so, the dis tinction between I fainting ' and 'becoming unconscious ' in explanation of the suggestion made to Nirmal does not assume any great importance.
It was next suggested to Nirmal that he had told the Police that his father had heart trouble.
This suggestion was put before the jury in the following way: " The case was put by the defence that the Colonel had heart trouble and that Nirmal was confronted with contradiction that he told the Magistrate and the police that his father had heart trouble.
Nirmal had denied it.
" Nirmal 's explanation was that he did not tell the Magistrate or the police that his father had heart 14 trouble he merely said that his father used to have occasional palpitation of heart when he ate too much or took irregular meals.
Pushpa Pal, the investigating police officer, understood this to mean heart trouble and he recorded " heart trouble " in Nirmal 's statement.
Pushpa Pal admitted that even if Nirmal had stated that Col. Mitra had palpitation of heart, he would have recorded it as heart trouble.
This part of the evidence of Pushpa Pal also the learned Judge placed before the jury.
It cannot, therefore, be said that the learned Judge misled the jury in any way or left the jury with the impression that Nirmal had admitted that his father had heart trouble.
Similar comments were made with regard to the placing of the evidence of other eye witnesses, but their general effect is the game.
They do not, in our view, establish that the jury were misled on any of the points in dispute.
We must, however, mention two more points, one in connection with a person called Sarat Banerji and the other with regard to Mrs. Nagendra Bala Ghose.
Sarat Banerji, it appears, was a priest who brought some holy water, and there was some evidence to show that such water was sprinkled on the Colonel soon after the incident.
Sarat Banerji was not examined in the case, and the question naturally arose whether he was present at the time of the incident and if so, when did he come to 18, Bondel Road ? A number of prosecution witnesses were crossexamined on this point, and the learned Judge repeatedly referred to this matter in summing up the evidence of those witnesses.
We do not agree with learned counsel for the petitioners that the learned Judge committed any misdirection in drawing the attention of the jury to this matter.
As to Mrs. Nagendra Bala Ghose, the criticism was that the learned Judge usurped the function of the jury.
About this witness the learned Judge said: " Now, gentlemen, in cross examination she was cross examined on her eyesight.
She did succeed in pointing out to an old man in Court.
That is in answer to Q. 30.
But further ahead she could not see properly.
She is far too old a woman on whom any reliance can be placed having regard to her state of 15 health and having regard to her state of vision and her power of memory.
Shew as called by the prosecution only to meet the defence suggestion that she was there at the time of the incident in Prof. Mahanti 's place and was being kept back.
It was submitted before us that Mrs. Ghose was no doubt old, but she was a respectable and reliable witness who was staying in a neighbouring house from the verandah of which the place of incident was visible; therefore, it was argued that the learned Judge was not justified in expressing himself so strongly against this witness, and in doing so, he improperly dissuaded the jury from forming their own opinion about her evidence.
Having examined her evidence, we are unable to hold that the comments of the learned Judge were unjustified or that he wrongly influenced the jury against the witness.
It must be stated here that the learned Judge had cautioned the jury that they were not bound by his opinion on a question of fact and were free to act on their own opinion.
This brings us to the medical evidence.
The two doctors of importance who were examined in the case were Dr. Majumdar, who made the postmortem examination, and Dr. Kabir Hussain, Professor of Forensic and State Medicine in the Calcutta Medical College.
Those two doctors expressed widely divergent views as to the probable cause of the injuries sustained by Col. Mitra and also of his death.
The learned Judge rightly placed before the jury those divergent views.
Dealing with the evidence of Dr. Majumdar, the learned Judge said: "Suggestions were made to Dr. Majumdar in cross.
examination that in case a fist blow was given on the left temporal region whether any external injury was to be expected.
He said that external injury was expected and there was no external injury mentioned in the postmortem report in this case.
Then Dr. Maumdar 's opinion is that such a man cannot be expected to talk.
It is also Dr. Majumdar 's opinion that the injury was due to a fall and he does not think that the injuries Nos. 1, 2 and 3 could be caused by a lathi blow or a blow by a rod.
According to his opinion, the fracture was also due to a fall.
16 It is contended that this must have misled the jury in thinking that there was no external injury on the site of the fracture on the left temporal region and therefore it could not have been caused by a fist blow.
Our attention was drawn to the evidence of Dr. Kabir Hussain, who opined that the haemorrhage on the inner surface of the scalp near the site of the fracture was an external injury.
The point to be noticed in this connection is that the learned Judge did not omit to place before the jury what Dr. Kabir Hussain had said regarding what he thought to be the presence of an external injury at the site of the fracture; he placed in extenso the questions put to Dr. Kabir Hussain and the answers given by him on this point.
Tile jury were, therefore, properly placed in possession of the views of both the doctors, and it was for them to decide which view should be accepted.
Both the doctors were asked questions as to whether the injuries sustained by Col. Mitra could be caused by a fall on a rough substance like a masonry box or by a blow of a hard weapon like a flexible rod .
On this point again the two doctors disagreed ; the learned Judge did place before the jury the different views expressed by the two doctors.
A grievance has been made before us that in summing up the evidence of Dr. Kabir Hussain the learned Judge failed to draw the attention of the jury to the answers given to ques tions 73, 74 and 75 by which the doctor categorically negatived the suggestion of the defence that a fracture of the temporal gone of the kind sustained by the Colonel could be caused by a fall on a hard substance.
It is true that the answers to questions 73, 74 and 75 we 're not specifically placed before the jury, but reading the charge relating to the medical evidence ' as a whole, we find that the learned Judge sufficiently indicated to the jury the disagreement between the two doctors on the main questions of fact and the reasons which each doctor gave for his opinion.
It was the province of the jury to accept one opinion or the other.
The learned Judge concluded his summing up of the medical evidence in these words: " Now, gentlemen, when a medical witness is called in as an expert he is not a witness of fact.
Medical 17 evidence of an expert is evidence of opinion, not of fact.
Where there are alleged eye witnesses of physical violence which is said to have caused the hurt, the value of medical evidence by prosecution is only corroborative.
It proves that the injuries could have been caused in the manner alleged and nothing more.
The use which the defence can make of the medical evidence, or any medical evidence which the defence might itself choose to bring, is to prove that the injuries could not possibly have been caused in the manner alleged and thereby discredit the eye witnesses.
Therefore, you must remember this particular point of view that if you believe the eye witnesses, then there is no question of having it supported by medical evidence; unless the medical evidence again in its turn goes so for that it completely rules out all possibility that such injuries could take place in the manner alleged by the prosecution and that is a point which you should bear in mind, because if you accept the evidence of the eye witnesses, no question of further considering the medical evidence arises at all.
The only question in that case when you consider the medical evidence is to test the eye witnesses ' version as to whether any of the particular injuries shown in the report can be caused in the manner alleged by the prosecution.
But if you don 't believe the eye witnesses, then consideration of the medical evidence in any manner becomes unnecessary.
" We do not think that any exception can be taken to the observations made above in the context of the two versions which the jury had to consider.
One version was that the Colonel had been assaulted and thereby sustained the injuries; the other version was that he had sustained the injuries by a fall on a rough surface like the masonry letter box.
None of the two doctors were giving direct evidence of how the injuries were caused; they were merely giving their opinion as to how in all probability they were caused.
The learned Judge was, therefore, right in directing the jury in the way he did about the medical evidence in the case.
We may also point out here that the learned Judge drew the attention of the jury also to the evidence of Dr. Suresh Sinha, who said that the 3 18 fracture on the temporal region could be the indirect effect of the other injuries sustained by the Colonel.
We now go on to third head of criticism viz., the ,learned Judge 's exposition of the law relating to the two charges on which Sunil was tried.
These charges the learned Judge correctly explained with reference to the relevant provisions of the Indian Penal Code.
But be made one error.
Dealing with the word ' voluntarily ' in section 325, he said: "The word ' voluntarily ' means what it says; it means 'of one 's free will '.
" Perhaps, the learned Judge forgot that the word is defined in section 39, Indian Penal Code, and that definition should have been placed before the jury.
We do not, however, think that this minor lapse misled the jury in any way or occasioned a failure of justice.
There is one more point in this connection.
The learned Judge did not tell the jury that it was open to them to return a verdict of guilty for an offence under section 323, Indian Penal Code, if they came to the conclusion that Sunil gave a blow to the Colonel with a flexible rod, but did not cause the fracture.
In the circumstances of the case, however, we do not think that the failure to direct the jury that it was open to them to return a verdict of guilty on a minor offence occasioned any failure of justice.
If the eyewitnesses for the prosecution were believed, it would be undoubtedly a case under section 325 Indian Penal Code; if on the contrary, the eye witnesses were not believed and the defence version was accepted that the Colonel sustained the injuries by a fall, then there would be no case even under section 323 Indian Penal Code.
A grievance was made before us under the fourth head of criticism that admissible evidence was shut out and inadmissible evidence was let in.
It was submitted that Nirmal 's statements to Pushpa Pal on his arrival at No. 18, Bondel Road or at least his statements to the Head Constable Mathura Singh, before the arrival of the investigating officer, were not hit by section 162 Criminal Procedure Code and were clearly admissible in evidence.
The learned Judge said in this connection: 19 " I would like to remind you that if any person makes any statement to the police, that is not admissible evidence as a rule unless in the case of contradictions which are formally proved, as you have seen the counsel for the accused has proved contradictions in some cases; but you must bear in mind that except such cases, this is no evidence." In the opinion which we have formed it is unnecessary to consider whether the learned Judge was right or wrong: because we are of the opinion that even if those statements of Nirmal were admissible, they would not be substantive evidence of the facts stated therein ; and if Nirmal 's evidence in Court was not accepted, his statements to the police officers concerned would hardly make any difference.
As to the admission of inadmissible evidence, learned counsel for the petitioners placed before us those parts of the charge to the jury which dealt with the cross examination of prosecution witnesses on their police statements.
Ho submitted that a large part of that cross examination was inadmissible in view of the decision of this Court in Tahsildar Singh vs The State of Uttar Pradesh (1).
That decision dealt exhaustively with section 162 Criminal Procedure Code and laid down certain propositions to explain the scope of that section; it was, however, observed that the examples given therein were not exhaustive and the Judge must decide in each case whether the recitals intended to be used for contradiction satisfied the requirements of the law.
We agree that on the principles laid down in Tahsildar Singh 's decision (1) some of the statements put to the prosecution witnesses were not really contradictions and did not, therefore, fall within what is permissible under section 162 Criminal Procedure Code.
We may take, by way of example, what was put to Nirmal.
The learned Judge placed the following contradictions in Nirmal 's evidence to the jury: "He was also cross examined on his statement to the police.
The main point made in his cross examination on his statement to the police, are firstly, that the fist blow on the left temple was not mentioned by him and then he only said assault with blows before (1) ; 20 the police and that he also said that the Colonel was hit near about the gate of the house and not beside the boundary wall.
It was also suggested to him in defence that the Colonel did not fall on the lawn at all but fell on the letter box.
The further suggestion to him was that the fist blow was a false invention and it was intended only after the postmortem report was out.
He was also told that he did not mention to the police that the Colonel was lying on his back.
He was also criticised for not having mentioned the names of persons who carried his father after he had fallen down.
Nirmal 's answer was that he was not asked and that it was physically impossible for him alone to carry his father.
Then there was crossexamination as to whether the fist blow was before or after Sati Mitra had clasped the Colonel.
" Now, on the principles laid down in Tahsildar Singh 's decision (1) Nirmal 's failure to mention before the police that his father was lying on his back was not a contradiction; but his failure to mention that a fist blow on the left temple was given to his father was a contradiction.
Therefore, the point before us really is this : assuming that some of the statements admitted in evidence were not really contradictions, do they materially affect the verdict ? In our opinion, they do not.
By and large, the important statements made before the police were admissible under section 162 Criminal Procedure Code; but some minor statements were not.
We do not think that the verdict of the jury can be said to have been vitiated on this ground.
Lastly, we come to the defence evidence.
Here the complaint is that the learned Judge has summed up the defence evidence by adopting a different standard.
We are unable to agree.
Even with regard to the prosecution witnesses, the learned Judge had emphasised points in favour of the prosecution.
For example, dealing with the evidence of Purna Mali, the learned Judge said: " Now, gentlemen, these questions are important because he does not improve the case or try to improve the case by suggesting that he saw a fist blow on the left temple and it is a matter for you to (1) A.T.R.
I959 S.C. 1012 21 consider in this connection whether this is a witness whom you would consider a liar because you will have to consider the suggestion that if he were then he would have probably tried to improve the case by suggesting to say that he did see a fist blow on the temple." Dealing with the evidence of Pushpa Pal, the learned Judge pointedly drew attention of the jury to a circumstance which was partly in favour of the prosecution and partly of the defence: " You also remember that Pushpa Pal held an inquest at about 9 a.m. on the 11th August, 1950.
He says that he examined the compound, the lawn, the boundary wall, the gate, the masonry letter box, the bricks on edge and the whole spot of 18, Bondel Road including the pathway, but he found no blood marks anywhere.
" We have examined the charge to the jury carefully; it may suffer from a plethora of details and also perhaps a meticulous statement of the divergent views of the two doctors; but we have found no trace of the adoption of a double standard, or of a serious misdirection on any question of fact or law.
We have, therefore, come to the conclusion that on the principles which this Court has adopted for interference with a jury verdict, no case for interference has been made out in this case.
The appeal is accordingly dismissed.
HIDAYATULLAH, J. I have had the advantage of reading the judgment just delivered by my learned brother, section K. Das, J. He ' is of the opinion that the charge to the jury by the learned trial Judge was proper.
Since I have the misfortune to differ from him in this conclusion, I am delivering a separate judgment.
In my opinion, the charge to the jury was defective for several reasons, particularly misdirec tions in law and absence of any guidance while setting forth at enormous length, without comment, the evidence in the case.
My learned brother has pointed out that this is an unfortunate case, and I agree with him that it is so, in view of the events that have happened.
The facts of the case were simplicity itself.
The offence alleged 22 to have been committed as far back as August 11, 1950, has been the subject of three trials.
It was first tried before the Additional Sessions Judge, Alipur who convicted the present respondent, Sunil, under sections 325 and 447 of the Indian Penal Code, agreeing with the verdict of the jury.
On appeal, the High Court of Calcutta set aside the conviction, and ordered a, retrial at the Criminal Sessions of the High Court.
The case was then tried.
by Mitter, J. with a special jury.
The jury brought in an unanimous verdict of guilty against Sunil under the two sections, with which the learned Judge agreed.
Sunil was sentenced to a long term of imprisonment, but the appellate side of the Calcutta High Court, on appeal, set aside the conviction and sentence, and ordered a retrial.
The third trial was conducted by P. B. Mukherjee J. Before the trial, the State Government withdrew the case against Sunil 's brother, Satyen, who was tried along With him in the previous trials, and was also convicted.
This withdrawal of the case was on the somewhat unusual ground that his health was bad.
Sunil himself, it appears, was defended at Government cost by one of the Government advocates.
The trial dragged through a weary course, in which prolonged cross examination of the witnesses took place, and alleged contradictions between their previous versions were put to them in detail.
After the arguments were over, the learned Judge charged the jury at considerable length.
I have estimated that the charge is a document of some 50,000 60,000 words.
How much of it was of any real guidance to the jury is a matter, to which I shall address myself in the sequel; but it appears at the outset that the length of the charge was somewhat extraordinary, regard being had to the plain facts, to which I now refer.
On August 11, 1950, Sunil and his brothers were occupying a flat in No. 17 Bondel Road, which belonged to Nirmal, son of the late section C. Mitra, a very well known Gynaecologist and Surgeon of Calcutta.
It appears that the water supply to the flat was irregular and intermittent, and Sunil bad, in common with the other tenants, a complaint against the land 23 lord, Nirmal.
Incidents had taken place previously, and Sunil had taken the matter to the rent control authorities, and, it is alleged, had even threatened the landlord with dire consequences, if the water supply was not improved.
Under an alleged agreement, the water supply was regulated by working the electric pump during certain hours of the day; but nothing turns upon it.
It appears that the water supply did not improve, and often enough, an 'exasperating situation arose in so far as the tenants of No. 17, Bondel Road, including the present respondent, Sunil, were concerned.
On the fateful morning, matters came to a head, because the water supply, as was frequent, failed in the flat.
Evidence has been led in the case to show that Sunil was angry and started abusing and expostulating in a loud manner.
He followed up his expostulations by entering the compound of No. 18, Bondel Road, whether to see to the working of the pump himself, as he contended, or to remonstrate more effectively with the landlord, as is the prosecution case.
However it be, Nirmal 's father, Col. Mitra, happened to be present that morning, and he came out to talk the matter over with Sunil, who apparently was quite loud in his remonstrances.
Whether the Colonel gave any offence to Sunil by rebuking him is not much to the present purpose, because I am not determining the true facts in this order.
The case for the prosecution is that Sunil grappled with the Colonel, and gave him a blow upon the head with what is described as a `rod like ' object, and also hit him on the temple with his fist.
The Colonel, it is alleged, fell down, while Sunil clambered the parapet wall, and made good his escape, because the Colonel had previously ordered that the gates be shut.
Meanwhile, the Colonel was taken and laid on a cot, where he expired.
A phone call having been made to the police, the Investigating Officer arrived on the scene, and after taking some statements including one from Sunil, he went and arrested him and also his two brothers.
Post mortem examination revealed a linear fracture of the temporal bone with a haematoma under the surface.
On the forehead of the Colonel 24 was a mark of the injury alleged to have been given with the ' rod like ' object, though over the seat of ' the fracture no outward visible injury was seen.
The doctor who performed the autopsy also found certain pathological defects in the liver and the, gall bladder, and he asked the Chemical Examiner to examine the viscera for possible poisoning.
He gave the opinion that death was "due to shock consequent to head Injury, i.e., injuries on the top of senile changes and pathological liver and gall bladder as well as to inhibition." With regard to the head injury which was certified to be ante mortem, the doctor was of opinion that it was likely to have been caused by a fall on some hard substance.
The charge against Sunil, in the first instance, was under section 302, but the case proceeded in the sub sequent trials only under section 325 read with a further charge under section 447 of the Indian Penal Code for house trespass, with intention to intimidate, insult or annoy the owner.
The above facts clearly show that the essence of the case lay in a very narrow compass.
The questions which the jury had to determine were whether Sunil trespassed into the premises of No. 18, Bondel Road with the intention of insulting, intimidating or annoying the owner and further, whether Sunil struck one or more blows either with a I rod like ' object or his fist on the head of Col. Mitra, thereby causing him injuries, simple or grievous.
Alternatively, the jury had to determine whether Col. Mitra suffered these injuries not at the hands of Sunil but by a fall, which was the defence.
No doubt, the case involved a very lengthy cross examination of the witnesses for the prosecution, who alleged that they had witnessed the entire occurrence.
The issues to be decided were simple; One would have expected that the learned Judge in charging the jury would have, at least, pointed out to the jury what were the points for determination after weighing the evidence, pro and con, in the case; but the learned Judge did not, in spite of the voluminous charge, put these simple points before the jury.
The attention of the jury was never directed to these simple matters, but, on the 25 other hand, it was directed to almost everything else.
No doubt, a verdict of the jury is entitled to the greatest weight, not only before the Court of trial but in all appeals including that before this Court.
The law does not allow an appeal against the verdict, except only if the Judge in his charge to the jury is guilty of a wrong direction in law or of a substantial misdirection.
Since the verdict of the jury depends upon the charge, the charge becomes a most vital document in judging whether the verdict be sustained or not.
It is the charge which one has to examine, to find out whether the verdict is defective or not.
Such an important stage in the trial requires that the Judge should be careful to lead the jury to a correct appre ciation of the evidence, so that the essential issues in the case may be correctly determined by them, after understanding the true import of the evidence on the rival sides.
A charge which fails to perform this basic purpose cannot be regarded as a proper charge, and if it contains also misdirections as to law, it cannot be upheld.
The learned Judge in his charge to the jury began by telling the jury in a sentence, or two each, what were the essential things they had to remember, before making up their minds as to the verdict.
He told the jury that they were the judges of fact, and that it was their function to determine all issues of fact, without accepting any view which he might feel disposed to express upon the credibility or otherwise of the ' witnesses.
These observations in black and white do read quite well; but, in view of the fact that the Judge expressed ' almost no opinion as to the credibility or otherwise of the witnesses, it lost in practical application all its point.
Then, the Judge stated that every accused was presumed to be innocent, until the contrary was proved, and further, that the jury should convict only if the facts were compatible with his guilt.
So far as this direction went, nothing can be said against it.
The Judge next pro ceeded to explain what was meant by the expression fact proved ".
He paraphrased the definition of proved " from the Evidence Act.
In dealing with 4 26 this topic, he omitted to explain also the expressions " disproved " and " not proved " ; but that too cannot be said to be a serious defect.
He then expatiated on reasonable doubt, the benefit of which, according to him, must go to the accused.
In dealing with this subject, he observed as follows: " The law further says, if you have any reasonable doubt, then the fact is not proved and the verdict you bring would be a verdict of not guilty.
If you have no reasonable doubt, then the verdict you are to give is the verdict of guilty.
A further question that you should bear in mind is that you may be in a state where you cannot decide.
That is a case of benefit of doubt and if you reach such a stage, then the law says that you will give the benefit of doubt to the accused.
That means that if you have a kind of doubt which makes you unable to decide, then the accused is not guilty.
Again, if you have no such doubt, then the accused is guilty.
These are the main principles of criminal trial which I think, you should bear in mind while you are approaching the evidence in this case.
" This statement of the law is partly true but not wholly true.
The learned Judge, with due respect, did not make it clear to the jury that the prosecution case is built up of numerous facts, though the fact to be determined is the guilt of the accused, and that a reasonable doubt may arise not only in connection with the whole of the case but also in relation to any one or more of the numerous facts, which the prosecution seeks to establish.
Every individual fact on which doubt may be entertained may be held against the prosecution; but it ' does not mean that if the jury entertained a doubt about any individual fact, the benefit of that doubt must result in their bringing in a verdict I of not guilty '.
This, however, seems to be the effect of this direction which incidentally is almost the only direction on the point of law which the learned Judge, apart from what I have stated earlier, has chosen to give.
In my opinion, the learned Judge should have told the jury that they could give the benefit of the doubt on proof of any individual fact, if they felt any doubt 27 about the proof.
But be should have cautioned them that the totality of facts must be viewed in relation to the offence charged, and the benefit resulting in acquittal could be given only if they felt that when all was seen and considered, there was doubt as to., whether the accused had committed the crime or not.
The direction on the point of law contained in the above passage was too attenuated, and, in my opinion misleading, and led to the inference, possibly, that if the jury felt a doubt about even one circumstance, they must bring in a verdict of not 'guilty '.
Having laid down the law to the extent indicated above, the learned Judge next explained the ingredients of section 325 of the Indian Penal Code.
He explained this with reference only to grievous hurt, drawing the attention of the jury to ' fracture of bone ' or injury endangering life ' in the definition.
He, failed to say that grievous hurt was only an aggravated form of hurt, and that the liability of the accused did not cease, if he committed an act which resulted in a simple hurt.
Indeed, the learned Judge did not tell the jury that even if they held that the accused did not cause a grievous injury, it would be open to them to hold that he caused a simple injury, which would bring the matter within section 323 of the Indian Penal Code.
I may further point out that after the verdict of I not guilty ' under section 325, the learned Judge did not question the jury whether they thought that the accused was guilty of causing at least simple hurt.
The jury gave no reasons; they only answered the query whether they thought that the accused was guilty of the offence of causing grievous hurt.
But they were not questioned whether they thought, on the facts of the case, that the accused had committed the lesser offence of causing simple hurt.
It must be remembered that the prosecution case was that two blows were given, one causing the injury to the temple resulting in a fracture of the temporal bone and the other, causing an injury on the forehead of of Col. Mitra.
One of them was grievous; the other was not.
Of course, the jury were perfectly entitled, to hold that the accused caused neither of these injuries; but it is possible that the jury, if questioned, 28 would have answered that they thought that the accused had caused the simple injury but not the one resulting in the fracture of the temporal bone.
The failure to question the jury with regard to the lesser ,offence completely ruled out that aspect of the case from the minds of the jury, with the result that the jury were limited to a case of grievous hurt and not lesser offence.
These defects in the charge to the jury on matters of law are heightened by the manner in which the facts have been laid before them.
The charge to the jury, as I have stated, ran the course of 50,00060,000 words.
The matter I have so far discussed is contained in 1,000 1,500 words.
Thereafter, the learned Judge did nothing more than paraphrase the evidence of each single witness in detail, or read out extracts from it.
Throughout the course of this reading and paraphrasing, he made no attempt to connect the evidence with the fact to be tried.
All that he ever said and he said it with monotonous iteration was that it was for the jury to decide whether they believed the witnesses or not.
No doubt, a Judge in charging the jury is neither compelled nor required to express his opinion on the evidence, except on a matter of law.
But Judges marshll facts and evidence to draw the attention of the jury to what is relevant and what is not.
They do hot try to place everything that a witness states, before the jury.
It must be remembered that a charge is a vital document, and the Judge 's summing up is only needed, because the minds of the jury must be directed to the salient points in the evidence, so that they may avoid the irrelevant or immaterial parts thereof.
The learned Judge before dealing with the evidence, prefaced his remarks by saying this : " I now propose to take up the prosecution witnesses individually with a view to sum up the evidence of each witness and the suggestions made to each by the counsel for the accused.
" This represents a very fair and adequate summary of what the Judge really did, except that he did not sum up the evidence but placed it in its entirety.
As I have stated, he took each witness, turn, by turn 29 paraphrased his evidence sentence by sentence, and read out those portions which he did not paraphrase, without trying to draw the attention of the jury to the relevancy or materiality of the various parts, The document is composed of a series of narrations with regard to the testimony of the witnesses ' each portion beginning with the words, " Then there is the evidence of witness so and so. " and ending with ,,This is the evidence of witness so and so. " In between is a voluminous account of everything that each witness stated.
Not only this; no difference was made between the testimony of the eye witnesses and of the formal witnesses in the matter of treatment.
I quote verbatim from the charge what the learned Judge said with regard to one of the police witnesses.
" Then comes the evidence of Head Constable Mathura Singh.
He reached No. 18, Bondel Road in a lorry and he was accompanied by a constable.
You remember he was first sent by Pushpa Pal.
This Head Constable Mathura Singh posted another constable at the gate so as not to allow a crowd to gather.
He also saw Col. Mitter lying unconscious like a dead person covered with a blanket.
He also had talk with Nirmal.
I would like to remind you that if any person makes any statement to the police, that is not admissible evidence as a rule unless in the case of contradictions which are formally proved as you have seen the Counsel for the accused has proved contradictions in some cases but you must bear in mind that except such cases, this is no evidence.
Then this Constable Mathura Singh went to No. 17 with the other constable and posted that other constable at No. 17 to control the crowd so as to prevent any one coming out of No. 17 And then while he was coming back to No. 18 to find out if he could telephone the officer in charge, the constable found the officer in charge at the gate of No. 18.
After Pushpa Pal, the Officer in charge came out of No. 18, Bondel Road, he went to No. 17 and brought down the accused.
That is the evidence of Constable Mathura Singh also.
This Constable took charge of the accused and left for the thana with the accus 30 ed at about 9 O 'clock in the morning on the 11th August, 1950.
Mathura Singh was cross examined and be said in cross examination that he did not note down the names of the persons forming the crowd at No. 18.
He did not go and find any article at No. 17.
His evidence is that he was there to guard No. 17 so that no one escaped from there.
" It needs no argument to apprehend that all this was not only a waste of the Court 's time but was also likely to obliterate the impression which the jury had gathered with regard to the other material evidence in the case.
This is only one passage quoted from the evidence of one witness.
Not only were several such witnesses brought to the notice of the jury; but even in the evidence of those that were relevant and material, there was no attempt made to extricate the relevant from the irrelevant, the material from the immaterial, the ore from the dross.
The learned Judge, as he had indicated, followed the pattern of putting all the evidence before the jury without any attempt to focus their attention on the salient parts of it, and without expressing his opinion either for or against the accused.
There were only two passages in the entire charge, in which the learned Judge expressed his opinion.
One was with regard to an old lady who was an eyewitness and who viewed the incident from the upper storey of a neighbouring house.
That lady was the one person about whom it could be said that she was entirely disinterested and whose respectability was above reproach.
She was old and had weak eyesight.
She had stated that she saw the quarrel going on, then she asked for her spectacles and saw properly.
Whether she saw correctly or not was the question.
The learned Judge told the jury that the lady was too old and unreliable to be a proper witness, without warning them this time that his opinion was not binding on them.
The other comment is with regard to the medical evidence, where the learned Judge in one part promised the jury that he would give them adequate guidance how to weigh the conflicting medical testimony, which, it appears, he forgot to do at the end, and in another portion, he gave this direction: 31 "Now, gentlemen, when a medical witness is called as an expert he is not a witness of fact.
Medical evidence of In expert is evidence of opinion, not of fact.
Where there are alleged eye witness of physical violence which is said to have caused the, hurt, the value of medical evidence by prosecution is only corroborative.
It proves that the injuries could have been caused in the manner alleged and nothing more.
The use which the defence can make of the medical evidence, or any medical evidence which the defence might itself choose to bring, is to prove that the injuries could not possibly have been caused in the manner alleged and thereby discredit the eyewitnesses.
Therefore, you must remember this particular point of view that if you believe the eye witnesses, then there is no question of having it supported by medical evidence; unless the medical evidence again in its turn goes so far that it completely rules out all possibility that such injuries could take place in the manner alleged by the prosecution and that is a point which you should bear in mind, because if you accept the evidence of the eye witnesses, no question of further considering the medical evidence arises at all.
The only question in that case when you consider the medical evidence is to test the eye witnesses ' version as to whether any of the particular injuries shown in the report can be caused in the manner alleged by the prosecution.
But if you don 't believe the eye witnesses then consideration of the medical evidence in any manner becomes unnecessary.
I think this will be gentlemen, a convenient time for you to halt, otherwise it might be too tiring for you.
(Foreman of the jury expressed the desire to continue the Charge).
" I do not think that the direction is either correct or complete.
is incorrect, because a medical witness who performs a postmortem examination is a witness of fact,though he also gives an opinion on certain aspects of the case.
Further, the value of a medical witness is not merely a check upon the testimony of eyewitnesses; it is also independent testimony, because it may establish certain facts, quite apart from the other oral evidence.
If a person is shot, at close 32 range, the marks of tatooing found by the medical witness would show that the range was small, quite apart from any other opinion of his.
Similarly, fractures of bones, depth and size of the wounds would show the nature of the weapon used.
It is wrong to say that it is only opinion evidence; it is often direct evidence of the facts found upon the victim 's person.
However that be, these two passages were the only directions given by the learned Judge to the jury ; the rest of the charge was only a paraphrase of the medical evidence running the course of 15,000 words.
There is also a complete disregard of section 162 of the Code of Criminal Procedure both during the trial and also during the charge.
Omissions were treated as contradictions and placed before the jury.
The following two passages extracted from the charge illustrate the defect at both stages : Q. 151.
Did you tell the police that you did not see when the old man was assaulted and who assaulted him ? A.
I stated to the police that I had seen the old man being dealt a fist blow, but I had not seen him being struck with a rod.
Q. 152.
Did you tell the police that you did not see when the old man was assaulted and who assaulted him ? A.No.
I did not make that statement.
I Gentlemen, that is a contradiction and it will be for you to judge how far that goes to destroy the credit of this witness.
Another contradiction was put to him that he did not mention that Sati Mitra was pulled by hair, but he says it here.
You will find from his answer to Question 158 that even before the police he made the statement that Sati Mitra was pushed away.
The language used was pushed away '.
Then in answers to Questions 161 to 164 further contradictions with this police statement were made out in cross examination.
The first is that it was not mentioned by him before the police that there was any fist blow on the Colonel; secondly, that it was not mentioned to the police by him that Sati Mitra intervened in the matter by clasping the Colonel, and also on the point whether 33 the Colonel was dragged by his shirt.
I will read out the relevant questions and answers: Q. Do you find further that you have stated in the next paragraph after that 'I also saw another tall person stated to be the second brother was dragging the old man holding his wearing shirt '? A.
I saw that person dragging the Colonel by holding his genji and when a fist blow was given to the Colonel, Sati Mitter came and clasped him from a side.
Q. 161.
Do you find here that all that is written is that you saw the Colonel being dragged and nothing is mentioned about the fist blow and Mrs. Sati Mitter clasping her father in law and being pulled away by the hair ? A.
I do not know how the police had recorded my statement.
But I am telling you that (what) I saw.
I saw that when a fist blow was given to the Colonel Sati Mitter came and clasped the Colonel from a side and she was thrown down by being caught by her hair.
Q.164.
Forget about the genji and the shirt You find here that nothing is mentioned about your evidence that you saw the Colonel being given a fist blow by the accused on the left temple and then Sati Mitter coming and clasping the Colonel round his waist, you find that is not mentioned ? A.
On my being repeatedly asked about the lathi blow I denied to the police that I had seen any lathi blow being given to him, but I said that I had seen a fist blow being given. " The second passage is even more significant.
This is how it runs: " She makes it clear that she saw the incident at different stages having been to the kitchen in the meantime and come back.
She saw the Colonel after her return from the kitchen.
She does not remember the dress of the assailant.
She also says that the gate of No. 18 was closed.
Her evidence has been criticised also for contradiction between her evidence here and her statement to the police first.
It is said that she said before the police that she heard the hulla herself; here she says that it was the children 's cries 5 34 which attracted her attention.
Secondly, she said to the police that she came first to the drawing room ; here she says that she came first to the verandah.
Thirdly, she also said to the police that she saw the person wearing Choti or pants and blue shirs Fourthly, before the police she said that she saw the three persons leaving Nirmal and started arguing.
Here she says that she did not see them arguing.
Fifthly, it is said she told the police she saw the Colonel once go near the pillar of the gate on the western side but she does not say so here.
Then again, it is said that she told the police that she saw the assailant bring out a black looking object from somewhere in his waist and she subsequently saw the old man fallen down.
She said here that she did not see the old man falling down.
Gentlemen, you will again weigh these contradictions and see whether they are such as to discredit the witness or are such for which you can make allowance.
In fact, she said in cross examination that I something ' was brought out by the assailant from his right side.
I think, gentlemen of the jury, you also asked her some questions.
Q. During the examination it appears that you have told us that you saw Colonel Mitter being drawn towards 17, Bondel Road ? A.
He was being dragged in the direction of the Mansion House.
Q. 111.
That is, towards the west of the path ? A. Yes. Q. 112.
How far was he from the boundary walls abutting the Bondel Road ? A.
I would not be able to tell you that because I was seeing this from above, from a height.
Then the last question to her was this: Q. 113.
You have just given us more or less what you saw.
Could you also tell us exactly on what part of the lawn, was it at the central portion of the lawn or was it on the side of the lawn that you saw that one person who was with the Colonel was bringing out something from his side ? At what position were the Colonel and that gentleman standing ? 35 A.
It is difficult for me to describe the position.
But I can say that he was neither in the exact centre of the lawn nor was he absolutely on an extreme side of the lawn.
He was somewhere about 4 or 5 cubits way from the gate of the boundary wall.
" In the previous trials, the Calcutta High Court rejected the verdict of the jury, because in the opinion of Chakravarti, C.J. (Sarkar, J. concurring), it was all comment and no evidence.
It may be said that this time it was all evidence and no comment or arrangement.
The Calcutta High Court has laid down in a series of cases what the charge to the jury should be, and I shall refer only to the Calcutta cases.
There is no settled rule or practice as to what a charge should or should not contain.
That is dictated by the circumstances of each case.
Sir James Fitz James Stephen in his History of Criminal Law of England, Vol.
455 456 (quoted in Trial by Jury and Misdirection by Mukherji, 1937 Edn., at p. 237) says: "The summing up again is a highly characteristic part of the proceedings, but it is one on which I feel it difficult to write.
I think however that a Judge who merely states to the Jury certain propositions of law and then reads over his notes does not discharge his duty.
This course was commoner in former times than it is now.
I also think that a Judge who forms a decided opinion before he has heard the whole case or who allows himself to be in any degree actuated by an advocate 's feelings in regulating the proceedings, altogether fails to discharge his duty, but I further think that he ought not to conceal his opinion from the Jury, nor do I see how it is possible for him to do so, if he arranges the evidence in the order in which it strikes his mind.
The mere effort to see what is essential to a story, in what order the important events happened, and in what relation they stand to each other must, of necessity, point to a conclusion.
The act of stating for the Jury the questions which they have to answer and of stating the evidence bearing on those questions and in showing in what respect it is important, generally goes a considerable way 36 towards, suggesting an answer to them, and if a Judge does not do as much at least as this, he does almost nothing.
" As pointed out by Mukerji (ibid p. 253): " Where the charge to the Jury was little more than a rambling statement of the evidence as it came from the mouths of the several witnesses who were called and no attempt was made to sift the relevant and important matters from the irrelevant and unimportant facts, held that the charge was defective and the trial was vitiated on that account.
(Jabed Sikdar) (1).
It is not sufficient for the Judge simply to point out this peace of evidence and that, this presumption and that, this bit of law and that.
It is his duty to help and guide the Jury to a proper conclusion.
It is his duty to direct the attention of the Jury to the essential facts.
It is his duty to point out to them the weight to be attached to the evidence and to impress upon them that if there is any doubt in their minds they must give the benefit of the doubt to the accused.
It is not enough that the Judge has said something on each of these matters somewhere in the charge.
It is the manner of saying it, the arrangement and the structure of his charge which will make it either of value or valueless to the Jury.
(Molla Khan) (2).
It is not enough to read out the evidence in extenso it is incumbent on the Judge to analyse it and place it succinctly before the Jury (Rajab Ali) (3).
" The charge in this case goes manifestly against these directions.
It is no more than 'a recital of the entire evidence in the case ' almost as detailed as the evidence itself, and there is no attempt whatever to give any guidance to the Jury.
No doubt, the Privy Council in Arnold vs King Emperor(4) stated that: " A charge to a Jury must be read as a whole.
If there are salient propositions of law in it, these will, of course be the subject of separate analysis.
But in a protracted narrative of fact, the determination of which is ultimately left to the jury, it must (1) (2) A.I.R. 1934 Cal. 169 (S.B.) (3) A.I.R. 1927 Cal.
(4) (1914) L.R. 4I I.A. 149.
37 needs be that the view of the Judge may not coincide with the view of others who look upon the whole proceedings in black type.
It would however, not be in accordance with usual or good practice to treat such cases as cases of misdirection, if, upon the general view taken, the case has been fairly left within the Jury 's province.
" These observations apply only if the matter has been fairly left to the jury.
When this charge is read through its vast length, the most astute person is left guessing as, to where it was all driving the jury to.
It is a protracted narrative no doubt, but it is so amorphous as to give no indication of its real purport and import, and leaves the matter not in the hands of the jury, but, if I may so say with great respect, in the air.
I think that this was a case for the exercise of the powers of this Court under article 136.
As was laid down in Ramkrishan Mithanlal Sharma vs The State of Bombay(1), the Judge in summing up for the prosecution and defence should not give merely a summary of the evidence; he must marshall the evidence so as to give proper assistance to the jury, who are required to decide which view of the facts is true.
I am, therefore, of opinion that the charge to the jury cannot be said to be a proper charge on any principle or precedent, and that the verdict cannot be accepted.
Though this case has taken already almost ten years, there is prima facie reason to think that justice has failed.
Since the matter is now before the highest Court, there is no likelihood of any further delay in the case, and what is just therein can be done.
I would, therefore, proceed to hear the case on merits.
By Court: In accordance with the opinion of the majority, this appeal is dismissed.
Appeal dismissed.
(1) ; , 930.
| The appellant, a resident and ordinarily resident in India, carried on trade in Colombo in grains and foodstuffs for cattle.
For the relevant assessment years the Income tax Officer rejected the accounts produced by the appellant on the grounds inter alia that there was absence of vouchers and that the stock account and the manufacturing account had not been kept or produced; and he then made an estimate of the profits.
The Appellate Tribunal also agreed with the Income tax Officer and held that the correct profits could not be deduced from the books produced by the assessee and that therefore the proviso to section 13 of the (1)(1959) II L.L.J. 38. 886 Indian income tax Act, 1922 applied.
Having taken into consideration all the relevant factors it computted the profits at 15 on grains imported from India and 12 1/2 % on grains purchased in Ceylon, and, in support of its computation, it pointed out that in certain cases which had come to its notice the rates of profits went Up to 20%.
The appellant challenged the validity of the assessment on the ground that the principle of natural justice had been violated in that the Tribunal had taken into consideration the rate of profit in other cases without giving an opportunity to the appellant to explain those cases, and relied upon Dhakeshwari Cotton Mills Ltd.v.
The Commissioner of lncome tax, WestBengal.
[1I955] i S.C.R. 941 He also urged that the non production of stock account was not such a defect as to entitle the Taxing Authorities to reject the books and apply the proviso to section 13 of the Act.
Held:(1) that the percentage of profits made by traders in other cases was not the basis made by the Tribunal for arriving at any conclusion as to the percentage at which income should be computed in the present case, but was merely an ancillary support to that conclusion and that Dhakeshwari Cotton Mills Ltd. vs The Commissioner of Income tax, West Bengal, was not applicable to the case.
(2)that the keeping of a stock register is of great importance because that is a means of verifying the assessee 's accounts by having aquantitative tally; that if, after taking into account all the materials including the want of a stock register, it is found that from the method of accounting correct profits of the business are not deducible, the operation of the proviso to section 13 of the Act would be attracted.
Ghansyam Das Permanand vs Commissioner of Income tax C.P. & Beray , Bombay Cycle Stores Company Ltd. vs Commissioner of Income tax.
and Commissioner of Income tax vs McMillan and Co. [1958] S.C.R. 689, relied on.
|
Civil Appeal Nos. 152, 153, 155,156, 158, 160 and 162 of 1972.
From the Judgment and Order dated 20.11.
1970 of the Andhra Pradesh High Court in W.A. No. 616 of 1969.
103 of 1970, 472 397 of 1970,474 of 1970,473 of 1970,99of 1970 and W.P. No. 4947 of 1968.
G. Venkatesh Rao and A.V. Rangam for the Appellants.
C. Sitaramiah, B. Parthasarthi, A.D.N. Rao and A. Subba Rao the Respondents.
The Judgment of the Court was delivered by K.N. SAIKIA, J.
These seven appeals by certificate under Article 133(1)(a) of the Constitution of India are from the common Judgment of the Andhra Pradesh High Court dated 20.11.1970 in several appeals and writ petitions.
The appel lants are the tenants and respondents are the landholders or their legal representatives, as the case may be, in respect of the tenanted agricultural lands of the hitherto inam estates of Kukunuru and Veerabhadrapuram villages in the West Godavari District of Andhra Pradesh.
After coming into force of the Andhra Pradesh (Andhra Area) Estates (Abolition and Conversion into Ryotwari) Act, 1948 (A.P. Act 25 of 1948), hereinafter referred to as `the Estates Abolition Act ', the inam estates were abolished and the land stood vested in the Government free of all encumbrances.
The pre existing right, title and interest of erstwhile landholders ceased except to claim ryotwari patta.
The tenants were not liable to be evicted pending the proceedings for issuance of ryotwari patta.
The respondents landholders, hereinafter referred to as `the landholders ', claimed that the lands in question were either under their personal cultivation or they intended to resume those for private cultivation and as such those were their private lands and they were entitled to ryotwari pattas.
The appellants tenants on the contrary claimed that those were not private lands of the landholders as those were neither under their personal cultivation nor they intended to resume those for personal cultivation, but those were in possession of the tenants who were entitled to ryotwari pattas after the abolition of the estates.
The Settlement Officer of Anakappalla, after making inquiry under section 25 of the Estates Abolition Act held in all the cases in these appeals, except one (out of which W.P. No. 695/1968 arose) that the landholders failed to establish that they were personally cultivating the lands or they intended to resume the lands for personal cultivation and as such rejected their claims, except in the aforesaid case.
The landholders ' appeals therefrom to the Estates Abolition Tribunal were 398 allowed relying on.
and applying the tests formulated in Periannan vs Amman Kovil, AIR 1952 Mad. 323 (FB) and holding that in all cases the landholders were entitled to the grant of ryotwari pattas as the lands were private lands within the meaning of section 3(10)(b)(i) of the Andhra Pradesh.
(Andhra Area) Estates Land Act, 1908 (A.P. Act I of 1908), hereinaf ter referred to as `the Estates Land Act ', and that the tenants were not entitled to ryotwari pattas in respect of the same.
The appellants tenants moved writ petitions before the High Court of Andhra Pradesh impugning the deci sion of the Estates Abolition Tribunal.
O. Chinnappa Reddy, J. as he then was, sitting singly, after discussing the case law on the question, by a common Judgment in nine writ petitions, observing that it was common ground before the Subordinate Tribunal as well as before him that the nature of the lands at the inception, whether ryoti or private, was not known and that the burden of establishing that the lands were private lands was on the landholders; and that it was also common ground before him that apart from the fact that there were occasional changes of tenants, and that the lands were sometimes leased under short term leases, there were no other circumstances indicating that the landholders intended to resume cultivation of the lands, held that after the pronouncement of this Court in Chidambaraam Chettiar vs Santhanaramaswamy Odayar; , , the decision of the Full Bench of the Madras High Court in Periannan vs Amman Kovil, (supra) could no longer be considered good law and that the decision in Jagdeesarn Pillai vs Kupparnreal, ILR and in Perish Priest of Karayar vs Thiaga raja Swami Devasthanam, App.
176 178 and 493 of 1946 once more held the field.
It was also observed that since in all the cases before him the only mode of proof attempted by the land holders was the grant of short term leases and change of tenants and rent, it must be held that the lands were not established to be private lands and that no `at tempt was made to prove personal cultivation or any inten tion to resume personal cultivation.
As the Estates Aboli tion Tribunal applied the tests laid down by the Madras Full Bench in Periannan 's case (supra) and since Periannan 's case was no longer good law, the writ petitions had to be allowed and the impugned orders of the Tribunal quashed in eight writ petitions.
In Writ Petition No. 695 of 1968 the orders of the Assistant Settlement Officer was quashed.
The landholders preferred writ appeals therefrom.
Two Writ Petitions, namely, Writ Petition No. 4947 of 1968 and Writ Petition No. 310 of 1968 were also taken up for hearing analogously.
The Division Bench observing that the main question for consideration in the appeals was whether the decision of the Full Bench in Periannan 's 399 case was good law and it turned on the effect of some impor tant precedents and a review of the principles enunciated by them, and after discussing the case law took the view that in the first place the e observations of this Court in Chidambaram 's case were in accord with the rule in Perian nan 's case and secondly, even if some of the dicta in the Judgment of this Court in Chidambaram suggested a contrary principle, the effect of the entire observations did not support the contention that Periannan 's case had been im pliedly overruled by this Court.
The writ appeals were accordingly allowed except Writ Appeal No. 616 of 1969 which was dismissed.
Writ Petition No. 4947 of was allowed and Writ Petition No. 310 of 1968 was dismissed taking the same view.
Hence these appeals by certificate.
Mr. A.V. Rangam, the learned counsel for the appellants, submits that the learned Single Judge having found as fact that the landholders had failed to establish that the lands were their private lands as those were neither under their personal cultivation nor they were intended to be resumed for personal cultivation and applying the rule in Chidamba ram 's case the learned Single Judge having held that the lands were not private lands, the Division Bench erred in holding to the contrary; and that the learned Single Judge correctly held that Periannan 's case was no longer good law as in Chidambaram Chettiar vs Santhanaramaswamy Odayar, (supra), it was held that the definition of private land in section 3(10) of the Estates Land Act of 1908 read as a whole indicated clearly that the ordinary test for private land was the test of retention by the landholder for his own personal use and cultivation by him or under his personal supervision, though they might be let on short leases, it was not the intention or the scheme of the Act to treat as private those lands with reference to which the only pecul iarity was the fact that the landholder owned both the varams in the land and had been letting them out on short leases, the Division Bench erred in holding that Periannan 's test were still applicable.
Mr. C. Sitaramiah, the learned counsel for the respondents.
submits that the correct tests for determining what was private land had been laid down in Periannan 's case, which were not different from those of Chidambaram 's case and the Division Bench correctly applied those tests to find that the lands were private lands of the landholders; and that in Chidambaram 's case the appellant had not adduced sufficient evidence to rebut the presumption under section 185 of the Estates Land Act that the lands con cerned in the inam village were not ryoti lands as defined in section 3(16) as the Tanjore Palace Estate was held to be an `estate ' within the meaning of section 3(2)(d) of the Estates Land Act and the widows of the Raja enjoyed both the varams, but were not personally cultivating 400 them.
In the instant case, according to counsel, the rights of the landholders were not the same as those of the widows of the Raja of Tanjore after the relinquishment of the landed properties by the Government which amounted to a re grant.
The Division Bench pointed out several misconceptions in some precedents for which they could not be said to have laid down the correct law.
Counsel further submits that in Chidambaram 's case, the grant of Orathur Padugai village was of the whole village and a named one and, therefore, it was an Estate within the meaning of section 3(2)(d) of Estates Land Act and the courts having concurrently found that the lands in dispute were ryoti lands and not private lands, the landholders claiming that the lands were private lands had to show that they converted the ryoti lands into private lands which they could prove only by showing their personal cultivation and they failed to prove it, and that case was therefore distinguishable on facts and could not be held to have overruled Periannan 's tests.
The question to be decided in these appeals, therefore, is whether in view of this Court 's decision in Chidamba rarn 's case the decision in Periannan 's case is still good law, and whether on application of the correct legal tests the lands in dispute are private lands of the landholders entitling them to ryotwari pattas in respect thereof or those are ryoti lands in possession of the appellants as tenants of the landholders and, as such, they are entitled to ryotwari pattas thereof.
In other words, whether the appellants or the respondents are entitled to ryotwari pattas under the Abolition of Estates Act.
To appreciate the rival submissions, reference to the relevant provisions of the Estates Land Act and the Estates Abolition Act is necessary, and to understand the relevant provisions of the two Acts a little knowledge of development of the land system and legislation in the area will be helpful.
The Estates Land Act amended and declared the law relat ing to the holding on land in estated in the Andhra Area of the State of Andhra Pradesh which includes the West Godavari District to which the two inam villages concerned in this appeal belong.
It appears the scheme of the Estates Land Act divides cultivable lands in the two categories, namely, (1) private lands and (2) ryoti lands.
The Act relates to the holding of land in estates.
As defined in section 3(2) `estate ' means: "(a) any permanently settled estate or temporarily settled zamindari; 401 (b) any portion of such permanently settled estate or tempo rarily settled zamindari which is separately registered in the office of the Collector; (c) any unsettled palaiyam or jagir; (d) (i) any inam village, or (ii) any hamlet or khandriga in an inam village, of which the grant as an inam has been made, confirmed or recognized by the Government, notwithstanding that subse quent to the grant, such village, hamlet or khandriga has been partitioned among the grantees, or the successors intitle of the grantee or grantees.
[Explanation: (1) Where a grant as an inam is expressed to be of a named village, [hamlet of khandriga in an inam village] the area which forms the subject matter of the grant shall be deemed to be an estate notwithstanding that: it did not include certain lands in the village [hamlet or khandriga] of that name which have already been granted on service or other tenure or been reserved for communal pur poses].
[Explanation: (1 A) An inam village, hamlet or kandriga in an inam village granted in inam, shall be deemed to be an estate, even though it was confirmed or recognized on dif ferent dates, or by different title deeds or in favour of different persons.
Explanation: (1 B) [If any hamlet or khandriga granted as inam] was at any time designated as an inam village of as a part thereof in the revenue accounts, it shall for purposes of item (ii) or sub clause (d) be treated as being a hamlet or khandriga of an inam village, notwithstanding that subse quently it [has come to be designated] in the Revenue ac counts as a ryotwari or zamindari village or part thereof].
Explanation (2) Where an inam village is resumed by the State Government, it shall cease to be an estate; but, if any village so resumed is subsequently regranted by the Government as an inam, it shall from the date of such re grant, be regarded as an estate.
402 Explanation (3): Where a portion of an inam village is resumed by the Government such portion shall cease to be part of the estate, but the rest of the village shall be deemed to be an inam village for the purposes of this sub clause.
If the portion so resumed or any part thereof is subsequently regranted by the Government as an inam, such portion or part shall from the date of such re grant.
be regarded as forming part of the inam village for the purpose of this sub clause; (e) any portion consisting of one or more villages of any of the estates specified above in clauses (a), (b) and (c) which is held on a permanent under tenure .
" It appears that the original definition had undergone several amendments.
Clause (d) and Explanation (I A) were substituted by section 2(i) of Act XXXV of 1956.
The Explanation (1) was inserted by section 2(1) of Act 1I of 1945.
Explanation (1) and (1 B) were amended by section 2(ii) of Act XXXV of 1956 and Explanation (2) and (3) are the renumbered old Explana tions (1) and (2) inserted by section 2(1) of Act H of 1945.
The respondents claim to have been `landholders '.
As defined in section 3(5): `Landholder ' means a person owning an estate or part there of and includes every person entitled to collect the rents of the whole or any portion of the estate by virtue of any transfer from the owner or his predecessor in title or of any order of a competent Court or of any provision of law.
Where there is a dispute between two or more persons as to which of them is the landholder for all or any of the purposes of this Act or between two or more joint landholders as to which of them is entitled to proceed and be dealt with as such landholder, the person who shall be deemed to be the landholder for such purposes shall be the person whom the Collector subject to any decree or order of a competent Civil Court may recognize or nominate as such landholder in accordance with rules to be flamed by the State Government in this behalf.
" Both "Private land" and "ryoti land" have been defined in the Act.
As 403 defined in section 3(10) private land means: "(a) in the case of an estate within the meaning of sub clauses (a), (b), (c) or (e) of clause (2) means the domain or home farm land of the landholder by whatever designation known such as, kambattam, khas, sir, or pannai, and includes all land which is proved to have been cultivated as private land by the landholder himself, by his own servants or by hired labour, with his own or hired stock, for a continuous period of twelve years immediately before the commencement of this Act; and (b) in the case of an estate within the meaning of subclause (d) of clause (2), means (i) the domain or home farm land of the landholders, by whatever designation known, such as kambattam, khas, sir or pannai; or (ii) land which is proved to have been cultivated as private land by the landholder himself, by his own servants or by hired stock, for a continuous period of twelve years immedi ately before the first day of July 1908, provided that the landholder has retained the kudivaram ever since and has not converted the land into ryoti land; or (iii) land which is proved to have been cultivated by the landholder himself, by his own servants or by hired labour, with his own or hired stock, for a continuous period of twelve years immediately before the first day of November, 1933, provided that the landholder has retained the kudiva ram ever since and has not converted the land into ryoti land; or (iv) land the entire kudivaram in which was acquired by the landholder before the first day of November, 1933 for valu able consideration from a person owning the kudivaram but not the melvaram, provided that the landholder has retained the kudivaram ever since and has not converted the land into ryoti land, and provided further that, where the kudivaram was acquired at a sale for arrears of rent, the land shall not be deemed to be private land unless it is proved to have been cultivated by the landholder him 404 self, by his own servants or by hired labour, with his own or hired stock.
for a continuous period of twelve years since the acquisition of the land and before the commence ment of the Andhra Pradesh (Andhra Area) Estates land (Third Amendment) Act, 1936.
" As defined in section 3(16): `Ryoti land ' means cultivable land in an estate other than private land but does not include (a) beds and bunds of tanks and of supply, drainage surplus of irrigation channels; (b) threshing floor, catfie stands, village sites, and other lands situated in any estate which are set apart for the common use of the villagers; (c) land granted on service tenure either free of rent or on favourable rent if granted before the passing of this Act or free of rent if granted after that date, so long as the service tenure subsists.
Village is defined in section 3(19): `Village ' means any local area situated in or constituting an estate which is designated as a village in the revenue accounts and for which the revenue accounts are separately maintained by one or more karnams or which is now recognized by the State Government or may hereafter be by the State Government for the purposes of this Act to be a village, and includes any hamlet or hamlets which may be attached there to." The Estates Abolition Act provided for `the repeal of the permanent settlement, the acquisition of the landholders in permanent estate and in certain other estates in the State of Andhra Pradesh and the introduction of the ryotwari settlement in such estates.
It extended to the whole of the State of Andhra Pradesh and applied to all estates as de fined in section 3 clause (2) of the Estates Land Act.
This Act, in section 2(3) defined `estate ' to mean a zamindari or an under tenure or an inam estate.
As defined in section 2(7) `inam estate ' means an estate within the meaning of section 3, clause (2)(d) of the Estates Land Act.
405 The statement of objects and reasons of the Estates Abolition Act speaks of acute discontent among estate ryots and good deal of agitation under zamindari administration which was considered to have outlived its usefulness and needed abolition.
It also mentioned about the election manifesto issued by the Working Committee of the Congress Party in December 1945 urging reform of the land system and that such reform involved the removal of all intermediaries between the peasant and the State and that the rights of such intermediaries should be abolished on payment of equi table compensation.
In February 1947 the Madras Legislative Council passed a resolution accepting the general principle of the abolition of the zamindari system and recommending to the Government that legislation for the purpose be undertak en and brought forward at an early date.
The Government accordingly proposed to abolish the zamindari system by acquiring all estates governed by the Estates Land Act including whole inam villages and converting them into ryotwari paying equitable compensation to the several per sons having an interest in the estates.
The Estates Abolition Act has also undergone a number of amendments.
The Amendment Act 1 of 1950 inserted section 54(a)& section 54(b) dealing with compensation.
The Amendment Act XVII of 1951 clarified certain positions in regard to Inam vil lages.
Section 17(1) of the Estates Abolition Act provided for the grant of ryotwari patta to a person holding any land granted on service tenure failing under section 3(16)(c) of the Estates Land Act irrespective of whether such land consisted of only a portion of a village or of one or more villages.
The reference to one or more villages in the section had given rise to the misapprehension that it applied also to an entire village granted on service tenure.
But the intention was that the provisions of the section should not apply to such a village and clause 3 of the Act gave effect to it and clause 4 was consequential of clause 3.
The provisions of the Estates Abolition Act were brought into force in certain inam villages on the assumption that they were under tenure estates.
But it had been subsequently found that the assump tion was not correct.
It was therefore necessary to withdraw the operation of the Act from those villages and the Amend ment Act provided for such withdrawal.
The Amendment Act XXI of 1956 dealt with annual payments to any religious educa tional or charitable institutions.
The Amendment Act XVII of 1957 made provisions for the abolition and conversion in the ryotwari tenure of certain categories of inams under the Estates Abolition Act.
Under section 3(2)(d) of the Estates Land Act, as originally enacted,.whole inam villages in respect of which the original grant conferred only the melvaram right on a person not owning the kudivaram thereof alone 406 became `estates '.
By virtue of Third Amendment of the Es tates Land Act whole inam villages m which both melvaram and kudivaram rights vested in the inamdars also became estates.
The provisions of the Madras Estates Land (Reduction of Rent) Act, 1947 (Madras Act XXX of 1947) were applicable to both these categories of whole inam villages.
But the provi sions of the Estates Abolition Act were not applicable to the whole inam villages which became estates under the Madras Estates, Land (Third Amendment) Act, 1936, i.e. those in which the inamdars possessed both the melvaram and kudi varam rights.
Under section 2 of the Estates Land Amendment Act, 1946, section 3(2)(d) of the Estates Land Act was further amended so as to include within the definition of `estate ' hamlets and khandrigas of inam villages which were previously held to be not estates.
Provision was also made so as to bring within its purview only such of the inam hamlets and inam khandrigas of inam villages wherein the melvaram rights alone vest in the inamdars.
Thus, the only categories of inam estates which now remained outside the purview of the Estates Abolition Act were: (a) the whole inam village which became estate by virtue of the Madras Act XVIII of 1936 and (b) inam hamlets and khandrigas of inam villages which became estates by virtue of the Estates Land (Andhra Amend ment) Act, 1956 but in respect of which both melvaram and kudivaram rights vested in the inamdars.
The Amendment Act XX of 1960 dealt with all post 1936 inam villages which were also brought within the purview of the Estates Abolition Act by the Amendment Act XVIII of 1957.
The Andhra Pradesh (Andhra Area) Inams (Abolition and Conversion into Ryotwari) Act, 1956 (Act XXXVII of 1956) provided for conversion of all inam lands other than estates into ryotwari tenure.
The Act extended to the whole of the Andhra State, but applied only to lands described in clause (c) of section 2.
Section 2(c) defined "inam land" to mean any land in respect of which the grant in inam has been made, confirmed or recognised by the Government, (Act 3 of 1964 inserted thereafter the words) "land includes any land in the merged territory of Banagana palle in respect of which the grant in inam has been made, confirmed or recognised by any former Ruler of the territo ry", but does not include an inam constituting an estate under the Estates Land Act.
Section 2(d) defines an "Inam Village" to mean a village designated as such in the revenue accounts of the Government, (and includes a village so designated immediately before it was notified and taken over by the Government under the Estates Abolition Act.
Thus to find out whether a `village was designated as inam village or not, prima facie the revenue accounts of the Government which 407 were there at the time of the Inam Abolition Act came into force had to be looked into.
If it was so shown no further proof was necessary.
Only when the entries in the revenue accounts were ambiguous, and it was not possible to come to a definite conclusion, it might be necessary to consider other relevant evidence which was admissible under the evidence Act.
Section 2 A of this Act said: "Notwithstanding anything contained in this Act all communal lands and poramookes, grazing lands, waste lands.
forest lands, mines and quer ries, tanks, tank beds and irrigation works, streams and rivers, fisheries and ferries in the inam lands shall stand transferred to the Government and vest in them free of all encumbrances.
" Section 3 of the Act prescribed the procedure for deter mination of inam lands and provided for giving opportunity to interested persons.
As we have already noted the High Court found that the basis of the decision of the Tribunal in all the cases was that .sometimes the leases were for short terms with occa sional change of tenants and rents payable by them and that the nature of the lands, whether ryoti or private, was not known and that it was the burden of the landholder to prove that the lands were private lands and that there was no other circumstances to show that the landholders intended to resume cultivation of the same.
It was conceded before the Single Bench by the learned Advocate for the petitioners that if the tests formulated by the Full Bench in Perian nan 's case applied to the facts of these cases the land must be held to be private land and the landholders must be considered to have established their claim to grant of ryotwari pattas.
The Division Bench did not change this position in view of the provisions of Section 185 of the Estates Land Act as amended from time to time.
The original section said: "185.
When in any suit or proceeding it becomes necessary to determine whether any land is landholder 's private land, regard shall be had to local custom and to the question whether the land was before the first day of July 1898, specifically let as private land and to any other evidence that may be produced, but the land shall be presumed not to be private land untill the contrary is shown: Provided that all land which is proved to have been cultivated as private land by the landholder himself, by his own servants 408 or by hired labour with his own or hired stock for twelve years immediately before the commencement of this Act shall be deemed to be the landholder 's private land.
" Section 185 was amended in 1934, 1936 and 1955 whereafter it as follows: "185.
When in any suit or proceeding it becomes necessary to determine whether any land is the landholder 's private land, regard shall be had (1) to local custom, (2) in the case of an estate within the meaning of subclause (a) (b), (c) or (c) of clause (2) of section 3 to the ques tion whether the land was before the first day of July 1898, specifically let as private land and (3) to any other evidence that may be produced: Provided that the land shall be presumed not to be private land until the contrary is proved: Provided .further that in the case of an estate within the meaning of sub clause (d) of clause (2) of sec tion 3 (i) any expression in a lease, patta or the like, executed or issued on or after the first day of July 1918, to the effect or implying that a tenant has no right of occupancy or that his right of occupancy is limited or restricted in any manner, shall not be admissible in evidence for the purpose of proving that the land concerned was private land at the commencement of the tenancy; and (ii) any such expression in a lease, patta or the like, executed or issued before the first day of July 1918, shall not by itself be sufficient for the purpose of proving that the land concerned was private land at the commencement of the tenancy.
" When the Estates Abolition Act was passed, the legisla ture envisaged the difficulties that could arise in respect of the estates in which the landholder would be entitled to ryotwari patta.
Section 13 409 provided as to in respect of what lands in inam estates the landholder would be entitled to ryotwari patta and said: 13.
Lands in inam estate in which landholder is entitled to ryotwari patta: In the case of an inam estate, the landholder shall, with effect on and from the notified date, be entitled to ryotwari patta in respect of (a) all lands (including lanka lands) which immediately before the notified date, (i) belonged to him as private land within the meaning of Section 3, clause (10)(b) of the Estates I.and Act, or (ii) stood recorded as private land in a record prepared under the provisions of Chapter XI or Chapter XII of the said Act, not having been subsequently converted into ryoti land; and (b)(i) all lands which were properly included, or which ought to have been properly included, in the holding of a ryot and which have been acquired by the landholder, by inheritance or succession under a will provided that the landholder has cultivated such lands himself, by his own servants or by hired labour with his own or hired stock, in the ordinary course of husbandry, from the date of such acquisition or the 1st day of July, 1945 whichever is later and has been in direct and continuous possession of such lands from such later date; (ii) all lands which were properly included, or which ought to have been properly included in the holding of the ryot and which have been acquired by the landholder by purchase, exchange or gift, including purchase at a sale or arrears of rent; Provided that the landholder has cultivated such lands himself, by his own servants or by hired labour, with his own or hired stock, in the ordinary course of husbandry from the 1st day of July, 1945 and has been in direct and continuous possession of such lands from that date; (iii) all lands [not being (i) lanka lands], (ii) lands of the description specified in Section 3, clause (16), sub clauses (a), (b) and (c) of the Estates Land Act, or (iii) forest lands which have been abandoned or relinquished by a ryot, or 410 which have never been in the occupation of a ryot, provided that the landholder has cultivated such lands himself, or by his own servants or hired labour, with his own or hired stock, in the ordinary course of husbandry, from the 1st day of July, 1945 and has been in direct and continuous posses sion of such lands from that date.
Explanation: `Cultivate ' in this clause includes the plant ing and rearing of topes, gardens and orchards, but does not include the rearing of topes of spontaneous growth.
" Section 15 dealt with the determination of lands in which the landholder would be entitled to ryotwari patta under the foregoing provisions of the Act and said: "(1) The Settlement Officer shall examine the nature and history of all lands in respect of which the landholder claims a ryotwari patta under Sections 12, 13 or 14, as the case may be, and decide in respect of which lands the claim should be allowed.
XX XX XX XX XX XX XX XX XX XX An interpretation of the words "Private land" and "ryoti land" has to be made in consonance with the legislative purpose, provisions and scheme of the enactment.
Interpre tare et concordare leges legibus, est optimus interpretandi modus.
To interpret and in such a way as to harmonize laws with laws is the best mode of interpretation.
We may now examine the question whether the tests formu lated in Periannan 's case (supra) can still be applied in face of the decision in Chidambaram 's case (supra).
In other words whether Periannan 's decision is still a good law.
In Periannan the Full Bench of Madras High Court dealt with a batch of second appeals and a batch of civil revision peti tions.
The suits out which the second appeals arose.
related to the village of Manamelpatti, a Dharmasanam village in the Ramnad District and those were instituted by the trustees of Airabhadeswarar Soundaranayagi Amman Temple for ejectment of the defendants from the lands in their respective possession and for recovery of rent for faslis 1349 and 1350 and for future profits.
The village comprised 80 pangus out of which the plaint temple in this batch owned 231/2 pangus purchased from the original owners and one pangu taken on othi from the owner.
The plaintiffs in the batch of suits out of which the civil 411 revision petitions arose were the managers of the Devastha nam of Nagara Vairavapatti Valaroleeswaraswami Nagara Vaira vaswami Devasthanam.
That temple owned 54 and 5/8th pangus or shares in the village and the suits were instituted for recovery of the balance of amounts due as `irubhogam ' for faslis 1349 and 1350.
In both the batches of suits the plaintiffs claimed that they were the owners of meIvaram and kudivaram interests in the lands which were being enjoyed as "pannai" lands or private lands; that they were leasing the lands from time to time changing tenants and collecting "swamibhogam" in recognition of their full proprietary rights in the lands.
They claimed that the tenants had no occupancy rights in the lands; and in the second appeals batch a relief for ejectment of the tenants was also claimed.
The defence of defendants tenants in both the batches was common.
They claimed that the temples owned only the melvaram interest and that they, the tenants, were the owners of the kudivaram which they had been enjoying heredi tarily paying half varam in respect of the nanjas and a fixed money rent for the punja or dry lands according to the "tharam" (classification) of lands.
They denied that they ever paid "swami bhogam" to the temple.
In all the suits there was the common plea that the village was an "estate" under Section 3(2)(d) of the Madras Estates Land Act, as amended by the Madras Estates Land (Amendment) Act, 1936 (Act XVIII of 1936); that they had therefore acquired occu pancy rights under the Act; and that the lands were ryoti and that, therefore, the civil court had no jurisdiction to try those suits.
The plaintiffs also raised an alternative contention that on the footing that the village was an "estate" the suit lands were private lands or "pannai" lands of the temples and, therefore, the defendants acquired no occupancy rights in the lands under the statute and that the civil court alone had the jurisdiction to entertain and try the suits.
The High Court found that the main questions that had to be considered by the courts below were whether the village was or was not an estate under the Madras Estates Land Act and, if so, whether the lands were private lands as claimed by the plaintiffs or ryoti lands as claimed by the tenants.
The further question that even apart from the Estates Land Act whether the defendants had acquired occupancy rights by prescription was also raised and considered.
The jurisdic tion of the civil court to entertain the suits depended upon the decision of the question whether the village was or was not an estate.
On the main questions the concurrent findings of the Courts below were that the village was an "estate" under Section 3(2)(d) of the Madras Estates Land Act as amended in 1936, that the plaint temple owned the melvaram and kudivaram interests in the lands; that the lands were 412 private lands as defined by the Madras Estates Land Act; that the defendants had acquired no occupancy rights in the lands either under the Act or by prescription and that the suits were properly laid in the civil court which had un doubted jurisdiction to try the suits.
The Subordinate Judge, in appeals, agreed with the finding of the trial court but refused the plaintiff 's relief for ejectment on the ground that the tenancy was not lawfully terminated.
The lands in both the sets of cases were situated in the same village of Manamelpatti.
Before the High Court the findings of the courts below that the temple owned the melvaram and kudivaram interests in the lands and the defendants had not acquired permanent rights of occupancy in the lands apart from the Act had not been disputed by the defendants.
The dispute, therefore, was confined to two questions, namely, first, whether the vil lage was an "estate" under the Madras Estates Land Act and, secondly, whether the concurrent finding of the courts below that the lands were private lands of the temple was correct or not.
While deciding the second question and dismissing the second appeals and the civil revision petitions, the learned Judges discussed the relevant case law and therefrom Satyanarayana Rao, J with whom Vaswanath Sastri, J con curred, at paragraph 49 page 346 of the report held that the following propositions were established: "1.
If the land is known to be ryoti at its inception the only mode by which it could be converted into private land is by proof of continuous cultivation for a period of 12 years prior to the commencement of the Act.
Even if the nature of the land is not known, continuous cultivation for the required period of 12 years before the commencement of the Act would conclusively establish that the land is private land.
If there is no proof of cultivation for a continuous period of 12 years before the commencement of the Act, the land may be proved to be private land by other methods; provided the land was not shown to be once ryoti.
Cultivation of the lands or leasing of the lands under short term leases may be one mode of proof.
An intention to cultivate or resume for cultivation is also a test to decide that the land is private land and such 413 intention may be established by any other means, not neces sarily by cultivation and by cultivation alone.
The essence of private land is continuous course of conduct on the part of the land holder asserting and acting on the footing that he is the absolute owner thereof and recognition and acceptance by the tenants that the landhold er has absolute right in the land.
Mere proof that the land holder is the owner of both the warams is not sufficient to prove that the land is private land.
" Considered in light of the definition of "private land", sections 13 and 15 of the Estates Abolition Act and the basic concept of "domain or home farm land", we are of the view that the proposition 4, 5 and 6 above have to be doubt ed.
Viswanatha Sastri, J. who concurred summarised his conclusions as under: "I may now summarise my conclusion on the legal aspects of the case.
Where land proved or admitted to be once ryoti land is claimed to have been converted into private land, the claim is untenable unless the land holder proves direct cultivation for a period of 12 years before 1st July 1908.
No other mode of conversion is permissible.
Where you have to find out whether a land is private or ryoti its original character not being known, proof of direct cultivation of the land by the land holder for 12 years before 1st July 1908, would, without other evidence, conclusively establish its character as private land, but this is not the only mode of proof permitted to land holder.
Other evidence may be adduced and looked into and might consist, among other matters, of direct cultivation of the land at some period anterior to 12 years preceding 1st July 1908 but this is not indispensable.
Direct cultivation may be valuable and weighty evidence and may be inferred from accounts and other records usually kept by large land holders.
If, owing to lapse of time or other reasons, evi dence of direct cultivation is not forthcoming its absence is not fatal to the claim that the land is private.
section 185 of the Act 414 does not shut out, but on the other hand allows all evidence that would be relevant and admissible under the law of evidence, to prove that fact in issue, namely, whether the land is private or ryoti.
Local usage or custom and the letting of the land as private land in leases before 1898 are specifically mentioned in Ss. 185(1) and (2) as being relevant evidence but other evidence is also expressly made admissible under section 185(3).
The classification of lands as private lands at the time of the permanent settlement or in the early records of zamindaries, the terms of the grant of an undertenure, the assertion and enjoyment by the land holder of the right to both the warams, the intention to retain with himself the kudiwaram right and the consequent right to resume direct cultivation if he chooses, leases of the lands as private lands or with terms and conditions inconsistent with any right of occupancy in the leases, admissions by tenants that the land holder is the owner of both warams and that they have no occupancy rights, changes in the personnel of the tenants, variations in the rates of rent payable by the tenants these and kindred matters would be relevant and admissible in evidence to prove that the lands are private lands.
The probative value of such evidence depends on the facts and circumstance of each case.
The burden of proof that a particular land in an estate is private land rests on the land holder, the statu tory presumption being the other way.
This burden is not discharged merely by proving that both the warams were granted to or enjoyed by the land holder once upon a time.
There must be evidence of the treatment of the lands as private lands by the land holder, either by direct cultiva tion or otherwise in the manner above stated.
" Considering the statutory definition, in our opinion, the third paragraph and last part of last paragraph above have to be doubted.
Raghava Rao, J. who dissented summarised his conclusions separately.
We are not oblivious the fact that on the basis of the above propositions cases have been decided for a long time.
But their tenability having been questioned in the instant case we proceed to examine them.
The above propositions no doubt refer to different 415 aspects including the evidentiary aspect of the question of determination of `private lands ' and `ryoti lands ' but it may be difficult to hold that each or all of them by them selves laid down any rule to be invariably followed irre spective of the history, location and nature of the estates, their cultivation and the customs governing them.
There is also no sufficient exposition of the central concept of `domain ' and `home farm ' lands in the above propositions.
These words were not defined ,in the Estates Land Act In Zamindar of Chellapalli vs Rajalapati Somayya, , Wallis C.J. adopted the dictionary meaning, namely, "the land about the mansion house of a Lord and in his immediate occupancy".
Seshagiri Aiyar, J. in the same case quoted from the Encyclopaedia Brittanica, Vol.
III (3): `Domain ' as synonymous to `Domesne ' and is explained as follows: "Domesne (Domeine, Demain, Domain etc.) that portion of the land of a manor not granted out in the freehold tenancy, but (a) retained by the lord of the manor for his own use and occupation, or (b) let out as tenemental land to his retain ers or `villani. ' The domesne land originally held at the will of the landlord, in course of time came to acquire fixity of tenure and developed into the modern copyhold.
It is from domesne as used in sense (a) that the modern re stricted use of the word comes, i.e., `land immediately surrounding the mansion or dwelling house, the park or chase '." In Jagadeesam Pillai vs Kupoarnmal (supra) which related to lands in an inam village which was part of the Tanjore palace, Wadsworth, Offg.
C.J. accepeted the interpretation put upon the word "Domain" by Wailis, C.J. and Sesnagiri Aiyar, J. In Chellapalli case (supra) as meaning "land immediately surrounding the mansion or dwelling house, the park or chase" and that connoted land appurtenant to the mansion of the lord of the manor kept by the landlord for his personal use and cultivated under his personal supervi sion as distinct from lands let to tenants to be farmed without any control from the lord of the manor other than such control as in incident to the lease.
The learned Judge further observed: "It seems to us that the sub clause (b)(1) of the definition is intended to cover those lands which come obviously within what would ordinarily be recognised as the domain or home farm, that is to say, lands appurtenant to the landholder 's residence and kept for his enjoyment and use.
" In Parish Priest of Karayar Parish vs Thiagarajaswami Devas 416 thanam, (supra) Subba Rao and Chandra Reddy, JJ accepted the test laid down in Jagadeesam (supra) and the legal position was summarised as follows: "The legal position having regard to the provisions of the Act and the decisions dealing with them in so far as it is relevant for the purposes of this case may briefly be stated thus.
Private land as defined under the Madras Land Estates Act comprises two categories, private lands, technically so called and lands deemed to be private lands.
In regard to private lands strictly so called, it must be a domain or home farm land as understood in law.
The mere fact that particular lands are described in popular province as pan nai, kambattam, sir, khas, is not decisive of the question unless the lands so called partake of the characteristics of domain or home farm lands.
The test to ascertain whether a land is domain or home farm is that accepted by the Judicial Committee in `Mallikarjuna Prasad vs Somayya ', i.e. land which a zamindar has cultivated himself and intends to retain as resumable for cultivation by himself even if from time to time he demises for a season.
Whenever a question therefore arises whether a land is private land technically so called, as defined in sub clause (1) of clause (b) to section 3(10) the presumption is that it is not a private land.
The recitals in the leases, pattas etc.
after 1918 must be excluded and the recitals in similar documents prior to 1918 in them selves are not sufficient evidence.
There must be in addi tion direct evidence that these lands were either domain or home farm lands in the sense that they were in their origin lands directly cultivated by the landlord or reserved by him for his direct cultivation.
We are not concerned in this case with the question whether ryoti lands could be convert ed into private lands.
" The trend not to confine the concept of private lands only to domain or home farm lands but to include in it lands situate outside in which land holder had granted leases or made arrangements for cultivation with a view to resume them for personal cultivation did not find favour in the above three decisions.
In Chidambaram Chettiar (supra) involved lands in Orathur 417 Padugai in Tanjore Palace Estate.
The Raja of Tanjore having died without leaving any male issue the East India Company took possession of all his properties including his private property.
Later, on representation of the senior widow of the late Raja, the Government of India in 1962 "sanctioned the relinquishment of the whole of the landed property of the Tanjore Raja in favour of the heirs of the late Raja.
" The Tanjore Palace Estate thus came into existence.
In 1948 the appellant purchased the suit lands situate in Orathur Padugai within Tanjore Palace Estate and instituted suits for possession from the various defendants.
The Trial Court having dismissed the suits on the ground that the lands were situated in an estate as defined in section 3(2)(d) of the Madras Estates Land Act and they were ryoti lands as defined in section 3(16) in which the defendants have acquired occupancy rights.
The Madras High Court having affirmed that decree in appeal, the appellant came to this Court contending that the lands did not form an `estate ' under section 3(2)(d) because the restoration did not amount to a fresh grant but only resto ration of status quo ante; that Orathur Padugai was not a whole village to be an estate and that the widows of the late Raja enjoyed both the varams and the lands purchased by the appellant were private lands under section 3(10)(b) so that the defendants did not have any occupancy rights therein.
Holding that the relinquishment by the Government in 1962 amounted to a fresh grant and that since 1830 onwards Ora thur Padugai was a whole village and therefore an estate, their Lordships enunciated the tests as to private land thus: "Under section 3(10) of the Act, private land comprises of two categories, private lands technically so called, and lands deemed to be private lands.
In regard to private lands technically so called, it must be the domain or home farm land of the landholder as understood in law.
The mere fact that particular lands are described in popular parlance as pannai, kambattam, sir, khas, is not decisive of the ques tion unless the lands so called partake of the characteris tics of domain or home fair lands.
In our opinion the cor rect test to ascertain whether a land is domain or home farm is that accepted by the Judicial Committee in Yerlagadda Malikarjuna Prasad Nayudu vs Somayya, ILR , that is whether it is land which a zamindar has cultivated himself and intends to retain as resumable for cultivation by himself even if from time to time he demises for a sea son.
The Legislature did not use the words `domain or home farm land without attaching to them ,a meaning; and it is reasonable to suppose that the Legislature would 418 attach to these words the meaning which would be given to them in ordinary English.
It seems to us that the sub clause (b)(i) of the definition is intended to cover those lands which come obviously within what would ordinarily be recog nised as the domain or home farm, that is to say, lands appurtenant to the landholder 's residence and kept for his enjoyment and use.
The home farm is land which the landlord cultivates himself, as distinct from land which he lets out to tenants to be farmed.
The first clause is, therefore meant to include and signify those lands which are in the ordinary sense of the word home farm lands.
The other clauses of the definition appear to deal with those lands which would not necessarily be regarded as homefarm lands in the ordinary usage of the term; and with reference to those lands there is a proviso that lands purchased at a sale for arrears of revenue shall not be regarded as private lands unless cultivated directly by the landlord for the required period.
It seems to us that the definition reads as a whole indicates clearly that the ordinary test for `private land ' is the test of retention by the landholder for his personal use and cultivation by him or under his personal supervi sion.
No doubt, such lands may be let on short leases for the convenience of the landholder without losing their distinctive character; but it is not the intention or the scheme of the Act to treat as private those lands with reference to which the only peculiarity is the fact that the landlord owns both the warams in the lands and has been letting them out on short term leases.
There must, in our opinion be something in the evidence either by way of proof of direct cultivation or by some clear indication of an intent to regard these lands as retained for the personal use of the landholder and his establishment in order to place those lands in the special category of private lands in which a tenant under the Act cannot acquire occupancy rights.
" The concept of home farm does not appear to be much different from that of domain.
According to Black 's Law Dictionary, a farm means body of land under one ownership devoted to agriculture, either to raising crops or pasture or both.
The word farm means a considerable tract of land or number of small tracts devoted wholly or partially to agri cultural purposesor pasturage of cattle but may also include woodland.
The term does not necessarily include only the land 419 under cultivation and within a fence.
It may include all the land which forms part of the tract and may also include several connected parcels under one control.
According to Collins English Dictionary, farm means a tract of land usually with house and buildings cultivated as unit or used to rear livestock.
According to Webster 's Comprehensive Dictionary, International Edition, farm means a tract of land forming a single property and devoted to agricultural stock raising dairing and some allied activity.
We are therefore of the view that home farm necessarily implies a farm with the home of the landholder.
Pollock & Maitland in The History of English Law, 2nd Edn.
Vol. 1, at pp 362 363 describing the manorial arrange ment in England wrote: "Postponing until a late time any debate as to whether the term manor bore a technical meaning, we observe that this term is constantly used to describe a proprietary unit of common occurrence: the well to do landholder holds a manor or many manors.
Now speaking very generally we may say that a man who holds a manor has in the first place a house or homestead which is occupied by himself, his bailiffs or servants.
Along with this he holds cultivable land, which is in the fullest sense (so far as feudal theory permits) his own; it is his demesne land.
Then also, as part of the same complex of rights, he holds land which is holden of him by tenants, some of whom, it may be, are freeholders, holding in socage or by military service, while the remainder of them, usually the large majority of them, hold in villein age, by a merely customary tenure.
In the terms used to describe these various lands we notice a certain instructive ambiguity.
The land that the lord himself occupies and of which he takes the fruits he indubitably holds `in demesne '; the land holden of him by his freehold tenants he indubita bly does not hold `in demesne; his freehold tenants hold it in demesne, unless indeed, as may well be the case, they have yet other freeholders; below them.
But as to the lands holden of him by villein tenure, the use of words seems to fluctuate; at one moment he is said to hold and be seized of them in demesne, at the next they are sharply distinguished from his demesne lands, that term being reserved for those portions of the soil in which no tenant free or villein has any rights.
In short, `language reflects the dual nature of tenure in villeinage; it is tenure 420 and yet it is not tenure.
The king 's courts, giving no protection to the tenant, say that the lord is seized in demesne; but the manorial custom must distinguish between the lands holden in villeinage and those lands which are occupied by the lord and which in a narrower sense of the word are his demesne.
Describing the field system they wrote: " We have usually therefore in the manor ,lands of three kinds, (1) the demesne strictly so called, (2) the land of the lord 's freehold tenants, (3) the villenagium, the land holden of the lord by villein or customary tenure.
Now in the common case all these lands are bound together into a single whole by two economic bonds.
In the first place, the demesne lands are cultivated wholly or in part by the labour of the tenants of the other lands, labour which they are bound to supply by reason of their tenure.
A little labour in the way of ploughing and reaping is not out of the free hold tenants; much labour of the many various kinds is obtained from the tenants in villeinage, so much in many cases that the lord has but small, if any, need to hire labourers.
Then in the second place, these various tenements lie intermingled; neither the lord 's demesne nor the ten ant 's tenement can be surrounded by one ring fence.
The lord has his house and homestead; each tenant has his house with more or less curtilage surrounding it; but the arable por tions of the demesne and of the various other tenements lie mixed up together in the great open fields.
" In paragraph 758 of Halsbury 's Laws of England, 4th Edn., Vol. 9, on the destruction of customs it is said: "As manorial customs attached to the tenure as distinguished from the mere locality of the lands, it followed that upon the destruction of the tenure by enfranchisement of the lands at common law the customs were also destroyed.
A statutory enfranchisement must have effect, however, in accordance with the terms of the statute, and where the statute preserves rights notwithstanding the enfranchisement and the extent of the rights so preserved depended upon custom, the custom remains relevant to define the rights preserved by the statute.
" 421 The basic concept of domain or home farm land and the concept of cultivation as private land by the landholders used in the definition had, therefore, to be borne in mind in determining private land.
The observation of the Division Bench in the impugned Judgment that it is not possible to regard the pronouncement in Zamindar of Chellapalli vs Somayya, (supra) as an authority for the proposition that domain within the meaning of section 3 (10) of the Estates Land Act must be held to mean land around the mansion home of lord and appurtenant thereto, has therefore to be rejected.
The decision of the High Court of Madras in Chellapalli case was confirmed by the Privy Council in Yerlagadda Mallikarju na Prasad Nayudu vs Somayya, (supra).
The learned Single Judge in the instant case also relied on the observations in Chellapalli 's case (supra).
The learned Single Judge rightly observed that the test laid down by Wadsworth, Offg.
C.J. were approved by the Supreme Court in Chidambaram 's case in identical language and that the legislature did not use the word domain or home farm land without attaching to them a meaning and it was reasonable to suppose that they would attach to those words the meaning which would be given to them in ordinary English, namely, to connote land appurte nant to the mansion of the lord of the manor kept by the lord for his personal use and cultivated under his personal supervision is distinct from land let to tenant to be formed without any control from the lord of the manor other than such control as incident to the lease.
We respectfully agree.
To this extent the propositions of the learned Judges in Periannan 's case (supra) the tenability of which we doubted, can no longer be held to be good law in view of this Court 's decision in Chidambaram 's case (supra) and P. Venkataswami vs
D.S. Ramireddy, In P. Venkataswami vs
D.S. Ramireddy (supra) the question was whether the landlord was entitled to ryotwari patta.
The High Court applied the tests in Pariannan 's case.
Referring to the provisions of Sections 13 and 15(1) of the Estates Abolition Act (which we have quoted earlier).and reiterating what was said in Chidambaram 's case this Court held: "Thus even on the provisions of the Madras Estat is Land Act, 1908 considered by the Madras Full Bench, this Court appears to have taken a different view.
Apart from this, the provisions we are concerned with, namely, Section 13(b)(iii) of the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948 requires as a condition `that the landholder has cultivated such lands himself, by his own servants or hired labour '.
We are unable to agree that the 422 words `has cultivated ' could imply a mere intention to cultivate.
Apart from Article 141 of the Constitution of India we are of the opinion that the decision in Chidambaram and Venka taswarni are in consonance with the objects and purposes of the Estates Land Act, the Estate Abolition Act, the Inam (Abolition and Conversion into Ryotwari) Act and the accept ed objectives of the land reforms legislation.
We now take up the question as to who were entitled to ryotwari pattas in this case.
The landholders admitted that if the Pariannan 's tests were not applicable, they would not be entitled to ryotwari patta.
Even so we proceed to examine the question on the facts on record.
As defined in section 3(15) of the Estates Land Act, "ryot" means a person who holds for the purpose of agriculture ryoti land in an estate on condi tion of paying to the landholder the rent which is legally due upon it.
Under the Explanation, a person who has occu pied ryoti land for a continuous period of 12 years shall be deemed to be a ryot for all the purposes of this Act.
This Explanation was added by the Estates Land Amendment Act, 1934 (Act VIII of 1934).
The conferment of occupancy right on the ryot in ryoti land was an object of the Estates Land Act.
The original Section 6 dealing with occupancy right in ryoti land was substituted by Section 5 of the Amendment Act VIII of 1934.
Thereafter also it has undergone several amendments.
At the relevant time it stood as follows: "6.
Occupancy right in ryoti land: (1) Subject to the provi sions of this Act, every ryot now in possession or who shall hereafter be admitted by a landholder to possession of ryoti land situated in the estate of such landholder shall have a permanent right of occupancy in his holding.
Explanation: (1) For the purposes of this sub section, the expression `every ryot now in possession ' shall include every person who, having held land as a ryot, continues in possession of such land at the commencement of this Act.
Explanation: (2) In relation to any inam village which was not an estate before the commencement of the Andhra Pradesh (Andhra Area) Estates Land (Third Amendment) Act, 1936, but became an estate by virtue of that Act, or in relation to any land in an inam village which ceased to be part 423 of an estate before the commencement of that Act, the ex pression `now ' and `commencement of this Act ' in this sub section and Explanation (1) shall be construed as meaning the thirtieth day of June, 1934, and the expression `hereaf ter ' in this sub section shall be construed as meaning the period after the thirtieth day of June, 1934.
Explanation: (3) In relation to any hamlet, or khandriga in an inam village which was not an estate before the commence ment of the Andhra Pradesh (Andhra Area) Estates Land (Amendment) Act, 1936, but became an estate by virtue of that Act, the expressions `now ' and `commencement of this Act ', in this sub section and Explanation (1) shall be construed as meaning the Seventh day of January 1948, and the expression `hereafter ' in this sub section shall be construed as meaning the period after the seventh day of January, 1948.
Explanation: (4) Every landholder who receives or recovers any payment under Section 163 from any person unauthorizedly occupying ryoti land shall be deemed to have thereby admit ted such person into possession unless within two years from the date of receipt of recovery of payment or the first of such payments, if more than one, he shall file a suit in a Civil Court for ejectment against such person.
(2) Admission to waste land under a contract for the pasturage of cattle and admission to land reserved bona fide by a landholder for raising a garden or tope or for forest under a contract for the temporary cultivation there of with agricultural crops shall not by itself confer upon the person so admitted a permanent right of occupancy; nor shall such land, by reason only of such letting or temporary cultivation, become ryoti land." (3, 4, 5 and 6 are not extracted) Section 6 A which was inserted by the Amendment Act VIII of 1934 provided that a person having a right of occupancy in land does not lose it by subsequently becoming interested in the land as landholder or by subsequently holding land as an ijaadar or farmer of rent.
Section 8 provided for merger of occupancy rights and said: 424 "Whenever before or after the commencement of this Act the occupancy right in any ryoti land vests in the landholder, he shall have no right to hold the land as a ryot but shall hold it as a landholder, but nothing in this sub section shall prejudicially affect the rights of any third person.
(2) Whenever before or after the commencement of this Act the occupancy right in any ryoti land vests in any co landholders, he shall be entitled to hold the land sub ject to the payments to his co landholders of the shares of the rent which may from time to time payable to them and if such co landholder lets the land to a third person; such third person, shall be deemed to be a ryot in respect of the land.
(3) The merger, if any, of the occupancy right under sub sections (1) and (2) shall not have the effect of converting ryoti land into private land.
(4) Where after the passing of the Act, the inter est of the ryot in the holding passes to the landholder by inheritance, the landholder shall notwithstanding anything contained in this Act have the right, for a period of twelve years from the date of succession, of admitting any person to the possession of such land on such terms as may be agreed upon between them.
(5) If before the first day of November 1933, the landholder has obtained in respect of any land in an estate within the meaning of sub clause (d) of clause (2) of Sec tion 3 a final decree or order of a competent Civil Court establishing that the tenant has no occupancy right in such land, and no tenant has acquired any occupancy right in such land before the commencement of the Andhra Pradesh (Andhra Area) Estates Land (Third Amendment) Act, 1936, the land holder shall, if the land is not private land within the meaning of this Act, have the right, notwithstanding any thing contained in this Act, for a period of twelve years from the commencement of the Andhra Pradesh (Andhra Area) Estates Land (Third Amendment) Act, 1936, of admitting any person to the possession of such land on such terms as may be agreed upon between them; 425 Provided that nothing contained in this sub section shall be deemed during the said period of twelve years or any part thereof to affect the validity of any agreement between the landholder and the tenant subsisting at the commencement of the Andhra Pradesh (Andhra Area) Estates Land (Third Amendment) Act, 1936".
Section 9 provided that no landholder shall as such be entitled to eject a ryot from his holding or any part hereof otherwise than in accordance with the provisions of this Act.
Section 10 made the occupancy rights heritable and transferable providing that "all rights of occupancy shall be heritable, and shall be transferable by sale, gift or otherwise.
" If a ryot dies intestate without leaving any heirs except the Government, his right of occupancy shall be extinguished but the land.
in respect of which he has such right of occupancy shall not cease to be ryoti land.
The Estates Abolition Act accepted the same definitions of occupancy right and ryot as in the Estate Land Act.
The above provisions conferred permanent, heritable and trans ferable right of occupancy on the tenant.
This right stemmed from the will of the legislature and involved an element of social engineering through law star pro ratione voluntas populi: the will of the people stands in place of a reason.
The right of the landholder to keep his private land to himself has therefore to be interpreted in its proper per spective.
Statuta pro publico late interpretatur.
Statute made for the public good ought to be liberally construed.
The concept of past or present intention of the landholder to resume personal cultivation of land let out to a tenant and still in possession of the tenant has to be strictly construed against the landlord and liberally in favour of the tenant.
The aforesaid doubtful propositions formulated by the learned Judges in Periannan 's case must, therefore, be held to be erroneous.
For the same reason the observation of the Division Bench in this case that the decision in Periannan 's case is still good law in face of the decision of this Court in Chidambaram (supra), and subsequent deci sion in Venkataswami 's case (supra) must be held to be equally erroneous and to that extent must be overruled and the decisions in Zamindar of Chellapalli vs Rajalapati Somayya, (supra); Jagadeesam Pillai vs Kuppammal, (supra) and in Parish Priest of Karayar Parish vs Thiagarajaswami Devasthanam, (supra) must be held to have been correctly decided.
We have no doubt that the formation and development of the land revenue system in Madras will justify the view we have taken in the facts of this case.
The formation of the Madras Presidency was by 426 successive acquisitions by the East India Company.
The State of Andhra Pradesh was curved out of Madras.
Baden Powell in Land System of British India, Vol.
3 p. 5 wrote in 1892: "In tracing the progress of the Madras Land Revenue System, it will be advisable in the first place to review the gener al course of acquisition, by which the Madras district became British, and next to describe, in a brief and general manner, the various stages of the history of the early revenue management.
Commencing with the settlement (above alluded to) in the Baramahal (1792 98), which was soon followed by those of Coimbatore (1799), the ceded districts (1800), and the Carnatik Districts (1801), we shall see how the first raiyatwari system, or rather systems, were over thrown for a time by an attempt to make a general zamindari settlement (1801 1808); how on the failure of the attempt, a proposal for `village settlements ' (in the sense of granting leases for the whole village, to a renter, a headman, or a joint body of inhabitants) was tried with various success for a few years; and how, in the end, a raiyatwari assess ment was finally ordered ( 18 12 18 18).
" Ryotwari indicates a system where each field or holding is dealt with separately, and where the holder is free to pay the revenue and keep the field, or free himself by giving it up, as he pleases.
The first general acquisition of territory by the East India Company the first from a revenue point of view, was the country around Madras, known as `Jagir ' because it was originally granted by the Nawab of the Karnatik as a Jagir; the revenue thus assigned was intended as a contribution towards the expenses of the wars undertaken in aid of the Nawab.
The next acquisition in point of time was that of the Northern Sirkars (often written `Circar ').
These territories were granted in 1765 by the Delhi Emperor; but the Madras Government, looking to the practical claim of the Nizam of Dakhan, who was hardly even in name subject to Delhi, also obtained a grant from him in 1768.
The five administrative divisions known to the Mughal system as `Sirkar ' were those of chicacole (chikakol) Srikakulam, Rajahmundry (Rajamahen driveram), Eliore (Alur), Mustafanagar .(or Kandafiti), and Murtazanagar (Gantur or Kandavid).
Later they formed the districts of Vizagapatam (Visakhapatnam), Gangam, Kishna and Godavari.
427 The northern Sikars had been brought under Muhammadan domin ion first in 1471 A.D., and had various fortunes under the different contending dynasties.
In 1687, Aurangazeb 's con quest of the Dakhan added them to the Mughal empire, and they were ultimately taken over by the Subedar of the Dakhan (Nizam ul Mulk) nominally from the Emperor Karukhsir in 1713 A.D. "These came at once under British administration.
It was found that they consisted (1) of lands settled under zamin dars, as in Bengal, (2) of haveIi lands, those reserved for the support of the royal family and its immediate depend ants, and therefore `crown ' property.
Such a state of things invited the application of the Bengal system; the zamindars were accordingly left in possession and the haveIi lands were parcelled out and leased to revenue farmers for a term of years.
The Jagir lands were in 1780, divided into blocks and put under a similar system of revenue leases.
" When the Board of Revenue issued instructions to adopt a system of village lesses so as to prepare for some form of zamindari settlement, i.e. one man should be made answerable for the revenue of each village or other estate after the passing of Permanent Settlement Regulations in Bengal.
The Zamindari Regulation No. XXV was passed in 1802 and by 1805 introduction of the system was effected.
In the Northern Sirkars land was permanently settled with the zamindars; and the `HaveIi ' lands were made into percels or mutthas, and sold to the highest bidder.
The Mutthadars (or Mittadars) became the proprietors and permanent settlement holders.
Each settlement became an estate.
In some districts the `poligars ' became landlords holding sanad i milkiat i istim rar or title deed of perpetual ownership their estates being called `settled polliems '.
According to Paden Powell the zamindari estates were found chiefly in the North East ern districts and especially in the Ganjam and Vizagapatam districts.
There were also few Feudatory States which paid only a fixed tribute.
The village leases continued with some form of joint or individual middlemen with varying periods of 3 to 10 years made with a view to eventual permanency.
But the system was not successful.
Between the ryotwari and village lease system the general difference was that the ryotwari only assessed the `field ' or survey unit, and left the ryot. to hold it or not as he pleased, provided he gave notice of his intention in proper time; if he kept the field he must pay the assessment that was all.
The lease system involved payment of a certain sum for a fixed area, whether the land was cultivated or not.
It was no use 428 for the middlemen lease holder to throw up his land, for that would not relieve him of his contract liability.
The idea was to make the villagers jointly and severally respon sible, though the lease was to the head inhabitants of each village.
Desire was to see a system under which the proprie tary inhabitants at large of each village should enter into engagements with the Government, and derive a common and exclusive interest in the cultivation of their lands in proportion of their right of property.
Ultimately the Ryotwari system was adopted.
The end of the lease proposals and the village system inquiry was that the home authorities, as Baden Powell says, probably influ enced by the opinion of Munro, who visited England in 1807, finally decided for the Ryotwari system as it was believed that the village system failed.
Hence the Estates Abolition Act protected the rights of the ryots by defining private land on the one hand and preserving the occupancy rights of the ryots on the other.
In doing so the two concepts of `private land ' and `ryoti ' land along with those of `estate ' and `occupancy ' assumed significance.
The two villages concerned in the instant case are said to be inam viiages.
But the origin of the lands in dispute was admittedly not known.
The characteristics of the inam estates and the rights and liabilities of the Inamdars from time to time have therefore to be taken into account.
Baden Powell wrote at pp.78 80 Vol. 3: Section Ill Settlement of inam Claims. "The Settlement, as we have seen, only assesses the land under raiyatwari tenure.
If, however, there is land in the village, consisting of a few fields or even a division of the village, held revenue free, or at a reduced rate, such an area is shown in the village registers.
But it may be that a whole village is `inam '.
If so, it constitute a separate estate, like a Zamindari or a `pollam ', and does not come within the scope of the Settle ment.
Government has no claim to the land or to the revenue, unless there is a fixed quit rent, which is recorded as is the permanently settled revenue or `peshkash ' of the Zamind ari or pollam estate.
There was accordingly a special proce dure under which the right and title of the holders of these favoured estates was elucidated and put on a sound 429 basis; and the quit rent, Or reduced rate, where the estate is not entirely revenue free, determined by rule.
All native governments were in the habit of reward ing favourites, providing for the support of mosques, tem ples, religious schools, shrines, and for almsgiving and the maintenance of Brahmans or Muhmmadan saints, & C., by grant ing the revenue on the land, whether they granted the land itself or not." The Inam Commission of Madras appointed on 16.11.
1858 had the task of validating and issuing title deeds for inams lawfully in possession for fifty years and in resuming others, or commuting them for money pensions.
The Commission dealt with all kinds whether they included right in the lard or only Government revenue; they were: (1) Inams proper, where the land granted, was either a field, or a village, or a group of villages.
(2) Muhammadan jagirs, which were personal grants and might or might not include the land.
(3) Shrotriyams (Srotriyam) and agraharams, grants certain (different) classes of Branmans which did not give more than the revenue, leaving the land in its original occupancy, unless it could be shown that the occupancy was also granted.
The following nine kinds of inams (classified according to their object or purpose) were enumerated: (1) For religious institutions and services connect ed therewith.
Nearly a million and a half acres were so assigned, including temples, pagodas, and mosques.
The largest grants were in the southern districts.
(2) For purposes of public utility.
Such as support of chatrams (places where refreshment was given gratuitous ly), water pandais (drinking places), topes or groves, flower gardens for temple service (mandavanam), schools (Patshalas), for maintaining bridges, ponds and tanks, etc.
430 (3) `Dasabandham ' inams for the construction, mainte nance, and repair of irrigation works in the Ceded dis tricts, in Kistna, Nellore, North Arcot and Salem.
(4) To Brahmans and other religious persons for their maintenance called `Bhatavritti ' and (Muhammadan `Khairat '.
They formed nearly half the inams of the Presidency, and covered more than three and a half million acres.
(5) Maintenance grants for the families of poligars and ancient land officers.
These were grants to families of dispossessed poligars in Baramahal and the ceded districts; to Kanungos (Chingleput), and to Deshmukhs etc.
(6) Lands alienated for the support of members of the family (also for religious persons) by poligars, etc.
These were the `bisai ' (bissoye), doratanam, mukhasa, jivitham, arearam (North Arcot) umlikai, etc.
(7) Grants connected with the general police of the country under former rulers: Such were `kattubadis '.
(8) Grants to village headmen, karnams, and village police (Gramamaniyam, etc. ).
(9) Grants to village artisans, where they were not paid by the fees called merai (or in addition to them).
The Commission also took up enfranchisement of the inams, i.e. to convert into his own private property by payment of a moderate quit rent.
From this the inams could be classified as (1) still unenfranchised; (2) enfranchised but liable to jodi or quit rent as the case may be; (3) enfranchised, the rent being commuted or redeemed.
The Commission work was closed in November 1869.
A member of the Board of Revenue continued thereafter.
The nature and histo ry of the inam villages would, therefore, have been helpful in deciding the claims.
It was perhaps easier for the landholders to trace the origin of the inam villages than for the tenants to do so.
Admittedly that was not done.
We have also considered the question of practice and pre sump 431 tions if any in this regard.
By Madras Act VIII of 1865 it was enacted that inamdars and other landholders should enter into written agreements with their tenants, the engagements of the land owners being termed pattas and those of tenants being termed Muchlika.
The patta should contain, amongst other things, "all other special terms by which, it is intended the parties shall be bound.
The muckhlika should at the option of the landholders, be counterpart of the patta, or a simple engagement to hold according to the terms of the patta.
In the instant case the pattas and the muchlikas are not claimed to have shown anything to establish the lands to be private lands.
Only the facts of occasional change of tenants and rents have been shown.
The Privy Council in Suryanarayana vs Patanna, [1918] 41 ILR Madras 10 12, where the decision of the appeal mainly depended on the question whether the Agraharam Village of Korraguntapalem in the Northern Circars of then Presidency of Madras was an estate, observed that the "term kudivaram is not defined in the Act.
It is a tamil word, and literally signifies a cultivator 's share in the produce of the land held by him as distinguished from the landlord 's share in the produce of the land received by him as the rent.
The landlord 's share is sometimes designated `melvaram" The Privy Council held that there was no presumption of law to the effect that in the case of an inamdar it should be presumed, in the absence of inam grant under which he held, that the grant was of the royal share of the revenue only.
"In their Lordships ' opinion there is no such presump tion of law.
But a grant of a village by or on behalf of the Crown under the British rule is in law to be presumed to be subject to such rights of occupancy, if any, as the cultiva tors at the time of grant may have had.
" As against the above, we now have the statutory presumptions in Section 185(3) of the Estates and Act, namely, "that the land shall be presumed not to be private land until the contrary is proved," and in case of estate within the meaning of sub clause (d) of clause (2) the second proviso (i) and (ii).
This evolution of the land revenue system concerned is likely to remind one of what Sir Henry Maine showed in his Ancient Law, "that in early times the only social brother hood recognised was that of kinship, and that almost every form of social organisation, tribe, guild, and religious fraternity, was conceived under a similitude of it.
Feudal ism, converted the village community based on a real or assumed consanguinity of its members, into the fief in which the relations of tenant and lord were those of contract, while those of the 432 unfree tenant rested on status.
" It also reminds one what was said in the context of rights over land. "This earth", says Jagannatha, "is the cow which grants every wish; she affords property of a hundred various kinds (inferior, if the owner need the assent of another proprietor superior, if his right precede assent); while she deludes hundred owners, like a deceiving harlot, with the illusion of false enjoy ment; for, in truth, there is no other lord of this earth but one, the Supreme Lord.
" For the foregoing reasons we set aside the impugned Judgment, restore that of the learned Single Judge and allow the appeals.
We leave the parties to bear their own costs in these appeals.
R.S.S. Appeals allowed.
| Respondent No. 1 is a firm dealing in medicines and respondents 2 and 3 are its managing parnter and pharmacist.
In contravention of the provisions of Drugs (Price Control) Order 1979, para 21 read with para 18 they charged from a Nursing Assitant of the Medical College Hospital, Kottayam, Rs. 90 in excess of the maximum retail price fixed for the sale of 15 tablets of Largactil of 100 mg each and 60p in excess for 100 tablets of Hipnotex of 5mg each.
According to the prosecution this act of their 's being in contravention of the provisions of the Order, was punishable under Section 7 of the and accordingly prosecution was initiated against the respondents.
The trial court found the respondents guilty and convicted them and sentenced respondent No. 1 firm to a fine of Rs. 2.000 and respondents 2 and 3 to three months simple imprisonment.
On appeal, the High Court of Kerala acquitted them taking the view that none of the aforesaid two medicines, namely Largactil and Hipnotex were 'formulations ' as defined in Section 2(f) of the Drugs (Price Control) Order 1979 and as such the sale of these drugs at higher rates than the prescribed was not punishable under paras 21 read with para 18 of the order.
The appellants have thus filed this appeal after obtaining special leave.
The question for decision in the present case relates to the correctness of the construction made by the High Court of the provisions of the 'Order '.
Partly allowing the appeal, this Court, HELD: A bulk drug is one which may be capable of use by itself or as an ingredient in any formulation.
[69G] Formulation is a medicine which may comprise even of one bulk 66 drug by itself or more than one bulk drug.
The definition of 'Formulation ' is very wide and includes even one bulk drug where that one bulk drug by itself is treated as a medicine.
[70B] The provisions of para 21 which in terms are meant to control sale prices of formulations specified in the Third Schedule as also the other provisions of the Order which in terms may be of limited application are specifically made applicable to all formulations as defined in the Order except only paragraphs 10 to 14 which have been expressly excluded.
It is by virtue of para 18 that the prohibition contained in para 21 has been made applicable to formulations not specified in the Third Schedule.
[70G H] The High Court misconstrued the provisions of the Drugs (Price Control) Order 1979.
The Court rejected that construction and held that the allegations in the present case, if proved, would amount to a contravention of para 21 read with para 18 of the 'Order ' which is punishable under Section 7 of the .
The Court however did not interfere with the acquittal of the respondents.
[72B C]
|
Nos. 661, 1380, 1885 & 1886 of 1967.
209 Appeal from the judgment and order dated February 25, 1965 of the Patna High Court in First Appeals Nos. 437 and 438 of 1959.
section V. Gupte, B. P. Rajgarhia and U. P. Singh, for the appellants in C.A. Nos. 661 and 1380 of 1967) and for respondent No. 1 C.A. Nos.
1885 and 1886 of 1967).
D. Goburdhun, for the respondent (in C.A. Nos. 661 and 1380 if 1967 and for the appellant (in C.A. Nos. 1885 and 1886 of 1967).
The Judgment of the Court was delivered by P. laganmohan Reddy, J.
These appeals are by certificate against the judgment of the Patna High Court in land acquisition appeals.
Two notifications dated 7 7 1954 under section 4 of the.
Land Acquisition Act 1894 (Act 1 of 1894) (hereinafter called 'the Act '), were issued one in respect of a portion of Plot Nos. 178 and 1784 admeasuring 2.65 acres and the other in respect of the whole of the plot No. 1783 admeasuring 2 acres situated in Ward No. 3 of Ranchi Municipality.
Section 6 notification in respect of these lands was published on 7 9 1954 and possession was taken on 23 9 1954 under section 17(1) after making a declaration under section 17(4) that the provisions of section 5A shall not apply.
The Collector awarded compensation of Rs. 1,20,419 6 11 in respect of the first acquisition and Rs. 47,648 13 6 in respect of the second.
Thereafter, at the instance of the claimant, a reference under section 18 of the Act was made to the Judicial Commissioner of Chhota Nagpur, Ranchi who.
while maintaining the market value, of the land, awarded by the Collector, gave further compensation for severance at the rate of 5% and 10% in respect of potential value of the land.
The Judicial Commissioner, however, did not grant the 15% solatium under section 23(2) of the Act.
Being dissatisfied, the claimants preferred appeals to the High Court.
The High Court revised the compensation and awarded Rs. 90,000/ per acre and 15% as solatium on the market value under section 23(2) of the Act but did not grant them the 5% towards severance.
Interest at 6% per annum on the amount of enhanced compensation from 23 9 1954 together with costs was also decreed.
Against the judgment and decree, the claimants have filed Civil Appeals 661 & 1380/67 while the State has filed Civil Appeals 1885 86/67.
The lands in question which have been acquired were earlier leased on 22 9 1944 to the Military authorities on a rent of Rs. 600/ per month for a period of 6 months under a registered deed with option Lo renew for a maximum period of 10 years 2lO which period expired on 21 9 1954.
One of the conditions of the lease was that on the termination of the lease, the lessor would exercise the option given under the lease to purchase all buildings, structures, gardens and any other structures constructed by the lessee during their occupation of the leased property, at 75 per cent of the valuation that would be determined by the Superintending Engineer, Chhota Nagpur Circle, and in case the lessors refused to purchase, the lessee was entitled to dismantle and take away the materials.
Towards the end of the lease period, the Govern ment of Bihar decided to acquire the property for the State Soldiers, Sailors and Airmen 's Board and initiated proceedings as aforesaid.
In these appeals the only question that has to be determined is : What is the market value of the property as on the date of section 4 notification ? In the valuation report given by the Land Acquisition Officer, Ranchi, Ex 1, the principle of capitalisation on the basis of 20 times the annual rental of Rs. 7,200/ at the rate of Rs. 600/ p.m. was adopted as the price of the lands.
In that report it was also pointed out that the sale price of 1.08.5 acres out of the premises of the Ranchi Club as per registered sale deed, exhibit C 1 dated 1 4 1953, was Rs. 41,470/ per acre.
which was not fair.
Apart from these 25 other sale transactions in respect of portions of Plot No. 1789 between 1952 and 1953 were also referred in that report.
Some of these lands were situated opposite to the Ranchi Club and the sale price came to Rs. 1092/ per katha, which is about Rs. 60,000/ per acre.
He was further pointed out that some other lands a little further away from the main road but belonging to the same Plot No. 1789 were sold at the rates between Rs. 250 / / to Rs. 800/ per katha.
This report formed the basis of the award made by the Collector.
The High Court took judicial notice, and in our view rightly so, that after the termination of the Second World War in 1945 there was a rise in land values due to the increased demand of homestead lands for building purposes.
It also considered various sale deeds produced and proved on behalf of the claimants along with the oral evidence to determine the market value of the land.
The objections from both the appellant and the respondent were taken into account in respect of each of these and most of them were considered as not furnishing a proper or adequate valuation either having regard to the distance of the lands which were the subject matter of the sale or the inadequacy of the information pertaining thereto.
The High Court, however, adopted the price in the sale deed Ex C 1 executed on 6 5 1953 by the Ranchi Club Ltd., in favour of the President of India in respect of 1.085 acres 3 bighas 5 kathas 10 chhataks in Plot No. 1221 for Rs. 45,000/:as the basis for arriving at the market value of the acquired land.
211 Though the land in question was situated on the main Ranchi Chaibasa Road, a strong objection was taken against adopting the price as a basis because it was not only 1/2 mile away from the land under acquisition but what was sold was only the leasehold right in the land.
These objections were rejected on the ground that for all,practical purposes the interest that was held or sold by the Ranchi Club under Ex.
C 1 was not inferior to an absolute title.
The area of the land, the subject matter of the sale, was considered to be fairly large being more than 1 acre and the situation was also the same as the land under acquisition except that it was farther away from it.
In these circumstances, the High Court thought, after a proper allowance is made for the difference in distance, the transaction yields a more acceptable guide for determining the market value of the land under acquisition and accordingly, it adopted twice the price.
as charged for the land in Ext.
C 1 as indicating a fair market value of the land in question.
The High Court further added Rs. 7060/ per acre as the difference between tenure rights and lease hold rights that were held by the President of India and awarded Rs. 90,00O./ per acre.
it did notwithstanding the fact that it was conscious that there was no definite data for the two additions that have been made, because in its view, in cases of this nature a certain amount of estimate has to be made which may even be arbitrary.
Accordingly, it awarded compensation for the 4.65 acres of land which was acquired by the Government at Rs. 90,000/ per acre together with 15% solatium Payable under clause (2) of section 23 of the Act.
5% compensation for severance of land from the claimants ' other portion of the land that remained with them after acquisition, which was awarded by the Judicial Commissioner, Chhota Nagpur, was disallowed on the ground that there was an entrance to the back portion of the land which was left with the #owners and also because there was no evidence to show that in fact there had been any depreciation in he value of the remaining area and if so, to what extent.
On the other hand, it main tained the 10% on the market value of the land awarded by the Land Acquisition Court on account of the increase in the potentialities of the land.
The basis adopted by the High Court is challenged on the ground that they are contrary to the well established principles applicable for determining the value of lands acquired under the Act.
The general principles for determining compensation have, been set out in sections 23 & 24 of the Act.
The compensation payable to the owner of the land is the market value which is determined by reference to the price which a seller might reasonably expect to obtain from a willing purchaser, bat as this may not be possible to ascertain with any amount of precision, the authority charged with the duty to award compensation is bound to 212 make an estimate judged by an objective standard.
The land acqui red has, therefore, to be valued not only with reference to its condition at the time of the declaration under section 4 of the Act but its potential value also must be taken into account.
The sale deeds of the lands situated in the vicinity and the comparable benefits and advantages which they have, furnish a rough and ready method of computing the market value.
This, however, is not the only method.
The rent which an owner was actually receiving at the relevant point of time or the rent which the neighbouring lands of similar nature are fetching can be taken into account by capitalising the rent which according to the present prevailing rate of interest is 20 times the annual rent.
But this also is not a conclusive method.
This Court had in Special Land Acquisition Officer, Bangalore vs T. Adinarayan Setty(1), indicated at page 412 the methods of valuation to be adopted in ascertaining the market value of the land on the date of the notificatioa under section 4(1) which are : (i) opinion of experts, (ii) the price paid within a reasonable time in bona fide transactions of purchase ,of the lands acquired or the lands adjacent to the lands acquired and possessing similar advantages; 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 into consideration, the requirement being always to arrive as near as possible an estimate of the market value.
In arriving to a reasonably correct market value, it may be necessary to take even two or all of those methods 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 potentially nor is it possible in all cases to have reliable material from which that valuation can be accurately determined.
Bearing these principles in mind, we do not think that the High Court was justified in adopting the registered sale deed, Ex.
C 1 executed by the Ranchi Club, in favour of the President of India, because that land is farther away not only from the, land acquired but from the town though it is on the main RanchiChaibasa Road.
Even the High Court recognised that there was no definite data for the two additions that have been made and in our view it would not be a proper method of ascertaining the value of the land 'acquired.
The only two documents that may be considered are Ex.10 and Ex 11 which are in respect of the lands situated in the vicinity and on either side of the land ac quired.
The other sale deeds are of smaller areas and do not furnish a proper basis for ascertaining the market value and have been quite properly not relied upon by the learned Advocate for (1) (1959) (Supp1. 1) S.CR.
213 the claimants ' The annual rental value of the land acquired, namely, Rs. 7 200/ will also not furnish a proper method of computation because that was a rent fixed in 1944 when that land was not of such great value as it had acquired at the time when sec.
4 notification was issued.
A perusal of the correspondence between the owners of the land and the Deputy Commissioner of Ranchi would show that the land owners had given it at consessional rate to ' the Military authorities having regard to the purpose for which it was being put to use.
On behalf of the claimants great reliance is placed on Ex.11 which is a sale deed executed on 16 12 1946 by the claimants the Ranchi Automobiles of an area of 1 bigha 17 kathas equal to .617 acres for Rs. 1,45,000/. After deducting Rs. 15,403/ the price of the structures according ;to the Engineer 's report in 1959 (Ex 25), the net value of the land is Rs. 1,29,697/ .
This value would work out to Rs. 2,08,135.70 per acre.
The High Court rejected this computation on the ground that though the land was contiguous to the land under acquisition, neither the value of the pump and the other structures belonging to Burmah Shell nor the value of the structures that might have been on the land on the date of the sale which were built by the vendees as lessees could be ascertained either from the sale deed or the evidence.
Ex.10 is a lease in respect of 1/3 acre granted by the owners to Thakur Chandra Bali Shah and others executed on 20 2 1950 on a monthly rent of Rs. 157/ .
The High Court calculated the monthly rental of the land under acquisition at that rate to be not less than Rs. 2,000/ per month or Rs. 24,000/ per year.
On the basis of 20 times the annual rent if computed Rs. 4,80,000/as the market value which works out at Rs. 1,03,226/per acre.
It is, however, pointed out on behalf of the claimants that the High Court made a mistake in thinking that the rent for the land leased under Ex.10 was Rs. 157/ p.m. and on that basis it calculated the annual rental value of 4.65 acres of the ' acquired land.
We have checked the figures from the original lease and find that in fact the rent is Rs. 175/ and not Rs. 157/ .
On this basis the rate per acre of 20 times annual rental value would come to Rs. 1,26,000/ .
Even if exhibit 11 is to be taken as, the basis and ,the value of the structures as given by the Engineer in Ex.25 is to be accepted that cannot furnish a proper basis because the land in question is a small area of .617 acres or just over 1 an acre.
A smaller area such as this on a main road Would certainly fetch a higher price compared to a larger un developed area even though it may have a frontage on the main road.
In order to develop that area atleast the value of 1/3 of the land will have to be deducted for roads, drainage and other amenities.
On this basis, the value of the land at Rs. 2,08,135.70 per acre would, after deduction of 1/3 come to Rs. 1,38,757/per acre.
On the basis of the rental of Rs. 175/ p.m. in Ex.10, 214 the value at 20 times the rental will work out as already seen at Rs. 1,26,000/ .
Allowing for an increase in rents from 1950 to 1954, the date of section 4 notification, say at 5% the value per acre may be Rs. 1,33,000/ or thereabout.
If we take the average of Ex.10 and Ex.11 as computed by us the value per acre would come to about Rs. 1,35,878/ .
In our view, Rs. 1,35,000/ per acre would be a reasonable rate at which compensation could be awarded to the claimants.
The High Court was not justified in giving 10% towards potential value because that element is inherent in the fixation of the market value of the land and could not be assessed separately.
The High Court was also not justified in disallowing 5% awarded by the Judicial Commissioner, Chhotanagpur as compensation for severance merely because there was an entrance to the land.
When a portion left out there would be a diminution in the value of ;the land that is left out for which some compensation has to be allowed.
The 5% allowed by the Judicial Commissioner, Chhotanagpur is reasonable.
In this view, the claimants would be entitled to a decree as follows in respect of the lands acquired : (1) At the rate of Rs. 1,35,000 per acre for 4.65 acres; (2) 5% severence and 15% solatium on the market value computed as in (1); (3) Interest at 6% from the date of taking possession.
The appeals of the claimants are allowed to the extent of the variation and those by the Government are dismissed with costs.
The claimants will be entitled to proportionate costs on the difference between the amounts decreed and those that are now awarded in each of the two appeals filed by them.
K.B.N. 864SupCI/72 2500 12 4 73 GIPF.
| The relevant portion of article 5 of the Constitution reads: "At the commencement of this Constitution every person who has his domicile in the territory of India and who was born in the territory of India shall be a citizen of India".
Article 7 of the Constitution lays down: "Notwithstanding anything in article 5, a person who has after the first day of March 1947, migrated from the territory of India to the territory now included in Pakistan shall not be deemed to be a citizen of India".
It was contended on behalf of the respondent Kumar Rani who had migrated from India to Pakistan in 1948 that she was, and continued to be, a citizen of India on the ground that she was born in India and her domicile continued to be that of her husband, who throughout continued to be in India and that her case was covered by article 5 of the Constitution.
Held (repelling the contention) that article 7 of the Constitution clearly overrides article 5.
As the respondent had migrated from India to Pakistan after the 1st March, 1947, her case fell under article 7 of the Constitution and that inasmuch as it was a case of an unauthorised issue of an invalid permit which had been properly cancelled the proviso to article 7 did not apply and that therefore the respondent could not be deemed to be a citizen of India.
Held also, that the definitions of the phrase "evacuee property" in the Administration of Evacuee Property Ordinance 1949 and the (XXXI of 1950) clearly include the interest of an evacuee in any property held as a trustee or beneficiary.
The definition of evacuee property in Evacuee Property Ordinance 1949 (Bihar Ordinance No. III of 1949) is not 1260 different and the words used therein comprise also wakf property and any interest therein.
|
ivil Appeal No. 4552 of 1989.
From the Judgment and Order dated 23.12.
1988 of the Rajasthan High Court in C.W.P. No. 13 of 1987.
G.L. Sanghi and Y.P. Rao for the Appellant.
C.S. Vaidyanathan, S.R. Setia and K.V. Mohan for the Respondents.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
Special leave granted.
Having heard counsel on both sides and having perused the material on record, we are of opinion that the matter requires reconsideration by the Provident Fund Commissioner.
The Food Corporation of India has depots located at various places in Rajasthan for handling storing and trans porting food grains and other articles.
It has appointed contractors for execution of such works and the contractors in turn engaged some workers.
In respect of such workers, the Provident Fund Commissioner called upon the Corporation to deposit contribution payable under the Employees, Provi dent Fund Act and the scheme framed thereunder.
When there was non compliance, the Commissioner made an order under section 7A of the said Act determining amount payable by the Corporation.
Being aggrieved by that determination, the Corporation moved the 757 High Court for relief under article 226 of the Constitution.
The High Court has dismissed the petition.
Hence the Corpo ration has appealed to this Court.
The grievance complained of by the Corporation is that it was denied of reasonable opportunity to produce material in proof of identification of the workers in respect of whom the contribution was payable.
It is urged that the contrac tors are in possession of the relevant lists and the Commis sioner has not even given notice to contractors nor made them parties to the proceedings in spite of repeated re quests made by the Corporation.
Counsel for the Union of Workmen, however, contended that under the provisions of the the Corporation being the principal employer has to maintain list of workers; that it has failed to produce such list and, therefore, it cannot throw the burden on the contrac tors to prove the case.
We have carefully perused the Commissioner 's order and also the order of the High Court.
The total amount ordered to be payable comes to about Rs.22,48,000 in respect of the employees of depots namely: Udaipur, Jaipur, Ajmer, Badmer and Sawai Madhopur.
The Commissioner has also directed the Divisional Officer, Jaipur to deposit the Provident Fund Contribution i.e. Rs. 18,72,194 to the Fund being maintained by the trustees of the establishment.
It is indeed a large amount for the determination of which the Commissioner has only depended upon the lists furnished by the workers, Union.
It is no doubt true that the employer and contractors are both liable to maintain registers in respect of the workers employed.
But the Corporation seems to have some problems in collating the lists of all workers engaged in depots scattered at different places.
It has requested the Commissioner to summon the contractors to produce the re spective lists of workers engaged by them.
The Commissioner did not summon the Contractors nor the lists maintained by them.
He has stated that the Corporation has failed to produce the evidence.
The question, in our opinion, is not whether one has failed to produce evidence.
The question is whether the Commissioner who is the statutory authority has exercised powers vested in him to collect the relevant evidence before determining the amount payable under the said Act.
It is of importance to remember that the Commissioner while conducting an inquiry under section (7A) has the same powers as are 758 vested in a Court under the Code of Civil Procedure for trying a suit.
The section reads as follows: "section 7(A) Determination of Moneys due from Employer (1) The Central Provident Fund Commissioner, any Deputy Provident Commissioner or any Regional Provident Fund Commissioner may, by order determine the amount due from any em ployer under any provision of this Act (the scheme or the Family Pension Scheme or the Insurance Scheme as the case may be) and for this purpose may conduct such inquiry as he may deem necessary.
(2) The Officer conducting the inquiry under sub section (1) shall, for the purposes of such inquiry, have the same powers as are vested in a Court under the Code of Civil Procedure, 1908, for trying a suit in respect of the following matters, namely: (a) enforcing the attendance of any person or examining him on oath; (b) requiring the discovery and production of documents; (c) receiving evidence on affidavit; (d) issuing commissions for the examination of witnesses.
and any such inquiry shall be deemed to be a judicial pro ceeding within the meaning of Sections 193 and 228, and for the purpose of Section 196 of the Indian Penal Code.
" It will be seen from the above provisions that the Commissioner is authorised to 'enforce attendance in person and also to examine any person on oath.
He has the power requiring the discovery and production of documents.
This power was given to the Commissioner to decide not abstract questions of law, but only to determine actual concrete differences in payment of contribution and other dues by identifying the workmen.
The Commissioner should exercise all his powers to collect all evidence and collate all material before coming to proper conclusion.
That is the legal duty of the Commissioner.
It would be failure to exercise the jurisdiction particularly when a party to the proceedings requests for summoning evidence from a particu lar person.
759 We, therefore, allow the appeal and reverse the order of the Commissioner and that of the High Court.
The matter stands remitted to the Commissioner to dispose it of afresh and in accordance with law and in the light of the observa tion made.
The parties shall appear before the Commissioner to receive further orders on December 12, 1989.
The Commission er, shall dispose of the matter within three months thereaf ter.
N .P.V.
Appeal allowed.
| The petitioner, Madan Lal Anand, was detained alongwith two other persons, under section 3(1) of the , 1974 COFEPOSA ACT.
In the grounds of detention it was inter alia alleged that the detenu had imported polyester filament yarn and polyester fibre in the names of M/s Jasmine and M/s Expo International on the basis of "Actual User" advance licences obtained under the Duty Exemption Entitlement Certificate Scheme on the condition that they would manufac ture ready made garments out of the imported polyester filament and export the same; that they had no intention to manufacture or export the manufactured goods, as there was neither any machinery at their so called factory nor any power connection; that investigations had revealed that both the firms had sold the imported polyester filament yarn in contravention of the orders and conditions of the advance licences; and that the said firms were benami firms and Madan Lal Anand had played a very active and major role for obtaining advance licences in the names of the said firms, importing the yarn and selling it in the local market.
The three detenu, including Madan Lal Anand, filed a petition in the High Court of Punjab and Haryana praying for the issuance of a writ of habeas corpus and challenging the validity of the order of detention.
The High Court dismissed the petition.
Before this Court it was contended on behalf of the detenu that: 734 (i) as the detenu was prevented from complying with the condition of the advance licence within six months of the first clearance by the issuance of an abeyance order by the by.
Chief Controller of Imports & Exports, the provision of section 111(0) of the Customs Act was not violated, for the goods could not be confiscated and, accordingly, there was no question of smuggling within the meaning of section 2(e) of the COFEPOSA ACT read with section 2(39) of the Customs Act, 1962; (ii) certain documents/orders, including the abeyance order, which could influence the subjective satis faction of the detaining authority in favour of the detenu were not placed before him; (iii) while the detaining au thority had relied upon and referred to the confessional statement of the detenu, the retraction made by the detenu was not placed before the detaining authority; (iv) the counter affidavit not having been sworn by the detaining authority himself, the averments made therein should not be taken notice of; (v) there was delay in considering the representation of the detenu; and (vi) the life of each of the advance licences having expired, there was no chance of the detenu now involving himself in smuggling activities.
Dismissing the appeal as well as the writ petition this Court, HELD: (1) In view of clause (0) of section 111 of the if any goods exempted from payment of duty is imported without observing the condition, subject to which the exemption has been made, it will be a case of smuggling within the meaning of section 2(e) of the COFEPOSA ACT, [740D] (2) It was more than certain that the imported goods would not and could not be utilised in accordance with the condition of the advance licence, the provision of section 111(0) of the was violated on the very importa tion of the goods.
There was, therefore, no substance in the contention that there was no smuggling in this case.
[741D] (3) Even if certain documents/orders had not been placed before the detaining authority that could not, in the least, affect the subjective satisfaction of the detaining authori ty.
[742D] Kirpal Mohan Virmani vs Tarun Roy, ; Vakil Singh vs State of Jammu & Kashmir, and Kirit Kumar Chaman Lal Kundaliya vs Union of India, , referred tO. (4) The detenu was not prejudiced for non supply to him of the 735 copies of certain documents and accordingly there was no substance in the contention that there was non application of mind by the detaining authority.
[745C] (5) Even assuming that the ground relating to the con fessional statement made by the detenu under section 108 of the was an inadmissible ground as the subsequent retraction of the confessional statement was not considered by the detaining authority, still then that would not make the detention order bad, for, in the view of this Court, such order of detention shall be deemed to have been made separately on each of such grounds.
Therefore, even exclud ing the inadmissible ground, the order of detention can be justified.
[746A B] Prakash Chandra Mehta vs Commissioner & Secretary, Government of Kerala, ; , referred to.
(6) There can be no doubt that a deponent who has no personal knowledge about any fact may, on the basis of some other facts, make his submission in court.
[746G] (7) Merely because the detaining authority has not sworn an affidavit, it will not in all circumstances be fatal to the sustenance of the order of detention.
[747H] P.L. Lakhanpal vs Union of India & Ors.
, ; Asgar Ali vs District Magistrate Burdwan & Ors., and Suru Mallick vs State of West Bengal, , referred to.
(8) There was no laches or negligence on the part of the detaining authority or the other authorities concerned in dealing with the representation of the detenu.
The observa tions made by this Court that each day 's delay in dealing with the representation must be adequately explained are meant to emphasize the expedition with which the representa tion must be considered and not that it is a magical formu la, the slightest breach of which must result in the release of the detenu.
[749C D] Mst.
L.M.S. Ummu Saleema vs Shri B.B. Gujaral, ; , explained.
(9) The said two firms had really no existence and were the benami concerns of the detenu, and the detenu if re leased, may indulge in such economic offences in setting up fictitious firms and taking out 736 advance licences in the name of such firms.
[750B] Achla Kakkar vs Administrator, Union Territory of Delhi
|
ivil Appeal No. 2041 of 1968.
(From the Judgment and Decree dated 2.2.1966 of the Allahabad High Court (Lucknow Bench) Lucknow in First Execu tion Appeal No 5/62).
S.N. Prasad, for the appellant.
G.C. Mathur and O.P. Rana for the respondent.
The Judgment of the Court was delivered by BEG, C.J.
This appeal by certificate raises the simple question whether certain trees, said to be part of a grove, are included in 34 grove land, which, under section 6(a) (i) of the U.P. Zamindari Abolition and Land Reforms Act, 1950 (hereinafter referred to as the Act) vests in the State of Uttar Pradesh free from all encumbrances.
This very question was raised by the respondent decree holder in the execution proceed ings in this very case, between the same parties which came to this Court on an earlier occasion.
We have perused the judgment of this Court reported in ; , in the case.
We find that the position taken by the respond ent decree holder then also was that, after the coming into force of the Act, what could still be sold in execution of the decree was the right in trees of groves as these contin ued to vest in the intermediary.
This Court rejected ' that submission and held that after vesting of all the rights mentioned in.
section 6 of the Act in the State of Uttar Pradesh, new bhumidhari rights came into existence under section 18 of the Act.
It also held ' that the only way in which a mortgagee could enforce his right against the mortgage or after the Act came into force is provided in section 6(h) of the Act, read with section 73 of the , so that nothing more than the compensation awarded to the, intermediary could be proceeded against by the mortgagee.
Proceed against by the mortgagee.
We are surprised that, even after that decision which, according to the aPPellant judgment debtor, constitutes a complete answer to any further execution proceedings in respect of any part of bhumidhari rights, execution should have proceeded against trees in groves and the view taken by the execution court, that there is a distinction between, trees and a grove and grove land, should have been upheld by a Division Bench of the Allahabad 'High Court (Lucknow Bench).We find that it is impossible for us to accept this opinion in view of the definition of the intermediary 's grove under section 3(13) of the Act which says "intermediary grove means grove land held or occupied by an intermediary as such".
This means that "grove land" and an "intermediary 's groves are equated and groves are on ly collections of trees in plots of land so as to preclude cultivation in them.
The uncut trees are deemed to be parts of the "land".
Section 18(1)(a) of the Act provides that an "intermediary 's grove" is bhumidhari property.
Rights in it are part of bhumidhari rights.
After these clear words of the enactment.
we think it is not necessary even to consider previous definitions or to make out specious or unrealistic distinctions between standing uncut trees, which are parts of groves, and groves and grove land.
The proposition is well settled, under the general law, that trees, before they are cut, form parts of 'land '.
And, an inseparable part is always included in the whole.
In view of this very clear legal position, we allow this appeal and set aside the judgments and decrees of the High Court and the Execution Court with costs.
S.R. Appeal al lowed.
| In Rana Sheo Ambar Singh vs Allahabad Bank Ltd., Allaha bad (1962) 2 SCR p.441, this Court held that the respond ent could not enforce his rights under the mortgage by the sale of the new Bhumidari rights created in favour of the mortgagor by section 18 of the U.P. Zamindari Abolition and Land Reforms Act, 1950 and that the respondent could only enforce his rights against the appellant in the manner provided under section 6(h) of the Act read with section 73 of the Transfer of Property Act, and follow the compensation awarded to the intermediary.
Despite this decision having been brought to the notice in the execution proceedings initiated by the respondent attachment of the trees in groves belonging to the appellant was ordered by the executing Court taking the view that there is a distinction between the trees and a grove and grove land.
The Division Bench of the Allahabad High Court (Lucknow Bench) upheld the views of the Executing Court and dismissed the appeal Allowing the appeal by certificate, the Court, HELD: (1) The view that there is a distinction between trees and a grove and grove land and, therefore execution against trees in groves could be proceeded against cannot be accepted in the light of the definition of the intermediary grove under section 3(13) of the U.P. Zamindari Abolition and Land Reforms Act, 1950, viz., "intermediary 's grove" means groveland held or occupied by intermediary as such.
[34 D E, H] (2) Groves are only collection of trees in plots of land so as to preclude cultivation in them.
The uncut trees are deemed to be parts of the land.
The proposition is well settled under the general law, that trees, before they are cut.
form parts of 'land '.
And are inseparable part is always included in the whole.
[34E F] (3) Section 18(1)(a) of the Act provide that an "inter mediary grove" bhumidary property.
Rights in it are parts of bhumidari rights.
|
ition No. 4167 68, 7346 53, 7689 97, 8638, 8640 41, 9899 of 1982, 910 912 of 1983, 7987 91 of 1982 and 29, 1642 of 1983.
(Under article 32 of the Constitution) AND Civil Appeals Nos.
2464 65 of 1982.
Appeals by Special leave from the Judgment and Order dated the 9th April, 1982 of the Punjab and Haryana High Court in C.P. Nos. 4805 and 5184 of 1981.
For the appearing Petitioners/Appellants: S.B. Bhasme, B.R. Kapur, S.R. Srivastava, C.P. Mittal, D.B. Vohra, K.G. Bhagat, Vimal Dave, Ms. Kailash Mehta, A.K. Goel and Sarva Mitter.
For Respondent: Parmod Dayal, K.K. Jain and A.D. Sanger.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
: Each of these writ petitions is by a consumer of electric energy which has entered into a contract with the Haryana State Electricity Board ( 'Board ' for short), and challenge in these petitions under Article 32 of the Constitution is to the enhancement of security unilaterally made by the Board both in respect of meter as also for the payment of the energy dues.
Clause 22 of the standard contract stipulates: 168 "22.
Security Deposit: (a) Before commencing or resuming supply to a consumer the Board may require the consumer to lodge with the Board as security for the payment by the consumer of his monthly bills and for the value of the meters and/or other apparatus belonging to the Board and installed at the consumer 's premises a deposit, which may not be transferable, calculated as follows: Rs. 10.00 per KW of connected load or part thereof in the case of domestic; Rs. 20 per KW of connected load or part thereof in case of commercial and Rs. 30 per KW of connected load or part thereof in case of industrial/agricultural/bulk supply/street lighting consumers plus the following amount per meter: (1) . (2) . (3) . (4) For medium industrial supply and bulk supply above 20 KW and up to 100 KW.
Rs. 100.00 (5) For industrial and bulk supply above 100 KW.
Rs. 200.00 The security is obtainable in cash and an interest at the rate of 4% per annum shall be payable on security deposits of Rs. 50.00 and above.
No interest will be payable if a connection is disconnected within a year of giving supply.
(b) The Board will be at liberty at any time to demand further security deposit from consumers who have habitually defaulted in making payments of their monthly dues.
" Clause 31 provides: "31.
Rights of Board to revise schedules of tariffs and charges and conditions of supply: Subject to clause 169 30 above (relating to interpretation) the Board reserves the right at any time to amend, cancel, or add to, any of these schedules and conditions.
" Each of the contracts contains detailed provisions for security deposit as provided under clause 22.
The Board enhanced the tariff by almost four times but the enhancement of tariff has not been challenged by the consumers, who have filed these writ petitions.
Thereafter the Board decided in October 1980 that with effect from April 1, 1981, the security contemplated under clause 22 both in regard to the meter as also for due payment of the energy bills should be enhanced and fixed a new schedule.
Challenge in these petitions is to the enhancement in regard to both the meter as also security for due payment of energy bills made unilaterally by the Board.
As this is the common question arising in all these writ petitions, they are being disposed of by a common judgment.
The petitioning consumers have contended that the enhancement made in the security amount towards the meter is without any justification.
It is all the more so where meters have been installed several years before and there is no change in the circumstances justifying an enhancement in the security deposit for it.
Challenge is also advanced against the enhancement of the security deposit in the matter of payment of energy bills.
From 1968 the Board had introduced the condition of taking a security from every consumer to ensure timely clearance of energy bills and in the case of industrial consumers the security was worked out at Rs. 30 per KW.
With effect from April 1, 1981, in place of Rs. 30 per KW Rs. 100 per KW has been substituted.
It is contended that on account of this enhancement most of the petitioning consumers have been called upon to furnish additional security to the tune of several lakhs of rupees.
Similarly in regard to the meter a different basis has been adopted and from April 1, 1981, the security deposit now varies between Rs. 5000 and Rs. 10,000 in regard to industrial consumers.
After the enhancement came into force the Board through its prescribed officers called upon the petitioning consumers to make additional security deposits on both counts, within a time indicated.
According to the petitioners the ( 'Act ' for short) and the Rules made thereunder do not contemplate any provision of security for the timely payment of energy charges.
The Board has not framed any Regulations under section 79 of the 170 for demanding security of the type in issue.
According to the petitioners as the supply is controlled under an agreement entered into between the Board and the petitioning consumers, unilateral escalation would be contrary to any acceptable notion of contract.
Reliance is placed on behalf of the petitioners on the decision of the Allahabad High Court in Modi Industries Ltd. (Steel Section) vs U.P. State Electricity Board, and that of the Bombay High Court in M/s. Devidayal Metal Industries vs The Municipal Corporation for Greater Bombay and Anr.
Before the Allahabad High Court it was contended by the consumer that the Board contracted with it to supply 9500 KW electrical energy.
The rate schedule applicable to the consumer was HV 2.
Under the agreement of December 31, 1970, the consumer had deposited with the Board a sum of Rs. 3,44,135 as security.
The Board demanded a further security of Rs. 9,00,000.
The consumer took the plea before the High Court that neither under the ( '1910 ' for short), nor the and the agreement for supply between the parties was the Board authorised to demand additional security.
The Board took the plea that the tariff had gone up from time to time and the then existing rate schedule was of 1974.
Normally the meter reading was done after every 30 days or once in 30 days and it took about 15 to 20 days thereafter to prepare the bill and to send it to the consumer.
A further period of 15 days was allowed to the consumer to make the payment.
Seven days ' disconnection notice after expiry of the due period was to be given to the consumer.
It took 2 or 3 days thereafter to verify the accounts and take steps for disconnection on the ground of non payment, of the energy bill.
Thus a period of about 3 months was necessary to collect the energy bills from the date of consumption.
In order to safeguard the financial interest of the Board a sum equal to energy bill for three months on the average was demanded as security.
Reliance was placed on clause VI of the Schedule to the 1910 for authorising the Board to rise the additional demand of security.
The Court took the view a that clause VI of the Schedule to the 1910 had no application and came to the conclusion: "The Board is a statutory authority and has to act within the framework of the statutory provisions applicable to it.
If the act of the Board is found to be not 171 in consonance with or in breach of some statutory provisions of law, rule or regulation, it is open to challenge in a petition under article 226 of the Constitution.
In these petitions no contractual rights are sought to be enforced which may more suitably be agitated in a competent Civil Court as contended by the learned counsel for the Board".
A learned single Judge of the Bombay High Court without referring to the Allahabad decision came to the conclusion that the scheme of the made it clear that it was not open to the licenser to impose any financial burden in addition to what was provided for in the itself.
If this were not so, the whole object of the , which is to ensure the supply of electricity to the consumers in a controlled manner at rates which have to be controlled and approved by the State Government would be destroyed.
Because, in addition to the electricity charges, the licenser may, by contract, provide for other charges and thus impose a greater financial burden on the consumer than contemplated in the itself.
As against these decisions, reliance has been placed on a Bench decision of the Andhra Pradesh High Court in Krishna Cement Works vs The Secretary, APSEB and a single Judge decision of the Rajasthan High Court in M/s. B.R. Oil Mills vs Assistant Engineer (D), RSEB, Bharatpur and Anr., on behalf of the Board in support of the demand of security.
The Andhra Pradesh High Court has taken the view that sub para (a) of the first proviso to clause VI of the Schedule to the 1910 would be applicable and what would be sufficient security should be left to the Board to decide.
The Andhra Pradesh Electricity Board had adopted similar justification as placed by the Board before us to justify demand of enhanced security and dealing with such stand the learned Judge observed: "To our mind, this is a quite satisfactory explanation of the reasons behind insistence on cash security.
Certainly a public utility service like Electricity Board cannot launch itself on litigation to recover consumption charges on a large scale.
Power generation, which it does is an essential service and that shall never be allowed to suffer on account of improper security.
We 172 have already referred to the fact that it is reasonable on the part of the Board to require security for three months ' consumption charges.
Now to require that amount to be deposited in the form of cash is eminently reasonable. " The Rajasthan High Court has accepted the view of the Andhra Pradesh High Court.
We accept the view of the Andhra Pradesh High Court.
Counsel for the Board has also placed before us a Division Bench decision of the Punjab and Haryana High Court in M/s. Goodyear India Ltd. vs Haryana State Electricity Board and Others, where the decision of the Andhra Pradesh and Rajasthan High Courts have been followed.
We have been told that against that decision of the Punjab and Haryana High Court appeals have been preferred to this Court.
We are of the view that the Board has been conferred statutory power under section 49(1) of the to determine the conditions on the basis of which supply is to be made.
This Court in Bisra Stone Lime Company Ltd. & Anr.
vs Orissa State Electricity Board & Anr., took the view that enhancement of rates by way of surcharge was well within the power of the Board to fix or revise the rates of tariff under the provisions of the .
What applied to the tariff would equally apply to the security, that being a condition in the contract of supply.
Each of the petitioning consumers had agreed to furnish security in cash for payment of energy bills at the time of entering into their respective supply agreements.
There was no challenge in these writ petitions that the demand of security at the time of entering into supply agreements has to be struck down as being without jurisdiction.
Section 49(1) of the clearly indicates that the Board may supply electricity to any person upon such terms and conditions as the Board thinks fit.
In exercise of this power the Board had initially introduced the condition regarding security and each of the petitioners had accepted the term.
173 Under clause 31 of the agreement the Board reserved to itself the right to amend, cancel or add to any of the schedules and conditions at any time.
The provisions of this clause are similar to clause 13 of the agreement which came to be considered in Bisra Lime Stone Company 's case (supra).
We are, therefore, inclined to take the view that the Board had authority under the agreement itself to amend the conditions.
In exercise of that power the Board has now raised the additional demand.
We have already taken note of the fact that there has been a steep escalation in the tariff.
Counsel for the Board placed before us a statement which indicates that while tariff has gone up almost four times, the demand for security raised by the Board is much less it is a little more than two times of the original security.
On behalf of some of the petitioners it was contended that the security should represent the average energy bill for one month.
It was claimed that the Legislature has set up the Board as an autonomous body with large powers and providing scope to act purely with a view to creating an effective public utility service.
The Board should not be permitted to act either arbitrarily or capriciously; nor should it manage its affairs in a disorderly way and taking advantage of its monopoly status pass on the incidence of such vice to be shared by the consumers.
We share the concern of the petitioners and their counsel that the affairs of the Boards in the different States of the country are not upto the expectation of the consumers and there have been instances which give rise to genuine anguish and dissatisfaction.
The scheme of the clearly indicates a legislative mandate that the Board should manage its commercial activities in such a way that it does not make any loss.
It is also clear that the Board being a public utility organisation is not expected to make any undue profit by abusing its monopoly position.
An inbuilt system of control and supervision has been set up and the State Governments have been given power to give policy directions.
Situation seems to have arisen when stricter control and supervision are called for and if organisational changes and provision for greater control appear necessary, to improve the functioning of the Boards, steps should be taken without delay in this regard.
The Board should always remember that it is a public utility service and not a governmental agency enjoying wide powers and expected to have a share in the governance of the country.
174 We agree, however, on the facts placed that the stand of the Board that a demand equal to the energy bill of two months or a little more is not unreasonable.
Once we reach the conclusion that the Board has power to unilaterally revise the conditions of supply, it must follow that the demand of higher additional security for payment of energy bills is unassailable, provided that the power is not exercised arbitrarily or unreasonably.
On the security amount interest at the rate of 4% was initially payable.
The same has already been enhanced to 8% per annum.
Since the amount is held as security, we indicated to the counsel for the Board that security amount should bear the same interest as admissible on fixed deposits of Scheduled Banks for a term of years and we suggested keeping the present rate of interest in view that it should be enhanced to 10%.
Board 's counsel has now agreed that steps would be taken to enhance the present rate of interest of 8% to 10% with effect from October 1, 1983.
Once that is done, the argument that the security should be in the shape of Bank Guarantee does not call for consideration.
In regard to the enhanced security for the meter the explanation advanced by the Board is that the meters are required to be replaced or many costly parts have to be substituted by way of repair.
In view of the high cost of the meters the Board is justified in enhancing the security.
Petitioners have not disputed their obligation to furnish security for the meter.
But the challenge is to the enhancement.
Indisputably all the meters to the petitioning consumers have been supplied prior to the decision to enhance the security.
Keeping in view the likelihood of replacement or substantial repair, we suggested to learned counsel for the Board that the escalation may be reduced by 50%, i.e. in place of the enhanced demand varying between Rs. 5,000 and Rs. 10,000, it should be limited to Rs. 2,500 and Rs. 5,000.
Learned counsel has agreed that steps would be taken by the Board to evolve a formula by which the demand for security for the meter would be revised being limited to Rs. 2,500 at the minimum and Rs. 5,000 at the maximum in regard to industrial meters in respect of which the demand now is between Rs. 5,000 and Rs. 10,000.
It would, therefore, follow that the Board would not enforce its decision in regard to escalation of 175 the meter security until the new formula is evolved and it will be open for the Board to ask for additional security effective from October 1, 1983, in accordance with the new formula towards security for the meter.
We make no Order as to costs.
S.R. Petitions dismissed.
| Allowing the State appeal, the Court ^ HELD: 1.
In section 10 of COFEPOSA, both in the first and the second part of the section, it has been expressly mentioned that the detention will be for a period of one year or two years, as the case may be, from the date of detention and not from the date of the order of detention.
If the submission that the appeal has become infectious in view of the fact that the maximum period of detention mentioned in section 10 of the Act has expired, was accepted, two unintended results follow: (1) if a person against whom an order of detention is made under section 3 of the Act, he can successfully abscond till the expiry of the period and altogether avoid detention; and (2) even if the period of detention is interrupted by the wrong judgment of a High Court, he gets the benefit of the invalid order which he should not.
The period of one or two years, as the case may be, as mentioned in section 10 will run from the date of his actual detention, and not from the date of the order of detention.
If he has served a part of the period of detention, he will have to serve out the balance.
[741 H, 742 A C] 2.
The High Court in its writ jurisdiction under Article 226 of the Constitution is to see whether the order of detention has been passed on any materials before it.
If it is found that the order has been based by the detaining authority on materials on record, then the Court cannot go further and examine whether r the material was adequate or not, which is the function of an appellate authority or Court.
It can examine the material on record only for the purpose of seeing whether the order of detention has been based on no material.
The satisfaction mentioned in section 3 of the Act is the satisfaction of the detaining authority and not of the Court.
[742 E F] 3.
By implication, the High Court has erroneously imported the rule of criminal jurisprudence that the guilt of an accused must be proved beyond reasonable doubt to the law of detention.
[742 D] 741
|
Appeal No. 154 of 1961.
Appeal by special leave from the judgment and order dated October 31, 1960, of the National Industrial Tribunal (Bank Disputes), Bombay, in Reference No. 1 of 1960.
WITH Petitions Nos.
70 80 and 82 of 1961.
Petitions Under Article 32 of the Constitution of India for enforcement of Fundamental Rights.
A.S. R. Chari, V. G. Raw, D. P. Singh, Al.
K. Ramamurthi.
R. K. Garg and section C. Agarwal, for the appellant and the petition (in Petn.
No. 80 of 61).
M. C. Setalvad, Attorney General of India, N. V. Phadke, K. H. Bhabha, J. B. Dadachanji, section N. Andley, Rameshwar Nath and P. L. Vohra, for respondents Nos.
2 17 and 19 34 (In appeal and Petn.
No. 80 of 61).
J.B. Dadachanji, section N. Andley, Rameshwar Nath and P. L. Vohra, for respondents NOS.
41 49 (In appeal and Petn.
80 of 1961).
Anand Prakash, for Respdts.
35 40 (In Petn.
No. 80 of 61).
A. V. Viswanatha Sastri, D. P. Singh, M. K. Ramamurthi, R. K. Garg and section C. Agarwal, for Intervener No. 2.
D.S. Nargolkar and K. R. Choudhri, for Petitioners Nos. 70 and 82 of 61).
M. C. Setalvad, Attorney General of India, C.K. Daphtary, Solicitor General of India, H.N. Sanyal Additional Solicitor General of India, J.B Dadachanji, 272 section N. Andley, Rameshwar Nath and P. L. Vohra, for Respdt No. 2 (In Petns.
Nos. 70 and 82 of 61).
Naunit Lal .for intervener No. 3.
M. C. Setalvad Attorney General of India and T. sen, for Intervener No. 1. 1961.
August 28.
The Judgment of the Court was delivered by AYYANGAR, J.
Civil Appeal No. 154 of 1961 has been filed on special leave obtained from this Court Against an order of K. T. Desai, J., functioning as the National Industrial Tribunal (Banks Disputes) Bombay dated October 31, 1960.
The point arising for decision in the appeal is as regards the constitutional validity of section 34A of the Banking Companies Act, 1949 which was enacted on August 26, 1960 as an amendment to the parent Act (Act X of 1949).
The appellant before this Court is the All India Bank Employees ' Association which is a trade union organization of Bank Employees of several banks operating in India The Punjab National Bank Employees ' Union, which is a trade union with similar objects has been committed to intervene in this appeal in support of the appellant union The three other Writ Petitions are by other Bank Employees ' Unions whose description would be apparent from the cause title and all these cases have been heard together because in the writ petitions also the point raised is identical, viz., the validity of s.34A of the Banking Companies Act, which will be referred to hereafter as the impugned provision.
Section 34A whose validity is the matter in dispute in these proceedings runs in the following terms "34A. (1)Notwithstanding anything contained in section 11 of the .
or any other law for the time being in force, no banking company 273 shall in any I proceeding under the said Act or in any appeal or other proceeding arising therefrom or connected therewith, be Compelled by any authority before which such proceeding is pending to produce, or give inspection of, any of its books of account or other document or furnish or disclose any statement or information, when the banking company claims, that such document, statement or information is of a confidential nature and.
that: the production or inspection of such document or the furnishing or disclosure of such statement or information would involve disclosure of information relating to : (a)any reserves not shown as such in its published balance sheet ; or (b)any particulars not shown therein in respect of provisions made for bad and doubtful debts and other usual or necessary provisions.
(2)If, in.
any such proceeding in relation to any banking company other than the Reserve Bank of India,, any question arises as to whether any amount out of the reserves or provisions referred to in sub section (1) ,should be taken into account by the authority before which such proceeding is pending, the authority may, if it so thinks fit, refer the question to the Reserve Bank and the Reserve Bank shall after taking into account principles of sound banking and all relevant circumstances concerning the banking company, furnish to the authority a certificate stating that the authority shall not take into account any amount as such reserves and provisions of the banking company or may take them into account only to the extent of the amount specified by it in the certificate, and the certificate of the Reserve Bank on 274 such question shall be final and shall not be called in question in any such proceeding.
(3)For the purposes of, this section, "banking, company" shall have the meaning assigned to it in the , Before commencing the examination of the points in controversy and the grounds on which the legality of the above provision is impugned.
It would be helpful for a better appreciation of the problem if we set out in very brief outline, the history of the steps which led to the enactment in dispute ' There was a long standing practice in England of Banking Companies, as distinguished from companies carrying on other commercial etc.
activities, not to disclose, in their balance sheets and Profit & Loss accounts, bad and doubtful debts and the provision made therefore, as well as, the secret reserves created and held under various items a practice which received judicial recognition by Buckley, L., J. in .Newton vs Birmingham Small Arms Co. Ltd. (1) This practice was followed by several banks in India and questions arose from time to time as to how far the practice was consistent with the statutory provisions as to disclosure contained in the several Companies Acts enacted from time to time.
; We shall, how ever, add that the desirability and; even the legality of this practice has not gone without challenge, though there has been a considerable body of opinion which has held this to be salutary and necessary for the preservation and progress of a credit institution like a bank.
We are not now concerned with the desirability or ethics of the practice which is a matter for the consideration of the legislature but as to the steps by which accord was established between the practice and the law.
The Indian Companies Act of 1866 drew no distinction between the contents of balance sheet,% of banking companies as distinguished from those of (1) 275 other companies and both were required to disclose a list of debts owing to the concern which were considered bad or doubtful Pro visions on the same lines, i. e., without any, distinction between Banking and other companies, were copied and continued by the Indian Companies Act of 1882.
When, however, the Companies Act of 1913 was enacted, Form F ' to the 3rd Schedule to the Act contained a note in respect of the sub heading ' 'book debts ' under the head Property & Assets ' in the balance sheet, reading "distinguishing ill the case of a bank between those considered good and in respect of which the bank is fully: secured and those considered good for which the bank holds no security other than the debtor 's personal security; and distinguishing in all cases between debts considered good, and debts considered doubtful or bad.
Debts due b y directors or other officers of the company or any of the either severally or joint with any other persons to be separately stated in all cases.
" It would be seen that by reason of this note the obligations imposed upon banks as regards the classification of their; assets and the information to: be disclosed became slightly more detailed than in ' the case of other companies.
The practice, 'however, of bankers to which we adverted earlier not to disclose or not to disclose to the full extent bad and doubtful debts but to make, provision for them by setting aside under other heads, sufficient moneys which would operate as secret reserves, so that the credit of the institution would not be affected while its financial stability would remain unimpaired; was continued notwithstanding this, change in the form.
The Central Bank of India Limited in its published, balance sheets of the year 1925 adopted the above practice which however, wasn 't obviously in strict conformity with the requirements of From 'F 'to the third schedule read with note.
The 276 managing director of the bank was prosecuted by one Shamdasani who was a shareholder of the bank ,or "filing and publishing statements which were false in material particulars" an offence punishable under section 282 of the Indian Companies Act.
The Magistrate acquitted the accused on the ground that the balance sheet was in accordance with the usual practice of bankers and that the reserves of the company which were shown under various heads though not as a specific provision for bad and doubtful debts covered the possible losses several times.
Ail application for revision was filed before the High Court of Bombay and Fawcett, J. allowed it holding that a declared provision.
of the form cannot be allowed to be whittled down by general considerations as to the object of a balance sheet.
" This judgment was rendered on February 28, 1927 (vide Shamdasani vs Pochkanwala (1) and very soon thereafter the Government of India intervened by a notification dated March 29, 1927 under section 151 of the companies Act 1913 amending form 'F ' and as amended banks were excluded from the requirement of disclosing the reserve for bad and doubtful debts under the heading, `capital and Liabilities ' in the left hand side of the balance sheet, and in the right hand column "book debts which were bad and doubtful for which provision had been made to the satisfaction of the auditors",, were not required to be shown as part of the property and assets of a Bank.
The provisions of the Companies Act of 1913 underwent numerous changes by the amending Act of 1936 which included inter alia one whereby the change effected by the Notification, dated March 29, 1927, in Form `F ' were omitted and Form `F 'was made to retain the note which accompanied it under the Act of 1913 without the exception in favour of banks effected by the Notification.
This was possibly unintended, because on the day after the amending Act came into operation, the Central Government published a Notification on January 16, 1937 (1) A.I.R. 1927 Bom.
414 : 277 again under s.151 of the Companies Act restoring the alterations in the balance sheet Form 'F ' as had been effected by the prior Notification ,of March 1927.
The validity of this Notification was questioned as being beyond the powers of the Central Government by Shamdasani who filed a complain against the Central Bank of India Limited and its directors charging them with having issued a false balance sheet for the year ending December 31, 1939 a balance sheet which was in conformity with the form as modified by the Notification.
The Magistrate upheld the validity of the Notification and quitted the accused.
Shamdasani preferred a revision to the High Court and a full Bench of the Bombay High Court held that the Notification was beyond ' the powers of the Central Government, though the order of acquittal was affirmed upholding the plea of the accused that their act was bona fide in that they believed the alteration in the form to be valid (Vide Shamdasani vs The Central Bank of India Ltd.(", Immediately after 'this judgment the Central legislature passed Act XXX of 1943 with retrospective effect validating the Notification and amending the relevant sections of the Companies Act.
(sections 132,151, article 107) so as to empower the Government to effect changes in the form of the balance sheet in the manner in which they had done in January ' 1937.
The next event in order of date relevant to the present context is the report of the Company, Law Amendment Committee of the United Kingdom presided over by Mr. Justice Cohen where the entire question of undisclosed reserves was fully discussed.
The pros and cons of the question were elaborately considered by the Committee and it is sufficient therefore in this connection to a short passage in the report.
In paragraph 101 the problem is thus set, out : "The chief matter which has and controversy is the question of undisclosed or, a. (1) I. L. R. 278 the Are, frequently called, secret or inner reserves.
An undisclosed reserve is commonly created by using profits to write down more than is necessary such assets as investments,freehold and leasehold property or plant and machinery by creating excessive provisions for bad debts or other contingencies by charging capital expenditure to revenue ; or by undervaluing stock in trade.
Normally the object of creating an undisclosed reserve is to enable a company to avoid violent fluctuations in its published profits or its dividends.
" The Committee made number of recommendations several of which were adopted in ' the U. K. Companies Act of 1948, and those relevant ' to the point under discussion served to bring the law as to the contents of a balance sheet of a Banking Company unto.
line with the practice of sound and well managed banks.
In India, special legislation in relation to Banking Companies embodying several of these recommendations was enacted in the shape of the Banking Companies Act 1949 (Act of 1949).
Section 29 of the Act laid down the law in regard to requirements of the contents of the balance sheets of banks.
The balance sheet and Profit & Loss account were to be in the form set out in the 3rd schedule to that and sub section
(3) of that section exempted Banking Companies from the, requirements of conforming to the form of balance sheet and Profit & Loss, account of companies registered under the Indian Companies Act; and the Central Government were empowered by sub section
(4) to amend the, form set out in the schedule by Notifications published in the official.
, Gazette.
In Form 'A ' which provided the model of a balance sheet 'and Profit & Loss account in the case of banks, there was not much change as compared to the requirements of the previous law except that in the Profit & Loss account (Form 'B ' )I the third schedule) the provision for bad and doubtful debts was permitted to be excluded from the 279 income so that the amount of bad and doubtful debts did not figure separately on the income side of the profit & loss account.
The income as required to be shown was "income (less provision made during the year for bad and doubtful debts)".
This last item was modified by a Notification issued under the power conferred by s.29(4) of the Act in December 1951, so that after amendment .the beading "Income" in the Profit & Loss Account ran: "Income (less provision made during the year for bad and doubtful debts and other usual and necessary provisions").
Thus so far as shareholders of Banks and the general public including the customers of the bank were concerned, banks were relieved from the obligation of disclosing the entirety of their reserves as such and also of the extent of bad or doubtful debts and the provision made therefore.
While the law was in this state disputes arose between the employees of banks all over India and the respective banks with regard to wages, conditions of work etc.
which were referred by the Central Government in June 1949 to an ad hoc Tribunal with Shri K. C. Sen, a retired Judge of the Bombay High Court as Chairman.
The Tribunal passed an award but its validity was successfully challenged in this Court in April 1951 on the ground that all the members of the Tribunal who passed the award were not those who had all inquired into the dispute.
Thereafter a fresh Tribunal was appointed in January 1952 with Shri section Panchapages Sastri, a retired Judge of the High Court of Madras as Chairman.
The award of this Tribunal was published in April, 1953, but it is not necessary to state its terms.
Appeals against the award were preferred to the Labour Appellate Tribunal both by the banks as well as by workmen.
The Appellate Tribunal which heard the appeal consisted of three members with Shri Jeejeebhoy as president.
The claim of the workers in the appeal before the Appellate Tribunal in great part related to a 280 demand for increased wages and salaries and the main defence of the banks was that they had not the capacity to pay anything beyond what the Sastry Tribunal had granted.
The Jeejeebhoy Tribunal set out their difficulties in assessing the plea of incapacity raised by the banks in the context of the provisions of the Banking Companies Act and the form of balance sheet prescribed thereunder in the following terms : "At the very outset there is an initial difficulty in arriving at a correct estimate of the financial position of banks.
There are two circumstances which militate against our securing a proper insight into the financial state of banks.
We refer in particular to (a) the undisclosed or secret reserves and (b) to the manner in which it is permissible in law for a banking company to exhibit its balance sheet.
It is not in dispute that bank do have undisclosed or secret reserves which they acquire in a number of ways, and such undis closed reserves cannot be ascertained from the balance sheet. . . . . . . x x x The other difficulty with which we are confronted at the outset is the manner in which a bank is permitted to present its profit & lose account.
On the income side the form originally prescribed by the Banking Companies Act required the banks to declare "Income less provision made during the year for bad and doubtful debts)" ; this has now been altered by an amendment made by the Central Government in exercise of the powers conferred under sub section 4 of section 29 of the Banking Companies Act to read "Income (less provision made during the year for bad and doubtful debts and other usual or necessary provisions)".
The effect of this alteration is that the profits as shown for any 281 particular year are first shown not only of bad and doubtful debts but also of 'other usua l or necessary provisions ' before being shown in the balance sheet. . . .
It maybe that these other usual or necessary provisions ' have been passed by the Board of Directors, and by the auditors of the concern and may even have been scrutinized by the Reserve Bank of India ; but it is our duty and function to decide the question of the capacity of a bank to pay, and in the absence of important information of this character our estimate of the capacity of a concern to pay must necessarily be incom plete. . . .
Banks feel that they now have the form of the Banking Companies Act to shield themselves against an enquiry on the subject ; but insofar as we are concerned we consider these undisclosed reserves and these appropriations.
relevant for the purposes of our investigation and in their absence we would have to decide as beat as we could from the other materials before us; and draw such inferences as justified.
" It was the contention of the workmen that an Industrial Tribunal had the right in law to compel banks to sis, lose their secret reserves as well as the amount of "the bad and doubtful debts and other necessary provisions" which bad been excluded under the head "income" in the, Profit & Loss Account of banks.
This matter was agitated by them before this Court in State Bank of India and others vs Their Workmen (1) being an.
appeal against the decision of the Labour Appellate Tribunal.
In view, however, of the conclusion reached by this Court on other parts of the case it refrained from pronouncing upon the correctness or otherwise of this claim by the workmen.
The diputes between the employees of banks (1)(1959), 2 L.T L. J. 205.
282 and the managements, however, continued with the result that on March 21, 1960 the Central Government in exercise of the powers conferred on it by sub section
(1A) of section 10 of the referred the dispute which related to several matters to the National Tribunal constituted by & Notification of Government of the same date, K. T. Desai, J. was the Tribunal so appointed.
Most of the major banks in the country were made parties to the reference including the Reserve Bank and State Bank of India.
After the Tribunal started functioning and after the parties formulated their respective contentions, applications were filed by the Bank Employees Association on June 9, 1960, for directing the respondent banks to produce before the Tribunal for the purposes of adjudication several documents listed in the applications.
Among the items in respect of which production was thus sought were (1) statements showing "the secret reserves in any form" of each bank from 1954 right upto December 31, 1959 ; and (2) statements showing the provision made "for bad and doubtful debts and other usual and necessary provisions" during the years 1954 to 1959 and the total amounts outstanding in such items in each bank in the said years.
The banks filed their reply on July 16, 1960.
The production of the documents and the information called for on several of the matters including the above two was resisted by the Indian Banks Association (being an association of employers) on the ground that they were by law exempted from disclosure in the interest of the industry and the public and claimed absolute privilege from making the disclosure.
It was at this stage that the impugned provision was enacted by Parliament as an amendment to the Banking Companies Act.
As several of the banks relied upon the impugned provisions in support of their plea that they could not be compelled to disclose either the quantum of their secret reserves or their nature, or as regards the provision made in 283 the several years for "bad and doubtful debts and for other reasonable and necessary provision", the bank employees association challenged the constitutional validity of section 34A of the Banking Companies Act, which, if valid, could have afforded a sufficient answer to the demand for production of the documents in relation to these matters.
This objection was argued before the National Tribunal which upheld the validity of the section.
As we have stated earlier, Civil Appeal No. 154 is directed against and challenges the correctness of this decision.
The Writ Petitions have been filed by Bank Employees Associations which were not parties to the application for production before the National Tribunal and are intended to support the plea of the appellant in Civil Appeal No. 154 of 1961.
The foregoing narrative would show that the Banking Companies Act, as it stood before the amendment now challenged, had brought the law as to the disclosure of secret reserves and the provision for bad and doubtful debts etc.
Into accord with the usual practice of Bankers, and had protected these items from being compulsorily disclosed to the shareholders of the respective companies and to the general public.
There had been a controversy as to whether the workmen of these establishments were or were not entitled to be placed on a different position from the shareholders because of the bearing of these undisclosed items on the determination of the quantum of their wage etc.
and on their conditions of work having financial implications.
Parliament had, by the impugned legislation, extended the protection from compulsory disclosure to the workmen as well, but with a safeguard in their cue that the Reserve Bank would determine the amount of reserves etc.
which could be taken into account in the course of industrial adjudication.
The question before us is, is this attempt at some approximation of the position of the workmen to that of shareholders etc.
unconstitutional ? 284 Mr. Chari, learned Counsel for the appellant in Civil Appeal No. 154 addressed to us the main arguments in the case and these were supplemented by learned Counsel appearing for the petitioners in the several writ petitions and also by learned Counsel on behalf of the Interveners both in the appeal as well as in the petitions.
Though the arguments before us ranged over a very wide field, the attack on the validity of the legislation was rested on two main grounds : (1) that the impugned legislation contravened the fundamental right guaranteed to "trade unions" by the provi sion contained in sub cl.
(c) of el.
(1) of article 19; and (2) that it violated the freedom of equality guaranteed by article 14 of the Constitution.
We shall consider these two points in that order : First as to the impugned provision being obnoxious to, or in contravention of sub cl.(c) of cl.
(1) 'of article 19 'of the ' Constitution.
This Article runs, to quote only the relevant words "Article 19.
(1) All citizens shall have the right (a). . . . . . . . (b). . . . . . . . (c) to form associations or unions The right is subject to the qualification contained in cl.(4), reading : "(4).
Nothing in sub clause (c) of the said clause shall affect the operation of any existing law insofar as it imposes, or prevent the State from making any law imposing, in the interests of public order or morality, reasonable restrictions on the exercise of the right conferred by the said sub clause.
" It is not the contention of any of the learned Counsel that the right of workmen to form unions or associations which is the right guaranteed by sub cl.
(c) of cl.
(1) of article 19 on its literal reading has 285 been denied by the impugned legislation.
The argument, however, was that it would not be a proper construction of the content of this guaranteed freedom to read the text literally but that the freedom should be so understood as to cover not merely a right to form an union in the sense of getting their union registered so as to function as an union, i.e., of placing no impediments or restrictions on their formation which could not be justified as dictated by public order or morality but that it extended to confer upon unions so formed a right to effectively function as an instrument for agitating and negotiating and by collective bargaining secure, uphold or enforce the demands of workmen in respect of their wages prospects or conditions of work.
It was further submitted that unless the guaranteed right comprehended these, the right to form an Union would be most illusory.
To understand the implications of learned Counsel 's submission in their proper perspective the several steps in the reasoning might be set out as follows : (1)The Constitution guarantees, by sub cl.(c) of cl.
(1) of article 19, to citizens in general and to workers in particular the right to form unions.
In this context it was pointed out that the expression `union ' in addition to the word ,association ' found in the Article refers to associations formed by workmen for "trade union" purposes ; the word "union, being specially chosen to designate labour or Trade unions.
(2)The right to "form an union" in the sense of forming a body carries with it as a concomitant right a guarantee that such unions shall achieve the object for which they were formed.
If this concomitant right were not conceded, the right guaranteed to form an union would be an idle right, an empty shadow lacking all substance.
(3)The object for which labour unions axe brought into being and exist is to ensure collective 286 bargaining by labour with the. employers.
The necessity for this has arisen from an incapacity stemming from the handicap of poverty and consequent lack of bargaining power in workmen as compared with employers which is the reason d 'etre for the existence of labour organizations.
Collective bargaining in order to be effective must be enforceable labour withdrawing its co operation from the employer and there is consequently a fundamental right to strike a right which is thus a natural deduction from the right to form unions guaranteed by sub cl.
(c) of cl.(1) of article 19.
As strikes, however, produce economic dislocation of varying intensity or magnitude, a system has been devised by which compulsory industrial adjudication is substituted for the right to strike.
This is the ratio underlying the provisions of the under which Government is empowered in the event of an industrial dispute which may ultimately lead to a strike or lock out or when such strikes or lock outs occur, to refer the dispute to an impartial Tribunal for adjudication with a provision banning and making illegal strikes or lock outs during the pendency of the adjudication proceedings.
The provision of an alternative to a strike in the shape of industrial adjudication is a restriction on the fundamental right to strike and it would be reasonable and valid only if it were an effective substitute.
(4)For an adjudication to satisfy the tests of reasonableness and effectiveness two conditions are necessary : (a) that the adjudicator should be enabled to have before him all the materials which are necessary for pronouncing upon the matter in controversy before him ; and (b) that the adjudicator by whom the controversy between the parties should be decided should be an impartial person or body who would render the decision or award after fully hearing the parties, and that no matter in controversy should be the subject of ex parte decision by an interested party or without the disputants having an opportunity to know the, 287 materials on which the decision is reached, as also an opportunity to place their case with reference to such material.
(5)In regard to the right of labour unions to function effectively and to achieve the object of their existence as set out earlier, by negotiated settlement or by compulsory adjudication, the only limitations permitted to be imposed by law are those set out in cl.(4) of article 19 and unless, therefore, either the objects of the association or the marmer of achieving them are contrary to, or transgress public order or morality, for which reason alone reasonable restrictions might be imposed upon the guaranteed right, the.
freedom guaranteed is absolute.
(6)The legislation now impugned withdraws as it were a vital issue in dispute between the parties before the adjudicator, viz:, the capacity of the industry to pay, from his cognisance and vests the power of deciding that issue in the Reserve Bank which is a biased and interested party, the decision itself being rendered ex parte, the trade unions being deprived even of the knowledge of facts which lead to the decision.
It was on this line of reasoning that learned Counsel submitted that the impugned enactment violated the freedom guaranteed by sub cl.
(c) of el.
(1) of article 19.
We shall now proceed to consider the soundness and tenability of the steps in the reasoning.
It is not necessary to discuss in any detail the first step as sub cl.
(c) of el.
(1) of article 19 does guarantee to all citizens the right ',to from associations".
It matters little whether or not learned Counsel is right in his submission that the expression "union ' in the clause has reference particularly to Trade Unions or whether the term is used in a generic sense to designate any association formed for any legitimate purpose and merely as a variant of the expression "Association" for comprehending every body of persons so formed.
It is not controverted 288 that workmen have a right to form "associations or unions" and that any legal impediment in the way of the formation of such unions imposed directly or indirectly which does not satisfy the tests laid down in cl.
(4) would be unconstitutional as contravening a right guaranteed by of the Constitution It is the second step in the argument of the learned Counsel, viz., that the right guaranteed to form "an union" carries with it a concomitant right that the achievement of the object for which the union is formed shall not be restricted by legislation unless such restriction were imposed in the interest of public order or morality, that calls for critical examination.
We shall be referring a little later to the authorities on which learned Counsel rested his arguments under this head, but before doing so we consider it would be proper to discuss the matter on principle and on the construction of the constitutional provision and then examine how far the authorities support or contradict the conclusion reached.
The point for discussion could be formulated thus : When sub cl.
(c) of cl.
(1) of article 19 guarantees the right to form associations, is a guarantee also implied that the fulfilment of every object of an association so formed is also a protected right, with the result that there is a constitutional guarantee that every association shall effectively achieve the purpose for which it was formed without interference by law except on grounds relevant to the preservation of public order or morality set out in cl.
(4) of article 19? Putting aside for the moment the case of Labour Unions to which we shall refer later, if an association were formed, let us say.
for carrying on a lawful business such as a joint stock company or a partnership, does the guarantee by sub cl.(c) of the freedom.
to form the association, carry with it a further guaranteed right to the company or the partnership to pursue its trade and achieve its profit making object and that the only limitations 289 which the law could impose on the activity of the association or in the way of regulating its business activity would be those based on public order and morality under cl.
(4) of article 19? We are clearly of the opinion that this has to be answered in the negative An affirmative answer would be contradictory of the scheme underlying the text and the frame of the several fundamental rights which are guaranteed by Part III and particularly by the scheme of the seven freedoms or groups of freedoms guaranteed by sub cls.
( 'a) to (g) of el.
(1) of article 19.
The acceptance of any such argument would mean that while in the case of an individual citizen to whom a right to carry on a trade or business or pursue an occupation is guaranteed by sub cl.
(g) of cl.
(1) of article 19, the validity of a law which imposes any restriction on this guaranteed right would have to be tested by the, criteria laid down by cl.
(6) of article 19.
if however he associated with another and carried on the same activity say as a partnership, or as a company etc.
, he obtains larger rights of a different content and with different characteristics which include the right to have the validity of legislation restricting his activities tested by different standards, viz., those laid down in el.
(4) of article 19.
This would itself be sufficient to demonstrate that the construction which the learned Counsel for the appellant contends is incorrect, but this position is rendered clearer by the fact that article 19 as contrasted with certain other Articles like articles 26, 29 and 30 grants rights to the citizen as such, and associations can lay claim to the fundamental rights guaranteed by that Article solely on the basis of their being an aggregation of citizens, i.e., in right of the citizens composing the body.
As the stream can rise no higher than the source, associations of citizens cannot lay claim to rights not open to citizens, or claim freedom from restrictions to which the citizens: composing it are subject.
The resulting position way, be illustrated thus If an association were formed ' for ' the purpose of 290 arrying on business, the right to form it would be Guaranteed by sub cl.
(c) of cl.
(1) of article 19 subject to any law restricting that right conforming to cl.
(4) of article 19.
As regards its business activities, however, and the achievement of the objects for which it was brought into existence, its rights would be those guaranteed by sub cl.
(g) of cl.
(1) of article 19 subject to any relevant law on the matter conforming to el.
(6) of article 19 ; while the property which the association acquires or possesses would be protected by sub el.
(f) of cl.
(1) of article 19 subject to legislation within the limits laid down by cl.
(5) of article 19.
We consider it unnecessary to multiply examples to further illustrate the point.
Applying what we have stated earlier to the case of a labour union the position would be this : while the right to form an union is guaranteed by sub el.
(c), the right of the members of the association to meet would be guaranteed by sub el.
(b), their right to move from place to place within India by sub cl.(d), their right to discuss their problems and to propagate their views by sub cl.
(a), their right to hold property would be that guaranteed by sub cl.
(f) and so oneach of these freedoms being subject to such restrictions as might properly be imposed by cls.
(2) to (6) of article 19 as might be appropriate in the context.
It is one thing to interpret each of the freedoms guaranteed by the several Articles in Part III a fair and liberal sense, it is quite another to read which guaranteed right as involving or including 'Concomitant rights necessary to achieve the object which might be supposed to under lie the grant of each of those rights, for that construction would, by a series of ever expanding concentric circles in the shape of rights.
concomitant to concomitant rights and so on, lead to an almost grotesque result.
There is no doubt that in the context of the principles underlying the Constitution and the manner in which its Part III has been framed the 291 guarantees embodied in it are to be interpreted in a liberal way so as to subserve the purpose for which the constitution makers intended them and not in any pedantic or narrow sense, but this however does not imply that the Court is at liberty to give an unnatural and artificial meaning to the expressions used based on ideological considerations.
Besides it may be pointed out that both under the Trade Unions act as well as under the the expressions `union signifies not merely a union of workers but includes also unions of employers.
If the fulfilment of every object for which an union of workmen was formed were held to be a guaranteed right, it would logically follow that a similar content ought to be given to the same freedom when applied to an union of employers which would result in an absurdity.
We are pointing this out not as any conclusive answer, but to indicate that the theory of learned Counsel that a right to, form unions guaranteed by sub cl.
(c) of ol.(1) of article 19 carries with it a fundamental right in the union so formed to achieve every object for which it was formed with the legal consequence that any legislation not falling within el.
(4) of article 19 which might in any way hamper the fulfilment of those objects, should be declared unconstitutional and void under Art, 13 of the Constitution, is not a proposition which could be accepted as correct.
Besides the qualification subject to which the right under sub cl.
(c) is guaranteed, viz., the contents of el.
(4) of article 19 throw considerable light upon the scope of the freedom, for the significance and contents of the grants of the Constitution are beat understood and read in the light of the restrictions imposed.
If the right guaranteed included not merely that which.
would flow on a literal reading of the Article, but every right which is necessary in order that the association brought into existence fulfils every object for which it is formed, the qualifications therefor, would be not merely those in cl.(4) of Art, 19, but would be.
more numerous and 292 very different, restrictions which bore upon and took into account the several fields in which associations or unions of citizens, might legitimately engage themselves.
Merely by way of illustration we might point out that learned Counsel admitted that though the freedom guaranteed to workmen to form labour unions carried with it the concomitant right to collective bargaining together with the right to strike, still the provision in the forbidding strikes in the protected industries as well as in the event of a reference of the dispute to adjudication under section 10 of the was conceded to be a reasonable restriction on the right guaranteed by sub cl.(c) of cl.(1) of article 19.
It would be seen that if the right to strike were by implication a right guaranteed by sub cl.
(c) of cl.
(1) of article 19 then the restriction on that right in the interests of the general public, viz., of national economy while perfectly legitimate if tested by the criteria in el.
(6) of article 19, might not be capable of being sustained as a reasonable restriction imposed for reasons of morality or public order.
On the construction of the Article, therefore, apart from the authorities to which we shall refer presently, we have reached the conclusion that even a very liberal interpretation of sub cl.
(c) of cl.
(1) of article 19 cannot lead to the conclusion that the trade unions have a guaranteed right to an effective collective bargaining or to strike, either as part of collective bargaining or otherwise.
The right to strike or the right to declare a look out may be controlled or restricted by appropriate industrial legislation, And the validity of such legislation would have to be tested not with reference to the criteria laid down in cl.(4) of article 19 but by totally different considerations.
We shall now proceed to consider the authorities, relied ion by the learned Counsel in support of this theory of "Concomitant right" to collective bargaining guaranteed to labour unions.
first as regards the decisions of this Court on which learned 293 Counsel relied Romesh Thappar vs The State of Madras(1)Was the earliest case referred to; and learned counsel placed reliance in particular on the following passage in the judgment of the learned Chief Justice : "Turning now to the ' merits, there can be no doubt that freedom of speech and expression includes freedom of propagation of ideas, and that freedom is ensured by the freedom of circulation. 'Liberty of circulation is as essential to that freedom as the liberty of publication.
Indeed, without circulation the publication would be of little value : Ex parte Jackson, ; Based on this, learned Counsel submitted that if the phrase "freedom of speech and expression ' in sub cl.
(a) of el.
(1) of article 19 were given this liberal construction so as to effectuate the object for which the freedom was conferred, a similar construction ought to be adopted of the content of the freedom guaranteed by sub cl.
(c) of el.
(1) of article 19.
We are, however, unable to discern any analogy between the two cases.
It is obvious that "freedom of speech" means freedom to speak so as to be heard by others, and therefore to convey one 's ideas to others.
Similarly the very idea of freedom of expression necessarily connotes that what one has a right to express may be communicated to others.
Unless therefore the freedom guaranteed by sub cl.(a) of el.
(1) of article 19 were read as confined to the right to speak to oneself or to express his ideas to himself, which obviously they could not mean, the guaranteed freedom would mean freedom to address others, and of conveying to others one 's ideas by printed word, viz., freedom of circulation.
We do not see, therefore, any analogy between the case which was considered by this Court in Romesh Thappar 's (1) case and the one before us.
(1) ; In A. 294 The observations in the judgment of Bhagwati, J. in Express New,,?,papers (Private) Ltd. vs Union of India(1) on which Counsel relied, in regard to the content of the 'freedom of speech and expression that they "include within its scope the freedom of the press", for the press with the printed word is merely the mechanism by which the freedom is exercised do Dot really carry the matter any ` further.
We were next referred to the observations of Das C. J. in the advisory opinion Re the Kerala Education The question, which was being considered in the passage,relied on, related to the scope and content of cl.
(1) of article 30 which guaran tees to all minorities a right to establish and administer educational institutions of their choice.
The question debated before this Court was, whether the provision in the Kerala Education Bill which denied recognition by Government to educational institutions run by minorities contravened this freedom guaranteed to them ? Dealing with this Das C. J. said : "Without recognition, therefore, the edu cational institutions established or to be established by the minority communities cannot fulfil the real objects of their choice and the rights under article 30(1) cannot be effectively exercised.
The right to establish educational institutions of their choice must, therefore, mean the right to establish real institutions which would effectively serve the needs of their community and the scholars who resort to their educational institutions.
There is, no doubt, no such thing as fundamental right to recognition by the State but to deny recognition to ' the educational institutions except upon terms tantamount to the surrender of their constitutional right of administration of the educational institutions of their choice is (1) (2) 1959 S.C.R. 995. 295 in truth and in effect to deprive them of their rights under article 30 (1).19 We do not consider that these observations and this construction of el.
(1) of article 30 assist learned Counsel in his submission as regards the theory of concomitant rights flowing from the freedom guaranteed by sub cl.
(c) of cl.
(1) of article 19.
The observations of the learned Chief Justice and the conclusions drawn are in relation to the construction of article 30 and cannot be divorced from ' the context.
They do not purport to lay down any general rule of construction for the freedoms guaranteed under the several sub heads of cl.
(1) of article 19, and, indeed, what we have pointed out earlier should suffice to indicate the impossibility of upholding any such construction of the freedoms guaranteed by the latter Article.
Learned Counsel also referred us to certain passages in two judgments of the Supreme Court of the United States : National Association for the advancement of colored people vs Alabama,(1)and Bates vs Little Rock(2)in which the Court held that, freedom of speech and assembly which were fundamental rights guaranteed by the Constitution would be abrogated or improperly encroached upon by legislation 'which compelled the disclosure to public authorities of the membership rolls.
In the two decisions the facts were that the associations in question were for the protection of coloured persons and the requirement of disclosure of the names of members was inserted in the law for the purpose of putting a pressure upon these associations so as to dissuade people from joining them.
The argument of learned Counsel before us was based on the dicta in these two decisions that the I right to form an association which followed by reason of the due process ' clause in the 14th amendment carried with it the right to ensure that the associations were able to maintain themselves as associations.
In the two (1) 2 Law.
Second 1488.
(2) 4 Law.
Second 480.
296 decisions referred to, the learned Judges of the Supreme Court of the United States were not construing the content of a provision on the lines of article 19(1)(c), for in America, the right of association is not any specifically guaranteed right, but has been derived by judicial interpretation of the due process clause of the 14th Amendment.
But apart from this the legislation there impugned was one which directly affected the formation of the association and in that sense may be hit by the terms of sub cl.(c) of cl.(1) of article 19 if statutes with similar purpose were enacted in India.
The decisions cited are no authority for the second step in the argument for which they were cited.
Learned Counsel also referred us to two other decisions of the Supreme Court of the United States in which the right of employees to self organization, to form, join and assist labour organisations and to bargain collectively through representatives of their own choice and to engage in concerted Activities for the purpose of collective bargaining or other mutual aid has been referred to as "a fundamental right" (vide National Labor Relations Board vs Jones and Laughlin Steel Corporation and ors.
, (1) and Amalgamated Utility Workers vs Consolidated Edison Company of New York) (2).
We do not consider the inference sought to be drawn well founded.
What the learned Judges of the Supreme Court were referring to as a fundamental right was not with reference to a fundamental right as recognized or guaranteed by the Constitution, but in the sense of a right of the unions which enacted law.
recognized or respected, and as other decisions of the United states ' Supreme Court show, was subject to regulation by the legislature(3).
We have, therefore, reached the conclusion that the right guaranteed.
by sub cl.(c) of cl.(1) of article 19 does not carry with it a concomitant right (1) ; ,909.
(2) ; , 741.
Vide Weaver Constitutional Law and its Administration (1 946) p. 505, referring to Dorchy vs, Kansas ; : "Neither he common law nor the 14th Amendment confers the absolute right to strike.
" 297 that the unions formed for protecting the interests of labour shall achieve the purpose for which they were brought into existence, such that any interference, to such achievement by the law of the land would be unconstitutional unless the same could be justified as in the interests of public order or morality.
In our opinion, the right guaranteed under sub cl.
(c) of el.
(1.) of article 19 extends to the formation of an association and insofar as the activities of the association are concerned or as regards the steps which the union might take to achieve the purpose of its creation, they are subject to such laws as might be framed and that the validity of such laws is not to be tested by reference to the criteria to be found in cl.
(4) of article 19 of the Constitution.
In this view it is not necessary to consider the other steps in.
the argument of learned Counsel all of which proceed upon the correctness of the step which we have just now disposed of.
Nevertheless we consider it proper to deal with the submission that the impugned legislation (a) withdraws an essential part of the dispute between the parties from the jurisdiction of an impartial adjudicator and vests the same in the Reserve Bank of India which is a biased body ; and (b) that the adjudicator is left without proper materials to discharge his duties by withdrawing the, proper materials from his cognizance.
A complaint that the impugned provision withdraws the dispute from the adjudication of an impartial arbitrator and leaves it to the decision of another body is an obvious overstatement of the position.
The dispute between the parties in relation either to wages, bonus or other amenities or perquisites which involve financial obligations on the part of the employer remain even after the impugned provision was enacted, with the adjudicator and he alone determines the rights of the parties subject to the provisions of the Industrial law or other relevant legislation, and the relief which he could award to the employees remains 298 the same.
The adjudicator alone determines ' the capacity of the industry to pay or to bear the enhanced cost.
The only result of section 34 A is that in regard to two itmes, viz., secret reserves and the provision made by banks "for bad and doubtful debts and other necessary provisions", the reasonable quantum which would be available for being taken into account by the adjudicator would be estimated and determined by an expert body which is a governmental authority or practically a department of Government, viz., the Reserve Bank of India which is entrusted by law with duty of maintaining the credit structure of the country.
From what we have 'stated earlier as the genesis of the legislation now impugned, it would be apparent that Government had to effect a reconciliation between two conflicting interests : one was the need to preserve and maintain the delicate fabric of the credit structure of the country by strengthening the real as well as the apparent credit worthiness of banks operating in the country.
It was really this principle which is vital to the economic life of the community that has been responsible for the changes that have been made from 1927 onwards as regards the form of balancesheet and of the Profit & Loss accounts of banking companies as distinguished from other trading and industrial organizations.
There was urgent need to protect from disclosure certain of the items of appropriation by banks in order to preserve them as credit institutions.
On the other hand, there was the need an equally urgent need for enabling the workers in these institutions not to be denied a proper wage and other emoluments and proper conditions of service.
the question was how far information which in the interests of national economy the banks were entitled to withhold from their shareholders and the general public, was to be made available for determining the capacity of the banks to pay their employees.
It was in these Circumstances that the impugned legislation was 299 enacted which while preserving industrial adjudication in respect of disputes between the banks and their employees, entrusted the duty of determining the surplus reserve which could be taken into account as part of the assets for determining capacity to pay, to the Reserve Bank.
Thus understood there does not appear to be anything unreasonable in the solution which the I impugned legislation has effected.
We do not also consider that there is any substance in the complaint that the Reserve Bank of India is a biased body.
If it was not the Reserve Bank of India, the only other authority that could be entrusted with the function would be the Finance Ministry of the Government of India and that department would necessarily be guided by the Reserve Bank having regard to the intimate knowledge which the Reserve Bank has of the banking structure of the country as a whole and of the affairs of each bank in particular.
In the circumstance therefore it matters little from the point of view of the.
present argument whether it is the Finance Ministry that was vested with the power to determine the matters set up in section 34 A or whether it is the Reserve Bank that does so, as under the impugned enactment.
Learned Counsel made a further submission that the impugned enactment was a piece of colourable legislation and that the purported objective of securing secrecy from disclosure was really a device adopted for depressing wages and for denying to workmen employed in banks their legitimate rights.
It was urged that the preamble to the amending Act sought to make out that the real purpose behind the legislation was the ensuring of secrecy from disclosure of the reserves held by the banks and of the bad and doubtful debts which arose in the course of business and the provision made for these losses and proceeded on the ratio that such disclosure would hurt the credit of the 300 banks which would have repercussions not merely on the individual bank but also on the banking structure of the country as a whole.
This, it was submitted, was not the real but only the colourable object and purpose underlying the legislation.
In this connection it was stressed that section 21 of the and r. 30 of the Industrial Disputes Rules had made ample provision for securing secrecy to the affairs of every concern in regard to which disclosure would not be in public interest.
We are satisfied that this submission has no basis in fact and besides even if made out does not affect the validity of the legislation.
As we have pointed out already, the impugned legislation merely carries out to its logical conclusion the effect of the changes in the form of the balance sheet and Profit and Loss accounts of Banks which starting in 1927 culminated in the notification dated December 22, 1951 under section 29 (4) of the Banking Companies Act amending the Forms appended to that Act.
If the construction of the "right to form unions" under sub cl.
(c) of cl.(1) of article 19 put forward by learned Counsel for impugning the validity of the enactment is negatived, then subject to the point about article 14 which we shall examine presently, legislative competence being conceded there could be no legal objection to its validity.
Objections based on colourable legislation have relevance only in situations when the power of the legislature is restricted to particular topics, and an attempt is made to escape legal fetters imposed on its powers by resorting to forms of legislation calculated to mask the real subject matter.
No such problem exists in the present case and it is common ground that once the legislation passes the test of the fundamental rights,guaranteed by Part III, legislative competence not being in dispute, its.
validity is beyond cavil.
The question whether the secrecy assured by section 21 of is or is not sufficient to protect the interests of I the Banks, is a matter of legislative policy and is for Parliament 301 alone and even the fact that the Court could be persuaded that the existing law is sufficient would be no ground for invalidating the 'impugned legislation.
When the end which the legislature reeks to achieve, viz ., secrecy is competent, the enquiry as to ultra vires stops.
Whether less than what was done might have been enough, whether more drastic provision was made than occasion demanded, whether the same purposes could have been achieved by provisions differently framed or by other means, these are wholly irrelevant considerations for testing the validity of the law.
They do not touch or concern the ambit of the power but only the manner of its exercise, and once the provisions of of the Constitution are out of the way, the validity of the legislation is not open to challenge.
The next point urged was that the impugned provision was in violation of article 14; though the several learned Counsel who. appeared in support of the case of the workers were not all agreed as to the precise grounds upon which it could be ' held that the impugned provision violated article 14.
It was first submitted that the provision was rendered invalid because it vested an arbitrary power in.
banks which were parties to a dispute under the , to claim or not to claim the privilege of not producing the documents and that no criterion had been indicated as to the Circumstances in which Banks could decide to make the claim.
But this, however, is answered by the provision itself which runs "When the banking company, claims that such document, statement of information is of a confidential nature and: that the production or inspection of such document. would involve disclosure of '.
information relating to the matters set not the.
matters set out in sub clauses (a) and (b)" 302 It was also submitted that sub cl.
(b) of sub section
(1) was vague, in that a reference was made to "provision made for bad and doubtful debts and other usual or necessary provisions".
We do not see any substance in this point either, because these words are taken from the form under the Banking Companies Act and their meaning is clear in banking circles.
In fact, in the application which the employee associations made before the adjudicator to direct the production of information and documents from the banks this phrase was used and it is apparent that even the Bank Employees ' Associations understood it as having a definite connotation.
It was next submitted on behalf of some of the interveners that section 34A(1) and (2) violated article 14 in that the classification contained in it was impermissible as not being based on rational grounds.
It was said (1) that the protection against a disclosure applied only to adjudications under the industrial Disputes Act and not to other adjudications ; (2) that it applied only to certain banking companies and not to all banking companies; and (3) that by reason of section 34A (2) the provisions of the impugned enactment were applied in a discriminatory manner to all banks other than the Reserve Bank.
The first two points cover the same ground and arise out of the fact that the.
impugned provision by its 3rd sub section defines a "banking company" referred to in it and to which its provisions apply, as meaning a ""Banking Company" under the .
The defines a "Banking Company" in section 2(b) as follows: "Banking Company means a banking company as defined in section 5 of the Banking Companies Act, 1949, having branches or other establishments in more than one State and includes the State Bank of India and the Reserve Bank of India.
" 303 It would thus be seen that though the Banking Companies Act applied to every banking company it is only those banks whose operations extended beyond one State were brought within the scope, of the definitions of a "banking company" under the .
The result of that was that Banking Companies not having branches in more than one State would be an industry so as to be within the but not , 'a banking company" within its definition.
In the circumstances learned Counsel is right in his submission that such banking companies as are not within the definition of "a banking company" under the would not be entitled to claim the protection from disclosure conferred on "banking companies" by the impugned provision.
This, however, is no ground for holding the legislation invalid.
In the first place, the complaint of discrimination is not by the banks who are not on the terms of section 34A entitled to the protection from disclosure of their reserves etc.
Secondly it is common ground that 95 % of the banking business in this country is in the hands of Banks which are, within the definition of "banking companies" under section 2(b) (b) of the .
Besides, these banks, employ over 80,O0O out of the 90,000 bank employees.
In the circumstances and seeing that the injury to the credit structure will only be by the disclosure of the reserves etc., of the banks of this class, there is sufficient rational connection and basis for classification to justify the differentiation.
The fact that the legislation does not cover every banking company is therefore no ground for holding the provision to be discriminatory within article 14.
The last point about the exclusion, of the Reserve Bank of India from the operation of section 34A (2) has also no substance.
in the very nature of things and on the scheme of the provision the Reserve Bank could not but be excluded from sub section
(3) of the impugned provision.
In determining 304 what reserves could properly be taken into account, the Reserve Bank would be discharging not any quasi judicial but only an administrative function, determining this matter with reference to uniform business principles and it therefore appears to us that.
there is no impropriety in its findings being final even in regard to itself.
A submission on similar lines about bias was also made in relation to the impact of the impugned provision insofar as it related to the industrial dispute between the State Bank of India and its employees.
It was pointed out to us that the Reserve Bank of India owned practically the entirety of the sharecapital of the State Bank of India, with the result that the Reserve Bank was pecuniarily and vitally interested in supporting the State Bank as against the latter 's employees in any industrial dispute and that the element of bias which the situation involved would invalidate the impugned provision.
We consider this argument without force.
If, as we have held, the impugned provision is valid and does not violate any of the freedoms guaranteed by of the Constitution in regard to the employees of the Reserve Bank, the challenge to the impugned provision cannot obviously be successful in the case of the employees of the State Bank.
As we have stated earlier, though the arguments before us ranged on a very wide ground, we have not thought it necessary to deal with all of them because in view of our conclusions on the crucial points in the case the others which were subject of debate before us did not arise for consideration.
The appeal fails and is dismissed with costs.
The petitions also fail and are dismissed with costs.
(one hearing fee) Appeal and Petitions dismissed.
| In execution of a decree obtained on a mortgage a vil lage owned by the mortgagor which was included in the mort gage was sold by the court on the 6th July 1935 and it was purhased by the mortgagee.
An application by the mortgagor under 0 .XXI,.r. 90, C.P.C., for setting aside the sale for irregulrities was dismissed, the sale was confirmed and full satisifiction of the decree was recorded, on the 6th March 1943.
A few days afterwards the mortgagor and his adopted son made an application under section 19 of the Madras Agricul turists ' Relief Act, 1938, praying for relief under the Act, and, as this application also was dismissed they preferred two appeals, one from the order dismissing this application and the other against the order of 6th March 1943 refusing to set aside the sale.
The High Court of Madras held that, as the mortgagor 's village had been sold he did not come within the purview of el.
(i)) of the proviso to 6. 3 of the Madras Agriculturists ' Relief Act and so he was entitled to claim relief under the Act and the debt stood discharged under the provision of the Act, but the Bale was not liable to be set aside; and in accordance with this judgment the decree holder was directed to pay the amount for which the property had been sold with interest thereon: ' Held per FAZL ALl and MUKHERJEA JJ. (i)that the conclu sions arrived at by the High Court were self contradictory because if the sale was effective on the date it was held or confirmed, the decree was also satisfied on that date and the judgementdebtors were no longer entitled to invoke the provisions of the Act; (ii) that the High Court was not justified in law in deciding the appeal on the footing that the judgment debtors ceased to be owners of the village from the date of sale and on that account were not hit by cl.
(D) of the proviso to section 3 of the Act inasmuch as when an appeal is preferred from an order rejecting an application under O.XXI, r. 90, C.P.C., to set aside an execution sale, the sale does not become absolute until the matter is finally decided by the appellate court.
807 Per CHANDRASEKHARA AIYAR J.
After the execution sale in 1935 the only interest which the judgment debtors had in the village was to have the sale set aside under the relevant provisions of the Civil Procedure Code and this interest, not being an interest contemplated by section 3 (ii) (a) & (b) and section 19 (1) of the Act, they were not "agriculturists" and were not entitled to any relief under the Act.
Held also, per FAlL ALl and MUKHERJEA JJ.
A person does not cease to be a land holder of an estate within the mean ing of cl.
(D) to the proviso to section 3 of the Act merely because the estate is placed in the hands of a receiver.
Bhawani Kunwar vs Mathura Prasad Singh (I.L.R. 40 Cal.
89) and Chandramani Shaha vs Anarjan Bibi (I.L.R. 61 Cal. 945) referred Judgment of the Madras High Court reversed.
|
Appeal No. 23 of 1964.
Appeal from the judgment and decree dated May 12, 1961 of the Allahabad High Court in Civil Misc.
Writ No. 3588 of 1958.
M. C. Setalvad, K. C. Jain and B. P. Maheshwari, for the appellant.
972 section N. Andley, Rameshwar Nath and P. L. Vohra, for the res pondent.
The Judgment of P. B. GAJENDRAGADKAR, C.J., K. N.WANCHOO and RAGHUBAR DAYAL JJ., was delivered by WANCHOO J. M. HIDAYATULLAH and J. R. MUDHOLKAR JJ.
delivered separate Opinions.
Wanchoo J.
This is an appeal on a certificate granted by the Allahabad High Court.
The appellant is a public limited company and owns two sugar factories situate in the city of Rampur.
The factories comprise a number of buildings including some for residential purposes also.
The Municipal Board of Rampur (hereinafter referred to as the respondent) decided to impose water tax in Rampur as provided under section 128(1) (x) of the U.P. Municipalities Act, No. 11 of 1916 (hereinafter referred to as the Act).
The procedure for the imposition of tax by the Municipal Board under the Act is provided in sections 131 to 135 of the Act Section 131 provides that when a Board desires to impose a tax, it shall by special resolution frame proposals specifying the tax, the persons or class of persons to be made liable, and the des cription of property or other taxable thing or circumstance in respect of which they are to be made liable, the amount or rate leviable from each such person or class of persons, and any other matter required by the Rules framed by the State Government.
The Board has also to prepare a draft of the rules which it desires the State Government to make in respect of the tax, namely, for assessment, collection, exemption and other matters relating to tax, [section 131(2)].
Section 131(3) which is important for our purposes reads thus : "The Board shall, thereupon publish in the manner prescribed in section 94 the proposals framed under sub section (1) and the draft rules framed under subsection (2) along with a notice in the form set forth in Schedule III.
" Section 132 provides for procedure subsequent to framing proposals and permits any inhabitant of the municipality within a fortnight from the publication of the notice, to submit to the Board an objection in writing to all or any of the proposals.
The Board has to take these, proposals into consideration and pass orders thereon by special resolution and if it thinks necessary it can modify the proposals.
if the proposals and the rules (if any) are modified, the modified proposals and rules are again published.
It is open to any inhabitant of the municipality again to object to the modified proposals, and if any such objection is made, it 973 is dealt with in the same manner as objections to the original proposals.
When the proposals have been finally settled, the Board has to submit them along with the objections to the prescribed authority or the State Government, as the case may be, under section 133 of the Act.
The prescribed authority or the State Government has the power thereunder to sanction the proposals or to return them to the Board for further consideration or sanction them without modification or with such modification not involving an increase of the amount to be imposed as it deems fit.
Section 134 provides that when the proposals have been sanctioned, the State Government has to take into consideration the draft rules submitted by the Board and make such rules under section 296 of the Act as it thinks fit.
When the rules have been made the order of sanction and a copy of the rules has to be sent to the Board, which thereupon by special resolution has to direct the imposition of the tax with effect from the date to be specified in the resolution.
Section 135 then provides that a copy of the above resolution has to be submitted to the State Government or the prescribed authority, as the case may be.
Upon receipt of such copy, the, State Government or the prescribed authority, as the case may be, has to notify in the official gazette the imposition of the tax from the appointed day and the imposition of the tax is in all cases subject to the condition that it has been so notified under section 135 (2).
Then comes section 135 (3), which reads as follows "A notification of the imposition of a tax under subsection (2) shall be conclusive proof that the tax has been imposed in accordance with the provisions of this Act.
" Section 94 (3) which provides for the manner of publication reads thus : "Every resolution passed by a Board at a meeting shall, as soon thereafter as may be, be published in a local paper published in Hindi and where there is no such local paper, in such manner as the State Government may, by general or special order, direct." According to the respondent, it followed the procedure pro vided under the Act for the imposition of the tax and after following the procedure the tax came to be imposed from April 1, 1957 at the rate of 10 per centum of the annual value of lands and buildings.
After the tax was thus imposed, the respondent sent notices of demand to the appellant requiring it to pay water tax for the years 1957 58 and 1958 59.
This was done on 974 October 7, 1958.
It may be added that under section 129 of the Act there are certain restrictions subject to which water tax can be imposed and one of the restrictions is that the tax shall not be imposed, where the unit of assessment is a plot of land or a building, on any such plot or building of which no part is within a radius to be fixed by rule in this behalf for each municipality from the nearest standing or other waterwork whereat water is made available to the public by the Board.
In the present case this limit has been fixed by the rules at 600 feet.
The appellant objected to the payment of water tax demanded from it, and one of its objections was that it was exempt under section 129 (a), as there was no standpipe or other waterwork whereat water was made available to the public by the respondent within 600 feet of the buildings of the factory, the Central Office or the Govan Colony, except that some buildings outside the main Raza Sugar Factory were within 600 feet.
The respondent however rejected the objections, and threatened to recover the amount by coercive process.
The appellant then filed a writ petition before the High Court in December 1958 and a large number of grounds were taken in the writ petition in support of its case that it was not liable to pay water tax, including certain constitutional objections to the vires of the Act itself.
The appellant failed in the High Court on all points and 'has come up in appeal before us on a certificate granted by the High Court.
In the present appeal however only two points have been urged before us on behalf of the appellant.
We are therefore not ;concerned with the other points raised in the High Court and shall confine ourselves to the two points urged before us, namely (1) There was no publication as provided by section 131(3) read with section 94(3) of the Act, and as the provision of section 131(3) is mandatory and was not complied with, all subsequent action taken for the imposition of the tax was bad for non compliance with a mandatory provision and therefore the tax itself was not levied according to law and could not be realised; and (2) the tax could not be levied on most of the premises belonging to the appellant as there was no standpipe or other waterwork whereat water was made available to the public by the respondent within 600 feet of all of the buildings of the appellant.
975 We shall first consider the ground as to publication and three questions fall to be decided in that behalf : (first), is publication as provided in section 131 (3) mandatory or directory, for it is contended on behalf of the respondent that publication under section 131(3) is merely directory; (secondly), was the publication in this case strictly in accordance with the manner provided in section 94(3); and (thirdly), if the publication was not strictly in accordance with the manner provided in section 94(3), is the defect curable under section 135(3)? The question whether a particular provision of a statute which on the face of it appears mandatory, inasmuch as it uses the word "shall"as in the present case is merely directory cannot be resolved by laying down any general rule and depends upon the facts of each case and for that purpose the object of the statute in making the provision is the determining factor.
The purpose for which the provision has been made and its nature, the intention of the legislature in making the provision, the serious general inconvenience or injustice to persons resulting from whether the; provision is read one way or the other, the relation of the particular provision to other provisions dealing with the same subject and other considerations which may arise on the facts of a particular case including the language of the provision, have all to be taken into account in arriving at the conclusion whether a particular provision is mandatory or directory.
The respondent strongly relies on the State of U.P. vs Man bodhan Lal Srivastava(1), where article 320(3) (c) of the Constitution was held to be directory and not mandatory, and contends that the principle of that case applies with full force to the facts of the present case.
If is therefore necessary to consider that case before we consider the facts of the present case in the light of the circumstances to which we have referred above and which are helpful in determining whether a particular provision is mandatory or directory.
Article 320(3) (c) provides for consultation with the Public Service Commission on all disciplinary matters affecting a person serving under the Government of India or the Government of a State in a civil capacity, and the language of the Article is mandatory in form, as it provides that the Public Service Commission shall be consulted.
This Court relied on the following observations of the Judicial Committee of the Privy Council in Montreal Street Railway Company vs Normandin(2) in that connection: (1) ; (2) ; 976 "The question whether provisions in a statute are directory or imperative has very frequently arisen in this country, but it has been said that no general rule can be laid down, and that in every case the object of the statute must be looked at.
When the provisions of a statute relate to the performance of a public duty and the case is such that to hold null and void acts done in neglect of this duty would work serious general inconvenience, or injustice to persons who have no control over those entrusted with the duty, and at the same time would not promote the main object of the Legislature, it has been the practice to hold such provisions to be directory only, the neglect of them, though punishable, not affecting the validity of the acts done.
" That was a case where the jury., lists had not been revised as required by law.
Following the principle laid down in that case, this Court held that article 320(3) (c) itself contemplates three grounds: (i) that the proviso to article 320 itself contemplates that regulations may be made specifying matters in which either generally, or in any particular class of cases or in particular circumstances it shall not be necessary for a Public Service Commission to be consulted; (ii) that the advice of the Public Service Commission was not binding on the Government, and in the ab sence of such binding character it was difficult to see how non compliance with the provisions of article 320(3) (c) could have the effect of nullifying the final order passed by the Government; and (iii) that article 311 was not in any way controlled by article 320 and there was no provision in the Constitution expressly or otherwise providing that the result of non compliance with article 320(3) (c) would be to invalidate the proceedings ending with the final order of the Government.
It was also pointed out in that case that an examination of the terms of article 320 showed that the word "shall" appeared in almost every paragraph and every clause or sub clause of that Article.
If it were held that the provisions of article 320 (3) (c) were mandatory in terms, the other clauses or sub clauses of that Article would have to be equally held to 'be mandatory.
If they were so held, any appointments made to the public services without observing strictly the terms of these sub clauses in cl.
(3) of article 320 would adversely affect the person so appointed to a public service, without any fault on 'his part and without his having any say in the matter, and this 'could not have been intended by the makers of the Constitution. 'Thus this Court approximated article 320(3) (c) to a statutory 977 provision like the one which came up for consideration in Montreal Street Railway Company 's case(1) and held that if the Article were construed as mandatory, it would cause serious general inconvenience, and injustice to persons who had no control over those entrusted with the duty.
That decision was clearly based on the special facts in that case dealing with appointments and dismissals of public servants and the duty of the Government to consult the, Public Service Commission in that behalf and cannot and should not be extended to cases based on a different set of facts.
As the Judicial Committee itself pointed out the question whether provisions in a statute are directory or mandatory cannot be decided by laying down a general rule and in every case the object of the statute must be looked at.
That case therefore in the circumstances is of little assistance to the respondent, except insofar as it lays down the principle that no general rule can be laid down for determining the question whether a provision in a statute is directory or mandatory, and that every case will have to be judged on the basis of the object of the statute concerned.
This brings us to the examination of the facts and circums tances of the present statute in the light of what we have said above as to the criteria for determining whether a provision in a statute is mandatory or directory.
The provision with which we are concerned, namely, section 131(3), can be divided into two parts.
The first part lays down that the Board shall publish proposals and draft rules along with a notice inviting objections to the proposals or the draft rules so published within a fortnight from, the publication of the notice (see Sch.
The second part provides for the manner of publication and that manner is according to s ' 94(3).
We shall first deal with what we have called the first part of section 131(3).
This provision deals with taxation.
The object of providing for publication of proposals and draft rules is to invite objections from the inhabitants of the municipality, who have to pay the tax.
The purpose of such publication obviously is to further the democratic process and to provide a reasonable opportunity of being heard to those who are likely to be affected by the tax before imposing it on them.
It is true that finally it is the Board itself which settles the proposals with respect to taxation and submits them to Government or the prescribed authority, as the case may be,, for approval.
Even so we have no doubt that the object behind this publication is to find out the reaction of tax payers generally to the taxation (1) ; 978 proposals, and it may very well be in a particular case that the Board may drop the proposals altogether and may not proceed further with them, if the reaction of the tax payers in general is of disapprobation.
Further the purpose served by the publication of the proposals being to invite objections, in particular from the tax payers, to the tax proposed to be levied on them, the legislature in its wisdom thought that compliance with this part of section 131(3) would essentially carry out that purpose.
In the circumstances if we are to hold that this part of section 131(3) was merely directory, the whole purpose of the very elaborate procedure provided in sections 131 to 135 for the imposition of tax would become meaningless, for the main basis of that procedure is the consideration of objections of tax payers on the proposals of the Board.
If such publication is merely directory, the Board can proceed to levy the tax without complying with them and that would make the entire elaborate procedure provided in the Act before a tax is imposed nugatory.
We are therefore of opinion that this part of section 131(3) is mandatory and it is necessary to comply with it strictly before any tax can be imposed.
We shall consider the interpretation of section 135(3) later, but we have no doubt that in the present case, in spite of section 135(3), the legislature intended that there must be publication as provided in what we have called the first part of section 131(3).
We therefore hold that this part of section 131(3) is mandatory considering its language, the purpose for which it has been enacted, the setting in which it appears and the intention of the legislature which obviously is that no tax should be imposed without hearing tax payers.
Lastly we see no serious general inconvenience or injustice to anyone if this part of the provision is held to be mandatory; on the other hand it will be unjust to tax payers if this part of the provision is held to be directory, inasmuch as the disregard of it would deprive them of the opportunity to make objections to the proposals, and the draft rules.
We therefore hold that this part of section 131(3) is mandatory.
Turning now to the second part, which provides for the manner of publication, that manner is provided in section 94(3) already set out above.
It seems to us that when the legislature provided for the manner of publication it did not intend that manner should be mandatory.
So long as publication is made in substantial compliance with the manner provided in section 94(3), that would serve the purpose of the mandatory part of the section which provides for Publication.
It would therefore, not be improper to hold that the manner of publication provided 979 in section 94(3) is directory and so long as there is substantial compliance with that the purpose of the mandatory part of section 131(3) would be served.
In this connection we may refer to K. Kamaraja Nadar vs Kunju Thevar(1).
In that case, a question arose whether section 117 of the Representation of the People Act (No. 43 of 1951) was mandatory or directory.
That section required that a petitioner filing an election petition had to enclose with the petition a Government Treasury receipt showing that a deposit of one thousand rupees had been made by him either in a Government Treasury or in the Reserve Bank of India in favour of the Secretary to the Election Commission as security for the costs of the petition.
This Court analysed this provision and observed that it consisted of three parts : namely, (i) the Government Treasury receipt must show that such deposit had been actually made in a Government Treasury or in the Reserve Bank of India; (ii) it must also show that it had been made in favour of the Secretary to the Election Commission; and (iii) it must further show that it had been made as security for the costs of the petition.
The question then arose whether the words 'in favour of the Secretary to the Election Commission" were mandatory in character so that if the deposit had not been made in favour of the Secretary to the Election Commission as therein specified the deposit even though made in a Government Treasury or in the Reserve Bank of India and as security for the costs of the petition would be invalid and of no avail.
This Court held that these words in section 1 17 were directory and not mandatory in their character, and that the essence of the provision contained in section 117 was that the Petitioner should furnish security for the costs of the petition and should enclose along with the petition a Government Treasury receipt showing that a deposit of one thousand rupees had been made by him either in a Government Treasury or in the Reserve Bank of India to be at the disposal of the Election Commission to be utilised by it in the manner authorised by law and was under its control and payable on a proper application being made in that behalf to the Election Com mission or to any person duly authorised by it to receive the same, be he the Secretary to the Election Commission or any ,one else.
If this essential requirement was complied with, no literal compliance was at all necessary with the words "in favour of the Secretary to the Election Commission" appearing in that section.
Though, therefore, the making of the deposit and the presentation of the receipt thereof along with the petition was (1) L2Sup./65 980 held to be mandatory, this Court hold that the form in which the deposit should be made was only directory.
The principle of that case in our opinion applies to the manner of publication provided in section 94(3) in the present case.
As we have said already the essence of section 131(3) is that there should be publication of the proposals and draft rules so that the tax payers have an opportunity of objecting to them and that is provided in what we have called the first part of section 131,(3); that is mandatory.
But the manner of publication provided by section 94(3) which we have called the second part of section 131(3), appears to be directory and so long as it is substantially complied with that would be enough for the purpose of providing the tax payers a reasonable opportunity of making their objections.
We are therefore of opinion that the manner of publication provided in section 131(3) is directory.
Let us see what section 94(3) requires and what has been done in this case.
That section requires the publication to be made in a local paper and that local paper must be one published in Hindi.
It further provides that where there is no such local paper, the publication may be made in such manner as the State Government may by general or special order direct.
In the present case, the publication has been made in a local paper, but that local paper is not published in Hindi; it is published in Urdu, though the actual publication of the resolution in the present case was in Hindi.
The contention on behalf of appellant is that this is no compliance with section 94(3).
It appears that there is a local paper published in Hindi also in Rampur, but the evidence is that it is published very irregularly.
It is urged that if there was no local paper published regularly in Hindi in Rampur, then the direction of the State Government should have been sought for the manner of publication.
It may be accepted that there has not been strict compliance with the provisions of section 94(3) inasmuch as the publication has not been made in a local paper published in Hindi.
We must however point out that if section 94(3) is interpreted literally, all that it requires is that the publication must be in a local paper and that local paper must be published in Hindi, though the actual publication of the resolution may not be in Hindi.
That does not seem to us to be the real meaning of section 94(3) and what it substantially requires is that the publication should be in Hindi in a local paper, and if that is done that would be compliance with section 94(3).
Now what has happened in this case is that the publication has been made in a local paper which on the evidence seems to have good circulation in Rampur and the actual resolution has been published in Hindi, though the paper itself is published in Urdu.
It seems to us therefore that there is substantial compliance with the provisions of section 94(3) in this case, even though there is a technical defect inasmuch as the local paper in which the publication has been made is published in Urdu and not in Hindi.
But what has happened in this case is in our opinion substantial compliance with section 94(3) and as we have held that provision to be directory it must be held that section 131(3) has been complied with.
This brings us to the third point, namely, the effect and interpretation of section 135(3) which we have already set out.
That sub section provides that a notification made under section 135(2) shall be conclusive proof that the tax has been imposed in accordance with the provisions of the Act.
It has been urged on behalf of the respondent that the publication has been made as required by section 135(2) in the official gazette and therefore is conclusive proof that the tax had been imposed in accordance with the provisions of the Act, i.e., all the provisions of the Act had been complied with.
It is urged that once a notification has been made as required by section 135(2), section 135(3) raises an irrebuttable presumption that all the provisions of the Act have been complied.
with and therefore it was not open to,the appellant to raise the question of non compliance with the provisions of section 131(3) read with section 94(3) at all in the present case.
Reliance in this connection has been placed on the Berar Swadeshi Vanaspati vs Municipal Committee, Shegaon(1).
In that case section 67(8) of the C.P. & Berar Municipalities Act, 1922 came up for consideration.
That section was in terms similar to the terms of section 135(3).
This Court held in that case that as the provision of section 67(7) which correspond to section 135(2) here, had been complied with, that was conclusive evidence of the tax having been imposed in accordance with the provisions of that Act, and it could not be challenged on the ground that all the necessary steps had not been taken.
Now what happened in that case was that the necessary publication was made as required by law and objections were invited to the proposed tax.
Only one objection was filed in that case and that objection was considered by the Board and rejected.
The other procedural provisions were complied with and tax was imposed and a final notification made (1) 982 under section 67 (7) of that Act.
Imposition of the tax was challenged on the ground that the Board did not take into consideration the objections filed.
The evidence in that case was that the Board had taken into consideration the objections filed and had rejected them on grounds which the appellant (in that case) thought were not proper.
It was in those circumstances that this Court held that sub section
(8) of section 67 was conclusive.
The present case is in our opinion similar to that case.
Here also the publication was made, as we have already pointed out in compliance with what we have called the first part of section 131(3).
Further the manner of publication was in substantial compliance with section 94(3).
Therefore, as there was substantial compliance with the provisions of section 94(3), section 135(3) would in our opinion come to the help of the respondent and it must be held that all necessary steps had been taken.
It is however contended on behalf of the respondent that section 135(3) goes further and means that where it applies, the tax must be held to be imposed in accordance with the provisions of the Act, even though none of the procedural provisions may have been complied with at all.
It is enough to say that the question in this form does not arise before us directly for we have held that there was publication in compliance with section 131(3) though the manner was not strictly, in accordance with section 94(3).
We do not think it necessary in the present case to decide what would happen if there was no compliance at all with the various procedural provisions including section 131(3) by a Board before imposing a tax and the evidence consisted only of a notification under section 135(2).
It has been held by the Allahabad High Court in a number of cases that if there is no compliance with the procedural provisions in section 131 to section 134, the mere notification under section 135(2) would not be sufficient to impose a tax and section 135(3) would not save such tax: (see Azimulla vs Suraj Kumar Singh(1) and Municipal Board, Hapur vs Raghuvendra Kripal(2).
These are cases in which certain procedural provisions were not complied with at all and the High Court held that section 135(3) would not save the tax in such cases.
We do not think it necessary to express any opinion on this question for it does 'not arise in the present case.
We may however point out that the decision in the Berar Swadeshi Vanaspathi 's case(1) is not a case where there was no compliance whatsoever with procedural provisions all that had happened in that case was that the objections had (1) A.I.R. (1957) All. 307.
(3) (2) 983 been taken into consideration by the Board though they were rejected for reasons which were considered by the appellant in that case to be not sufficient.
In that case therefore there was compliance with the provisions of the Act and all that we need say is that case is no authority for the proposition that even if there is no compliance whatsoever with a mandatory provision of a statute relating to procedure for the imposition of a tax, a provision like section 135(3) of the Act or section 67(8) of ' the C.P. & Berar Municipal Act would necessarily save such imposition.
If section 135(3) means that where there is substantial compliance with the provisions of the Act that would be conclusive proof that they have been complied with there can be no valid objection to such a provision.
But if the section is interpreted to mean, as is urged for the respondent, that even if there is no compliance whatever with any mandatory provision relating to imposition of tax and the only thing proved is that a notification under section 135(2) has been made, the tax would still be good, the question may arise whether section 135(3) itself is a valid provision.
For present purposes however it is unnecessary to decide that question.
In the present case the mandatory part of section 131(3) has been complied with and its directory part has been substantially complied with and so section 135(3) will apply and the objection that the tax is not validly imposed must fail.
This brings us to the second point raised before us.
So far as that is concerned, it is enough to say that it is mainly a question of fact whether the buildings or any of them belonging to the appellant are within 600 feet of the standpipe.
The restriction imposed in cl.
(a) of section 129 is that water tax can be levied on a building where any part of it is within a radius fixed by rules which in the present case is 600 feet from the nearest standpipe or water work whereat water is made available by the Board to the public.
What is contended on behalf of the appellant is that these words mean that there should be standpipe or water work from which water is made available to the public by the respondent and that it is not enough if underground pipes carrying water are passing within 600 feet.
It seems to us that this contention of the appellant is correct.
The restriction in section 129(a) is that no water tax can be levied on a building which is more than a certain distance fixed by the rules from a standpipe or other water work from which water is made available to the public.
The restriction that water should be made available to the public within the specified distance does not mean that if pipes carrying water pass underground that would be enough.
What is required is that water 984 should be made available to the public from the nearest standpipe or other water work and that requires that there must be something above the ground from which the public can draw water.
But even so, the question is one of fact and the High Court has pointed out that there was dispute on this question of fact and there was no sufficient material before it to enable it to come to a definite finding whether all the buildings of the appellant were beyond the radius of 600 feet from the nearest standpipe.
In this state of the evidence the question must be left open and the appellant can pursue such remedies as he may be advised to take.
The appeal therefore fails and is hereby dismissed with Hidayatullah J.
I agree that this appeal should be dismissed but would like to say a few words about the failure to publish the notice in strict compliance with the provisions of section 94(3) of the U.P. Municipalities Act.
The procedure for the imposition of a tax by the Municipality has been analysed by my learned brother Wanchoo very succinctly.
I agree generally with all he has said but as I view the matter differently on the construction of sections 131 (3), 94(3) and 135(3) of the Act, I shall briefly give the reasons for my decision on that part of the case.
The general scheme of taxation in the Act is this: After the Municipal Committee or Board decides to impose a tax it is required to frame proposals by a special resolution [section 131(1)] and to frame rules which it desires the State Government to make relative to the assessment, collection etc., of the tax [section 131(2)].
Section 131(3) then provides: "The Board shall, thereupon, publish in the manner prescribed in section 94 the proposal framed under subsection (1) and the draft rules framed under subsection (2) along with a notice in the form setforth in Schedule III." This enables any inhabitant affected by the proposal to object.
The Municipal Committee or the Board then considers the objections and passes orders on the objections but if it modifies the proposals or the rules it publishes them a second time and the whole procedure has to be gone through again.
When there is no modification or the proposals or rules are finally settled, the original proposals and rules, if any, have to be forwarded to Government.
Government may accept the proposals and the rules or may send them back for further consideration.
The proposals and the rules when finally sanctioned by Government are returned to the Municipality which imposes the tax with effect from a specified date by passing a fresh resolution.
This does not impose the tax proprio vigore.
The resolution has to be submitted to Government and when it is notified in the official Gazette, the tax is imposed from the appointed date.
Section 153 (3) then provides "A notification of the imposition of a tax under subsection (2) shall be conclusive proof that the tax has been imposed in accordance with the provisions of the Act.
" The tax here was imposed by Rampur Municipality and the notices were published in an Urdu newspaper called "Aghaz" though the notices were in Hindi.
Section 94(3) of the U.l.
Act provides: "Every resolution passed by a Board at a meeting shall, as soon thereafter as may be published in a. local paper published in Hindi and where there is no such local paper in such manner as the State Government may, by general or special order, direct.
" There was in Rampur another newspaper which was published in Hindi but its circulation was admittedly very poor.
The newspaper selected for publication, though in Urdu, was widely read, and the notice itself was in Hindi.
Thus there was a local paper with a wide circulation and there was a notice in Hindi.
The only breach was that the paper was not 'published in Hindi '.
There was, clearly no literal compliance with section 94(3).
Two questions, therefore, arise : (a) Is section 94(3) mandatory ? and (b) If section 94(3) is not strictly complied with whether section 135(3) makes the notification conclusive against the defect ? In my judgment the answers to these questions depend upon the nature of the functions of a Municipal Committee and its powers of imposing a tax.
A Municipal Committee enjoys powers of taxation not as a legislature but as a delegate of the legislature.
Taxes levied by it are in effect levied by Government.
They are allowed to be imposed and retained by the Municipality to perform its functions and to pay for its expenses.
The whole procedure is shortened in this way, otherwise Government would be required to levy taxes and to give the proceeds to the Municipality.
However, the final 986 word lies with Government and the legislature makes this the vital condition in the imposition of the tax.
What the Municipality does in consequence of the power so conferred, it can only effectively do if the conditions laid down with the grant of power are followed and Government finally approves of the tax.
the manner of its imposition and manner of its collection.
Once Government has approved of the Resolution and published it in the Gazette the tax is deemed to be conclusively imposed in accordance with the procedure laid down.
The legislation on the subject is then complete and the tax derives its legislative validity from the legislature 's will.
Now sections 131 135 lay down the procedure.
All the conditions apparently seem equally obligatory because every condition is couched in mandatory language.
The crux of the problem before us is whether all the conditions are to be treated as mandatory or all of them as directory or some of them as of one kind and some of the other kind ? What is the test to apply and if a distinction is to be made, on what principle? In my opinion, the way to look at the matter is this.
A tax to be valid must be imposed in accordance with the Municipalities Act.
The Act lays down conditions some of which are devised for the protection of the taxpayers and some others for ministerial operations connected with the method or system of imposing the tax or for promoting dispatch, efficiency and publicity etc.
All conditions of the first kind must, of course, be regarded as mandatory, because they lie at the very root of the exercise of the power.
Thus preparation of assessment rolls, hearing of objection, framing of assessment rules are all mandatory.
Similarly, conditions involving the passing of resolutions by the necessary majority at special meetings after proper notice to members are fundamental and cannot be overlooked.
If a defect of a fundamental kind occurs it would (in the absence of curative provision) remain even if Government gave its sanction See Scadding vs Lorant(1) (affirming Sub Nom) (2) and Joshi Kalidas vs Dakor Town Municipality(3).
Conditions which promote despatch or provide for ministerial operations are usually directory and although compliance with them is also necessary it is sufficient if the compliance is substantial.
It may be accepted that a provision for a notice to the tax payers informing them about the proposal to impose a Particular tax and the rules made for the imposition, is fundamental.
Such (1) E.R. H.L. 164.
(2) 13 Q.B. 706.
(3) I.L.R. 987 a provision, if ignored, would frustrate the very policy of the law that there should be no tax without an opportunity to object, and to ignore it would ordinarily be fatal.
Similarly the direction at.
The notice should be published in a local newspaper is also an integral part of the Scheme.
The same purpose cannot be achieved by proclaiming by beat of drum or distributing hand bills or publishing a notice in a newspaper not circulating locally.
There is no option there because if the notice cannot be published in a local newspaper the section goes on to provide for alternative modes of publication to be determined by Government.
The sub section, however, goes further and says that the newspaper must be one that is published in Hindi.
I would be disposed to consider this further direction as not fundamental.
If a newspaper is selected which is very widely read in the locality but is not in Hindi and the notice is published in Hindi, I imagine the intention of the law is better promoted than if another newspaper published in Hindi with next to no circulation is selected.
There is no doubt a departure from the letter of the law but the departure promotes the very object and purpose of it.
I would regard such a provision as directory.
It is a provision for the guidance of the Municipality and not something which can be said to be essential to the validity of the imposition.
It seems to me that it is not necessary at all to go into the niceties of the distinction between mandatory and directory provisions in general or in relation to the provisions of the U.P. Municipalities Act in particular.
The legislature has itself furnished the solution by enacting section 135(3) which indicates the consequences of an omission.
It lays down emphatically a rule of evidence which precludes courts from making inquiries into the minutiae of the procedure with a view to declaring the imposition invalid.
The legislature is quite content to enact that Government should review the proposals, the rules and the procedure before accepting the resolution imposing the tax and that after this is done and a notification issues all questions about the procedural part of the imposition must cease.
The legislative will takes over from that stage and the tax is imposed as validly as if the legislature itself imposed it.
Whether one reads section 135(3) as enacting an absolute rule of evidence (and I am in favour of reading it as such See: The Berar Swadeshi Vanaspati vs Municipal Committee, Shegaon) (1) or as merely related to venial defects, errors or omissions, it is plain that it must at least protect the imposition of water tax in Rampur against a flaw in procedure of the (1) 988 kind we are dealing with or it would serve no purpose at all.
This provision, therefore, 'serves to cure the breach of the direction which was intended to serve merely as a guide to the municipalities, and it precludes courts from inquiring into such a breach.
That was a matter for Government to take into consideration before according its approval and Government must be deemed to have approved this other mode of publication which, it is clear enough it could have permitted to be followed in the first instance under the latter part of section 94(3) itself.
Subject to these reasons for holding the tax to be valid I agree that the appeal be dismissed with costs.
Mudholkar J. I agree that the appeal be dismissed but on the point of law urged before us I would like to state my reasons separately.
I find it difficult to construe sub section
(3) of s.131 as partly directory and partly mandatory; that is to say, that the requirement of publication is mandatory but the requirement of the manner of publication is not mandatory but only directory.
To construe the section that way would be giving two different meanings to the verb "shall" occurring in the provision which governs both publication as well as the manner of publication.
"Shall" can, according to the authorities, no doubt be construed literally and, therefore, as being mandatory or, liberally and thus being only directory depending upon the object of the provision in which it occurs, the connected provisions and other similar matters.
But it seems to me on principle that when a verb used in a provision governs two different matters it cannot be given one meaning in so far as it relates to one matter and another meaning insofar as it relates to another matter.
The provisions of section 94(3) are clearly directory inasmuch as a deviation from the mode of publication prescribed therein that is publication in a local newspaper in the Hindi language is contemplated by it.
The requirement of section 131(3) is publication in the manner provided for in section 94 which is actually provided in sub section
(3) of section 94.
Since the latter provision is directory it is immaterial to consider whether section 131(3) is directory or mandatory or to read it as partly one and partly the other and depart from the normal rule of construction which discountenances read ing a word in a provision in two different senses.
While a mandatory provision must be strictly complied with, substantial compliance is sufficient with respect to a directory 989 provision.
There has been substantial compliance with the provisions of section 94(3) since the proposals were in fact published in the Hindi language in a local newspaper.
The only departure from the letter of the law was not obtaining the permission of the State Government for publishing the proposals in an Urdu newspaper.
In my view the essential requirement of section 94(3) is publication in a local newspaper.
Where this requirement is satisfied, the omission to obtain a direction from the State Government permitting publication in a newspaper other than one in the Hindi language is not of much consequence.
Upon this view the question whether section 131(3) is mandatory or whether section 135(3) has become void by reason of article 13(1) of the Constitution or whether it can cure a defect resulting from non compliance with a mandatory provision do not at all arise for consideration.
| The appellant company challenged the imposition of water tax by the Rampur Municipal Board in a petition under article 226 of the Constitution of India on the ground that the tax had not been imposed according to law inasmuch as the proposals and draft rules had been published by the Board in an Urdu paper whereas according to the mandatory provisions of section 131(3) read with section 93(3) of the U.P. Municipalities Act, 1916, they should have been published,in a Hindi paper.
The High Court dismissed the petition but granted a certificate under article 133(1)(c).
The questions for consideration were whether the whole of section 131(3) was mandatory, or the part of it requiring publication in the manner laid down in section 94(3) i.e., in a Hindi newspaper was merely directory; and whether the publication in the Government Gazette of the notification imposing the tax was not conclusive proof, as provided in section 135(3), of the prescribed procedure having been observed.
HELD: (Per GAJENDRAGADKAR" C. J., WANcHoo and RAGHUBAR DAYAL JJ.) (i) Section 131(3) can be divided into two parts the first one providing that the proposal and draft rules for a tax intended to be imposed should be published for the objections of the public, if any, and the second laying down that the publication must be in the manner laid down in section 94(3).
Considering the object of the provisions for publication namely to enable the public to place its viewpoint before the Board it Is necessary to hold that the first part of the section is mandatory, for to hold otherwise would be to render the whole procedure prescribed for the imposition of taxes nugatory.
The second part of the section is, however, merely directory.
What it substantially requires is that the publication should be in Hindi in a local paper, and if that is done that would be compliance with section 94(3).
In the instant case publication was made in Hindi in a local paper which on the evidence seems to have good circulation in Rampur.
There is no regularly published local Hindi newspaper.
There was, in the circumstances, substantial compliance with the provisions of section 94(3) in this case.
[977 E F; 978 D F; 980 C; 981 A B] (ii) Section 135(3) provides that a notification of the imposition of tax in the Government Gazette was conclusive proof that the tax had been imposed in accordance with the provisions of the Act.
Whether such a notification will save a tax which has been imposed without at all complying with one of the mandatory provisions of the relevant law was a question that did not directly arise in the case.
In the instant case there had been compliance with the mandatory part of section 131(3) and substantial compliance with the second part.
Therefore a. 135(3) applied to the case 971 and the objection that the tax was not validly imposed could not succeed.
[983 B D; 983 D E].
K. Kamaraja Nadar vs Kunju Thevar, , relied on.
State of U.P. vs Manbodhan Lai Srivastva, ; and Berar Swadeshi Vanaspati vs Municipal Committee, Shegaon, , distinguished.
Montreal Street Railway Company vs Normandin, ; , Azimulla vs Suraj Kumar Singh, A.I.R. (1957) All.
307 and Municipal Board, Hapur vs Raghuvendra Kripal, 1960 A.L.I. 185, referred to.
Per HIDAYATULLAH J. A Municipal Committee enjoys powers of taxation not as a legislature but as a delegate of the legislature.
Taxes levied by it are in effect levied by the Government.
What the Municipality does in exercise of the delegated power can be effective only if the conditions laid down with the grant of the power are complied with and the Government finally approves the tax.
Once the Government after giving its approval has notified its imposition in the Government Gazette the tax is deemed to be conclusively imposed in accordance with the procedure laid down.
[985 H to 986 D] Some conditions which are laid down are for the protection of taxpayers and some others are for ministerial operations.
The first kind are fundamental and cannot be overlooked.
Conditions which promote dispatch or provide for ministerial operation are directory and substantial compliance is sufficient.
[986 G] The direction to publish the notice in a paper published in Hindi regarded as sufficient compliance in the case.
[987 C D] The Berar Swadeshi Vanaspati vs Municipal Committee, Shegaon, , relied on.
Per MUDHOLKAR J.
Where a verb used in a provision governs two different matters it cannot be given one meaning insofar as it relates to one matter and another meaning insofar as it relates to another matter.[988 F] Since section 94(3) is clearly directory it is immaterial to consider whether section 131(3) is directory or mandatory or to read it as partly one and partly the other and depart from the normal rule of construction which discountenances reading a word in a provision in two different senses.
[988 G H] The essential requirement of section 94(3) is publication in a local newspaper.
Where the requirement is satisfied, the omission to obtain a direction from the State Government permitting publication in a newspaper other then one in Hindi language is not of much consequence.
Upon this view the question whether section 131(3) is mandatory or whether section 135(3) has become void by reason of article 13(1) of the Constitution or whether it ran cure a defect resulting from non compliance with a mandatory provision does not at all arise for consideration.
[989 B C]
|
Appeal No. 1353 of 1975.
(Appeal by Special Leave from the Judgment and Order dated 1 11 1974 of the Bombay High Court in Appeal No. 493 of 1966 from original Decree.) F.S. Nariman, B.R. Zaiawala, B.S. Bisaria, J.B. Dadac hanji, O.C. Mathut, K.J. John and Shri Narain, for the appellants.
P.H. Parekh and Miss Manju Jetely, for the respondent.
The Judgment of the Court was delivered by KAILASAM, J.
This appeal by special leave is preferred by the Board of Trustees of the Port of Bombay against the judgment of the Bench of the Bombay High Court in first appeal confirming the decree passed by the City Civil Court and dismissing the appeal with costs.
The respondents, Indian Goods Supplying Co., a partnership firm in Bombay, filed suit No. 3304 of 1959 in the Bombay City Civil Court at Bombay praying for a decree against the Trustees of the Port of Bombay in the sum of Rs. 24,950 with interest.
Three consignments of Chinese newsprint were imported by the respondents for home consumption in India.
The first 2 consignments arrived on February 16, 1957.
Suffice it to say that the clearance of the two consignments as well as the third consignment 345 was considerably delayed and the Port Trust claimed demur rage for the period from March 25, 1957.
The respondents disputed the right of the Port Trust to charge any demurrage for the period during which the goods were detained by the Customs authorities for analytical test.
as well as for the Import Trade Control formalities.
It is common ground that so far as the period for analytical test certified by the Customs authorities is concerned the Port Trust cannot charge demurrage.
But so far as the period during which the goods were detained for the Import Trade Control formalities by the Customs authorities the Port Trust claimed demurrage.
Due to protracted correspondence between the parties the goods were not cleared and ultimately the suit was filed by the respondents for recovery of a sum of Rs. 24,950 and interest thereon from the Port Trust being the aggregate loss sustained by them.
The appellants denied that liabili ty and pleaded that the Port Trust.
was in law entitled to ' collect the demurrage levied on the respondents and that as they failed to pay the demurrage the Port Trust was entitled to sell the goods by public auction.
The City Civil Court, Bombay, decreed the suit for a sum of Rs. 24,950 with interest at the rate of 6 per cent per annum from the date of the suit till judgment and there after at 4 per cent per annum and costs of the suit.
The appellants preferred an appeal to a Division Bench of the Bombay High Court which dismissed the appeal and confirmed the decree passed by the City Civil Court.
When the appeal was pending before the High Court the appellants deposited the decretal amount in court which was withdrawn by the respondents.
Mr. Nariman, counsel for the Port Trust, stated that the Port Trust does not want to ask for the repayment of the money and that he will confine himself to the question of the correctness of the decision of the Bombay High Court holding that the Port Trust is not entitled to collect demurrage in the circumstances of this case.
It is therefore sufficient for the purposes of the appeal to confine ourselves to determining the question of law which has been raised before the High Court and decided by it.
The question that was raised before the High Court was whether the claim of demurrage by the Port Trust for the period during which the goods were detained with the Port Trust in respect of Import Trade Control formalities is maintainable.
The High Court held that the importer of the goods cannot be held responsible for any delay not at tributed to his own default and that the importer whose goods are detained by the Customs Department is entitled to claim the clearance of goods without demurrage during the period for which the Customs Department has detained them.
The appellants, the Board of Trustees of the Port of Bombay, is a statutory body constituted by the Bombay Port Trust Act, Act 6 of 1879, and is a body corporate.
Chapter VI of the Act relates to Revenue and Expenditure and pro vides for levy of rates.
Section 346 43 empowers the Board to frame a scale of tolls, dues, rents, rates and charges to be levied for each or any of the matters enumerated in clauses (a) to (d).
Sub section (a) enables framing of scale of rates relating to the landing, shipping, wharfage, cranage, storage or demurrage of goods.
We are concerned with the framing of the scale of rates for demurrage of goods.
Section 43B(1) requires that every scale framed by the Board shah be submitted to the Central Government for sanction and, when so sanctioned and pub lished in the Bombay Government Gazette, shall have the force of law; and subject to the like sanction and publica tion, may from time to time be amended or added to by the Board.
It is admitted that the Board framed a scale of rights for demurrage of goods and the scale so framed by the Board was submitted to the Central Government and was sanc tioned by the Central Government and published by the Bombay Government in the Gazette as required.
The result is that under section 43B(1 ) the scales so framed by the Board and approved by the Central Government shall have the force of law.
The learned counsel for the appellants as the Port Trust in this appeal have given up its claims to refund of the money taken by the respondents.
In view of this the counsel for the respondents confined his arguments to supporting the view taken by the High Court regarding the question of law.
He submitted that the Central Government had taken action under section 43B (IA) and had called upon the Board to modify the operation of such scales and therefore the Board was bound to modify the scales accordingly.
This conten tion is based on a D.O. letter dated 7th September, 1952 addressed by the Government of India to the Port Trust which is typed at page 350 of the Supplement Paper Book No. 2.
In the D.O. letter the Government expressed its view that it seems unreasonable to charge an importer any demurrage once it is accepted that clearance was delayed on account of the reasons beyond his control.
The letter concluded by expressing an earnest hope that the Bombay Port Trust will reconsider their decision and fall in line with the practice of the Calcutta and Madras Ports.
It concluded by stating "We shall be grateful if you will kindly place the matter before the Trustees for their favourable consideration and intimate to us the result.
" The Board considered this letter and after taking into consideration the several circumstances, suggested that demurrage may be levied on a graded scale.
The Government of India was informed of the Resolution of the Board and no further action was taken by the Government.
The D.O. letter addressed by the Government of India cannot be considered as a direction by the Central Government calling upon the Board to modify any portion of the scale framed by the Port Trust.
The language of the D.O. would indicate that the Government wanted the Port Trust to consider the Government 's proposal and nothing further.
The Port Trust considered the proposal and made its report.
We are unable to accept the plea of the learned counsel for the respondents that the D.O. letter should be construed as a direction calling upon the Board to modify the portion of the scale framed by the Board.
Section 43B(1A) has there fore no application to this case.
347 Chapter VII of the Port Trust Act enumerates the powers and functions of the Board.
It is the duty of the Board to recover the rates to have a lien on the goods and seize and detain the goods until such rates are fully paid.
The Board is empowered to sell the goods if rates are not paid or lien for freight is not discharged.
It can also dispose of goods not removed from the premises of the Board within the time limited.
Section 65 also provides the mode of application of proceeds of the sale.
Under section 66 the Board is entitled to distrain for non payment rates.
The Port clearance shall not be granted till the rates are paid.
It is thus a statutory duty of the Board to collect the rates prescribed.
The contention put forward on behalf of the respondents is that they are in no way responsible for the delay in clearing the goods as the goods had been detained under the Import Trade Control Regulations.
It is no doubt true that before clearance is given by the Import Trade Control authorities and the Customs Department the goods cannot be cleared by the respondents.
Neither can the Port Trust deliver the goods without the consent of the Import Trade Control authorities.
Taking into account the hardship caused to the importer because of the delay certain conces sions in demurrage rates are permitted.
The Port Trust has prescribed the reduced demurrage levy which is 1/6th of the normal rate from the date of expiry of the free days upto the 60th day, 1/3rd of the normal rate after the expiry of the 60th day, upto the 90th day, half the normal rate after the expiry of the 90th day upto the 120th day, 2/3rd of the normal rate after the expiry of the 120th day upto the 150th day and at the full rate after the expiry of the 150th day.
As the scale of rates are framed by virtue of the statutory powers conferred on the Board under section 43 and as the rates have been approved by the Central Government under section 43B the rates have the force of law and cannot be questioned.
Taking into account the hardship to the import ers certain concession has been given but the legality of the rates which are being levied according to law cannot be questioned.
This view was taken by this Court in a recent decision reported in Trustees the Port of Madras vs M/s. Aminchand Pyarelal & Ors.
(1) Where it had t6 consider the validity of the scale of rates fixed by the Madras Port Trust.
In a suit by the Port Trust against the importer and the Union of India and the Customs authorities to recov er the balance of demurrage amounting to about rupees three lakhs the question arose whether the scale of charges in the Port Trust Regulations under the heading "Demurrage" was void and ultra vires for the reason that it was unrea sonable and not within the authority of the Port Trust.
The relevant provisions of the Bombay Port Trust Act with which we are concerned are in pari materia with the provisions of the Madras Act which fell for consideration by the Supreme Court.
The Supreme Court held that the scale of rates and statement of conditions flamed by the Madras Port Trust under sections 42, 43 and 43A are not by laws (1) ; 348 and the sections confer authority on the Board to frame a scale of rates at which and a statement or conditions under which any of the services specified therein shall be per formed.
It observed "The Board 's power to frame a scale of rates and statement of conditions is not a regulatory power to order that something must be done or something may not be done.
The rates and conditions govern the basis on which the Board performs the services mentioned in sections 42, 43 and 43 A.
Those who desire to avail of the services of the Board are liable to pay for those services at prescribed rates and to perform the conditions framed in that behalf by the Board.
" The Court rejected the view of the High Court that demurrage being a charge for wilful failure to remove the goods within the free period can ' be levied only if the failure to remove the goods is due to the fault or negli gence of the importer or his agent.
It also did not agree with the view taken by the High Court that the authority given to the Board to frame the scale of rates can be exer cised only for the purpose of levying charges where the importer was not prevented by any lawful authority from clearing the goods from the transit area and he had default ed or was negligent in clearing the goods.
Justice Chandra chud, who spoke for the Court, observed in his judgment at page 736 supra that the statute had not placed any limita tion on the power of the Board to fix rates and as the Board had the power to frame a scale of rates at which and the statement of conditions under which any of the services specified in the section shall be performed and as the Board has fixed the scale of rates it was difficult to see in what manner or respect the Board has exceeded its power under section 42.
The Court proceeded to observe in rejecting the view of the High Court that the Board cannot fix rates of demurrage when the failure to remove was not due to some fault or negligence of the importer, that there is no such fetter on the Board 's powers to fix the rates.
This deci sion of the Supreme Court is on all fours with the facts of the present case and concludes the question.
Mr. Nariman, counsel for the appellants cited three deci sions of the English Courts in support of his contention that even on the basis of a contract the right of the Port Trust to recover demurrage cannot be denied unless the person claiming the demurrage is responsible for the delay.
In Aktieselskabet Reidar vs Arcos, Limited (1), Lord Justice Atkin in answering the question whether if the chatterer has failed to complete the loading of the ship within the lay days, and the ship during the demurrage days becomes, without the default of the shipowner, unable to carry as much cargo as she would have carried if loaded within the lay days, but receives from the charterer a full cargo for her diminished capacity, the loss falls upon the charterer in addition to the demurrage, expressed his opin ion that the decision should be for the shipowner.
It was held that "The result of the authorities appears to be that in a contract fixing a number of lay days and providing for days at demurrage thereafter, the charterer enters into a binding obligation to load a complete cargo within the lay days subject to any default by the shipowner or to the operation (1) 349 of any exceptions, matters which do not arise in this case .
If however, for reasons other than the shipown er 's default, the chatterer becomes unable to do that which he contracted to do namely, put a full and complete cargo on board during the fixed laydays, the breach is never repaired, the damages are not completely mitigated, and the shipowner may recover the loss that he has incurred in addition to his liquidated demurrage or his unliquidated damages for detention.
" Thus it appears clear that claim of demurrage cannot be resisted unless where the detention was due to the shipowner 's default.
In the present case the Port Trust 's claim for demurrage cannot be denied unless it is proved that the delay was due to the Port Trust itself.
In Budgett & Co. vs Binnington & Co., (1) a clause in the charterparty fixed the number of lay days for unloading and allowed other days for demurrage.
During the lay days a strike took place both among the labourers employed on behalf of the ship and those employed by the consignees, with the result that the unloading ceased, and could not be resumed till some days after the expiration of the lay days.
The Court of Appeal held that as the number of lay days was fixed the consignees were liable to pay demurrage, notwith standing the inability of the shipowners, owing to the strike, to do their part in the unloading.
The test that was laid down by Lord Esher Master of the Rolls, was.
Has the shipowner failed in his duty through any default of his own or of persons for whom he is responsible ? As the non delivery was occasioned by something which the shipowner could not foresee or by the act of persons over whom he had any control it was held that he was not liable.
In Compania Crystal De Vapores of Panama vs Herman & Mohatta (India) Ltd., (2) Justice Devlin quoted with approv al the law laid down by Lord Esher in Budgert Co. vs Bin nington & Co. (supra) which is in the following terms : "If the shipowner by any act of his has prevented the discharge, then, `though the freighter 's contract is broken, he is ex cused ', he was referring to a case in which the shinowner 's act preventing the discharge was in breach of his obligation to give the charterer all facilities for the discharge.
But here the act of the shipowner which de layed the discharge was not a breach of any obligation of his.
" The position therefore is that even though the delay in clearing the goods was not due to the negligence of the importer for which he could be held responsible yet he cannot avoid the payment of demurrage as the rates imposed are under the authority of law the validity of which cannot be questioned.
The claim cannot be resisted as there is no evidence that the delay was due to any act of the Port Trust or persons for whom the Port Trust is responsible.
(1) [1891] 1 Q.B.p. 35.
(2) [2953] 2 ALl.
E.R. 508.
350 One other contention which was raised before the High Court but was not dealt with by it may be referred to.
It was submitted on behalf of the respondents that the defini tion of the words "free days" would not include the period of holidays or part of a holiday or Sunday in computing the number of free days during which the Customs Duty may not be assessed or received and therefore the period of detention of the goods during the operation of Import Trade Control formalities must be considered as free days.
In the scale of rates charged at the docks framed by the Bombay Port Trust under sections 43.
43A and 43B of the Bombay Port Trust Act, 1879, in Section III reference is made to free days.
Under the heading "Free Days" it is provided that all goods will be allowed storage in Docks free of rent for 5 days.
It is further provided that in computing the number of free days Sundays and holidays referred to in by law 118 as well as any other days on which Customs Duty may not be assessed or received, will be omitted in the case of all goods liable to duty under section 20 of the Sea Customs Act.
The submission was that not only Sunday and holidays should be omitted but also other days on which Customs Duty may not be assessed or received will have to be omitted and this should be understood as days during which the Import Trade Control formalities could not be completed.
This contention cannot be accepted as these Rules are in tended only to omit Sundays, other holidays and days on which the assessment of Customs Duty cannot be taken up and would not include the entire period during which the Import Trade Control formalities have not been completed.
The High Court was therefore in error in holding that the importer of the goods cannot be held responsible for any delay not attributable to his own default and that demurrage under section 43A could never be imposed as long as the goods were detained for the purpose of the operation of the Import Trade Control Regulations.
In the result the appeal is allowed but due to the concession made by the learned counsel for the Port Trust there will be no order directing the refund of the money that had already been deposited by the Port Trust and withdrawn by the respond ents.
The appellant also does not press his counter claim.
There will be no order as to costs in this appeal.
S.R. Appeal allowed.
| The appellant, a statutory body framed the scales of rates of demurrage of goods under section 43 (a) of the Bombay 'Port Trust Act 1879 which was sanctioned by the Central Government.
Later on the Central Government in its D.O. letter dated 7th September 1952 addressed to the appel lant expressed its view that it seems unreasonable to charge an importer any demurrage once it is accepted that clearance was delayed on account of the reasons beyond his control.
It also expressed its hope that the appellant would recon sider its decision and fall in line with the practice of the Calcutta and Madras Ports.
The Port considered this letter and after taking into consideration the several circum stances suggested that demurrage may be levied on a graded scale and the Central Government did not take any further action.
In fact, the appellant has prescribed reduced demurrage levy from the expiry of the free days.
In respect of the three consignments of Chinese news print imported by the respondent for home consumption in India, the appellant claimed demurrage for the period from March 25, 1957 and as the amount was not paid the goods were sold in public auction.
The respondent thereafter filed a suit for recovery of a sum of Rs. 24,950/ and interest thereon from the appellant being the aggregate loss sus tained by it.
The appellant denied that liability and pleaded that it was, in law, entitled to collect the demur rage levied on the respondent and as it failed to pay the demurrage, the appellant was entitled to sell the goods by auction.
The City Civil Court, Bombay decreed the suit with interest at 6 per cent per annum from the date of the suit till judgment and thereafter at 4 per cent per annum and costs of the suit.
The appeal preferred by the appellant to the High Court failed and the decree stood confirmed.
The decretal amount deposited in the High Court during the pendency of the appeal was withdrawn by the respondent.
Allowing the appeal by Special leave the Court, HELD: (1) The High Court was in error in holding that the importer of the goods cannot be held responsible for any delay not attributable to his own default and that demur rage under section 43(a) could never be imposed as long as the goods were detained for the purpose of the operation of the Import Trade Control regulations.
[350 E] (2) The D.O. letter addressed by the Government of India should not be construed as a direction calling upon the Board to modify any portion of the scale framed by the Port Trust.
The language of the D.O. would indicate that the Government wanted the Port Trust to consider the Govern ment 's proposal and nothing further.
The Port Trust consid ered the proposal and made its report.
Section 43B(1A) has no application to this case.
[346 F H] (3) It is no doubt true that before clearance is given by the Import.
Trade Control Authorities and the Customs Authorities, the goods cannot be cleared by the importer.
Neither can the Port Trust deliver the goods without the consent of the Import Trade Control Authorities.
Taking into account the hardship caused to the importer because of the delay certain concessions in demurrage rates are per mitted.
As the scales of rates are permitted by virtue of the statutory 344 powers conferred on the Board under section 43 and as the rates have been approved by the Central Government under section 43B, the rates have the force of law and cannot be questioned.
Taking into account the hardship to the importers certain concession has been given but the legality of the rate which are being levied according to law cannot also be questioned.
[347 C D; E F] Trustees of the Port of Madras vs M/s Aminchand Pyarelal & Ors.
[1976].
SCR 721.
followed.
(4) Even though the delay in clearing the goods was not due to the negligence of the importer for which he should be held responsible yet he cannot avoid the payment of demurrage as the rates imposed are under the authority of law, the validity of which cannot be questioned, In the instant case the claim of the appellant cannot be resisted as there is no evidence that the delay was due to any act of the Port Trust or persons for whom the Port Trust is respon sible.
[349 G H] Aktieselskabet Reidar vs Arcos, Limited [1927] 1 K.B. 352;Budgett & Co. vs Bippington & Co. [1891] 1 Q.B.p. 35 and Compania Crystal De Vapores of Panama vs Herman & Mohatta (India) Ltd. , quoted with approval.
(5) Section 43, 43A and 43B of the Bombay Port Trust Act 1891 which make reference to "free days" are intended only to omit Sundays, other holidays or on which the assessment of customs duty cannot be taken up and would not include the entire period during which the Import Trade Control formali ties have not been completed.
[350 C D] (6) Under the powers vested in the Board, it is its statutory duty to collect the rates, to have a lien on the goods and seize and detain the goods until such rates are fully paid.
The Board is empowered to sell the goods if rates are not paid or lien for freight is not discharged or when the goods are not removed from its premises within the limited time.
[347 A B]
|
ivil Appeal No. 4426 of 1986.
From the Judgment and Order dated 11.9.
1984 of the Delhi High Court in L.P.A. No. 219 of 1981 V.K. Kanth, G.D. Gupta and C.V. Subba Rao for the Appel lants.
Ram Panjwani, Vijay Panjwani and D.N. Goburdhan for the Respondent.
The Judgment of the Court was delivered by SEN, J.
This appeal by special leave directed against the judgment and order of the Delhi High Court dated Septem ber 11, 1985 raises a question of frequent occurrence.
The question is whether where a Government servant retains accommodation allotted to him under SR 317 B 11 beyond the concessional period of two months permissible under sub r.(2) thereof, the liability to pay damages equivalent to the market rent for the period of such unauthorised occupa tion under SR 3 17 B 22 is contingent upon the Directorate of Estates serving a notice upon him that he would be liable to pay market rent for retention of such accommodation as held by the High Court.
Put very briefly, the essential facts are these.
In the year 1968 the respondent who was then a Squadron Leader in the Indian Air Force on being posted at the Headquarters, Western Command, Palam, Cantonment, Delhi, applied on May 9, 1968 for allotment of accommodation in the Curzon Road Hostel, New Delhi.
In the application for allotment he gave a declaration that he had read the Allotment of Government Residences (General Pool in Delhi) Rules, 1963 and the allotment made to him shall be subject to the said Rules, including the amendments made thereto.
The Directorate of Estates by its order dated June 27, 1968 allotted Flat No. 806 B to the respondent in the Curzon Road Hostel on a rent of Rs. 161 per month, exclusive of electricity and water charges.
The respondent was transferred from Delhi to Chand igarh on June 11, 1970 and therefore the allotment of the flat to him stood automatically cancelled under sub r. (3) of SR 317 B 11 after the concessional period of two months from the date of his transfer i.e.w.e.f.
August 11, 1970.
He however did not give any intimation of his transfer to the Directorate of Estates with the result that he contined in unauthorised occupation of the said flat for a 98 period of nearly five years and was being charged the normal rent for that period.
On February 28, 1975 the Estate Offi cer having come to know about the transfer of the respondent from Delhi, the Directorate addressed a letter dated March 18, 1975 cancelling the allotment w.e.f. August 11, 1970 and intimating that he was in unauthorised occupation thereof.
On the next day i.e. the 19th, the Directorate sent another letter asking the respondent to vacate the flat.
On March 25, 1975 the respondent vacated the flat and handed over possession of the same to the Directorate of Estates.
But he addressed a letter of even date by which he repudiated his liability to pay damages alleging that he was in possession of the flat under a valid contract and that at no time was he in unauthorised occupation, and further that under that the said contract he was not liable to pay any damages.
It appears that there was some correspondence between the parties but the respondent disputed his liability to pay damages for the period of his unauthorised occupation.
In consequence whereof, proceedings were initiated by the Estate Officer under s.7 of the to recover Rs.38,811.17p.
as damages.
The Estate Officer duly served notices on the respondent under s.7(3) of the Act from time to time and the respondent appeared in the proceedings and contested the claim.
Apparently, the respondent in the meanwhile made a representation to the Central Government.
On such represen tation being made, the Government on compassionate grounds reduced the amount to Rs.20,482.78p.
and deducted the same on October 30, 1976 from out of the commuted pension payable to the respondent.
On November 25, 1976 the respondent appeared and protested against the recovery of the amount of Rs.20,482.78p.
from the commuted pension payable to him which, according to him, was contrary to section 11 of the Pen sions Act, 1871, by process of seizure and sequestration.
The respondent complained that despite his repeated re quests, he was not given opportunity of a hearing and was informed that the matter was being examined in depth, and that the whole procedure was arbitrary and capricious.
The respondent filed a petition in the High Court under article 226 of the Constitution challenging the action of the Government in making a unilateral deduction of Rs.20,482.78p.
towards recovery of damages from the commuted pension payable to him which, according to him, was contrary to section 11 of the .
The writ petition was allowed by a learned Single Judge by his judgment and order dated September 7, 1981 who held that although the allotment of the 99 fiat to the respondent stood cancelled in terms of sub r.(3) of SR 317 B 11 w.e.f. August 11, 1970 i.e. after the conces sional period of two months from the date of his transfer, the Government was estopped from claiming the amount of Rs.20,482.78p.
as damages equivalent to the market rent under SR 3 17 B 22 for the period from August 11, 1970 to March 25, 1975.
In coming to that conclusion, the learned Single Judge held that the Government not only knowingly allowed the respondent to continue in occupation till March 25, 1975 and charged him the normal rent of Rs. 161 per month presumably under its power of relaxation under SR 317 B 25.
Further, he held that the Government having failed to serve the respondent with a notice that he would be liable to pay market rent for the period of such unautho rised occupation, the doctrine of promissory estoppel pre cluded the Government from claiming damages equivalent to the market rent under SR 317 B 22 for the period in ques tion.
Aggrieved, the appellant preferred an appeal but a Division Bench by its judgment under appeal affirmed the decision of the learned Single Judge.
It based its decision mainly on the terms of SR 317 B 25 which confer the power of relaxation on the Government and held that since the Govern ment had not recovered the rent at the market rate as per missible under SR 317 B 22 w.e.f. August 11, 1970 and having knowingly allowed the respondent to retain the flat for the period in question, it must be presumed that the Government had acted in exercise of its power of relaxation under SR 317 B 25.
In support of the appeal Shri G. Ramaswamy, learned Additional Solicitor General mainly advanced two conten tions.
First of these is that where a Government servant has retained the government accommodation allotted to him under SR 317 B 11(1) beyond the concessional period of two months allowed under sub r.(2) thereof, the liability to pay dam ages equal to the market rent for the period of his unautho rised occupation is not a contingent liability.
It is urged that the High Court was in error in holding that the appel lant was not entitled to deduct Rs.20,482.78p.
from the commuted pension payable to the respondent because of the failure of the Directorate of Estates to serve the respond ent with a notice after the allotment of the flat in ques tion stood automatically cancelled w.e.f. August 11, 1970.
Secondly, he submits that the construction placed by the High Court upon SR 317 B 22 was plainly erroneous.
It is submitted that the High Court was wrong in assuming 'that there was some kind of estoppel operating against the Gov ernment and in proceeding upon the basis that recovery of damages equivalent to the market rent for use and occupation for the period of unauthorised occupation was punitive in nature and 100 therefore the Court had power to grant relief against recov ery of damages at that rate.
These contention must, in our opinion, prevail.
It would be convenient here to set out the relevant statutory provisions.
Sub s.(2) of s.7 of the Public Prem ises (Eviction of Unauthorised Occupants) Act, 1971 invests the Estate Officer with authority to direct the recovery of damages from any person who is, or has at any time been, in unauthorised occupation of any public premises, having regard to such principles of assessment of damages as may be prescribed.
R.8 of the Public Premises (Eviction of Unautho rised Occupants) Rules, 1971 lays down the principles for assessment of such damages.
Among other things, r.8(c) provides that in making assessment of damages for unautho rised us, ' and occupation of any public premises, the Estate Officer shall take into consideration the rent that would have been realised if the premises had been let on rent for the period of unauthorised occupation to a private person.
Allotment of residential premises owned by Government in Delhi is regulated by the Allotment of Government Residences (General Pool in Delhi) Rules, 1963.
Sub r.
(1) of SR 3 17 B 11 provides inter alia that an allotment of such premises to a Government officer shall continue in force until the expiry of the concessional period permissible under sub r.(2) thereof after the officer ceases to be on duty in an eligible office in Delhi.
Sub r.(2) of SR 317 B 11 provides that a residence allotted to an officer may, subject to sub r.(3), be retained on the happening of any of the events specified in Column 1 of the Table underneath for the period specified in the corresponding entry in Column 2 thereunder.
The permissible period for retention of such premises in the event of transfer of the Government officer to a place outside Delhi is a period of two months.
SR 3 17 B 22 insofar as material provides as follows: "Where, after an allotment has been cancelled or is deemed to be cancelled under any provi sion contained in these rules, the residence remains or has remained in occupation of the officer to whom it was allotted or of any person claiming through him, such officer shall be liable to pay damages for use and occupation of the residence, services, furni tures and garden charges, equal to the market licence fee as may be determined by Government from time to time.
" It is difficult to sustain the judgment of the High Court or the reasons therefore.
The construction placed by the High Court on the 101 two provisions contained in SR 317 B 22 and SR 317 B 25 is apparently erroneous.
It is plain upon the terms of SR 3 17 B 22 that the liability to pay damages equal to the market rent beyond the concessional period is an absolute liability and not a contingent one.
Both the learned Single Judge as well as the Division Bench were clearly in error in subjecting the liability of a Government officer to pay market rent for the period of unauthorised occupation to the fulfilment of the condition that the Director of Estates should serve him with a notice that in the event of his continuing in unauthorised occupation he would be liable to pay market rent.
They were also in error in proceeding upon the wrongful assumption that since the Government had not recovered the rent at the market rate as permissible under SR 3 17 B22 and allowed the respondent to continue in unau thorised occupation for a period of nearly five years, it must be presumed that the Government had relaxed the condi tion in favour of the respondent under SR 317 B 25.
The view expressed by the High Court that there was a presumption of relaxation of the condition for payment of market rent under SR 3 17 B 22 due to inaction on the part of the Government, is not at all correct.
For a valid exercise of power of relaxation, the condition pre requisite under SR 317 B 25 is that the Government may relax all or any of the provisions of the Rules in the case of any officer or residence or class of officers or types of residences, for reasons to be recorded in writing.
There was no question of any presump tion arising for the relaxation which had to be by a specif ic order by the Government for reasons to be recorded in writing.
Nor was there a question of any promisory estoppel operating against the Government in a matter of this kind.
In the facts and circumstances of the present case, the respondent had given a declaration in his application for allotment that he had read the Allotment of Government Residences (General Pool in Delhi) Rules, 1963 and that the allotment made to him shall be subject to the said Rules as amended from time to time.
According to sub r.(3) of SR 317 B 11 the allotment was to continue till the expiry of the concessional period of two months under sub r.(2) there of after June 11, 1970, the date of transfer and thereafter it would be deemed to have been cancelled.
It is not disput ed that the respondent continued to remain in occupation of the premises unauthorisedly from August 11, 1970 even after his transfer outside Delhi.
He was not entitled to retain any accommodation either from the general pool or the de fence pool once he was transferred to a place outside Delhi.
The respondent retained the flat in question at his own peril with full knowledge of the consequences.
He was bound by the declaration to abide by the Allot 102 ment Rules and was clearly liable under SR 3 17 B 22 to pay damages equal to the market rent for the period of his unauthorised occupation.
Before an estoppel can arise, there must be first a representation of an existing fact distinct from a mere promise made by one party to the other; secondly that the other party believing it must have been induced to act on the faith of it; and thirdly, that he must have so acted to his detriment.
In this case, there was no represen tation or conduct amounting to representation on the part of the Government intended to induce the respondent to believe that he was permitted to occupy the flat in question on payment of normal rent or that he was induced to change his position on the faith of it.
If there was any omission, it was on the part of the respondent in concealing the fact from the Director of Estates that he had been transferred to a place outside Delhi.
There was clearly a duty on his part to disclose the fact to the authorities.
There is nothing to show that he was misled by the Government against whom he claims the estoppel.
It is somewhat strange that the High Court should have spelled out that the respondent being a Squadron Leader was an employee of the Central Government and therefore the Government of India to whom the Curzon Road Hostel belongs must have had knowledge of the fact of his transfer.
The entire judgment of the High Court proceeds upon this wrongful assumption.
In the premises, it is difficult to sustain the judgment of the High Court and it has to be reversed.
Nonetheless, the writ petition must still succeed for another reason.
It is somewhat strange that the High Court should have failed to apply its mind to the most crucial question involved, namely, that the Government was not competent to recover the amount of Rs.20.482.78p.
alleged to be due and payable towards damages on account of unauthorised use and occupa tion of the flat from the commuted pension payable to the respondent which was clearly against the terms of section 11 of the which reads as follows: "Exemption of pension from attachment: No pension granted or continued by Government on political considerations, or on account of past services or present infirmities or as a compassionate allowance, and no money due or to become due on account of any such pension or allowance, shall be liable to seizure, attachment or sequestration by process of any Court at the instance of a creditor, for, any demand against the pensioner, or in satisfac tion of a decree or order of any such Court.
" 103 According to its plain terms, section 11 protects from attach ment, seizure or sequestration pension or money due or to become due on account of any such pension.
The words "money due or to become due on account of pension" by necessary implication mean money that has not yet been paid on account of pension or has not been received by the pensioner and therefore wide enough to include commuted pension.
The controversy whether on commutation of pension the commuted pension becomes a capital sum or still retains the character of pension so long as it remains unpaid in the hands of the Government, is not a new one till it was settled by the judgment of this Court in Union of India vs Jyoti Chit Fund & Finance & Ors.
, ; We may briefly touch upon the earlier decisions on the question.
In an English case, in Crowe vs Price, it was held that money paid to a retired officer of His Majesty 's force for the commutation of his pension does not retain its character as pension so as to prevent it from being taken in execution.
On p.217 of the Report, Coleridge, CJ.
said: "It is clear to me that commutation money stands on an entirely different ground from pension money, and that if an officer commuted his pension for a capital sum paid down, the rules which apply to pension money and make any assignment of it void, do not apply to this sum.
" Following the dictum of Coleridge, CJ., Besley, CJ. and King, J. in Municipal Council, Salem vs B. Gururaja Rao, ILR held that when pension or portion thereof is commuted, it ceases to be pension and becomes a capital sum.
The question in that case was whether the commuted portion of the pension of a retired Subordinate Judge was income for purposes of assessment of professional tax under s.354 of the Madras District Municipalities Act, 1920.
The learned Judges held that where pension is commuted there is no longer any periodical payment; the pensioner receives once and for all a lump sum in lieu of the periodical pay ments.
The pension is changed into something else and be comes a capital sum.
On that view they held that the sum received by the retired Subordinate Judge in lieu of the portion of his pension when it was commuted was no longer pension and therefore not liable to pay a professional tax under s.354 of the Madras District Municipalities Act.
That is to say, the commuted portion, of the pension was not income for purposes of assessment of professional tax in a municipality.
The question arose in a different form in C. Gopalachariar vs Deep Chand Sowcar, AIR 1941 Mad. 207 and it was whether the commuted portion of the pension was not attachable in 104 execution of a decree obtained by certain creditors in view of section 11 of the .
Pandurang Row, J. interpreting section 11 of the Act was of the opinion that not only the pen sion but any portion of it which is commuted came within the provisions of the section.
He particularly referred to the words "money due or to become due on account of pension" appearing in section 11 of the Act which, according to him, would necessarily include the commuted portion of the pension.
He observed that the phrase "on account of" is a phrase used in ordinary parlance and is certainly not a term of art which has acquired a definite or precise meaning in law.
Accord ingly to its ordinary connotation the phrase "on account of" means "by reason of" and he therefore queried: "Now can it be said that the commuted portion of the pension is not money due on account of the pension? Though the pension has been commuted, still can it be said that money due by reason of such commutation or because of such commutation, is not money due on account of pension?" He referred to section 10 of the Act which provides for the mode of commutation and is part of Chapter III which is headed "Mode of Payment", and observed: "In other words, the commutation of pension is regarded as a mode of payment of pension.
If so, can it be reasonably urged that payment of the commutation amount is not payment on account of the pension, though not of the pension itself, because after commutation it ceases to be pension? I see no good reason why it should be deemed to be otherwise.
No doubt money is due immediately under the commutation order, but the commutation order itself is on account of a pension which was commuted or a portion of the pension which was commuted.
The intention behind the provisions of section 11, , is applicable to 'the commuted portion as well as to the uncommuted portion of the pension and the language of section 11 does not appear to exclude from its protection the money that is due under a commutation order commuting a part of the pension.
" In Hassomal Sangumal vs Diaromal Laloomal, AIR 1942 Sind 19.
Davis, CJ.
speaking for a Division Bench referred to Gopalachariar 's case and pointed out that it does not lay down that once a 105 pension has been commuted and the money paid over to the pensioner, the exemption from attachment still continues.
The learned Chief Justice went on to say that the words "money due or to become due" used in section 11 must by necessary implication mean the money that has not yet been paid to the pensioner.
In Jyoti Chit Fund 's case the Court repelled the conten tion that since the civil servant had already retired, the provident fund amount, pension and other compulsory deposits which were in the hands of the Government and payable to him had ceased to retain their character as such provident fund or pension under ss.3 and 4 of the .
Krishna Iyer, J. speaking for himself and Chandrachud, J. observed: "On first principles and on precedent, we are clear in our minds that these sums, if they are of the character set up by the Union of India, are beyond the reach of the court 's power to attach.
Section 2 (a) of the Provi dent Funds Act has also to be read in this connection to remove possible doubts because this definitional clause is of wide amplitude.
Moreover, s.60(1), provides (g) and (k), leave no doubt on the point of non attachability.
The matter is so plain that discussion is uncalled for.
We may state without fear of contra diction that provident fund amounts, pensions and other compulsory deposits covered by the provisions we have referred to, retain their character until they reach the hands of the employee.
The reality of the protection is reduced to illusory formality if we accept the interpretation sought.
" The learned Additional Solicitor General has very fairly brought to our notice Circular No. F.7(28)E .V/53 dated August 25, 1985 issued by the Government of India, Ministry of Finance to the effect: "When a pensioner refuses to pay Government dues The failure or refusal of a pensioner to pay any amount owed by him to Government cannot be said to be 'misconduct ' within the meaning of Article 351 of the C.S.R. (Rule 8, C.C.S. (Pension) Rules, 1972).
The Possible way of recovering/damanding Government dues from a retiring officer who refuses to agree in writing, to such dues being recovered from his pension is either to delay the final sanc 106 tion of his pension for some time which will have the desired effect for persuading him to agree to recovery being made therefrom or take recourse to Court of law.
" It bears out the construction that the words "money due or to become due on account of pension" occurring in section 11 of the includes the commuted portion of the pension payable to an employee after his retirement.
It must accordingly be held that the Government had no authority or power to unilaterally deduct the amount of Rs.20,482.78p.
from the commuted pension payable to the respondent, con trary to section 11 of the .
For these reasons, the appeal partly succeeds and is allowed.
The judgment and order of the High Court are set aside.
We allow the writ petition filed by the respondent in the High Court and direct that a writ of mandamus be issued ordaining the Central Government to refund the amount of Rs.20,482.78p.
deducted from the commuted pension paid to the respondent.
The Government shall be at liberty to initi ate proceedings under s.7(2) read with section 14 of the for recovery of Rs.20.482.78p.
due on account of damages for unauthorised use and occupation of the fiat in question from the respondent as arrears of land revenue, or have recourse to its remedy by way of a suit for recovery of damages.
Before parting with the case, we wish to add a few words.
The Government should consider the feasibility of dropping the proceedings for recovery of damages, if the respondent were to forego his claim for interest.
In this case, the deduction of the amount of Rs.20,482.78p.
from the commuted pension payable to the respondent was made as far back as October 30, 1976.
Since then, 10 years have gone by.
Even if interest were to be calculated at 9% per annum, the interest alone would aggregate to more than Rs.18,000.
Since the Government had the benefit of the money for all these years, it may not be worthwhile in pursuing the matter any further.
There shall be no order as to costs.
S.R. Appeal allowed.
| The appellant was convicted for murder on the basis inter alia of the dying declaration of the deceased.
The Sessions Court rejected it on the ground that though the deceased gave the narrative of events in Punjabi the statement was taken down in Urdu.
Held, that in view of the fact that in the Punjab the lan guage used in the subordinate courts and by the Police for recording statements has always been Urdu, the recording of dying declarations in Urdu cannot be a ground for saying that the statement does not correctly reproduce what was stated by the declarant.
Accordingly, the dying declaration should not have been rejected.
The dying declaration in the instant case was a long docu ment containing a narrative of a large number of incidents which happened before the actual assault, which was more in the nature of the First Information Report : Held, that the object of a dying declaration being to get from the person making the statement the cause of his death or the circumstances of the transaction which resulted in his death, persons who record such declaration should not include in that statement details which are not relevant under section 32(1) of the , unless they are necessary to make the statement coherent or complete.
It is desirable that rules should be framed for the guidance of persons recording dying declarations, and included in the Rules and Orders made by the High Court.
Where a person who was stated in the dying declaration to have witnessed the occurrence was not examined by the prose cution at the trial on the ground that he had been won over and it was contended that this was a serious omission and an adverse inference should be drawn: Held, that there was no obligation on the part of the prose cution to examine this witness and that the court would not interfere with the discretion of the prosecutor, 410 Abdul Mohammad vs Attorney General of Palestine, A.I.R. , Stephen Servaraine vs The King, A. 1.
R. ,and Habeeb Mohammed vs The State of Hydera bad; , , referred to.
|
ivil Appeal No. 1870 of 1982.
From the Judgment and Order dated 2.9.1981 of the Punjab and Haryana High Court in R.S.A. No. 1556 of 1980.
V.M. Tarkunde and Prem Malhotra for the Appellant.
S.C. Mohanta, Mahavir Singh and C.V. Subba Rao for the Respondents.
The Judgment of the Court was delivered by DUTT, J.
In this appeal by special leave the appellant, a Bus Conductor of the Haryana Roadways, has challenged the validity of the order of termination of his service on the ground of failure of the punishing authority to give any reason for the impugned order in violation of the principles of natural justice.
A charge was levelled against the appellant that he did not issue tickets to nine passengers, although he had taken the fare from each of them.
A disciplinary proceeding was started against the appellant.
The 1059 Enquiry Officer, after considering the allegations consti tuting the charge, the plea of the appellant in defence and the evidence adduced by the parties including the appellant, held that the charge against the appellant was proved.
The punishing authority agreed with the findings of the Enquiry Officer and by the impugned order terminated the service of the appellant.
Aggrieved, the appellant filed a suit challenging the legality of the order of termination.
It was contended by the appellant that as no reason was given in the impugned order, it was illegal and invalid being opposed to the principles of natural justice.
The Trial Court overruled the said contention and also held that the Civil Court had no jurisdiction to entertain and try the suit.
Accordingly, the Trial Court dismissed the suit.
On appeal, the learned Additional District Judge held in disagreement with the Trial Court and, in our opinion, rightly that the Civil Court had jurisdiction to entertain and try the suit.
The learned Additional District Judge, however, held that the impugned order was a non speaking order not containing any reason and, as such, it was in valid.
In that view of the matter, the learned Additional Judge allowed the appeal, set aside the judgment of the Trial Court and the impugned order of termination of service of the appellant and decreed the suit.
The State of Haryana took the matter to the High Court in a second appeal.
The High Court affirmed the finding of the learned Additional District Judge as to the jurisdiction of the Civil Court, but set aside his finding that the impugned order was a non speaking order.
The High Court took the view that the impugned order was quite legal and valid.
Upon the said findings.
the High Court allowed the appeal and set aside the judgment and decree of the learned Addi tional District Judge.
Hence this appeal by special leave.
It has been urged by Mr. Tarkunde, learned Counsel appearing on behalf of the appellant, that the punishing authority has not applied his mind before passing the im pugned order, which is apparent from the fact that he had not given any reason in justification of the impugned order.
Counsel submits that non application of the mind and failure to give any reason by the punishing authority vitiated the impugned order of termination and, accordingly, it should be set aside.
It has been pointed out by the High Court that the punishing 1060 authority has passed a lengthy order running into seven pages mentioning therein the contents of the charge sheet, the detailed deposition of the witnesses, as accorded by the Enquiry Officer, and the findings of the Enquiry Officer.
The explanation submitted by the appellant has also been reproduced in the impugned order.
Thereafter, the punishing authority stated as follows: "I have considered the charge sheet, the reply filed to the charge sheet, the statements made during enquiry, the report of the Enquiry Officer, the show cause notice, the reply filed by the delinquent and other papers and that no reason is available to me on the basis of which reliance may not be placed on the report of the Enquiry Officer.
Therefore, keeping these circumstances in view, I termi nate his service with effect from the date of issue of this order.
" In view of the contents of the impugned order, it is difficult to say that the punishing authority had not ap plied his mind to the case before terminating the services of the appellant.
The punishing authority has placed reli ance upon the report of the Enquiry Officer which means that he has not only agreed with the findings of the Enquiry Officer, but also has accepted the reasons given by him for the findings.
In our opinion, when the punishing authority agrees with the findings of the Enquiry Officer and accepts the reasons given by him in support of such findings, it is not necessary for the punishing authority to again discuss evidence and come to the same findings as that of the En quiry Officer and give the same reasons for the findings.
We are unable to accept the contention made on behalf of the appellant that the impugned order of termination is vitiated as it is a non speaking order and does not contain any reason.
When by the impugned order the punishing authority has accepted the findings of the Enquiry Officer and the reason given by him, the question of non compliance with the principles of natural justice does not arise.
It is also incorrect to say that the impugned order is not a speaking order.
There is, therefore, no substance in the appeal.
The appeal is dismissed.
There will, however, be no order as to costs.
In view of the fact that it is the first offence of the appellant, who is said to be the father of five minor chil dren and has no other means of livelihood, the respondent may consider the re employment of the appellant to the post of Conductor or to any other post, to which he may be found to be suitable.
N.P.V. Appeal dismiss.ed.
| The service of the appellant, a bus conductor, was terminated consequent upon the enquiry conducted into alle gations of non issue of tickets to nine passengers, though fare was collected from each of them.
A suit filed by the appellant, contending that the order of termination was illegal and void and was opposed to the principles of natu ral justice, as no reason was given in the order, was dis missed by the trial court.
It was also held that the Civil Court had no jurisdiction to entertain and try the suit.
The Additional District Judge, on appeal, held that the Civil Court had jurisdiction to entertain and try the suit and set aside the impugned order of termination as invalid as it was a non speaking order not containing any reason.
In second appeal, the High Court affirmed the finding of the Additional District Judge as to the jurisdiction of the Civil Court, but set aside his finding that the impugned order was a non speaking order and held that it was quite legal and valid.
In the appeal to this Court it was contended on behalf of the appellant that the punishing authority had not ap plied his mind before passing the impugned order, which was apparent from the fact that he had not given any reason in justification thereof and this had vitiated the impugned order of termination.
Dismissing the appeal, this Court, HELD: When the punishing authority agrees with the findings of the Enquiry Officer who accepts the reasons given by him in support of such findings, it is not neces sary for the punishing authority to again 1058 discuss evidence and come to the same findings as that of the Enquiry Officer and give the same reasons for the find ings.
[1060E] In the instant case, it is difficult to say that the punishing authority had not applied his mind.
The punishing authority has placed reliance upon the report of the Enquiry Officer, which means he has not only agreed with the find ings of the Enquiry Officer but also accepted the reasons given by him for the same.
When the punishing authority has accepted the findings of the Enquiry Officer and the reasons given by him, the question of non compliance with the prin ciples of natural justice does not arise.
[1060E F] It cannot be said that the impugned order is not a speaking order and is vitiated.
[1060F] [In view of the fact that it is the first offence of the appellant, who is said to be the father of five minor chil dren and has no other means of livelihood, the respondent may consider the re employment of the appellant to the post of Conductor or to any other post, to which he may be found to be suitable.] [1060G H]
|
No. 132 of 1951.
Peti tion under article 32 of the Constitution for a writ in the nature of mandamus.
The material facts are set out in the judgment.
Nuruddin Abroad for the petitioner.
K.N. Aggarwal for the respondents.
February 27.
The Judgment of the Court was delivered by DAs J.
This is an application under article 32 of the Constitution made by Mohammad Yasin for the protection of his fundamental right of carrying on his business which, according to him, is being infringed by the respondent.
The case sought to be made out in the petition may be shortly stated as follows: The petitioner is a wholesale dealer in fresh vegetables and fruits at Jalalabad in the district of Muzaffarnagar in the State of Uttar Pradesh and claims to have been carrying on such business for the last 7 years or so at his shop situated in the town of Jalalabad.
The vegetable and fruit growers used to bring their goods to the town and get them auctioned through any of the vegetable dealers of their choice who used to charge one anna in the rupee as and by way of commission.
The respondent Committee which is a Town Area Committee has framed certain bye laws under which all right and power to levy or collect commission on sale or purchase of vegetables and fruits within the limits of the town vest in the respondent Committee or any other agency appointed by the Committee and no one except the respondent Committee is authorised to deal in wholesale vegetables and fruits and collect the commission thereof in any place and in any event.
The respondent Committee has by auction given the contract for sale of 575 vegetables and fruits and for collecting the commission for the current year to the respondent Bishamber who, it is alleged, has never dealt in vegetables and fruits The respondent Committee has not set up any market nor has it framed any bye laws for issue of licences to the vegetable and fruit merchants.
The bye laws also provide for prosecu tion for the breach of any of the provisions of these bye laws.
Although, in terms, there is no absolute prohibition against carrying on business as wholesale dealer in vegeta bles and fruits, the result of the bye laws requiring the wholesale dealers to pay the prescribed fee of one anna in the rupee to the contractor who holds the monopoly is, in effect, to bring about a total prohibition of the business of the wholesale dealers in vegetables and fruits.
The petitioner contends that by granting a monopoly of the right to do wholesale business in vegetables and fruits to the respondent Bishamber the respondent Committee has in effect totally prevented the petitioner from carrying on his busi ness and has thereby infringed his fundamental right under article 19(1)(g) of the Constitution.
In the alterna tive, the petitioner contends that the respondent Committee has no legal authority to impose a tax of the kind it has sought to do, that the imposition of a tax calculated at one anna in the rupee is in the nature of a sale tax and cannot be regarded as a licence fee and such unauthorised impost constitutes an illegal restraint on his fundamental right under article 19 (1) (g).
The notice of motion has been served on the respondent Committee as well as on respondent Bishamber.
The respond ents have entered appearance and filed an affidavit in opposition to the present application affirmed by their agent on record Paragraph 4 of that affidavit is as follows : "4.
Paragraphs 4, 5, 6 and 7 of the petition are wrong and misleading and do not convey the correct idea.
If the bye laws are read from beginning to end, the correct posi tion is that the Town Area Committee has lawfully imposed certain taxes on the purchase 576 and sale of fruits and vegetables within the ambit of the Town Area; and instead of collecting the aforesaid taxes departmentally the Committee finds it more convenient and less expensive to auction the 'right to collect the taxes ' and give the contract to the highest bidder or whomsoever it thinks fit and proper.
There is absolutely no restriction on anybody who wants to purchase or anybody who wants to sell; only he must pay the prescribed tax to the Town Area Commit tee through the Contractor.
The market is open, and writ large throughout the territory of the Town Area Committee and anybody can purchase from anybody and anybody can sell to anybody, without any control or intervention by the Contractor, whose position is simply that of a taxcollector on behalf of the Town Area Committee.
Instead of getting the pay, he gets the profits, if any, and runs the risk of incurring losses if his gross realisations are less than what he paid.
This is clearly the position, and it is submitted, there is nothing wrong with it legally and no interference of the petitioner 's rights.
" The petitioner has to his petition annexed copies of a set of bye laws dated June 24, 1942, and a copy of a resolu tion of the respondent Committee dated March 16, 1950, recommending the addition of several bye laws to the previ ous bye laws.
At the hearing of the petition before us it was agreed by and between counsel on both sides that the petition has to be disposed of on the basis of the bye laws of 1942 only and learned counsel for the respondent Commit tee has produced the original bye laws of 1942 before us.
Bye law 1 only provides that no person shall sell or pur chase any vegetable or fruit within the prescribed limits of the Town Area Committee, Jalalabad by wholesale or auction,without paying the fee fixed under these bye laws to the licensee appointed by the Town Magistrate.
Bye law 4 (b) expressly provides that any person can sell in wholesale at any place in the Town Area provided he pays the pre scribed fees to the licensee.
It is, therefore, clear that these byelaws do not in terms, prohibit anybody from dealing in vegetables and fruits as alleged by the petitioner 577 and in this respect they materially differ from the bye laws which this Court had to consider in the Kairana case(1) which consequently does not govern this case.
Learned counsel, however, contends and we think with considerable force and cogency that although, in form, there is no prohibition against carrying on any wholesale business by anybody, in effect and in substance the bye laws have brought about a total stoppage of the wholesale deal ers ' business in a commercial sense.
The wholesale dealers, who will have to pay the prescribed fee to the contractor appointed by auction, will necessarily have to charge the growers of vegetables and fruits something over and above the prescribed lee so as to keep a margin of profit for themselves but in such circumstances no grower of vegetables and fruits will have his produce sold to or auctioned by the wholesale dealers at a higher rate of commission but all of them will flock to the contractor who will only charge them the prescribed commission.
On the other hand, if the wholesale dealers charge the growers of vegetables and fruits only the commission prescribed by the bye laws they will have to make over the whole of it to the contractor without keeping any profit themselves.
In other words, the wholesale dealers will be converted into mere tax col lectors for the contractor or the respondent Committee without any remuneration from either of them In effect, therefore, the bye laws, it is said, have brought about a total prohibition of the business of the wholesale dealers in a commercial sense and from a practical point of view.
We are not of opinion that this contention is unsound or untenable.
Learned counsel for the petitioner, however, does not leave the matter there.
He goes further and urges that the respondent Committee has no legal authority to impose this fee of one anna in the rupee on the value of goods sold or auctioned and that such imposition is in the nature of a sale tax rather than a licence fee.
(1) ; 578 Learned counsel for the respondent in reply takes a preliminary objection to this line of argument.
He points out that as the levying of a tax without authority of law is specifically prohibited under article 265 of the Constitu tion, article 81(1) must be construed as referring to depri vation of property otherwise than by levying of a tax and that levying of a tax in contravention of article 265 does not amount to a breach of a fundamental right.
He contends, on the authority of the decision of this Court in Ramjilal vs Income tax Officer, Mohindargarh(1), that while an ille gal imposition of tax may be challenged in a properly con stituted suit, it cannot be questioned by an application under article 32.
This argument overlooks the difference between a tax like the income tax and a licence fee for carrying on a business.
A licence fee on a business not only takes away the property of the licensee but also operates as a restriction on his right to carry on his business, for without payment of such fee the business cannot be carried on at all.
This aspect of the matter was not raised or considered in the case relied on by the learned counsel, and that case, therefore, has no application to the facts of this case.
Under article 19(1) (g) the citizen has the right to carry on any occupation, trade or business which right under that clause is apparently to be unfettered.
The only restriction to this unfettered right is the authority of the State to make a law relating to the carrying on of such occupation, trade or business as mentioned in clause (6) of that article as amended by the Constitution (First Amend ment) Act, 1951.
If therefore, the licence fee cannot be justified on the basis of any valid law no question of its reasonableness can arise, for an illegal impost must at all times be an unreasonable restriction and will necessarily infringe the right of the citizen to carry on his occupa tion, trade or business under article 19 (1) (g) and such infringement can properly be made the subject matter of a challenge under article 32 of the Constitution.
(1) [1951] S.C.R.127.
579 Learned counsel for the respondents then refers us to the U.P. Town Areas Act (No. 11 of 1914) which governs the respondent Committee.
Section 14 of this Act requires the Committee to annually determine and report to the District Magistrate the amount required to be raised in any town area for the purposes of this Act and provides that the amount so determined shall be raised by the imposition of a tax to be assessed on the occupiers of houses or lands within the limits of the town area according either to their general circumstances or to the annual rental value of the houses or lands so occupied by them as the Committee may determine.
There were, at the time when the bye laws of the respond ent Committee were framed, five provisos to this section none of which authorised the imposition of any tax on any business and, therefore, they have no bearing on the ques tion now under consideration.
Learned counsel for the respondents, however, draws our attention to section 38 of the Act which authorises the Provincial Government by noti fication in the Official Gazette to extend to all or any or any part of any town area any enactment for the time being in force in any municipality in the United Provinces and to declare its extension to be subject to such restrictions and modifications, if any, as it thinks fit.
Then he proceeds to draw our attention to Notification No. 397/XI 871 E, dated the 6th February, 1929, whereby, in supersession of all previous notifications, the Provincial Government, in exer cise of the powers conferred by section 38(1) of the United Provinces Town Areas Act, 1914, extended the provisions of sections 293(1) and 298(2) (J) (d) of the United Provinces Municipalities Act (11 of 1916) to all the town area in the United Provinces in the modified form set forth therein.
The original bye laws produced by learned counsel purport, however, to have been framed by the respondent Committee under sections 298 (2)(F)(a)and 294 of the United Provinces Municipalities Act (11 of 1916).
We have not been referred to any notification whereby section '294 580 of the United Provinces Municipalities Act was extended to the respondent Committee.
It appears, however, that the bye laws of the respondent Committee were revised in Septem ber 1942 and were then said to have been made under section 298 (2) (J) (d).
It will have, therefore, to be seen wheth er these bye laws come within The purview of section 298 (2) (J) (d) as modified in their application to the respondent Committee.
It will be noticed that under section 298 (2) (J) (d) as modified as aforesaid the respondent Committee is authorised only to make bye laws fixing any charges or fees or any scale of charges or fees to be paid under section 9.93(1) and prescribing the times at which such charges or fees shall be payable and designating the persons authorised to receive payment thereof.
Section 293(1), as modified, authorises the respondent Committee to charge fees to be fixed by bye laws or by public auction or by agreement for the use or occupation (otherwise than under a lease) of any immovable property vested in, or entrusted to the management of the Town Area Committee, including any public street or place of which it allows the use or occupation whether by allowing a projection thereon or otherwise.
Bye law 1 of the respondent Committee to which a reference has already been made forbids a person from using any land within the limits of the town area for the sale or purchase of fruits and vegetables without paying the prescribed fee.
Bye law 4 (b), however, allows any person to sell in wholesale at any place in the town area, provided he pays the prescribed fees to the licensee.
These bye laws do not purport to fix a fee for the use or occupation of any immovable property vested in or entrusted to the management of the Town Area Committee including any public street or place of which it allows the use or occupation whether by allowing a projection thereon or otherwise.
Sections 293(1) and 298(2) (J) (d) of the United Province Municipalities Act, 1916, as amended at the time they were extended to the town areas in the United Provinces do not empower the Town Area Committee to make any bye law authorising it to 581 charge any fees otherwise than for the use or occupation of any property vested in or entrusted to the management of the Town Area Committee including any public street.
Therefore, the bye laws prima facie go much beyond the powers con ferred on the respondent Committee by the sections men tioned above and the petitioner complains against the en forcement of these bye laws against him as he carries on business in his own shop and not in or on any immoveable property vested in the Town Area Committee or entrusted to their management.
Learned counsel for the respondent Commit tee, however, urges that the growers of vegetables and fruits come on foot or in carts or on horses along the public street and stand outside the petitioner 's shop and for such use of the public street the respondent Committee is well within its powers to charge the fees.
From the way the case was formulated by the learned counsel, it is quite clear that if anybody uses the public street it is the growers of vegetables and fruits who come to the petition er 's shop to get their produce auctioned by the petitioner and the petitioner cannot be charged with fees for use of the public street by those persons.
In our opinion, the bye laws which impose a charge on the wholesale dealer in the shape of the prescribed fee, irrespective of any use or occupation by him of immoveable property vested in or en trusted to the management of the Town Area Committee includ ing any public street, are obviously ultra vires the powers of the respondent Committee and, therefore, the bye laws cannot be said to constitute a valid law which alone may, under article 19(16) of the Constitution,ofimpose a restric tion on the right conferred by article 19(1) (g).
In the absence of any valid law authorising it, such illegal impo sition must undoubtedly operate as an illegal restraint and must infringe the unfettered right of the wholesale dealer to carry on his occupation, trade or business which is guaranteed to him by article 19(1) (g) of our Constitution 75 582 In this view of the matter the petitioner is entitled to a suitable order for protection of his fundamental right.
The prayer in the petition, however, has been expressed in language much too wide and cannot be granted in that form.
The proper order would be to direct the respondent Committee not to prohibit the petitioner from carrying on the busi ness of a wholesale dealer in vegetables and fruits within the limits of the Jalalabad Town Area Committee until proper and valid bye laws are framed and thereafter except in accordance with a licence to be obtained by the petitioner under the bye laws to be so framed.
The respondent Commit tee will pay the costs of this application to the petition er.
Agent for the petitioner: Naunit Lal.
| There is a difference between a tax like the income tax and a licence fee for carrying on an occupation, trade or business.
A licence lee on a business not only takes away the property of the licensee but also operates as a restric tion on his fundamental 573 right to carry on his business.
Therefore if the imposition of a licence fee is without authority of law it can be challenged by way of an application under article 32.
Under article 19(1) (g) of the Constitution a citizen has the right to carry on any occupation, trade or business and the only restriction on this unfettered right is the author ity of the State to make a law relating to the carrying on of such occupation, trade or business as mentioned in cl.
(6) of that article as amended by the Constitution (First Amendment) Act, 1951.
If therefore a licence fee imposed for carrying on an occupation, trade or business cannot be justified on the basis of any valid law, no question of its reasonableness can arise, for an illegal impost must at all times be an unreasonable restriction and will necessarily infringe the right of the citizen to carry on his occupa tion, trade or business under article 19(1) (g), and such infringement can properly be made the subject matter of a challenge under article 32 of the Constitution.
Bye law No. 1 of the Bye laws of the Town Area Committee of Jalalabad (in the United Provinces) provided that no person shall sell or purchase any vegetables or fruit within the prescribed limits of the Town Area Committee by whole sale or auction, without paying the fees fixed by these bye laws to the licensee appointed by the Town Magistrate.
Bye law No. 4 (b) provided that any person can sell in wholesale at any place in the town area provided he pays the prescribed fees to the licensee.
A person who had been carrying on the business of wholesale dealer in vegetables and fruits in his own shop at Jalalabad for a period of seven years applied for protection under article 32 contending that these bye laws infringed his fundamental right to carry on his trade guaranteed by article 19 (1) (g) and were there fore void.
Held, that section 293 (1) and section 298 (2) (J) (d) of the U.P. Municipalities Act, 1916, as amended at the time they were extended to the town areas in the United Provinces did not empower the Town Area Committee to make any bye law autho rising it to charge any fees otherwise than for the use and occupation of any property vested in or entrusted to the management of the Town Area Committee including any public street.
The bye laws in question which imposed a charge on the wholesale dealer in the shape of the prescribed fee, irrespective of any use or occupation by him of immovable property vested in or entrusted to the management of the Town Area Committee including any public street, are obvi ously ultra vires the powers of the Committee and, there fore, the bye laws cannot be said to constitute a valid law which alone may, under article 19 (6) of the Constitution, impose a restriction on the right conferred by article 19(1) (g).
In the absence of any valid law authorising it, such illegal imposition must undoubtedly operate as an illegal restraint and must infringe the unfettered right of the wholesale dealer to carry on 74 574 his occupation, trade or business which is guaranteed to him by article 19 (1) (g) of our Constitution.
Kairana case ; and Ramji Lal vs Income tax Officer, Mohindargarh ; distinguished.
|
Appeal No. 545 of 1965.
167 Appeal by special leave from the judgment and order dated, December 18, 1961 of the Madhya Pradesh High Court in Misc.
Petition No. 247 of 1961.
M. section Gupta and Yashpal Singh, for the appellant.
section K. Mehta and K. L. Mehta, for the respondents.
The Judgment of the Court was delivered by Shelat, J.
The appellant Municipal Committee is for the vil lage Khurari, a notified area under the Central Provinces and Berar Municipalities Act, 1922.
The Committee is entitled to levy and collect under the said Act and under the Rules made thereunder octroi duty inter alia on foodgrains brought into the municipal limits for sale.
On March 8, 1954, respondents 1 and 2 applied for refund of octroi duty on the ground that they had exported from the municipal area foodgrains of which particulars were given in the schedule attached thereto.
The appellant Committee replied that they would not be entitled to the refund unless they filed with their application the receipts of duty is sued by the Committee at the time when it was paid on the importation of the said foodgrains.
It may be mentioned that it was not the case of the Committee in the said reply that the said goods were not exported by respondents 1 and 2 by rail or that they were not the same goods which were imported into the area and which were purchased by respondents 1 and 2 and on which duty would be payable by the cultivators from whom respondents 1 and 2 had purchased the said foodgrains.
The Committee simply refused to pay the refund as the respondents failed to produce the said receipts.
In the appeal filed by respondents 1 and 2 before the Additional Deputy Commissioner, that officer held, on a construction of rr. 27 and 34, that it would be the.
person who had paid the duty when the goods were brought into the municipal area who alone could claim the refund if the goods exported by him were the same on which the duty was paid.
The Board of Revenue before whom respondents 1 and 2 filed a revision application against the Deputy Commissioner 's said order held that the word 'refund ' in r. 27 meant that the person who had paid the duty could alone be entitled to claim the refund and that respondents 1 and 2 not being such persons could not apply for it.
On that ground alone the Board rejected the revision application.
Respondents 1 and 2 thereupon filed a writ petition in the High Court of Madhya Pradesh for quashing the said orders of the Deputy Commissioner and the Board of Revenue.
The admitted facts before the High Court were, (1) that res pondents 1 and 2 had purchased the said foodgrains from certain cultivators; and (2) that those cultivators had in fact paid octroi 168 duty when they brought the said foodgrains for sale within the municipal area.
The contention of respondents 1 and 2 before the High Court was that as persons who had exported the said goods they were entitled to the refund of the duty paid by their vendors, the said cultivators, ' and that the Board misconstrued the rules and was in error in refusing the refund to them.
A learned Single Judge of the High Court held that under r. 9(c) a declaration had to be made if the goods were intended for consumption or use within the municipal area or if they were intended for immediate export.
He observed that r. 9, however, did not 'provide for any such declaration if the goods brought into the municipal area were intended for sale.
He then observed that section 27 dealt with refund of octroi on the exportation of dutiable goods outside the municipal limits and the exporter thereunder was entitled to a refund of 7/8th of the duty paid on such goods.
He held that the duty having admittedly been paid on such goods by the said cultivators and respondents 1 and 2 having purchased and exported those very goods, they were entitled to the refund.
On this basis he quashed the orders of the Deputy Commissioner and the Board and allowed the writ petition.
In the Letters Patent appeal filed by the appellant Committee, a division bench of that High Court agreed with the Single Judge on his construction of r. 27 but as the Board had considered only one question, namely, whether respondents 1 and 2 not having themselves paid the duty were not entitled to claim the refund, remanded the case for dealing with the rest of the questions.
On remand to the Board, the Committee contended, (1) that respondents 1 and 2 had to establish that duty was paid on the said goods when they, were imported into the municipal area; and (2) that they 'had also to produce the receipts of payment of such duty and that without doing so they were not entitled to the refund.
The Board rejected the contention and held on the strength of rr.
42 and 43 of the said Rules that except in the case of cloth or goods produced or manufactured within the municipal area, no proof by the person claiming refund of duty paid on importation was required and that such payment would be presumed in the case of goods other than the two aforesaid kinds of goods.
The Board further held that r. 27 also did not lay down that the person who has exported the goods had to prove payment of octroi on those goods when they entered the area.
The Board on this interpretation allowed the revision application of respondents 1 and 2 and set aside the orders of the Committee and the Deputy Commissioner and directed payment of the refund.
The Municipal Committee thereupon filed a writ petition in the High Court for quashing the Board 's order contending once again that no octroi duty had been paid on the said foodgrains.
The High Court rejected this contention in view of the admission made by 169 the Committee before the Deputy Commissioner, the Board and the High Court in earlier proceedings that the goods exported by respondents 1 and 2 were duty paid.
The High Court held that in view of those admissions the Committee could not require respondents 1 and 2 to produce the receipts to prove payment of the duty, apart from the fact that the rules did not require a claimant who had exported dutiable goods to produce receipts of payment of duty.
The High Court further held that it was clear from rr. 28 and 29 that the amount of refund is to be determined from the quantity of foodgrains exported or from their value and, therefore, even for determining the amount of refund production of receipts by such a claimant was not necessary nor was such production required by rr.
42 and 43 except, as aforesaid, in the case of two categories of goods, viz., cloth and articles produced or manufactured within the municipal area.
The High Court held that that being the position and there being no dispute as to the fact that the goods in question were duty paid and those very goods had been exported,, there was nothing in the rules which barred respondents 1 and 2 from recovering 7/8th of the duty paid on those goods.
The High Court dismissed the writ petition.
The Committee then filed a review petition before the High Court on the ground that it had not considered in its judgment its contention based on rr.
35 to 38 urged before it, The contention was that compliance of those rules by respondents 1 and 2 was a condition precedent to their being entitled to the refund.
The High Court conceded in its judgment on the review petition that the said point was urged before it but observed that it did not deal with it as during the hearing of the writ petition it was pointed out to the counsel for the Committee that there was no substance in it.
According to the High Court, rr. 35 to 37 did not require any compliance by respondents 1 and 2 as they dealt with matters to be done by the Octroi Superintendent and the Muharrir at the exit post when an application for refund is made by a person exporting the goods out of municipal limits and that the fact that respondents 1 and 2 did not present the challan at such exit post, did not debar them under the 'rules from claiming the refund.
The review petition on this ground was, therefore, rejected.
Aggrieved by the dismissal of its writ petition, the appellant Committee obtained special leave from this Court and filed this appeal.
In view of the aforesaid decision of the Board and the High Court in the earlier stages of this litigation, most of the contentions raised by the Committee justifying its refusal to refund have by now been concluded.
It cannot now be disputed (1) that respondents 1 and 2 had purchased foodgrains from the cultivators who had imported them into the municipal area for sale; (2) that those cultivators had at that time paid the duty on those food;up.
C. I./68 12 170 gains; and (3) that respondents 1 and 2 had exported the identical goods by rail.
Counsel for the Committee, however, urged that the view taken by the High Court was erroneous and that if the rules regarding refund were read together, it would be clear that a person claiming refund would not be entitled to it unless he has followed the procedure thereunder prescribed.
To appreciate this contention it would be necessary to turn to those rules.
The rules dealing with refund of octroi are rr.
27 to 43.
Rule 27 provides that on exportation of dutiable goods outside the municipal limits an exporter shall be entitled to a refund equal to 7/8th of the duty paid on them at the time of their import.
We do not detain ourselves on the proviso to this rule as it is not relevant for the purposes of this appeal.
The object of r. 27 is clear, viz., that in case of dutiable goods, the Committee has to refund to the person who has exported them 7/8th of the duty paid thereon at the time when they were brought into the municipal limits.
The rule does not require such an exporter to produce receipts of payment of duty levied at the time of their entry.
Obviously, the Committee was wrong in insisting upon respondents 1 and 2 to produce receipts before they could be granted the refund, nor could it justify its demand that respondents 1 and 2 should prove that duty had been paid on the said goods at the time of their entry as the rule does not lay down any such obligation on the exporter.
Rules 28 to 33 are not relevant and need not, therefore, be set out.
Rule 34 provides that an application for refund is to be made in the prescribed form and that.the exporter after filling in the particulars has to present his application at the office appointed for that purpose.
Rules 35 to 39 provide an elaborate procedure to be followed at the time of exportation.
Rule 35 provides that on receipt of an application for refund, the Octroi Officer must, satisfy himself that the goods brought for export agree with those mentioned in the application and if satisfied, he must prepare a challan showing the amount of refund and hand it over to the exporter who then shall take the goods beyond the municipal limits.
Under r. 36, the exporter has to present the challan in which the refund amount is calculated at the exit post within the time prescribed which shall not exceed twelve hours from the examination of the goods under r. 35 to their exportation.
Under r. 37, the Muharrir has to check the goods at the exit post and ascertain that the goods agreed with those mentioned in the chalIan and then issue a certificate to the exporter on which the refund would be paid to him.
Rule 38 provides that where the goods are not presented at the out post as provided by r. 35, the exporter may get them verified by the officer who would then make an endorsement on the application and on such endorsement made the exporter would get the refund '.
Under r. 39 when goods are 171 exported by rail, the exporter has to produce the railway receipt as well as the refund challan bearing the certificate of the Muharrir at the exit post.
It is clear from rr.
35 to 39 that they lay down the procedure for claiming refund.
Counsel for the Committee, therefore, appears to be right in his contention that an exporter desiring to claim refund has to make his application at the time of exportation of the goods and in the manner prescribed in these rules.
It appears also that there is considerable force in his contention ,that rr.
42 and 43 deal with only two categories of goods, viz., cloth and articles locally produced or manufactured and that r. 43 is confined to those two kinds of goods only and, therefore, when it provides that no further proof of duty having been paid on them is required, it means that no proof of such payment other than the one mentioned in r. 42 would be needed in respect of the said two categories of goods.
In our view, r. 43 has to be read in the context of r. 42 and must, therefore, be read to mean that no further proof of payment other than the one mentioned in r. 42 would be required to respect of those two classes of goods and, therefore, r. 43 does not apply to other kinds of goods.
The reason is that if r. 43 is read in the manner in which the High Court has read it, it would render rr.
35 to 39 totally nugatory, a construction which a court having to construe these rules, would be loath to adopt.
It would seem, therefore, that these rules do provide a procedure which an exporter wishing to claim refund has to follow.
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 Committee is that though the rules lay down a procedure 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 rr.
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 to 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.
The appeal is dismissed with costs.
| Held by the Court (KANIA C.J., PATANJALI SASTRI, MEHR CHAND MAHAJAN, DAS and CHANDRASEKHARA AIYAR JJ.
FAZL ALI and MUKHERJEA JJ., dissenting) Article 13(1) of the Indian Constitution does not make existing laws which are incon sistent with fundamental rights void ab initio, but only renders such laws ineffectual and void with respect to the exercise of fundamental rights on and after the date of the commencement of the Constitution.
It has no retrospective effect, and if therefore an act was done before the com mencement of the new Constitution in contravention of the provisions of any law which was a valid law at the time of the commission of the act, a prosecution for such an act, which was commenced before the Constitution came into force can be proceeded with and the accused punished according to that law.
even after the commencement of the new Constitu tion.
On the expiry of a temporary statute no further proceed ings can be taken under it unless the statute itself saved pending proceedings and if an offence had been committed under a temporary statute and proceedings were initiated but the offender had not been prosecuted and punished before the expiry of the statute, then in the absence of a saving clause the pending prosecution cannot be proceeded with after the expiry of the statute by efflux of time.
The effect of article 13(1) is quite different from that of the expiry of a temporary statute or the repeal of a statute by a subsequent statute.
A court of law has to gather the spirit of the Constitu tion from the language/of the Constitution.
What one may believe or wish to be the spirit of the Constitution cannot prevail if the language of the Constitution does not support that view.
229 Per FAZL ALI and MUKHERJEA JJ.
(contra) Though article 13(1) has no retrospective operation, and transactions which are past and closed and rights which have already vested will remain untouched, with regard to inchoate matters which were still not determined when the Constitution came into force, and as regards proceedings which were pending at the time of the enforcement of the Constitution and not yet prosecuted to a final judgment, a law which has become void under article 13(1) of the Constitution cannot be applied.
What has to be looked at is the state of the law at the time when the question arises as to whether a person has commit ted an offence, and if it is found that the law which made the act an offence has become completely ineffectual and nugatory, then neither can a charge be framed nor can the accused person be convicted.
Judgment of the Bombay High Court affirmed.
|
CIVIL Appeal NO.
650 of 1982.
From the Award dated 6.3 1981 of the Labour Court Delhi in IClD No. 41 Or 1979.
P.N. Tewari and S.R. Srivastava for the Appellants.
25F read with Sec. 2(00) of the Industrial Disputes Act , 1947 ( 'Act ' for short) and as the provisions of Sec.
25F have not been complied with , the termination of service would be bad and illegal.
The Labour Court then proceeded to examine whether the relief of reinstatement should be granted or compensation in lieu of reinstatement should be given.
The Labour Court held that 'even where Sec.
25F of the Industrial Disputes Act is not complied with and therefore the termination of service is illegal and invalid , there is certainly a discretion with the Labour Court whether to order reinstatement of the workman or not. ' We have our serious reservations about the statement of law but it is not necessary to deal with it in the present case because instead of granting reinstatement , we propose to award adequate compensation taking into account both the backwages as well as compensation in lieu of reinstatement.
The Labour Court while proceeding to quantify the compensation observed that 'the termination of services of the two workmen was bonafide and not a colorable exercise of power in accordance with the service rules and then proceeded to award one year 's wages as compensation ' for the failure of the employer to comply with the requirements of provisions contained in Sec.
25F of the Act.
The workmen have filed this appeal by special leave.
Ordinarily where the termination of service is found to be 626 bad and illegal , in the field of industrial relations a declaration follows that the workman continues to be in service and has to be reinstated in service with full backwages (See Hindustan Tin Works Pvt. Ltd. vs Employees of Hindustan Tin Works Pvt.
Ltd.(1).
The Labour Court has , however , the discretion to award compensation instead of reinstatement if the circumstances of a particular case are unusual or exceptional so as to make reinstatement in expedient or improper.(See M/s Hindustan Steels Ltd. , Rourkela vs A.K. Roy & Ors.(2).
In the present case , the Labour Court having held that the termination of services of the appellants would constitute retrenchment and as the pre requisite for a valid retrenchment having not been satisfied , the termination of service was bad , yet in the facts of the case in his discretion declined to grant the relief of reinstatement.
Whenever , it is said that something has to be done within the discretion of the authority then that something has to be done according to the rules of reason and justice and not according to private opinion , according to law and not humour.
It is to be not arbitrary , vague and fanciful but legal and regular and it must be exercised within the limit to which an honest men to the discharge of his office ought to find himself.
(See Sharp vs Wekfield(3).
Discretion means sound discretion guided by law.
It must be governed by , rule , not by humour , it must not be arbitrary , vague and fanciful.
(See S.D. Jaisinghani vs Union of India & Ors.(4).
The Labour Court while declining to grant the relief of reinstatement which should have ordinarily followed , consequent upon its finding that the termination of service was bad and illegal , in exercise of its discretion awarded one year 's wages as compensation in lieu of reinstatement on the ground that 'the termination of service of each of the appellant was bonafide and not a colorable exercise of power in accordance with service rules. ' There is thus an error apparent on the face of the record of the case in as much as if the termination of service was according to service (1) ; (2) ; (3) 11891] A.C. 173.
(4) 11967] 2 S.C.R. 703 , 627 rules and Was bonafide it could not be simultaneously held to be illegal and invalid.
Therefore the discretion was exercised on irrelevant and extraneous considerations or considerations not germane to the determination.
As a necessary corollary , we would have granted the normal relief of reinstatement.
Dr. Chitley , learned counsel who appeared for the respondents attempted to take us through the evidence with a view to persuading us that the employer even if it acted contrary to law , should not be burdened with reinstatement because it had lost confidence in the appellants.
The employer is a foreign air transport company.
The workmen were loaders posted at Delhi Airport.
In this far fetched hierarchical relationship , loss of confidence if it is to be considered a relevant factor would have hardly impressed us.
However , as the workmen are out of job from August 30 , 1973 i.e. roughly for a period of 12 years , it is in their own interest , that instead of reinstatement in service under an unwilling if not a hostile employer.
adequate compensation would meet the ends of justice.
Therefore , in the special facts and circumstances of this case , though disagreeing with tile reasons given by the Labour Court for declining to grant the normal relief of reinstatement , we uphold the same but the meagre compensation awarded by the Labour Court namely one year 's E. wages requires to be adequately and properly modified.
Dr. Chiley gave us information about the last wages drawn by each of the workmen.
That does not take care of over time allowance or bonus or other benefits that they enjoy.
Roughly , the monthly pay packet of each workman appears to be around Rs. 1,000.
Each one of them was a loader which means doing 1 ' manual job.
Each one of them is entitled to backwages in full for a period of 12 years.
Each one was therefore entitled to get Rs. 1,50,000 towards back wages.
Adding to it the compensation in lieu of reinstatement in the amount of Rs. 50,000, we are of the opinion that a total compensation in the amount of Rs. 2,00,000 to each appellant would meet the ends of justice.
Before we conclude this judgment , we would like to make it abundantly clear that the compensation of Rs. 2,00,000 [I awarded to each appellant includes backwages for a period of 628 12 years.
Now that the amount is being paid in one lump sum , it is likely that the employer may take recourse to Sec.
192 of the Income Tax Act , 1961 which provides that when any person responsible for paying any income chargeable under the head 'Salaries ' shall , at the time of payment , deduct income tax on the amount payable at the average rate of income tax computed on the basis of the rates in force for the financial year in which the payment is made , on the estimated income of the assessee under this head for that financial year.
If therefore the employer proceeds to deduct the income tax as provided by Sec. 192 , we would like to make it abundantly clear that each appellant would be entitled to the relief under Sec.
89 of the Income Tax Act which provides that where , by reason of any portion of assessee 's salary being paid in arrears or in advance or by reason of his having received in any one financial year salary for more than 12 months or a payment which under the provisions of clause (3) of Section 17 is a profit in lieu of salary , his income is assessed at a rate higher than that it would otherwise have been assessed , the Income tax Officer shall on an application made to him in this behalf grant such relief as may be prescribed.
The prescribed relief is set out in Rule 21(A) of the Income tax Rules.
Both the appellants are entitled to the relief under Sec. 89 because compensation herein awarded includes salary which was in arrears for 12 years and it is being paid in one lump sum under the orders of this Court.
Therefore , the salary has to be spread over for a period of 12 years as also the compensation in lieu of reinstatement and the relief should be given as provided by Sec. 89 of the Income tax Act read with Rule 21(A) of the Income tax Rules.
Both the appellants are entitled to the same.
If any application is necessary to be made , the same may be made to the competent authority and the respondent employer shall assist the appellants in each case for obtaining the relief.
When the hearing concluded and we indicated that we were inclined to award compensation for backwages and in lieu of reinstatement , we requested Shri S.R. Srivastava , learned counsel for the appellants to give us in a tabulated form the compensation to which each appellant would be entitled with a spread over from the date of the order of termination of service till the end of the present year.
The tabulations have been supplied in respect of each of the appellants.
We have gone through the tabulations and 629 we are satisfied that they represent the correct state of affairs and they are taken on record and are being treated as part of this judgment.
Accordingly , this appeal is partly allowed and the award giving one year 's wages as compensation is modified to the effect that each appellant should be paid Rs. 2,00,000 as and by way of backwages and in lieu of relief of reinstatement.
As we have awarded adequate compensation , it is not necessary to award costs.
We order accordingly.
A.P.J. Appeal partly allowed.
| Pursuant to a policy decision arrived at an All India Conference on Co operative Societies, various State Legislatures, roughly at about the same lime introduced enactments providing for amalgamation of co operative societies.
The vires of the provisions, contained in sub sections 8 to 11 of section 13 of the Punjab Co operative Societies Act, 1961 providing for compulsory amalgamation of cooperative societies if it is necessary in the interests cooperative societies, is challenged in these appeals by special leave aud other special leave petitions.
Dismissing the appeals and petitions, the Cource, ^ HELD 1.
The vires of legislation is not to be decided on the basis of affidavits of underlings of the executive who can hardly be described as authorised to speak for the legislature.
As usual in these and such cases, 581 the Counter affidavits , where they have been filed , leave much to be desired and arc least helpful to the Court.
[584F G 585A] A 2.1 The law providing for amalgamation of co operative societies , in view of the constitutional bar contained in Article 31 A (1) (c) cannot be struck down as violative of the provisions of Article 19 (1) (c) of the Constitution , the right of a citizen to form a society or to be a member of a certain cooperative society is not interfered with if the society of which he has become a member is amalgamated with another society consisting of members with whom he may not be willing to be associated [588D G] In the cases here , the cooperative societies are governed by statute from their inception.
They are created by statute , they are controlled by statute and so there can be no objection to statutory interference with their composition on the ground of contravention of the individual right of freedom of association.
j 594C D] Damyanti Naranga vs Union of India , [1971] 3 S.C.R. 840 , explained and distinguished.
2.2 The expression "Corporations" occurring in Article 31 A (I) (c) of the Constitution cannot be given such a limited or narrow interpretations so as not to comprehend cooperative societies in its expanse.
011 the other hand , the very requirement of the Corporation mentioned in Article 31 A (I) (c) requires the expression to be given a broad interpretation since there can been higher interest than the public interest.[589C D] 2.3 Section 30 of the Punjab Cooperative Societies Act , 1961 confers every registered co operative society the status of a body corporate having perpetual succession and a common seal , with power to hold property enter into contracts , institute and defend suits and other legal proceedings and to do all things necessary the purposes for which it is constituted Therefore , co operative society is a corporation as commonly understood [591G H , 592A] Board of Trustees , Ayurvedic , and Unani Tibia College , Delhi vs The State of Delhi , [1962] Suppl.
1 SCR 156 applied.
2.4 The scheme of the Constitution as enjoined in Entries 43 and 44 of List I of the Seventh Schedule an Entry 32 of List 11 does not make any difference either.
The mention of co operative societies both in Entry 43 of List I and Entry 32 of List II along with other corporations give an indication that the Constitution makers were of the view that co operative societies were of the same genus as other corporations and all were corporations.
In fact the very express exclusion; of co operative societies from Entry 43 of List I is indicative of the view that but for such exclusion , co operative societies would be comprehended within the expression "corporations".[592A , 592F G] 2.5 The statement of Objects and Reasons of the Constitution (4th) 582 amendment) Act and the report of the Joint Select Committee relating thereto , do now show that initially it was proposed to give protection to legislation pertaining to amalgamation of companies only but later it was thought fit to extend the protection to statutory corporations also and therefore , the expression "corporations" was substituted in the Act in the place of the expression "companies ' which had been mentioned in the Bill.
It was obviously thought by the Parliament that the protection should not be confined to companies only but should extend to all corporations which would naturally include Statutory Corporations.
The more generic expression "corporation" was used so that all companies statutory corporations and the like may be brought in.
There is no indication that notwithstanding the use of the generic expression "corporations" , the expression was intended to exclude corporations other than companies and statutory corporations.
Parliament apparently chose the broader expression not with a view to limit the protection of the legislation relating to amalgamation to any class of corporations but with a view to protect legislation pertaining to amalgamation of all classes of corporations.
[592H , 593D G] 2.6 The very philosophy and concept of the cooperative movement is impregnated with the public interest and the amalgamation of co operative societies when such amalgamation is in the interest of the co operative societies is certainly in the public interest or can only be to secure the proper management of the societies.
Therefore , it cannot be said that the protection of Art , 31 A(l) (c) was not available to section 13 (8) of the Punjab Co operative Societies Act , as the interest of a co operative society may not necessarily be in the public interest or for the proper management of the society.
[594D G] 2.7 Notice to individual members of a co operative society , is opposed to the very status of a cooperative society as a body corporate and is , therefore , unnecessary.
Once a person becomes a member of a co operative society he loses his individuality qua the society and he has no independent rights except those given to him by the statute and the bye laws He must act and speak through the society or rather , the society alone can act and speak for qua rights or duties of the society as a body.
So if the statute which authorises compulsory amalgamation of cooperative societies provides for notice to the societies concerned , the requirement of natural justice is fully satisfied.
The notice to the society will be deemed as notice to all its members.
That is why section 13 (9) (a) provides for the issue of notice to the societies and not to individual members.
Section 13 (9) (b) , however , provides the members also with an opportunity to be heard if they desire to be heard Further a member who objects to the proposed amalgamation within the prescribed time is given , by section 31 (11) the option , to walk out , as it were , by withdrawing his share , deposits or loans as the case may be.
[595A , C A] 2,8 A fresh notification would not be necessary where the Assistant Registrar even initially was authorised generally to perform all the functions of a Registrar.
A fresh notification would probably be necessary where the Assistant Registrar was authorised to perform certain specified functions only of the Registrar.
That is not claimed to be the situation here.
[596A B] 583 2.9 It cannot be said that the dignity of a human being is even remotedly affected by the amalgamation of a co operative society of which an individual is member with another co operative society.
Therefore the contention that both Article 31 A(l)(c) of the Constitution and section 13(8) of the Punjab Cooperative Societies Act , offended the basic structure of the Constitution and therefore were void is misplaced.
OBSERVATION: [The Counsel appearing in the Supreme Court , particularly , when they appear before the Constitution Bench must avoid advancing totally unsustainable propositions.
The time of the Supreme Court is public time and as the mountainous arrears show that time is becoming increasingly dear and precious.
The counsel must carefully examine with a greater sense of responsibility the submissions which they propose to make before actually advancing them in the Court].
[596G H 593A B] 3.
It is not unusual for parties and counsel to raise innumerable grounds in the petitions and memoranda of appeal etc.
but , later , confine themselves , in the course of argument to a few only of those grounds , obviously because the rest of the grounds are considered even by them to be untenable.
No party or counsel is thereafter entitled to make a grievance that the grounds not argued were not considered.
If indeed any ground which was argued was not considered it should be open to the party aggrieved to draw the attention of the Court making the order to it by filing a proper application for review or clarification.
The time of the superior Courts is not to be wasted in inquiring into the question whether a certain ground to Which no reference is found in the judgment of the subordinate court was argued before that court or not .[596D E]
|
vil Appeal No. 350 (NT) of 1987.
632 From the Judgment and Order dated 19.11.
1985 of the Allahabad in S.T.R. No. 401 of 1985.
S.C. Manchanda and Ashok K. Srivastava for the Appellant.
Raja Ram Agarwal, Ajay Kumar Jain, Pramod Dayal and A.D. Sanger for the Respondent.
The Order of the Court was delivered by THAKKAR, J. A transaction of sale or purchase which takes place 'in the course of export ' falling within the purview of sub section (3) of Section 51 of the Central Sales tax Act.
1956 (hereinafter called the 'Act ') cannot be subjected to sales tax by any State.
The said provision inter alia provides that the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deemed to be in the course of such export.
(i) provided such last sale or purchase took place 'after ' and (ii) was for the purpose of complying with, the agreement or order for or in relation to such export Such a transaction cannot be subjected to sales tax/purchase tax by any State in view of the embargo imposed by article 286(1) (a).1 The controversy centering around this question has been set at rest in Consolidated Coffee Ltd. v .
Coffee Board, Bangalore, A.I.R. (Vol. 46) p. 164.
Under the circum stances, if the last sale in favour of the respondent who is a dealer in hides and skins and exports the same out of the territory of India has taken place (1) after an agreement was entered When a sale or purchase of goods said to take place in the course of import or export (1) X X X X (2) X X X (3) Notwithstanding anything contained m ' sub section(1), the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deemed to be in the course of such export, if such last sale or purchase took place after and was for the purpose of complying with, the agree ment or order for or in relation to such export.
" 1. "286(1) (a) No law of a State shall impose, or authorise the imposition of a tax on the sale or purchase of goods where such sale or purchase takes place (a) outside the State; or (b) in the course of the import of the goods, or export of the goods out, of the territory of India.
633 into for such export or order for such export had been accepted by him.
(2) last sale made in his favour was for the purpose of complying with the obligation undertaken under the said agreement or order, the transaction reflected in such last sale or purchase cannot be lawfully taxed under the Sales Tax Act.
It cannot be taxed because of the consti tutional bar embodied in Article 286 (1) (a) of the Consti tution of India.
The view taken by the High Court in the Judgment under appeal that such transactions are not exigi ble to sales tax/purchase tax under the U.P. Sales Tax Act, is unexceptionable in the light of the aforesaid provisions of the Constitution and sub section (3) of Section 5 of the Act and the law declared by this Court in Consolidated Coffee Ltd. We, therefore, see no reason to interfere with the order of the High Court.
It is no doubt true that Form III A under Rule 12 A of the U.P. Sales Tax Act is not an appropriate form to use in the context of such a transaction of last sale or purchase for the purpose of complying with an agreement or order for export which has already come into existence.
However, it is equally true that an appropriate form to meet the situation in relation to such last sales which are not exigible to sales/ purchase tax under the U.P. Sales Tax Act having regard to the constitutional bar and having regard to the provision contained in sub section (3) of Section 5 of the Act has not been devised under the afore said Rules.
It was under these circumstances that the respondent has furnished to his vendors form III A which is not appropriate except in regard to purchases made for sales of undressed hides as such within the State or in the course of inter State trade.
But the mere fact that such a form has been given will not empower the State to collect or levy the sales tax/purchase tax in respect of a transaction in the course of export which satisfies the aforesaid tests prescribed by Section 5 (3) of the .
It would be unconstitu tional in view of the constitutional bar to levy tax on sales in the course of export regardless of the fact whether an appropriate form is used or not.
The transactions entered into by him which are such on which sales tax/purchase tax cannot be levied on account of the constitutional bar read with sub section (3) of Section 5 of the cannot become exigible to tax merely because a wrong form is used (particularly when the appropriate form has not been devised by the Rule making authority).
Liability for tax in respect of such transactions cannot be fastened on the respondent for the very good reason that the State has no power to collect or levy sales tax/purchase tax on such transactions.
The U.P. Sales Tax authorities should have devised an appropriate form in this behalf.
They can do so even now (as has 634 been done under the Delhi Sales Tax Act by prescribing Form 49 to meet such a situation).
Learned counsel for the appel lant submits that till such a form is prescribed the re spondent who claims to have entered into these transactions in the course of export as defined by sub section (3) of Section 5 of the Act may furnish to his vendor a copy of Form H as provided by the .
The respondent has no objection and is prepared to do so.
Under the circumstances, for the future purposes instead of fur nishing form III A under Rule 12 A of the Sales Tax Act, .the respondent will furnish a photostat copy of form H under the .
Learned counsel for the respondent states that if such a copy is furnished to the vendor it will be accepted by the competent authority and the vendor will not be held liable for payment of sales tax/purchase tax in respect of such transactions subject to the rider that respondent will be held liable in case the purchases made by him do not satisfy the conditions and tests prescribed by sub section (3) of Section 5 of the and are not made in the course of export within the meaning of the said provision.
So far as the past transactions are concerned the respondent will not be liable provided he satisfies the aforesaid tests and the transactions of last sales made to him are in the course of export within the deeming clause of sub section (3) of Section 5 of the Act.
The appeal is disposed of accordingly.
There will be no order as to costs.
N.P. V Appeal dis posed of.
| In a writ petition filed under Article 32 of the Consti tution of India, the Court found that good and substantial reasons existed for directing the petitioner to approach the concerned High Court in the first instance instead of knock ing at the doors of this Court straightaway.
While directing so, this Court, HELD: 1.
If Supreme Court takes upon itself to do every thing which even the High Court can do, this Court will not be able to do what this Court alone can do under article 136 of the Constitution of India, and other provisions conferring exclusive jurisdiction on this Court.
There is no reason to assume that the concerned High Court will not do justice.
Or that this Court alone can do justice.
If this Court enter tains Writ Petitions at the instance of parties who approach this Court directly instead of approaching the concerned High Court in the first instance, tens of thousands of Writ Petitions would in course of time be instituted in this Court directly.
The inevitable result will be that the arrears pertaining to matters in respect of which this Court exercises exclusive jurisdiction under the Constitution will assume more alarming proportions.
[316B D] 2.
It is as important to do justice at this level, as to inspire confidence in the litigants that justice will be meted out to them at the High Court level, and other levels.
Faith must be inspired in the hierarchy of Courts and the institution as a whole.
Not only in this Court alone.
And this objective can be achieved only by this Court showing trust in the High Courts by directing the litigants to approach the High Courts in 315 the first instance.
Besides, as a matter of fact, if matters like the present one are instituted in the High Courts, there is a likelihood of the same being disposed of much more quickly, and equally effectively, on account of the decentralisation of the process of administering justice.
[316E G]
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Subsets and Splits